MENS WEARHOUSE INC, 10-K, 2000-04-28

MENS WEARHOUSE INC
10-K, 2000-04-28
APPAREL & ACCESSORY STORES

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 29, 2000 OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 0-20036

THE MEN'S WEARHOUSE, INC.
(Exact name of Registrant as Specified in its Charter)

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TEXAS 74-1790172
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)

5803 GLENMONT DRIVE
HOUSTON, TEXAS 77081-1701
(Address of Principal Executive Offices) (Zip Code)
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(713) 592-7200
(Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

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NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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NONE

Securities Registered Pursuant to Section 12(g) of the Act: COMMON STOCK, PAR
VALUE $.01 PER SHARE

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based on the closing price of shares of common stock on the
NASDAQ National Market System on April 24, 2000, was approximately $692.4
million.

The number of shares of common stock of the Registrant outstanding on April
24, 2000 was 41,131,259, excluding 161,746 shares classified as Treasury Stock.
In addition, there were 683,605 Exchangeable Shares outstanding at April 24,
2000.

DOCUMENTS INCORPORATED BY REFERENCE

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DOCUMENT INCORPORATED AS TO
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Notice and Proxy Statement for the Annual Meeting Part III: Items 10, 11, 12 and 13
of
Shareholders scheduled to be held June 21,
2000.
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FORM 10-K REPORT INDEX

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10-K PART AND ITEM NO. PAGE NO.
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PART I
Item 1. Business.................................................... 1
Item 2. Properties.................................................. 7
Item 3. Legal Proceedings........................................... 9
Item 4. Submission of Matters to a Vote of Security Holders......... 9
PART II
Item 5. Market for the Company's Common Equity and Related
Stockholder Matters......................................... 10
Item 6. Selected Financial Data..................................... 11
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 12
Item 7A Quantitative and Qualitative Disclosures About Market
Risk........................................................ 18
Item 8. Financial Statements and Supplementary Data................. 19
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................... 38
PART III
Item 10. Directors and Executive Officers of the Registrant.......... 38
Item 11. Executive Compensation...................................... 38
Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................................. 38
Item 13. Certain Relationships and Related Transactions.............. 38
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K......................................................... 38
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PART I

ITEM 1. BUSINESS

GENERAL

The Men's Wearhouse began operations in 1973 as a partnership and was
incorporated as The Men's Wearhouse, Inc. (the "Company") under the laws of
Texas in May 1974. Our principal corporate and executive offices are located at
5803 Glenmont Drive, Houston, Texas 77081-1701 (telephone number 713/592-7200),
and at 40650 Encyclopedia Circle, Fremont, California 94538-2453 (telephone
number 510/657-9821), respectively.

THE COMPANY

We are one of the largest specialty retailers of menswear in the United
States and Canada. At January 29, 2000, our U.S. operations included 501 stores
in 42 states and the District of Columbia, primarily operating under the brand
names of Men's Wearhouse and K&G, with approximately 28% of our locations in
Texas and California. At January 29, 2000, our Canadian operations included 113
stores in 10 provinces operating under the brand name of Moores.

Men's Wearhouse

Under the Men's Wearhouse brand, we target middle and upper middle income
men by offering quality merchandise at everyday low prices. In addition to
value, we provide a superior level of customer service. Men's Wearhouse stores
offer a broad selection of designer, brand name and private label merchandise at
prices we believe are typically 20% to 30% below the regular prices found at
traditional department and specialty stores. Our merchandise includes suits,
sport coats, slacks, business casual, sportswear, outerwear, dress shirts, shoes
and accessories. We concentrate on business attire that is characterized by
infrequent and more predictable fashion changes. Therefore, we believe we are
not as exposed to trends typical of more fashion-forward apparel retailers,
where significant markdowns and promotional pricing are more common. At January
29, 2000, we operated 450 Men's Wearhouse stores in 42 states and the District
of Columbia. These stores are referred to as "Men's Wearhouse stores" or
"traditional stores".

We also began a tuxedo rental program in selected Men's Wearhouse stores
during the year. We believe this program generates incremental business for us
without significant incremental personnel or real estate costs and broadens our
customer base by drawing first-time and younger customers into our stores. At
the end of fiscal 1999, we offered tuxedo rentals in 43 Men's Wearhouse stores.

K&G

Under the K&G brand, we target the more price sensitive customer. The K&G
brand was acquired as a result of our combination with K&G Men's Center, Inc.
("K&G Inc.") in June 1999 in a transaction accounted for as a pooling of
interests (see Note 2 of Notes to Consolidated Financial Statements). Under the
terms of the combination with K&G Inc., we issued 4.4 million shares of our
common stock in exchange for 10.3 million shares of K&G Inc. common stock based
on an exchange ratio of 0.43. K&G operated 34 stores at the time of the
combination. Prior to the combination, our Value Priced Clothing ("VPC")
subsidiary targeted the market for the more price sensitive customer with 20
stores in five states operating under the names "C&R", "SuitMax" and "Suit
Warehouse". The four C&R stores were closed in early 1999 as had been previously
planned. Following the combination, ten SuitMax stores were transferred and
renamed to operate under the K&G brand, while four SuitMax stores (and one K&G
Inc. store) that represented duplicative store sites were closed. At January 29,
2000, we operated 47 K&G stores in 18 states and, through VPC, the four Suit
Warehouse stores in metropolitan Detroit.

We believe that K&G's more basic, value-oriented superstore approach
appeals to certain customers in the menswear market. K&G offers first-quality,
current-season men's apparel and accessories comparable in quality to that of
traditional department and fine specialty stores, at everyday low prices we
believe are

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typically 30% to 70% below the regular prices charged by such stores. K&G's
merchandising strategy emphasizes broad and deep assortments across all major
menswear categories, including tailored clothing, casual sportswear, dress
furnishings, footwear and accessories. This merchandise selection, which
includes brand name as well as private label merchandise, positions K&G to
attract a wide range of menswear customers in each of its markets. As with the
Men's Wearhouse brand, K&G's philosophy of delivering everyday value
distinguishes K&G from other retailers that adopt a more promotional pricing
strategy.

Moores

On February 10, 1999, we combined with Moores Retail Group Inc. ("Moores"),
a privately owned Canadian corporation, in exchange for securities
("Exchangeable Shares") exchangeable for 2.5 million shares of our common stock
(see Note 2 of Notes to Consolidated Financial Statements). Moores is one of
Canada's leading specialty retailers of menswear, with 113 stores in ten
Canadian provinces at January 29, 2000. Moores focuses on conservative, basic
tailored apparel. This limits exposure to changes in fashion trends and the need
for significant markdowns. Approximately 60% of Moores' merchandise consists of
men's tailored clothing. The remaining 40% includes dress shirts, sportswear,
outerwear and accessories. Moores typically offers a full assortment of suits
and sport coats with prices of suits generally ranging from Can$149 to Can$299.
At the time of its combination with the Company, Moores also operated eight
stores in the United States. These stores were closed in order to eliminate
duplicate store sites in existing Men's Wearhouse markets.

Moores distinguishes itself from other Canadian retailers of menswear by
manufacturing a significant portion of the tailored clothing for sale in its
stores. Moores conducts its manufacturing operations through its wholly owned
subsidiary, Golden Brand Clothing (Canada) Ltd. ("Golden Brand"), which is the
second largest manufacturer of men's suits and sport coats in Canada. Golden
Brand's manufacturing facility in Montreal, Quebec, includes a cutting room,
fusing department, pant shop and coat shop. At full capacity, the coat shop can
produce 12,000 units per week and the pant shop can produce 25,000 units per
week. As a result of the vertical integration and the related cost savings,
Moores is able to provide greater value to its customer by offering a broad
selection of quality merchandise at everyday low prices, which the Company
believes typically range from 20% to 30% below the regular prices charged by
traditional Canadian department and specialty stores. Beginning in 1999, Golden
Brand also manufactures product for Men's Wearhouse stores.

EXPANSION STRATEGY

Our expansion strategy includes:

- opening additional Men's Wearhouse and K&G stores in new and existing
markets,

- increasing the size of certain existing Men's Wearhouse stores,

- expanding our tuxedo rental program to additional Men's Wearhouse stores,

- launching an enhanced and expanded internet presence for e-commerce,

- expanding our distribution facility with a new center to handle tuxedo
rental and e-commerce fulfillment,

- identifying strategic acquisition opportunities, and

- testing expanded merchandise categories in selected stores.

In general terms, we consider a geographic area served by a common group of
television stations as a single market.

On a limited basis, we have acquired store locations, inventories, customer
lists, trademarks and tradenames from existing menswear retailers in both new
and existing markets. We may do so again in the future. At present, we plan to
open an additional 35 new Men's Wearhouse stores and 10 new K&G stores in 2000,
to close approximately two Men's Wearhouse stores and one K&G store in 2000, to
expand and relocate

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approximately 36 existing Men's Wearhouse stores and to continue expansion in
subsequent years. We believe that our ability to increase the number of
traditional stores in the United States above 525 will be limited. However, we
believe that additional growth opportunities exist through selectively expanding
existing stores, improving and diversifying the merchandise mix, relocating
stores and expanding our K&G brand.

MERCHANDISING

Our stores offer a broad selection of designer, brand name and private
label men's business attire, including a consistent stock of core items (such as
navy blazers, tuxedos and basic suits). Although basic styles are emphasized,
each season's merchandise reflects current fabric and color trends, and a small
percentage of inventory, accessories in particular, are usually more fashion
oriented. The broad merchandise selection creates increased sales opportunities
by permitting a customer to purchase substantially all of his tailored wardrobe
and accessory requirements, including shoes, at our stores. Within our tailored
clothing, we offer an assortment of styles from a variety of manufacturers and
maintain a broad selection of fabrics and colors. We believe that the depth of
selection offered provides us with an advantage over most of our competitors.

The Company's inventory mix includes "business casual" merchandise designed
to meet increased demand for such product resulting from the trend toward more
relaxed dress codes in the workplace. This merchandise consists of tailored and
non-tailored clothing (sport coats, casual slacks, knits and woven sports
shirts, sweaters and casual shoes) that complements the existing product mix and
provides opportunity for enhanced sales without significant inventory risk.

We do not purchase significant quantities of merchandise overruns or
close-outs. We provide recognizable quality merchandise at consistent prices
that assist the customer in identifying the value available at our stores. We
believe that the merchandise at Men's Wearhouse and Moores stores is generally
offered 20% to 30% below traditional department and specialty store regular
prices and that merchandise at K&G stores is generally 30% to 70% below retail
prices typically charged by such stores. A ticket is affixed to each item, which
displays our selling price alongside the price we regard as the regular retail
price of the item. At the checkout counter, the customer's receipt reflects the
savings from what we consider the regular retail price.

By targeting men's business attire, a category of men's clothing
characterized by infrequent and more predictable fashion changes, we believe we
are not as exposed to trends typical of more fashion-forward apparel retailers.
This allows us to carry basic merchandise over to the following season and
reduces the need for markdowns; for example, a navy blazer or gray business suit
may be carried over to the next season. Our Men's Wearhouse and Moores stores
have a once-a-year sale after Christmas that runs through the month of January,
during which prices on many items are reduced 20% to 50% off the everyday low
prices. This sale reduces stock at year-end and prepares for the arrival of the
new season's merchandise.

During 1997, 1998 and 1999, 67.6%, 65.5% and 62.2%, respectively, of our
total net sales were attributable to tailored clothing (suits, sport coats and
slacks) and 32.4%, 34.5% and 37.8%, respectively, were attributable to casual
attire, sportswear, shoes, shirts, ties, outerwear and other accessories.

In addition to accepting cash, checks or nationally recognized credit
cards, beginning in October 1998 we started offering our own private label
credit card to Men's Wearhouse customers. We have contracted with a third-party
vendor to provide all necessary servicing, processing and to assume all credit
risks associated with our private label credit card program. We believe that the
private label credit card provides us with an important tool for targeted
marketing and presents an excellent opportunity to communicate with our
customers. During 1999, our customers used the private label credit card for
approximately 10% of our sales.

CUSTOMER SERVICE AND MARKETING

The Men's Wearhouse and Moores sales personnel are trained as clothing
consultants to provide customers with assistance and advice on their apparel
needs, including product style, color coordination, fabric and garment fit. For
example, clothing consultants at Men's Wearhouse stores attend an intensive
training program at our training facility in Fremont, California, which is
further supplemented with weekly store

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meetings, periodic merchandise meetings and frequent interaction with multi-unit
managers and merchandise managers.

We encourage our clothing consultants to be friendly and knowledgeable and
to promptly greet each customer entering the store. Consultants are encouraged
to offer guidance to the customer at each stage of the decision-making process,
making every effort to earn the customer's confidence and to create a
professional relationship that will continue beyond the initial visit. Clothing
consultants are also encouraged to contact customers after the purchase or
pick-up of tailored clothing to determine whether customers are satisfied with
their purchases and, if necessary, to take corrective action. Store personnel
have full authority to respond to customer complaints and reasonable requests,
including the approval of returns, exchanges, refunds, re-alterations and other
special requests, all of which we believe helps promote customer satisfaction
and loyalty.

K&G stores are designed to allow customers to select and purchase apparel
by themselves. For example, each merchandise category is clearly marked and
organized by size, and suits are specially tagged "Athletic Fit,"
"Double-Breasted," "Three Button," etc., as a means of further assisting
customers to easily select their styles and sizes. K&G employees assist
customers with merchandise selection, including correct sizing.

Each of our stores provides on-site tailoring services to facilitate timely
alterations at a reasonable cost to customers. Tailored clothing purchased at a
Men's Wearhouse store will be pressed and re-altered (if the alterations were
performed at a Men's Wearhouse store) free of charge for the life of the
garment.

Because management believes that men prefer direct and easy store access,
we attempt to locate our stores in neighborhood strip and specialty retail
centers or in freestanding buildings to enable customers to park near the
entrance of the store.

Our total annual advertising expenditures, which were $53.3 million, $60.8
million and $64.5 million in 1997, 1998 and 1999, respectively, are significant.
The Company advertises principally on television and radio, which we consider
the most effective means of attracting and reaching potential customers, and our
advertising campaign is designed to reinforce our various brands.

PURCHASING AND DISTRIBUTION

We purchase merchandise from approximately 800 vendors. In 1999, no vendor
accounted for 10% or more of purchases. Management does not believe that the
loss of any vendor would significantly impact us. While we have no material
long-term contracts with our vendors, we believe that we have developed an
excellent relationship with our vendors, which is supported by consistent
purchasing practices.

We believe we obtain favorable buying opportunities relative to many of our
competitors. We do not request cooperative advertising support from
manufacturers, which reduces the manufacturers' costs of doing business and
enables them to offer us lower prices. Further, we believe we obtain better
discounts by entering into purchase arrangements that provide for limited return
policies, although we always retain the right to return goods that are damaged
upon receipt or determined to be improperly manufactured. Finally, volume
purchasing of specifically planned quantities purchased well in advance of the
season enables more efficient production runs by manufacturers, who, in turn,
are provided the opportunity to pass some of the cost savings back to us.

We purchase a significant portion of our inventory through a direct
sourcing program. In addition to finished product, we purchase fabric from mills
and contract with certain factories for the assembly of the finished product to
be sold in our U.S. stores. Arrangements for fabric and assembly have been with
both domestic and foreign mills and factories. Product for stores operating in
the U.S. acquired during 1997, 1998 and 1999 through the direct sourcing program
represented approximately 20%, 23% and 26%, respectively, of total U.S.
inventory purchases. We expect that purchases through the direct sourcing
program will represent approximately 27% of total purchases in 2000. During
1997, 1998 and 1999, our manufacturing operations at Golden Brand provided 54%,
55% and 56%, respectively, of inventory purchases for Moores stores and 2%
during 1999 of inventory purchases for Men's Wearhouse stores (none in 1997 and
1998).

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To protect against currency exchange risks associated with certain firmly
committed and certain other probable, but not firmly committed inventory
transactions denominated in a foreign currency (primarily the Italian lira), we
enter into forward exchange contracts. In addition, many of the purchases from
foreign vendors are financed by letters of credit.

We have entered into license agreements with a limited number of parties
under which we are entitled to use designer labels, such as "Vito Rufolo" and
"Gary Player", and nationally recognized brand labels such as "Botany" and
"Botany 500", in return for royalties paid to the licensor based on the costs of
the relevant product. These license agreements generally limit the use of the
individual label to products of a specific nature (such as men's suits, men's
formal wear or men's shirts). The labels licensed under these agreements will
continue to be used in connection with a portion of the purchases under the
direct sourcing program described above, as well as purchases from other
vendors. We monitor the performance of these licensed labels compared to their
cost and may elect to selectively terminate any license. We have also purchased
several trademarks, including "Cricketeer," "Joseph & Feiss International,"
"Baracuta," and "Country Britches," which are used similarly to our licensed
labels. Because of the continued consolidation in the men's tailored clothing
industry, we may be presented with opportunities to acquire or license other
designer or nationally recognized brand labels.

All merchandise for Men's Wearhouse stores is received into our central
warehouse located in Houston, Texas. Merchandise for a store is picked and then
moved to the appropriate staging area for shipping. In addition to the central
distribution center in Houston, we have additional space within certain Men's
Wearhouse stores in the majority of our markets, which function as
redistribution facilities for their respective areas. Most merchandise for
Moores and K&G stores is direct shipped by vendors to the stores.

We lease and operate 29 long-haul tractors and 58 trailers, which, together
with common carriers, ship merchandise from the vendors to our distribution
facilities and from the distribution facilities to Men's Wearhouse stores within
each market. We also lease or own 55 smaller van-like trucks, which are used to
ship merchandise locally or within a given geographic region.

MANAGEMENT INFORMATION AND TELECOMMUNICATION SYSTEMS

We have aggressively pursued the implementation of technology which
provides the opportunity for competitive advantage and which leverages human
resources. By using sophisticated management information systems, and by
integrating them with highly functional telecommunication systems, we have
effectively managed the operation of our business and inventory while
experiencing substantial growth.

To date, the Company has incurred approximately $2.3 million in
expenditures to address the Year 2000 issue. No significant additional
expenditures are expected. The conversion to the Year 2000 occurred without any
significant impact on the Company's operations and none is anticipated in the
future.

COMPETITION

We believe that the unit demand for men's tailored clothing has declined.
Our primary competitors include specialty men's clothing stores, traditional
department stores, off-price retailers, manufacturer-owned and independently
owned outlet stores and three-day stores. Over the past several years market
conditions have resulted in consolidation of the industry. We believe that the
principal competitive factors in the menswear market are merchandise assortment,
quality, price, garment fit, merchandise presentation, store location and
customer service. We attempt to distinguish ourselves from our competitors by
providing what we believe to be the best features of each competing shopping
alternative.

We believe that strong vendor relationships, our direct sourcing program
and our buying power are the principal factors enabling us to obtain quality
merchandise at attractive prices. We believe that our vendors rely on our
predictable payment record and history of honoring promises, including our
promise not to advertise names of labeled and unlabeled designer merchandise,
when requested. Certain of our competitors (principally department stores) are
larger and have substantially greater financial, marketing and other

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resources than we have and there can be no assurance that we will be able to
compete successfully with them in the future.

SEASONALITY

Like most retailers, our business is subject to seasonal fluctuations.
Historically, over 30% of our net sales and over 45% of our net earnings have
been generated during the fourth quarter of each year. Because of the
seasonality of our business, results for any quarter are not necessarily
indicative of the results that may be achieved for the full year. See Note 9 of
Notes to Consolidated Financial Statements.

TRADEMARKS AND SERVICEMARKS

We are the owner in the United States of the trademark and servicemark,
"The Men's Wearhouse(R)", and of federal registrations therefor expiring in 2009
and 2002, respectively, subject to renewal. We have also been granted
registrations for that trademark and servicemark in 40 states (including Texas
and California) of the 42 states in which we do business and have used those
marks. Applications for the remaining two states have been filed. Our rights in
the "The Men's Wearhouse" mark are a significant part of our business, as the
mark has become well known through our television and radio advertising
campaigns. Accordingly, we intend to maintain our mark and the related
registrations.

We are also the owner in the United States of the servicemarks "The Suit
Warehouse" and The Suit Warehouse and logo, which are tradenames used by the
stores operated by VPC, and "MenSmart" and "K&G", which are tradenames used by
some of the stores operated by K&G. K&G stores operate under the tradenames K&G
Men's Superstore, K&G Men's Center, K&G MenSmart, T&C Men's Center and T&C
MenSmart. We own the registrations for K&G and K&G (stylized). The applications
for the servicemarks "K&G Men's Superstore" and K&G Men's Superstore (and
design) are in process. In addition, we own or license other
trademarks/servicemarks used in the business, principally in connection with the
labeling of product purchased through the direct sourcing program.

We own Canadian trademark registrations for the marks "Moores The Suit
People", "Moores Vetements Pour Hommes" and Moores Vetements Pour Hommes (and
design). Moores stores operate under the tradenames Moores The Suit People and
Moores Clothing for Men. The applications for the servicemarks for "Moores
Clothing for Men" and Moores Clothing for Men (and design) have also been filed.

EMPLOYEES

At January 29, 2000, we had approximately 10,700 employees, of whom
approximately 8,000 were full-time and approximately 2,700 were part-time
employees. Seasonality affects the number of part-time employees as well as the
number of hours worked by full-time and part-time personnel. Approximately 900
of our employees at Golden Brand belong to the Union of Needletrades, Industrial
and Textile Employees. Golden Brand is part of a collective bargaining unit, of
which it is the largest company.

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ITEM 2. PROPERTIES

As of January 29, 2000, we operated 501 stores in 42 states and the
District of Columbia and 113 stores in 10 Canadian provinces. The following
table sets forth the location, by state or province, of these stores:

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MEN'S WEARHOUSE K&G/VPC MOORES
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UNITED STATES
California........................................ 84 5
Texas............................................. 44 9
Florida........................................... 31
Illinois.......................................... 22
Michigan.......................................... 19 4
New York.......................................... 19 1
Ohio.............................................. 16 3
Pennsylvania...................................... 16 2
Virginia.......................................... 15 1
Washington........................................ 13 2
Georgia........................................... 12 5
North Carolina.................................... 12 1
Massachusetts..................................... 11 3
Colorado.......................................... 10 2
Minnesota......................................... 10 2
New Jersey........................................ 10 4
Maryland.......................................... 9 3
Arizona........................................... 8
Indiana........................................... 8 1
Tennessee......................................... 8 1
Connecticut....................................... 7
Missouri.......................................... 7
Oregon............................................ 6
Wisconsin......................................... 6
Alabama........................................... 5
Nevada............................................ 5
Utah.............................................. 5
Louisiana......................................... 4 1
South Carolina.................................... 4
Kentucky.......................................... 3
Nebraska.......................................... 3
New Hampshire..................................... 3
Oklahoma.......................................... 3
Kansas............................................ 2 1
New Mexico........................................ 2
Arkansas.......................................... 1
Delaware.......................................... 1
District of Columbia.............................. 1
Idaho............................................. 1
Iowa.............................................. 1
Mississippi....................................... 1
Rhode Island...................................... 1
South Dakota...................................... 1
CANADA
Ontario........................................... 49
Quebec............................................ 23
British Columbia.................................. 14
Alberta........................................... 12
Manitoba.......................................... 5
New Brunswick..................................... 3
Nova Scotia....................................... 3
Saskatchewan...................................... 2
Newfoundland...................................... 1
Prince Edward Island.............................. 1
--- -- ---
Total................................... 450 51 113
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Men's Wearhouse and Moores stores vary in size from approximately 2,800 to
15,100 total square feet (average square footage at January 29, 2000 was 5,238
square feet). Men's Wearhouse and Moores stores are primarily located in middle
and upper middle income neighborhood strip and specialty retail shopping
centers. We believe our customers generally prefer to limit the amount of time
they spend shopping for menswear and seek easily accessible store sites.

Men's Wearhouse and Moores stores are designed to further our strategy of
facilitating sales while making the shopping experience pleasurable. We attempt
to create a specialty store atmosphere in these stores through effective
merchandise presentation and sizing, attractive in-store signs and efficient
checkout procedures. Most of these stores have similar floor plans and
merchandise presentation to facilitate the shopping experience and sales
process. Designer, brand name and private label garments are intermixed, and
emphasis is placed on the fit of the garment rather than on a particular label
or manufacturer. Each store is staffed with clothing consultants and sales
associates and has a tailoring facility with at least one tailor.

K&G stores vary in size from approximately 7,900 to 30,000 total square
feet (average square footage at January 29, 2000 was 17,425 square feet). K&G
stores are "destination" stores located primarily in low-cost warehouses and
secondary strip shopping centers that are easily accessible from major highways
and thoroughfares. K&G has created a 15,000 to 20,000 square foot prototype
superstore with fitting rooms and convenient check-out, customer service and
tailoring areas. K&G stores are organized to convey the impression of a dominant
assortment of first-quality merchandise and to project a no-frills,
value-oriented warehouse atmosphere. Each element of store layout and
merchandise presentation is designed to reinforce K&G's strategy of providing
unparalleled selection and assortment in each category. We seek to make K&G
stores "customer friendly" by utilizing store signage and grouping merchandise
by menswear categories and sizes, with brand name and private label merchandise
intermixed. We also seek to instill a sense of urgency for the customer to
purchase by opening K&G stores for business on Fridays, Saturdays and Sundays
only, except for a limited number of Monday holidays and an expanded schedule
for the holiday season when stores are open every day. Each store is typically
staffed with a manager, assistant manager and other employees who serve as
customer service and sales personnel and cashiers. Each store also has a
tailoring facility with at least one tailor.

We lease our stores on terms generally from five to ten years with renewal
options at higher fixed rates in most cases. Leases typically provide for
percentage rent over sales break points. Additionally, most leases provide for a
base rent as well as "triple net charges", including but not limited to common
area and maintenance expenses, property taxes, utilities, center promotions and
insurance. In certain markets, we lease between 1,000 and 5,000 additional
square feet in a Men's Wearhouse store to be utilized as a redistribution
facility in that geographic area.

We own a 240,000 square foot facility situated on approximately seven acres
of land in Houston, Texas which serves as our principal office, warehouse and
distribution facility. Approximately 65,000 square feet of this facility is used
as office space for our financial, information technology and merchandising
departments with the remaining 175,000 square feet serving as a warehouse and
distribution center. We also own a 150,000 square foot facility, situated on an
adjacent six acres, comprised of approximately 9,000 square feet of office space
and 141,000 square feet serving as a warehouse and distribution center. During
1999, we purchased a 46-acre site in Houston on which we will build additional
new distribution facilities. The first phase of construction of an approximately
380,000 square foot distribution center to support our e-commerce and tuxedo
rental programs, as well as staging for direct sourced merchandise and
out-of-season merchandise, will begin in early 2000.

Our executive offices in Fremont, California are housed in a 35,500 square
foot facility which we own. This facility serves as an office and training
facility.

K&G leases a 100,000 square foot facility in Atlanta, Georgia which serves
as an office, distribution and store facility. Approximately 47,000 square feet
of this facility is used as office space for financial, information technology
and merchandising personnel, 23,000 square feet is used as a distribution center
for direct sourced merchandise and the remaining 30,000 square feet is used as a
store.

8
<PAGE> 11

Moores leases a 37,700 square foot facility in Toronto, Ontario, comprised
of approximately 17,900 square feet of office space and 19,800 square feet used
as a warehouse and distribution center. Moores also leases a 70,000 square foot
warehouse facility in Montreal, Quebec, and a 230,000 square foot facility in
Montreal, Quebec, comprised of approximately 10,000 square feet of office space,
70,000 square feet of warehouse space and 150,000 square feet of manufacturing
space.

We lease certain of our properties from certain principal shareholders and
officers and directors of the Company. These properties are (1) a one acre
facility in Houston, Texas used as a supply depot, (2) the 100,000 square foot
K&G facility in Atlanta, Georgia, (3) a K&G store in Irving, Texas and (4) the
land underlying a Men's Wearhouse store in Dallas, Texas. Management believes
that these leases are on terms that are no less favorable than could be obtained
from an independent third party.

ITEM 3. LEGAL PROCEEDINGS

We are involved in various routine legal proceedings, including ongoing
litigation, incidental to the conduct of our business. Management believes that
none of these matters will have a material adverse effect on our financial
condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended January 29, 2000.

9
<PAGE> 12

PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is traded on the NASDAQ under the symbol "MENS." Prior to
April 3, 2000 the Company's stock was traded on the NASDAQ under the symbol
"SUIT". The following table sets forth, on a per share basis for the periods
indicated, the high and low sale prices per share for our common stock as
reported by NASDAQ. The prices set forth below for periods prior to June 19,
1998 have been adjusted to give retroactive effect to the 50% stock dividend
paid on that date.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL YEAR 1998
First quarter ended May 2, 1998........................... $29.67 $22.33
Second quarter ended August 1, 1998....................... 36.88 26.67
Third quarter ended October 31, 1998...................... 34.63 14.00
Fourth quarter ended January 30, 1999..................... 32.50 22.00
FISCAL YEAR 1999
First quarter ended May 1, 1999........................... $34.94 $21.63
Second quarter ended July 31, 1999........................ 28.38 23.06
Third quarter ended October 30, 1999...................... 25.13 19.50
Fourth quarter ended January 29, 2000..................... 31.00 21.94
</TABLE>

On April 24, 2000, there were approximately 1,000 holders of record and
approximately 6,700 beneficial holders of our common stock.

We have not paid cash dividends on our common stock and for the foreseeable
future we intend to retain all of our earnings for the future operation and
expansion of our business. Our credit agreement prohibits the payment of cash
dividends on our common stock. See Note 4 of Notes to Consolidated Financial
Statements.

10
<PAGE> 13

ITEM 6. SELECTED FINANCIAL DATA

The following selected statement of earnings and balance sheet information
for the fiscal years indicated has been derived from The Men's Wearhouse, Inc.
(the "Company") audited consolidated financial statements. The Selected
Financial Data should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Consolidated
Financial Statements and notes thereto. References herein to years are to the
Company's 52-week or 53-week fiscal year, which ends on the Saturday nearest
January 31 in the following calendar year. For example, references to "1999"
mean the fiscal year ended January 29, 2000. All fiscal years for which
financial information is included herein had 52 weeks, except 1995 which had 53
weeks.

Financial and operating data for all periods presented reflect the
retroactive effect of the February 1999 combination with Moores Retail Group
Inc. ("Moores") and the June 1999 combination with K&G Men's Center, Inc., both
accounted for as a pooling of interests (see Note 2 of Notes to Consolidated
Financial Statements). The pro forma 1999 statement of earnings data excludes
the non-recurring charges related to these combinations. The combination with
Moores did not affect the statement of earnings data for fiscal 1995 or 1996 as
Moores commenced operations on December 23, 1996 and operating results for the
40-day period in fiscal 1996 were not significant.

<TABLE>
<CAPTION>
PRO FORMA
1995 1996 1997 1998 1999 1999
-------- -------- -------- ---------- ---------- ----------
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT
PER SHARE AND PER SQUARE FOOT DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net sales..................................... $466,370 $571,651 $875,319 $1,037,831 $1,186,748 $1,186,748
Gross margin.................................. 170,786 207,209 315,169 377,834 438,966 438,966
Operating income.............................. 35,706 45,015 74,333 95,045 100,931 115,638
Earnings before extraordinary item............ 19,694 25,727 37,334 50,142 55,957 67,188
Earnings per share of common stock before
extraordinary item(1):
Basic....................................... $ 0.59 $ 0.72 $ 0.95 $ 1.23 $ 1.34 $ 1.61
Diluted..................................... $ 0.58 $ 0.72 $ 0.93 $ 1.19 $ 1.32 $ 1.58
Weighted average shares outstanding(1)........ 33,207 35,517 39,194 40,738 41,848 41,848
Weighted average shares outstanding
plus dilutive potential common shares(1).... 33,725 38,309 42,275 42,964 42,452 42,452
OPERATING INFORMATION:
Percentage increase in comparable U.S. store
sales(2).................................... 7.5% 4.8% 9.2% 9.6% 7.7%
Percentage increase in comparable Canadian
store sales(2).............................. -- -- 4.5% 2.1% 0.3%
Average square footage -- all stores(3)....... 5,156 5,422 5,868 6,146 6,193
Average sales per square foot of selling
space(4).................................... $ 427 $ 416 $ 378 $ 384 $ 400
NUMBER OF STORES:
Open at beginning of the period............... 239 289 460 526 579
Opened........................................ 51 56 65 65 54
Acquired(5)................................... -- 115 6 4 --
Closed........................................ (1) -- (5) (16) (19)
-------- -------- -------- ---------- ----------
Open at end of the period..................... 289 460 526 579 614
CAPITAL EXPENDITURES............................ $ 23,423 $ 27,350 $ 31,825 $ 53,474 $ 47,506
</TABLE>

<TABLE>
<CAPTION>
FEBRUARY 3, FEBRUARY 1, JANUARY 31, JANUARY 30, JANUARY 29,
1996 1997 1998 1999 2000
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET INFORMATION:
Working capital.............................. $ 96,611 $181,133 $234,376 $230,624 $280,251
Total assets................................. 221,308 414,979 500,371 535,076 611,195
Long-term debt(6)............................ 4,455 112,250 107,800 44,870 46,697
Shareholders' equity......................... 146,080 192,045 261,357 351,455 408,973
</TABLE>

- ---------------

(1) Adjusted to give effect to a 50% stock dividend effected on November 15,
1995 and a 50% stock dividend effected on June 19, 1998.
(2) Comparable store sales data is calculated by excluding the net sales of a
store for any month of one period if the store was not open throughout the
same month of the prior period.
(3) Average square footage -- all stores is calculated by dividing the total
square footage for all stores open at the end of the period by the number of
stores open at the end of such period.
(4) Average sales per square foot of selling space is calculated by dividing
total selling square footage for all stores open the entire year into total
sales for those stores.
(5) Stores acquired in fiscal 1996 include 98 Canadian stores acquired by Moores
upon the commencement of its operations on December 23, 1996.
(6) February 1, 1997 and January 31, 1998 balances include the 5 1/4%
Convertible Subordinated Notes Due 2003. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" for a discussion of the redemption of the Notes.

11
<PAGE> 14

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

The Company opened its first store in Houston, Texas in August 1973. The
Company combined with Moores Retail Group Inc. ("Moores") in February 1999 and
with K&G Men's Center, Inc. ("K&G") in June 1999, with both combinations
accounted for as a pooling of interests (see Note 2 of Notes to Consolidated
Financial Statements). At January 29, 2000, the Company operated 501 stores in
the United States and 113 stores in Canada. The Company opened 65 stores in
1997, 65 stores in 1998 and 54 stores in 1999; in addition, the Company acquired
six stores in May 1997 and four stores in February 1998. This growth has
resulted in significant increases in net sales and has also contributed to
increased net earnings for the Company. Expansion is generally continued within
a market as long as management believes it will provide profitable incremental
sales volume.

The Company currently intends to continue its expansion in new and existing
markets and plans to open approximately 35 new Men's Wearhouse stores and 10 new
K&G stores in 2000. The average cost (excluding telecommunications and
point-of-sale equipment and inventory) of opening a new store is expected to be
approximately $350,000 for a Men's Wearhouse store and approximately $325,000
for a K&G store in 2000.

In addition to increases in net sales resulting from new stores and
acquisitions, the Company has experienced comparable store sales increases in
each of the past five years, including a 7.7% increase for U.S. stores and a
0.3% increase for Canadian stores for 1999.

The Company has closed 40 stores in the three years ended January 29, 2000.
Generally, in determining whether to close a store, the Company considers the
store's historical and projected performance and the continued desirability of
the store's location. In determining store contribution, the Company considers
net sales, cost of sales and other direct store costs, but excludes buying
costs, corporate overhead, depreciation and amortization, financing costs and
advertising. Store performance is continually monitored and, occasionally, as
neighborhoods and shopping areas change, management may determine that it is in
the best interest of the Company to close or relocate a store. In 1997, the
Company closed five stores due to substandard performance and/or the proximity
of a newly opened or acquired store. In 1998, the Company closed three stores
due to substandard performance or the proximity of another store. The remaining
13 stores closed in 1998 and four of the stores closed in 1999 were stores
acquired in January 1997 that were closed as part of the Company's efforts to
integrate and develop its operations that target the more price sensitive
clothing customer. Of the remaining 15 stores closed in 1999, two were closed
due to substandard performance or lease expiration and 13 were closed to
eliminate duplicate store sites following the combinations with Moores and K&G.

The following table sets forth the Company's results of operations
expressed as a percentage of net sales for the periods indicated:

<TABLE>
<CAPTION>
FISCAL YEAR
---------------------
1997 1998 1999
----- ----- -----
<S> <C> <C> <C>
Net sales................................................... 100.0% 100.0% 100.0%
Cost of goods sold, including buying and occupancy costs.... 64.0 63.6 63.0
----- ----- -----
Gross margin................................................ 36.0 36.4 37.0
Selling, general and administrative expenses................ 27.3 27.2 27.2
Combination expenses........................................ 0.2 -- 1.3
----- ----- -----
Operating income............................................ 8.5 9.2 8.5
Interest expense............................................ 1.0 0.8 0.2
----- ----- -----
Earnings before income taxes................................ 7.5 8.4 8.3
Income taxes................................................ 3.2 3.6 3.6
----- ----- -----
Earnings before extraordinary item.......................... 4.3% 4.8% 4.7%
===== ===== =====
</TABLE>

12
<PAGE> 15

RESULTS OF OPERATIONS

1999 Compared with 1998

The following table presents a breakdown of 1998 and 1999 net sales of the
Company by stores open in each of these periods:

<TABLE>
<CAPTION>
NET SALES
------------------------------
STORES 1998 1999 INCREASE
- ------ -------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
54 stores opened in 1999................................ $ -- $ 49.5 $ 49.5
69 stores opened or acquired in 1998(1)................. 66.8 124.5 57.7
Stores opened before 1998............................... 971.0 1,012.7 41.7
-------- -------- ------
Total......................................... $1,037.8 $1,186.7 $148.9
======== ======== ======
</TABLE>

- ---------------

(1) Sales include $16.1 million and $18.2 million for 1998 and 1999,
respectively, attributable to the four stores acquired in February 1998.

The Company's net sales increased $148.9 million, or 14.3%, to $1,186.7
million for 1999 due primarily to sales resulting from the increased number of
stores and increased sales at existing stores. Comparable store sales (which are
calculated by excluding the net sales of a store for any month of one period if
the store was not open throughout the same month of the prior period) increased
7.7% in the US and 0.3% in Canada from 1998.

Gross margin increased $61.1 million, or 16.2%, to $439.0 million in 1999.
As a percentage of sales, gross margin increased from 36.4% in 1998 to 37.0% in
1999. This increase in gross margin resulted mainly from decreases in product
and occupancy costs as a percentage of sales, offset by the lower product
margins realized in the K&G stores as compared to the traditional Men's
Wearhouse stores.

Selling, general and administrative ("SG&A") expenses, as a percentage of
sales, were 27.2% in 1999, remaining unchanged from the prior year, while SG&A
expenditures increased by $40.5 million to $323.3 million. On an absolute dollar
basis, the principal components of SG&A expenses increased primarily due to the
Company's growth. Advertising expense decreased from 5.9% to 5.4% of net sales,
while store salaries increased from 10.6% to 10.8% of net sales and other SG&A
expenses increased from 10.7% to 11.0% of net sales.

As a result of the Moores and K&G combinations, the Company recorded
transaction costs of $7.7 million, duplicative stores closing costs of $6.1
million and litigation costs of $0.9 million. The transaction costs were
composed primarily of investment banking fees, professional fees and contract
termination payments, while the duplicative store closing costs consisted
primarily of lease termination payments and the write-off of fixed assets
associated with the closing of duplicate store sites in existing markets. The
litigation charge resulted from the settlement of a lawsuit filed by a former
K&G employee related to his employment relationship with K&G.

Interest expense, net of interest income, decreased from $8.0 million in
1998 to $2.6 million in 1999. Weighted average borrowings outstanding decreased
$42.8 million from the prior year to $61.0 million in 1999, and the weighted
average interest rate on outstanding indebtedness decreased from 9.7% to 6.8%.
The decrease in weighted average borrowings resulted primarily from the
redemption of the 5 1/4% Convertible Subordinated Notes in the third quarter of
1998. The decrease in the weighted average interest rate was due primarily to
the refinancing of debt concurrent with the Moores combination. Interest expense
was offset by interest income of $2.1 million in 1998 and $1.6 million in 1999,
which resulted from the investment of excess cash.

The Company's effective income tax rate for the year ended January 29, 2000
was 43.1% and 42.4% for the prior year. The effective tax rate was higher than
the statutory federal rate of 35% primarily due to the

13
<PAGE> 16

effect of state income taxes, the nondeductibility of a portion of meal and
entertainment expenses and, in 1999, nondeductible transaction costs.

These factors resulted in 1999 earnings before extraordinary item of $56.0
million or 4.7% of net sales, compared with 1998 earnings before extraordinary
item of $50.1 million or 4.8% of net sales. The Company's earnings before
extraordinary item, as reported and after the effect of non-recurring charges
related to the combinations with Moores and K&G, were as follows (in thousands,
except per share amounts):

<TABLE>
<CAPTION>
FISCAL YEAR
-----------------
1998 1999
------- -------
<S> <C> <C>
Earnings before extraordinary item, as reported............. $50,142 $55,957
Combination expenses:
Transaction costs, net of tax benefit of $633............. -- 7,074
Duplicative store closing costs, net of tax benefit of
$2,471................................................. -- 3,599
Litigation costs, net of tax benefit of $372.............. -- 558
------- -------
Earnings before extraordinary item and non-recurring
charges................................................... $50,142 $67,188
======= =======
Diluted earnings per share before extraordinary item, as
reported.................................................. $ 1.19 $ 1.32
======= =======
Diluted earnings per share before extraordinary item and
non-recurring charges..................................... $ 1.19 $ 1.58
======= =======
</TABLE>

The Company recorded an extraordinary charge of $2.9 million, net of a $1.4
million tax benefit, related to the write-off of deferred financing costs and
prepayment penalties for the refinancing of approximately US$57 million of
Moores indebtedness. The extraordinary charge of $0.7 million, net of a $0.5
million tax benefit, in the third quarter of 1998 resulted from the early
retirement of the Company's $57.5 million of 5 1/4% Convertible Subordinated
Notes.

1998 Compared with 1997

The following table presents a breakdown of 1997 and 1998 net sales of the
Company by stores open in each of these periods:

<TABLE>
<CAPTION>
NET SALES
----------------------------
STORES 1997 1998 INCREASE
- ------ ------ -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
69 stores opened or acquired in 1998(1)................... $ -- $ 66.8 $ 66.8
71 stores opened or acquired in 1997(2)................... 60.5 117.6 57.1
Stores opened before 1997................................. 814.8 853.4 38.6
------ -------- ------
Total........................................... $875.3 $1,037.8 $162.5
====== ======== ======
</TABLE>

- ---------------

(1) Sales include $16.1 million attributable to the four stores acquired in
February 1998.

(2) Sales include $10.6 million and $15.4 million for 1997 and 1998,
respectively, attributable to the six stores acquired in May 1997.

The Company's net sales increased $162.5 million, or 18.6%, to $1,037.8
million for 1998 due primarily to sales resulting from the increased number of
stores and increased sales at existing stores. Comparable store sales increased
9.6% in the US and 2.1% in Canada from 1997.

Gross margin increased $62.7 million, or 19.9%, to $377.8 million in 1998.
As a percentage of sales, gross margin increased from 36.0% in 1997 to 36.4% in
1998. This increase in gross margin predominantly related to a decrease in
product and occupancy costs as a percentage of sales for the traditional Men's
Wearhouse stores. This increase was partially offset by the lower product
margins realized in the K&G stores as compared to the traditional Men's
Wearhouse stores.

14
<PAGE> 17

SG&A expenses decreased, as a percentage of sales, from 27.3% in 1997 to
27.2% in 1998, while SG&A expenditures increased by $43.5 million to $282.8
million. On an absolute dollar basis, the principal components of SG&A expenses
increased primarily due to the Company's growth. The decrease in SG&A expenses
as a percentage of sales was related primarily to the impact of comparable sales
increases. Advertising expense decreased from 6.1% to 5.9% of net sales and
store salaries increased from 10.5% to 10.6% of net sales, while other SG&A
expenses decreased from 10.8% to 10.7% of net sales.

Interest expense, net of interest income, decreased from $8.5 million in
1997 to $8.0 million in 1998. Weighted average borrowings outstanding decreased
$16.5 million from the prior year to $103.8 million in 1998, while the weighted
average interest rates on outstanding indebtedness increased from 9.1% to 9.7%.
The change in weighted average borrowings resulted from the early retirement of
the $57.5 million of 5 1/4% Convertible Subordinated Notes in the third quarter
of 1998, of which $36.8 million was converted to common stock. The impact of the
decrease in weighted average borrowings was partially offset by higher interest
rate borrowings under the Company's revolving credit facility during the last
half of 1998. Interest expense was offset by interest income of $2.5 million in
1997 and $2.1 million in 1998, which resulted from the investment of excess
cash.

The Company's effective income tax rate for the year ended January 30, 1999
was 42.4% and 43.3% for the prior year. The effective tax rate was higher than
the statutory federal rate of 35% primarily due to the effect of state income
taxes, the nondeductibility of a portion of meal and entertainment expenses and,
in 1997, nondeductible transaction costs. This, combined with the factors
discussed above, resulted in 1998 earnings before extraordinary item of $50.1
million, or 4.8% of net sales, compared with 1997 earnings before extraordinary
item of $37.3 million, or 4.3% of net sales.

The extraordinary item of $0.7 million, net of a $0.5 million tax benefit,
related to the early retirement of the Company's 5 1/4% Subordinated Notes.

LIQUIDITY AND CAPITAL RESOURCES

In July 1997, the Company issued 1,500,000 shares of common stock for net
proceeds of $30.0 million. The Company used the proceeds from such offering to
fund its continued expansion and upgrade its information technology
infrastructure. The remaining cash was invested in short-term securities.

In August 1998, the Company gave notice to the holders of its outstanding
5 1/4% Convertible Subordinated Notes (the "Notes") that the Company would
redeem the Notes on September 14, 1998. As a result, $36.8 million principal
amount of the Notes was converted into 1.6 million shares of the Company's
common stock and $20.7 million principal amount was redeemed for an aggregate of
$21.5 million.

In February 1999, the Company amended and restated its revolving credit
agreement with a group of banks (the "Credit Agreement"). This agreement
provides for borrowings of up to $125 million through February 5, 2004. Advances
under the Credit Agreement bear interest at a rate per annum equal to, at the
Company's option, the agent's prime rate or the reserve adjusted LIBOR rate plus
an interest rate margin varying between .75% to 1.25%. The Credit Agreement
provides for fees applicable to unused commitments of .125% to .225%. As of
January 29, 2000, there was no indebtedness outstanding under the Credit
Agreement.

The Credit Agreement contains various restrictive and financial covenants,
including the requirement to maintain a minimum level of net worth and certain
financial ratios. The Credit Agreement also prohibits payment of cash dividends
on the common stock of the Company. The Company is in compliance with the
covenants in the Credit Agreement.

In February 1999, the Company also entered into two Canadian credit
facilities in conjunction with the combination with Moores. These facilities
include a revolving credit agreement which provides for borrowings up to Can$30
million (US$20 million) through February 5, 2004 and a term credit agreement
which provides for borrowings of Can$75 million (US$50 million) to be repaid in
quarterly installments of Can$0.9 million (US$0.6 million) beginning May 1,
1999; remaining unpaid principal is payable on February 5, 2004. Covenants and
interest rates are substantially similar to those contained in the Company's
Credit Agreement. Borrowings under these agreements were used to repay
approximately US$57 million in outstanding
15
<PAGE> 18

indebtedness of Moores with the remaining availability used to fund operating
and other requirements of Moores.

The Company's primary sources of working capital are cash flow from
operations and borrowings under the Credit Agreement. The Company had working
capital of $234.4 million, $230.6 million and $280.3 million at the end of 1997,
1998 and 1999, respectively. Historically, the Company's working capital has
been at its lowest level in January and February, and has increased through
November as inventory buildup is financed with both short-term and long-term
borrowings in preparation for the fourth quarter selling season.

Net cash provided by operating activities amounted to $33.8 million, $35.6
million and $101.3 million in 1997, 1998 and 1999, respectively. These amounts
primarily represent net earnings plus depreciation and amortization and
increases in current liabilities, offset by increases in inventories. The
increase in inventories of $48.4 million in 1997, $46.4 million in 1998 and
$15.7 million in 1999 resulted from the addition of inventory for new and
acquired stores and stores expected to be opened shortly after the year-end,
backstocking and the purchase of fabric used in the direct sourcing of
inventory.

Capital expenditures totaled $31.8 million, $53.5 million and $47.5 million
in 1997, 1998 and 1999, respectively. The following table details capital
expenditures (in millions):

<TABLE>
<CAPTION>
1997 1998 1999
----- ----- -----
<S> <C> <C> <C>
New store construction...................................... $11.0 $22.7 $17.2
Relocation and remodeling of existing stores................ 6.7 7.7 13.5
Information technology...................................... 6.0 13.6 9.3
Distribution facilities..................................... 4.8 3.6 4.0
Other....................................................... 3.3 5.9 3.5
----- ----- -----
Total............................................. $31.8 $53.5 $47.5
===== ===== =====
</TABLE>

Property additions relating to new stores include stores in various stages
of completion at the end of the fiscal year (three stores at the end of 1997,
two stores at the end of 1998 and one store at the end of 1999). New store
construction cost is net of $2.8 million in 1997 related to proceeds from sale
and leaseback transactions and includes $2.2 million in 1998 for land costs that
the Company recovered from a sale and leaseback transaction in 1999. New store
construction costs were higher in 1998 and 1999 due in part to the Company's
entering higher cost markets in the northeastern U.S.

The Company had net purchases of short-term investments of $1.9 million in
1997 and net maturities of $11.7 million in 1998 and $6.0 million in 1999. The
Company acquired certain other assets in connection with various transactions
including, but not limited to, trademarks, tradenames, customer lists,
non-compete agreements and license agreements, for $3.9 million in 1997, $6.7
million in 1998 and $0.3 million in 1999. In addition, in 1999 the Company
purchased the minority interests in certain K&G stores for $2.1 million.

Net cash provided by financing activities was $28.1 million in 1997 and
includes the net proceeds of the public offering of common stock of $31.5
million in 1997. Net cash used in financing activities was $19.7 million in 1998
and $10.5 million in 1999 due mainly to the net payments of long-term debt.

The Company's primary cash requirements are to finance working capital
increases as well as to fund capital expenditure requirements which are
anticipated to be approximately $72 million for 2000. This amount includes the
anticipated costs of opening approximately 35 new Men's Wearhouse stores and 10
new K&G stores in 2000 at an expected average cost per store of approximately
$350,000 for the Men's Wearhouse stores and approximately $325,000 for the K&G
stores (excluding telecommunications and point-of-sale equipment and inventory).
It also includes approximately $14 million for the first phase of construction
of a new distribution center. The balance of the capital expenditures for 2000
will be used for telecommunications, point-of-sale and other computer equipment
and store remodeling and expansion. The Company anticipates that each of the
approximately 35 new Men's Wearhouse stores and each of the approximately 10 new
K&G stores will require, on average, an initial inventory costing approximately
$550,000 and $880,000, respectively (subject to the same seasonal patterns
affecting inventory at all stores), which will be funded by the Company's
revolving credit facility, trade credit and cash from operations. The actual
amount of future

16
<PAGE> 19

capital expenditures and inventory purchases will depend in part on the number
of new stores opened and the terms on which new stores are leased. Additionally,
the continuing consolidation of the men's tailored clothing industry and recent
financial difficulties of significant menswear retailers may present the Company
with opportunities to acquire retail chains significantly larger than the
Company's past acquisitions. Any such acquisitions may be undertaken as an
alternative to opening new stores. The Company may use cash on hand, together
with its cash flow from operations, borrowings under the Credit Agreement and
issuances of equity securities, to take advantage of significant acquisition
opportunities.

The Company anticipates that its existing cash and cash flow from
operations, supplemented by borrowings under its various credit agreements, will
be sufficient to fund planned store openings, other capital expenditures and
operating cash requirements for at least the next 12 months.

In connection with the Company's direct sourcing program, the Company may
enter into purchase commitments that are denominated in a foreign currency
(primarily the Italian lira). The Company generally enters into forward exchange
contracts to reduce the risk of currency fluctuations related to such
commitments. The majority of the forward exchange contracts are with two
financial institutions. Therefore, the Company is exposed to credit risk in the
event of nonperformance by these parties. However, due to the creditworthiness
of these major financial institutions, full performance is anticipated. The
Company may also be exposed to market risk as a result of changes in foreign
exchange rates. This market risk should be substantially offset by changes in
the valuation of the underlying transactions.

IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

The Company has adopted Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income." For the three years ended January 29,
2000, the accompanying consolidated financial statements are presented in
accordance with this statement.

The Company has adopted Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information," and
reports its operations in one business segment -- retail sales of menswear.

In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"), which requires that an entity recognize all derivative instruments as
either assets or liabilities on its balance sheet at their fair value. Gains and
losses resulting from changes in the fair value of derivatives are recorded each
period in current earnings or comprehensive earnings, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. Gains and losses on derivative instruments reported in
comprehensive earnings will be reclassified as earnings in the period in which
earnings are affected by the hedged item. In June 1999, the Financial Accounting
Standards Board issued Statement No. 137, "Accounting for Derivatives
Instruments and Hedging Activities -- Deferral of the Effective Date of FASB
Statement No. 133", which defers the effective date of SFAS 133 until the
Company's year ending February 2, 2002. The Company is currently evaluating the
impact, if any, of SFAS 133 on its financial position and results of operations.

YEAR 2000 RISKS

INFLATION

The impact of inflation on the Company has been minimal.

FORWARD-LOOKING STATEMENTS

Certain statements made herein and in other public filings and releases by
the Company contain "forward-looking" information (as defined in the Private
Securities Litigation Reform Act of 1995) that
17
<PAGE> 20

involve risk and uncertainty. These forward-looking statements may include, but
are not limited to, future capital expenditures, acquisitions (including the
amount and nature thereof), future sales, earnings, margins, costs, number and
costs of store openings, demand for men's clothing, market trends in the retail
men's clothing business, currency fluctuations, inflation and various economic
and business trends. Forward-looking statements may be made by management orally
or in writing, including, but not limited to, this Management's Discussion and
Analysis of Financial Condition and Results of Operations section and other
sections of the Company's filings with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 and the Securities Act of 1933.

Actual results and trends in the future may differ materially depending on
a variety of factors including, but not limited to, domestic and international
economic activity and inflation, the Company's successful execution of internal
operating plans and new store and new market expansion plans, performance issues
with key suppliers, severe weather, foreign currency fluctuations, government
export and import policies and legal proceedings. Future results will also be
dependent upon the ability of the Company to continue to identify and complete
successful expansions and penetrations into existing and new markets, and its
ability to integrate such expansions with the Company's existing operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to exposure from fluctuations in U.S. dollar/Italian
lira exchange rates. As further described in Note 8 of Notes to Consolidated
Financial Statements, the Company utilizes foreign currency forward exchange
contracts to limit exposure to changes in currency exchange rates. At January
29, 2000, the Company had 25 contracts maturing in monthly increments to
purchase an aggregate notional amount of $24.3 million in foreign currency.
These forward contracts do not extend beyond June 29, 2001. At January 30, 1999,
the Company had 15 contracts maturing in monthly increments to purchase an
aggregate notional amount of $9.6 million in foreign currency. Unrealized pretax
losses on these forward contracts totaled approximately $1.8 million at January
29, 2000 and approximately $0.1 million at January 30, 1999. A hypothetical 10%
change in applicable January 29, 2000 forward rates would increase or decrease
this pretax loss by approximately $2.2 million related to these positions.
However, it should be noted that any change in the value of these contracts,
whether real or hypothetical, would be significantly offset by an inverse change
in the value of the underlying hedged item.

Moores conducts its business in Canadian dollars. The exchange rate between
Canadian dollars and U.S. dollars has fluctuated over the last ten years. If the
value of the Canadian dollar against the U.S. dollar weakens, then the revenues
and earnings of the Company's Canadian operations will be reduced when they are
translated to U.S. dollars. Also, the value of the Company's Canadian net assets
in U.S. dollars may decline.

The Company is also subject to market risk due to its long-term floating
rate term loan of $49.3 million at January 29, 2000 (see Note 4 of Notes to
Consolidated Financial Statements). An increase in market interest rates would
increase the Company's interest expense and its cash requirements for interest
payments. For example, an average increase of 0.5% in the variable interest rate
would increase the Company's interest expense and payments by approximately $0.2
million.

18
<PAGE> 21

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
The Men's Wearhouse, Inc.
Houston, Texas

We have audited the consolidated balance sheets of The Men's Wearhouse,
Inc. and its subsidiaries (the "Company") as of January 30, 1999 and January 29,
2000 and the related consolidated statements of earnings, shareholders' equity,
and cash flows for each of the three years in the period ended January 29, 2000.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial statements based on
our audits. The consolidated financial statements give retroactive effect to the
mergers of the Company and Moores Retail Group Inc. ("Moores") and K&G Men's
Center, Inc. ("K&G") in 1999, each of which has been accounted for as a pooling
of interests as described in Note 2 to the consolidated financial statements. We
did not audit the balance sheet of Moores as of January 31, 1999, or the related
statements of earnings, stockholders' equity, and cash flows of Moores for the
years ended January 31, 1998 and 1999, which statements reflect total assets of
$74,263,000 as of January 31, 1999, and total revenues of $131,414,000 and
$130,675,000 for the years ended January 31, 1998 and 1999, respectively. Those
statements were audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to the amounts included for Moores for
fiscal 1997 and 1998, is based solely on the report of such other auditors. We
did not audit the balance sheet of K&G as of January 30, 1999, or the related
statements of earnings, stockholders' equity, and cash flows of K&G for the
years ended February 1, 1998 and January 31, 1999, which statements reflect
total assets of $57,230,000 as of January 31, 1999, and total revenues of
$112,795,000 and $139,234,000 for the years ended February 1, 1998 and January
31, 1999, respectively. Those statements were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it relates to the
amounts included for K&G for fiscal 1997 and 1998, is based solely on the report
of such other auditors.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits and the reports of
the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of the Company and its subsidiaries as
of January 30, 1999 and January 29, 2000, and the results of their operations
and their cash flows for each of the three years in the period ended January 29,
2000 in conformity with accounting principles generally accepted in the United
States of America.

DELOITTE & TOUCHE LLP

Houston, Texas
February 28, 2000

19
<PAGE> 22

INDEPENDENT AUDITORS' REPORT

To the Shareholders of
Moores Retail Group Inc.

We have audited the consolidated balance sheets of Moores Retail Group Inc.
as at January 31, 1999 and 1998, and the consolidated statements of income and
comprehensive income, stockholders' equity and cash flows for the years then
ended (not presented separately herein). These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in Canada. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as at January 31, 1999 and 1998,
and the results of its operations and the changes in its cash flows for the
years then ended in accordance with accounting principles generally accepted in
the United States.

ERNST & YOUNG LLP
Chartered Accountants

Montreal, Canada,
March 5, 1999

20
<PAGE> 23

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of
K&G Men's Center, Inc.:

We have audited the accompanying balance sheet of K&G Men's Center, Inc. (a
Georgia corporation) and subsidiaries as of January 31, 1999 and the related
consolidated statements of operations, shareholders' equity, and cash flows for
each of the two years in the period ended January 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of K&G Men's Center, Inc. and
subsidiaries as of January 31, 1999 and the results of their operations and
their cash flows for each of the two years in the period ended January 31, 1999
in conformity with accounting principles generally accepted in the United
States.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
March 17, 1999

21
<PAGE> 24

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARES) (NOTE 1)

<TABLE>
<CAPTION>
JANUARY 30, JANUARY 29,
1999 2000
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash...................................................... $ 31,012 $ 77,798
Inventories............................................... 302,717 319,940
Other current assets...................................... 25,903 25,727
-------- ---------
Total current assets.............................. 359,632 423,465
-------- ---------
PROPERTY AND EQUIPMENT, AT COST
Land...................................................... 4,598 5,253
Buildings................................................. 12,069 12,854
Leasehold improvements.................................... 84,911 99,843
Furniture, fixtures and equipment......................... 110,492 131,973
-------- ---------
212,070 249,923
Less accumulated depreciation and amortization............ (88,299) (111,497)
-------- ---------
Net property and equipment............................. 123,771 138,426
-------- ---------
OTHER ASSETS, Net........................................... 51,673 49,304
-------- ---------
TOTAL............................................. $535,076 $ 611,195
======== =========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable.......................................... $ 64,878 $ 76,420
Accrued expenses.......................................... 43,748 53,301
Short-term borrowings..................................... 7,568 --
Current portion of long-term debt......................... 3,644 2,594
Income taxes payable...................................... 9,170 10,899
-------- ---------
Total current liabilities.............................. 129,008 143,214
LONG-TERM DEBT.............................................. 44,870 46,697
OTHER LIABILITIES........................................... 9,743 12,311
-------- ---------
Total liabilities...................................... 183,621 202,222
-------- ---------
COMMITMENTS AND CONTINGENCIES (Note 8)
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 2,000,000 shares
authorized, 1 share issued............................. -- --
Common stock, $.01 par value, 100,000,000 shares
authorized, 41,839,829 and 41,943,143 shares issued or
issuable............................................... 393 409
Capital in excess of par.................................. 178,144 182,662
Retained earnings......................................... 174,146 227,191
Accumulated comprehensive (loss) income................... (233) 59
-------- ---------
Total.................................................. 352,450 410,321
Treasury stock, 71,384 and 55,373 shares at cost.......... (995) (1,348)
-------- ---------
Total shareholders' equity............................. 351,455 408,973
-------- ---------
TOTAL............................................. $535,076 $ 611,195
======== =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

22
<PAGE> 25

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED
JANUARY 31, 1998, JANUARY 30, 1999 AND JANUARY 29, 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (NOTE 1)

<TABLE>
<CAPTION>
FISCAL YEAR
----------------------------------
1997 1998 1999
-------- ---------- ----------
<S> <C> <C> <C>
Net sales................................................. $875,319 $1,037,831 $1,186,748
Cost of goods sold, including buying and occupancy
costs................................................... 560,150 659,997 747,782
-------- ---------- ----------
Gross margin.............................................. 315,169 377,834 438,966
Selling, general and administrative expenses.............. 239,315 282,789 323,328
Combination expenses:
Transaction costs....................................... 1,521 -- 7,707
Duplicate facility costs................................ -- -- 6,070
Litigation costs........................................ -- -- 930
-------- ---------- ----------
Operating income.......................................... 74,333 95,045 100,931
Interest expense (net of interest income of $2,517, $2,060
and $1,568, respectively)............................... 8,464 7,993 2,580
-------- ---------- ----------
Earnings before income taxes.............................. 65,869 87,052 98,351
Provision for income taxes................................ 28,535 36,910 42,394
-------- ---------- ----------
Earnings before extraordinary item........................ 37,334 50,142 55,957
Extraordinary item, net of tax............................ -- 701 2,912
-------- ---------- ----------
Net earnings.............................................. $ 37,334 $ 49,441 $ 53,045
======== ========== ==========
Net earnings per basic share:
Earnings before extraordinary item...................... $ 0.95 $ 1.23 $ 1.34
Extraordinary item, net of tax.......................... -- (0.02) (0.07)
-------- ---------- ----------
$ 0.95 $ 1.21 $ 1.27
======== ========== ==========
Net earnings per diluted share:
Earnings before extraordinary item...................... $ 0.93 $ 1.19 $ 1.32
Extraordinary item, net of tax.......................... -- (0.02) (0.07)
-------- ---------- ----------
$ 0.93 $ 1.17 $ 1.25
======== ========== ==========
Weighted average shares outstanding:
Basic................................................... 39,194 40,738 41,848
======== ========== ==========
Diluted................................................. 42,275 42,964 42,452
======== ========== ==========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

23
<PAGE> 26

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED JANUARY 31, 1998,
JANUARY 30, 1999 AND JANUARY 29, 2000
(IN THOUSANDS, EXCEPT SHARES) (NOTE 1)

<TABLE>
<CAPTION>
CAPITAL ACCUMULATED
COMMON IN EXCESS RETAINED COMPREHENSIVE TREASURY
STOCK OF PAR EARNINGS (LOSS) INCOME STOCK TOTAL
------ --------- -------- ------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE -- February 1, 1997................... $239 $ 104,990 $87,371 $ 24 $ (579) $192,045
Comprehensive income:
Net earnings.............................. -- -- 37,334 -- -- 37,334
Translation adjustment.................... -- -- -- (212) -- (212)
--------
Total comprehensive income............ 229,167
Common stock issued in public offering --
1,500,000 shares.......................... 10 29,951 -- -- -- 29,961
Common stock issued upon exercise of stock
options -- 268,268 shares................. 1 1,563 -- -- -- 1,564
Common stock withheld to satisfy tax
withholding liabilities of
optionees -- 84,921 shares................ -- (1,949) -- -- -- (1,949)
Tax benefit recognized upon exercise of
stock options............................. -- 1,614 -- -- -- 1,614
Treasury stock issued to profit sharing
plan -- 56,339 shares..................... -- 762 -- -- 238 1,000
---- --------- -------- ----- ------- --------
BALANCE -- January 31, 1998................... 250 136,931 124,705 (188) (341) 261,357
Comprehensive income:
Net earnings.............................. -- -- 49,441 -- -- 49,441
Translation adjustment.................... -- -- -- (45) -- (45)
--------
Total comprehensive income............ 310,753
Stock dividend --50%........................ 126 (126) -- -- -- --
Common stock issued upon conversion of
subordinated notes --1,615,501 shares..... 16 35,909 -- -- -- 35,925
Common stock issued to stock discount
plan -- 21,588 shares..................... -- 428 -- -- -- 428
Common stock issued in public offering --
37,953 shares............................. -- 1,564 -- -- -- 1,564
Common stock issued upon exercise of stock
options -- 135,590 shares................. 1 1,657 -- -- -- 1,658
Common stock withheld to satisfy tax
withholding liabilities of
optionees -- 26,050 shares................ -- (905) -- -- -- (905)
Tax benefit recognized upon exercise of
stock options............................. -- 1,458 -- -- -- 1,458
Treasury stock purchased -- 55,000 shares... -- -- -- -- (926) (926)
Treasury stock issued to profit sharing
plan -- 64,218 shares..................... -- 1,228 -- -- 272 1,500
---- --------- -------- ----- ------- --------
BALANCE -- January 30, 1999................... 393 178,144 174,146 (233) (995) 351,455
Comprehensive income:
Net earnings.............................. -- -- 53,045 -- -- 53,045
Translation adjustment.................... -- -- -- 292 -- 292
--------
Total comprehensive income............ 404,792
Common stock issued to stock discount
plan -- 47,481 shares..................... -- 1,301 -- -- -- 1,301
Common stock issued upon exercise of stock
options -- 67,201 shares.................. 1 910 -- -- -- 911
Common stock withheld to satisfy tax
withholding liabilities of
optionees -- 11,368 shares................ -- (413) -- -- -- (413)
Conversion of stock options upon combination
with Moores............................... -- 1,237 -- -- -- 1,237
Conversion of exchangeable shares to common
stock -- 1,515,629 shares................. 15 (15) -- -- -- --
Tax benefit recognized upon exercise of
stock options............................. -- 418 -- -- -- 418
Treasury stock purchased -- 50,000 shares... -- -- -- -- (1,273) (1,273)
Treasury stock issued to profit sharing
plan -- 66,011 shares..................... -- 1,080 -- -- 920 2,000
---- --------- -------- ----- ------- --------
BALANCE -- January 29, 2000................... $409 $ 182,662 $227,191 $ 59 $(1,348) $408,973
==== ========= ======== ===== ======= ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

24
<PAGE> 27

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED
JANUARY 31, 1998, JANUARY 30, 1999 AND JANUARY 29, 2000
(IN THOUSANDS) (NOTE 1)

<TABLE>
<CAPTION>
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings.............................................. $ 37,334 $ 49,441 $ 53,045
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Extraordinary item, net of tax.......................... -- 701 2,912
Depreciation and amortization........................... 21,884 26,761 30,082
Deferred tax provision (benefit)........................ (3,810) 2,194 (256)
Stock option compensation expense....................... 211 137 889
Duplicate facility costs................................ -- -- 4,004
Increase in inventories................................. (48,431) (46,428) (15,737)
Increase in other current assets........................ (1,982) (1,285) (1,227)
Increase in accounts payable and accrued expenses....... 23,377 4,705 23,858
Increase (decrease) in income taxes payable............. 5,041 (1,343) 3,271
Increase in other liabilities........................... 170 684 444
-------- -------- --------
Net cash provided by operating activities........... 33,794 35,567 101,285
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures, net................................. (31,825) (53,474) (47,506)
Investment in trademarks, tradenames and other
intangibles............................................. (3,931) (6,718) (321)
Maturities of short-term investments...................... 15,774 29,698 8,525
Purchases of short-term investments....................... (17,658) (18,045) (2,500)
Purchases of minority interest............................ -- -- (2,135)
-------- -------- --------
Net cash used in investing activities............... (37,640) (48,539) (43,937)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock.................... 31,525 3,649 2,212
Proceeds from (repayment of) revolving credit facility.... (4,421) 4,443 --
Long-term borrowings...................................... 3,773 42,500 49,688
Principal payments on long-term debt...................... (423) (45,809) (60,113)
Repayment of convertible debt............................. -- (21,473) --
Deferred financing and merger costs....................... (270) (1,010) (625)
Distributions to minority interest........................ (114) (176) --
Tax payments related to options exercised................. (1,949) (905) (413)
Purchase of treasury stock................................ -- (926) (1,273)
-------- -------- --------
Net cash provided by (used in) financing
activities.......................................... 28,121 (19,707) (10,524)
-------- -------- --------
Effect of exchange rate changes on cash..................... (2,109) 123 (38)
-------- -------- --------
INCREASE (DECREASE) IN CASH................................. 22,166 (32,556) 46,786
CASH:
Beginning of period....................................... 41,402 63,568 31,012
-------- -------- --------
End of period............................................. $ 63,568 $ 31,012 $ 77,798
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest................................................ $ 8,644 $ 10,367 $ 1,445
======== ======== ========
Income taxes............................................ $ 27,526 $ 36,428 $ 39,417
======== ======== ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
Additional capital in excess of par, net of unamortized
deferred financing costs, resulting from conversion of
long-term debt into common stock........................ $ -- $ 35,909 $ --
======== ======== ========
Additional capital in excess of par resulting from tax
benefit recognized upon exercise of stock options....... $ 1,614 $ 1,458 $ 418
======== ======== ========
Additional capital in excess of par resulting from
conversion of stock options upon combination with
Moores.................................................. $ -- $ -- $ 1,237
======== ======== ========
Treasury stock contributed to employee stock ownership
plan.................................................... $ 1,000 $ 1,500 $ 2,000
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

25
<PAGE> 28

THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business -- The Men's Wearhouse, Inc. and its subsidiaries
(the "Company") is a specialty retailer of menswear. The Company operates
throughout the United States primarily under the brand names of Men's Wearhouse
and K&G and in Canada under the brand name of Moores. The Company follows the
standard fiscal year of the retail industry, which is a 52-week or 53-week
period ending on the Saturday closest to January 31. Fiscal year 1997 ended on
January 31, 1998, fiscal year 1998 ended on January 30, 1999 and fiscal year
1999 ended on January 29, 2000. Each of these fiscal years included 52 weeks.

Principles of Consolidation -- The consolidated financial statements
include the accounts of The Men's Wearhouse, Inc. and its wholly owned
subsidiaries. Intercompany accounts and transactions have been eliminated in the
Company's consolidated financial statements. Financial data for all periods
presented reflect the retroactive effect of the February 1999 combination with
Moores Retail Group Inc. ("Moores") and the June 1999 combination with K&G Men's
Center, Inc. ("K&G"), both accounted for as a pooling of interests (see Note 2).

Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Cash -- For purposes of the statement of cash flows, the Company considers
all highly liquid investments with maturities of three months or less to be cash
equivalents.

Inventories -- Inventories are valued at the lower of cost or market, with
cost determined primarily on the retail first-in, first-out method.

Property and Equipment -- Property and equipment are stated at cost. Normal
repairs and maintenance costs are charged to earnings as incurred and additions
and major improvements are capitalized. The cost of assets retired or otherwise
disposed of and the related allowances for depreciation are eliminated from the
accounts in the year of disposal and the resulting gain or loss is credited or
charged to earnings.

Buildings are depreciated using the straight-line method over their
estimated useful lives of 20 to 25 years. Depreciation of leasehold improvements
is computed on the straight-line method over the term of the lease or useful
life of the assets, whichever is shorter. Furniture, fixtures and equipment are
depreciated using primarily the straight-line method over their estimated useful
lives of three to ten years.

Other Assets -- Other assets consist primarily of goodwill and the cost of
trademarks, tradenames and other intangibles acquired. These assets are being
amortized over estimated useful lives of 15 to 30 years using the straight-line
method.

Impairment of Long-Lived Assets -- The Company evaluates the carrying value
of long-lived assets, such as property and equipment and goodwill and other
intangibles, for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. If it is
determined, based on estimated undiscounted future cash flows, that an
impairment has occurred, a loss is recognized currently for the impairment.

Fair Value of Financial Instruments -- As of January 30, 1999 and January
29, 2000, management estimates that the fair value of cash and cash equivalents,
receivables, accounts payable, accrued expenses and long-term debt are carried
at amounts that reasonably approximate their fair value.

26
<PAGE> 29
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

New Store Costs -- Promotion and other costs associated with the opening of
new stores are expensed as incurred.

Advertising -- Advertising costs are expensed as incurred. Advertising
expenses were $53.3 million, $60.8 million and $64.5 million in fiscal 1997,
1998 and 1999, respectively.

Revenue Recognition -- The Company records revenue at the time of sale and
delivery.

Stock Based Compensation -- As permitted by Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
No. 123"), the Company accounts for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." The disclosures required by SFAS No.
123 are included in Note 7.

Stock Dividend -- In June 1998, the Company effected a three-for-two common
stock split by paying a 50% stock dividend to stockholders of record as of June
12, 1998. All share and per share information included in the accompanying
consolidated financial statements and related notes have been restated to
reflect the stock dividend.

Derivative Financial Instruments -- The Company enters into foreign
currency forward exchange contracts to hedge against foreign exchange risks
associated with certain firmly committed, and certain other probable, but not
firmly committed, inventory purchase transactions that are denominated in a
foreign currency (primarily the Italian lira). Gains and losses associated with
these contracts are accounted for as part of the underlying inventory purchase
transactions.

Foreign Currency Translation -- Assets and liabilities of foreign
subsidiaries are translated into U.S. dollars at the exchange rates in effect at
each balance sheet date. Shareholders' equity is translated at applicable
historical exchange rates. Income, expense and cash flow items are translated at
average exchange rates during the year. Resulting translation adjustments are
reported as a separate component of shareholders' equity.

Comprehensive Income -- The Company has adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income", which
establishes standards for the reporting of comprehensive income in a company's
financial statements. Comprehensive income includes all changes in equity during
the period presented that result from transactions and other economic events
other than transactions with shareholders.

Segment Information -- The Company has adopted Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and
Related Information," which requires disclosure of certain information about
operating segments. The Company considers its business as one operating
segment -- retail sales of menswear -- based on the similar economic
characteristics of its three brands. Revenues of Canadian retail operations were
$131.4 million, $130.7 million and $133.2 million for fiscal 1997, 1998 and
1999, respectively. Long-lived assets of the Company's Canadian operations were
$32.4 million and $32.7 million as of the end of fiscal 1998 and 1999,
respectively.

27
<PAGE> 30
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

New Accounting Pronouncements -- In June 1998, the Financial Accounting
Standards Board issued Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"), which requires that an entity recognize
all derivative instruments as either assets or liabilities on its balance sheet
at their fair value. Gains and losses resulting from changes in the fair value
of derivatives are recorded each period in current earnings or comprehensive
earnings, depending on whether a derivative is designated as part of a hedge
transaction, and if it is, the type of hedge transaction. Gains and losses on
derivative instruments reported in comprehensive earnings will be reclassified
as earnings in the period in which earnings are affected by the hedged item. In
June 1999, the Financial Accounting Standards Board issued Statement No. 137,
"Accounting for Derivatives Instruments and Hedging Activities -- Deferral of
the Effective Date of FASB Statement No. 133", which defers the effective date
of SFAS 133 until the Company's year ending February 2, 2002. The Company is
currently evaluating the impact, if any, of SFAS 133 on its financial position
and results of operations.

2. BUSINESS COMBINATIONS AND ACQUISITIONS

On February 10, 1999, the Company combined with Moores, a privately owned
Canadian corporation, in exchange for securities ("Exchangeable Shares")
exchangeable for 2.5 million shares of the Company's common stock. The
Exchangeable Shares have substantially identical economic and legal rights as,
and will ultimately be exchanged on a one-on-one basis for, shares of the
Company's common stock. The Exchangeable Shares were issued to the shareholders
and option holders of Moores in exchange for all of the outstanding shares of
capital stock and options of Moores because of Canadian tax law considerations.
All Exchangeable Shares must be converted into common stock of the Company
within five years of the combination. As of January 29, 2000, there were 1.0
million Exchangeable Shares that have not yet been converted but are reflected
as common stock outstanding for financial reporting purposes by the Company. The
combination with Moores has been accounted for as a pooling of interests.

On June 1, 1999, the Company combined with K&G, a superstore retailer of
men's apparel and accessories operating 34 stores in 16 states, with K&G
becoming a wholly owned subsidiary of the Company. The Company issued
approximately 4.4 million shares of its common stock to K&G shareholders based
on an exchange ratio of 0.43 of a share of the Company's common stock for each
share of K&G common stock outstanding. In addition, the Company converted the
outstanding options to purchase K&G common stock, whether vested or unvested,
into options to purchase 228,000 shares of the Company's common stock based on
the exchange ratio of 0.43. The combination has been accounted for as a pooling
of interests.

In conjunction with the Moores and K&G combinations, the Company recorded
transaction costs of $7.7 million, duplicative stores closing costs of $6.1
million and litigation costs of $0.9 million. The transaction costs were
composed primarily of investment banking fees, professional fees and contract
termination payments, while the duplicative store closing costs consisted
primarily of lease termination payments and the write-off of fixed assets
associated with the closing of duplicate store sites in existing markets. The
litigation charge resulted from the settlement of a lawsuit filed by a former
K&G employee related to his employment relationship with K&G. In addition, the
Company recorded an extraordinary charge of $2.9 million, net of a $1.4 million
tax benefit, related to the write-off of deferred financing costs and prepayment
penalties for the refinancing of approximately US$57 million of Moores'
indebtedness.

28
<PAGE> 31
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following is a reconciliation of the amounts of revenues and net
earnings previously reported by the Company to the combined amounts of revenues
and earnings after giving effect to the combinations with Moores on February 10,
1999 and K&G on June 1, 1999 (in thousands):

<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED
--------------------- MAY 1,
1997 1998 1999
-------- ---------- ------------
<S> <C> <C> <C>
Revenues
The Men's Wearhouse (as previously reported)... $631,110 $ 767,922 $222,183
Moores......................................... 131,414 130,675 --
K&G............................................ 112,795 139,234 36,681
-------- ---------- --------
Combined............................... $875,319 $1,037,831 $258,864
======== ========== ========
Net earnings (loss)
The Men's Wearhouse (as previously reported)... $ 28,883 $ 40,219 $ (500)
Moores......................................... 2,068 2,993 --
K&G............................................ 6,383 6,229 1,338
-------- ---------- --------
Combined............................... $ 37,334 $ 49,441 $ 838
======== ========== ========
</TABLE>

The separate results of Moores' operations during the 10 day period from
February 1, 1999 through February 10, 1999 were not material to the Company's
operations as a whole, and therefore, are not disclosed separately in the table
above.

The separate results of operations for K&G in fiscal 1999 for the period
prior to its combination with the Company are reflected in the table above for
the three months ended May 1, 1999. The fiscal 1999 extraordinary item of
$2,912, net of tax, reported by the Company was not affected by the combination
with K&G.

In May 1997, the Company acquired six men's tailored clothing stores,
including inventory, operating in Texas and Louisiana. In February 1998, the
Company acquired four stores, including inventory, operating in Detroit,
Michigan. Also acquired were trademarks, trade names and other intangible assets
associated with these businesses.

Transaction costs in fiscal 1997 consist of professional fees, regulatory
fees and other costs related to a withdrawn financing initiative by Moores.

29
<PAGE> 32
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. EARNINGS PER SHARE

Basic EPS is computed using the weighted average number of common shares
outstanding during the period and net earnings. Diluted EPS gives effect to the
potential dilution which would have occurred if additional shares were issued
for stock options exercised under the treasury stock method and, in fiscal 1997
and 1998, conversion of convertible debt, with net earnings adjusted for
interest expense associated with the convertible debt. The following table
reconciles the earnings and shares used in the basic and diluted EPS
computations (in thousands, except per share amounts):

<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Earnings before extraordinary item...................... $37,334 $50,142 $55,957
Extraordinary item, net of tax.......................... -- 701 2,912
------- ------- -------
Net earnings............................................ $37,334 $49,441 $53,045
======= ======= =======
Weighted average number of common shares outstanding.... 39,194 40,738 41,848
======= ======= =======
Basic EPS
Earnings before extraordinary item.................... $ 0.95 $ 1.23 $ 1.34
Extraordinary item, net of tax........................ -- (0.02) (0.07)
------- ------- -------
Net earnings.......................................... $ 0.95 $ 1.21 $ 1.27
======= ======= =======
Earnings before extraordinary item...................... $37,334 $50,142 $55,957
Interest on notes, net of taxes......................... 1,943 1,144 --
------- ------- -------
As adjusted............................................. 39,277 51,286 55,957
Extraordinary item, net of tax.......................... -- 701 2,912
------- ------- -------
As adjusted............................................. $39,277 $50,585 $53,045
======= ======= =======
Weighted average number of common shares outstanding.... 39,194 40,738 41,848
Assumed exercise of stock options....................... 553 684 604
Assumed conversion of notes............................. 2,528 1,542 --
------- ------- -------
As adjusted............................................. 42,275 42,964 42,452
======= ======= =======
Diluted EPS
Earnings before extraordinary item.................... $ 0.93 $ 1.19 $ 1.32
Extraordinary item, net of tax........................ -- (0.02) (0.07)
------- ------- -------
Net earnings.......................................... $ 0.93 $ 1.17 $ 1.25
======= ======= =======
</TABLE>

4. LONG-TERM DEBT

In February 1999, the Company amended and restated its revolving credit
agreement with a group of banks (the "Credit Agreement"). This agreement
provides for borrowing of up to $125 million through February 5, 2004. Advances
under the Credit Agreement bear interest at a rate per annum equal to, at the
Company's option, the agent's prime rate or the reserve adjusted LIBOR rate plus
an interest rate margin varying between .75% to 1.25%. The Credit Agreement
provides for fees applicable to unused commitments of .125% to .225%. As of
January 29, 2000, there was no indebtedness outstanding under the Credit
Agreement.

In February 1999, the Company also entered into two Canadian credit
facilities in conjunction with the combination with Moores (see Note 2). These
facilities include a revolving credit agreement (the "Canadian Credit
Agreement"), which provides for borrowings up to Can$30 million (US$20 million)
through

30
<PAGE> 33
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

February 5, 2004 and a term credit agreement (the "Term Loan"), which provides
for borrowings of Can$75 million (US$50 million). The Company's total
indebtedness of US$49.3 million as of January 29, 2000 consists of Term Loan
borrowings. The Term Loan is to be repaid in quarterly installments of Can$0.9
million (US$0.6 million) beginning May 1, 1999, with the remaining unpaid
principal payable on February 5, 2004. The effective interest rate for the Term
Loan at January 29, 2000 was 6.0%. Covenants and interest rates are
substantially similar to those contained in the Company's Credit Agreement.
Borrowings under these agreements were used to repay approximately US$57 million
in outstanding indebtedness of Moores with the remaining availability used to
fund cash operating and other requirements of Moores. The refinanced Moore's
debt, which totaled US$55.9 million at January 30, 1999, consisted of a
revolving credit facility and three notes payable with effective interest rates
ranging from 8.7% to 15.7%.

In June 1999, the Company, in conjunction with the combination with K&G,
repaid $0.2 million in outstanding notes payable of K&G. This indebtedness,
which was outstanding at January 30, 1999, consisted of two notes payable with
fixed interest rates ranging from 6% to 12%.

Maturities of long-term debt for the next five fiscal years are as follows:
2000 -- $2.6 million; 2001 -- $2.6 million; 2002 -- $2.6 million; 2003 -- $2.6
million and 2004 -- $38.9 million.

The Company utilizes letters of credit for inventory purchases. At January
29, 2000, letters of credit totaling approximately $13.2 million were issued and
outstanding.

5. INCOME TAXES

The provision for income taxes consists of the following (in thousands):

<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Current tax expense:
Federal............................................... $23,526 $25,715 $32,338
State................................................. 4,498 4,558 5,486
Foreign............................................... 4,321 4,443 4,826
Deferred tax expense (benefit):
Federal and state..................................... (3,554) 2,594 125
Foreign............................................... (256) (400) (381)
------- ------- -------
Total......................................... $28,535 $36,910 $42,394
======= ======= =======
</TABLE>

The table above does not include the tax benefit of $0.5 million in fiscal
1998 and $1.4 million in fiscal 1999 related to extraordinary items. In
addition, no provision for U.S. income taxes or Canadian withholding taxes has
been made on the cumulative undistributed earnings of Moores (approximately
$13.6 million at January 29, 2000) since such earnings are considered to be
permanently invested in Canada. The determination of any unrecognized deferred
tax liability for the cumulative undistributed earnings of Moores is not
considered practicable since such liability, if any, will depend on a number of
factors that cannot be known until such time as a decision to repatriate the
earnings might be made by management.

31
<PAGE> 34
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

A reconciliation of the statutory federal income tax rate to the Company's
effective tax rate is as follows:

<TABLE>
<CAPTION>
FISCAL YEAR
------------------
1997 1998 1999
---- ---- ----
<S> <C> <C> <C>
Federal statutory rate...................................... 35% 35% 35%
State income taxes, net of federal benefit.................. 5 5 4
Nondeductible transaction costs............................. 1 -- 3
Other....................................................... 2 2 1
-- -- --
43% 42% 43%
== == ==
</TABLE>

At January 30, 1999 the Company had net deferred tax assets of $3.9 million
with $7.5 million classified as other current assets and $3.6 million classified
as other liabilities (noncurrent). At January 29, 2000, the Company had net
deferred tax assets of $4.7 million with $10.9 million classified as other
current assets and $6.2 million classified as other liabilities (noncurrent). No
valuation allowance was required for the deferred tax assets. Total deferred tax
assets and liabilities and the related temporary differences as of January 30,
1999 and January 29, 2000 were as follows (in thousands):

<TABLE>
<CAPTION>
JANUARY 30, JANUARY 31,
1999 2000
----------- -----------
<S> <C> <C>
Deferred tax assets:
Accrued rent and other expenses........................... $ 5,759 $ 6,615
Accrued compensation...................................... 1,034 1,272
Accrued markdowns......................................... 1,826 3,088
Deferred intercompany profits............................. 1,486 1,963
Other..................................................... 437 621
------- -------
10,542 13,559
------- -------
Deferred tax liabilities:
Capitalized inventory costs............................... (2,557) (2,085)
Property and equipment.................................... (2,555) (3,981)
Intangibles............................................... (1,024) (1,044)
Deferred intercompany interest............................ -- (1,174)
Other..................................................... (522) (604)
------- -------
(6,658) (8,888)
------- -------
Net deferred tax assets..................................... $ 3,884 $ 4,671
======= =======
</TABLE>

32
<PAGE> 35
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. OTHER ASSETS AND ACCRUED EXPENSES

Other assets consist of the following (in thousands):

<TABLE>
<CAPTION>
JANUARY 30, JANUARY 29,
1999 2000
----------- -----------
<S> <C> <C>
Goodwill and other intangibles.............................. $48,796 $51,541
Accumulated amortization.................................... (5,363) (8,422)
------- -------
43,433 43,119
Deposits and other.......................................... 8,240 6,185
------- -------
Total............................................. $51,673 $49,304
======= =======
Accrued expenses consist of the following (in thousands):

Sales, payroll and property taxes payable................... $11,440 $11,084
Accrued salary, bonus and vacation.......................... 11,472 15,397
Other....................................................... 20,836 26,820
------- -------
Total............................................. $43,748 $53,301
======= =======
</TABLE>

7. CAPITAL STOCK, STOCK OPTIONS AND BENEFIT PLANS

In July 1997, the Company sold 1,500,000 shares of common stock with net
proceeds to the Company of $30.0 million. In addition, the Company effected a
50% stock dividend on June 19, 1998. All share and per share amounts reflected
in the financial statements give retroactive effect to the stock dividend. In
July 1998, K&G issued 88,263 shares of its common stock in a public offering
with net proceeds of $1.6 million. As a result of the June 1999 merger (see Note
2), the shares of K&G common stock issued were converted into 37,953 shares of
the Company's common stock based upon an Exchange Ratio of .43.

The Company has adopted the 1992 Stock Option Plan ("1992 Plan") which, as
amended, provides for the grant of options to purchase up to 1,071,507 shares of
the Company's common stock to full-time key employees (excluding certain
officers), the 1996 Stock Option Plan ("1996 Plan") which provides for the grant
of options to purchase up to 1,125,000 shares of the Company's common stock to
full-time key employees (excluding certain officers), and the 1998 Key Employee
Stock Option Plan ("1998 Plan") which, as amended, provides for the grant of
options to purchase up to 2,100,000 shares of the Company's common stock to
full-time key employees (excluding certain officers). Each of the plans will
expire at the end of ten years and no option may be granted pursuant to the
plans after the expiration date. In fiscal 1992, the Company also adopted a
Non-Employee Director Stock Option Plan ("Director Plan") which, as amended,
provides for the grant of options to purchase up to 67,500 shares of the
Company's common stock to non-employee directors of the Company. Options granted
under these plans must be exercised within ten years of the date of grant.

Generally, options granted under the 1992 Plan, 1996 Plan and 1998 Plan
vest at the rate of 1/3 of the shares covered by the grant on each of the first
three anniversaries of the date of grant and may not be issued at a price less
than 50% of the fair market value of the Company's stock on the date of grant.
However, a significant portion of options granted under these Plans vest
annually in varying increments over a period from one to ten years. Options
granted under the Director Plan vest one year after the date of grant and are
issued at a price equal to the fair market value of the Company's stock on the
date of grant.

In connection with an employment agreement entered into in January 1991
with an officer of the Company, that officer was granted options to acquire
796,705 shares of common stock of the Company at a price of $1.57 per share.
Among other things, the employment agreement provides that upon the exercise of
any of these options, the Company will pay the officer an amount which, after
the payment of income taxes by the officer on such amount, will equal the $1.57
per share purchase price for the shares purchased upon

33
<PAGE> 36
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

exercise of the options. The Company recognized compensation expense as the
options vested. The officer exercised 110,654 options in fiscal 1997. As of
January 31, 1998, all stock options granted in connection with this employment
agreement have been exercised.

As discussed in Note 2, the Company converted options to purchase K&G
common stock into options to purchase shares of the Company's common stock in
connection with the combination with K&G. The following table is a summary of
the Company's stock option activity:

<TABLE>
<CAPTION>
WEIGHTED
SHARES UNDER AVERAGE OPTIONS
OPTION EXERCISE PRICE EXERCISABLE
------------ -------------- -----------
<S> <C> <C> <C>
Options outstanding, February 1, 1997........... 1,457,668 $11.63 534,770
=========
Granted....................................... 723,910 23.87
Exercised..................................... (268,268) 5.14
Forfeited..................................... (8,155) 14.27
---------
Options outstanding, January 31, 1998........... 1,905,155 17.18 548,685
=========
Granted....................................... 312,390 29.94
Exercised..................................... (135,590) 11.46
Forfeited..................................... (24,977) 20.15
---------
Options outstanding, January 30, 1999........... 2,056,978 19.46 740,635
=========
Granted....................................... 142,557 23.46
Exercised..................................... (67,201) 13.08
Forfeited..................................... (79,374) 39.19
---------
Options outstanding, January 29, 2000........... 2,052,960 19.18 1,063,649
========= =========
</TABLE>

Grants of stock options outstanding as of January 29, 2000 are summarized
as follows:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------- -----------------------
WEIGHTED-
AVERAGE WEIGHTED- WEIGHTED-
REMAINING AVERAGE AVERAGE
RANGE OF NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
EXERCISE PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
- --------------- ----------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
$ 3.85 to 15.00........................ 454,665 4.7 Years $10.53 363,538 $ 8.69
15.01 to 25.00........................ 1,304,361 7.6 Years 19.31 620,218 15.56
25.01 to 50.00........................ 293,934 8.5 Years 31.99 79,893 25.64
--------- ---------
3.85 to 50.00........................ 2,052,960 19.18 1,063,649 16.76
========= =========
</TABLE>

As of January 29, 2000, 1,314,819 options were available for grant under
existing plans and 3,367,779 shares of common stock were reserved for future
issuance under these plans.

The difference between the option price and the fair market value of the
Company's common stock on the dates that options for 268,268, 135,590 and 67,201
shares of common stock were exercised during 1997, 1998 and 1999, respectively,
resulted in a tax benefit to the Company of $1.6 million in 1997, $1.5 million
in 1998 and $0.4 million in 1999, which has been recognized as capital in excess
of par. In addition, the Company withheld 84,921 shares, 26,050 shares and
11,368 shares, respectively, of such common stock for withholding payments made
to satisfy the optionees' income tax liabilities resulting from the exercises.

The Company has a profit sharing plan, in the form of an employee stock
plan, which covers all eligible employees, and an employee tax-deferred savings
plan. Contributions to the plans are made at the discretion of the Board of
Directors. During 1997, 1998 and 1999, contributions charged to operations were
$1.5 million, $2.1 million and $2.8 million, respectively, for the plans.

34
<PAGE> 37
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In 1998, the Company adopted an Employee Stock Discount Plan ("ESDP"),
which allows employees to authorize after-tax payroll deductions to be used for
the purchase of up to 1,425,000 shares of the Company's common stock at 85% of
the then fair market value. The Company makes no contributions to this plan but
pays all brokerage, service and other costs incurred. A participant may not
purchase more than $2,500 in value of shares during any calendar quarter. During
1998 and 1999, employees purchased 21,588 and 47,481 shares, respectively, under
the ESDP, the weighted-average fair value of which was $19.86 and $21.89 per
share, respectively. As of January 29, 2000, 1,355,931 shares were reserved for
future issuance under the ESDP.

The Company has adopted the disclosure-only provisions of SFAS No. 123 and
continues to apply APB Opinion 25 and related interpretations in accounting for
the stock option plans and the employee stock purchase plan. Had the Company
elected to apply the accounting standards of SFAS No. 123, the Company's net
earnings and net earnings per share would have approximated the pro forma
amounts indicated below (in thousands, except per share data):

<TABLE>
<CAPTION>
FISCAL YEAR
---------------------------
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Earnings before extraordinary item:
As reported............................................. $37,334 $50,142 $55,957
Pro forma............................................... $36,178 $48,325 $53,623

Earnings per share before extraordinary item:
As reported:
Basic................................................. $ 0.95 $ 1.23 $ 1.34
Diluted............................................... $ 0.93 $ 1.19 $ 1.32
Pro forma:
Basic................................................. $ 0.92 $ 1.19 $ 1.28
Diluted............................................... $ 0.90 $ 1.15 $ 1.26
</TABLE>

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model, which resulted in a weighted-average
fair value of $10.90, $13.76 and $14.61 for grants made during fiscal 1997, 1998
and 1999, respectively. The following assumptions were used for option grants in
1997, 1998 and 1999, respectively: expected volatility of 52.15%, 52.07% and
52.92%, risk-free interest rates (U.S. Treasury five year notes) of 5.48%, 4.78%
and 5.31%, and an expected life of five years.

8. COMMITMENTS AND CONTINGENCIES

Lease commitments

The Company leases retail business locations, office and warehouse
facilities, computer equipment and automotive equipment under operating leases
expiring in various years through 2019. Rent expense for fiscal 1997, 1998 and
1999 was $44.7 million, $52.9 million and $61.5 million, respectively, and
includes contingent rentals of $0.3 million, $0.1 million and $0.4 million,
respectively.

35
<PAGE> 38
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Minimum future rental payments under noncancelable operating leases as of
January 29, 2000 for each of the next five years and in the aggregate are as
follows (in thousands):

<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
- ----------- --------
<S> <C>
2000........................................................ $ 65,107
2001........................................................ 61,581
2002........................................................ 56,525
2003........................................................ 50,334
2004........................................................ 42,194
Thereafter.................................................. 106,205
--------
Total............................................. $381,946
========
</TABLE>

Leases on retail business locations specify minimum rentals plus common
area maintenance charges and possible additional rentals based upon percentages
of sales. Most of the retail business location leases provide for renewal
options at rates specified in the leases. In the normal course of business,
these leases are generally renewed or replaced by other leases.

Legal matters

The Company is a defendant in various lawsuits and subject to various
claims and proceedings encountered in the normal conduct of its business. In the
opinion of management, any uninsured losses that might arise from these lawsuits
and proceedings would not have a material adverse effect on the business or
consolidated financial position or results of operations of the Company.

Currency contracts

The Company routinely enters into inventory purchase commitments that are
denominated in a foreign currency (primarily the Italian lira). To protect
against currency exchange risks associated with certain firmly committed and
certain other probable, but not firmly committed inventory transactions, the
Company enters into foreign currency forward exchange contracts. At January 29,
2000, the Company held forward exchange contracts with notional amounts totaling
$24.3 million. All such contracts expire within 17 months. Gains and losses
associated with these contracts are accounted for as part of the underlying
inventory purchase transactions. The fair value of the forward exchange
contracts is estimated by comparing the cost of the foreign currency to be
purchased under the contracts using the exchange rates obtained under the
contracts (adjusted for forward points) to the hypothetical cost using the spot
rate at year end. At January 29, 2000, the contracts outstanding had a fair
value of $1.8 million less than their notional value.

The majority of the forward exchange contracts are with two financial
institutions. Therefore, the Company is exposed to credit risk in the event of
nonperformance by these parties. However, due to the creditworthiness of these
major financial institutions, full performance is anticipated. The Company may
also be exposed to market risk as a result of changes in foreign exchange rates.
This market risk should be substantially offset by changes in the valuation of
the underlying transactions.

36
<PAGE> 39
THE MEN'S WEARHOUSE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The Company's quarterly results of operations reflect all adjustments,
consisting only of normal, recurring adjustments, which are, in the opinion of
management, necessary for a fair statement of the results for the interim
periods presented. The consolidated results of operations by quarter for the
1998 and 1999 fiscal years are presented below (in thousands, except per share
amounts):

<TABLE>
<CAPTION>
FISCAL 1998
QUARTERS ENDED
------------------------------------------------
MAY 2, AUGUST 1, OCTOBER 31, JANUARY 30,
1998 1998 1998 1999
-------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales................................. $229,830 $226,580 $234,273 $347,148
Gross margin.............................. 80,546 82,990 83,651 130,194
Earnings before extraordinary item........ 8,126 10,389 8,828 22,799
Net earnings.............................. $ 8,126 $ 10,389 $ 8,127 $ 22,799
Earnings per share before extraordinary
item:
Basic................................... $ 0.20 $ 0.26 $ 0.22 $ 0.55
Diluted................................. $ 0.20 $ 0.25 $ 0.21 $ 0.54
</TABLE>

<TABLE>
<CAPTION>
FISCAL 1999
QUARTERS ENDED
------------------------------------------------
MAY 1, JULY 31, OCTOBER 30, JANUARY 29,
1999 1999 1999 2000
-------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales................................. $258,864 $256,567 $272,836 $398,481
Gross margin.............................. 91,435 93,294 99,593 154,644
Earnings before extraordinary item........ 3,750 8,750 12,972 30,485
Net earnings.............................. $ 838 $ 8,750 $ 12,972 $ 30,485
Earnings per share before extraordinary
item :
Basic................................... $ 0.09 $ 0.21 $ 0.31 $ 0.73
Diluted................................. $ 0.09 $ 0.21 $ 0.31 $ 0.72
</TABLE>

In the first quarter of 1999, the Company recorded an extraordinary charge
of $2.9 million, net of a $1.4 million tax benefit, related to the write-off of
deferred financing costs and prepayment penalties for the refinancing of
approximately US$57 million of Moores' indebtedness.

An extraordinary charge of $0.7 million, net of tax benefit of $0.5
million, related to the early retirement of the Notes (Note 4) was recognized in
the third quarter of 1998.

Due to the method of calculating weighted average common shares
outstanding, the sum of the quarterly per share amounts may not equal earnings
per share for the respective years.

37
<PAGE> 40

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item is incorporated herein by reference
from the Company's Proxy Statement for its Annual Meeting of Shareholders to be
held June 21, 2000.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by reference
from the Company's Proxy Statement for its Annual Meeting of Shareholders to be
held June 21, 2000.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is incorporated herein by reference
from the Company's Proxy Statement for its Annual Meeting of Shareholders to be
held June 21, 2000.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated herein by reference
from the Company's Proxy Statement for its Annual Meeting of Shareholders to be
held June 21, 2000.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) 1. FINANCIAL STATEMENTS.

The following consolidated financial statements of the Company are included
in Part II, Item 8.

Independent Auditors' Reports
Consolidated Balance Sheets as of January 30, 1999 and January 29, 2000
Consolidated Statements of Earnings for the years ended January 31,
1998, January 30, 1999 and January 29, 2000
Consolidated Statements of Shareholders' Equity for the years ended
January 31, 1998, January 30, 1999 and January 29, 2000
Consolidated Statements of Cash Flows for the years ended January 31,
1998, January 30, 1999 and January 29, 2000
Notes to Consolidated Financial Statements

2. FINANCIAL STATEMENT SCHEDULES

All such schedules are omitted because they are not applicable or because
the required information is included in the Consolidated Financial Statements or
Notes thereto.

38
<PAGE> 41

3. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT INDEX
------- -------------
<C> <S>
3.1 -- Restated Articles of Incorporation (incorporated by
reference from Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended July 30, 1994).
3.2 -- By-laws, as amended (incorporated by reference from
Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the fiscal year ended February 1, 1997).
3.3 -- Certificate of Designation, Preferences, Limitations and
Relative Rights of the Series A Special Voting Preferred
Stock. (incorporated by reference from Exhibit 3.3 to the
Company's Annual Report of Form 10-K for the fiscal year
ended January 20, 1999).
3.4 -- Articles of Amendment to the Restated Articles of
Incorporation (incorporated by reference from Exhibit 3.1
to the Company's Quarterly Report on Form 10-Q for the
quarter ended July 31, 1999).
4.1 -- Restated Articles of Incorporation (included as Exhibit
3.1).
4.2 -- By-laws (included as Exhibit 3.2).
4.3 -- Form of Common Stock certificate (incorporated by
reference from Exhibit 4.3 to the Company's Registration
Statement on Form S-1 (Registration No. 33-45949)).
*4.4 -- Employment Agreement dated as of January 31, 1991, by and
between the Company and David H. Edwab, including the
First Amendment thereto dated as of September 30, 1991
(incorporated by reference from Exhibit 4.4 to the
Company's Registration Statement on Form S-1
(Registration No. 33-45949)).
*4.5 -- Second Amendment effective as of January 1, 1993, to
Employment Agreement dated as of January 31, 1991, by and
between the Company and David H. Edwab (incorporated by
reference from Exhibit 4.5 to the Company's Registration
Statement on Form S-1 (Registration No. 33-60516)).
*4.6 -- Second [sic] Amendment dated as of April 12, 1994, to
Employment Agreement dated as of January 31, 1991
(incorporated by reference to Exhibit 4.6 to the
Company's Annual Report on Form 10-K for the fiscal year
ended January 28, 1995).
4.7 -- Registration Rights Agreement dated as of November 18,
1998, by and among The Men's Wearhouse, Inc. and Marpro
Holdings, Inc., MGB Limited Partnership, Capital
D'Amerique CDPQ Inc., Cerberus International, Ltd., Ultra
Cerberus Fund, Ltd., Styx International Ltd., The Long
Horizons Overseas Fund Ltd., The Long Horizons Fund, L.P.
and Styx Partners, L.P. (incorporated by reference from
Exhibit 4.13 to the Company's Registration Statement on
Form S-3 (Registration No. 333-69979)).
4.8 -- Support Agreement dated February 10, 1999, between The
Men's Wearhouse, Inc., Golden Moores Company, Moores
Retail Group Inc. and Marpro Holdings, Inc., MGB Limited
Partnership, Capital D'Amerique CDPQ Inc., Cerberus
International, Ltd., Ultra Cerberus Fund, Ltd., Styx
International Ltd., The Long Horizons Overseas Fund Ltd.,
The Long Horizons Fund, L.P. and Styx Partners, L.P.
(incorporated by reference from Exhibit 4.2 to the
Company's Current Report on Form 8-K (Registration No.
333-72549)).
</TABLE>

39
<PAGE> 42

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT INDEX
------- -------------
<C> <S>
4.9 -- Revolving Credit Agreement dated as of February 5, 1999,
by and among the Company and NationsBank of Texas N.A.
and the Banks listed therein, including form of Revolving
Note. (incorporated by reference from Exhibit 4.13 to the
Company's Annual Report of Form 10-K for the fiscal year
ended January 30, 1999.)
4.10 -- Term Credit Agreement dated as of February 5, 1999, by
and among the Company, certain subsidiaries of the
Company and NationsBank of Texas N.A. and the Banks
listed therein, including form of Term Note.
(incorporated by reference from Exhibit 4.14 to the
Company's Annual Report of Form 10-K for the fiscal year
ended January 30, 1999).
4.11 -- Revolving Credit Agreement dated as of February 10, 1999,
by and among the Company, certain subsidiaries of the
Company and Bank of America Canada and the Banks listed
therein, including form of Revolving Note. (incorporated
by reference from Exhibit 4.15 to the Company's Annual
Report of Form 10-K for the fiscal year ended January
30,1999).
4.12 -- Certificate of Designation, Preferences, Limitations and
Relative Rights of the Series A Special Voting Preferred
Stock (included as Exhibit 3.3).
9.1 -- Voting Trust Agreement dated February 10, 1999, by and
between The Men's Wearhouse, Inc., Golden Moores Company,
Moores Retail Group Inc. and The Trust Company of Bank of
Montreal (incorporated by reference from Exhibit 9.1 to
the Company's Current Report on Form 8-K (Registration
No. 333-72579)).
*10.1 -- Employment Agreement dated as of January 31, 1991,
including the First Amendment thereto dated as of
September 30, 1991 by and between the Company and David
H. Edwab (included as Exhibit 4.4).
*10.2 -- Second Amendment effective as of January 1, 1993, to
Employment Agreement dated as of January 31, 1991, by and
between the Company and David H. Edwab (included as
Exhibit 4.5).
*10.3 -- Second [sic] Amendment dated as of April 12, 1994, to
Employment Agreement dated as of January 31, 1991
(incorporated by reference to Exhibit 4.6 to the
Company's Annual Report on Form 10-K for the fiscal year
ended January 28, 1995).
*10.4 -- 1992 Stock Option Plan (incorporated by reference from
Exhibit 10.5 to the Company's Registration Statement on
Form S-1 (Registration No. 33-45949)).
*10.5 -- First Amendment to 1992 Stock Option Plan (incorporated
by Reference from Exhibit 10.9 to the Company's
Registration Statement on Form S-1 (Registration No.
33-60516)).
*10.6 -- Non-Employee Director Stock Option Plan (incorporated by
reference from Exhibit 10.7 to the Company's Registration
Statement on Form S-1 (Registration No. 33-45949)).
*10.7 -- First Amendment to Non-Employee Director Stock Option
Plan (incorporated by reference from Exhibit 10.16 to the
Company's Registration Statement on Form S-1
(Registration No. 33-45949)).
10.8 -- Commercial Lease dated September 1, 1995, by and between
the Company and Zig Zag, A Joint Venture (incorporated by
reference from Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended May 4, 1996).
</TABLE>

40
<PAGE> 43

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT INDEX
------- -------------
<C> <S>
10.9 -- Commercial Lease dated April 5, 1989, by and between the
Company and Preston Road Partnership (incorporated by
reference from Exhibit 10.10 to the Company's
Registration Statement on Form S-1 (Registration No.
33-45949)).
*10.10 -- Stock Agreement dated as of March 23, 1992, between the
Company and George Zimmer (incorporated by reference from
Exhibit 10.13 to the Company's Registration Statement on
Form S-1 (Registration No. 33-45949)).
*10.11 -- Split-Dollar Agreement and related Split-Dollar
Collateral Assignment dated November 25, 1994 between the
Company, George Zimmer and David Edwab, Co-Trustee of the
Zimmer 1994 Irrevocable Trust (incorporated by reference
to Exhibit 10.20 to the Company's Annual Report on Form
10-K for the fiscal year ended January 28, 1995).
*10.12 -- 1996 Stock Option Plan (incorporated by reference from
Exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the quarter ended August 3, 1996).
*10.13 -- Second Amendment to Non-Employee Director Stock Option
Plan (incorporated by reference to Exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended August 3, 1996).
10.14 -- 1998 Key Employee Stock Option Plan (incorporated by
reference from Exhibit 10.18 to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31,
1998).
10.15 -- First amendment to 1998 Key Employee Stock Option Plan
(incorporated by reference from Exhibit 4.1 to the
Company's registration Statement on Form S-8
(registration No. 333-80033)).
10.16 -- Amended and Restated Employment Agreement dated as of
June 1, 1999, by and between K&G Men's Center, Inc. and
Stephen H. Greenspan (incorporated by reference from
Exhibit 10.1 of the Company's Current Report on Form 8-K
dated June 11, 1999).
10.17 -- Lease dated October 1, 1994, by and between Stephen H.
Greenspan, Paul Ruben and Richard M. Vehon and T&C
Liquidators, Inc. (Filed herewith.)
10.18 -- Amendment to Lease dated April 15, 1996, by and between
Stephen H. Greenspan, Paul Ruben and Richard M. Vehon and
T&C Liquidators, Inc. (Filed herewith.)
10.19 -- Lease Agreement dated November 20, 1995, by and between
Ellsworth Realty, L.L.C. and K&G Men's Center, Inc.
(Filed herewith.)
10.20 -- Amendment to Lease Agreement dated November 29, 1995, by
and between Ellsworth Realty, L.L.C. and K&G Men's
Center, Inc. (Filed herewith.)
10.21 -- Second Amendment to Lease Agreement dated July 1, 1999,
by and between Ellsworth Realty, L.L.C. and K&G Men's
Center, Inc. (Filed herewith.)
10.22 -- Second Amendment to 1998 Key Employee Stock Option Plan.
(Filed herewith.)
10.23 -- Limited Liability Company Agreement of Chelsea Market
Systems, L.L.C. dated January 3, 2000, between and among
Renwick Technologies, Inc. and Harry M. Levy. (Filed
herewith.)
10.24 -- Software Development Agreement dated January 3, 2000, by
and between the Company and Chelsea Market Systems,
L.L.C. (Filed herewith.)
21.1 -- Subsidiaries of the Company. (Filed herewith.)
23.1 -- Consent of Deloitte & Touche LLP, independent auditors.
(Filed herewith.)
23.2 -- Consent of Ernst & Young LLP, independent auditors.
(Filed herewith.)
23.3 -- Consent of Arthur Andersen LLP, independent auditors.
(Filed herewith.)
</TABLE>

41
<PAGE> 44

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT INDEX
------- -------------
<C> <S>
27.1 -- Financial Data Schedule. (Filed herewith.)
27.2 -- Restated financial data schedule for the first, second
and third quarters in fiscal years 1997 and for fiscal
years 1996 and 1997 (incorporated by reference from
Exhibit 27.2 to the Company's Quarterly Report on Form
10-Q for the quarter ended July 31, 1999).
27.3 -- Restated financial data schedule for the first, second
and third quarters in fiscal years 1998, for the first
quarter in fiscal year 1999 and for fiscal year 1998
(incorporated by reference from Exhibit 27.3 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended July 31, 1999).
27.4 -- Restated financial data schedule, as amended, for the
first quarter in fiscal year 1999. (Filed herewith.)
</TABLE>

- ---------------

* Management Compensation or Incentive Plan

As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Registrant
has not filed with this Annual Report on Form 10-K certain instruments defining
the rights of holders of long-term debt of the Registrant and its subsidiaries
because the total amount of securities authorized under any of such instruments
does not exceed 10% of the total assets of the Registrant and its subsidiaries
on a consolidated basis. The Registrant agrees to furnish a copy of any such
agreements to the Securities and Exchange Commission upon request.

The Company will furnish a copy of any exhibit described above to any
beneficial holder of its securities upon receipt of a written request therefor,
provided that such request sets forth a good faith representation that, as of
the record date for the Company's 2000 Annual Meeting of Shareholders, such
beneficial holder is entitled to vote at such meeting, and provided further that
such holder pays to the Company a fee compensating the Company for its
reasonable expenses in furnishing such exhibits.

(b) REPORTS ON FORM 8-K.

On February 25, 1999, the Company filed a report on Form 8-K related to the
February 10, 1999 closing of the Moores combination. Moores consolidated
financial statements, including a consolidated balance sheet as of January 31,
1998 and October 31, 1998, a consolidated statement of income and comprehensive
income, a consolidated statement of stockholders' equity and a consolidated
statement of cash flows, each for the year ended January 31, 1998 and for the
nine months ended October 31, 1997 and October 31, 1998, as well as pro forma
financial statements including a combined balance sheet as of October 31, 1998
and combined statements of earnings for the years ended January 31, 1998 and for
the nine months ended November 1, 1997 and October 31, 1998, were included in
this current report on Form 8-K.

On March 5, 1999, the Company filed a current report on Form 8-K related to
the signing of the merger agreement with K&G.

On April 26, 1999, the Company filed a report on Form 8-K pursuant to the
terms of the combination agreement with Moores. The Company's consolidated
statements of earnings for each of the two month periods ended April 4, 1998 and
April 3, 1999, as well as pro forma statements of earnings for each of the same
periods excluding one-time transaction costs, duplicative store closing costs
and extraordinary charges associated with Moores, were included in this current
report on Form 8-K.

On June 11, 1999, the Company filed a report on Form 8-K related to the
June 1, 1999 closing of the K&G merger. K&G consolidated financial statements,
including a consolidated balance sheet as of February 1, 1998 and January 31,
1999, a consolidated statement of operations, a consolidated statement of
stockholders' equity and a consolidated statement of cash flows, each for the
year ended February 2, 1997, February 1,1998 and January 31, 1999, as well as
pro forma financial statements including a combined balance sheet as of January
30, 1999 and combined statements of earnings for the years ended February 1,
1997, January 31, 1998 and January 30, 1999, were included in this current
report on Form 8-K.

42
<PAGE> 45

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

THE MEN'S WEARHOUSE, INC.

By: /s/ GEORGE ZIMMER
----------------------------------
George Zimmer
Chairman of the Board and
Chief Executive Officer

Dated: April 28, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacity and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ GEORGE ZIMMER Chairman of the Board, Chief April 28, 2000
- ----------------------------------------------------- Executive Officer and Director
George Zimmer

/s/ DAVID EDWAB President and Director April 28, 2000
- -----------------------------------------------------
David Edwab

/s/ GARY G. CKODRE Vice President -- Finance and April 28, 2000
- ----------------------------------------------------- Principal Financial and
Gary G. Ckodre Accounting Officer

/s/ RICHARD E. GOLDMAN Executive Vice President and April 28, 2000
- ----------------------------------------------------- Director
Richard E. Goldman

/s/ HARRY M. LEVY Executive Vice President -- April 28, 2000
- ----------------------------------------------------- Planning and Systems, Assistant
Harry M. Levy Secretary and Director

/s/ ROBERT E. ZIMMER Senior Vice President -- Real April 28, 2000
- ----------------------------------------------------- Estate and Director
Robert E. Zimmer

/s/ JAMES E. ZIMMER Senior Vice President -- April 28, 2000
- ----------------------------------------------------- Merchandising and Director
James E. Zimmer

/s/ RINALDO S. BRUTOCO Director April 28, 2000
- -----------------------------------------------------
Rinaldo S. Brutoco

/s/ MICHAEL L. RAY Director April 28, 2000
- -----------------------------------------------------
Michael L. Ray

/s/ SHELDON I. STEIN Director April 28, 2000
- -----------------------------------------------------
Sheldon I. Stein

/s/ STEPHEN H. GREENSPAN Chief Executive Officer -- Value April 28, 2000
- ----------------------------------------------------- Priced Clothing Division and
Stephen H. Greenspan Director
</TABLE>

43
<PAGE> 46

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT INDEX
------- -------------
<C> <S>
4.10 -- Term Credit Agreement dated as of February 5, 1999, by
and among the Company, certain subsidiaries of the
Company and NationsBank of Texas N.A. and the Banks
listed therein, including form of Term Note.
(incorporated by reference from Exhibit 4.14 to the
Company's Annual Report of Form 10-K for the fiscal year
ended January 30, 1999).
4.11 -- Revolving Credit Agreement dated as of February 10, 1999,
by and among the Company, certain subsidiaries of the
Company and Bank of America Canada and the Banks listed
therein, including form of Revolving Note. (incorporated
by reference from Exhibit 4.15 to the Company's Annual
Report of Form 10-K for the fiscal year ended January
30,1999).
4.12 -- Certificate of Designation, Preferences, Limitations and
Relative Rights of the Series A Special Voting Preferred
Stock (included as Exhibit 3.3).
9.1 -- Voting Trust Agreement dated February 10, 1999, by and
between The Men's Wearhouse, Inc., Golden Moores Company,
Moores Retail Group Inc. and The Trust Company of Bank of
Montreal (incorporated by reference from Exhibit 9.1 to
the Company's Current Report on Form 8-K (Registration
No. 333-72579)).
*10.1 -- Employment Agreement dated as of January 31, 1991,
including the First Amendment thereto dated as of
September 30, 1991 by and between the Company and David
H. Edwab (included as Exhibit 4.4).
*10.2 -- Second Amendment effective as of January 1, 1993, to
Employment Agreement dated as of January 31, 1991, by and
between the Company and David H. Edwab (included as
Exhibit 4.5).
*10.3 -- Second [sic] Amendment dated as of April 12, 1994, to
Employment Agreement dated as of January 31, 1991
(incorporated by reference to Exhibit 4.6 to the
Company's Annual Report on Form 10-K for the fiscal year
ended January 28, 1995).
*10.4 -- 1992 Stock Option Plan (incorporated by reference from
Exhibit 10.5 to the Company's Registration Statement on
Form S-1 (Registration No. 33-45949)).
*10.5 -- First Amendment to 1992 Stock Option Plan (incorporated
by Reference from Exhibit 10.9 to the Company's
Registration Statement on Form S-1 (Registration No.
33-60516)).
*10.6 -- Non-Employee Director Stock Option Plan (incorporated by
reference from Exhibit 10.7 to the Company's Registration
Statement on Form S-1 (Registration No. 33-45949)).
*10.7 -- First Amendment to Non-Employee Director Stock Option
Plan (incorporated by reference from Exhibit 10.16 to the
Company's Registration Statement on Form S-1
(Registration No. 33-45949)).
10.8 -- Commercial Lease dated September 1, 1995, by and between
the Company and Zig Zag, A Joint Venture (incorporated by
reference from Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended May 4, 1996).
10.9 -- Commercial Lease dated April 5, 1989, by and between the
Company and Preston Road Partnership (incorporated by
reference from Exhibit 10.10 to the Company's
Registration Statement on Form S-1 (Registration No.
33-45949)).
*10.10 -- Stock Agreement dated as of March 23, 1992, between the
Company and George Zimmer (incorporated by reference from
Exhibit 10.13 to the Company's Registration Statement on
Form S-1 (Registration No. 33-45949)).
</TABLE>
<PAGE> 48

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT INDEX
------- -------------
<C> <S>
*10.11 -- Split-Dollar Agreement and related Split-Dollar
Collateral Assignment dated November 25, 1994 between the
Company, George Zimmer and David Edwab, Co-Trustee of the
Zimmer 1994 Irrevocable Trust (incorporated by reference
to Exhibit 10.20 to the Company's Annual Report on Form
10-K for the fiscal year ended January 28, 1995).
*10.12 -- 1996 Stock Option Plan (incorporated by reference from
Exhibit 10.2 to the Company's Quarterly Report on Form
10-Q for the quarter ended August 3, 1996).
*10.13 -- Second Amendment to Non-Employee Director Stock Option
Plan (incorporated by reference to Exhibit 10.3 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended August 3, 1996).
10.14 -- 1998 Key Employee Stock Option Plan (incorporated by
reference from Exhibit 10.18 to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31,
1998).
10.15 -- First amendment to 1998 Key Employee Stock Option Plan
(incorporated by reference from Exhibit 4.1 to the
Company's registration Statement on Form S-8
(registration No. 333-80033)).
10.16 -- Amended and Restated Employment Agreement dated as of
June 1, 1999, by and between K&G Men's Center, Inc. and
Stephen H. Greenspan (incorporated by reference from
Exhibit 10.1 of the Company's Current Report on Form 8-K
dated June 11, 1999).
10.17 -- Lease dated October 1, 1994, by and between Stephen H.
Greenspan, Paul Ruben and Richard M. Vehon and T&C
Liquidators, Inc. (Filed herewith.)
10.18 -- Amendment to Lease dated April 15, 1996, by and between
Stephen H. Greenspan, Paul Ruben and Richard M. Vehon and
T&C Liquidators, Inc. (Filed herewith.)
10.19 -- Lease Agreement dated November 20, 1995, by and between
Ellsworth Realty, L.L.C. and K&G Men's Center, Inc.
(Filed herewith.)
10.20 -- Amendment to Lease Agreement dated November 29, 1995, by
and between Ellsworth Realty, L.L.C. and K&G Men's
Center, Inc. (Filed herewith.)
10.21 -- Second Amendment to Lease Agreement dated July 1, 1999,
by and between Ellsworth Realty, L.L.C. and K&G Men's
Center, Inc. (Filed herewith.)
10.22 -- Second Amendment to 1998 Key Employee Stock Option Plan.
(Filed herewith.)
10.23 -- Limited Liability Company Agreement of Chelsea Market
Systems, L.L.C. dated January 3, 2000, between and among
Renwick Technologies, Inc. and Harry M. Levy. (Filed
herewith.)
10.24 -- Software Development Agreement dated January 3, 2000, by
and between the Company and Chelsea Market Systems,
L.L.C. (Filed herewith.)
21.1 -- Subsidiaries of the Company. (Filed herewith.)
23.1 -- Consent of Deloitte & Touche LLP, independent auditors.
(Filed herewith.)
23.2 -- Consent of Ernst & Young LLP, independent auditors.
(Filed herewith.)
23.3 -- Consent of Arthur Andersen LLP, independent auditors.
(Filed herewith.)
27.1 -- Financial Data Schedule. (Filed herewith.)
</TABLE>
<PAGE> 49

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT INDEX
------- -------------
<C> <S>
27.2 -- Restated financial data schedule for the first, second
and third quarters in fiscal years 1997 and for fiscal
years 1996 and 1997 (incorporated by reference from
Exhibit 27.2 to the Company's Quarterly Report on Form
10-Q for the quarter ended July 31, 1999).
27.3 -- Restated financial data schedule for the first, second
and third quarters in fiscal years 1998, for the first
quarter in fiscal year 1999 and for fiscal year 1998
(incorporated by reference form Exhibit 27.3 to the
Company's Quarterly Report on Form 10-Q for the quarter
ended July 31, 1999).
27.4 -- Restated financial data schedule, as amended, for the
first quarter in fiscal year 1999. (Filed herewith.)
</TABLE>

- ---------------

* Management Compensation or Incentive Plan

<PAGE> 1

EXHIBIT 10.17

STATE OF GEORGIA
COUNTY OF FULTON

LEASE

THIS Lease, made and entered into this 1st day of October, 1994, by and
between STEPHEN H. GREENSPAN, PAUL RUBEN and RICHARD M. VEHON (herein referred
to as the "Lessor") and T&C LIQUIDATORS, INC., a Texas corporation (herein
referred to as the "Lessee").

ARTICLE I. DEMISE OF PREMISES

Section 1.01 Demise. For and in consideration of the payment of rent
herein reserved and the performance of the covenants and agreements herein on
the part of Lessee to be observed and performed, Lessor does hereby demise and
lease to Lessee that certain tract of land being Lot 5 and the South 20 feet of
Lot 4, in BLOCK D, of FREEWAY INDUSTRIAL DISTRICT, an Addition to the City of
Irving, Dallas County, Texas, according to the Map or Plat thereof recorded in
Volume 402, Page 1437, of the Map Records of Dallas County, Texas together with
all buildings, structures and other improvements, now or hereafter located
thereon (herein collectively referred to as the "Premises").

ARTICLE II. TERM OF LEASE

Section 2.01 Term of Lease. The term of this Lease shall commence on
the 1st day of October, 1994 and, unless sooner terminated or extended as herein
provided, shall continue thereafter for two (2) years until midnight on the 30th
day of September, 1996.

ARTICLE III. COVENANTS AND WARRANTIES OF LESSOR

Section 3.01 Leasehold Estate of Lessor. Lessor warrants that it has
full right and lawful authority to enter into this Lease; that it is lawfully
seized of a fee simple estate in the Premises, subject to those matters set
forth on Exhibit "A" hereof.

Section 3.02 Quiet Possession. On paying the rent herein reserved and
performing and observing each and every covenant to be observed, kept and
performed by Lessee under this Lease, Lessee shall peaceable hold and enjoy the
Premises during the term of this Lease.

ARTICLE IV. ANNUAL RENT AND ADDITIONAL RENT

Section 4.01 Rent. During the term of this Lease, Lessee agrees to pay
Lessor, as rent hereunder, an annual rent as follows:

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<TABLE>
<CAPTION>
MONTHLY
YEAR ANNUAL RENT INSTALLMENT
----------------- ----------- -----------
<S> <C> <C>
10/1/94 - 9/30/95 $ 60,000.00 $ 5,000.00
10/1/95 - 9/30/96 $ 63,000.00 $ 5,250.00
</TABLE>

The rent shall be paid in equal monthly installments on the first day
of each calendar month during the term of this Lease, at the office of Lessor,
1750-A Ellsworth Industrial Boulevard, Atlanta, Georgia 30318, or at such other
address as Lessor may from time to time designate in writing to Lessee.

Section 4.02 Additional Rent. Lessee agrees to pay, from time to time
as provided in this Lease (i) all other amounts and sums which Lessee herein
assumes and agrees to pay, (ii) interest at the rate of ten percent (10%) per
annum on such of the foregoing amounts and sums as are payable to Lessor and are
not paid within five (5) days after the due date or if a demand therefor is
required by terms of this Lease, within five (5) days after the date of such
demand, from the due date or the date of such demand, as the case may be, until
payment thereof, and (iii) interest at the rate of ten percent (10%) per annum
on all installments of rent not paid by the due date, from the due date thereof
until paid (each and all of the sums provided in this Section 4.02 are herein
referred to as the "Additional Rent"). If Lessee fails to pay any Additional
Rent, Lessor shall have all the fights, powers and remedies provided for in this
Lease or at law or in equity or otherwise in the event of nonpayment of the
rent.

Section 4.03 Net Lease; Non-Termination. This Lease is a net lease and
the rent and Additional Rent shall be paid without notice, demand, counterclaim,
set-off, deduction or defense and, without abatement, suspension, deferment,
diminution or reduction. Except as otherwise expressly provided in the Lease,
this Lease shall not terminate nor shall Lessee have any right to terminate this
Lease or be entitled to the abatement of any rent hereunder or any reduction
thereof, nor shall the obligations of Lessee under this Lease be otherwise
affected, by reason of (i) any damage to or destruction of all or any portion of
the Premises from whatever cause, (ii) any taking of all or any part of the
Premises by condemnation, requisition or otherwise, (iii) the prohibition,
limitation, or restriction of or interference with Lessee's use of all or any
portion of the Premises, (iv) any title defect or encumbrance or any eviction by
paramount title or otherwise, (v) failure on the part of Lessor to perform or
comply with any term, provision or covenant of this Lease or any other agreement
to which Lessor and Lessee may be parties, (vi) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to Lessor, or any action taken with respect to this Lease by
any trustee or receiver of Lessor or by any court in which such proceedings so
long as the rights and interest of Lessee hereunder are not materially altered
by such proceeding, (vii) any claim which Lessee has or might have against

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Lessor, or (viii) for any other cause whether similar or dissimilar to the
foregoing. Except as otherwise expressly provided in this Lease, Lessee waives
all rights now or hereafter conferred by statute or otherwise to quit, terminate
or surrender this Lease or the leasehold estate in the Premises or any part
thereof, or to any abatement, suspension, deferment, diminution or reduction of
the rent.

ARTICLE V. TAXES ASSESSMENTS AND CHARGES

Section 5.01 Taxes and Assessments. Subject to the provisions of
Section 14.01 hereof, Lessee agrees to discharge and pay before the same become
delinquent and before any fine, penalty, or interest may be added for
nonpayment, any and all taxes, assessments, license fees, excises, imposts and
charges of every nature and classification (all or any one of which are herein
referred to as a "Tax") that at any time during the term of this Lease and any
extension hereof are levied, assessed, charged or imposed on the Premises, this
Lease, the leasehold estate of Lessee created hereby or any rent reserved or
payable hereunder including any gross receipts or other taxes levied upon,
assessed against or measured by the rent; provided, however, that Lessee shall
not be obligated to pay any income, inheritance or estate tax or any tax
imposed, levied or assessed with respect to or because of the income,
appreciation or other benefits derived by Lessor from or by virtue of this
Lease.

Section 5.02 Charges. Subject to the provisions of Section 14.01
hereof, Lessee agrees that it shall pay when due all charges for all public or
private utility services including, but not limited to water, sewer, gas, light,
heat and air conditioning, telephone, electricity, trash removal, power and
other utility and communications services (all or anyone of which are herein
referred to as a "Charge") that at any time during the term of this Lease are
rendered with respect to the Premises.

Section 5.03 General. Lessee agrees to deliver to Lessor, within thirty
(30) days after the same shall become due, receipts evidencing the payment of
any Tax or Charge required to be paid by Lessee. If any Tax or Charge may be
paid in installments, Lessee shall be obligated to pay only such installments as
they become due. Any Tax for the year in which this Lease commences and
terminates shall be prorated between Lessor and Lessee as of such dates.

ARTICLE VI. CONDITION AND USE OF THE PREMISES

Section 6.01 Condition of the Premises. Lessee acknowledges that (i)
the Premises are in good order and condition and comply in all respects with the
requirements of this Lease, (ii) Lessor has made no representation or warranty
with respect to the condition of the Premises or their fitness or ability to be
used for any particular purpose and (iii) Lessee has made a complete inspection
of the Premises and that all risks with respect to the Premises are to be borne
by Lessee. Lessor leases and Lessee takes the Premises "as-is" with all faults
and defects.

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Section 6.02 Use of the Premises. Lessee may use the Premises for any
lawful retail purpose. Lessee shall not use the Premises or any portion thereof
for any other purpose without the prior written consent of Lessor. Lessee agrees
that the use or occupation of the Premises or any part thereof shall not violate
any permit, license or franchise with respect thereto, vitiate or increase the
rate of insurance with respect to the Premises, cause the value or usefulness
thereof to diminish or constitute a public or private nuisance or waste.

ARTICLE VII. COMPLIANCE WITH LAW LIENS AND ENCUMBRANCES

Section 7.01 Compliance with Laws. Subject to the provisions of Section
14.01 hereof, Lessee, at its sole cost and expense, shall comply with and cause
the Premises and any improvements located thereon to comply with (i) all
federal, state, county, municipal and other government statutes, laws, rules,
regulations and ordinances affecting the Premises or any part thereof, or the
use thereof, including those which require the "Repairs", as that term is
defined in Section 8.01 hereof, "Alterations", as that term is defined in
Section 8.02 hereof, or any structural changes in the improvements whether or
not any such statutes, laws, rules, orders, regulations or ordinances which may
hereafter be enacted involve a change of policy on the part of the governmental
body enacting the same, (ii) all rules, orders and regulation of the National
Board of Fire Underwriters or other bodies exercising similar functions and
responsibilities in connection with the prevention of fire or the correction of
hazardous conditions which apply to the Premises and (iii) the requirements of
all policies of public liability, fire and other insurance which at the time may
be in force with respect to the Premises (any one of the items enumerated in
this Section 7.01 is herein referred to as a "Regulation" and all or more than
one of which are herein referred to as the "Regulations").

Section 7.02 Liens and Encumbrances. Subject to the provisions of
Section 14.01 hereof, Lessee shall not create or permit to be created or to
remain, and, shall promptly discharge, at its sole cost and expense, any lien,
encumbrance or charge (each or all of which are herein referred to as "Lien") on
the Premises or any part thereof or on Lessee's leasehold estate hereunder that
arises from the use or occupancy of the Premises by Lessee or by reason of any
labor, service or material furnished or claimed to have been furnished to Lessee
or by reason of any construction, Alteration, Repair or demolition by Lessee of
all or any part the Premises. The existence of any Lien shall not constitute a
violation of this Section 7.02 if payment is not then due upon the contract or
for the material or services for which such Lien has been claimed. Notice is
hereby given that Lessor will not be liable for the cost and expense of any
labor, services or materials furnished or to be furnished with respect to the
Premises at or by the direction of Lessee or anyone holding the Premises or any
part thereof by, through or under Lessee and that no laborer's, mechanic's or
materialman's or other lien for such labor, services or materials shall attach
to or affect the interest of Lessor in and to the Premises or the fee simple
title in the Premises.

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<PAGE> 5

ARTICLE VIII. REPAIRS AND ALTERATIONS

Section 8.01 Maintenance and Repair. Lessee, at its sole cost and
expense, shall keep the Premises in good order, condition and repair ordinary
wear and tear excepted and shall promptly make or cause to be made any and all
necessary or appropriate repairs, replacements, or renewals (herein collectively
referred as the "Repairs"). Lessor shall not be required to make any Repairs in,
on or to the Premises during the term of this Lease. Lessee hereby waives any
right to make repairs at the expense of Lessor which may or hereafter be
provided by statute or law.

Section 8.02 Alterations and Additions. Lessee, at its sole cost and
expense, may make additions to, alterations and replacements of and
substitutions for the building and improvements (herein singularly referred to
as an "Alteration" and collectively referred to as the "Alterations"); provided,
however, that any Alteration shall (i) not reduce or diminish the market value
of the Premises; (ii) be performed in a good workmanlike manner and with such
materials and in such manner as is consistent in character and quality with
construction of the building; (iii) conform with all the requirements of this
Lease including, but not limited to, those under Section 7.01 and Article X
hereof and (v) be expeditiously completed free of any Lien and in compliance
with any applicable Regulation. If the aggregate cost of any Alteration shall
exceed Fifty Thousand Dollars ($50,000.00) or if the Alteration substantially
affects the exterior appearance of any part of the building and/or the
improvements located on the Premises, prior to the commencement thereof, Lessee
shall obtain the prior written consent of Lessor.

Section 8.03 Inspection by Lessor. Lessor and its authorized
representatives may enter the Premises or any part thereof at all reasonable
times for the purpose of inspecting the same. Lessor shall not have any duty to
make any such inspection nor shall it incur any liability or obligation for not
making any such inspection.

ARTICLE IX. DAMAGE AND DESTRUCTION

Section 9.01 Notices. If any damage to or destruction of all or any
part of the Premises occurs, Lessee will promptly give written notice thereof to
Lessor generally describing the nature and extent of such damage or destruction.

Section 9.02 Total or Partial. If the Premises are (i) partially
damaged and restoration thereof cannot, in Lessor's sole discretion, be
completed within one hundred and fifty (150) days after the date of such
destruction or (ii) totally destroyed, Lessor, at its sole and exclusive option
by notice to Lessee given on or before sixty (60) days after the date of such
casualty, may terminate this Lease in which event the rent shall abate for the
unexpired portion of the term of this Lease effective as of the date of the
notice of termination. If this Lease is terminated, Lessor and Lessee shall be
released and discharged from any obligations or liabilities under this Lease
except for those which by there express terms survive the expiration or
termination of this Lease.

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<PAGE> 6

Section 9.03 Restoration. If Lessor elects to restore the Premises
after a casualty (whether total or partial), Lessor shall, at its sole cost and
expense, proceed with reasonable diligence to restore the Premises to
substantially the same condition as they were prior to such casualty. During
such restoration, if all or a portion of the Premises are untenantable and the
damage or destruction was not caused in whole or in part by any negligent act or
omission of Lessee, its agents, employees, invitees or others for whom the
Lessee is responsible, the rent payable under this Lease during the period in
which the Premises are untenantable shall be adjusted in such a manner as is
fair and reasonable under the circumstances. If Lessor elects to restore the
Premises and thereafter fails to complete the necessary restoration of the
Premises to permit Lessee to reoccupy the Premises on or before one hundred and
fifty (150) days after the date such destruction, Lessee may, at its option and
as its sole right and exclusive remedy, terminate this Lease by notice to Lessor
given on or before thirty (30) days after the date on which the Premises were
required to be restored by Lessor. If this Lease is terminated, Lessor and
Lessee shall be released and discharged from any obligations or liabilities
under this Lease except for those which by there express terms survive the
expiration or termination of this Lease.

Unless otherwise expressly provided in this Lease, there shall be no
abatement or reduction or any rent payable by Lessee under this Lease during the
Restoration or on account of such damage or destruction.

ARTICLE X. INSURANCE.

Section 10.01 Classes of Insurance. Lessee shall keep the Premises
insured against the risks and hazards and with coverage in amounts not less than
those specified as follows:

A. Insurance against loss or damage to the Premises by fire
and other risks customarily included under a standard ISO form of
commercial property insurance with a special form coverage in an amount
equal to the full and actual replacement cost, including the costs of
debris removal, less physical depreciation of the improvements located
on the Premises and with replacement cost endorsements and deductible
provisions which do not exceed One Thousand and No/100 Dollars
($1,000.00);

B. General public liability and property damage insurance
(including, but not limited to, coverage for any construction on or
about the Premises) covering the legal liability of Lessor and Lessee
against claims for any bodily injury or death of persons and for damage
to or destruction of property occurring on, in or about the Premises
and the adjoining streets, sidewalks and passageways and arising out of
the use or occupation of the Premises by Lessee in the minimum amounts
of One Million Dollars ($1,000,000.00) for each occurrence in
connection with any one death or bodily injury, Three Million Dollars
($3,000,000.00) in connection with any single occurrence, and Five
Hundred Thousand Dollars ($500,000.00) in connection with claims for
property damage; and

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C. Such other insurance on the Premises in such amounts and
against such other insurable hazards which at the time are commonly
obtained in the case of property similar to the Premises, due regard
being given to the height and type off the improvements and their
construction, composition, location and use.

Section 10.02 Requirements. All insurance required under Section 10.01
hereof shall be written by companies of recognized financial standing i.e., A
Best Rating of at least A and a Financial Size Category of at least XI which are
authorized to do insurance business in the state where the Premises are located;
shall name as the insured parties Lessor and Lessee, as their respective
interest may appear; shall be reasonably satisfactory to Lessor in all respects
and shall specifically provide (i) an effective waiver by the insurer of all
rights of subrogation against any named insured or such insured's interest in
the Premises or any income derived therefrom, (ii) that all insurance proceeds
for losses shall be adjusted by Lessor, (iii) that all insurance proceeds shall
be payable to Lessor for the benefit of Lessor and Lessee, as their respective
interests may appear, (iv) that no cancellation, reduction in amount or material
change in coverage thereof shall be effective until at least ten (10) days after
receipt by Lessor and Lessee of written notice thereof, and (v) that during
construction of improvements on the Premises such policies shall be in
"Builder's Risk" form. Lessee, at its cost and expense, shall permit Lessor to
examine all policies evidencing the insurance required to be maintained by
Lessee under this Lease. Nothing contained in this Lease shall be construed to
require Lessor to prosecute any claim against any insurer or to contest any
settlement proposed by any insurer.

Section 10.03 Certificates. Lessee shall deliver to Lessor promptly
after the execution and delivery of this Lease and on each anniversary of the
date of this Lease, a certificate addressed to Lessor, signed by Lessee and
dated within thirty (30) days prior to the delivery thereof (i) listing the
insurers and policy numbers evidencing all the insurance then required to be
maintained by Lessee hereunder and (ii) certifying that said insurance is in
full force and effect and that such insurance and the policies evidencing the
same comply with the requirements of this Lease. Lessee's failure to effect,
maintain or renew any insurance provided for in this Article X, to pay the
premiums therefor or to deliver to Lessor any of such certificates shall entitle
Lessor, at its option but without obligation, upon ten (10) days notice to
Lessee, to procure such insurance, pay the premiums therefor or obtain such
certificates and any sums expended by Lessor for such purposes shall be
Additional Rent hereunder and shall be repaid by Lessee within ten (10) days
following the date on which such expenditure shall be made by Lessor.

Section 10.04 General. Lessee shall not obtain or carry separate
insurance concurrent in form or contributing in the event of loss in addition to
the insurance required under Section 10.01 hereof unless Lessor is included
therein as a named insured, with loss payable as in this Lease provided. Lessee
shall promptly notify Lessor whenever any such separate insurance is obtained
and shall, if requested, deliver to Lessor the policy, policies or certificates
evidencing the same.

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ARTICLE XI. INDEMNIFICATION

Section 11.01 Indemnification. Lessee agrees to defend, indemnify and
save harmless Lessor from and against any and all liability, loss, damage, cost,
expense including all attorney's fees and expenses of Lessee and of Lessor,
causes of action, suits, claims, demands or judgments of any nature whatsoever
(i) arising from any injury to or to the death of any person or damage to any
property occurring on the Premises or on adjoining sidewalks, streets or ways,
(ii) in any manner arising out of or connected with the use, non-use, condition
or occupation of the Premises or any part thereof or of adjoining sidewalks,
streets or ways or (iii) resulting from the violation by Lessee of any term,
condition or covenant of this Lease or of any contract, agreement, restriction
or Regulation affecting the Premises or any part thereof or the ownership,
occupancy or use thereof. The obligations of Lessee under this Section 11.01
shall survive the expiration or earlier termination of this Lease and any
transfer or assignment by Lessor or Lessee of this Lease or any interest
hereunder.

ARTICLE XII. OWNERSHIP OF IMPROVEMENTS

Section 12.01 Title to Improvements. Ownership of and title to the
building, the improvements and all machinery and equipment now or hereafter
constructed, installed or placed by Lessee on the Premises and all Alterations
thereto when constructed, installed or placed on the Premises, shall be and
remain in Lessor. Any improvements constructed by Lessee on the Premises,
whether by obligation created hereunder or otherwise, shall not in any way
constitute a substitute for or a credit against any obligation of Lessee under
this Lease to pay rent or Additional Rent.

Section 12.02 Surrender. On the expiration or earlier termination of
the term of this Lease, Lessee shall peaceable quit and surrender the Premises
to Lessor, any and all machinery and equipment and all Alterations constructed,
installed or placed by Lessee thereon in good order and condition, ordinary wear
and tear excepted. If there is not then a Default under this Lease, Lessee shall
have the right upon the expiration of the term of this Lease to remove from the
Premises all machinery and equipment placed or installed by Lessee thereon. Any
machinery and equipment not removed by Lessee on or before the termination of
this Lease shall become the property of Lessor immediately upon such
termination.

Section 12.03 Removal of Improvements. Lessee, at its sole cost and
expense, shall, upon Lessor's written request therefor, promptly remove all or
any part of the improvements, machinery and equipment from the Premises
subsequent to the expiration or earlier termination of this Lease. Lessee, at
its sole cost and expense, shall repair any damage caused thereby to the
Premises or any improvements, buildings or structures remaining thereon.

ARTICLE XIII. ASSIGNMENT AND SUBLETTING

Section 13.01 Assignment with Consent. Lessee shall have the right to
assign all of its interest in, to and under this Lease for any portion of the
unexpired term hereof at any time to any

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person or entity (herein referred to as the "Assignee") provided that (i) the
Assignee is approved and accepted by any franchisor under any franchise
agreement or license pursuant to which the improvements on the Premises are
operated, (ii) the Assignee shall be approved and accepted by Lessor which
approval and acceptance shall be based upon the net worth of the Assignee being
sufficient to insure the timely performance of all terms, conditions,
provisions, agreements and covenants to be observed, performed and complied with
by Lessee under the provisions of this Lease, (iii) Lessee delivering to Lessor
an assumption agreement duly executed by the Assignee, in substance and form
satisfactory to Lessor and its counsel, legally effective to cause the Assignee
to assume all of the terms, conditions, provisions, agreements and covenants to
be observed, performed or complied with by Lessee under this Lease, (iv) the
Assignee shall have paid or caused to be paid all rent and Additional Rent and
other sums required to be paid hereunder to and including the date of such
assumption, and (v) the Assignee completely and totally remedying or curing any
Default existing prior to the date of such assumption so that, at the time of
such assumption, there shall exist no Default or event which, with notice or
lapse of time, or both, would constitute a Default. Any assignee of Lessee's
interest under this Lease, immediate or remote, shall have like power of
assignment on the same conditions and subject to the same restrictions as those
imposed on Lessee under this Section 13.01.

Section 13.02 Subleases. Lessee shall have the right to sublease all or
any portion of the Premises without the consent or approval of Lessor. In no
event shall any sublease relieve the Lessee of any of its obligations under this
Lease, including the payment of the rent.

Section 13.03 Termination of Subleases. If this Lease is terminated by
Lessor prior to the expiration of the term hereof, Lessor agrees that, subject
to the conditions hereinafter set forth, such termination shall not result in a
termination of any bona fide sublease entered into by Lessee pursuant to Section
13.02 hereof of all or any portion of the Premises and that any such sublease
shall continue for the duration of its term and any extension thereof as a
direct lease between Lessor and the sublessee thereunder with the same force and
effect as if Lessor hereunder had originally entered into such sublease as the
lessor thereunder. The application of the provisions of this Section 13.03 shall
be conditioned upon (i) the sublease being submitted to Lessor for recognition
and Lessor failing to object thereto by written notice to the sublessee at its
address shown in the lease within thirty (30) days after the date of the receipt
thereof by Lessor, (ii) the sublessee under the lease agreeing, in the event of
the termination of this Lease, to attorn to Lessor, (iii) the sublease being in
good standing at the time of the termination of this Lease and (iv) that the
sublease be for a use authorized and not prohibited by the provisions of Section
6.02 hereof. On the satisfaction of the foregoing conditions and on request and
at Lessee's expense, Lessor agrees to execute, acknowledge and deliver such
reasonable agreements evidencing and agreeing to the foregoing as said sublessee
may reasonably require.

ARTICLE XIV. RIGHT TO CONTEST.

Section 14.01 Permitted Contests. Lessee, at its expense, may contest
(by appropriate legal

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proceedings conducted in good faith and with due diligence) the amount, validity
or application, in whole or in part, of any Tax, Charge, Regulation or Lien
provided that (i) Lessee shall give Lessor prior written notice of such contest,
(ii) Lessee shall first make all contested payments (under protest if it
desires) unless such proceeding shall suspend the collection thereof from Lessor
and from the rent under this Lease or from the Premises, (iii) no part of the
Premises or any interest therein or the rent under this Lease shall be exposed
or subjected thereby to sale, forfeiture, foreclosure or interference, (iv)
Lessor shall not be exposed thereby to any civil or criminal liability for
failure to comply with any Regulation and the Premises shall not be subject to
the imposition of any Lien as a result of such failure and (v) Lessee shall have
furnished any security required in such proceeding or under this Lease or
reasonably requested by Lessor to insure payment of any Tax, Charge, Lien or
compliance with any Regulation. Lessee agrees to pay and save Lessor harmless
from and against any and all losses, judgments, decrees and costs including all
attorney's fees and expenses in connection with such contest, promptly after the
final determination of such contest, pay and discharge the amounts which shall
be levied, assessed, charged or imposed or be determined to be payable therein
together with all penalties, fines, interest, costs and expenses resulting
therefrom and will promptly comply with any Regulation under which compliance is
required. The obligations of Lessee under this Section 14.01 shall survive the
expiration or earlier termination of this Lease and any transfer or assignment
by Lessor or Lessee of this Lease or any interest hereunder.

ARTICLE XV. CONDEMNATION

Section 15.01 Total. If all or any portion of the Premises is taken for
any public or quasi-public use under any governmental law, ordinance or
regulation or by right of eminent domain or by private purchase in lieu thereof
and the taking would prevent the use of the Premises for the purpose for which
they are then being used, this Lease shall terminate and the rent shall be
abated during the unexpired portion of the term of this Lease effective on the
date the condemning authority takes possession of the Premises. Lessor shall
notify Lessee in the event Lessor receives notice of a proposed taking.

Section 15.02 Partial. If a portion of the Premises shall be subject to
a taking and this Lease is not terminated as provided in Section 15.01 hereof,
Lessor, at its sole and exclusive option, may either (i) terminate this Lease by
notice to Lessee effective as of the date which is ninety (90) days after the
date of such notice or (ii) restore and reconstruct the Premises and any other
improvements situated on the Premises to the extent necessary to make the
Premises tenantable. If Lessor elects to restore the Premises, the rent payable
under this Lease for the unexpired portion of the term of this Lease shall be
equitably adjusted to reflect the effects of the taking.

Section 15.03 Award. In any taking of all or a portion of the Premises,
Lessor shall be entitled to receive all of the award made in connection
therewith, including, without limitation, any award for the value of the
unexpired term of this Lease. Lessee shall not be entitled to receive any award
for the loss of its leasehold advantage. If there is an allocation in the award
made to Lessor for moving or business interruption expenses of Lessee, Lessor
shall pay such designated portion

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of the award to Lessee on or before fifteen (15) days after its actual receipt
thereof. Notwithstanding anything contained herein to the contrary, Lessor shall
not be obligated to seek recovery of such expense for or on behalf of Lessee.

ARTICLE XVI. DEFAULT

Section 16.01 Events of Default. The occurrence of any of the following
acts, events or conditions (herein referred to as a "Default") regardless of the
pendency of any proceeding which has or might have the effect of preventing
Lessee from complying with the terms, conditions or covenants of this Lease,
shall constitute a default on an event of default under this Lease.

A. Lessee fails to make any payment of rent or Additional Rent
required to be paid by Lessee or to fulfill or perform any other
covenants, agreements or obligations of Lessee hereunder and such
failure continues for ten (10) days after the payment is due or the
performance required.

B. The Premises are abandoned or left unoccupied for a period
of thirty (30) consecutive days and Lessee does not deliver to Lessor
during such period a written certification that Lessee is prevented
from occupying the Premises by circumstances beyond its control and
describing said circumstances and that Lessee intends to reoccupy the
Premises on the termination of such circumstances.

C. The estate or interest of Lessee in the Premises is levied
on or attached in any proceedings and such process in not vacated or
discharged within thirty (30) days after the date of such levy or
attachment.

Section 16.02 Termination. On the occurrence of any Default hereunder,
Lessor shall have the right, at its election and regardless of the availability
to Lessor of any other remedy under this Lease or by law or in equity provided,
to give Lessee then or at any time thereafter while any such Default exists or
continues written notice of the termination of this Lease as of the date
specified in such notice of termination, which date shall be not less than ten
(10) days after the date of the giving of such notice. On such termination date
this Lease and the term and estate herein granted shall, subject to the
provisions of Section 16.05 hereof, expire and terminate by limitation, and all
rights of Lessee under this Lease shall expire and terminate, unless prior to
such termination date, Lessee pays to Lessor all arrears of rent and Additional
Rent payable by Lessee under this Lease together with interest thereon at the
rate of 10% per annum and all cost and expenses, including, without limitation,
attorney's fees and expenses incurred by or on behalf of Lessor by reason of any
Default and fully remedy any other Default then existing to the satisfaction of
Lessor.

Section 16.03 Reentry by Lessor. Whether or not this Lease has been
terminated pursuant to Section 16.02 hereof, if a Default occurs, Lessor may,
for and on behalf of Lessee and as Lessee's legal representative, enter upon and
repossess the Premises or any part thereof by force, summary

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proceedings, ejectment or otherwise and may remove Lessee and all other persons
and any and all property therefrom. Lessor shall not be liable to Lessee or to
any person or entity claiming by, through or under Lessee for or by reason of
any such entry, repossession or removal.

Section 16.04 Rights upon Repossession. At any time or from time to
time after the repossession of the Premises or any part thereof pursuant to
Section 16.03 hereof and whether or not this Lease shall have been terminated
pursuant to Section 16.02 hereof, Lessor may at its option (i) repair or alter
the Premises in such manner as Lessor may deem necessary or advisable so as to
put the Premises in good order and make the same rentable and (ii) relet or
operate the Premises or any part thereof for the account of Lessee for such term
or terms which may be greater or less than the period which would otherwise have
constituted the remainder of the term of this Lease on such conditions which may
include concessions or free rent and for such uses as Lessor in its discretion
may determine, and may collect and receive the rents therefor. Lessor shall not
be responsible or liable for any failure to collect any rent due upon any such
reletting. No repossession of the Premises by Lessor shall be construed as an
election to terminate this Lease and the term herein demised unless, in
connection therewith, a written notice of termination evidencing such intention
is given to Lessee as provided in Section 16.02 hereof.

Section 16.05 Liability of Lessee. No termination of this Lease
pursuant to Section 16.02 hereof or by operation of law or otherwise except as
expressly provided herein and no repossession of the Premises or any part
thereof pursuant to Section 16.03 hereof or otherwise, shall relieve Lessee of
its liabilities and obligations hereunder, all of which shall survive such
termination or repossession.

Section 16.06 Right of Lessor to Perform for Lessee. Notwithstanding
any other provision of this Lease to the contrary, upon the occurrence of any
Default, Lessor, at its exclusive option on behalf of Lessee, may take whatever
steps it deems reasonably necessary to cure any Default and to charge Lessee for
the cost and expenses attributable thereto. Lessee shall pay all costs and
expenses immediately upon receipt of a statement thereof from Lessor. Any
amounts not so paid shall be deemed Additional Rent hereunder.

Section 16.07 General. Each right, power and remedy of Lessor provided
in this Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall be cumulative and concurrent and shall be in addition to each
and every other right, power or remedy provided in this Lease or now or
hereafter existing at law or in equity or by statute or otherwise. In addition
to any other remedy provided in this Lease, Lessor shall be entitled, to the
extent permitted by applicable law, to injunctive relief in the event of the
violation or attempted or threatened violation of any term, condition or
covenant of this Lease or to a decree compelling performance thereof. The
exercise by Lessor of any one or more of the rights, powers or remedies provided
in this Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by Lessor of any
such right, power or remedy. Lessor shall have no obligations to mitigate any
damages it may incur by reason of default of Lessee.

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<PAGE> 13

ARTICLE XVII. LIABILITY OF LESSOR

Section 17.01 Limitation on Liability. Notwithstanding anything
contained in this Lease or otherwise at law to the contrary, Lessee agrees that
Lessor and its partners, shall have no personal liability under this Lease and
that, in any action brought to enforce the covenants, agreements and warranties
of Lessor under this Lease, Lessee shall in no event be entitled to seek and
shall not seek any damages against Lessor or any of its partners for the breach
or default of any covenant, warranty or agreement under this Lease and any
judgment or decree against Lessor or any of its partners shall be enforceable
against Lessor and any of its partners only to the extent of its interest in the
Premises. Any judgment or decree shall not be subject to enforcement and
execution against any other asset of Lessor or any of its partners. In the event
of the sale or other transfer of the Premises, all obligations of Lessor
hereunder shall be transferred to the new owner of the Premises as of the date
of the sale of the Premises and Lessor shall have no obligations or liability,
as landlord, from and after the date of the sale or transfer of the Premises.

ARTICLE XVIII. MISCELLANEOUS

Section 18.01 Waiver. The failure of Lessor to insist on the strict
performance by Lessee of any term, condition or covenant on Lessee's part to be
performed pursuant to the terms of this Lease or to exercise any option, right,
power or remedy of Lessor contained in this Lease shall not be deemed nor
construed as a waiver of such performance or relinquishment of such right now or
subsequent hereto. The receipt by Lessor of any rent or Additional Rent required
to be paid by Lessee hereunder with knowledge of any Default by Lessee shall not
be deemed a waiver of such Default. No waiver by Lessor of any provision of this
Lease shall be deemed to have been made unless expressed in writing and signed
by Lessor.

Lessee hereby waives and surrenders any right or privilege under any
present or future constitution, statute or law to redeem the Premises or to
continue this Lease for the term herein demised after the termination of this
Lease and the benefits of any present or future constitution, statute or rule of
law which exempts property from liability for debt or for distress for rent.

Section 18.02 Estoppel Certificates. Lessee shall execute, acknowledge
and deliver to Lessor and to any mortgagee of Lessor upon request, a written
statement certifying (i) that this Lease is unmodified and in full force and
effect or if there have been modifications, that the Lease is in full force and
effect as modified, and stating the modifications, (ii) the dates to which rent
and Additional Rent payable by Lessee hereunder have been paid and (iii) that no
notice has been received by Lessee of any Default which has not been cured,
except as to any Default specified in said certificate.

Lessor shall execute, acknowledge and deliver to Lessee a written
certificate certifying (i) that this Lease is unmodified and in full force and
effect or if there have been modifications, that this Lease is in full force and
effect as modified, and stating the modifications, (ii) the dates to which rent
and Additional Rent payable by Lessee hereunder have been paid and (iii) whether
or not, to the

-13-

<PAGE> 14

knowledge of Lessor, there is then existing any Default under this Lease and if
so, specifying the same.

Section 18.03 No Merger of Title. There shall be no merger of the
leasehold estate created by this Lease with the leasehold estate of Lessor and
or the fee estate in the Premises by reason of the fact that the same person may
own or hold both the leasehold estate created by this Lease or any interest
therein, the leasehold estate or the fee estate in the Premises by reason of the
fact that the same person may own or hold both the leasehold estate created by
this Lease or any interest therein, the leasehold estate or the fee estate in
the Premises or any interest therein; and no such merger shall occur unless and
until all persons or entities having any interest in the leasehold estate
created by this Lease or the fee estate in the Premises shall join in a written
instrument effecting such merger and shall duly record the same.

Section 18.04 Transfer by Lessor. If Lessor shall transfer or assign or
otherwise dispose of its interest under this Lease, it shall thereupon be
released and discharged from any and all liabilities and obligations under this
Lease except those accruing prior to such transfer, assignment or other
disposition and such liabilities and obligations shall thereafter be binding
upon the assignee of Lessor's interest under this Lease.

Section 18.05 Separability. Each and every covenant and agreement
contained in this Lease shall be for any and all purposes hereof construed as
separate and independent and the breach of any covenant by Lessor shall not
discharge or relieve Lessee from its obligation to perform each and every
covenant and agreement to be performed by Lessee under this Lease. All rights,
powers and remedies provided herein may be exercised only to the extent that the
exercise thereof does not violate applicable law and shall be limited to the
extent necessary to render this Lease valid and enforceable. If any term,
provision or covenant of this Lease or the application thereof to any person or
circumstances shall be held to be invalid, illegal or unenforceable, the
validity of the remainder of this Lease or the application so such term,
provision or covenant to persons or circumstances other than those to which it
is held invalid or unenforceable shall not be affected hereby.

Section 18.06 Notices Demands and Other Instruments. All notices,
demands, requests, consents, approvals and other instruments required or
permitted to be given pursuant to the terms of this Lease shall be in writing
and shall be deemed to have been properly given if sent by first class
registered or certified United States mail, return receipt requested, addressed
to each party hereto at the following address:

Lessor: c/o K&G Associates, Inc.
1750-A Ellsworth Industrial Boulevard
Atlanta, Georgia 30318
Attention: Stephen H. Greenspan

-14-

<PAGE> 15

Lessee: T&C Liquidators, Inc.
3417 E. John W. Carpenter Freeway
Irving, Texas 75062
Attention: Richard M. Vehon

or at such other address in the United States as Lessor or Lessee may from time
to time designate in writing delivered to the other party.

Section 18.07 Successors and Assigns. Each and every covenant, term,
condition and obligation contained in this Lease shall apply to and be binding
upon and inure to the benefit or detriment or the respective legal
representatives, successors and permitted assigns of Lessor and Lessee. Whenever
reference to the parties hereto is made in this Lease, such reference shall be
deemed to include the legal representatives, successors and assigns of said
party the same as if in each case expressed. The term "person" when used in this
Lease shall mean any individual, corporation, limited liability company,
partnership, firm, trust, joint venture, business association, syndicate,
government or governmental organization or any other entity.

Section 18.08 Headings. The headings to the various sections of this
Lease have been inserted for purposes of reference only and shall not limit or
define the express terms and provisions of this Lease.

Section 18.09 Counterparts. This Lease may be executed in any number of
counterparts, each of which is an original, but all of which shall constitute
one instrument.

Section 18.10 Applicable Law. This Lease shall be construed under and
enforced in accordance with the law of the State of Georgia.

Section 18.11 Exhibits. Exhibit A attached hereto is by this reference
incorporated herein and made a part hereof.

Section 18.12 Entire Agreement; Amendments. This Lease sets forth the
entire understanding and agreement of Lessor and Lessee with respect to the
Premises. All courses of dealing, usage of trade and all prior representations,
promises, understandings and agreements, whether oral or written, are superseded
by and merged into this Lease. No modification or amendment of this Lease shall
be binding on Lessee and/or Lessor unless in writing and signed by both parties
hereto.

Section 18.13 All Genders and Numbers Included. Whenever the singular
or plural number, or masculine, feminine, or neuter gender is used in this
Lease, it shall equally apply to, extend to, and include the other.

Section 18.14 Time is of Essence. All time limits stated in this Lease
are of the essence.

Section 18.15 Memorandum of Lease. Lessor and Lessee hereby agree that
this Lease shall

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<PAGE> 16

not be recorded in the public records of Dallas, County, Texas. Lessor and
Lessee may, contemporaneously with the execution of this Lease, execute a
memorandum of this Lease, in recordable form satisfactory to Lessor and Lessee,
wherein a legal description of the Premises, the term of this Lease and certain
other terms and provisions hereof, excepting, however, the provisions hereof
relating to the amount of the rent payable hereunder, shall be set forth. The
memorandum of this Lease shall be filed for record with the Clerk of the
Superior Court of Dallas County, Texas. Any and all recording cost and stamps,
if any, required in connection with the recording of the memorandum of this
Lease shall be at sole cost and expense of Lessee.

IN WITNESS WHEREOF, Lessor and Lessee have caused these presents to be
duly executed and their seals to be affixed hereunto as of the day and year
first above written.

Signed, sealed and delivered "LESSOR"
delivered in the presence of:

/s/ J. SAUER /s/ STEPHEN H. GREENSPAN (SEAL)
- --------------------------------- -------------------------------
Witness STEPHEN H. GREENSPAN

/s/ KEELA BISHOP
- ---------------------------------
Notary Public

[NOTARY SEAL]

-16-

<PAGE> 17

Signed, sealed and delivered
delivered in the presence of:

/s/ J. SAUER /s/ PAUL RUBEN (SEAL)
- --------------------------------- -------------------------------
Witness PAUL RUBEN

/s/ KEELA BISHOP
- ---------------------------------
Notary Public

[NOTARY SEAL]

Signed, sealed and delivered
delivered in the presence of:

/s/ J. SAUER /s/ RICHARD M. VEHON (SEAL)
- --------------------------------- -------------------------------
Witness RICHARD M. VEHON

/s/ KEELA BISHOP
- ---------------------------------
Notary Public

[NOTARY SEAL]

Signed, sealed and delivered "LESSEE"
delivered in the presence of:

/s/ J. SAUER T&C LIQUIDATORS, INC.,
- --------------------------------- a Georgia corporation
Witness

/s/ KEELA BISHOP By: /s/ STEPHEN H. GREENSPAN
- --------------------------------- ----------------------------
Notary Public Its:
---------------------------

[NOTARY SEAL] [CORPORATE SEAL]

-17-

<PAGE> 18

EXHIBIT "A"

TITLE ENCUMBRANCES

1. Visible easements on the property.

2. An easement for utilities, 6 feet in width as shown by the plat
recorded in Volume 402, Page 1437, Map Records, Dallas County, Texas.
Affects: North and West sides of Lot 4.

3. An easement for utilities, 6 feet in width as shown by the plat
recorded in Volume 402, Page 1437, Map Records, Dallas County, Texas.
Affects: Southwest side of Lot 5.

4. Part of Irving Flood Control District Section I as set out in
instrument filed 8/31/89, recorded in Volume 89170, Page 1576, Real
Property Records, Dallas County, Texas.

5. Building Line 25 feet from Royalty Row and along Southwest side as
shown by plat recorded in Volume 402, Page 1437, Map Records of Dallas
County, Texas.

6. Subject to the Order Adopting Airport Zoning Regulations of the
Dallas-Fort Worth Regional Airport, Ordinance No. 71-100, imposed by
the Joint Airport Zoning Board of the Dallas-Fort Worth Regional
Airport, filed September 2, 1982, recorded in Volume 82173, Page 0178,
Real Property Records of Dallas County, Texas, and in Volume 7349, Page
1106, Real Property Records, Tarrant County, Texas.

7. All other matters in the public records.

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<PAGE> 1
EXHIBIT 10.18

STATE OF GEORGIA
COUNTY OF FULTON

AMENDMENT TO LEASE

THIS AMENDMENT TO LEASE is made and entered into as of the 15th day of
April, 1996, by and between STEPHEN H. GREENSPAN, PAUL RUBEN and RICHARD M.
VEHON (herein referred to as the "Lessor") and T&C LIQUIDATORS, INC., a Texas
corporation (herein referred to as the "Lessee").

WHEREAS, Lessor and Lessee entered into that certain lease (herein
referred to as the "Lease") dated October 1, 1994 regarding that certain tract
of land being Lot 5 and the South 20 feet of Lot 4, in BLOCK D, of FREEWAY
INDUSTRIAL DISTRICT, an Addition to the City of Irving, Dallas County, Texas,
according to the Map or Plat thereof recorded in Volume 402, Page 1437, of the
Map Records of Dallas County, Texas together with all buildings, structures and
other improvements, now or hereafter located thereon (herein collectively
referred to as the "Premises");

WHEREAS, Lessor and Lessee desire to amend the Lease as herein set
forth; and

NOW, THEREFORE, in consideration of Ten and No/100 Dollars ($10.00) in
hand paid by each party to the other and other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, Lessor and Lessee
agree that the Lease is hereby amended as follows:

1. Section 2.01 of the Lease is amended by providing that the term of
the Lease shall be extended to include the period from and including October 1,
1996 through September 30, 2001 (herein referred to as the "Extended Initial
Term").

Provided Lessee is not in default under the terms of the Lease, Lessee
shall have the right and option (herein referred to as the "First Renewal
Option") to extend the term of the Lease for an additional five (5) years
(herein referred to as the "First Extension Term") after the expiration of the
Extended Initial Term on the same terms and conditions set forth herein except
the annual rent shall be determined as herein set forth. Lessee shall exercise
the First Renewal Option by notice to Lessor given not less than one hundred
eighty (180) nor more than three hundred sixty (360) days prior to the
expiration of the Extended Initial Term.

Provided Lessee has exercised the First Renewal Option and provided
Lessee is not in default hereunder, Lessor shall have the further right and
option (herein referred to as the "Second Renewal Option") to extend the term of
the Lease for an additional five (5) years (herein referred to as the "Second
Extension Term") after the expiration of the First Extension Term upon the same
terms and conditions as set forth herein except that the annual rent shall be
determined as herein set forth. Lessee shall exercise the Second Renewal Option
by notice to Lessor given not less than one hundred eighty (180) nor more than
three hundred sixty (360) days prior to the expiration of the First Renewal
Term.

2. Section 4.01 of the Lease is amended by providing that during the
Extended Initial Term of the Lease, Lessee agrees to pay Lessor, as rent
hereunder, an annual rent as follows:

-1-

<PAGE> 2

<TABLE>
<CAPTION>
EXTENDED INITIAL MONTHLY
TERM ANNUAL RENT INSTALLMENTS
- ----------------- ---------------------------------------------- ------------
<S> <C> <C>
10/1/96 - 9/30/97 $66,000.00 $5,500.00
10/1/97 - 9/30/98 $66,000.00 $5,500.00
10/1/98 - 9/30/99 $66,000.00 $5,500.00
10/1/99 - 9/30/00 Adjusted as herein provided
10/1/00 - 9/30/01 Same annual rent and monthly installments as
for year 10/1/99 - 9/30/00
</TABLE>

<TABLE>
<CAPTION>
FIRST EXTENSION
TERM ANNUAL RENT AND MONTHLY INSTALLMENTS
- ----------------- -------------------------------------------------------------------
<S> <C>
10/1/01 - 9/30/02 Adjusted as herein provided
10/1/02 - 9/30/03 Same annual rent and monthly installments as for 10/1/01 - 9/30/02
10/1/03 - 9/30/04 Same annual rent and monthly installments as for 10/1/01 - 9/30/02
10/1/04 - 9/30/05 Adjusted as herein provided
10/1/05 - 9/30/06 Same annual rent and monthly installments as for 10/1/04 - 9/30/05
</TABLE>

<TABLE>
<CAPTION>
SECOND EXTENSION
TERM ANNUAL RENT AND MONTHLY INSTALLMENTS
- ----------------- -------------------------------------------------------------------
<S> <C>
10/1/06 - 9/30/07 Adjusted as herein provided
10/1/07 - 9/30/08 Same annual rent and monthly installments as for 10/1/06 - 9/30/07
10/1/08 - 9/30/09 Same annual rent and monthly installments as for 10/1/06 - 9/30/07
10/1/09 - 9/30/10 Adjusted as herein provided
10/1/10 - 9/30/11 Same annual rent and monthly installments as for 10/1/09 - 9/30/10
</TABLE>

On October 1, 1999 and again on October 1, 2001, October 1, 2004,
October 1, 2006 and October 1, 2009 (herein each referred to as an "Adjustment
Date") the annual rent shall be increased as follows:

A. For the year from October 1, 1999 through September 30, 2000, the
annual rent shall be increased by an amount equal to the lesser of the product
obtained by multiplying (i) the annual rent for the preceding year (i.e.,
October 1, 1998 through September 30, 1999) by one hundred fifteen percent
(115%) or (ii) the annual rent for the preceding year by (B) the percentage
change of the "CPI" (as that term is herein defined) for December 1998 from the
CPI for the month of December 1995 plus one hundred percent (100%).

B. For the year from October 1, 2001 through September 30, 2002, the
annual rent shall be increased by an amount equal to the lesser of the product
obtained by multiplying (i) the annual rent for the

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<PAGE> 3

preceding year (i.e., October 1, 2000 through September 30, 2001) by one hundred
ten percent (110%) or (ii) the annual rent for the preceding year by (B) the
percentage change of the "CPI" (as that term is herein defined) for December
2000 from the CPI for the month of December 1998 plus one hundred percent
(100%).

C. For the year from October 1, 2004 through September 30, 2005, the
annual rent shall be increased by an amount equal to the lesser of the product
obtained by multiplying (i) the annual rent for the preceding year (i.e.,
October 1, 2003 through September 30, 2004) by one hundred fifteen percent
(115%) or (ii) the annual rent for the preceding year by (B) the percentage
change of the "CPI" (as that term is herein defined) for December 2003 from the
CPI for the month of December 2000 plus one hundred percent (100%).

D. For the year from October 1, 2006 through September 30, 2007, the
annual rent shall be increased by an amount equal to the lesser of the product
obtained by multiplying (i) the annual rent for the preceding year (i.e.,
October 1, 2005 through September 30, 2006) by one hundred ten percent (110%) or
(ii) the annual rent for the preceding year by (B) the percentage change of the
"CPI" (as that term is herein defined) for December 2005 from the CPI for the
month of December 2003 plus one hundred percent (100%).

E. For the year from October 1, 2009 through September 30, 2010, the
annual rent shall be increased by an amount equal to the lesser of the product
obtained by multiplying (i) the annual rent for the preceding year (i.e.,
October 1, 2008 through September 30, 2009) by one hundred fifteen percent
(115%) or (ii) the annual rent for the preceding year by (B) the percentage
change of the "CPI" (as that term is herein defined) for December 2008 from the
CPI for the month of December 2005 plus one hundred percent (100%).

An example on how to determine the change in the annual rent is set
forth below. In no event shall the annual rent for any year during the term of
the Lease be less than the annual rent for the next preceding year of the term
of the Lease.

EXAMPLE

<TABLE>
<CAPTION>
Index Point Change

<S> <C>
CPI (for December 1998) 118.5
Less CPI for December 1995 113.8
Equals Index Point Change 4.7

Percentage Change

Index Point Change 4.7
Divided by CPI for December 1995 113.8
Equals Percentage of Change 0.041

Annual Rent

Annual Rent for preceding year $ 100.00
Multiplied by Percentage of Change 1.041
Equals Annual Rent for current year $ 104.10
</TABLE>

-3-

<PAGE> 4

For the purpose hereof, the term "CPI" shall mean the Consumer Price
Index, All Urban Consumers (CPI-U), U.S. City Average, All Items - 1982 - 84 =
100 which is published by the United States Bureau of Labor Statistics (herein
referred to as "BLS").

If the standard reference base for the CPI is changed, the CPI shall be
converted using factors supplied by BLS which are based on the percentage change
and not the index point change in the reference base. If an error is discovered
in the CPI and is changed by BLS, the annual rent shall be recomputed based on
the correct CPI and any payments required by reason thereof shall be promptly
made by Lessor or Lessee, as the case may be. If the CPI is discontinued or is
no longer published on a monthly basis, the annual rent for any calendar year
after the year in which the CPI is discontinued or is no longer published on a
monthly basis shall be an amount equal to one hundred three percent (103%) of
the annual rent for the preceding calendar year of the Lease Term.

3. The Lease, as amended hereby, is and shall remain in full force and
effect and is hereby ratified and confirmed in all respects.

4. Each and every covenant, term, condition and obligation contained in
this Lease shall apply to and be binding upon and inure to the benefit or
detriment or the respective legal representatives, successors and permitted
assigns of Lessor and Lessee. Whenever reference to the parties hereto is made
in this Lease, such reference shall be deemed to include the legal
representatives, successors and assigns of said party the same as if in each
case expressed.

IN WITNESS WHEREOF, Lessor and Lessee have caused these presents to be
duly executed and their seals to be affixed hereunto as of the day and year
first above written.

Signed, sealed and delivered "LESSOR"
delivered in the presence of:

/s/ CYNTHIA LE MONS /s/ STEPHEN H. GREENSPAN (SEAL)
- --------------------------------- ------------------------------
Witness STEPHEN H. GREENSPAN

/s/ KEELA BISHOP
- ---------------------------------
Notary Public

[NOTARY SEAL]

Signed, sealed and delivered
delivered in the presence of:

/s/ CYNTHIA LE MONS /s/ W. PAUL RUBEN (SEAL)
- --------------------------------- ------------------------------
Witness PAUL RUBEN

/s/ KEELA BISHOP
- ---------------------------------
Notary Public

[NOTARY SEAL]

-4-

<PAGE> 5

Signed, sealed and delivered
delivered in the presence of:

/s/ JUDY MERRELL /s/ RICHARD M. VEHON (SEAL)
- --------------------------------- ------------------------------
Witness RICHARD M. VEHON

/s/ LINDA TIETZE
- ---------------------------------
Notary Public

[NOTARY SEAL]

Signed, sealed and delivered "LESSEE"
delivered in the presence of:

/s/ JUDY MERRELL T&C LIQUIDATORS, INC.,
- --------------------------------- a Texas corporation
Witness

/s/ LINDA TIETZE By: /s/ RICHARD M. VEHON
- --------------------------------- ---------------------------
Notary Public Its:
--------------------------

[NOTARY SEAL] [CORPORATE SEAL]

-5-

<PAGE> 1

EXHIBIT 10.19

LEASE AGREEMENT

THIS LEASE AGREEMENT is made and entered into this 20th day of
November, 1995, between ELLSWORTH REALTY. L.L.C., a Georgia limited liability
company (herein referred to as the "Landlord") and K&G MEN'S CENTER, INC., a
Georgia corporation (herein referred to as the "Tenant").

W I T N E S S E T H :

1. PREMISES

In consideration of the rents and other covenants of this Lease,
Landlord hereby leases to Tenant and Tenant hereby takes from Landlord those
certain premises (herein referred to as the "Premises") containing approximately
5.5 acres more or less and the brick building containing approximately 100,000
square feet and referred to alternately as 1225 Chattahoochee Avenue. Atlanta,
Georgia 30318 and 1750 Ellsworth Industrial Blvd., Atlanta, Georgia 30318. The
Premises are comprised of approximately 70,000 square feet of leaseable area to
be used for "office/warehouse" purposes (herein referred to as the
"Office/Warehouse Space") and 30,000 square feet of leaseable space to be used
for retail purposes (herein referred to as " Retail Space"). A legal description
of the premises is attached as Exhibit "A" hereto and made part hereof.

2. TERM

Subject to the terms and conditions hereinafter set forth, the term of
this Lease shall commence on the November 20, 1995 (herein referred to as the
"Commencement Date") and expire unless extended as hereinafter provided, at
midnight on the 31st day of December, 2005. The term of this Lease and any
extension thereof shall be referred to herein as the "Lease Term".

3. RENT

A. Fixed Rent. Tenant agrees to pay to Landlord, as an initial annual
rent for the Premises during the Lease Term, without notice, demand, deduction
or offset, the sum of Two hundred and thirty thousand Dollars ($230,000.00).
Tenant shall pay the annual rent, in advance, in equal monthly installments of
Nineteen thousand One Hundred and Sixty and 66/100 Dollars ($19,166.67) on the
first (1st) day of each month during the Lease Term upon the store opening.
Before the store opening the Tenant will pay to the Landlord Four thousand
dollars ($4,000) a month. The Tenant agrees to open the store as of February 1,
1996. The annual rent shall be paid to Landlord at the address set forth in
Paragraph 24 hereof or at such other place designated by Landlord. If the Lease
Term shall begin on any date other than the first day of a month or shall end on
any date other than the last day of a month, the monthly installment (prorated
on a thirty (30) day month) shall be paid in advance for such month.

B. Percentage Rent. In addition to the fixed rent and all other sums
payable hereunder, Tenant agrees to pay to Landlord annually on January 20 of
each calendar year during the Lease Term and any extension thereof, as
percentage rent, (herein referred to as the "Percentage Rent") for the Retail
Space a sum equal to one (1%) percent of the amount by which Tenant's "Gross
Sales", as that term is herein defined, from January 1 to December 31 of the
preceding calendar year exceeds Fifteen Million and No/100 Dollars
($15,000,000.00).

C. Rent Increase for Premises. Commencing on January 1, 1997 and on
each January 1st of each year thereafter during the Lease Term, Tenant agrees to
pay, as an annual rent for such calendar year for the Premises, without notice,
demand, offset or deduction, an amount determined by multiplying (i) the annual
rent for the Premises for the preceding calendar year of the Lease Term by (ii)
the percentage change of the "CPI" ( as that term is herein defined) for the
month of November of the preceding calendar year of the Lease Term from the CPI
for the month of January of the preceding calendar year of the Lease Term plus
one hundred percent (100%). The percentage change of the annual rent for each
calendar year shall be the

<PAGE> 2

same as the percentage change in the CPI for the one (1) month period for the
preceding calendar year. An example of how to determine the change in the annual
rent is set forth below. In no event shall the annual rent during the Lease Term
be less than the annual rent required to be paid during the First or preceding
calendar year of the Lease Term whichever is higher. The monthly installments of
the annual rent for the Premises shall be adjusted accordingly and shall be due
and payable, in advance, on the first (1st) day of each month of such calendar
year.

For purposes hereof, the term "CPI" shall mean the Consumer Price
Index. All Urban Consumers (CPI-U), U.S. City Average, All Items - 1982 - 84 =
l00 which is published by the United States Bureau of Labor Statistics (herein
called "BLS").

If the standard reference base for the CPI is changed, the CPI shall be
convened using factors supplied by BLS which are based on the percentage change
and not the index point change in the reference base. If an error is discovered
in the CPI and is changed by the BLS, the annual rent shall be recomputed based
on the correct CPI and any payments required by reason thereof shall be promptly
made by Landlord and Tenant, as the case may be. If the CPI is discontinued or
is no longer published on a monthly basis the percentage change shall be an
amount equal to one hundred and three percent (103%) of the annual rent for the
preceding calendar year of the Lease Term.

Example:

<TABLE>
<S> <C>
Index Point Change

CPI (for November) 118.5
Less CPI (for January) 113.8
Equals Index Point Change 4.7

Percentage Change

Index Point Change 4.7
Divided by CPI for January 113.8
Equals Percentage Change 0.041

Annual Rent

Annual Rent preceding year $100.00
Multiplied by Percentage of Change 1.041
Equals Annual Rent Current Year $104.10
</TABLE>

D. Definition of Gross Sales. The term "Gross Sales" as used herein
shall mean the total amount of the actual total sales price (whether for cash or
on credit or partly on credit) of all sales or rentals of goods, wares,
merchandise, services, and all credit charges and all other receipts and
revenues from business conducted in or from the Retail Space, including, but not
limited to, all sales to employees of Tenant, all mail or telephone orders
received or filed at or from the Retail Space, all deposits not refunded to
purchasers, all orders taken at the Retail Space whether or not said orders are
filled elsewhere, all receipts or sales through any vending machine or other
coin operated machine or device, and all sales and revenues by any sublessee,
occupant, concessionaire, licensee and any other party or parties in any way
using the Retail Space. Gross Sales shall not include any sums collected and
actually paid by Tenant for any sales or retail excise tax imposed by any duly
constituted governmental authority, refunds, returns and allowances; amounts
received for merchandise transferred to any other place of business of Tenant
and service charges on credit card sales. Each sale upon installment or credit
shall be treated as a sale for the full price in the month in which such sale
shall be made, irrespective of the time when Tenant shall receive payment.

E. Reports. Tenant shall use a tape-recording cash register or such
other sales-recording device which makes a permanent written record of each
sale. During the Lease Term and any extension thereof,

<PAGE> 3

Tenant shall maintain and keep on the Premises or at the principal office of
Tenant (or its parent corporation) for the immediately preceding three (3)
calendar years, full, complete and accurate permanent bank deposit records and
receipts, and business records and ledgers of all of the Gross Sales arising out
of the business conducted at or from the Retail Space. Landlord may, at all
times during normal business hours, inspect and audit such books and records at
the Premises. If the results of any audit disclose that any statement of Gross
Sales made by Tenant for any calendar year has been misstated by four (4%)
percent or more, Tenant shall immediately pay to Landlord the cost of such
audit. The failure to deliver any statement of Gross Sales promptly when due
shall constitute a default by Tenant under this Lease.

On or before the twentieth (20th) day of the month after the end of
each calendar quarter during the Lease Term and any extension thereof. Tenant
shall deliver to Landlord, a complete and accurate written statement showing, in
reasonable detail, the amount of the Gross Sales for the preceding calendar
quarter, including a complete and accurate copy of the Georgia Sales and Use Tax
return for such calendar quarter and a statement of the total amount of sales
taxes and excise taxes paid or payable for such calendar quarter. Each such
statement shall be signed and verified by Tenant, or, if Tenant is a
corporation, by one of its principal officers. Tenant shall, on or before the
20th day of January of each year during the term of this Lease, deliver to
Landlord a complete and accurate copy of the Sales and Use Tax return filed or
required to be filed by Tenant for the preceding calendar year.

4. USE AND INSURANCE

A. Use. The Premises may be used for any lawful purpose, including
retail and general office and warehouse use. Tenant, at its sole cost and
expense, shall during the Lease Term (i) obtain and maintain any and all
licenses and permits necessary for any such use and (ii) comply with all
governmental laws, ordinances, regulations, orders and directives applicable to
the use of the Premises. Tenant shall not receive, store or otherwise handle any
product, material or merchandise which is explosive or highly inflammable,
including, but not limited to, any "hazardous substances" as dm1 term is defined
in Paragraph 8 hereof or permit the Premises to be used for any purpose which
would render the insurance thereon void or the insurance risk more hazardous.
The Premises shall not be used for any illegal purposes, in violation of any
regulation of any governmental body or in any manner to create any nuisance.

B. Insurance Requirements. Tenant shall during the Lease Term, at its
sole cost and expense, obtain and maintain (i) comprehensive general public,
liability insurance (with contractual liability endorsement) with coverage in
amounts of not less than $2,000,000.00 with respect to property damage, bodily
injury, personal injury or death to one or more persons and (ii) standard fire
and extended coverage insurance on all buildings and other improvements which
comprise the Premises in an amount which shall equal the replacement cost for
the buildings and improvements and shall include business and rental
interruption insurance. Any insurance policy required hereunder shall insure
Landlord and Tenant and any designees of Landlord (including, the holder of any
security deed encumbering the Premises, which as of the date hereof is SunTrust
Bank, Atlanta), contain such mortgage endorsements as required by Landlord and
any such designee, be written by a responsible insurance Company licensed to do
business in Georgia, be in form and substance satisfactory to Landlord and
contain endorsements that such insurance may not be canceled or materially
altered by the insurance company except upon thirty (30) days prior written
notice to Landlord and any such designee. Upon taking or accepting possession of
the Premises and thereafter, at least seven (7) days prior to the expiration of
each policy required to be carried by Tenant hereunder, Tenant shall deliver to
Landlord and any such designee either a duplicate original or a certificate of
insurance of all substitute or renewal policies required to be carried by Tenant
hereunder together with evidence that the entire premium therefor has been paid.

5. SERVICES

A. Utilities. Tenant shall pay for all public and other utilities and
related services rendered or furnished to the Premises during the Lease Term,
including, but not limited to gas, heat, light, power, telephone, sprinkler
charges and other utilities and services used on or provided to the Premises and
any taxes, penalties, surcharges or the like pertaining thereto and any cost to
maintain and repair the facilities and

<PAGE> 4

equipment used in providing such utilities and services.

B. Janitorial Service. Tenant, at its sole cost, shall provide its own
janitorial services to be performed in the Premises during the Lease Term.

C. Interruption of Service. Except for the gross negligence of
Landlord, Landlord shall not be liable for any interruption, discontinuance or
failure of any utility or other service furnished to the Premises. Any
interruption, discontinuance or failure of any utility or other service to the
Premises shall not constitute an eviction (constructive or otherwise) or give
Tenant the right to claim any damages against Landlord or any right to withhold,
reduce or abate the payment of the annual rent or any other sum required to be
paid to Landlord under the terms of this Lease.

6. ADDITIONAL CHARGES

A. Taxes. Commencing on the Commencement Date and continuing thereafter
during the Lease Term, Tenant agrees to pay to Landlord annually, without offset
or deduction, on or before seven (7) days after notice, the real estate ad
valorem taxes, governmental and public charges and special and general
assessments, including all costs and fees incurred by Landlord in contesting
same (herein collectively referred to as the "Taxes") imposed against the
building and the real property and the buildings and improvements which comprise
the Premises for each calendar year during the Lease Term.

B. Water and Sewer Charges. Commencing on the Commencement Date and
continuing thereafter periodically during the Lease Term, Tenant agrees to pay
to Landlord, without offset or deduction, on or before seven (7) days after
notice any and all water and sanitary sewer charges incurred by Landlord for the
Premises.

C. Rent Tax. If any governmental authority imposes a tax, levy or other
imposition upon Landlord based upon the rent received by Landlord under this
Lease, Tenant shall pay to Landlord, on or before seven (7) days after notice
and without offset or deduction, the amount thereof. The tax, levy or imposition
to which reference is made shall include sales, use, excise or similar tax, but
shall not include capital stock, estate, or inheritance taxes imposed upon
Landlord. The sums contemplated in this Paragraph shall be paid in addition to
the sums required to be paid by Tenant pursuant to Paragraph 6.A. hereof.

D. Payments. The payments required under this Paragraph 6 shall be made
to Landlord at the address set forth in Paragraph 24 hereof.

7. REPAIRS

A. Tenant. Tenant, at its sole cost and expense, shall make all
repairs, replacements, alterations and maintenance to the Premises including,
but not limited to, the roof, exterior walls, foundation of the building,
windows, doors and glass, heating, ventilating and air conditioning systems and
any repairs, replacements, damage or injury to all or any part of the Premises
caused by Tenant or its agents, employees, invitees or licensees. Landlord shall
not be required to make any repairs, replacements, alterations or improvements
to the building or the Premises. Landlord shall not be liable to Tenant for any
damage or inconvenience which occurs by reason of the Premises being in need of
repair.

B. Waste. Tenant shall not commit or allow any waste or damage to be
committed on or to any portion of the Premises. At the expiration or termination
of this Lease, Tenant shall deliver and surrender the Premises to Landlord in
good order, condition and repair, ordinary wear and tear excepted. The cost and
expense of any repair necessary to restore the Premises to such order, condition
and repair shall be paid by Tenant; and, if Landlord undertakes to perform such
restoration, Tenant shall, on or before seven (7) days after notice, reimburse
Landlord for the cost thereof.

C. Self Help by Landlord. In the event Tenant fails to promptly make
any repairs or replacements, or perform any alteration or maintenance required
to be made by Tenant hereunder, Landlord

<PAGE> 5

may, at its option and at Tenant's expense, make the repairs or replacements and
perform the maintenance for and on behalf of Tenant. Tenant shall, on or before
seven (7) days after notice, pay to Landlord all cost and expense incurred by
Landlord in making such repairs and replacements and performing such alteration
or maintenance.

8. COMPLIANCE WITH LAWS, RULES AND REGULATIONS

A. General. Tenant, at its sole cost and expense, shall promptly comply
with all laws, ordinances, orders, rules and regulations of state, federal,
municipal or other agencies or bodies having jurisdiction now or hereafter
affecting the use, condition and occupancy of the Premises.

B. Hazardous Substance. Tenant shall not, on or about the Premises,
make, store, use, treat, dispose of or permit any person or entity to make,
store, use, treat or dispose of any (i) "hazardous substance", as that term is
defined in the Comprehensive Environmental Response, Compensation and Liability
Act, and the Rules and Regulations promulgated pursuant thereto, as from time to
time amended (herein collectively called "CERCLA") or (ii) any other hazardous
waste, contaminant, petroleum, oil, radioactive or other materials the removal
of which is required or the maintenance of which is prohibited, penalized or
regulated by any local, state or federal agency, authority or governmental unit.

C. Indemnity. Tenant agrees to defend, indemnify and hold Landlord and
its successors and assigns harmless from and against any and all claims or
demands arising out of or in any manner connected with the "release" or
"threatened release" of "hazardous substances", as those terms are defined in
CERCLA, or contaminants, oil, petroleum, radioactive or other materials from the
Premises or any portion or portions thereof, arising out of or in any manner
connected with the occupancy or use of the Premises by Tenant during the Lease
Term and any and all actions, suits and proceedings in connection with any such
claim or demand and any and all loss, cost, damage, liability and expense
incurred by Landlord in connection therewith, including, but not limited to,
attorneys fees and other costs of litigation. The terms of this Paragraph shall
survive the expiration or termination of this Lease.

9. ALTERATIONS AND IMPROVEMENTS

A. General. Tenant shall not make or permit any alteration, addition or
improvement to be made in or to the Premises without the consent of Landlord
which consent shall not be unreasonably withheld. Any alteration, addition or
improvement to the Premises permitted by Landlord shall be performed by Tenant
at its expense in accordance with any license or permit required with respect
thereto and in a good workmanlike manner and in compliance with all applicable
governmental laws, titles, regulations and ordinances. Any alteration, addition
or improvement shall, on completion, be the property of Landlord and shall be
surrendered to Landlord on the expiration or termination of this Lease.

B. No Liens. Tenant shall have no authority, express or implied, to
create or place any lien or encumbrance on the Premises. Tenant shall pay or
cause to be paid all sums due and payable by Tenant on account of any labor
performed or materials furnished in connection with any work performed on the
Premises.

C. Indemnify. Tenant agrees to defend, indemnify and hold Landlord
harmless from and against any and all claims or demands based on any act or
omission of Tenant which gives rise to any lien or claim of lien against the
Premises or the right, title and interest of Landlord in the Premises and any
and all actions, suits and proceedings in connection with any such claim or
demand and any and all loss, cost, damage, liability and expense incurred by
Landlord in connection therewith, including attorneys fees and other costs of
litigation. The terms of this Paragraph shall survive the expiration of the
Lease Term.

<PAGE> 6

10. CONDEMNATION

A. Total. In the event all or a substantial portion (but in any event
greater than 30% of the total square feet) of the Premises is taken for any
public or quasi-public use under any governmental law, ordinance or regulation
or by right of eminent domain or by private purchase in lieu thereof (herein
collectively referred to as a "Taking") and the Taking would prevent or
materially interfere with the use of the Premises for the purpose for which they
are then being used, this Lease shall terminate and the rent shall be abated
during the unexpired portion of the Lease Term effective on the date the
condemning authority takes possession of the Premises. Landlord shall notify
Tenant in the event Landlord receives notice of a proposed Taking.

B. Partial. In the event a portion of the Premises shall be subject to
a Taking and this Lease is not terminated as provided in the Paragraph 10.A.
hereof, Landlord may, at its sole and exclusive option, either (i) terminate
this Lease by notice to Tenant effective as of the date which is ninety (90)
days after the date of such notice or (ii) restore and reconstruct the Premises
to the extent necessary to make the Premises tenantable. In the event Landlord
elects to restore the Premises, the rent payable under this Lease for the
unexpired portion of the Lease Term shall be adjusted in such a manner which is
fair and reasonable under the circumstances.

C. Award. In the event of any Taking of all or a portion of the
Premises, Landlord shall be entitled to receive all of the award made in
connection with such Taking, including, without limitation, any award for the
value of the unexpired term of this Lease. Tenant shall not be entitled to
receive any award for the loss of its leasehold advantage. In the event there is
an allocation in the award made to Landlord for moving or business interruption
expenses of Tenant, Landlord shall pay such designated portion of the award to
Tenant on or before ten (10) days after its actual receipt thereof.
Notwithstanding anything contained herein to the contrary, Landlord shall not be
obligated to seek recovery of such expense for or on behalf of Tenant.

11. FIRE AND CASUALTY

A. Total. In the event the Premises are totally destroyed or partially
damaged by fire, tornado or other casualty, Tenant shall immediately notify
Landlord. In the event (i) the Premises are partially damaged and restoration
thereof cannot, in Landlord's sole discretion, be completed within one hundred
and fifty (150) days after the date of notice to Landlord by Tenant of such
destruction or (ii) the Premises are totally destroyed. Landlord, at its sole
and exclusive option by notice to Tenant, terminate this Lease in which event
the rent shall abate for the unexpired portion of the Lease Term effective as of
the date of the notice of termination.

B. Partial. In the event Landlord elects to restore the Premises after
a casualty (whether total or partial), Landlord shall, at its sole cost and
expense, proceed with reasonable diligence to restore the Premises or the
building in which the Premises are located to substantially the same condition
as they were prior to such casualty. During such restoration, in the event all
or a portion of the Premises are untenantable and the damage or destruction as
not caused in whole or in part by any negligent act or omission of Tenant, its
agents, employees, invitees or others for whom the Tenant is responsible, the
rent payable under this Lease during the period in which the Premises are
untenantable shall be adjusted in such a manner as is fair and reasonable under
the circumstances. In the event Landlord elects to restore the Premises and
thereafter fails to complete the necessary restoration of the Premises to permit
Tenant to reoccupy the Premises within one hundred and fifty (150) days after
receipt by Landlord of Tenant's notice of such destruction, Tenant may, at its
option and as its sole right and exclusive remedy, terminate this Lease by
notice to Landlord.

C. Mortgagee. Notwithstanding anything contained in this Lease to the
contrary, in the event the "Mortgagee", as that term is herein defined, requires
that the insurance proceeds received by Landlord in connection with any casualty
be applied to repay the indebtedness secured by the "Mortgage", as that term is
herein defined. Landlord shall have the right to terminate this Lease by notice
to Tenant on or before thirty (30) days after the date on which Landlord
receives written notice from the Mortgagee that such proceeds shall be applied
to repay such indebtedness.

<PAGE> 7

12. WAIVER OF SUBROGATION

Notwithstanding anything contained in this Lease to the contrary,
Landlord and Tenant hereby each waive and release the other from any and all
rights of recovery, claim, action or cause of action, against each other, their
agents, officers, and employees for any loss or damage that may occur to the
Premises, or personal property (building contents) within the building, by
reason of fire, the elements or any other cause which could be insured against
under the terms of standard fire and extended coverage insurance policies,
regardless of cause or origin, including negligence of Landlord or Tenant and
their agents, officers and employees, as the case may be. Landlord and Tenant
each agree to give to their respective insurance companies which have issued
policies of fire and extended coverage insurance, written notice of the terms of
the mutual waivers contained in this Paragraph and to have the insurance
policies properly endorsed, if necessary, to prevent the invalidation of the
insurance coverages by reason of the mutual waivers contained in this Paragraph.

13. LANDLORD LIABILITY

A. Disclaimer of Liability. Landlord shall not be liable to Tenant, its
employees, agents, invitees, licensees or visitors, or to any other person for
any injury to person or damage to property on or about the Premises caused by
(i) the negligence or misconduct of Tenant, its agents, servants or employees or
by any other person entering the Premises under express or implied invitation of
Tenant, (ii) the building and improvements being out of repair or in disrepair,
(iii) leakage of gas, oil, water, steam or electricity into the Premises, (iv)
the breakage of pipes and plumbing in the Premises or (v)any latent defect,
deterioration or change in the condition of the Premises.

B. Indemnity. Tenant agrees to defend, indemnify and hold Landlord
harmless from and against any claim or demand arising out of any damage or
injury contemplated in Paragraph 13.A. hereof, and any action, suit and
proceeding in connection with any such claim or demand and any and all loss,
cost, damage, liability or expense incurred by Landlord in connection therewith
including attorney's fees and other costs of litigation. The terms of this
Paragraph shall survive the expiration of the Lease Term.

14. QUIET ENJOYMENT

Landlord represents to Tenant that it has full right and authority to
execute and deliver this Lease. Upon payment of the rent and performance by
Tenant of each of the covenants and agreements contained in this Lease which
require its performance, Tenant shall peaceably and quietly have, hold and enjoy
the Premises during the Lease Term without hindrance by Landlord.

15. LANDLORD'S RIGHT OF ENTRY

Landlord shall have the right, at all reasonable hours, to enter the
Premises for the purpose of determining Tenant's use of the Premises or if any
default has occurred under this Lease.

16. ASSIGNMENT OR SUBLEASE

Landlord shall have the right to transfer and assign, in whole or in
part, its rights and obligations in this Lease. Tenant may assign this Lease or
sublet all (but not any part) of the Premises with the prior written consent of
Landlord which consent shall not be unreasonably withheld provided such assignee
assumes the obligations of Landlord under this Lease. Upon receipt from Tenant
of written request for Landlord's consent to any proposed assignment or
sublease, Landlord shall have the option, by notice delivered to Tenant on or
before fifteen (15) days after receipt of tenant's notice to Landlord, to
terminate this Lease as of the date the proposed assignment or sublease would
have been effective. The failure of Landlord to exercise its option hereunder
shall not be deemed to be the consent of Landlord to any proposed assignment or
sublease. IN THE EVENT LANDLORD CONSENTS TO ANY PROPOSED ASSIGNMENT OR SUBLEASE,
TENANT SHALL NEVERTHELESS AT ALL TIMES,

<PAGE> 8

REMAIN FULLY RESPONSIBLE AND LIABLE FOR THE PAYMENT OF THE RENT AND FOR
COMPLIANCE WITH ALL OF ITS OTHER OBLIGATIONS UNDER THIS LEASE.

17. HOLDING OVER

In the event Tenant holds over after the expiration or termination of
this Lease. Tenant shall be a tenant at will and all of the terms and provisions
of this Lease shall be applicable during that period, except that Tenant shall
pay to Landlord, as annual rent, an amount equal to one and one-half (1.5) times
the annual rent which would have been payable by Tenant had the period during
which Tenant is holding over been a part of the Lease Term. Tenant agrees to
vacate and deliver the Premises to Landlord upon Tenant's receipt of notice from
Landlord to vacate. The rent payable during the hold over period shall be
payable to Landlord on or before the fifth (5th) day of each month. No holding
over by Tenant, whether with or without the consent of Landlord, shall operate
to extend the Lease Term.

18. DEFAULT BY TENANT

The following events shall be deemed to be events of default by Tenant
under this Lease:

(i) Tenant shall fail to pay the annual rent or any installment thereof
when due and such failure shall continue for a period of five (5) days from the
date such payment was due.

(ii) Tenant shall fail to pay any additional charge contemplated under
Paragraph 6 hereof which is required to be paid by Tenant hereunder and such
failure shall continue for a period of five (5) days after such payment was due.

(iii) The entry of a decree or order for relief by a court having
jurisdiction of Tenant in an involuntary case under the federal bankruptcy laws,
as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
Tenant or for any substantial part of its property, or ordering the winding-up
or liquidation of its affairs and the continuance of any such decree or order
unstayed and in effect for a period of sixty (60) consecutive days.

(iv) The commencement by Tenant of a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or the
consent by Tenant to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Tenant or for any substantial part of its property, or the making
of any assignment for the benefit of creditors, or the failure of Tenant
generally to pay its debts as such debts become due, or the taking of any action
by Tenant in furtherance of any of the foregoing.

(v) Tenant shall abandon or vacate the Premises.

(vi) Tenant shall fail to comply with or perform any other term or
provision of this Lease and such failure shall not be cured within twenty (20)
days after written notice by Landlord thereof to Tenant.

19. REMEDIES

Upon the occurrence of an event of default, Landlord shall have the
option to pursue any one or more of the following remedies without further
notice or demand whatsoever.

Landlord may terminate this Lease in which event Tenant shall
immediately surrender possession of the Premises to Landlord. In the event
Tenant fails to surrender possession of the Premises, Landlord may, without
prejudice to any other remedy which it may have for possession or past due
payments of the rent, enter upon and take possession of the Premises and remove
Tenant and any other person who may be occupying the Premises or any part
thereof without being liable for prosecution or any claim of damages

<PAGE> 9

therefor. Tenant shall be liable for any and all damages therefor to which
Landlord is entitled by law by reason of the termination of this Lease.

Without terminating this Lease, Landlord may enter upon and take
possession of the Premises and cause Tenant and any other person who may be
occupying the Premises or any part thereof to be removed without being liable or
prosecution or any claim for damages therefor, and relet the Premises on behalf
of Tenant and receive the rent therefor. Tenant agrees to pay to Landlord, on or
before seven (7) days after notice, any deficiency that may arise by reason of
such reletting including any and all costs to release the Premises.

Landlord may enter upon the Premises without being liable for
prosecution or any claim for damages therefor and do whatever Tenant is
obligated to do under the terms of this Lease. Tenant agrees to reimburse
Landlord, on or before seven (7) days after notice, for any costs, fees or
expenses which Landlord may incur in effecting compliance with Tenant's
obligations under this Lease. Tenant further agrees that Landlord shall not be
liable for any damages to Tenant from such action, whether caused by the
negligence of Landlord or otherwise.

Each right and remedy of Landlord provided for in this Lease or now or
hereafter existing at law or in equity or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right or
remedy provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise. The exercise or commencement by Landlord of
any one or more of the rights or remedies provided for in this Lease or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by Landlord of any or all of such
other rights or remedies.

No waiver by Landlord of any breach by Tenant of any of the terms,
provisions and covenants contained herein shall be deemed or construed to
constitute a waiver of any other or subsequent breach by Tenant of any of the
terms, provisions and covenants contained herein. Landlord's acceptance of the
payment of rent (or portions thereof or any other payments hereunder after the
occurrence of and during the continuance of an event of default (or with
knowledge of a breach of any term or provision of this Lease which with the
giving of notice and the passage of time, or both, would constitute an event of
default) shall not be construed as a waiver of such default.
Forbearance by Landlord to enforce one or more of the remedies herein provided
upon the occurrence of an event of default shall not be deemed or construed to
constitute a waiver of such default. No act or omission by Landlord or its
agents during the Lease Term shall be deemed an acceptance of the surrender of
the Premises, and no agreement to accept a surrender of the Premises shall be
valid unless in writing and signed by Landlord. No surrender of the Premises or
any part thereof by delivery of keys or otherwise shall operate to terminate
this Lease unless and until expressly accepted in writing by Landlord.

Landlord shall not be required to relet the Premises nor exercise any
other right granted to Landlord hereunder nor shall Landlord be under any
obligation to minimize or mitigate Tenants loss or damage as a result of the
default of Tenant under this Lease.

Unless otherwise expressly provided in this Lease, Tenant shall not
have the right to terminate this Lease by reason of any default or breach by
Landlord of any provision of this Lease or by reason of the condition or state
of repair of the Premises.

20. LATE CHARGES

In the event Tenant fails to pay any installment or payment of rent
hereunder or any other payments required to be paid to Landlord pursuant to (the
terms of this Lease on or before five (5) days after the date the installment or
payment is due, Tenant shall pay to Landlord as a late charge an amount equal to
five percent (5%) of the amount of such installment or payment. The failure by
Tenant to pay the late charge shall be an event of default hereunder. The
provision for a late charge shall be in addition to all of other rights and
remedies of Landlord hereunder or at law and shall not be construed as
liquidated damages or as limiting Landlord's remedies in any manner.

<PAGE> 10

21. ATTORNEY'S FEES

Upon the occurrence of an event of default by Tenant under this Lease
or in the event it shall become necessary or appropriate for Landlord to employ
or consult with an attorney concerning or regarding any rights or remedies of
Landlord hereunder and Landlord consults with or engages an attorney regarding
the enforcement of this Lease, the collection of any rent due or to become due
or the recovery of the possession of the Premises, Tenant agrees to pay landlord
any reasonable attorney's fees incurred by Landlord for the services of the
attorney whether or not suit is actually filed.

22. TENANT ESTOPPEL CERTIFICATE

Upon taking possession of the Premises and periodically thereafter
during the Lease Term, Tenant shall, on or before ten (10) days after notice
from Landlord, deliver to Landlord a letter certifying (i) the Commencement
Date, (ii) whether or not Tenant is in possession of the Premises, (iii) the
date to which the annual rent and all other sums required to be paid by Tenant
hereunder have been paid, (iv) whether or not Tenant has knowledge of any
default by either party under this Lease and (v) to such other items as Landlord
or the Mortgagee or any prospective purchaser may require.

23. RIGHTS OF MORTGAGEE

A. Right to Cure. In the event Tenant has the express right to
terminate this Lease by reason of the default or breach of Landlord under this
Lease, Tenant shall not exercise any such right unless and until it shall have
first given written notice to Landlord and the owner (herein called the
"Mortgagee") of any deed to secure debt (herein called the "Mortgage") now or
hereafter encumbering the land on which the building and the Premises are
located (if the name and address of the Mortgagee shall previously have been
furnished to Tenant) specifying in such notice the acts or omissions which
constitute the default or breach by Landlord which permit Tenant to terminate
this Lease. The Mortgagee shall have a reasonable period (but in no event less
than 30 days) to remedy such act or omission after receipt of such notice.
Landlord and the Mortgagee, or either of them, their agents or employees, shall
be entitled to enter the Premises and do therein whatever may be necessary to
cure such default or breach.

B. Subordination. This Lease is and shall be automatically subject and
subordinate to any security deed (including the Mortgage) and to any and all
advances to be made thereunder and to all renewals, notifications and extensions
thereof. It is the intention of Landlord and Tenant that the foregoing
subordination shall be self-operating without any further agreement of Tenant.

C. Attornment. In the event the Mortgagee exercises the power of sale
or accepts a deed in lieu of foreclosure under the Mortgage, Tenant agrees, in
consideration for the subordination of this Lease set forth above, to attorn to
and recognize the purchaser at such sale, as landlord under this Lease. Tenant
acknowledges that the purchaser at such sale shall not be liable for any act or
omission of Landlord (or any prior landlord) or subject to any claims which
Tenant may have against Landlord (or any prior Landlord) except for claims which
Tenant notified the Mortgagee of pursuant to Paragraph 23.A. hereof and which
Mortgagee elects to perform to prevent Tenant from Terminating the Lease.

D. Confirmation. In the event the Mortgagee requires confirmation of
the agreements contemplated in Paragraph 28.C. hereof, including, but not
limited to. the subordination of this Lease to the Mortgage, Tenant agrees, on
or before seven (7) days after request to execute and deliver to Landlord such
instrument as the Mortgagee may reasonably require. In the event Tenant fails to
do so, Landlord is hereby irrevocably vested with full power and authority to
confirm the subordination of Tenant's interest under this Lease to the
Mortgagee.

24. NOTICES

A. Landlord Address. Any payments required to be made by Tenant to
Landlord under this Lease shall be paid to Landlord at the address set forth
below or at any other address within the United States as Landlord may specify
from time to time.

<PAGE> 11

B. Notices. Any notice, consent, approval or other communication which
may be required or permitted to be given or delivered hereunder shall be in
writing and shall be deemed to have been given, delivered and received if mailed
or delivered to the party at the address set forth below (i) as of the date when
the notice is personally delivered (to a member, if the addressee is a limited
liability company or to any officer [if none is designated] if the addressee is
a corporation, and/or (ii) if mailed, in the United States Mail, certified,
return receipt requested, as of the date which is three (3) days after the date
of the postmark on such notice and/or (iii) if delivered by courier or express
mail service, telegram or mailgram where the carrier provides or retains
evidence of the date of delivery, as of the date of such delivery.

TO THE LANDLORD: TO THE TENANT:

Ellsworth Realty, L.L.C. K & G Men's Centers, Inc.
1750 Ellsworth Industrial Blvd. 1777 Ellsworth Industrial Blvd.
Atlanta, Georgia 30318 Atlanta, Georgia 30318

Landlord and Tenant may by notice to the other in the manner provided
above, designate a different address for receiving notices under this Lease. A
post office box shall not be the only notice address for a party. Any notice
which is delivered to the notice address on a non-business day shall be deemed
given the next business day if left at the notice address; or, if not left at
the notice address, the next business day when re-delivered to the notice
address. The refusal to accept delivery of. notice or the absence of anyone at a
notice address to accept delivery shall not prevent any notice from being
effectively given. A non-business day is a Saturday, Sunday or legal holiday
generally observed in the city where notice is delivered.

25. CORPORATE AUTHORITY

If Tenant signs as a corporation, each person executing this Lease on
behalf of Tenant does hereby covenant and warrant that Tenant is a duly
authorized and existing corporation in good standing in the state of its
incorporation, that Tenant has and is qualified to do business in Georgia, and
that the corporation has full right and authority to enter into this Lease, and
that each person signing on behalf of the corporation is authorized to do so.

26. MISCELLANEOUS

A. Limitation on Liability. The term "Landlord" as used in this Lease
shall mean only the owner for the time being of the Premises. Landlord shall
have no personal liability with respect to any of the provisions of this Lease.
If Landlord is in default with respect to its obligations under this Lease.
Tenant shall look solely to the equity of Landlord in the Premises for the
satisfaction of Tenant's remedies. In the event of the sale or transfer of the
Premises by Landlord all obligations of Landlord hereunder shall be transferred
to the new owner of the Premises as of the date of sale of the Premises and the
transfer of this Lease and Landlord shall have no obligation or liability, as
landlord, from and after the date of the transfer of this Lease.

B. Survival. All obligations of Tenant hereunder which are not fully
performed as of the expiration or termination of this Lease shall survive the
expiration or termination of this Lease, including without limitation, all
payment obligations with respect to taxes, insurance premiums, sanitary and
water charges and all obligations concerning the condition of the Premises. Upon
the expiration or termination of this Lease and prior to Tenant vacating the
Premises, Tenant shall pay to Landlord an amount reasonably estimated by
Landlord to (i) restore the Premises, including without limitation, the heating
and air conditioning systems, in good order, condition and repair, normal wear
and tear excepted. and (ii) pay the obligations of Tenant for real estate taxes,
insurance premiums and sanitary and water charges for the year in which the
Lease expires or terminates. All such amounts shall be used and held by Landlord
for payment of such obligations of Tenant and Tenant shall be liable for any
additional costs therefor and shall pay to Landlord, on or before seven (7) days
after notice, any such additional costs. Any portion of the estimated payment in
excess of the actual costs shall be returned to Tenant after all such
obligations have been determined and satisfied.

<PAGE> 12

C. Applicable Law. This Lease shall be governed by and construed in
accordance with the laws of the State of Georgia and, if any provision of this
Lease shall to any extent be invalid or unenforceable, the remainder of this
Lease shall not be affected thereby.

D. Time of the Essence. Time is of the essence with respect to this
Lease.

E. Relationship. This Lease shall create the relationship of landlord
and tenant between Landlord and Tenant and no estate shall pass out of or be
conveyed by Landlord. Tenant has only a usufruct which is not subject to levy
and sale and is not assignable.

F. Successors and Assigns. This lease shall be binding on and inure to
the benefit of Landlord and Tenant and their respective heirs, personal
representatives, successors and permitted assigns.

G. Entire Agreement. This lease contains the entire agreement of the
parties and there are, and were, no verbal representations. understandings,
stipulations, agreements or promises pertaining to this Lease and not
incorporated in this Lease. This Lease may not be altered, waived, amended or
extended except by an instrument in writing, signed by both Landlord and Tenant.

H Severability. If any term, covenant or condition of this Lease or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, such provision, or the application of such term,
covenant or condition to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall be deemed severable, and the
remainder hereof shall not be affected thereby, and each term, covenant, or
condition of this Lease shall be valid and be enforced to the fullest extent
permitted by law.

I. Net Lease. This Lease is net to Landlord.

IN WITNESS WHEREOF, the parties herein have hereunto set their hands
and seals this 20th day of November 1995.

TENANT: LANDLORD:

/s/ JOHN C. DANCU /s/ STEPHEN H. GREENSPAN

K&G MEN'S CENTER, INC. ELLSWORTH REALTY, L.L.C.

By: John C. Dancu By: Stephen Greenspan
Title: Chief Financial Officer Title: Member

Attest/Witness: Attest/Witness:

Name: Name:

(CORPORATE SEAL) (CORPORATE SEAL)

<PAGE> 13

EXHIBIT "A"

LEGAL DESCRIPTION

ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Lot 192 of the 17th
District, City of Atlanta, Fulton County, Georgia containing 5.4381 acres, more
or less, and being more particularly described as follows:

COMMENCE at a point located at the intersection of the northernmost right-of-way
line of Chattahoochee Avenue (being 50 feet from centerline) with the
westernmost right-of-way line of Ellsworth Industrial Drive (25 feet from
centerline); thence run north along the westernmost right-of-way line of
Ellsworth Industrial Drive a distance of 180 feet to an iron pin found (being 25
feet from centerline) and the TRUE POINT OF BEGINNING; thence leave said
right-of-way line and run South 89(0) 41' West a distance of 175.1 feet to an
iron pin found; thence run South 00(0) 32' East a distance of 167.0 feet to a
3/4" iron rod found on the northernmost right-of-way line of Chattahoochee
Avenue (being 50' from centerline); thence run along the northernmost
right-of-way line of Chattahoochee Avenue and along the arc of a curve to the
right whose arc distance is 128.22 feet and being subtended by a chord of North
79(0) 32' West and having a chord distance of 128.21 feet to an iron pin found
(being 50 feet from centerline); thence leave said right-of-way line and run
North 00(0) 13' West a distance of 988.5 feet to an iron pin placed; thence run
North 89(0) 47' East a distance of 50.0 feet to a pk nail placed; thence run
South 00(0) 13' East a distance of 145.0 feet to a pk nail found; thence run
North 89(0) 47' East a distance of 50.00 feet to a pk nail placed; thence run
South 00(0) 13' East a distance of 145.0 feet to a pk nail found; thence run
North 89(0) 47' West a distance of 250.0 feet to a pk nail found on the
westernmost right-of-way line of Ellsworth Industrial Drive (being 25 feet from
centerline); thence run along said right-of-way line South 00(0) 13' East a
distance of 700.0 feet to an iron pin found and the TRUE POINT OF BEGINNING, as
per Survey prepared for Ellsworth Realty, L.L.C., General Electric Company,
SunTrust Bank, Atlanta and Chicago Title Insurance Company, prepared by Metro
Engineering and Surveying Co., Inc., bearing the certification and seal of
Chester M. Smith, Jr., Georgia Registered Land Surveyor Number 1445, dated
December 1, 1971, last revised November 7, 1995.

<PAGE> 1

EXHIBIT 10.20

AMENDMENT TO LEASE AGREEMENT

This amendment is entered into as of this 29th day of November, 1995 by
and between ELLSWORTH REALTY, L.L.C., a Georgia limited liability company
(herein referred to as the "Landlord") and K&G MEN'S CENTER, INC., a Georgia
corporation (herein referred to as the "Tenant").

In consideration of ten and no/100 Dollars ($10.00) paid by each party
hereto to the other and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Landlord and Tenant agree that the
Lease Agreement between Landlord and Tenant dated November 20, 1995 is hereby
amended by providing that the portion of the Premises outlined in red on Exhibit
"A" attached hereto and made a part hereof containing approximately 20,000
square feet of gross leasable area (herein referred to as the "Office/Warehouse
Space") shall, on or before thirty (30) days after notice from Landlord, be
surrendered by Tenant to Landlord in the same condition as required as if the
term of the Lease had expired and Tenant shall have no rights, obligations or
liabilities with respect to the Office/Warehouse Space. The Lease shall
otherwise continue in full force and effect and all terms and conditions thereof
shall not be modified or amended in any manner (including the payment of any
rent contemplated in Paragraph 3 of the Lease and the payment of the Taxes
contemplated in Paragraph 6 of the Lease) except, that (i) any utilities or
other charges for services provided to the entire building in which the Premises
are located shall be prorated based on the gross leasable area of the
Office/Warehouse Space to the gross leasable area of the entire building and
(ii) Tenant shall not be responsible for (A) any repairs to the Office/Warehouse
Space contemplated to be made by Tenant under Paragraph 7 of the Lease and/or
(B) compliance with any laws with respect to the Office/Warehouse Space
contemplated under Paragraph 8 of the Lease.

IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands
and seals as of this 29th day of November, 1995.

TENANT: LANDLORD:

K&G MEN'S CENTER, INC. ELLSWORTH REALTY, L.L.C.,
a Georgia limited liability company a Georgia corporation

By: /s/ JOHN C. DANCU By: /s/ PAUL RUBEN
---------------------------------- --------------------------------
Title: Chief Financial Officer Its: Member

[CORPORATE SEAL]

<PAGE> 2

EXHIBIT A

[DIAGRAM]

<PAGE> 1
EXHIBIT 10.21

SECOND
AMENDMENT TO LEASE AGREEMENT

This Amendment, effective July 1, 1999, entered into by and between
ELLSWORTH REALTY, L.L.C., a Georgia limited liability company (herein referred
to as the "Landlord") and K&G MEN'S CENTER, INC., a Georgia corporation (herein
refereed to as the "Tenant").

1. Term. Subject to the terms and conditions hereinafter set
forth, the Additional Space shall be included as part of the
Premises and subject to the terms of the Lease beginning on
July 1, 1999. Tenant shall have the right of possession of the
Additional Space as of the date hereof. From and after July 1,
Tenant shall have the same rights and options with respect to
the Additional Space as it has with respect to the Premises.

2. Rent. Beginning on July 1, 1999, Tenant agrees to pay to
Landlord, as annual rent for the Additional Space during the
Lease Term, without notice, demand, deduction or offset, the
sum of Sixty Thousand Eight Hundred and No/100 Dollars
($60,800.00). Landlord agrees that Tenant shall pay the annual
rent in advance, in equal monthly installments of Five
Thousand Sixty-Six and 67/100 Dollars (5,066.67) on the first
(1st) day of each month during the Lease Term, commencing July
1, 1999. The annual rent for the Additional Space shall be
adjusted at the same time the annual rent is adjusted for the
Premises on a stand alone basis pursuant to Paragraph 3 (c) of
the Lease.

3. General. All other terms of the Lease shall apply to the
Additional Space.

This Lease, as amended, hereby, is hereby ratified and confirmed in all
other respects.

IN WITNESS WHEREOF, Landlord and Tenant have hereunto set their hands
and seals, effective July 1, 1999.

TENANT: LANDLORD:

K&G MEN'S CENTER, INC. ELLSWORTH REALTY, L.L.C.
A Georgia corporation a Georgia limited liability company

By: /s/ BRADLEY M. BELL By: /s/ JOHN C. DANCU
----------------------------- --------------------------------
Title: Vice President Finance Its: Member
-------------------------- -------------------------------

[CORPORATE SEAL]

<PAGE> 2

EXHIBIT A

[DIAGRAM]

<PAGE> 1
EXHIBIT 10.22

SECOND AMENDMENT
TO THE MEN'S WEARHOUSE, INC.
1998 KEY EMPLOYEE STOCK OPTION PLAN

THIS AGREEMENT by The Men's Wearhouse, Inc. (the "Sponsor"),

WITNESSETH:

WHEREAS, the Sponsor maintains the Plan known as "The Men's Wearhouse,
Inc. 1998 Key Employee Stock Option Plan" (the "Plan"); and

WHEREAS, the Sponsor retained the right in Article VII of the Plan to
amend the Plan from time to time; and

WHEREAS, the Board of Directors of the Sponsor approved resolutions on
the 25th day of March, 2000, to amend the Plan;

NOW, THEREFORE, the Sponsor agrees that, effective as of March 25,
2000, Section 4.2 of the Plan is hereby amended in its entirety to read as
follows:

4.2 DEDICATED SHARES. The total number of shares of Stock with
respect to which Options may be granted under the Plan shall be
2,100,000 shares. The shares may be treasury shares or authorized but
unissued shares. The number of shares stated in this Section 4.2 shall
be subject to adjustment in accordance with the provisions of Section
4.5. If any outstanding Option expires or terminates for any reason or
any Option is surrendered, the shares of Stock allocable to the
unexercised portion of that Option may again be subject to an Option
under the Plan.

<PAGE> 1
EXHIBIT 10.23

LIMITED LIABILITY COMPANY AGREEMENT

CHELSEA MARKET SYSTEMS, L.L.C.

BETWEEN

RENWICK TECHNOLOGIES, INC.

AND

HARRY M. LEVY

AS THE MEMBERS

DATED AS OF JANUARY 3, 2000

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<S> <C>
DEFINITIONS.......................................................................................................1

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY...................................................................4
SECTION 1.1 FORMATION.........................................................................4
SECTION 1.2 PARTNERSHIP FOR TAX PURPOSES ONLY.................................................4

ARTICLE II

NAME.....................................................................................................5

ARTICLE III

PURPOSE..................................................................................................5
SECTION 3.1 PURPOSE...........................................................................5
SECTION 3.2 POWERS OF THE COMPANY.............................................................5

ARTICLE IV

NAMES AND ADDRESSES OF MEMBERS...........................................................................5

ARTICLE V

REGISTERED AGENT; REGISTERED OFFICE;
PRINCIPAL OFFICE; ADDITIONAL OFFICES.....................................................................6

ARTICLE VI

TERM.....................................................................................................6

ARTICLE VII

CAPITAL CONTRIBUTIONS....................................................................................6
SECTION 7.1 CONTRIBUTIONS.....................................................................6
SECTION 7.2 NO LIABILITY FOR ADDITIONAL CONTRIBUTIONS.........................................7
SECTION 7.3 CAPITAL ACCOUNTS..................................................................7
SECTION 7.4 ADJUSTMENT OF CAPITAL ACCOUNTS....................................................7
</TABLE>

-i-
<PAGE> 3

<TABLE>
<S> <C>
ARTICLE VIII

DISTRIBUTIONS............................................................................................8
SECTION 8.1 AMOUNT; TIMING....................................................................8
SECTION 8.2 FAILURE TO WITHDRAW...............................................................9
SECTION 8.3 TRANSFEROR/TRANSFEREE ALLOCATIONS.................................................9
SECTION 8.4 MEMBER ADVANCES...................................................................9

ARTICLE IX

ALLOCATIONS OF INCOME, GAIN,
LOSS, DEDUCTION AND CREDIT...............................................................................9
SECTION 9.1 GENERAL...........................................................................9
SECTION 9.2 SPECIAL ALLOCATION...............................................................10
SECTION 9.3 ALLOCATIONS FOR TAX PURPOSES.....................................................10
SECTION 9.4 TRANSFER/TRANSFEREE ALLOCATIONS..................................................11
SECTION 9.5 RELIANCE ON ADVISORS.............................................................11
SECTION 9.6 TAX MATTERS PARTNER..............................................................11

ARTICLE X

BOOKS OF ACCOUNT, RECORDS AND TAX INFORMATION...........................................................12
SECTION 10.1 MAINTENANCE OF BOOKS AND RECORDS.................................................12
SECTION 10.2 REPORTS..........................................................................12

ARTICLE XI

FISCAL YEAR.............................................................................................13

ARTICLE XII

COMPANY FUNDS...........................................................................................13

ARTICLE XIII

STATUS OF MEMBERS.......................................................................................13

ARTICLE XIV

MANAGEMENT AND OPERATION OF BUSINESS....................................................................13
SECTION 14.1 MEMBER MANAGEMENT................................................................13
SECTION 14.2 MANAGEMENT COMMITTEE.............................................................13
SECTION 14.3 INABILITY TO AGREE ON A BUSINESS PLAN............................................16
</TABLE>

-ii-
<PAGE> 4

<TABLE>
<S> <C>
SECTION 14.4 COMPENSATION AND REIMBURSEMENT...................................................17
SECTION 14.5 OFFICERS.........................................................................17
SECTION 14.6 EXCULPATION......................................................................17
SECTION 14.7 INDEMNIFICATION..................................................................18
SECTION 14.8 CERTAIN AFFILIATE TRANSACTIONS...................................................19
SECTION 14.9 OTHER ACTIVITIES.................................................................19

ARTICLE XV

TRANSFER OF MEMBERSHIP INTERESTS........................................................................19
SECTION 15.1 RESTRICTIONS ON TRANSFER.........................................................19
SECTION 15.2 PROCEDURES.......................................................................19
SECTION 15.3 CONSENT TO TRANSFER..............................................................20
SECTION 15.4 COMPLIANCE WITH SECURITIES LAWS..................................................20
SECTION 15.5 BUY-OUT. ......................................................................20
SECTION 15.6 BUY-OUT EVENT....................................................................21

ARTICLE XVI

DISSOLUTION OF THE COMPANY..............................................................................21
SECTION 16.1 EVENTS OF DISSOLUTION............................................................21
SECTION 16.2 OPTION TO PURCHASE INTEREST OF BANKRUPT MEMBER...................................22

ARTICLE XVII

WINDING UP AND TERMINATION OF THE COMPANY...............................................................23
SECTION 17.1 LIQUIDATOR.......................................................................24
SECTION 17.2 RESERVES.........................................................................24
SECTION 17.3 SALE OF ASSETS; DISTRIBUTION OF PROCEEDS.........................................24
SECTION 17.4 FINAL ACCOUNTING.................................................................24
SECTION 17.5 RECOURSE LIMITED TO COMPANY ASSETS...............................................24
SECTION 17.6 TERMINATION......................................................................24

ARTICLE XVIII

NOTICES.................................................................................................25

ARTICLE XIX

AMENDMENTS AND MEETINGS.................................................................................25
SECTION 19.1 AMENDMENTS.......................................................................25
SECTION 19.2 MEETINGS OF THE MEMBERS..........................................................25
</TABLE>

-iii-
<PAGE> 5

<TABLE>
<S> <C>
ARTICLE XX

REPRESENTATIONS, WARRANTIES AND COVENANTS...............................................................26

ARTICLE XXI

MISCELLANEOUS...........................................................................................26
SECTION 21.1 NO RIGHT OF PARTITION............................................................26
SECTION 21.2 ENTIRE AGREEMENT; SUPERSEDURE....................................................26
SECTION 21.3 GOVERNING LAW....................................................................26
SECTION 21.4 BINDING EFFECT...................................................................26
SECTION 21.5 CONSTRUCTION OF AGREEMENT........................................................26
SECTION 21.6 CAPTIONS.........................................................................27
SECTION 21.7 EFFECT OF INVALID PROVISION......................................................27
SECTION 21.8 COUNTERPARTS.....................................................................27
SECTION 21.9 WAIVER...........................................................................27
</TABLE>

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<PAGE> 6

LIMITED LIABILITY COMPANY AGREEMENT
OF
CHELSEA MARKET SYSTEMS, L.L.C.

THIS AGREEMENT is made as of the 3rd day of January, 2000, between and
among Renwick Technologies, Inc., a Texas corporation, and Harry M. Levy

WHEREAS, the parties hereto desire to form a limited liability company
under and pursuant to the Act;

NOW, THEREFORE, in consideration of the premises and the mutual
undertakings contained herein, the parties hereto hereby agree as follows:

DEFINITIONS

The following definitions shall be applicable to the terms set forth
below as used in this Agreement:

"ACT" means the Delaware Limited Liability Company Act, 6 Del. Code
Sections 18-101 et seq., as it may be amended from time to time, and any
successor to said Act.

"AFFILIATE" means any corporation, partnership, trust or other entity
controlling, controlled by or under direct or indirect common control with a
Member or in which a Member directly or indirectly holds ten percent (10%) or
more of the outstanding voting or equity interests.

"AGREED VALUE" means, in the case of any contributions or distributions
of property, the fair market value of such property net of any indebtedness or
other liability either assumed or to which such property is subject, as such
fair market value is determined by the Members using such reasonable method of
valuation as they may adopt.

"AGREEMENT" means this Limited Liability Company Agreement of Chelsea
Market Systems, L.L.C. as the same may be amended or modified from time to time
in accordance with Article XIX hereof.

"ALTERNATE REPRESENTATIVES" has the meaning ascribed thereto in Section
14.2(a).

"APPROVED BUSINESS PLAN" means a Business Plan and any amendments and
revisions thereto that have been approved by the Management Committee pursuant
to Section 14.2(b).

"BANKRUPTCY" means the occurrence of any of the events described in
Section 18-304 of the Act with respect to a specified person.

-1-
<PAGE> 7

"BUILT-IN GAIN" with respect to any Company property means (i) the
excess of the Agreed Value of any Contributed Property over its adjusted basis
for federal income tax purposes as of the time of contribution and (ii) in the
case of any adjustment to the Carrying Value of any Company property subject to
depreciation, cost recovery or amortization pursuant to Section 7.4 as a result
of a contribution of cash for a Membership Interest, the Unrealized Gain with
respect to such property.

"BUILT-IN LOSS" with respect to any Company property means (i) the
excess of its adjusted basis for federal income tax purposes of any Contributed
Property over its Agreed Value as of the time of contribution and (ii) in the
case of any adjustment to the Carrying Value of any Company property subject to
depreciation, cost recovery or amortization pursuant to Section 7.4 as a result
of a contribution of cash for a Membership Interest, the Unrealized Loss with
respect to such property.

"BUSINESS DAY" means any day other than a Saturday, Sunday or bank
holiday in Houston, Texas.

"BUSINESS PLAN" shall mean the projected operating and capital spending
budgets of the Company for each fiscal year (or in the case of the initial
Business Plan the applicable portion thereof) after completion of the
Development Contract and shall set forth income and expense projections and
planned contributions and financing.

"CAPITAL ACCOUNT" means the account established for each Member
pursuant to Section 7.3.

"CAPITAL CONTRIBUTIONS" means the Agreed Value of any property and the
amount of cash contributed by a Member to the Company.

"CARRYING VALUE" with respect to any Capital Contribution means the
Agreed Value of such property reduced as of the time of determination by all
depreciation, cost recovery and amortization deductions charged to the Capital
Accounts with respect to such property and an appropriate amount to reflect any
sales, retirements or other dispositions of assets included in such property
and, with respect to any other Company property, the adjusted basis of such
property for federal income tax purposes as of the time of determination. The
Carrying Values shall be further adjusted as provided in Section 8.4.

"CERTIFICATE" means the Certificate of Formation of the Company to be
filed in the Office of the Secretary of State of the State of Delaware pursuant
to the Act, and any and all amendments thereto and restatements thereof.

"CODE" means the Internal Revenue Code of 1986, as amended and in
effect on the effective date hereof and, to the extent applicable, as
subsequently amended.

"COMPANY" means Chelsea Market Systems, L.L.C., the limited liability
company formed hereunder.

-2-
<PAGE> 8

"CONTRIBUTED PROPERTY" means any Capital Contribution of property other
than cash.

"DEFAULT INTEREST RATE" means a floating rate per annum equal to the
lesser of (a) 2% per annum over the borrowing rate of The Men's Wearhouse, Inc.
under its $125,000,000 Revolving Credit Agreement dated February 15, 1999, or
such other credit facility as may be substituted therefor, as the case may be
with adjustments in such varying rate hereunder to be made on the same date as
any change in the aforesaid rate or (b) the maximum rate permitted by Law.

"DELINQUENT CONTRIBUTION" has the meaning ascribed thereto in Section
7.1(c).

"DELINQUENT MEMBER" has the meaning ascribed thereto in Section 7.1(c).

"DEVELOPMENT CONTRACT" means that certain Software Development
Agreement between the Company and The Men's Wearhouse, Inc. dated effective
January 3, 2000, concerning the development, testing and completion of a POS
software system by the Company for The Men's Wearhouse.

"DISTRIBUTABLE CASH" means, at the time of determination, all Company
cash derived from the conduct of the Company's business, other than (i) Capital
Contributions, together with interest earned thereon pending utilization
thereof, (ii) financing proceeds, (iii) reserves for working capital and (iv)
other amounts that the Members reasonably determine to be necessary for the
proper operation of the Company's business and its winding up and liquidation.

"HARRY" means Harry M. Levy, an individual residing in Houston, Harris
County, Texas.

"INDEMNITEE" has the meaning ascribed thereto in Section 14.7(a).

"LENDING MEMBER" has the meaning ascribed thereto in Section 7.1(c).

"LIQUIDATOR" has the meaning ascribed thereto in Section 17.1.

"MANAGEMENT COMMITTEE" has the meaning ascribed thereto in Section
14.2.

"MEMBERS" means Renwick and Harry or their respective successors or
permitted assigns and "MEMBER" means any one of them.

"MEMBER'S OPTIONAL CONTRIBUTION" has the meaning ascribed thereto in
Section 7.1(c).

"MEMBERSHIP INTEREST" as to any Member means the entire ownership
interest and rights of that Member in the Company, including, without
limitation, its right to a distributive share of the profits and losses of the
Company, its right to a distributive share of the assets of the Company in
accordance with the provisions hereof, and its right to participate in the
management of the affairs of the Company.

-3-
<PAGE> 9

"RENWICK" means Renwick Technologies, Inc., a Texas corporation.

"REPRESENTATIVE" has the meaning given such term in Section 14.2(a).

"SHARING RATIO" means the percentages set forth below:

<TABLE>
<CAPTION>
MEMBER SHARING RATIO
------ -------------
<S> <C>
Renwick 50%
Harry 50%
</TABLE>

"SYSTEMS COMPLETION" has the meaning ascribed thereto in the
Development Contract.

"TMP" has the meaning ascribed thereto in Section 9.6(a).

"UNREALIZED GAIN" attributable to a Company property means, as of the
date of determination, the excess of the fair market value of such property as
of such date of determination over the Carrying Value of such property as of
such date of determination.

"UNREALIZED LOSS" attributable to a Company property means, as of the
date of such determination, the excess of the Carrying Value of such property as
of such date of determination over the fair market value of such property as of
such date of determination.

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

SECTION 1.1 FORMATION. The Members hereby form the limited liability
company pursuant to the Act. The rights and liabilities of the Members shall be
as provided in the Act, except as herein otherwise expressly provided. The
Membership Interests of any Member shall be personal property for all purposes.
Each Member shall execute, acknowledge, swear to, and deliver all certificates
and other instruments conforming with this Agreement that are necessary to
qualify, continue, or terminate the Company as a limited liability company under
the laws of the State of Delaware and to qualify the Company to do business in
such other states or other jurisdictions where such qualification is necessary
or desirable.

SECTION 1.2 PARTNERSHIP FOR TAX PURPOSES ONLY. The Members intend that
the Company not be a partnership (including a limited partnership) or joint
venture, and that no Member be a partner or joint venturer of any other Member,
for any purposes other than U.S. federal and state tax purposes, and this
Agreement may not be construed to suggest otherwise.

-4-
<PAGE> 10

ARTICLE II

NAME

The name of the Company shall be, and the business of the Company shall
be conducted under the name of, Chelsea Market Systems, L.L.C. or such other
name or names that comply with applicable law as the Members may designate from
time to time. The Management Committee shall take any action that they determine
is required to comply with the Act, assumed name act, fictitious name act, or
similar statute in effect in each jurisdiction or political subdivision in which
the Company proposes to do business.

ARTICLE III

PURPOSE AND POWERS

SECTION 3.1 PURPOSE. The purpose of the Company is to design, create
and market computer software for use in retail operations, and to market
products and services related to the software and to engage in any and all
activities necessary, convenient, desirable or incidental to the foregoing.

SECTION 3.2 POWERS OF THE COMPANY. Subject to the terms of this
Agreement, the Company shall have the power and authority to take any and all
actions necessary, appropriate, proper, advisable, convenient or incidental to
or for the furtherance of the purposes set forth in Section 3.1, including the
power to conduct the Company's business and to carry on the Company's
operations. The Company shall have and exercise the powers granted to a limited
liability company by the Act in any state, territory, district or possession of
the United States, or in any foreign country that may be necessary, convenient
or incidental to the accomplishment of the purposes of the Company.

ARTICLE IV

NAMES AND ADDRESSES OF MEMBERS

The names and mailing addresses of the Members are as set forth on the
signature pages hereof.

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<PAGE> 11

ARTICLE V

REGISTERED AGENT; REGISTERED OFFICE;
PRINCIPAL OFFICE; ADDITIONAL OFFICES

The name and address of the registered office of the Company in the
State of Delaware is c/o The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The
principal office of the Company shall be 4611 Montrose Blvd., Suite A205,
Houston, Texas 77006. The name and address of the registered agent for service
of process on the Company in the State of Delaware is The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801. The Members may change the registered agent or the
registered office of the Company and may establish such additional offices of
the Company as they may, from time to time determine.

ARTICLE VI

TERM

The term of the Company shall be perpetual from the date of the filing
of the Certificate in the Office of the Secretary of State of the State of
Delaware unless sooner liquidated or dissolved in accordance with this
Agreement.

ARTICLE VII

CAPITAL CONTRIBUTIONS

SECTION 7.1 CONTRIBUTIONS.

(a) Upon execution of this Agreement, the Members shall
contribute the amounts set forth below.

<TABLE>
<CAPTION>
Capital
Member Contribution
------ ------------
<S> <C>
Renwick $5,000

Harry $5,000

Total $10,000
</TABLE>

(b) Each Member shall be required during each fiscal year to
make the additional Capital Contributions (i) included in the Business
Plan for such fiscal year or any amendment thereto, in either case as
approved by the Management Committee pursuant to this Agreement or (ii)
otherwise required by the Management Committee. Renwick shall

-6-
<PAGE> 12

contribute the Surplus Amount as defined in the Development Contract to
fund the first Approved Business Plan and, unless otherwise agreed by
the Management Committee, all other capital contribution shall be made
pro rata in accordance with the Members' Sharing Ratios. Unless
otherwise provided in the Business Plan, each such contribution shall
be made in cash.

(c) If a Member does not contribute by the time required all
or any portion of a Capital Contribution (the "Delinquent
Contribution") that the Member is required to make as provided in this
Agreement, the Company may, with notice to that Member (the "DELINQUENT
MEMBER") and each of the other Members request that the Capital
Contribution be made by the other Members. The Company shall give a
written notice to the Delinquent Member and to the other Members
specifying the amount of the Capital Contribution which has not been
made. Each Member that elects to do so, shall, within five Business
Days, notify the Company of the portion of such Delinquent Contribution
the Member desires to make to the Company. If the Members, in the
aggregate, elect to make contributions which would exceed the
Delinquent Contribution, the amount to be contributed by each Member
shall be reduced on a pro rata basis based on the amount each Member
elected to contribute compared to the aggregate of the amounts all
Members elected to contribute. The contribution made by a Member
pursuant to this subparagraph (c) is referred to herein as a "Member's
Optional Contribution."

SECTION 7.2 NO LIABILITY FOR ADDITIONAL CONTRIBUTIONS. The liability of
each Member to the Company shall be limited to the amount of its Capital
Contribution made and to be made pursuant to Section 7.1, and no Member shall
have any further personal liability to contribute money to, or in respect of,
the liabilities or the obligations of the Company unless it agrees in writing to
make additional Capital Contributions to the Company, nor shall any Member be
personally liable for any obligations of the Company, except as may be provided
in the Act. No Member shall be entitled to the return of any part of its Capital
Contribution or to be paid interest in respect of either its Capital Account or
any Capital Contribution made by such Member. No unrepaid Capital Contribution
shall be deemed or considered to be a liability of the Company or any Member. No
Member shall be required to contribute or lend any cash or property to the
Company to enable the Company to return any Member's Capital Contribution to the
Member.

SECTION 7.3 CAPITAL ACCOUNTS. A capital account ("CAPITAL ACCOUNT")
shall be established for each Member and shall be maintained in such a manner as
to correspond with the requirements of Treasury Regulations promulgated from
time to time under section 704(b) of the Code. The respective Capital Accounts
of the Members shall not bear interest.

SECTION 7.4 ADJUSTMENT OF CAPITAL ACCOUNTS. If any Company property is
to be distributed in liquidation of the Company or a Membership Interest, the
Capital Accounts of the Members (and the amounts at which all Company properties
are carried on its books and records) shall, immediately prior to such issuance
or distribution, as the case may be, be adjusted (consistent with the provisions
of section 704(b) of the Code and the Treasury Regulations promulgated

-7-
<PAGE> 13

thereunder) upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to all Company properties (as if such Unrealized Gain or Unrealized
Loss had been recognized upon actual sale of such properties upon a liquidation
of the Company immediately prior to such issuance). If the Carrying Value of any
property of the Company is properly reflected on the books of the Company at a
value that differs from the adjusted tax basis of such property, this Section
7.4 shall be applied with reference to such value.

ARTICLE VIII

DISTRIBUTIONS

SECTION 8.1 AMOUNT; TIMING.

(a) Except as otherwise provided herein or by the Act,
Distributable Cash shall be distributed among the Members pro rata in
accordance with their Sharing Ratios in such aggregate amounts and at
such times as shall be determined by the Management Committee.

(b) Notwithstanding the foregoing, in the event a Member is a
Delinquent Member and any other Member has made a Member's Optional
Contribution with respect to the Delinquent Contribution of such
Delinquent Member, all distributions to be made to such Delinquent
Member shall first be made to the Members who have made such Member's
Optional Contributions until such time as such Members have received an
amount equal to 400% of the amount of their Member's Optional
Contributions. In the event that more than one Member has made a
Member's Optional Contribution with respect to a Delinquent
Contribution, the distribution which would otherwise be made to the
Delinquent Member of such Delinquent Contribution shall be divided
among such Members pro rata based on the amount of each Member's
Optional Contribution made with respect to such Delinquent Contribution
compared to the aggregate amount of all Member's Optional Contributions
with respect to such Delinquent Contribution. In the event there are
outstanding Member's Optional Contributions with respect to more than
one Delinquent Contribution of a Delinquent Member, all distributions
which would otherwise be paid to that Delinquent Member shall first be
paid to the Member or Members who made Member's Optional Contributions
with respect to the oldest Delinquent Contribution of that Delinquent
Member until such Members shall have received 400% of such Member's
Optional Contributions and then with respect to the next oldest and in
such order until all Members making Member's Optional Contributions
with respect to Delinquent Contributions of such Delinquent Member have
received 400% of the aggregate of all Delinquent Contributions of such
Delinquent Member. When the amounts required to be paid pursuant hereto
with respect to Member's Optional Contributions have been made with
respect to all Delinquent Contributions of a Delinquent Member, such
Delinquent Member shall cease being a Delinquent Member.

-8-
<PAGE> 14

SECTION 8.2 FAILURE TO WITHDRAW. If any Member does not withdraw the
whole or any part of its share of any cash distribution made pursuant to Section
8.1, such Member shall not be entitled to receive any interest thereon without
the express written consent of the other Member.

SECTION 8.3 TRANSFEROR/TRANSFEREE ALLOCATIONS. Unless otherwise agreed
in writing by a transferor and transferee of a Membership Interest herein,
Distributable Cash distributable with respect to any Membership Interest which
may have been transferred during any year shall be distributed to the holder of
such Membership Interest who was recognized as the owner on the date of such
distribution, without regard to the results of Company operations during the
year.

SECTION 8.4 MEMBER ADVANCES. Notwithstanding the foregoing, if any
Member advances any funds or makes any other payment to or on behalf of the
Company, not required pursuant to the provisions hereof, to cover operating or
capital expenses of the Company which cannot be paid out of the Company's
operating revenues, such advance or payment shall be deemed a loan to the
Company by such Member, bearing interest from the date such advance or payment
was made until such loan is repaid at the Default Interest Rate. Notwithstanding
Section 8.1 above, all distributions of Distributable Cash shall first be
distributed to the Members making such loans until all such loans have been
repaid to such Members, together with interest thereon as above provided, and,
thereafter, the balance of such distributions, if any, shall be made in
accordance with the terms of Section 8.1 above. If distributions are
insufficient to repay and return all such loans as provided above, the funds
available from time to time shall first be applied to repay and retire the
oldest loan first and, if any funds thereafter remain available, such funds
shall be applied in a similar manner to remaining loans in accordance with the
order of the dates on which they were made; however, as to loans made on the
same date, each such loan shall be repaid pro rata in the proportion that such
loan bears to the total loans made on said date.

ARTICLE IX

ALLOCATIONS OF INCOME, GAIN,
LOSS, DEDUCTION AND CREDIT

SECTION 9.1 GENERAL. Except as otherwise provided herein or unless
another allocation is required by Treasury Regulations issued under section
704(b) of the Code (including, but not limited to, provisions pertaining to
qualified income offsets and minimum gain chargebacks) for purposes of
maintaining the Capital Accounts, all items of Company income, gain, loss,
deduction and credit shall be allocated among the Members pro rata in accordance
with their Sharing Ratios. For purposes of computing the amount of each item of
income, gain, deduction or loss to be charged or credited to the Capital
Accounts, the determination, recognition and classification of such item shall
be the same as its determination, recognition and classification for federal
income tax purposes, provided that:

(a) Any deductions for depreciation, cost recovery, or
amortization attributable to any Company property shall be determined
as if the adjusted basis of such property were

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<PAGE> 15

equal to the Carrying Value of such property. Upon an adjustment to the
Carrying Value of any Company property subject to depreciation, cost
recovery, or amortization pursuant to Section 7.4, any further
deductions for such depreciation, cost recovery, or amortization
attributable to such property shall be determined as if the adjusted
basis of such property were equal to the Carrying Value of such
property immediately following such adjustment.

(b) Any income, gain or loss attributable to the taxable
disposition of any Company property shall be determined by the Company
as if the adjusted basis of such property as of such date of
disposition were equal in amount to the Carrying Value of such property
as of such date.

(c) All fees and other expenses incurred by the Company to
promote the sale of a Membership Interest that can neither be deducted
nor amortized under section 709 of the Code shall be treated as an item
of deduction.

(d) Computation of all items of income, gain, loss and
deduction shall be made without regard to any election under section
754 of the Code which may be made by the Company and, as to those items
described in section 705(a)(1)(B) or section 705(a)(2)(B) of the Code,
without regard to the fact that such items are not includable in gross
income or are neither currently deductible nor capitalizable for
federal income tax purposes.

SECTION 9.2 SPECIAL ALLOCATION.

(a) All items of deduction or loss attributable to the non-pro
rata Capital Contribution to be made by Renwick pursuant to Section
7.1(b) shall be allocated solely to Renwick.

(b) Once a Member that makes Member's Optional Contribution
has received distributions under Section 8.1(b) in any amount equal to
such Member's Optional Contribution, such Member shall be allocated
gross income equal to the amount of all additional distributions
received under Section 8.1(b) during any fiscal year of the Company as
a result of such Member's Optional Contribution.

SECTION 9.3 ALLOCATIONS FOR TAX PURPOSES.

(a) The Company shall, except to the extent such item is
subject to allocation pursuant to subsection (b) below, allocate each
item of income, gain, loss, deduction and credit, as determined for
federal and other income tax purposes, in the same manner as such item
was allocated for book purposes.

(b) The Company, for federal and other income tax purposes
shall, in the case of Contributed Properties, allocate items of income,
gain, loss, depreciation and cost recovery

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<PAGE> 16

deductions attributable to those properties with a Built-In Gain or a
Built-In Loss pursuant to section 704(c) of the Code. Similar
allocations shall be made in the event that the Carrying Value of
Company properties subject to depreciation, cost recovery or
amortization are adjusted pursuant to Section 7.4 upon the issuance of
Membership Interests for cash. If an existing Member acquires
additional Membership Interests, such allocations shall apply only to
the extent of his or its additional Membership Interests. No allocation
under section 704(c) of the Code shall be charged or credited to a
Member's Capital Account.

SECTION 9.4 TRANSFER/TRANSFEREE ALLOCATIONS. Income, gain, loss,
deduction or credit attributable to any Membership Interest which has been
transferred shall be allocated between the transferor and the transferee
allocated equally among the days of the Company's fiscal year without regard to
Company operations during such days.

SECTION 9.5 RELIANCE ON ADVISORS. The Management Committee may rely
upon, and shall have no liability to the Members or the Company if it does rely
upon, the written opinion of tax counsel or accountants retained by the Company
from time to time with respect to all matters (including disputes with respect
thereto) relating to computations and determinations required to be made under
this Article IX or other provisions of this Agreement.

SECTION 9.6 TAX MATTERS PARTNER.

(a) Renwick is designated tax matters partner ("TMP") as
defined in section 6231(a)(7) of the Code. The TMP and the other Member
shall use their best efforts to comply with responsibilities outlined
in this Section 9.6 and in sections 6222 through 6232 of the Code
(including any Treasury Regulations promulgated thereunder) and in
doing so shall incur no liability to any other Member.

(b) If any Member intends to file a notice of inconsistent
treatment under section 6222(b) of the Code, such Member shall, prior
to the filing of such notice, notify the TMP of such intent and the
manner in which the Member's intended treatment of a Company item is
(or may be) inconsistent with the treatment of that item by the
Company.

(c) No Member other than the TMP shall file a request pursuant
to section 6227 of the Code for an administrative adjustment of
partnership items for any Company taxable year.

(d) No Member other than the TMP shall file a petition under
Code sections 6226, 6228 or other Code sections with respect to any
Company item, or other tax matters involving the Company. In the case
where the TMP files such petition, he shall determine the forum in
which such petition will be filed.

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<PAGE> 17

ARTICLE X

BOOKS OF ACCOUNT, RECORDS AND TAX INFORMATION

SECTION 10.1 MAINTENANCE OF BOOKS AND RECORDS. Proper and complete
records and books of account (including those required by the Act) shall be kept
by the Company in which shall be entered all transactions and other matters
relative to the Company's business as are usually entered into records and books
of account maintained by persons engaged in businesses of like character. The
Company books and records shall be maintained in accordance with accounting
principles described herein, and shall be kept on the accrual basis. The books
and records shall at all times be made available and shall be open to the
reasonable inspection and examination of the Members or their duly authorized
representatives during the business hours of the Company for any purpose
reasonably related to the interest of such Member as a member of the Company.

SECTION 10.2 REPORTS.

(a) As soon as reasonably practicable after the end of each
fiscal year, the Company shall send each person who was a holder of a
Membership Interest at any time during the fiscal year then ended:

(i) All Company tax information as shall be necessary
for the preparation by such holder of its federal and any
applicable state and local income tax returns; and

(ii) A balance sheet, profit and loss statement and
statement of cash flows for such year; and

(b) Once the Company has adopted its first Approved Business
Plan, a quarterly statement of income and cash flow compared to the
applicable Approved Business Plan with an explanation of each deviation
of more than 5% from any item in the Approved Business Plan.

ARTICLE XI

FISCAL YEAR

The fiscal year of the Company shall end on December 31st of each year.

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<PAGE> 18

ARTICLE XII

COMPANY FUNDS

The funds of the Company shall be deposited in such bank account or
accounts, or invested in such interest-bearing or non-interest-bearing accounts,
as shall be designated by the Management Committee. All withdrawals from any
such bank accounts shall be made by Company officers, employees or agents duly
authorized by the Management Committee.

ARTICLE XIII

STATUS OF MEMBERS

No Member shall have any personal liability whatever, whether to the
Company, to any of the Members or to the creditors of the Company, for the debts
of the Company or any of its losses beyond the amount agreed to be contributed
by it to the capital of the Company as set forth in Section 7.1 except to the
extent required by the Act. No Member shall be obligated to restore any deficit
in its Capital Account upon the liquidation of the Company or its Membership
Interest.

ARTICLE XIV

MANAGEMENT AND OPERATION OF BUSINESS

SECTION 14.1 MEMBER MANAGEMENT. Subject tp Section 14.2 below, the
management of the Company is vested in the Members, acting exclusively in their
membership capacities and all actions of the Members shall require approval of
Members holding at least a majority of the total of all Sharing Ratios.

SECTION 14.2 MANAGEMENT COMMITTEE. The Company shall be managed by a
committee which is hereby named the "MANAGEMENT COMMITTEE." Decisions or actions
taken by the Management Committee in accordance with the provisions of this
Agreement shall constitute decisions or actions by the Company and shall be
binding on each Member of the Company. The Management Committee shall conduct
its affairs in accordance with the following provisions and the other provisions
of this Agreement:

(a) Organization of Management Committee:

(i) George Zimmer, Harry Levy and David Edwab shall
be the initial members of the MANAGEMENT COMMITTEE with
Messrs. Zimmer and Edwab being "REPRESENTATIVES" of Renwick
and Harry as his own REPRESENTATIVE. Upon Systems Completion,
the Management Committee shall be increased to four persons
and Harry shall appoint the fourth person as his
Representative. No individual may serve as the Representative
of more than one Member. Each of Renwick and Harry

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<PAGE> 19

may also appoint one or more individuals ("ALTERNATE
REPRESENTATIVES") with the power of substitution and authority
to act in place of its Representatives in case of the
unavailability thereof. Each Representative and Alternate
Representative shall be duly authorized to act on behalf of
and to bind the appointing Member. Each of Renwick and Harry
reserves the right to remove any one or more of its
Representative or Alternate Representatives, as the case may
be, and to appoint successors and substitutes therefor, from
time to time, and any such change shall be effective upon such
Member's delivering a written notice of such change to the
other Member.

(ii) In the event the individual serving as the
president/chief executive officer of the Company is not a
Representative, he or she shall be an additional member of the
Management Committee; however, that individual shall be a
nonvoting member.

(iii) Each Representative shall have one vote on all
matters to be decided by the Management Committee. Voting may
occur by voice vote at a meeting of the committee or by
written consent.

(iv) Any action of the Management Committee shall
require the affirmative vote of a majority of the persons on
the Management Committee. In addition, if, at any time, any
Member is a Delinquent Member, its Representative and
Alternate Representative(s) may not participate in the
Management Committee and all decisions shall be made by the
Representative or Alternate Representative(s) of the other
Member.

(v) To expedite the handling of Company business, it
is understood and agreed that any document executed by a
Representative or any Alternate Representative of each Member
shall, as to any third parties, be deemed to be the action of
the Member appointing such Representative or Alternate
Representative. Further, any Person dealing with the Company
may rely upon a certificate signed by a Representative or any
Alternate Representative of both Members as to:

(A) the identity of the Members, their
Representatives and Alternate Representatives;

(B) the existence or nonexistence of any
fact or facts that constitute conditions precedent to
acts by the Company or are in any other manner
related to the affairs of the Company;

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<PAGE> 20

(D) any act or failure to act by the Company
or the Management Committee; or

(E) any other matter whatsoever involving
the Company or the Management Committee.

(b) Matters Requiring Management Committee Consent:
Notwithstanding any other provision of this Agreement, the following
actions require the consent of the Management Committee:

(i) the annual Business Plan and any amendments to
the Approved Business Plan;

(ii) the incurrence of, or commitment to incur, any
capital cost for any project that exceeds $25,000 (to the
extent not covered by the Approved Business Plan) or that
would cause the Company to exceed its annual capital budget as
reflected on the Approved Business Plan;

(iii) the sale or divestiture of any asset of the
Company having a fair market value in excess of $25,000, to
the extent not covered in the Approved Business Plan;

(iv) material contracts and agreements covering
amounts in excess of $100,000 or for a term in excess of 36
months, and amendments thereof, to the extent these matters
are not covered by the Approved Business Plan;

(v) borrowings or issuances of debt securities
(excluding trade credits and advances under working capital
funding facilities) of the Company, to the extent these
matters are not covered in the Approved Business Plan;

(vi) issuances by the Company of any new Membership
Interests;

(vii) entering into or amending contracts between the
Company and any Member or its Affiliates; and

(viii) the filing or settlement of any lawsuit
involving a claim or settlement payment of more than $1,000.

(i) Regular meetings of the Management Committee
shall be held periodically, but no less frequently than
quarterly, on such dates, at such times and at such locations
as the members of such committee shall from time to time

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<PAGE> 21

determine, taking into account the convenience of all parties.
The individual then serving as the president/chief executive
officer of the Company or any Representative or Alternate
Representative may call a special meeting of the Management
Committee. Notice of any special meeting shall include a
statement of the matters proposed to be considered at such
meeting and shall be given to all participants by the Person
calling the meeting, under normal circumstances at least ten
(10) Business Days prior to the meeting, although shorter
notice of a meeting (but not less than eight (8) hours) may be
given if the circumstances of urgency so require. All notices
of Management Committee meetings shall be given either in
writing, or by telephone if immediately followed by written
confirmation, and no Management Committee meeting shall be
held unless the president/chief executive officer of the
Company and a Representative or Alternate Representative of
each Member participates in such meeting. Each Member agrees
to use reasonable efforts to cause at least one of its
Representatives or an Alternate Representative to participate,
in the manner provided for herein, in all Management Committee
meetings.

(ii) Representatives and Alternate Representatives
may participate in any Management Committee meeting by means
of telephone conference call or similar communications
equipment so long as all Persons participating in the meeting
can hear each other simultaneously. If required, the
Management Committee may act without a meeting by written
consent.

(iii) The individual serving as the president/chief
executive officer of the Company shall preside at all
Management Committee meetings.

(d) A Member may exercise all rights or powers provided to
members of a limited liability company by the Act, except to the extent
that any such exercise is inconsistent with, or contrary to, an express
provision of this Agreement.

SECTION 14.3 INABILITY TO AGREE ON A BUSINESS PLAN. In the event the
Management Committee does not approve the Business Plan within 30 day of the
submission of a Business Plan by any of the Representatives to the Management
Committee, except where a majority of the Management Committee expressly agree
to defer approval of a Business Plan, the Management Committee shall meet to
agree upon a person to either arbitrate or mediate the disagreement among the
Representatives. If the Management Committee agrees upon a person to arbitrate
the disagreement between the Representatives, the Management Committee shall
submit the matter to such arbiter within 14 days. Each Representative shall have
the right to make written and oral submissions to the arbiter. Within 14 days of
the last of such submissions, the arbiter shall issue his or her ruling which
shall be binding on all Members. If the Management Committee selects a mediator,
all Representatives shall have the opportunity to meet together with the
mediator on a date specified by the mediator upon 21 days' advance notice to the
Representatives, which notice can be waived. The Representatives, with the
assistance of the mediator, shall attempt in good faith to reach agreement on a
Business Plan. If the Management Committee can not agree on either an arbiter or

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<PAGE> 22

a mediator, Michael W. Conlon shall select a mediator and the Representatives
shall meet with such mediator in the same manner as set forth in the previous
sentence. If, notwithstanding completion of the foregoing, the Management
Committee has not agreed on a Business Plan and a Business Plan has not been
ordered by an arbiter, the Company shall be liquidated and terminated in
accordance with Article XVII.

SECTION 14.4 COMPENSATION AND REIMBURSEMENT. The Management Committee
is not entitled to compensation for its services. Each Representative and
Alternate Representative shall be reimbursed by their respective Member for
out-of-pocket costs and expenses incurred in serving on the Management
Committee.

SECTION 14.5 OFFICERS.

(a) Subject to the provisions hereof, the Management Committee
shall from time to time designate officers of the Company to carry out
the day-to-day business of the Company.

(b) The officers of the Company shall be comprised of one or
more individuals designated from time to time by the Management
Committee. No officer need be a resident of the State of Delaware. Each
officer shall hold his or her office for such terms and shall have such
authority and exercise such powers and perform such duties as shall be
determined from time to time by the Management Committee. Any number of
offices may be held by the same individual. The salaries or other
compensation, if any, of the officers and agents of the Company shall
be fixed from time to time by the Management Committee.

(c) The officers of the Company may consist of a
president/chief executive officer, a secretary and a treasurer. The
Management Committee may also designate one or more vice presidents,
assistant secretaries, and assistant treasurers. The Management
Committee may designate such other officers and assistant officers and
agents as the Management Committee shall deem necessary.

(d) Any officer may be removed as such at any time by the
Management Committee, either with or without cause, in the discretion
of the Management Committee; provided, that such removal shall be
without prejudice to the contract rights, if any, of the person so
removed. Designation of an officer shall not of itself create contract
rights.

SECTION 14.6 EXCULPATION. NEITHER THE MANAGEMENT COMMITTEE, THE
MEMBERS, THEIR RESPECTIVE AFFILIATES, NOR ANY OWNER, OFFICER, DIRECTOR, PARTNER,
EMPLOYEE OR AGENT OF THE MEMBERS OR THEIR RESPECTIVE AFFILIATES, SHALL BE
LIABLE, RESPONSIBLE OR ACCOUNTABLE IN DAMAGES OR OTHERWISE TO THE COMPANY OR ANY
MEMBER FOR ANY ACTION TAKEN OR FAILURE TO ACT (EVEN IF SUCH ACTION OR FAILURE TO
ACT CONSTITUTED THE NEGLIGENCE OF A PERSON) ON BEHALF OF THE COMPANY WITHIN THE
SCOPE OF THE AUTHORITY CONFERRED ON THE PERSON DESCRIBED IN THIS AGREEMENT OR BY
LAW UNLESS SUCH ACT OR OMISSION WAS PERFORMED OR

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<PAGE> 23

OMITTED FRAUDULENTLY OR CONSTITUTED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. TO
THE EXTENT THAT, AT LAW OR IN EQUITY, THE MANAGEMENT COMMITTEE, THE MEMBERS,
THEIR RESPECTIVE AFFILIATES, OR ANY OWNER, OFFICER, DIRECTOR, PARTNER, EMPLOYEE
OR AGENT THEREOF HAVE DUTIES (INCLUDING FIDUCIARY DUTIES) AND LIABILITIES
RELATING TO THE COMPANY OR TO ANOTHER MEMBER, THE MANAGEMENT COMMITTEE, THE
MEMBERS, THEIR RESPECTIVE AFFILIATES, OR ANY OWNER, OFFICER, DIRECTOR, PARTNER,
EMPLOYEE OR AGENT THEREOF ACTING UNDER THE AGREEMENT SHALL NOT BE LIABLE TO THE
COMPANY OR TO ANY OTHER MEMBER OR ITS AFFILIATES FOR THEIR RELIANCE ON THE
PROVISIONS OF THIS AGREEMENT. THE PROVISIONS OF THIS AGREEMENT, TO THE EXTENT
THAT THEY EXPAND OR RESTRICT THE DUTIES AND LIABILITIES OF THE MANAGEMENT
COMMITTEE, THE MEMBERS, THEIR RESPECTIVE AFFILIATES, OR ANY OWNER, OFFICER,
DIRECTOR, PARTNER, EMPLOYEE OR AGENT THEREOF OTHERWISE EXISTING AT LAW OR IN
EQUITY, ARE AGREED BY THE MEMBERS TO REPLACE SUCH OTHER DUTIES AND LIABILITIES
OF THE MANAGEMENT COMMITTEE, THE MEMBERS, THEIR RESPECTIVE AFFILIATES, OR ANY
OWNER, OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT THEREOF.

SECTION 14.7 INDEMNIFICATION. (a) TO THE FULLEST EXTENT PERMITTED BY
LAW, THE MANAGEMENT COMMITTEE, THE MEMBERS, THEIR RESPECTIVE AFFILIATES AND
THEIR RESPECTIVE OFFICERS, DIRECTORS, PARTNERS, EMPLOYEES AND AGENTS OR ANY
PERSON PERFORMING A SIMILAR FUNCTION (INDIVIDUALLY, AN "INDEMNITEE") SHALL BE
INDEMNIFIED AND HELD HARMLESS BY THE COMPANY FROM AND AGAINST ANY AND ALL
LOSSES, CLAIMS, DAMAGES, JUDGMENTS, LIABILITIES, OBLIGATIONS, PENALTIES,
SETTLEMENTS AND REASONABLE EXPENSES (INCLUDING LEGAL FEES) ARISING FROM ANY AND
ALL CLAIMS, DEMANDS, ACTIONS, SUITS OR PROCEEDINGS, CIVIL, CRIMINAL,
ADMINISTRATIVE OR INVESTIGATIVE, IN WHICH THE INDEMNITEE MAY BE INVOLVED, OR
THREATENED TO BE INVOLVED, AS A PARTY OR OTHERWISE, BY REASON OF ITS STATUS AS
(x) A MEMBER OF THE MANAGEMENT COMMITTEE, A MEMBER OR AN AFFILIATE THEREOF, OR
(y) AN OFFICER, DIRECTOR, PARTNER, EMPLOYEE OR AGENT OF A MEMBER OR AN AFFILIATE
THEREOF, REGARDLESS OF WHETHER THE INDEMNITEE CONTINUES TO BE A MEMBER OF THE
MANAGEMENT COMMITTEE, A MEMBER OR AN AFFILIATE THEREOF OR AN OFFICER, DIRECTOR,
EMPLOYEE OR AGENT OF A MEMBER OR AN AFFILIATE THEREOF AT THE TIME ANY SUCH
LIABILITY OR EXPENSE IS PAID OR INCURRED, UNLESS THE ACT OR FAILURE TO ACT
GIVING RISE TO INDEMNITY HEREUNDER WAS PERFORMED OR OMITTED FRAUDULENTLY OR
CONSTITUTED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

(b) The Company may purchase and maintain insurance on behalf
of the Management Committee and such other Persons as the Management
Committee shall determine against any liability that may be asserted
against or expense that may be incurred by such Person in connection
with the Company's activities, regardless of whether the Company would
have the power to indemnify such Person against such liability under
the provisions of this Agreement.

(c) Expenses incurred by any Indemnitee in defending any claim
with respect to which such Indemnitee may be entitled to
indemnification by the Company hereunder (including without limitation
reasonable attorneys' fees and disbursements) shall, to the maximum
extent permitted by law, be advanced by the Company prior to the final

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<PAGE> 24

disposition of such claim, upon receipt of a written undertaking by or
on behalf of such Indemnitee to repay the advanced amount of such
expenses unless it is determined ultimately that the Indemnitee is
entitled to indemnification by the Company under Section 14.7(a).

(d) The indemnification provided in this Section 14.7 is for
the benefit of the Indemnitees and shall not be deemed to create any
right to indemnification for any other Persons.

SECTION 14.8 CERTAIN AFFILIATE TRANSACTIONS. It is understood and
agreed that after Systems Completion each Member and its Affiliates shall be
entitled to acquire any computer software upgrades, improvements or additions
marketed by the Company or its Affiliates at cost to the Company or its
Affiliates. It is also understood that the Company will enter into system
maintenance agreements with its Members and their affiliates.

SECTION 14.9 OTHER ACTIVITIES. It is further understood and agreed that
the other business interests and activities of the Members and Affiliates of the
Members may be of any nature or description. Neither the Company nor any Member
or its Affiliates shall have any right, by virtue of this Agreement or the
relationship created hereby, in or to the business activities of the other
Members or of such Affiliates or to the income or proceeds derived therefrom,
and the pursuit of such business activities, even if competitive with the
business of the Company, shall not be deemed wrongful or improper. Any Member or
any Affiliate of a Member shall have the right to take for its own account or to
recommend to others any investment opportunity without being required to offer
the same to the other Members of the Company.

ARTICLE XV

TRANSFER OF MEMBERSHIP INTERESTS

SECTION 15.1 RESTRICTIONS ON TRANSFER. No Member shall have the right
to directly or indirectly transfer, sell, assign, pledge, hypothecate or
otherwise dispose of its interest in the Company, or any portion thereof,
without complying with the provisions of this Article XV. Any attempted transfer
or assignment of any interest in the Company in violation of the provisions of
this Article XV shall be void and of no force and effect.

SECTION 15.2 PROCEDURES. Any Member who desires to transfer all or any
portion of its Membership Interest shall arrange for any permitted transferee to
be bound by the provisions of this Agreement, as it may then be amended,
including, specifically, this Article XV, by having such transferee execute two
counterparts of an instrument of assignment satisfactory in form and substance
to the other Member and by delivering the same to the Company together with any
such other information that may be required by counsel to the Company to
determine whether the proposed transfer violates applicable federal or state
securities or other laws or regulations. If and when the other requirements of
this Article XV are satisfied, the transferee shall become a substituted Member
as to the Membership Interest thus transferred effective as of the first day of
the

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<PAGE> 25

calendar month during which the Company actually receives the aforesaid
instrument of assignment executed by both the transferor and transferee and, in
the case of the transfer of a Member's entire Membership Interest, until such
time as the transferee is admitted to the Company as a Member of the Company,
the transferor Member shall not cease to be a Member of the Company. The
transferee shall be required to pay any and all reasonable filing and recording
fees, legal fees, accounting fees, and other charges and fees incurred by the
Company and its counsel as a result of such transfer.

SECTION 15.3 CONSENT TO TRANSFER. Harry shall not directly or
indirectly transfer, sell, assign, pledge, hypothecate or otherwise dispose of
all or any portion of his interest in the Company if, as a result thereof, he
would own less than a 1% interest in the Company.

SECTION 15.4 COMPLIANCE WITH SECURITIES LAWS. All Members acknowledge
that the Membership Interests have not been registered under (i) the Securities
Act of 1933, as amended (the "1933 ACT"), in reliance on the exemptions afforded
by Section 4(2) of the 1933 Act, or (ii) applicable state securities laws in
reliance on exemptions under such laws. Therefore, to preserve said exemptions
and notwithstanding anything contained herein to the contrary, the Members
hereby agree that Membership Interests shall be nontransferable and
nonassignable, except in compliance with the registration provisions of the 1933
Act and the Act, or an exemption or exemptions therefrom, and any attempted or
purported transfer or assignment in violation of the foregoing shall be void and
of no effect. Accordingly, as an additional condition precedent to any
assignment or other transfer of any interest in the Company, the Management
Committee may require an opinion of counsel satisfactory to the Management
Committee that such assignment or transfer will be made in compliance with the
registration provisions of the 1933 Act and applicable state securities laws or
exemption(s) therefrom, and such transferor or assignor shall be responsible for
paying said counsel's fee for the opinion.

SECTION 15.5 BUY-OUT. Upon the happening of a Buy-Out Event, as defined
below, Renwick shall, within 30 days of receipt of notice of the Buy-Out Event,
make an offer to purchase all of the interests in the Company not held by
Renwick (the "Subject Interests"). The offer, which shall be in writing and
shall be delivered to Harry, unless Harry shall be deceased or mentally
incapacitated, in which case it shall be delivered to the executor of his estate
or his legal guardian, shall specify a dollar amount in cash for the Subject
Interests. Harry, or his executor or legal guardian as the case may be, shall
have thirty days in which to advise Renwick in writing whether the holders of
the Subject Interests elect to sell the Subject Interests for the amount offered
by Renwick or elect to buy Renwick's interest in the Company for cash in an
amount equal to the price offered by Renwick divided by the Subject Interests
times Renwick's interest in the Company. Within ten business days of the notice
to Renwick indicating whether the holders of the Subject Interests elect to sell
the Subject Interests to Renwick or elect to buy from Renwick its interest in
the Company, Renwick and the holders of the Subject Interests shall complete the
sale and purchase by the purchaser delivering the purchase price in cash by wire
transfer to the account specified by the seller and the seller delivering such
documents of transfer evidencing the sale and transfer of the applicable
interests in the Company as the purchaser may reasonably request.

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<PAGE> 26

SECTION 15.6 BUY-OUT EVENT. For purpose of this Agreement, a Buy-Out
Event shall mean any of the following:

(a) The death or mental or physical incapacity of Harry such
that he is unable to perform his normal working duties for a period of
more than six months.

(b) The election by Harry to sell so much of his interest in
the Company so that he will own less than a 1% interest in the Company.
If Harry decides to make any such sell, prior to his doing so, he must
give written notice of a Buy-Out Event to Renwick and in such notice
must specify the terms of all offers or reasonably anticipated offers
to purchase all of the Company, including all or substantially all of
the assets of the Company, or to purchase any interests in the Company.

(c) Harry shall desire to have all of the interest in the
Company or, all or substantially all of its assets sold to a person or
group of persons. In this case, Harry shall give written notice to
Renwick of a Buy-Out Event and in such notice shall specify the terms
on which any person or group of persons, specifying such person or
group of persons, proposal to purchase all or substantially all of the
assets of the Company or the entire interest in the Company. If, within
10 business days of receipt of such notice, Renwick advises Harry that
it concurs with the proposed sale, the notice from Harry shall cease to
be considered a notice of a Buy-Out Event, and Renwick and Harry shall
proceed in good faith to close the sale of the entire interest in the
Company or of all or substantially all of the assets of the Company.

(d) In the event that the Management Committee does not
approve the Business Plan, the terms of Section 14.3 have been
satisfied, and the Company is required to be liquidated pursuant to
Section 14.3, either Harry or Renwick may declare and give notice of a
Buy-Out Event provided such notice is given within 30 days of the final
meeting with the mediator as contemplated by Section 14.3.

ARTICLE XVI

DISSOLUTION OF THE COMPANY

SECTION 16.1 EVENTS OF DISSOLUTION. The happening of any one of the
following events shall work an immediate dissolution of the Company:

(a) The death, retirement, resignation, expulsion, bankruptcy
or dissolution of a Member unless the business of the Company is
continued by the written consent of the remaining Member within 90 days
following the occurrence of any such event;

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<PAGE> 27

(b) The receipt by the Company of the final payment due on the
sales price of all or substantially all the assets of the Company or
the Company's business following the Company's sale thereof;

(d) Inability to agree on a Business Plan;

(e) The expiration of the term of the Company as provided in
Article VI of this Agreement, unless all Members agree to extend the
term of the Company past the date set forth in Article VI; and

(f) The entry of a decree of judicial dissolution underss.
18-802 of the Act.

Each Member covenants and agrees that it will not retire, resign or voluntarily
dissolve, without the prior written consent of the other Member, which consent
may be granted or withheld in the sole discretion of the other Member.

SECTION 16.2 OPTION TO PURCHASE INTEREST OF BANKRUPT MEMBER.

(a) If within 90 days of the Bankruptcy of any Member, the
other Member elects to continue the business of the Company, the
Bankruptcy shall be deemed to be an offer by the bankrupt Member of its
Membership Interest to the other Member at a price equal to the fair
market value of such bankrupt Member's Membership Interest determined
by agreement between the bankrupt Member (or its legal representative)
and the other Member; provided, however, if those Persons do not agree
on the fair market value on or before the 30th day following the
election of the other Member to continue the business of the Company,
such value shall be determined pursuant to the appraisal procedures set
forth in Section 16.2(b).

(b) If the Members cannot agree on the fair market value of a
Membership Interest or one or more of the assets or businesses of the
Company within 15 days after such value is to be determined under any
provisions of this Agreement, either Member, by notice to the other,
may require the determination of such fair market value to be made by
an independent appraiser specified in a written notice to the other
Member. If the Member receiving that notice objects to the independent
appraiser designated in that notice on or before the 15th day following
receipt, and the Members otherwise fail to agree on an independent
appraiser, either Member may petition the United States District Judge
for the Southern District of Texas then senior in service to designate
an independent appraiser. The determination of the fair market value by
the independent appraiser, however designated, shall be final and
binding on all parties. Each Member shall be responsible for 50% of the
cost of such appraisal.

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<PAGE> 28

ARTICLE XVII

WINDING UP AND TERMINATION OF THE COMPANY

SECTION 17.1 LIQUIDATOR. If the Company is dissolved for any reason, a
liquidator (the "LIQUIDATOR") shall commence to wind up the affairs of the
Company and to liquidate and sell its assets. The members of the Management
Committee shall serve as the Liquidator unless they appoint another person to
serve as the Liquidator. The Liquidator shall have full right and discretion to
determine the time, manner and terms of sale or sales of Company property
pursuant to such liquidation having due regard to the activity and condition of
the relevant market and general financial and economic conditions. The
Liquidator appointed in the manner provided herein shall have and may exercise,
without further authorization or consent of any of the parties hereto or their
legal representatives or successors in interest, all of the powers conferred
upon the Members under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers) to the extent necessary or desirable in the good faith judgment of the
Liquidator to carry out the duties and functions of the Liquidator hereunder for
and during such period of time, not to exceed two (2) years after the date of
dissolution of the Company, as shall be reasonably required in the good faith
judgment of the Liquidator to complete the liquidation and dissolution of the
Company as provided for herein, including, without limitation, the following
specific powers:

(a) The power to continue to manage and operate any business
of the Company during the period of such liquidation or dissolution
proceedings, excluding, however, the power to make and enter into
contracts which may extend beyond the period of liquidation.

(b) The power to make sales and incident thereto to execute
deeds, bills of sale, assignments and transfers of assets and
properties of the Company; provided, that the Liquidator may not impose
personal liability upon any of the Members under any such instrument.

(c) The power to borrow funds as may, in the good faith
judgment of the Liquidator, be reasonably required to pay debts and
obligations of the Company or operating expenses, and to execute and/or
grant deeds of trust, mortgages, security agreements, pledges and
collateral assignments upon and encumbering any of the Company
properties as security for repayment of such loans or as security for
payment of any other indebtedness of the Company; provided, that the
Liquidator shall not have the power to create any personal obligation
on any of the Members to repay such loans or indebtedness other than
out of available proceeds of foreclosure or sale of the properties or
assets as to which a lien or liens are granted as security for payment
thereof.

(d) The power to settle, release, compromise or adjust any
claims asserted to be owing by or to the Company, and the right to
file, prosecute or defend lawsuits and legal proceedings in connection
with any such matters.

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<PAGE> 29

SECTION 17.2 RESERVES. In making payment or provision for payment of
all debts and liabilities of the Company and all expenses of liquidation, the
Liquidator may set up such cash reserves as the Liquidator may deem reasonably
necessary for any contingent liabilities or obligations of the Company. Upon the
satisfaction or other discharge of such contingency, the amount of the reserves
not retired, if any, will be distributed in accordance with this Article.

SECTION 17.3 SALE OF ASSETS; DISTRIBUTION OF PROCEEDS. Upon the winding
up and termination of the business and affairs of the Company, its assets (other
than cash) shall be sold, its liabilities and obligations to creditors and all
expenses incurred in its liquidation shall be paid (either by payment or the
making of reasonable provision for payment). All items of Company income, gain,
loss or deduction shall be credited or charged to the Capital Accounts of the
Members in accordance with the applicable provisions of Article IX. Thereafter,
the net proceeds from such sales (after deducting all selling costs and expenses
in connection therewith), together with the reserve account referred to in
Section 17.2 above, shall be distributed among the Members in accordance with
their respective positive balances in their Capital Accounts.

SECTION 17.4 FINAL ACCOUNTING. Within a reasonable time following the
completion of the liquidation of the Company's properties, the Liquidator shall
supply to each of the Members a statement prepared by the Company's accountants
which shall set forth the assets and the liabilities of the Company as of the
date of complete liquidation, each Member's pro rata portion of distributions
pursuant to Section 17.3, and the amount retained as reserves by the Liquidator
pursuant to Section 17.2.

SECTION 17.5 RECOURSE LIMITED TO COMPANY ASSETS. Each holder of an
interest in the Company shall look solely to the assets of the Company for all
distributions with respect to the Company and his Capital Contribution thereto
(including the return thereof) and share of profits or losses thereof, and shall
have no recourse therefor (upon dissolution or otherwise) against the Company,
the Members or the Liquidator. No holder of an interest in the Company shall
have any right to demand or receive property other than cash upon dissolution
and termination of the Company.

SECTION 17.6 TERMINATION. Upon the completion of the liquidation of the
Company and the distribution of all Company funds, the existence of the Company
shall terminate and the Liquidator shall (and is hereby given the power and
authority to) execute, acknowledge, swear to and record all documents required
to effectuate the dissolution and termination of the Company. No Member shall be
required to restore any deficit balance existing in its Capital Account upon the
liquidation and termination of the Company.

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<PAGE> 30

ARTICLE XVIII

NOTICES

To be effective, all notices and demands under this Agreement must be
in writing and must be given (i) by depositing same in the United States mail,
postage prepaid, certified or registered, return receipt requested, (ii) by
telecopier with receipt confirmed by return telecopy, or (iii) by delivering
same in person or by overnight courier and receiving a signed receipt therefor.
For purposes of notice, the address of the Company shall be the address of its
then principal office and the addresses of the Members or their respective
assigns shall be as set forth on the signature pages hereof. Notices made in
accordance with the foregoing shall be deemed to have been given and made upon
receipt. Any Member or his assignee may designate a different address or
telecopier number to which notices or demands shall thereafter be directed by
written notice given in the manner hereinabove required and directed to the
Company.

ARTICLE XIX

AMENDMENTS AND MEETINGS

SECTION 19.1 AMENDMENTS. This Agreement may be modified or amended from
time to time by the written agreement of the Members.

SECTION 19.2 MEETINGS OF THE MEMBERS.

(a) Meetings of the Members may be called at any time by a
Member. Notice of any meeting shall be given to all Members not less
than two (2) days nor more than thirty (30) days prior to the date of
such meeting. Each Member may authorize any person to act for it by
proxy on all matters in which a Member is entitled to participate,
including waiving notice of any meeting, or voting or participating at
any such meeting. Every proxy must be signed by the Member or its
attorney-in-fact.

(b) Each meeting of Members shall be conducted by the person
that the Member calling the meeting shall designate. The Members shall
establish all other provisions relating to meetings of Members,
including notice of the time, place or purpose of any meeting at which
any matter is to be voted on by any Members, waiver of any such notice,
action by consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.

(c) No business may be conducted at a meeting of Members
unless Members holding at least a majority of the total of all Sharing
Ratios are present and to be a valid act of the Members at a meeting,
the action must be approved by Members holding at least a majority of
the total of all Sharing Ratios.

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<PAGE> 31

ARTICLE XX

REPRESENTATIONS, WARRANTIES AND COVENANTS

The Members each hereby respectively represent and warrant to the
others that (i) it is duly organized, validly existing and in good standing
under the jurisdiction of its organization, with full power and authority to
enter into and perform its obligations under this Agreement; (ii) it has validly
executed this Agreement, and upon delivery, this Agreement shall be a binding
obligation of such party, enforceable against such party in accordance with its
terms; and (iii) its entry into this Agreement and the performance of its
obligations hereunder will not require the approval of any governmental body or
regulatory authority and will not violate, conflict with or cause a default
under, any of its organizational documents, any contractual covenant or
restriction by which such party is bound, or any applicable law, regulation,
rule, ordinance, order, judgment or decree.

ARTICLE XXI

MISCELLANEOUS

SECTION 21.1 NO RIGHT OF PARTITION. The Members agree that the Company
properties are not and will not be suitable for partition. Accordingly, each of
the Members hereby irrevocably waives any and all rights that it may have to
maintain any action for partition of any of the Company property.

SECTION 21.2 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement and the
additional documents and agreements referred to herein constitute the entire
agreement among the parties. It supersedes any prior agreement or understandings
among them with regard to the subject matter hereof, and it may not be modified
or amended in any manner other than as set forth herein.

SECTION 21.3 GOVERNING LAW. This Agreement and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware.

SECTION 21.4 BINDING EFFECT. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, heirs, administrators, executors,
successors and assigns.

SECTION 21.5 CONSTRUCTION OF AGREEMENT. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in the masculine, the
feminine or the neuter gender shall include the masculine, feminine and neuter.
The term "person" means any individual, corporation, partnership, trust or other
entity.

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<PAGE> 32

SECTION 21.6 CAPTIONS. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.

SECTION 21.7 EFFECT OF INVALID PROVISION. If any provision of this
Agreement, or the application of such provision to any person or circumstance,
shall be held invalid, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.

SECTION 21.8 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. It shall not be necessary for all
Members to execute the same counterpart hereof.

SECTION 21.9 WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.

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

Address: RENWICK TECHNOLOGIES, INC.

5803 Glenmont By: /s/ DAVID EDWAB
Houston, Texas 77081 -----------------------------------------
Telecopy: (713) 592-7152 Name: David Edwab
and ------------------------------------
40650 Encyclopedia Circle Title: President
Freemont, California 94538 -----------------------------------
Telecopy: (510) 657-0875

/s/ HARRY M. LEVY
-----------------------------------------
Harry M. Levy
Address:

9211 Reid Lake Dr.
Houston, Texas 77036

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<PAGE> 1
EXHIBIT 10.24

SOFTWARE DEVELOPMENT AGREEMENT

PARTIES

This Software Development Agreement ("Agreement") is made as of the 3rd
day of January, 2000 ("Effective Date"), by and between The Men's Wearhouse,
Inc., a Texas corporation ("TMW"), and Chelsea Market Systems, L.L.C., a
Delaware limited liability company ("Chelsea").

INTRODUCTION

Chelsea has undertaken to develop, test and complete certain computer
software known as * (collectively the "Systems"). TMW has agreed to fund the
development of the Systems in exchange for a non-exclusive license to use the
Systems. In consideration of the premises, conditions and covenants herein
contained, Chelsea and TMW agree as follows:

I. DEFINITIONS

1.1 "Acceptance Date" shall mean with respect to each System, that date
upon which TMW accepts the System as completely developed in accordance with the
specifications and development schedule to be agreed to in writing by TMW and
Chelsea and when so agreed attached hereto as Exhibit A, as evidenced by the
parties' signature on Exhibit A.

1.2 "Development Period" shall mean the development time period for the
Systems subsequent to the signing of this Agreement and prior to termination of
this Agreement.

1.3 "Development Costs" shall mean direct costs incurred by Chelsea
related to development of the Systems, including, but not limited to, taxes,
labor, overhead and other expenses.

1.4 "Documentation" shall mean documentation developed by Chelsea
related to the Object Code or Source Code of the Systems.

1.5 "Improvements" shall mean any improvements, advancements,
modifications, alterations, or derivative works related to the Documentation,
Object Code or Source Code of the Systems authored, developed, conceived or
reduced to practice by Chelsea, whether or not

- --------------------
* Omitted pursuant to Rule 24b-2 of the General Rules and Regulations Under the
Securities Exchange Act of 1934 and filed separately with the Commission.

-1-

<PAGE> 2

protectable by patent, trade secret or copyright and whether or not fixed in a
tangible medium of expression.

1.6 "Object Code" shall mean the machine language code of the
individual program units of the Systems that are linked together to create an
executable form of the Systems.

1.7 "Payment Period" shall mean a calendar year.

1.8 "Software Package" shall mean the Improvements, Object Code, Source
Code and Documentation of the Systems.

1.9 "Source Code" shall mean the human readable computer code for the
Systems.

1.10 "Surplus Amount" shall have the meaning ascribed in Section 3.3.

1.11 "Systems Completion" shall mean the Acceptance Date for the last
to be delivered of the Systems.

II. SOFTWARE PACKAGE RIGHTS

2.1 Ownership and License Rights. Chelsea shall own all right, title
and interest in and to the Software Package and shall grant TMW a non-exclusive,
perpetual license in the Software Package. The non-exclusive license granted to
TMW shall:

(i) allow TMW and TMW's subsidiaries and affiliates to use,
reproduce, make derivative works of, and internally distribute copies of the
Software Package;

(ii) obligate Chelsea to provide TMW with Software Package
support services pursuant to the Maintenance Agreement separately executed by
both parties; and

(iii) obligate TMW to reimburse Chelsea for Chelsea's actual
costs associated with obtaining of licenses from third parties necessary to
complete and deliver the Software Package.

2.2 Transfer in the Event of Termination Prior to Acceptance Date. In
the event of termination of this Agreement prior to the Acceptance Date for any
of the Systems, Chelsea shall: (1) execute all such documents necessary to
assign to and vest in TMW, and subject to Section 5.1, the other Members of
Chelsea any and all rights to the Software Package related to such System,
including, but not limited to, any patent rights, copyrights, trademarks, or
trade secrets; and (2) cause its respective officers, employees and agents to
execute such documents necessary to assign to and vest in TMW, and subject to
Section 5.1, the other Members of Chelsea any and all such rights.

-2-

<PAGE> 3

2.3 Not withstanding the above, TMW's rights do not extend to the
ability to market or sublicense such Software Package.

III. BUDGETING AND COSTS

3.1 Development Budget. Chelsea shall prepare and submit a budget and
schedule of anticipated costs at the signing of this Agreement. This budget and
schedule shall become Exhibit "B" appended hereto and incorporated by reference.
In any given Payment Period, Chelsea shall not exceed any budgeted line item by
more than 10% without, to the extent practicable, notifying and consulting with
TMW prior to the incurrence thereof.

3.2 Costs. TMW shall reimburse Chelsea for all reasonable Development
Costs provided the aggregate of all such costs shall not exceed $ * . Chelsea
shall submit copies of invoices from third parties directly to TMW for payment.
Chelsea shall also bill TMW at the beginning of each month for any other
Development Costs. TMW shall pay all reasonable Development Costs within a
commercially reasonable time period and shall provide Chelsea with notice
concerning any disputed amount. TMW shall work with Chelsea to resolve any
disputed amounts and shall promptly pay any amounts once resolved. In the event
Chelsea determines that in its judgment the Development Costs may exceed $ * ,
Chelsea will immediately notify TMW to discuss the reasons for and nature of
such Development Costs overrun. Chelsea and TMW shall discuss the desirability
for and means to pay any such Developments Costs overrun but, absent its written
agreement, TMW shall have no obligation to pay any such Development Costs
overruns.

3.3 Surplus Amount. In the event the aggregate of all Development Costs
which TMW is required to pay to Chelsea for the complete development and
acceptance of all of the Systems is less than $ * , the amount (the "Surplus
Amount") by which such aggregate Development Costs is less that $ * shall be
contributed to Chelsea as contemplated by Section 7.1(b) of the Limited
Liability Company Agreement of Chelsea.

IV. WARRANTIES AND INDEMNITY

4.1 Warranties. Chelsea warrants and represents that it has the proper
skill, training and background to develop the Systems in a competent and
professional manner. Chelsea warrants and represents that the Systems when
completed and delivered to TMW in accordance herewith will perform the functions
in accordance with the specifications set forth in Exhibit A; provided that
Chelsea's sole obligation shall be to provide such labor and services as shall
be necessary to cause the Systems to perform in accordance with such
specifications, and that Chelsea not be liable for any consequential or
incidental damages, including, without limitation, loss of profits.

- -----------------
* Omitted pursuant to Rule 24b-2 of the General Rules and Regulations Under the
Securities Exchange Act of 1934 and filed separately with the Commission.

-3-

<PAGE> 4

4.2 Indemnity. Chelsea agrees to indemnify and hold TMW, its
affiliates, directors, officers, employees and agents harmless from and against
any liability or damages (including any consequential damages or lost profits)
or expenses in connection therewith (including reasonable attorneys' fees and
litigation costs) resulting from any claim asserted by any individual or third
Party (other than TMW, its subsidiaries or affiliates) which relates to the
development or use of the Systems. Notwithstanding the above, Chelsea disclaims
any liability and duty of indemnification resulting from use or development of
any version of the Software Package that has been modified by TMW without
specific, written authorization of Chelsea if the unauthorized modification
directly or indirectly contributes to the basis of the claim.

V. RESTRICTIONS ON MARKETING

5.1 Prohibited Licenses. Chelsea agrees that it will not license, sell
or in any other way transfer any rights to use any of the Software Package to
any company or business whose primary business at such time is the sale of
tailored men's clothing without the written consent of TMW. Chelsea further
agrees that if it at any time licenses, sells or otherwise assigns or transfers,
whether voluntarily, involuntarily or in liquidation or otherwise, any rights in
or to own or use any of the Software Package where such license, sale,
assignment or transfer may purport to grant to the transferee the right to
license, sell, assign or transfer any rights to use the Software Package or any
part thereof, such license, sell, assignment or transfer by Chelsea shall be
made expressly subject to this Section 5.1.

5.2 Limited Marketing Activities. Chelsea acknowledges and agrees that
its paramount obligations are to develop and deliver the Systems on or before
June 30, 2000. To that end, Chelsea agrees that it will not permit any of its
personnel working on the Software Package or whose attention to or work on the
Software Package is needed to assure timely Systems Completion to engage in any
other activity on behalf of Chelsea which would interfere with timely Systems
Completion. To this end, Chelsea personnel will not spend any time on marketing
the Software Package to third parties nor will Chelsea incur any cost or expense
to so market the Software Package prior to Systems Completion without the
written consent of TMW; provided however that Chelsea may make expenditures not
exceeding $25,000 and Chelsea personnel may do work that does not materially
interfere with timely Systems Completion where such expenditures and work relate
to the participation by Chelsea in technology shows in the Spring and Summer of
the year 2000 for the purpose of marketing the Software Package or parts
thereof.

VI. TERMINATION

6.1 Term. This Agreement shall begin as of the Effective Date and shall
continue until terminated as provided for herein.

-4-

<PAGE> 5

6.2 Termination. This Agreement shall terminate as follows:

(i) Chelsea may terminate this Agreement at its sole
discretion by providing TMW with thirty (30) days advance written notice;

(ii) TMW may terminate this Agreement at its sole discretion
by providing Chelsea with thirty (30) days advance written notice; or

(iii) this Agreement shall terminate of its own accord on at
Systems Completion.

6.3 Effect of Termination. Termination of this agreement shall relieve
TMW and Chelsea of any and all obligations contained herein with the exceptions
of:

(i) Chelsea's obligation to transfer ownership to TMW in the
event of termination prior to the Acceptance Date in accordance with Section
2.2;

(ii) Chelsea's obligation to grant TMW a non-exclusive license
that meets the requirements of Section 2.1 in the event of termination on the
Acceptance Date;

(iii) TMW's obligation to pay Development Costs to the date of
Termination;

(iv) Chelsea's obligation under Sections 4.1, 4.2 and 5.1,
only if Acceptance has occurred with respect to the relevant System ; and

(v) the Parties' mutual confidentiality obligations of
Paragraph 6.4.

6.4 Safeguarding Proprietary Information. Each Party shall keep
confidential any information relating the other Party's business which is
clearly designated or described in writing to be confidential. It is hereby
acknowledged by Chelsea that all information provided by TMW to Chelsea for use
in developing and testing the Software Package are confidential.

Each Party shall keep and instruct its employees and agents to keep
such information confidential by using at least the same care and discretion as
used with that Party's own confidential information. If either Party, its
employees or agents, breaches or threatens to breach the confidentiality
obligations, the other Party may obtain injunctive relief, in addition to its
other remedies, inadequate monetary damages and irreparable harm being
acknowledged. Upon TMW's request, but in any event upon termination of the
Agreement, Chelsea shall surrender to TMW all of TMW's confidential information,
including all copies and reproductions of any portion of TMW's confidential
information in any tangible form. These confidentiality obligations shall
survive termination of this Agreement.

-5-

<PAGE> 6

VII. GENERAL PROVISIONS

7.1 Complete Agreement. This Agreement represents the complete and
final agreement between the parties regarding the development of the Software
Package.

7.2 Governing Law. This Agreement shall be deemed made and entered into
in the State of Texas and shall be governed and construed under and in
accordance with the laws of the State of Texas. No conflicts of law rule or law
that might refer such construction interpretation to the laws of another state,
republic or country shall be considered. The Parties further acknowledge and
agree that any legal action arising as a result of this Agreement shall occur in
Houston, Texas, and the Parties hereto agree to consent to jurisdiction and
venue within the courts therein.

7.3 Modifications. Neither this Agreement nor any term or provision
hereof may be changed, waived, discharged, or amended in any manner other than
by an instrument in writing, signed by the Party against which the enforcement
of the change, waiver, discharge, or amendment is sought.

7.4 Binding Effect of Agreement. This Agreement shall be binding upon
the parties hereto, their heirs, legal representatives, successors, and assigns.

7.5 Waiver. The parties covenant and agree that if either Party fails
or neglects for any reason to take advantage of any of the terms provided for
herein, any such failure or neglect by either Party shall not be a waiver of any
of the terms, covenants or conditions of this Agreement or of the performance
thereof. None of the terms, covenants and conditions of this Agreement can be
waived by either Party except by its written consent.

7.6 No Partnership or Joint Venture. Chelsea undertakes this agreement
as an independent contractor, not as an employee of TMW. This Agreement does not
render either Party as the agent of the other or create a partnership or joint
venture between the parties, and neither Party shall have the power to bind the
other in any way.

7.7 Assignment. This Agreement may not be assigned or otherwise
transferred without the other Party's prior written consent.

7.8 Severability. If any word, sentence, paragraph, clause or a
combination thereof in this Agreement is found by a court or executive body with
judicial powers having jurisdiction over this Agreement or any of the Parties
hereto, in a final and unappealable order, to be in violation of any law, such
words, sentences, paragraph, clauses or combinations shall be inoperative and
the remainder of this Agreement shall remain binding upon the Parties hereto as
to fulfill the original intent of this Agreement.

-6-

<PAGE> 7

IN WITNESS WHEREOF, the respective representative of the Parties hereto
duly authorized have caused this Agreement to be executed in multiple originals
as of the date written below, but effective as of the Effective Date.

THE MEN'S WEARHOUSE, INC. CHELSEA MARKET SYSTEMS, L.L.C.

BY: /s/ DAVID EDWAB BY: /s/ HARRY LEVY
----------------------- -------------------------------

Its: President Its: President
---------------------- ------------------------------

-7-

<PAGE> 1
EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT
AS OF JANUARY 29, 2000(1)

DOMESTIC SUBSIDIARIES:
- ---------------------

The Men's Wearhouse of Michigan, Inc., a Delaware corporation(2)

Value Priced Clothing, LLC, a Delaware limited liability company(3)

TMW Realty Inc., a Delaware corporation(2)

TMW Texas General LLC, a Delaware limited liability company(4)

The Men's Wearhouse of Texas LP, a Delaware limited partnership(5)

TMW Capital Inc., a Delaware corporation(2)

TMW Equity LLC, a Delaware limited liability company(6)

TMW Finance LP, a Delaware limited partnership(7)

TMW Marketing Company, Inc., a California corporation(2)(8)

TMW Licensing I, Inc., a California corporation(9)

TMW Licensing II, Inc., a California corporation(10)

TMW Merchants LLC, a Delaware limited liability company(9)

TMW Purchasing LLC, a Delaware limited liability company(11)

Renwick Technologies, Inc., a Texas corporation(2)

K&G Men's Center, Inc., a Delaware corporation(2)(12)

K&G of Indiana, Inc., a Georgia corporation(12)(13)

K&G of Ohio, Inc., a Georgia corporation(12)(13)

K&G Associates of New Jersey, Inc., a New Jersey corporation(12)(13)

<PAGE> 2

T&C Liquidators, Inc., a Texas corporation(13)(14)

K&G Men's Company, Inc., a Delaware corporation(13)

Moores The Suit People U.S., Inc., a Delaware corporation(15)

FOREIGN SUBSIDIARIES:
- --------------------

Golden Moores Finance Company, a Nova Scotia unlimited liability company(2)

Golden Moores Company, a Nova Scotia unlimited liability company(2)

Moores Retail Group Inc., a New Brunswick corporation(15)

Moores The Suit People Inc., a New Brunswick corporation(16)(17)

Golden Brand Clothing (Canada) Ltd., a New Brunswick corporation(16)

- ----------

(1) The names of certain subsidiaries are omitted because such unnamed
subsidiaries, considered in the aggregate as a single subsidiary, do not
constitute a significant subsidiary as of January 29, 2000.

(2) 100% owned by The Men's Wearhouse, Inc.

(3) 100% owned by The Men's Wearhouse of Michigan, Inc. Value Priced Clothing,
LLC does business under the name "Suit Warehouse".

(4) 100% owned by TMW Realty Inc.

(5) TMW Realty Inc. owns a 99% interest as limited partner and TMW Texas General
LLC owns a 1% interest as general partner.

(6) 100% owned by TMW Capital Inc.

(7) TMW Capital Inc. owns a 99% interest as limited partner and TMW Equity LLC
owns a 1% interest as general partner.

(8) Formerly known as TMW Licensing Company, Inc.

(9) 100% owned by TMW Marketing Company, Inc.

(10) 100% owned by TMW Licensing I, Inc.

<PAGE> 3

(11) 100% owned by TMW Merchants LLC.

(12) Does business under the names K&G Men's Center, K&G Men's Superstore, K&G
Men's Mart and K&G MenSmart.

(13) 100% owned by K&G Men's Center, Inc.

(14) T&C Liquidators, Inc. does business under the names T&C Men's Center, T&C
Men's Mart and T&C MenSmart.

(15) All outstanding shares of common stock are owned by Golden Moores Company.

(16) 100% owned by Moores Retail Group Inc.

(17) Moores The Suit People Inc. does business under the name Moores Clothing
for Men as well as Moores The Suit People.

<PAGE> 1
EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement No.
333-80609 of the Men's Wearhouse, Inc. on Form S-3 and Registration Statement
No. 33-48108, Registration Statement No. 33-48109, Post-Effective Amendment
No. 1 to Registration Statement No. 33-48110, Registration Statement No.
33-61792, Registration Statement No. 333-21109, Registration Statement No.
333-21121, Registration Statement No. 33-74692, Registration Statement No.
333-53623, Registration Statement No. 333-80033 and Registration Statement
No. 333-72549 of the Men's Wearhouse, Inc. on Form S-8 of our report dated
February 28, 2000 appearing in this Annual Report on Form 10-K of the Men's
Wearhouse, Inc. for the year ended January 29, 2000.

DELOITTE & TOUCHE LLP

Houston, Texas
April 25, 2000

<PAGE> 1
EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statement No.
333-80609 of The Men's Wearhouse, Inc. on Form S-3 and Registration Statement
No. 33-48108, Registration Statement No. 33-48109, Post-Effective Amendment
No. 1 to Registration Statement No. 33-48110, Registration Statement No.
33-61792, Registration Statement No. 333-21109, Registration Statement No.
333-21121, Registration Statement No. 33-74692, Registration Statement No.
333-53623, Registration Statement No. 333-72549 and Registration Statement No.
333-80033 of the Men's Wearhouse, Inc. on Form S-8 of our report dated
March 5, 1999 appearing in this Annual Report on Form 10-K of the Men's
Wearhouse, Inc. for the year ended January 29, 2000.

Ernst & Young LLP

Montreal, Canada
April 27, 2000

<PAGE> 1
EXHIBIT 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our report dated March 17, 1999 appearing in this Annual Report on Form 10-K of
the Men's Wearhouse, Inc. for the year ended January 29, 2000, into The Men's
Wearhouse, Inc.'s previously filed Registration Statement No. 333-80609 of the
Men's Wearhouse, Inc. on Form S-3 and Registration Statement No. 33-48108,
Registration Statement No. 33-48109, Post-Effective Amendment No. 1 to
Registration Statement No. 33-48110, Registration Statement No. 33-61792,
Registration Statement No. 333-21109, Registration Statement No. 333-21121,
Registration Statement No. 33-74692, Registration Statement No. 333-53623,
Registration Statement No. 333-80033 and Registration Statement No. 333-72549 of
the Men's Wearhouse, Inc. on Form S-8.

Atlanta, Georgia
April 25, 2000

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