THIRD AMENDMENT TO    
FOURTH AMENDED AND RESTATED 
LOAN AND SECURITY AGREEMENT
       WELLS FARGO RETAIL FINANCE, LLC, Agent

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

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

July 29, 2005
 
THIS THIRD AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(this “Third Amendment”) is made in consideration of the mutual covenants
contained herein and benefits to be derived herefrom to the Fourth Amended and
Restated Loan and Security Agreement (the “Loan Agreement”) dated October 30,
2004 and effective as of October 31, 2004 among The Children’s Place Retail
Stores, Inc. (the “Parent”) and each of the Parent’s Subsidiaries identified on
the signature pages thereto (such Subsidiaries, together with Parent, are
referred to hereinafter individually and collectively, jointly and severally, as
the “Borrowers”), with each of their chief executive offices located at 915
Secaucus Road, Secaucus, New Jersey 07094, on the one hand, and the financial
institutions listed on the signature pages thereto (such financial institutions,
together with their respective successors and assigns, are referred to
hereinafter each individually as a "Lender" and collectively as the "Lenders"),
and Wells Fargo Retail Finance, LLC, as Agent, Wachovia Capital Finance
Corporation (New England) formerly known as Congress Financial Corporation (New
England), as Documentation Agent, and LaSalle Retail Finance, a Division of
LaSalle Business Credit, LLC, as Co-Agent, on the other hand.
 
Background:
 
The Borrowers and the Lenders previously amended the Loan Agreement pursuant to
a certain First Amendment dated December 31, 2004 and a Second Amendment dated
April 12, 2005. At this time, the Borrowers and the Lenders desire to further
amend the Loan Agreement. Accordingly, it is hereby agreed by and between the
Borrowers and the Lenders, as follows:
 
1. Amendment to Article 1 of Loan Agreement: The following definitions are
hereby amended to read as follows:
 
“Overadvance Amount” means up to $20,000,000.00 at any one time outstanding.
 
"Temporary Overadvance Facility" means a temporary revolving credit facility to
be maintained by the Lenders listed on Schedule 2.1(b) hereto for the benefit of
the Borrowers in an amount up to the Overadvance Amount, as set forth in Section
2.1(b).
 
2. Amendment to Article 2 of Loan Agreement: Section 2.1(b) of the Loan
Agreement is amended to read as follows:
 
(b) Temporary Overadvance. Subject to the terms and conditions of this
Agreement, in addition to the Advances to be made pursuant to Section 2.1(a),
above, the Lenders listed on Schedule 2.1(b) hereto agree to make Advances
(based on the percentages for each Lender listed on Schedule 2.1(b)), to
Borrowers in an amount at any one time outstanding not to exceed an amount equal
to the Overadvance Amount less the aggregate amount of all Advances outstanding
under the Temporary Overadvance Facility.
 

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

(i) The Temporary Overadvance Facility shall be in place, effective, and
available to the Borrower for the making of Advances thereunder commencing upon
the execution of this Agreement through October 31, 2005.
 
(ii) Advances under the Temporary Overadvance Facility shall be made upon
request by the Borrowers, in accordance with Section 2.1(e), below, and shall be
available in up to three (3) tranches, the first two (2) in the amount of
$7,000,000.00 each, and the last in the amount of $6,000,000.00.
 
(iii) Advances under the Temporary Overadvance Facility shall be secured by the
Collateral and shall constitute Advances and Obligations hereunder. During the
time that advances are outstanding under the Temporary Overadvance Facility,
interest shall accrue on the aggregate outstanding balance of the Temporary
Overadvance Facility at the LIBOR Rate plus 4.00 percent per annum.
 
(iv) The Borrowers shall pay to the Agent, for the pro rata benefit of each of
the Lenders listed on Schedule 2.1(b), a fee in connection with the Temporary
Overadvance Facility in the amounts, and at the times set forth in that certain
Fee Letter of even date entered into by and between the Agent and the Borrowers.
 
(v) At all times that the Temporary Overadvance Facility is outstanding, the
Borrowers shall submit to the Agent by 11:00 a.m. (Boston time) on Tuesday of
each week, an updated Borrowing Base Certificate as of the close of business on
the prior Saturday.
 
(vi) All Obligations outstanding under the Temporary Overadvance Facility shall
be paid in full in immediately available funds, without demand, notice, or
protest, on or before 5:00 p.m. (Boston time) on October 31, 2005.
 
3. Ratification of Loan Documents. No Claims against the Lenders:
 
(a) Except as provided herein, all terms and conditions of the Loan Agreement
and of each of the other Loan Documents remain in full force and effect. The
Borrowers hereby ratify, confirm, and re-affirm all terms and provisions of the
Loan Documents.
 
(b) The Borrowers acknowledge and agree that there is no basis nor set of facts
on which any amount (or any portion thereof) owed by the Borrowers under any
Loan Document could be reduced, offset, waived, or forgiven, by rescission or
otherwise; nor is there any claim, counterclaim, off set, or defense (or other
right, remedy, or basis having a similar effect) available to the Borrowers with
regard thereto; nor is there any basis on which the terms and conditions of any
of the Obligations could be claimed to be other than as stated on the written
instruments which evidence such Obligations.
 
-2-

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

(c) The Borrowers hereby acknowledge and agree that the Borrowers have no
offsets, defenses, claims, or counterclaims against the Lenders, or their
respective officers, directors, employees, attorneys, representatives,
predecessors, successors, or assigns with respect to the Obligations, or
otherwise, and that if the Borrowers now have, or ever did have, any offsets,
defenses, claims, or counterclaims against the Lenders, or their respective
officers, directors, employees, attorneys, representatives, predecessors,
successors, and assigns, whether known or unknown, at law or in equity, from the
beginning of the world through this date and through the time of execution of
this Third Amendment, all of them are hereby expressly WAIVED, and the Borrowers
hereby RELEASE the Lenders, and their respective officers, directors, employees,
attorneys, representatives, predecessors, successors, and assigns from any
liability therefor.
 
4. Miscellaneous:
 
(a) Terms used in this Third Amendment which are defined in the Loan Agreement
are used as so defined.
 
(b) This Third Amendment may be executed in counterparts, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one agreement.
 
(c) This Third Amendment expresses the entire understanding of the parties with
respect to the transactions contemplated hereby. No prior negotiations or
discussions shall limit, modify, or otherwise affect the provisions hereof.
 
(d) Any determination that any provision of this Third Amendment or any
application hereof is invalid, illegal, or unenforceable in any respect and in
any instance shall not affect the validity, legality, or enforceability of such
provision in any other instance, or the validity, legality, or enforceability of
any other provisions of this Third Amendment.
 
(e) The Borrowers shall pay on demand all costs and expenses of the Lenders,
including, without limitation, attorneys’ fees incurred by the Lenders in
connection with the preparation, negotiation, execution, and delivery of this
Third Amendment.
 
(f) In connection with the interpretation of this Third Amendment and all other
documents, instruments, and agreements incidental hereto:
 
(i) All rights and obligations hereunder and thereunder, including matters of
construction, validity, and performance, shall be governed by and construed in
accordance with the law of the State of California and are intended to take
effect as sealed instruments.
 
-3-

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

(ii) The captions of this Third Amendment are for convenience purposes only, and
shall not be used in construing the intent of the Lenders and the Borrowers
under this Third Amendment.
 
(iii) In the event of any inconsistency between the provisions of this Third
Amendment and any of the other Loan Documents or other agreements entered into
by and between the Lenders and the Borrowers, the provisions of this Third
Amendment shall govern and control.
 
(g) The Lenders and the Borrowers have prepared this Third Amendment and all
documents, instruments, and agreements incidental hereto with the aid and
assistance of their respective counsel. Accordingly, all of them shall be deemed
to have been drafted by the Lenders and the Borrowers and shall not be construed
against either party.
 
[Signatures Follow]
 

-4-

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

THE CHILDREN’S PLACE RETAIL STORES, INC., a Delaware corporation

By: /s/ Hiten Patel    
Name: Hiten Patel
Title: Senior Vice President,
Chief Financial Officer

THE CHILDREN’S PLACE SERVICES COMPANY LLC, a Delaware limited liability company
By:  /s/ Hiten Patel    
Name: Hiten Patel
Title: Senior Vice President,
Chief Financial Officer

WELLS FARGO RETAIL FINANCE, LLC, a Delaware limited liability company,
as Agent and as a Lender

By: /s/ Erika Pfeifer   
Name: Erika Pfeifer
Title: Account Executive,
Assistant Vice President
 
WACHOVIA CAPITAL FINANCE CORPORATION (NEW ENGLAND), a Massachusetts corporation,
as Documentation Agent and as a Lender

By: /s/ Willis A. Williams   
Name: Willis A. Williams
Title: Vice President    

LASALLE RETAIL FINANCE,
a Division of LaSalle Business Credit, LLC, as Agent for Standard Federal Bank
National Association
as Co-Agent and as a Lender

By: /s/ Matthew Potter    
Name: Matthew Potter
Title: Assistant Vice President

-5-

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

WEBSTER BUSINESS CREDIT CORP.,

By: /s/ Evan Israelson   
Name: Evan Israelson  
Title: Vice President

THE CIT GROUP/BUSINESS CREDIT, INC.,

By: /s/ Manuel Borges   
Name: Manuel Borges
Title: Vice President

-6-

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

Schedule 2.1(b)

Lender
 
Overadvance Commitment
 
Percentage
Wells Fargo Retail Finance, LLC
 
$7,000,000
 
35.0%
Wachovia Capital Finance Corporation
 
$5,200,000
 
26.0%
LaSalle Retail Finance
 
$4,000,000
 
20.0%
Webster Business Credit Corp.
 
$1,500,000
 
7.5%
The CIT Group/Business Credit, Inc.
 
$2,300,000
 
11.5%
Total
 
$20,000,000
 
100.0%

-7-

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