EXECUTION VERSION

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NINTH AMENDMENT AGREEMENT

Dated as of May 8, 2003

among

LILLIAN VERNON CORPORATION,

as Borrower,

LVC RETAIL CORPORATION and

LILLIAN VERNON INTERNATIONAL, LTD.

as Guarantors,

JPMORGAN CHASE BANK
(formerly known as The Chase Manhattan Bank),

as Agent,

and

THE BANKS NAMED HEREIN

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To The Credit Agreement Dated as of August 19, 1996

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     THIS NINTH AMENDMENT AGREEMENT, dated as of May 8, 2003 (this “Amendment”),
among LILLIAN VERNON CORPORATION, a Delaware corporation (the “Borrower”), LVC
RETAIL CORPORATION, a Delaware corporation (“LVC”), and LILLIAN VERNON
INTERNATIONAL, LTD., a New York corporation (“LVI Inc.”, and together with LVC,
the “Guarantors”), the several banks from time to time parties to the Agreement
(as defined below) (the “Banks”) and JPMORGAN CHASE BANK (formerly known as The
Chase Manhattan Bank), a New York banking corporation, as agent for the Banks
hereunder (in such capacity, the “Agent”);

W I T N E S S E T H :

          WHEREAS, the parties hereto have entered into a Revolving Credit
Agreement dated as of August 19, 1996 (as amended, restated, supplemented or
otherwise modified from time to time, the “Agreement”);

          WHEREAS, the Borrower has requested the Banks reduce the amount of the
credit facility and amend certain of the other provisions of the Agreement as
hereinafter set forth, in each case effective as of the date hereof (the
“Amendment Effective Date”); and

          WHEREAS, the Borrower and Guarantors desire, and each Bank and the
Agent are willing, on the terms and conditions set forth below, to modify
certain terms of the Agreement as set forth below;

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

     SECTION 1.     Defined Terms. Capitalized terms used herein and not defined
herein shall have the meanings specified in the Agreement.

     SECTION 2.     Amendment to the Agreement.

     (a)     Section 1.01 of the Agreement is hereby amended by deleting the
definitions of “Guarantors” and “Maturity Date” contained therein and inserting
in lieu thereof the following:

       “‘Guarantors’ shall mean LVC Retail Corporation, a Delaware corporation,
and Lillian Vernon International, Ltd., a New York corporation, and any person
that shall become a Guarantor in accordance with Section 5.11.”

       “‘Maturity Date’ shall mean the earlier to occur of (x) August 31, 2003
and (y) the date on which the merger contemplated by that certain Agreement and
Plan of Merger dated as of April 15, 2003 between the Borrower and Ripplewood
Holdings L.L.C. is consummated.”

     (b)     Schedule 2.01 to the Agreement is hereby amended by deleting such
schedule in its entirety and inserting in lieu thereof the Schedule 2.01
attached to this Amendment.

     (c)     Section 4.01 of the Agreement is hereby amended by adding a new
paragraph (e)

 

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at the end thereof to read as follows:

       (e) Notwithstanding any other provision contained in this agreement or in
any other Loan Document to the contrary, as of May 8, 2003, the Banks shall have
no obligation to lend under Section 2.01 hereof (with respect to their Tranche 1
Commitments) until the Borrower shall have executed and delivered to each Bank
an executed copy of a security agreement, which security agreement shall (i)
grant to the Agent, on behalf of the Banks, a lien in all of the Borrower’s
personal property located at its National Distribution Center, 2600
International Parkway, Virginia Beach, VA 23452, together with a lien on all
accounts receivables arising out of its operations at such location, and (ii) be
in form and substance reasonably satisfactory to the Banks.

     (d)     Section 6.01(f) of the Agreement is hereby amended by adding the
following proviso to the end thereof:

       provided, further, however, that the Borrower shall not mortgage, lien or
encumber, nor suffer to exist any mortgage, lien or encumbrance on, its property
located at 2600 International Parkway, Virginia Beach, VA 23452, except for such
mortgages, liens and encumbrances as are described in paragraphs (a), (b), (c),
(d) and (e) of this Section 6.01.

     (e)     Section 6.11 of the Agreement is hereby amended by deleting such
Section in its entirety and inserting in lieu thereof the following:

       SECTION 6.11. Consolidated Net Income. Permit Consolidated Net Income to
be less than zero for any fiscal year, calculated in accordance with GAAP;
provided that for the fiscal periods set forth below the Borrower may have a net
loss of up to but not exceeding the Permitted Net Loss set forth opposite such
period as follows:

          Fiscal Period   Permitted Net Loss

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Fiscal Year 2003,
     four quarters, year to date
  $ 19,000,000  
Fiscal Year 2004,
   first quarter
  $ 7,000,000  

     (f)      Section 6.12 of the Agreement is hereby amended by deleting such
Section in its entirety and inserting in lieu thereof the following:

       SECTION 6.12. Consolidated Working Capital. With respect to each fiscal
period set forth below, permit the Consolidated Working Capital to be less than
the amount set forth opposite such period as follows:

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          Fiscal Period   Consolidated Working Capital

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4th Quarter 2003
  $ 39,000,000  
1st Quarter 2004
  $ 26,000,000  
2nd Quarter 2004
  $ 24,000,000  
3rd Quarter 2004
  $ 15,000,000  

     (g)     Section 6.14 of the Agreement is hereby amended by deleting such
Section in its entirety and inserting in lieu thereof the following:

       SECTION 6.14. Consolidated Tangible Net worth Plus Subordinated Debt.
With respect to each fiscal period set forth below, at any time permit the sum
of Consolidated Tangible Net Worth plus Subordinated Debt to be less than the
amount set forth opposite such period as follows:

          Fiscal Period   Consolidated Tangible Net Worth plus Subordinated Debt

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4th Quarter 2003
  $ 71,000,000  
1st Quarter 2004
  $ 64,000,000  
2nd Quarter 2004
  $ 75,000,000  
3rd Quarter 2004
  $ 80,000,000  

     (h)     Article VI of the Agreement is hereby amended by adding a new
Section 6.18 at the end thereof to read as follows:

       SECTION 6.18. Negative Pledge. Enter into any agreement (other than the
Agreement and Plan of Merger referred to in paragraph (j) of Article VII hereof)
containing any provision prohibiting the creation or assumption of any mortgage,
pledge, lien, charge or other encumbrance upon its properties, revenues or
assets, whether now owned or hereafter acquired, or restricting the ability of
the Borrower or any Guarantor to amend or modify this agreement or any other
Loan Document.

     (i)     Article VII of the Agreement is hereby amended by adding a new
paragraph (j) immediately following paragraph (i) thereof to read as follows:

       (j) the merger contemplated by that certain Agreement and Plan of Merger
dated as of April 15, 2003 between the Borrower and Ripplewood Holdings L.L.C.
shall not have been consummated by August 31, 2003, or such agreement shall have
been terminated by any party thereto or no longer be in full force and effect.

     SECTION 3.     Conditions to Effectiveness. This Amendment shall become
effective only upon the satisfaction or waiver of all of the following
conditions precedent:

     (A)     The parties hereto shall have duly executed and delivered this
Amendment.

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     (B)     The Agent shall have received certificates of the Secretary or
Assistant Secretary of the Borrower and each of the Guarantors dated as of the
Amendment Effective Date, certifying: (i) that its respective By-laws either are
attached to such certificate, or to the extent not attached have not been
amended since the Closing Date, (ii) that its respective charter or certificate,
as the case may be, either is attached to such certificate or to the extent not
attached has not been amended since the Closing Date, and (iii) as to the
incumbency and signatures of each of its respective officers executing this
Amendment and any other documents to which it is a party.

     (C)     The Agent shall have received from the Borrower the fees and
expense reimbursements referred to under Section 8 hereof.

     SECTION 4.     Representations and Warranties. In order to induce the Banks
and Agent to enter into this Amendment, the Borrower and the Guarantors hereby
jointly and severally represent and warrant to the Agent: (i) that the
representations and warranties contained in the Agreement are true and correct
on and as of the Amendment Effective Date as though made on and as of such date,
except for changes which have occurred and which were not prohibited by the
terms of the Agreement; (ii) that no Default or Event of Default has occurred
and is continuing, or would result from the execution, delivery and performance
by the Borrower and the Guarantors, of this Amendment or the Agreement (as
amended by this Amendment); (iii) that the Borrower and the Guarantors have full
power, right and legal authority to execute, deliver and perform its obligations
under this Amendment; (iv) that the Borrower and Guarantors have taken all
action necessary to authorize the execution and delivery of, and the performance
of its obligations under this Amendment; (v) that this Amendment constitutes a
legal, valid and binding obligation of the Borrower and the Guarantors
enforceable against each of them in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization or moratorium or
similar laws affecting the rights of creditors generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law); and (vi) the Borrower owns the real property located at 2600
International Parkway, Virginia Beach, VA 23452, and has good and lawful right
to convey the same and that such property is free and clear from any and all
liens whatsoever, except such liens as are described in paragraphs (a), (b),
(c), (d) and (e) of Section 6.01 of the Agreement.

     SECTION 5.     Consent to Merger. The Borrower hereby represents and
warrants that Lillian Vernon Fulfillment Services, Inc. (heretofore a Guarantor
under the Agreement) has been acquired by, merged into or consolidated with the
Borrower as of the date hereof (the “Merger”), and that the Borrower has assumed
all obligations and liabilities of Lillian Vernon Fulfillment Services, Inc.
from and after the date hereof, including without limitation all such
obligations and liabilities arising under the Loan Documents. The Banks and the
other parties hereto hereby consent to the Merger.

     SECTION 6.     Guaranty. The Guarantors each acknowledge receipt of a copy
of this Amendment Agreement and hereby ratify and affirm their guaranty of the
Obligations of the Borrower under the Agreement as amended hereby.

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     SECTION 7.     Reference to and Effect on the Documents. Each reference in
the Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of
like import, and each reference to the Agreement in documents related to the
Agreement, shall mean and be a reference to the Agreement as amended hereby.
Except as specifically amended hereby, the Agreement and all such related
documents, and all other documents, agreements, instruments or writings entered
into in connection therewith, shall remain in full force and effect and are
hereby ratified, confirmed and acknowledged by the Borrower.

     SECTION 8.     Fees and Expenses. The Borrower agrees to pay or reimburse
the Agent, as stated in Section 10.05 of the Agreement (as amended hereby), for
its reasonable out-of-pocket costs and expenses, including, without limitation,
the reasonable fees and disbursements of counsel to the Agent incurred by the
Agent in connection with the preparation, reproduction, execution and delivery
of this Amendment and any other instruments and documents to be delivered
hereunder. For the avoidance of doubt, the Lenders acknowledge that there shall
be no fee due and owing to them solely by virtue of the occurrence of the
Maturity Date (as such term is amended by this Amendment).

     SECTION 9.     Governing Law. This Amendment and the rights and obligations
of the parties hereunder shall be governed by and construed and interpreted in
accordance with the substantive laws of the State of New York, without regard to
its conflict of laws principles.

     SECTION 10.   Counterparts. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Amendment by signing any such
counterpart.

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               IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.

              JPMORGAN CHASE BANK,
As Bank and as Agent,               By:   /s/ MARGARET J. NOLAN

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Name: Margaret J. Nolan
Title: Vice President

              SUNTRUST BANK               By:   /s/ BRUCE W. NAVE

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Name: Bruce W. Nave         Title: Senior Vice President

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SIGNATURE PAGE TO NINTH AMENDMENT
TO LILLIAN VERNON CREDIT AGREEMENT

              LILLIAN VERNON CORPORATION               By:   /s/ RICHARD P.
RANDALL

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        Name: Richard P. Randall         Title: Executive Vice President,      
            Chief Operating Officer,                   Chief Financial Officer

              LVC RETAIL CORPORATION               By:   /s/ HARRIET KRAYNIK

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        Name: Harriet Kraynik         Title: Secretary/Treasurer

              LILLIAN VERNON INTERNATIONAL, INC.               By:   /s/ SUSAN
C. HANDLER

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Name: Susan C. Handler         Title: Secretary

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SCHEDULE 2.01

COMMITMENTS

TRANCHE 1

          TRANCHE 1   TRANCHE 1 BANK   COMMITMENT AMOUNT

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JPMORGAN CHASE BANK
  $ 2,500,000  
SUNTRUST BANK
  $ 2,500,000  
 
   

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TOTAL
  $ 5,000,000  

TRANCHE 2

          TRANCHE 2   TRANCHE 2 BANK   COMMITMENT AMOUNT

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JPMORGAN CHASE BANK
  $ 10,000,000  
 
   

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TOTAL
  $ 10,000,000  

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