Exhibit 10.8

SECOND AMENDED AND RESTATED INTERCOMPANY SUBORDINATION
AGREEMENT

THIS SECOND AMENDED AND RESTATED INTERCOMPANY SUBORDINATION AGREEMENT (this
“Agreement”), dated as of August 22, 2007, is made among the Obligors (as
defined below), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, as agent (in such capacity, “Agent”) for the Lenders (as defined
below) and Bank Product Providers (as defined in the Loan Agreement (as defined
below)).

WHEREAS, Lerner New York, Inc. (“Lerner”), Lernco, Inc. (“Lernco”), NY & Co.
Group, Inc. (“NY&Co”), Lerner New York Holdings, Inc. (“Parent”), Nevada
Receivable Factoring, Inc. (“Nevada Factoring”), Jasmine Company, Inc.
(“Jasmine”), Associated Lerner Shops of America, Inc. (“Associated Lerner”) and
Lerner New York GC, LLC (“Lerner GC” and together with Lerner, Lernco, NY&Co,
Parent, Nevada Factoring, Jasmine, Associated Lerner and any other “Borrower”,
or “Guarantor” or “Obligor” under the Loan Agreement (as defined below),
“Obligors” and each an “Obligor”), and Agent have previously entered into the
Amended and Restated Intercompany Subordination Agreement, dated March 16, 2004
(the “Existing Intercompany Agreement”).

WHEREAS, Lerner, Lernco and Jasmine (each a “Borrower” and collectively,
“Borrowers”), Agent and the persons from time to time party to the Loan
Agreement (as hereinafter defined) as lenders (collectively, “Lenders”), have
amended and restated or are about to amend and restate the existing financing
arrangements of Agent, Lenders, Borrowers and Guarantors pursuant to which
Lenders (or Agent on behalf of Lenders) may make loans and advances and provide
other financial accommodations to Borrowers as set forth in the Second Amended
and Restated Loan and Security Agreement, dated as of the date hereof, by and
among Agent, Lenders, Borrowers and Guarantors (as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, the “Loan Agreement”) and other agreements, documents and instruments
referred to therein or at any time executed and/or delivered in connection
therewith or related thereto, including, but not limited to, this Agreement (all
of the foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the “Financing Agreements”);

WHEREAS, the Obligors, other than Borrowers, have each entered into a Second
Amended and Restated Guarantee, dated as of the date hereof (as amended,
modified, supplemented, renewed, extended, or replaced from time to time, the
“Guarantees” and each a “Guarantee”);

WHEREAS, the Obligors have or may from time to time enter into certain
transactions with one another pursuant to which certain sums are or may be owing
from one Obligor to another;

WHEREAS, in connection with the Loan Agreement and in order to induce Agent and
the Lenders to enter into the Loan Agreement, Agent and the Obligors now wish to
amend and

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restate the Existing Intercompany Agreement, in its entirety, on the terms and
conditions set forth herein in order to subordinate all such intercompany
indebtedness upon the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual promises, covenants, conditions,
representations, and warranties set forth herein and for other good and valuable
consideration, the parties hereto agree as follows:

SECTION 1.           DEFINITIONS; INTERPRETATION.

(A)           TERMS DEFINED IN LOAN AGREEMENT.  ALL CAPITALIZED TERMS USED IN
THIS AGREEMENT AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASSIGNED
TO THEM IN THE LOAN AGREEMENT.

(B)           CERTAIN DEFINED TERMS.  AS USED IN THIS AGREEMENT, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:

“Agent” has the meaning set forth in the preamble to this Agreement.

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Insolvency Event” has the meaning set forth in Section 3.

“Lenders” has the meaning set forth in the recitals to this Agreement.

“Obligors” has the meaning set forth in the recitals to this Agreement.

“Senior Debt” means the Obligations and other indebtedness and liabilities of
the Borrowers to Agent or the Lenders under or in connection with the Loan
Agreement, the Guaranteed Obligations and other indebtedness and liabilities of
the Guarantors under or in connection with the Guarantees and all other
indebtedness and liabilities of any Obligor to Agent or the Lenders under or in
connection with any other Financing Agreements, including all unpaid principal
of the Loans, all interest accrued thereon (including all interest that, but for
the provisions of the United States Bankruptcy Code, would have accrued), all
fees due under the Loan Agreement and the other Financing Agreements (including
all fees that, but for the provisions of the United States Bankruptcy Code,
would have accrued), and all other amounts payable by the Obligors, or any of
them, to Agent or the Lenders thereunder or in connection therewith, whether now
existing or hereafter arising, and whether due or to become due, absolute or
contingent, liquidated or unliquidated, determined or undetermined.

“Subordinated Debt” means, with respect to each Obligor, all indebtedness,
liabilities, and other obligations of any other Obligor owing to such Obligor in
respect of any and all loans or advances made by such Obligor to such other
Obligor whether now existing or hereafter arising, and whether due or to become
due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, including all fees and all other amounts payable by any other
Obligor to such Obligor under or in connection with any documents or instruments
related thereto.

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“Subordinated Debt Payment” means any payment or distribution by or on behalf of
the Obligors, directly or indirectly, of assets of the Obligors of any kind or
character, whether in cash, property, or securities, including on account of the
purchase, redemption, or other acquisition of Subordinated Debt, as a result of
an collection, sale, or other disposition of collateral, or by setoff, exchange,
or in any other manner, for or on account of the Subordinated Debt.

(C)           INTERPRETATION.  UNLESS THE CONTEXT OF THIS AGREEMENT CLEARLY
REQUIRES OTHERWISE, REFERENCES TO THE PLURAL INCLUDE THE SINGULAR, REFERENCES TO
THE SINGULAR INCLUDE THE PLURAL, THE TERM “INCLUDING” IS NOT LIMITING, AND THE
TERM “OR” HAS, EXCEPT WHERE OTHERWISE INDICATED, THE INCLUSIVE MEANING
REPRESENTED BY THE PHRASE “AND/OR.”  THE WORDS “HEREOF,” “HEREIN,” “HEREBY,”
“HEREUNDER,” AND SIMILAR TERMS IN THIS AGREEMENT REFER TO THIS AGREEMENT AS A
WHOLE AND NOT TO ANY PARTICULAR PROVISION OF THIS AGREEMENT.  SECTION,
SUBSECTION, CLAUSE, SCHEDULE, AND EXHIBIT REFERENCES ARE TO THIS AGREEMENT
UNLESS OTHERWISE SPECIFIED.  REFERENCES TO AGREEMENTS AND OTHER CONTRACTUAL
INSTRUMENTS SHALL BE DEEMED TO INCLUDE ALL SUBSEQUENT AMENDMENTS AND OTHER
MODIFICATIONS THERETO.  REFERENCES TO STATUTES OR REGULATIONS ARE TO BE
CONSTRUED AS INCLUDING ALL STATUTORY AND REGULATORY PROVISIONS CONSOLIDATING,
AMENDING, OR REPLACING THE STATUTE OR REGULATION REFERRED TO.  THE CAPTIONS AND
HEADINGS ARE FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT AFFECT THE
CONSTRUCTION OF THIS AGREEMENT.

SECTION 2.           SUBORDINATION TO PAYMENT OF SENIOR DEBT.  AS TO EACH
OBLIGOR, ALL PAYMENTS ON ACCOUNT OF THE SUBORDINATED DEBT SHALL BE SUBJECT,
SUBORDINATE, AND JUNIOR, IN RIGHT OF PAYMENT AND EXERCISE OF REMEDIES, TO THE
EXTENT AND IN THE MANNER SET FORTH HEREIN, TO THE PRIOR PAYMENT, IN FULL, IN
CASH OR CASH EQUIVALENTS OF THE SENIOR DEBT.  TO THE EXTENT REQUIRED UNDER ANY
AGREEMENTS TO WHICH ANY OF THE OBLIGORS ARE PARTY, EACH OBLIGOR HEREBY CONSENTS
TO THE SECURITY INTEREST OF AGENT IN EACH OF THE OBLIGOR’S PERSONAL PROPERTY AND
OTHER ASSETS.

SECTION 3.           SUBORDINATION UPON ANY DISTRIBUTION OF ASSETS OF THE
OBLIGORS.  AS TO EACH OBLIGOR, IN THE EVENT OF ANY PAYMENT OR DISTRIBUTION OF
ASSETS OF ANY OTHER OBLIGOR OF ANY KIND OR CHARACTER, WHETHER IN CASH, PROPERTY,
OR SECURITIES, UPON THE DISSOLUTION, WINDING UP, OR TOTAL OR PARTIAL LIQUIDATION
OR REORGANIZATION, READJUSTMENT, ARRANGEMENT, OR SIMILAR PROCEEDING RELATING TO
SUCH OTHER OBLIGOR OR ITS PROPERTY, WHETHER VOLUNTARY OR INVOLUNTARY, OR IN
BANKRUPTCY, INSOLVENCY, RECEIVERSHIP, ARRANGEMENT, OR SIMILAR PROCEEDINGS OR
UPON AN ASSIGNMENT FOR THE BENEFIT OF CREDITORS, OR UPON ANY OTHER MARSHALING OR
COMPOSITION OF THE ASSETS AND LIABILITIES OF SUCH OTHER OBLIGOR, OR OTHERWISE
(SUCH EVENTS, COLLECTIVELY, THE “INSOLVENCY EVENTS”) EXCEPT AS OTHERWISE
PERMITTED UNDER SECTION 9.7(A) OF THE LOAN AGREEMENT, BUT IN ANY EVENT, IF AN
EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING:  (I) ALL AMOUNTS OWING ON
ACCOUNT OF THE SENIOR DEBT SHALL FIRST BE PAID, IN FULL, IN CASH, OR PAYMENT
PROVIDED FOR IN CASH OR IN CASH EQUIVALENTS, BEFORE ANY SUBORDINATED DEBT
PAYMENT IS MADE; AND (II) TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY
SUBORDINATED DEBT PAYMENT TO WHICH SUCH OBLIGOR WOULD BE ENTITLED EXCEPT FOR THE
PROVISIONS HEREOF, SHALL BE PAID OR DELIVERED BY THE TRUSTEE IN BANKRUPTCY,
RECEIVER, ASSIGNEE FOR THE BENEFIT OF CREDITORS, OR OTHER LIQUIDATING AGENT
MAKING SUCH PAYMENT OR DISTRIBUTION DIRECTLY TO AGENT FOR APPLICATION TO THE
PAYMENT OF THE SENIOR DEBT IN ACCORDANCE WITH CLAUSE (I), AFTER GIVING EFFECT TO
ANY CONCURRENT PAYMENT OR DISTRIBUTION OR PROVISION THEREFOR TO AGENT OR ANY
LENDER IN RESPECT OF SUCH SENIOR DEBT.

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SECTION 4.           PAYMENTS ON SUBORDINATED DEBT.

(A)           PERMITTED PAYMENTS.  EXCEPT AS OTHERWISE PERMITTED UNDER THE TERMS
OF THE LOAN AGREEMENT, EACH OBLIGOR MAY MAKE, AND EACH OTHER OBLIGOR SHALL BE
ENTITLED TO ACCEPT AND RECEIVE, PAYMENTS ON ACCOUNT OF THE SUBORDINATED DEBT IN
THE ORDINARY COURSE OF BUSINESS.  NOTWITHSTANDING THE FOREGOING, AND WITHOUT IN
ANY WAY LIMITING THE GENERALITY OF ANY PROVISION OF THIS AGREEMENT, NEVADA
FACTORING HEREBY ACKNOWLEDGES THAT IT HAS NO RIGHT TO CHARGEBACK AGAINST ANY
AMOUNTS OWING TO OR SEEK RECAPTURE OF ANY PAYMENTS OR OTHER REMITTANCES AT ANY
TIME MADE TO LERNER.

(B)           NO PAYMENT UPON SENIOR DEBT DEFAULTS.  EXCEPT AS OTHERWISE
PERMITTED UNDER THE TERMS OF THE LOAN AGREEMENT, UPON THE OCCURRENCE OF ANY
EVENT OF DEFAULT, AND UNTIL SUCH EVENT OF DEFAULT IS CURED OR WAIVED, NO OBLIGOR
SHALL MAKE, AND NO OTHER OBLIGOR SHALL ACCEPT OR RECEIVE, ANY SUBORDINATED DEBT
PAYMENT; PROVIDED, HOWEVER, OBLIGORS MAY CONTINUE TO MAKE ANY PAYMENTS DUE TO
ANY BORROWER.

SECTION 5.           SUBORDINATION OF REMEDIES.  AS LONG AS ANY SENIOR DEBT
SHALL REMAIN OUTSTANDING AND UNPAID, FOLLOWING THE OCCURRENCE OF ANY EVENT OF
DEFAULT AND UNTIL SUCH EVENT OF DEFAULT IS CURED OR WAIVED, EACH OBLIGOR OTHER
THAN ANY BORROWER SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF AGENT:

(A)           ACCELERATE, MAKE DEMAND, OR OTHERWISE MAKE DUE AND PAYABLE PRIOR
TO THE ORIGINAL DUE DATE THEREOF ANY SUBORDINATED DEBT OR BRING SUIT OR
INSTITUTE ANY OTHER ACTIONS OR PROCEEDINGS TO ENFORCE ITS RIGHTS OR INTERESTS IN
RESPECT OF THE OBLIGATIONS OF ANY OTHER OBLIGOR OWING TO SUCH OBLIGOR;

(B)           EXERCISE ANY RIGHTS UNDER OR WITH RESPECT TO GUARANTIES OF THE
SUBORDINATED DEBT, IF ANY;

(C)           EXERCISE ANY RIGHTS TO SET-OFFS AND COUNTERCLAIMS IN RESPECT OF
ANY INDEBTEDNESS, LIABILITIES, OR OBLIGATIONS OF SUCH OBLIGOR TO ANY OTHER
OBLIGOR AGAINST ANY OF THE SUBORDINATED DEBT; OR

(D)           COMMENCE, OR CAUSE TO BE COMMENCED, OR JOIN WITH ANY CREDITOR
OTHER THAN AGENT AND THE LENDERS IN COMMENCING, ANY BANKRUPTCY, INSOLVENCY, OR
RECEIVERSHIP PROCEEDING AGAINST THE OTHER OBLIGORS.

SECTION 6.           PAYMENT OVER TO AGENT.  IN THE EVENT THAT, NOTWITHSTANDING
THE PROVISIONS OF SECTION 3, SECTION 4, AND SECTION 5, ANY SUBORDINATED DEBT
PAYMENTS SHALL BE RECEIVED IN CONTRAVENTION OF SECTION 3, SECTION 4, OR SECTION
5 BY ANY OBLIGOR BEFORE ALL SENIOR DEBT IS PAID, IN FULL, IN CASH OR CASH
EQUIVALENTS, SUCH SUBORDINATED DEBT PAYMENTS SHALL BE HELD IN TRUST FOR THE
BENEFIT OF AGENT, THE LENDERS AND BANK PRODUCT PROVIDERS (AS DEFINED IN THE LOAN
AGREEMENT) AND SHALL BE PAID OVER OR DELIVERED TO AGENT FOR APPLICATION TO THE
PAYMENT, IN FULL, IN CASH OR CASH EQUIVALENTS OF ALL SENIOR DEBT REMAINING
UNPAID TO THE EXTENT NECESSARY TO GIVE EFFECT TO SECTION 3, SECTION 4, AND
SECTION 5, AFTER GIVING EFFECT TO ANY CONCURRENT PAYMENTS OR DISTRIBUTIONS TO
AGENT OR ANY LENDER IN RESPECT OF THE SENIOR DEBT.

SECTION 7.           AUTHORIZATION TO AGENT.  IF, WHILE ANY SUBORDINATED DEBT IS
OUTSTANDING, ANY INSOLVENCY EVENT SHALL OCCUR AND BE CONTINUING WITH RESPECT TO
ANY OTHER OBLIGOR OR ITS PROPERTY:  (I) AGENT HEREBY IS IRREVOCABLY AUTHORIZED
AND EMPOWERED (IN THE NAME OF EACH

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OBLIGOR OR OTHERWISE), BUT SHALL HAVE NO OBLIGATION, TO DEMAND, SUE FOR,
COLLECT, AND RECEIVE EVERY PAYMENT OR DISTRIBUTION IN RESPECT OF THE
SUBORDINATED DEBT AND GIVE ACQUITTANCE THEREFOR AND TO FILE CLAIMS AND PROOFS OF
CLAIM AND TAKE SUCH OTHER ACTION (INCLUDING VOTING THE SUBORDINATED DEBT) AS IT
MAY DEEM NECESSARY OR ADVISABLE FOR THE EXERCISE OR ENFORCEMENT OF ANY OF THE
RIGHTS OR INTERESTS OF AGENT OR ANY LENDER; AND (II) EACH OBLIGOR SHALL PROMPTLY
TAKE SUCH ACTION AS AGENT REASONABLY MAY REQUEST (A) TO COLLECT THE SUBORDINATED
DEBT FOR THE ACCOUNT OF AGENT AND THE LENDERS AND TO FILE APPROPRIATE CLAIMS OR
PROOFS OF CLAIM IN RESPECT OF THE SUBORDINATED DEBT, (B) TO EXECUTE AND DELIVER
TO AGENT SUCH POWERS OF ATTORNEY, ASSIGNMENTS, AND OTHER INSTRUMENTS AS IT MAY
REQUEST TO ENABLE IT TO ENFORCE ANY AND ALL CLAIMS WITH RESPECT TO THE
SUBORDINATED DEBT, AND (C) TO COLLECT AND RECEIVE ANY AND ALL SUBORDINATED DEBT
PAYMENTS.

SECTION 8.           CERTAIN AGREEMENTS OF EACH OBLIGOR.

(A)           NO BENEFITS.  EACH OBLIGOR UNDERSTANDS THAT THERE MAY BE VARIOUS
AGREEMENTS BETWEEN AGENT, THE LENDERS AND ANY OTHER OBLIGOR EVIDENCING AND
GOVERNING THE SENIOR DEBT, AND EACH OBLIGOR ACKNOWLEDGES AND AGREES THAT SUCH
AGREEMENTS ARE NOT INTENDED TO CONFER ANY BENEFITS ON SUCH OBLIGOR AND THAT
NEITHER AGENT NOR ANY LENDER SHALL HAVE ANY OBLIGATION TO SUCH OBLIGOR OR ANY
OTHER PERSON TO EXERCISE ANY RIGHTS, ENFORCE ANY REMEDIES, OR TAKE ANY ACTIONS
WHICH MAY BE AVAILABLE TO THEM UNDER SUCH AGREEMENTS.

(B)           NO INTERFERENCE.  EACH OBLIGOR ACKNOWLEDGES THAT EACH OTHER
OBLIGOR HAS GRANTED TO AGENT, FOR ITSELF AND THE BENEFIT OF THE LENDERS AND BANK
PRODUCT PROVIDERS, SECURITY INTERESTS IN ALL OF SUCH OTHER OBLIGOR’S ASSETS, AND
AGREES NOT TO INTERFERE WITH OR IN ANY MANNER OPPOSE A DISPOSITION OF ANY
COLLATERAL BY AGENT IN ACCORDANCE WITH APPLICABLE LAW.

(C)           RELIANCE BY AGENT AND THE LENDERS.  EACH OBLIGOR ACKNOWLEDGES AND
AGREES THAT AGENT AND THE LENDERS WILL HAVE RELIED UPON AND WILL CONTINUE TO
RELY UPON THE SUBORDINATION PROVISIONS PROVIDED FOR HEREIN AND THE OTHER
PROVISIONS HEREOF IN ENTERING INTO THE FINANCING AGREEMENTS AND MAKING OR
ISSUING THE ADVANCES, THE LETTERS OF CREDIT, OR OTHER FINANCIAL ACCOMMODATIONS
THEREUNDER.

(D)           WAIVERS.  EXCEPT AS PROVIDED UNDER THE LOAN AGREEMENT, EACH
OBLIGOR HEREBY WAIVES ANY AND ALL NOTICE OF THE INCURRENCE OF THE SENIOR DEBT OR
ANY PART THEREOF AND ANY RIGHT TO REQUIRE MARSHALING OF ASSETS.

(E)           OBLIGATIONS OF EACH OBLIGOR NOT AFFECTED.  EACH OBLIGOR HEREBY
AGREES THAT AT ANY TIME AND FROM TIME TO TIME, WITHOUT NOTICE TO OR THE CONSENT
OF SUCH OBLIGOR, WITHOUT INCURRING RESPONSIBILITY TO SUCH OBLIGOR, AND WITHOUT
IMPAIRING OR RELEASING THE SUBORDINATION PROVIDED FOR HEREIN OR OTHERWISE
IMPAIRING THE RIGHTS OF AGENT OR ANY LENDER HEREUNDER, (I) THE TIME FOR ANY
OTHER OBLIGOR’S PERFORMANCE OF OR COMPLIANCE WITH ANY OF ITS AGREEMENTS
CONTAINED IN THE FINANCING AGREEMENTS MAY BE EXTENDED OR SUCH PERFORMANCE OR
COMPLIANCE MAY BE WAIVED BY AGENT (IN ACCORDANCE WITH THE FINANCING AGREEMENTS);
(II) THE AGREEMENTS OF ANY OTHER OBLIGOR WITH RESPECT TO THE FINANCING
AGREEMENTS MAY FROM TIME TO TIME BE MODIFIED BY SUCH OTHER OBLIGOR, AGENT AND
THE LENDERS (IN ACCORDANCE WITH THE FINANCING AGREEMENTS) FOR THE PURPOSE OF
ADDING ANY REQUIREMENTS THERETO OR CHANGING IN ANY MANNER THE RIGHTS AND
OBLIGATIONS OF SUCH OTHER OBLIGOR, AGENT OR THE LENDERS THEREUNDER; (III) THE
MANNER, PLACE, OR TERMS FOR PAYMENT OF SENIOR DEBT OR ANY PORTION THEREOF MAY BE
ALTERED OR THE TERMS FOR PAYMENT EXTENDED, OR THE SENIOR DEBT MAY BE RENEWED IN
WHOLE OR IN PART; (IV) THE MATURITY OF THE SENIOR DEBT MAY BE ACCELERATED IN
ACCORDANCE WITH THE TERMS OF ANY PRESENT OR FUTURE AGREEMENT BY ANY

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OTHER OBLIGOR, AGENT AND THE LENDERS (IN ACCORDANCE WITH THE FINANCING
AGREEMENTS); (V) ANY COLLATERAL MAY BE SOLD, EXCHANGED, RELEASED, OR SUBSTITUTED
AND ANY LIEN IN FAVOR OF AGENT OR ANY LENDER MAY BE TERMINATED, SUBORDINATED, OR
FAIL TO BE PERFECTED OR BECOME UNPERFECTED; (VI) ANY PERSON LIABLE IN ANY MANNER
FOR SENIOR DEBT MAY BE DISCHARGED, RELEASED, OR SUBSTITUTED; AND (VII) ALL OTHER
RIGHTS AGAINST THE OTHER OBLIGORS, ANY OTHER PERSON, OR WITH RESPECT TO ANY
COLLATERAL MAY BE EXERCISED (OR AGENT OR ANY LENDER MAY WAIVE OR REFRAIN FROM
EXERCISING SUCH RIGHTS IN ACCORDANCE WITH THE FINANCING AGREEMENTS).

(F)            RIGHTS OF AGENT AND THE LENDERS NOT TO BE IMPAIRED.  NO RIGHT OF
AGENT OR ANY LENDER TO ENFORCE THE SUBORDINATION PROVIDED FOR HEREIN OR TO
EXERCISE ITS OTHER RIGHTS HEREUNDER SHALL AT ANY TIME IN ANY WAY BE PREJUDICED
OR IMPAIRED BY ANY ACT OR FAILURE TO ACT BY ANY OTHER OBLIGOR, AGENT OR ANY
LENDER HEREUNDER OR UNDER OR IN CONNECTION WITH THE OTHER FINANCING AGREEMENTS
OR BY ANY NONCOMPLIANCE BY THE OTHER OBLIGORS WITH THE TERM AND PROVISIONS AND
COVENANTS HEREIN OR IN ANY OTHER LOAN DOCUMENT, REGARDLESS OF ANY KNOWLEDGE
THEREOF AGENT OR ANY LENDER MAY HAVE OR OTHERWISE BE CHARGED WITH.

(G)           FINANCIAL CONDITION OF THE OBLIGORS.  EXCEPT AS PROVIDED UNDER THE
LOAN AGREEMENT, EACH OBLIGOR SHALL NOT HAVE ANY RIGHT TO REQUIRE AGENT OR ANY
LENDER TO OBTAIN OR DISCLOSE ANY INFORMATION WITH RESPECT TO:  (I) THE FINANCIAL
CONDITION OR CHARACTER OF ANY OTHER OBLIGOR OR THE ABILITY OF THE OTHER OBLIGORS
TO PAY AND PERFORM SENIOR DEBT; (II) THE SENIOR DEBT; (III) THE COLLATERAL OR
OTHER SECURITY FOR ANY OR ALL OF THE SENIOR DEBT; (IV) THE EXISTENCE OR
NONEXISTENCE OF ANY GUARANTEES OF, OR ANY OTHER SUBORDINATION AGREEMENTS WITH
RESPECT TO, ALL OR ANY PART OF THE SENIOR DEBT; (V) ANY ACTION OR INACTION ON
THE PART OF AGENT, ANY LENDER OR ANY OTHER PERSON; OR (VI) ANY OTHER MATTER,
FACT, OR OCCURRENCE WHATSOEVER.

(H)           ACQUISITION OF LIENS OR GUARANTEES.  EACH OBLIGOR SHALL NOT,
WITHOUT THE PRIOR CONSENT OF AGENT, ACQUIRE ANY RIGHT OR INTEREST IN OR TO ANY
COLLATERAL NOT OWNED BY SUCH OBLIGOR OR ACCEPT ANY GUARANTIES FOR THE
SUBORDINATED DEBT.

SECTION 9.           SUBROGATION.

(A)           SUBROGATION.  UNTIL THE PAYMENT AND PERFORMANCE IN FULL IN CASH OF
ALL SENIOR DEBT, EACH OBLIGOR SHALL NOT HAVE, AND SHALL NOT DIRECTLY OR
INDIRECTLY EXERCISE, ANY RIGHTS THAT IT MAY ACQUIRE BY WAY OF SUBROGATION UNDER
THIS AGREEMENT, BY ANY PAYMENT OR DISTRIBUTION TO AGENT OR ANY LENDER HEREUNDER
OR OTHERWISE.  UPON THE PAYMENT AND PERFORMANCE IN FULL IN CASH OF ALL SENIOR
DEBT, EACH OBLIGOR SHALL BE SUBROGATED TO THE RIGHTS OF AGENT AND THE LENDERS TO
RECEIVE PAYMENTS OR DISTRIBUTIONS APPLICABLE TO THE SENIOR DEBT UNTIL THE
SUBORDINATED DEBT SHALL BE PAID IN FULL.  FOR THE PURPOSES OF THE FOREGOING
SUBROGATION, NO PAYMENTS OR DISTRIBUTIONS TO AGENT OR ANY LENDER OF ANY CASH,
PROPERTY, OR SECURITIES TO WHICH ANY OBLIGOR WOULD BE ENTITLED EXCEPT FOR THE
PROVISIONS OF SECTION 3, SECTION 4, OR SECTION 5 SHALL, AS AMONG SUCH OBLIGOR,
ITS CREDITORS (OTHER THAN AGENT AND THE LENDERS), AND THE OTHER OBLIGORS, BE
DEEMED TO BE A PAYMENT BY THE OTHER OBLIGORS TO OR ON ACCOUNT OF THE SENIOR
DEBT.

(B)           PAYMENTS OVER TO THE OBLIGORS.  IF ANY PAYMENT OR DISTRIBUTION TO
WHICH ANY OBLIGOR WOULD OTHERWISE HAVE BEEN ENTITLED BUT FOR THE PROVISIONS OF
SECTION 3, SECTION 4, OR SECTION 5 SHALL HAVE BEEN APPLIED PURSUANT TO THE
PROVISIONS OF SECTION 3, SECTION 4, OR SECTION 5 TO THE PAYMENT OF ALL AMOUNTS
PAYABLE UNDER THE SENIOR DEBT, SUCH OBLIGOR SHALL BE ENTITLED TO RECEIVE FROM
AGENT OR ANY LENDER, AS THE CASE MAY BE, ANY PAYMENTS OR DISTRIBUTIONS RECEIVED
BY SUCH PERSON IN EXCESS OF THE AMOUNT SUFFICIENT TO PAY IN FULL IN CASH ALL
AMOUNTS PAYABLE UNDER OR

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IN RESPECT OF THE SENIOR DEBT.  IF ANY SUCH EXCESS PAYMENT IS MADE TO AGENT OR
ANY LENDER, SUCH PERSON SHALL PROMPTLY REMIT SUCH EXCESS TO SUCH OBLIGOR AND
UNTIL SO REMITTED SHALL HOLD SUCH EXCESS PAYMENT FOR THE BENEFIT OF SUCH
OBLIGOR.

SECTION 10.         CONTINUING AGREEMENT; REINSTATEMENT.

(A)           CONTINUING AGREEMENT.  THIS AGREEMENT IS A CONTINUING AGREEMENT OF
SUBORDINATION AND SHALL CONTINUE IN EFFECT AND BE BINDING UPON EACH OBLIGOR
UNTIL PAYMENT AND PERFORMANCE IN FULL IN CASH OF THE SENIOR DEBT.  THE
SUBORDINATIONS, AGREEMENTS, AND PRIORITIES SET FORTH HEREIN SHALL REMAIN IN FULL
FORCE AND EFFECT REGARDLESS OF WHETHER ANY PARTY HERETO IN THE FUTURE SEEKS TO
RESCIND, AMEND, TERMINATE, OR REFORM, BY LITIGATION OR OTHERWISE, ITS RESPECTIVE
AGREEMENTS WITH THE OTHER OBLIGORS.

(B)           REINSTATEMENT.  THIS AGREEMENT SHALL CONTINUE TO BE EFFECTIVE OR
SHALL BE REINSTATED, AS THE CASE MAY BE, IF, FOR ANY REASON, ANY PAYMENT OF THE
SENIOR DEBT BY OR ON BEHALF OF ANY OTHER OBLIGOR SHALL BE RESCINDED OR MUST
OTHERWISE BE RESTORED BY AGENT OR ANY LENDER, WHETHER AS A RESULT OF AN
INSOLVENCY EVENT OR OTHERWISE.

SECTION 11.         TRANSFER OF SUBORDINATED DEBT.  EACH OBLIGOR MAY NOT ASSIGN
OR TRANSFER ITS RIGHTS AND OBLIGATIONS IN RESPECT OF THE SUBORDINATED DEBT
WITHOUT THE PRIOR WRITTEN CONSENT OF AGENT, AND ANY SUCH TRANSFEREE OR ASSIGNEE,
AS A CONDITION TO ACQUIRING AN INTEREST IN THE SUBORDINATED DEBT SHALL AGREE TO
BE BOUND HEREBY, IN FORM SATISFACTORY TO AGENT.

SECTION 12.         OBLIGATIONS OF THE OBLIGORS NOT AFFECTED.  THE PROVISIONS OF
THIS AGREEMENT ARE INTENDED SOLELY FOR THE PURPOSE OF DEFINING THE RELATIVE
RIGHTS OF EACH OBLIGOR AGAINST THE OTHER OBLIGORS, ON THE ONE HAND, AND OF AGENT
AND THE LENDERS AGAINST THE OBLIGORS, ON THE OTHER HAND.  NOTHING CONTAINED IN
THIS AGREEMENT SHALL (I) IMPAIR, AS BETWEEN EACH OBLIGOR AND THE OTHER OBLIGORS,
THE OBLIGATION OF THE OTHER OBLIGORS TO PAY THEIR RESPECTIVE OBLIGATIONS WITH
RESPECT TO THE SUBORDINATED DEBT AS AND WHEN THE SAME SHALL BECOME DUE AND
PAYABLE, OR (II) OTHERWISE AFFECT THE RELATIVE RIGHTS OF EACH OBLIGOR AGAINST
THE OTHER OBLIGORS, ON THE ONE HAND, AND OF THE CREDITORS (OTHER THAN AGENT AND
THE LENDERS) OF THE OTHER OBLIGORS AGAINST THE OTHER OBLIGORS, ON THE OTHER
HAND.

SECTION 13.         ENDORSEMENT OF OBLIGOR DOCUMENTS; FURTHER ASSURANCES AND
ADDITIONAL ACTS.

(A)           ENDORSEMENT OF OBLIGOR DOCUMENTS.  AT THE REQUEST OF AGENT, ALL
DOCUMENTS AND INSTRUMENTS EVIDENCING ANY OF THE SUBORDINATED DEBT, IF ANY, SHALL
BE ENDORSED WITH A LEGEND NOTING THAT SUCH DOCUMENTS AND INSTRUMENTS ARE SUBJECT
TO THIS AGREEMENT, AND EACH OBLIGOR SHALL PROMPTLY DELIVER TO AGENT EVIDENCE OF
THE SAME.

(B)           FURTHER ASSURANCES AND ADDITIONAL ACTS.  EACH OBLIGOR SHALL
EXECUTE, ACKNOWLEDGE, DELIVER, FILE, NOTARIZE, AND REGISTER AT ITS OWN EXPENSE
ALL SUCH FURTHER AGREEMENTS, INSTRUMENTS, CERTIFICATES, FINANCING STATEMENTS,
DOCUMENTS, AND ASSURANCES, AND PERFORM SUCH ACTS AS AGENT REASONABLY SHALL DEEM
NECESSARY OR APPROPRIATE TO EFFECTUATE THE PURPOSES OF THIS AGREEMENT, AND
PROMPTLY PROVIDE AGENT WITH EVIDENCE OF THE FOREGOING REASONABLY SATISFACTORY IN
FORM AND SUBSTANCE TO AGENT.

SECTION 14.         NOTICES.  ALL NOTICES AND OTHER COMMUNICATIONS PROVIDED FOR
HEREUNDER SHALL, UNLESS OTHERWISE STATED HEREIN, BE IN WRITING (INCLUDING BY
FACSIMILE TRANSMISSION) AND SHALL

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BE MAILED, SENT, OR DELIVERED IN ACCORDANCE WITH THE NOTICE PROVISIONS CONTAINED
IN THE LOAN AGREEMENT.

SECTION 15.         NO WAIVER; CUMULATIVE REMEDIES.  NO FAILURE ON THE PART OF
AGENT OR ANY LENDER TO EXERCISE, AND NO DELAY IN EXERCISING, ANY RIGHT, REMEDY,
POWER, OR PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL ANY
SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT, REMEDY, POWER, OR PRIVILEGE
PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER
RIGHT, REMEDY, POWER, OR PRIVILEGE.  THE RIGHTS AND REMEDIES UNDER THIS
AGREEMENT ARE CUMULATIVE AND NOT EXCLUSIVE OF ANY RIGHTS, REMEDIES, POWERS, AND
PRIVILEGES THAT MAY OTHERWISE BE AVAILABLE TO AGENT OR ANY LENDER.

SECTION 16.         COSTS AND EXPENSES.  EACH OF THE OBLIGORS, JOINTLY AND
SEVERALLY, AGREES TO PAY TO AGENT AND THE LENDERS ON DEMAND (A) THE REASONABLE
OUT-OF-POCKET COSTS AND EXPENSES OF SUCH PERSON, AND THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL TO SUCH PERSON, IN CONNECTION WITH THE NEGOTIATION,
PREPARATION, EXECUTION, DELIVERY, AND ADMINISTRATION OF THIS AGREEMENT, AND ANY
AMENDMENTS, MODIFICATIONS, OR WAIVERS OF THE TERMS THEREOF AND (B) ALL COSTS AND
EXPENSES OF SUCH PERSON, AND THE FEES AND DISBURSEMENTS OF COUNSEL TO SUCH
PERSON, IN CONNECTION WITH THE ENFORCEMENT OR ATTEMPTED ENFORCEMENT OF, AND
PRESERVATION OF RIGHTS OR INTERESTS UNDER, THIS AGREEMENT, INCLUDING ANY LOSSES,
COSTS AND EXPENSES SUSTAINED BY SUCH PERSON AS A RESULT OF ANY FAILURE BY ANY
OBLIGOR TO PERFORM OR OBSERVE ITS OBLIGATIONS CONTAINED IN THIS AGREEMENT.

SECTION 17.         SURVIVAL.  ALL COVENANTS, AGREEMENTS, REPRESENTATIONS AND
WARRANTIES MADE IN THIS AGREEMENT SHALL, EXCEPT TO THE EXTENT OTHERWISE PROVIDED
HEREIN, SURVIVE THE EXECUTION AND DELIVERY OF THIS AGREEMENT, AND SHALL CONTINUE
IN FULL FORCE AND EFFECT SO LONG AS ANY SENIOR DEBT REMAINS UNPAID.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE OBLIGATIONS OF EACH OBLIGOR UNDER
SECTION 16 SHALL SURVIVE THE SATISFACTION OF THE SENIOR DEBT.

SECTION 18.         BENEFITS OF AGREEMENT.  THIS AGREEMENT IS ENTERED INTO FOR
THE SOLE PROTECTION AND BENEFIT OF THE PARTIES HERETO AND THEIR SUCCESSORS AND
ASSIGNS, AND NO OTHER PERSON SHALL BE A DIRECT OR INDIRECT BENEFICIARY OF, OR
SHALL HAVE ANY DIRECT OR INDIRECT CAUSE OF ACTION OR - CLAIM IN CONNECTION WITH,
THIS AGREEMENT.

SECTION 19.         BINDING EFFECT.  THIS AGREEMENT SHALL BE BINDING UPON, INURE
TO THE BENEFIT OF AND BE ENFORCEABLE BY EACH OBLIGOR, AGENT, EACH LENDER, EACH
BANK PRODUCT PROVIDER AND THEIR RESPECTIVE SUCCESSORS AND PERMITTED ASSIGNS.

SECTION 20.         GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY
TRIAL WAIVER.

(A)           THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT AND
ANY DISPUTE ARISING OUT OF THE RELATIONSHIP BETWEEN ANY OBLIGOR AND AGENT OR ANY
LENDER, WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, BUT EXCLUDING ANY PRINCIPLES OF
CONFLICTS OF LAW OR OTHER RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE
LAW OF ANY JURISDICTION OTHER THAN THE LAWS OF THE STATE OF NEW YORK.

(B)           EACH OBLIGOR HEREBY IRREVOCABLY CONSENTS AND SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK FOR NEW
YORK COUNTY AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, WHICHEVER AGENT MAY ELECT, AND WAIVES ANY OBJECTION BASED ON VENUE OR
FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN ARISING UNDER
THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS

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OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF ANY
OBLIGOR AND AGENT OR ANY LENDER IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT, EQUITY
OR OTHERWISE, AND AGREES THAT ANY DISPUTE ARISING OUT OF THE RELATIONSHIP
BETWEEN ANY OBLIGOR OR ANY BORROWER AND AGENT OR ANY LENDER OR THE CONDUCT OF
ANY SUCH PERSONS IN CONNECTION WITH THIS AGREEMENT, THE OTHER FINANCING
AGREEMENTS OR OTHERWISE SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE
(EXCEPT THAT AGENT AND LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY OBLIGOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION WHICH AGENT DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON
ANY COLLATERAL AT ANY TIME GRANTED BY ANY BORROWER OR ANY OBLIGOR TO AGENT OR
ANY LENDER OR TO OTHERWISE ENFORCE ITS RIGHTS AGAINST ANY OBLIGOR OR ITS
PROPERTY).

(C)           EACH OBLIGOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED
MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO ITS ADDRESS SET FORTH BELOW AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME
SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS, OR, AT AGENT’S OPTION, BY
SERVICE UPON ANY OBLIGOR IN ANY OTHER MANNER PROVIDED UNDER THE RULES OF ANY
SUCH COURTS.  WITHIN THIRTY (30) DAYS AFTER SUCH SERVICE, ANY OBLIGOR SO SERVED
SHALL APPEAR IN ANSWER OF SUCH PROCESS, FAILING WHICH SUCH OBLIGOR SHALL BE
DEEMED IN DEFAULT AND JUDGMENT MAY BE ENTERED BY AGENT AGAINST SUCH OBLIGOR FOR
THE AMOUNT OF THE CLAIM AND OTHER RELIEF REQUESTED.

(D)           EACH OBLIGOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR ANY
OF THE OTHER FINANCING AGREEMENTS OR (II) IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF ANY OF OBLIGORS AND AGENT OR ANY LENDER IN
RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.  EACH
OBLIGOR HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY OBLIGOR,
ANY LENDER OR AGENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF OBLIGORS, LENDERS AND AGENT
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(E)           AGENT AND LENDERS SHALL NOT HAVE ANY LIABILITY TO OBLIGORS
(WHETHER IN TORT, CONTRACT, EQUITY OR OTHERWISE) FOR LOSSES SUFFERED BY OBLIGORS
IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR
RELATIONSHIPS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT
OCCURRING IN CONNECTION HEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND
NON-APPEALABLE JUDGMENT OR COURT ORDER BINDING ON AGENT OR SUCH LENDER THAT THE
LOSSES WERE THE RESULT OF ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.  IN ANY SUCH LITIGATION, AGENT AND LENDERS SHALL BE ENTITLED
TO THE BENEFIT OF THE REBUTTABLE PRESUMPTION THAT IT ACTED IN GOOD FAITH AND
WITH THE EXERCISE OF ORDINARY CARE IN THE PERFORMANCE BY IT OF THE TERMS OF THE
LOAN AGREEMENT AND THE OTHER FINANCING AGREEMENTS.

SECTION 21.         SUBMISSION TO JURISDICTION.  EACH OBLIGOR HEREBY IRREVOCABLY
CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE OF NEW YORK
AND THE STATE AND FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN, COUNTY OF
NEW YORK, STATE OF

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NEW YORK, WHICHEVER AGENT MAY ELECT, AND WAIVES ANY OBJECTION BASED ON VENUE OR
FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN ARISING UNDER
THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE, AND AGREES THAT ANY
DISPUTE WITH RESPECT TO ANY SUCH MATTERS SHALL BE HEARD ONLY IN THE COURTS
DESCRIBED ABOVE (EXCEPT THAT AGENT AND LENDERS SHALL HAVE THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST ANY OBLIGOR OR ITS OR THEIR PROPERTY IN THE COURTS
OF ANY OTHER JURISDICTION WHICH AGENT DEEMS NECESSARY OR APPROPRIATE IN ORDER TO
REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE ITS RIGHTS AGAINST ANY OBLIGOR
OR ITS OR THEIR PROPERTY).

SECTION 22.         ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS.

(A)           ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
OF EACH OF THE OBLIGORS, AGENT AND EACH OF THE LENDERS WITH RESPECT TO THE
MATTERS SET FORTH HEREIN AND SUPERSEDES ANY PRIOR AGREEMENTS, COMMITMENTS,
DRAFT, COMMUNICATIONS, DISCUSSIONS AND UNDERSTANDINGS, ORAL OR WRITTEN, WITH
RESPECT THERETO.

(B)           AMENDMENTS AND WAIVERS.  NO AMENDMENT TO ANY PROVISION OF THIS
AGREEMENT SHALL IN ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE IN WRITING
AND SIGNED BY EACH OF THE OBLIGORS AND AGENT; AND NO WAIVER OF ANY PROVISION OF
THIS AGREEMENT, OR CONSENT TO ANY DEPARTURE BY ANY OBLIGOR THEREFROM, SHALL IN
ANY EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE IN WRITING AND SIGNED BY AGENT. 
ANY SUCH AMENDMENT, WAIVER, OR CONSENT SHALL BE EFFECTIVE ONLY IN THE SPECIFIC
INSTANCE AND FOR THE SPECIFIC PURPOSE FOR WHICH GIVEN.

SECTION 23.         CONFLICTS.  IN CASE OF ANY CONFLICT OR INCONSISTENCY BETWEEN
ANY TERMS OF THIS AGREEMENT, ON THE ONE HAND, AND ANY DOCUMENTS OR INSTRUMENTS
IN RESPECT OF THE SUBORDINATED DEBT, ON THE OTHER HAND, THEN THE TERMS OF THIS
AGREEMENT SHALL CONTROL.

SECTION 24.         SEVERABILITY.  WHENEVER POSSIBLE, EACH PROVISION OF THIS
AGREEMENT SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
ALL APPLICABLE LAWS AND REGULATIONS.  IF, HOWEVER, ANY PROVISION OF THIS
AGREEMENT SHALL BE PROHIBITED BY OR INVALID UNDER ANY SUCH LAW OR REGULATION IN
ANY JURISDICTION, IT SHALL, AS TO SUCH JURISDICTION, BE DEEMED MODIFIED TO
CONFORM TO THE MINIMUM REQUIREMENTS OF SUCH LAW OR REGULATION, OR, IF FOR ANY
REASON IT IS NOT DEEMED SO MODIFIED, IT SHALL BE INEFFECTIVE AND INVALID ONLY TO
THE EXTENT OF SUCH PROHIBITION OR INVALIDITY WITHOUT AFFECTING THE REMAINING
PROVISIONS OF THIS AGREEMENT OR THE VALIDITY OR EFFECTIVENESS OF SUCH PROVISION
IN ANY OTHER JURISDICTION.

SECTION 25.         INTERPRETATION.  THIS AGREEMENT IS THE RESULT OF
NEGOTIATIONS BETWEEN, AND HAVE BEEN REVIEWED BY THE RESPECTIVE COUNSEL TO, THE
OBLIGORS, AGENT AND EACH LENDER AND IS THE PRODUCT OF ALL PARTIES HERETO. 
ACCORDINGLY, THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST AGENT OR ANY LENDER
MERELY BECAUSE OF THEIR INVOLVEMENT IN THE PREPARATION HEREOF.

SECTION 26.         COUNTERPARTS; TELEFACSIMILE EXECUTION.  THIS AGREEMENT MAY
BE EXECUTED IN ANY NUMBER OF COUNTERPARTS AND BY DIFFERENT PARTIES HERETO IN
SEPARATE COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED SHALL BE DEEMED TO BE AN
ORIGINAL AND ALL OF WHICH TAKEN TOGETHER SHALL CONSTITUTE BUT ONE AND THE SAME
AGREEMENT.  DELIVERY OF AN EXECUTED COUNTERPART OF THIS AGREEMENT BY
TELEFACSIMILE SHALL BE EQUALLY EFFECTIVE AS DELIVERY OF AN ORIGINAL EXECUTED
COUNTERPART OF THIS AGREEMENT.  ANY PARTY DELIVERING AN EXECUTED COUNTERPART OF
THIS AGREEMENT BY TELEFACSIMILE ALSO SHALL DELIVER AN ORIGINAL EXECUTED

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COUNTERPART OF THIS AGREEMENT BUT THE FAILURE TO DELIVER AN ORIGINAL EXECUTED
COUNTERPART SHALL NOT AFFECT THE VALIDITY, ENFORCEABILITY, AND BIND EFFECT OF
THIS AGREEMENT.

SECTION 27.         TERMINATION OF AGREEMENT.  UPON PAYMENT AND PERFORMANCE IN
FULL IN CASH OF THE SENIOR DEBT, THIS AGREEMENT SHALL TERMINATE AND AGENT SHALL
PROMPTLY EXECUTE AND DELIVER TO EACH OBLIGOR SUCH DOCUMENTS AND INSTRUMENTS AS
SHALL BE REASONABLY NECESSARY TO EVIDENCE SUCH TERMINATION; PROVIDED, HOWEVER,
THAT THE OBLIGATIONS OF EACH OBLIGOR UNDER SECTION 16 SHALL SURVIVE SUCH
TERMINATION.

SECTION 28.         ACKNOWLEDGMENT AND RESTATEMENT.

(A)           EACH OBLIGOR HEREBY ACKNOWLEDGES, CONFIRMS AND AGREES THAT: (I)
THE EXISTING INTERCOMPANY AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY
OBLIGORS AND IS IN FULL FORCE AND EFFECT AS OF THE DATE HEREOF; (II) THE
AGREEMENTS AND OBLIGATIONS OF OBLIGORS CONTAINED IN THE EXISTING INTERCOMPANY
AGREEMENT CONSTITUTE LEGAL, VALID AND BINDING OBLIGATIONS OF OBLIGORS
ENFORCEABLE AGAINST IT IN ACCORDANCE WITH THE TERMS THEREOF, AND OBLIGORS HAVE
NO VALID DEFENSE, OFFSET OR COUNTERCLAIM TO THE ENFORCEMENT OF SUCH OBLIGATIONS;
AND (III) AGENT, LENDERS AND BANK PRODUCT PROVIDER ARE ENTITLED TO ALL OF THE
RIGHTS, REMEDIES AND BENEFITS PROVIDED FOR IN THE EXISTING INTERCOMPANY
AGREEMENT.

(B)           AS OF THE DATE HEREOF, THE TERMS, CONDITIONS, AGREEMENTS,
COVENANTS, REPRESENTATIONS AND WARRANTIES SET FORTH IN THE EXISTING INTERCOMPANY
AGREEMENT ARE HEREBY AMENDED AND RESTATED IN THEIR ENTIRETY, AND AS SO AMENDED
AND RESTATED, ARE REPLACED AND SUPERSEDED BY THE TERMS, CONDITIONS AGREEMENTS,
COVENANTS, REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, EXCEPT
THAT NOTHING HEREIN SHALL IMPAIR OR ADVERSELY AFFECT THE CONTINUATION OF THE
LIABILITY OF OBLIGORS FOR THE OBLIGATIONS OR THE SECURITY INTERESTS AND LIENS
HERETOFORE GRANTED, PLEDGED OR ASSIGNED TO AGENT FOR ITSELF AND THE BENEFIT OF
LENDERS AND BANK PRODUCT PROVIDER.  THE AMENDMENT AND RESTATEMENT CONTAINED
HEREIN SHALL NOT, IN ANY MANNER, BE CONSTRUED TO CONSTITUTE PAYMENT OF, OR
IMPAIR, LIMIT, CANCEL OR EXTINGUISH, OR CONSTITUTE A NOVATION IN RESPECT OF, THE
INDEBTEDNESS AND OTHER OBLIGATIONS AND LIABILITIES OF OBLIGORS EVIDENCED BY OR
ARISING UNDER THE EXISTING INTERCOMPANY AGREEMENT AND ANY OF THE OTHER EXISTING
FINANCING AGREEMENTS TO WHICH OBLIGORS ARE A PARTY, AND THE LIENS AND SECURITY
INTERESTS SECURING SUCH INDEBTEDNESS AND OTHER OBLIGATIONS AND LIABILITIES SHALL
NOT IN ANY MANNER BE IMPAIRED, LIMITED, TERMINATED, WAIVED OR RELEASED.

 

[Signatures follow on next page]

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IN WITNESS WHEREOF, the undersigned has executed and delivered this Agreement as
of the date first written above.

LERNER NEW YORK, INC.,

 

a Delaware corporation

 

 

 

 

By:

/s/ Ronald W. Ristau

 

Name:

Ronald W. Ristau

 

Title:

President, Chief Financial Officer and Secretary

 

 

 

 

NY & CO. GROUP, INC.,

 

a Delaware corporation

 

 

 

 

By:

/s/ Ronald W. Ristau

 

Name:

Ronald W. Ristau

 

Title:

President, Chief Financial Officer and Secretary

 

 

 

 

JASMINE COMPANY, INC.,

 

a Massachusetts corporation

 

 

 

 

By:

/s/ Ronald W. Ristau

 

Name:

Ronald W. Wistau

 

Title:

President

 

 

 

 

LERNER NEW YORK HOLDING, INC.,

 

a Delaware corporation

 

 

 

 

By:

/s/ Ronald W. Ristau

 

Name:

Ronald W. Ristau

 

Title:

President, Chief Financial Officer and Secretary

 

 

 

 

LERNCO, INC.,

 

a Delaware corporation

 

 

 

 

By:

/s/ Ronald W. Ristau

 

Name:

Ronald W. Ristau

 

Title:

President

 

[SIGNATURES CONTINUE ON NEXT PAGE]

 

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

 

 

 

 

NEVADA RECEIVABLE FACTORING, INC.,

 

a Nevada corporation

 

 

 

 

By:

/s/ Ronald W. Ristau

 

Name:

Ronald W. Ristau

 

Title:

Secretary

 

 

 

 

ASSOCIATED LERNER SHOPS OF AMERICA, INC.,

 

a New York corporation

 

 

 

 

By:

/s/ Ronald W. Ristau

 

Name:

Ronald W. Ristau

 

Title:

Secretary

 

 

 

 

LERNER NEW YORK GC, LLC,

 

an Ohio limited liability company

 

 

 

 

 

By: LERNER NEW YORK, INC.,

 

 

Its: Sole Member

 

 

 

 

 

By:

/s/ Ronald W. Ristau

 

 

Name:

Ronald W. Ristau

 

 

Title:

President, Chief Financial Officer and Secretary

 

 

 

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent

 

 

 

 

By:

/s/ Laurence Forte

 

Name:

Laurence Forte

 

Title:

Managing Director

 

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