**Exhibit10.7**

EXECUTED VERSION

**SECONDAMENDED AND RESTATED STOCK PLEDGE AGREEMENT**

THIS SECOND AMENDED ANDRESTATED STOCK PLEDGE AGREEMENT (this “Agreement”), dated as of August 22,2007, is entered into by and between NEW YORK & COMPANY, INC., a Delawarecorporation (“Pledgor”), and WACHOVIA BANK, NATIONAL ASSOCIATION, anational banking association, in its capacity as agent (in such capacity, “Pledgee”)for the Lenders (as hereinafter defined) and Bank Product Providers (as definedin the Loan Agreement).

RECITALS

WHEREAS, Pledgor and Pledgeeentered into the Amended and Restated Stock Pledge Agreement, dated as of March16, 2004, as in effect on the date hereof (the “Existing Pledge Agreement”)and the other agreements, documents and instruments executed or delivered inconnection therewith as heretofore amended (the “Existing FinancingAgreements”).

WHEREAS, Pledgor owns onehundred percent (100%) of the issued and outstanding Capital Stock (as definedin the Loan Agreement) of Lerner New York Holding, Inc. (the “Company”),and may from time to time in the future, subject to the terms and conditionsset forth in the Financing Agreements, acquire one or more additionalSubsidiaries (as defined in the Loan Agreement) (“Future Subsidiaries”).

WHEREAS, LernerNew York, Inc., Jasmine Company, Inc., and Lernco, Inc. (each individually a “Borrower”and collectively “Borrowers”), Pledgee and the persons from time to time partyto the Loan Agreement (as hereinafter defined) as lenders (collectively, “Lenders”),have amended and restated or are about to amend and restate the existingfinancing arrangements of Agent, Lenders, Borrowers and Guarantors pursuant towhich Lenders (or Pledgee on behalf of Lenders) may make loans and advances andprovide other financial accommodations to Borrowers as set forth in the SecondAmended and Restated Loan and Security Agreement, dated as of the date hereof,by and among Pledgee, Lenders, Borrowers and Guarantors (as the same now existsor 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/ordelivered in connection therewith or related thereto, including, but notlimited to, this Agreement (all of the foregoing, together with the LoanAgreement, as the same now exist or may hereafter be amended, modified,supplemented, extended, renewed, restated or replaced, being collectivelyreferred to herein as the “Financing Agreements”).

WHEREAS, Pledgor desires topledge to Pledgee, for its benefit and the ratable benefit of the Lenders andBank Product Providers (as defined in the Loan Agreement), a continuingsecurity interest in all of the Capital Stock of the Company, any and all ofthe Future Subsidiaries organized under the laws of any jurisdiction within theUnited States of America (“Domestic Future Subsidiaries”) and 65% of theCapital Stock of all Future Subsidiaries organized under the laws of anyjurisdiction outside of the United States of America (“Foreign FutureSubsidiaries”), in each case as collateral security for the Obligations (asdefined below).

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WHEREAS, in order to inducePledgee and the Lenders to enter into the Loan Agreement, Pledgor and Pledgeedesire to amend and restate the Existing Pledge Agreement in its entirety asset forth herein.

AGREEMENT

NOW, THEREFORE, inconsideration of the foregoing facts the parties hereto agree as follows:

# 1.             Pledge.  Pledgor hereby delivers, pledges and grants acontinuing security interest to Pledgee, for Pledgor’s benefit and the ratablebenefit of the Lenders and the Bank Product Providers, in all of the CapitalStock of the Company, all of the Capital Stock of each Domestic FutureSubsidiary and 65% of the Capital Stock of each Foreign Future Subsidiary,whether now or hereafter owned or beneficially owned by Pledgor, together withall proceeds, replacements, substitutions, newly issued stock, stock receivedby reason of a stock split, bonus or any other form of issue, dividend ordistribution with respect to or arising from such stock (collectively, the “Collateral”).  Pledgor shall forthwith deliver to Pledgeethe Collateral together with stock powers in form and substance satisfactory toPledgee duly executed in blank, with signatures guaranteed, regarding theCollateral.  Pledgor hereby authorizesPledgee and its agents and attorneys to file any and all UCC financingstatements and amendments thereto deemed desirable by Pledgee to perfect orevidence the security interest in the Collateral granted hereunder.

# 2.             Obligations Secured.  The pledge and security interest effectuatedhereby shall secure all of Pledgor’s obligations to Pledgee and/or the Lenders,which obligations shall consist of all debts, obligations and liabilities ofPledgor to Pledgee and/or the Lenders under any Financing Agreement by whichPledgor is bound, including, without limitation, all obligations that areincluded in the definition of “Obligations” under the Loan Agreement(collectively, the “Obligations”).

# 3.             Representations And WarrantiesRegarding The Collateral.  Pledgorrepresents and warrants that:  (a) all ofthe shares of stock described in Paragraph 1 hereof are fully paid,non-assessable and validly issued; (b) the Collateral was not issued inviolation of any person’s or entity’s preemptive rights; (c) the Collateral isowned free and clear of any and all security interests, pledges, options topurchase or sell, redemptions or liens, other than the liens in favor ofPledgee; (d) Pledgor has full power to convey the Collateral; (e) no financingstatements covering the Collateral are recorded with any cognizant stateofficial or recording office (other than in favor of Pledgee, for itself andthe ratable benefit of the Lenders and Bank Product Providers); and (f) theCollateral is free and clear of any claims, security interests or liens otherthan those in favor of Pledgee.

# 4.             Covenants.  Pledgor will not permit the Company to (i)authorize the amendment of or amend its articles of organization, operatingagreement or other organizational documents to provide that its Capital Stockis governed by Article 8 of the Code, or (ii) authorize the issuance of orissue certificates evidencing its Capital Stock.

# 5.             Events Of Default.  For purposes herein, “Event of Default”shall mean any “Event of Default” as defined under the Loan Agreement.  Pledgor hereby appoints Pledgee as 

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# its attorney-in-fact toarrange, upon the occurrence and during the continuance of an Event of Default,for a transfer of the Collateral on the books of the Company or FutureSubsidiary, as applicable, to the name of Pledgee or to the name of Pledgee’snominee.

# 6.             Voting Rights.  During the term of this Agreement, so long asthere shall not occur any Event of Default, Pledgor shall have the right tovote the Collateral on all corporate questions for all purposes notinconsistent with the terms of this Agreement. Upon the occurrence and during the continuance of an Event of Default,Pledgee shall thereafter have, at its discretion, the option to exercise allvoting powers and other corporate rights pertaining to the Collateral.  Pledgee may, upon or at any time after theoccurrence of an Event of Default, at its option, transfer or register theCollateral or any part thereof into its own or its nominee’s name.

# 7.             Stock Adjustments And Dividends.  If during the term of this Agreement, anystock dividend, reclassification, readjustment or other change is declared ormade in the capital structure of the Company or Future Subsidiary or any optionincluded within the Collateral is exercised, or both, all new, substituted andadditional shares, or other securities, issued to Pledgor by reason of any suchchange or exercise shall be delivered to and held by Pledgee under the terms ofthis Agreement in the same manner as the Collateral originally pledgedhereunder.  During the term of thisAgreement and so long as there shall not have occurred an Event of Default,Pledgor shall have the right to receive any dividend or other distribution(other than dividends or distributions of stock) made on account of theCollateral; provided, however, that upon the occurrence of anEvent of Default, unless otherwise permitted under the terms of the LoanAgreement or the Intercompany Subordination Agreement (as defined in the LoanAgreement) Pledgor shall immediately deliver all such dividends or otherdistributions to Pledgee in the same form received (except that dividendsreceived in cash shall be remitted to the Blocked Account) and in the samemanner as the Collateral pledged hereunder.

# 8.             Warrants And Rights.  If during the term of this Agreement,subscription warrants or any other rights or options shall be issued inconnection with the Collateral, such warrants, rights and options shall beimmediately assigned by Pledgor to Pledgee to be held under the terms of thisAgreement in the same manner as the Collateral originally pledged hereunder.

# 9.             Remedies Upon Default.  In addition to the other remedies providedfor herein, in the Loan Agreement or otherwise available under applicable law,upon the occurrence and during the continuance of an Event of Default:

## (a)           Pledgee may:

### (i)            exercise in respect to theCollateral, any one or more of the rights and remedies available under the NewYork Uniform Commercial Code and other applicable law; and

### (ii)           sell or otherwise assign, give anoption or options to purchase or dispose of and deliver the Collateral (orcontract to do so), or any part thereof, in one or more parcels at public orprivate sale or sales, at any exchange, broker’s board or at any of Pledgee’soffices or elsewhere upon such terms and conditions as it may deem advisableand at such 

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### prices as itmay deem best, for cash, on credit or for future delivery without assumption ofany credit risk, free of any claim or right of whatsoever kind (including anyright or equity of redemption) of Pledgor, which claim, right and equity arehereby expressly waived and released. Pledgee or any Lender shall have the right to the extent permitted byapplicable law, upon any such sale or sales, public or private, to purchase thewhole or any part of the Collateral so sold; provided, however,Pledgor shall not receive any net proceeds, if any, of any such credit sale orfuture delivery until cash proceeds are actually received by Pledgee (whichcash proceeds shall be applied by Pledgee to the Obligations) and after allObligations have been paid in full.  Incase of any sale of all or any part of the Collateral on credit or for futuredelivery, the Collateral so sold may be retained by Pledgee until the sellingprice is paid by the purchaser thereof, but Pledgee shall incur no liability incase of the failure of such purchaser to pay for the Collateral so sold and, incase of such failure, the Collateral may again be sold as herein provided.

## (b)           Any noticerequired to be given by Pledgee of a sale of the Collateral, or any partthereof, or of any other intended action by Pledgee, which occurs not less thanfive (5) days prior to such proposed action, shall constitute commerciallyreasonable and fair notice to Pledgor thereof. If, after the occurrence of an Event of Default, a statement renouncingor modifying any right to notification of sale or other intended dispositionhas been signed by Pledgor, during the continuance of such Event of Default, nosuch notification need be given to Pledgor.

## (c)           Pledgee shallnot be obligated to make any sale or other disposition of the Collateral, orany part thereof unless the terms thereof shall, in its sole discretion, besatisfactory to it.  Pledgee may, if itdeems it reasonable, postpone or adjourn the sale of any of the Collateral, orany part thereof, from time to time by an announcement at the time and place ofsuch sale or by announcement at the time and place of such postponed oradjourned sale, without being required to give a new notice of sale.  Pledgor agrees that Pledgee has noobligations to preserve rights against prior parties to the Collateral.

## (d)           Pledgoracknowledges and agrees that Pledgee may comply with limitations orrestrictions in connection with any sale of the Collateral in order to avoidany violation of applicable law or in order to obtain any required approval ofthe sale or of the purchase thereof by any governmental regulatory authority orofficial and, without limiting the generality of the foregoing, Pledgoracknowledges and agrees that Pledgee may be unable to effect a public sale ofany or all the Collateral by reason of certain prohibitions contained in thefederal securities laws and applicable state securities laws, but may becompelled to resort to one or more private sales thereof to a restricted groupof purchasers who will be obliged to agree, among other things, to acquire suchsecurities for their own account for investment and not with a view to thedistribution or resale thereof.  Pledgoracknowledges and agrees that any such private sale may result in prices andother terms less favorable to the seller than if such sale were a public sale.  Notwithstanding any such circumstances,Pledgor acknowledges and agrees that such compliance shall not result in anysuch private sale for such reason alone being deemed 

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## to have been made in a commercially unreasonable manner.  Pledgee shall not be liable or accountable toPledgor for any discount allowed by reason of the fact that the Collateral issold in compliance with any such limitation or restriction.  Pledgee shall not be under any obligation todelay a sale of any of the Collateral for the period of time necessary topermit the issuer of such securities to register such securities for publicsale under the federal securities laws, or under applicable state securitieslaws, even if the issuer desires, requests or would agree to do so.

## (e)           Any cash heldby Pledgee as Collateral and all cash proceeds received by Pledgee in respectof any sale of, collection from, or other realization upon all or any part ofthe Collateral may, in the discretion of Pledgee, be held by Pledgee asCollateral for the Obligations and/or then or at any time thereafter applied,without any marshalling of rights, remedies or assets, and after payment of anyamounts payable to Pledgee or any Lender hereunder and, after deducting allreasonable costs and expenses of every kind in connection with the care,safekeeping, collection, sale, delivery or otherwise of any or all of theCollateral or in any way relating to the rights of Pledgee hereunder (includingattorneys’ fees and disbursements), to the payment of reduction of theObligations.  Any surplus of such cash orcash proceeds held by Pledgee and remaining after payment in full of all theObligations shall be paid over to Pledgor or to whomsoever may be lawfullyentitled to receive such surplus.

# 10.           Successors And Assigns.  This Agreement shall be binding upon andinure to the benefit of Pledgor, Pledgee, and their respective successors andassigns.  This Agreement may be sold,assigned and transferred by Pledgee, whether in accordance with the LoanAgreement or otherwise, to another person, firm, association or corporation, including,without limitation, any lender for whom Pledgee is acting as agent.

# 11.           Applicable Law.  This Agreement shall be governed by andconstrued under the internal laws of the State of New York but excluding anyprinciples of conflicts of law or other rule of law that would cause theapplication of the law of any jurisdiction other than the laws of the State ofNew York.  Whenever possible, eachprovision of this Agreement shall be interpreted in such manner as to beeffective and valid under applicable law, but, if any provision of thisAgreement shall be held to be prohibited or invalid under applicable law, suchprovision shall be ineffective only to the extent of such prohibition orinvalidity, without invalidating the remainder of such provision or theremaining provisions of this Agreement.

# 12.           Further Assurances.  Pledgor covenants and agrees that:  (a) it will execute and deliver, or cause tobe executed and delivered, all such other stock powers, proxies, instrumentsand documents as Pledgee may reasonably request from time to time in order toperfect and protect the security interests granted or purported to be granted hereunder(including without limitation the security interest granted in any CapitalStock of any Future Subsidiary) or otherwise to carry out the provisions andpurposes hereof, (b) it will take all such other action, as Pledgee mayreasonably request from time to time in order to perfect and protect thesecurity interests granted or purported to be granted hereunder (including withoutlimitation the security interest granted in any Capital Stock of any FutureSubsidiary) or otherwise to carry out the provisions and purposes hereof; (c)the Collateral will remain free and clear of all security interests and liensthroughout the term hereof, and (d) it will forward to Pledgee, immediately 

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# upon receipt, copies ofany information or documents received by Pledgor in connection with theCollateral.  For purposes of definingsecurity interest perfection, Pledgor further agrees that any Collateral whichis in transit to Pledgee shall be deemed to be in Pledgee’s possession.  Pledgor warrants and represents that none ofthe Collateral constitutes margin securities for the purposes of Regulations T,U or X, and also warrants and represents that none of the proceeds of any loansmade by Pledgee or the Lenders to Pledgor will be used to purchase or carry anymargin stock.

# 13.           Integrated Agreement.  Except as otherwise provided in the LoanAgreement, this Agreement sets forth the entire understanding of the partieswith respect to the within matters, and may not be modified except by a writingsigned by all parties.

# 14.           Incorporation By Reference.  All of the terms and conditions, including,without limitation, the warranties, representations, covenants, agreements anddefault provisions, of the Loan Agreement are incorporated herein by thisreference.

# 15.           Counterparts.  This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument and agreement.

# 16.           Section Headings.  The section headings herein are forconvenience of reference only, and shall not affect in any way theinterpretation of any of the provisions hereof.

# 17.           Release.  At such time as Pledgor shall completelysatisfy all of the non-contingent Obligations, and the Financing Agreementshave been terminated, other than upon enforcement of Pledgee’s remedies underthe Financing Agreements after an Event of Default, (i) Pledgee will executeand deliver to Pledgor a release or other instrument as may be necessary orproper to release Pledgor’s lien in the Collateral and return to Pledgor allstock certificates and stock powers relating to this Agreement which are in itspossession, subject to any dispositions thereof which may have been made byPledgee pursuant hereto and (ii) this Agreement will terminate along with suchother Financing Agreements as provided for in the Loan Agreement.

# 18.           Acknowledgment and Restatement.

## (a)           Pledgor herebyacknowledges, confirms and agrees that Pledgor is indebted to Pledgeeand Lenders in respect of any obligations, liabilities or indebtedness forloans, advances and letter of credit accommodations to Pledgee under theExisting Loan Agreement, the Existing Security Agreement or the other ExistingFinancing Agreements, together with all interest accrued and accruing thereon,and all fees, costs, expenses and other charges relating thereto, all of whichare unconditionally owing by Pledgor to Pledgee without offset, defense, orcounterclaim of any kind, nature or description whatsoever. Pledgor herebyratifies, assents, adopts and agrees to pay all of the Obligations arisingbefore, on or after the date hereof.

## (b)           Pledgorhereby acknowledges, confirms and agrees that Pledgee has and shall continue tohave, for itself and the benefit of Lenders, valid, enforceable and perfectedfirst priority security interests in and liens upon all of the Collateralheretofore granted to Pledgee pursuant to the Existing Security Agreement tosecure all 

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## of the Obligations subject only to liens permitted under the LoanAgreement and the other Financing Agreements.

## (c)           Pledgorhereby acknowledges, confirms and agrees that: (i) the Existing SecurityAgreement has been duly executed and delivered by Pledgor and is in full forceand effect as of the date hereof; (ii) the agreements and obligations ofPledgor contained in the Existing Security Agreement constitute legal, validand binding obligations of Pledgor enforceable against it in accordance withthe terms thereof, and Pledgor has no valid defense, offset or counterclaim tothe enforcement of such obligations; and (iii) Pledgee and Lenders are entitledto all of the rights, remedies and benefits provided for in the Existing SecurityAgreement.

## (d)           Except asotherwise stated in Section 18(b) hereof and in this Section 18(d), as of thedate hereof, the terms, conditions, agreements, covenants, representations andwarranties set forth in the Existing Security Agreement are hereby amended andrestated in their entirety, and as so amended and restated, are replaced andsuperseded by the terms, conditions agreements, covenants, representations andwarranties set forth in this Agreement, except that nothing herein shall impairor adversely affect the continuation of the liability of Pledgor for theobligations or the security interests and liens heretofore granted, pledged orassigned to Pledgee for itself and the benefit of Lenders.  The amendment and restatement containedherein shall not, in any manner, be construed to constitute payment of, orimpair, limit, cancel or extinguish, or constitute a novation in respect of,the indebtedness and other obligations and liabilities of Pledgor evidenced byor arising under the Existing Security Agreement and any of the other ExistingFinancing Agreements to which Pledgor is a party, and the liens and securityinterests securing such indebtedness and other obligations and liabilitiesshall not in any manner be impaired, limited, terminated, waived or released.

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IN WITNESS WHEREOF, this Agreement is executed as ofthe date first written above.
|        | “Pledgor”                            |
|--------|------------------------------------------------|
|   |                                           |
|   | NEW YORK & COMPANY, INC.,                  |
|   | a Delaware corporation                         |
|   |                                           |   |   |
|   | By:                                            |   | /s/ Ronald W.  Ristau |
|   | Name:                                          |   | Ronald W. Ristau |
|   | Title:                                         |   | President, Chief Financial Officer and Secretary |
|   |                                           |   |   |
|   | “Pledgee”                            |
|   |                                           |   |   |
|   | WACHOVIA BANK, NATIONAL  ASSOCIATION,as  Agent |
|   |                                           |   |   |
|   | By:                                            |   | /s/ Laurence Forte |
|   | Name:                                          |   | Laurence Forte |
|   | Title:                                         |   | Managing Director |

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