Exhibit 10.11


 


FOURTH
AMENDMENT TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


This FOURTH AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of January 4, 2006,
is entered into by and among the lenders party hereto (collectively, the “Lenders”),
Wachovia Bank, National Association, a national banking association, successor
by merger to Congress Financial Corporation, in its capacity as agent for the
Lenders (in such capacity, “Agent”), The CIT Group/Business Credit, Inc.,
a New York corporation, in its capacity as documentation agent (in such
capacity, “Documentation Agent”), Lerner New York, Inc., a Delaware
corporation (“Lerner”), and Lernco, Inc., a Delaware corporation (“Lernco”
and together with Lerner, “Borrowers” and individually each a “Borrower”).


 


RECITALS


 


WHEREAS, Borrowers, Agent, Documentation
Agent and Lenders have entered into financing arrangements pursuant to which
Agent and Lenders may make loans and advances and provide other financial
accommodations to Borrowers as set forth in the Amended and Restated Loan and
Security Agreement, dated March 16, 2004, among Agent, Documentation
Agent, Lenders and Borrowers, as amended by the First Amendment to Amended and
Restated Loan and Security Agreement, dated May 19, 2004, the Second Amendment
to Amended and Restated Loan and Security Agreement, dated as of December 17,
2004, and the Third Amendment to Amended and Restated Loan and Security
Agreement, dated as of July 19, 2005 (as the same now exists and may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced,
the “Loan Agreement”) and the other agreements, documents and instruments
referred to therein or any time executed and/or delivered in connection
therewith or related thereto, including this Amendment (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, Borrowers have requested that (a) certain
Lenders make new term loans to Borrowers, which together with cash held by
Borrowers, will be used to repay the existing term loans from certain Lenders,
and (b) Agent and Lenders agree to make certain amendments to the Loan
Agreement and the other Financing Agreements related to such new term loans and
other matters, and such Lenders are willing to make such new term loans to
Borrowers and Agent and Lenders are willing to agree to such amendments,
subject to the terms and conditions contained herein; and


 


WHEREAS, the parties hereto desire to enter
into this Amendment to evidence and effectuate such amendments, subject to the
terms and conditions and to the extent set forth herein;


 

















 


AGREEMENT


 


NOW, THEREFORE, in consideration of the
premises and covenants set forth herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:


 


1.     Definitions.


 


1.1   Additional
Definitions. As used herein, in the Loan Agreement or in any of the other
Financing Agreements, the following terms shall have the meanings given to them
below, and the Loan Agreement shall be deemed and is hereby amended to include,
in addition and not in limitation, the following definitions in their proper
alphabetical order:


 


(a)   “Existing Term
Loan” shall mean the term loan made by the parties to the Loan Agreement as Term
Loan Lenders to Borrowers pursuant to Section 2.3 of the Loan Agreement as
in effect immediately prior to the amendment of such Section as provided
for herein and the Fourth Amendment Effective Date.


 


(b)   “Fourth
Amendment” shall mean this Fourth Amendment to Amended and Restated Loan and
Security Agreement among Agent, Documentation Agent, Lenders and Borrowers.


 


(c)   “Fourth
Amendment Effective Date” shall mean the first date on which all of the
conditions precedent to the effectiveness of the Fourth Amendment shall have
been satisfied or waived in writing.


 


(d)   “Fourth Amendment
Fee Letter” shall mean the letter agreement, dated of even date herewith, by
and among Borrowers and Agent, setting forth certain fees payable by Borrowers
to Agent for the benefit of itself and Lenders, as the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced.


 


(e)   “Net Cash
Proceeds” shall mean the aggregate cash proceeds received by any Borrower or
Guarantor (i) in respect of any sale, lease, transfer or other disposition
of any assets or properties, or interest in assets and properties, in each case
outside the ordinary course of business of such Borrower or Guarantor, or (ii) as
proceeds of any loans or other financial accommodations provided to any
Borrower or Guarantor (either of clause (i) or (ii) of this
definition, a “Specified Disposition”), in each case net of (A) the reasonable
costs relating to such Specified Disposition (including, without limitation,
legal, accounting and investment banking fees, and sales commissions), (B) the
portion of such proceeds deposited in an escrow account or otherwise required
to be reserved pursuant to the purchase agreements related to such Specified
Disposition for purchase price adjustments or indemnification payments payable
by such Borrower or Guarantor to the purchaser thereof (but only until such
time as such portion of such proceeds is received by such Borrower or
Guarantor), (C) taxes paid or estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements), and (D) amounts applied to the repayment of Indebtedness
secured by a valid and enforceable lien on the asset or assets that are the
subject of such Specified Disposition required to be repaid in connection with
such transaction. For purposes of


 


2

















 


this definition, a Specified Disposition described in clause (i) above
shall exclude (x) sales, leases, transfers and other dispositions of Inventory
permitted under Section 9.7(b)(vi) hereof, and (y) sales and other
dispositions of defective, obsolete, out-of-season or slow moving Inventory to
a third-party off-price wholesaler, including Ben Elias and Value City, or any
other Person engaged in substantially the same business as Ben Elias or Value
City and permitted by Agent. Net Cash Proceeds shall exclude any non-cash
proceeds received by any Borrower or Guarantor from any Specified Disposition,
but shall include such proceeds when and as converted by any Borrower or
Guarantor to cash or other immediately available funds.


 


(f)    “Renewal Date”
shall have the meaning set forth in Section 14.1(a) hereof.


 


(g)   “Wachovia”
shall mean Wachovia Bank, National Association, a national banking association,
in its individual capacity, and its successors and assigns.


 


1.2   Amendments
to Definitions.


 


(a)   Ableco Related
Definitions. Each of Sections 1.1, 1.1.1, 1.1.2, 1.1.3, 1.1.4,
1.1.5, 1.122 and 1.123 of the Loan Agreement is hereby deleted in its entirety
and replaced with the following: “[Reserved]”.


 


(b)   Affiliate. The last
sentence of the definition of “Affiliate” set forth in Section 1.7 of the
Loan Agreement is hereby deleted in its entirety.


 


(c)   Agent. The
definition of “Agent” set forth in Section 1.8 of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:


 


“1.8  “Agent” shall mean Wachovia Bank,
National Association, a national banking association, successor by merger to
Congress Financial Corporation, in its capacity as agent on behalf of Lenders
pursuant to the terms hereof, and any replacement or successor agent hereunder.”


 


(d)   Cash Equivalents. The
definition of Cash Equivalents set forth in Section 1.36 of the Loan
Agreement is hereby amended by deleting “and Ableco” from such definition.


 


(e)   Change of
Control. Clause (e) of the definition of “Change of Control” set forth in
Section 1.38 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following: “(e) [Reserved]”.


 


(f)    Congress. The
definition of “Congress” set forth in Section 1.44 of the Loan Agreement
is hereby deleted in its entirety and replaced with “Wachovia” and all
references to the term “Congress” in the Loan Agreement and in any of the other
Financing Agreements shall be deemed and each such reference is hereby amended
to mean Wachovia.


 


3





















 


(g)   Eligible
Transferee. The definition of “Eligible Transferee” set forth
in Section 1.69 of the Loan Agreement is hereby deleted in its entirety
and replaced with the following:


 


“1.69  “Eligible Transferee” shall mean (a) any
Lender; (b) the parent company of any Lender and/or any Affiliate of such
Lender which is at least fifty percent (50%) owned by such Lender or its parent
company; (c) any person (whether a corporation, partnership, trust or
otherwise) that is engaged in the business of making, purchasing, holding or
otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by a Lender or
with respect to any Lender that is a fund which invests in bank loans and
similar extensions of credit, any other fund that invests in bank loans and
similar extensions of credit and is managed by the same investment advisor as
such Lender or by an Affiliate of such investment advisor, and in each case
(unless otherwise provided herein with regard to the Term Loan) is approved by
Agent; and (d) any other commercial bank, financial institution or “accredited
investor” (as defined in Regulation D under the Securities Act of 1933)
approved by Agent, provided, that, (i) no Borrower, Obligor,
Affiliate of any Borrower or Obligor, BSMB or any Affiliate of BSMB shall
qualify as an Eligible Transferee, (ii) no Person to whom any Indebtedness
which is in any way subordinated in right of payment to any other Indebtedness
of any Borrower or Obligor shall qualify as an Eligible Transferee, except as
Agent may otherwise specifically agree and (iii) no Person that is
organized under the laws of a jurisdiction other than the United States or any
state thereof shall qualify as an Eligible Transferee.”


 


(h)   Maximum Credit. The
definition of “Maximum Credit” set forth in Section 1.129 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:


 


“1.129  “Maximum Credit” shall mean the amount
of $127,500,000.”


 


(i)    Obligations. The
definition of “Obligations” set forth in Section 1.147 of the Loan
Agreement is hereby amended by deleting the proviso at the end of such
definition.


 


(j)    Qualified Cash. The
definition of “Qualified Cash” set forth in Section 1.165 of the Loan
Agreement is hereby amended by deleting the proviso at the end of such
definition.


 


(k)   Revolving Loan
Interest Rate. Clause (b) of the definition of “Revolving
Loan Interest Rate” set forth in Section 1.181 of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:


 


“(b)  So long as no
Event of Default has occurred and is continuing, on a quarterly basis,
effective on the first day of the first month following receipt of Borrowers’
quarterly financial statements, the Revolving Loan Interest Rate as to
Revolving Loans that are Eurodollar Rate Loans will be adjusted to the then
applicable percentage set forth below plus the Adjusted Eurodollar Rate for
Eurodollar Rate Loans so as to reflect the lowest Revolving Loan Interest Rate
based on (i) Borrowers’ EBITDA during the twelve (12) month period
ending on the last day of the immediately preceding


 


4

















 


fiscal quarter, and/or (ii) Borrowers’
Average Excess Availability for the immediately preceding fiscal quarter, as
set forth below:


 


	
  Tier

  	
   

  	
  EBITDA

  	
   

  	
  Average Excess

  Availability

  	
   

  	
  Adjusted Eurodollar

  Rate Basis

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Greater than
  $125,000,000

  	
   

  	
  Greater than
  $30,000,000

  	
   

  	
  1.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  Greater than
  $100,000,000 but equal to or less than $125,000,000

  	
   

  	
  Greater than
  $30,000,000

  	
   

  	
  1.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  Greater than
  $75,000,000 but equal to or less than $100,000,000

  	
   

  	
  Greater than
  $30,000,000

  	
   

  	
  1.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Greater than
  $50,000,000 but equal to or less than $75,000,000

  	
   

  	
  Greater than
  $15,000,000 but equal to or less than $30,000,000

  	
   

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  Equal to or
  less than $50,000,000

  	
   

  	
  Equal to or
  less than $15,000,000

  	
   

  	
  2.00

  	
  %

  



 


provided, that, (x)
in order for the percentages in Tier 1 or Tier 2 to be applicable, both the
EBITDA and the Average Excess Availability for the applicable periods must
satisfy the criteria set forth above, and (y) in order for the percentages in
Tier 3, Tier 4 or Tier 5 to be applicable, either the EBITDA or the Average
Excess Availability for the applicable periods must satisfy the criteria set
forth above.”


 


(l)    Revolving Loan
Maturity Date. The definition of “Revolving Loan Maturity Date”
set forth in Section 1.184 of the Loan Agreement is hereby deleted in its
entirety and replaced with the following: 
“1.184  [Reserved].”


 


(m)  Term Loan
Commitment. The definition of “Term Loan Commitment” set forth
in Section 1.201 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:


 


“1.201  “Term Loan Commitment” shall mean, as
to any Term Loan Lender: (a) at any time prior to the making of the Term
Loan, the amount of such Term Loan Lender’s term loan commitment as set forth
on Exhibit A to the Fourth Amendment or on Schedule 1 to the
Assignment and Acceptance Agreement pursuant to which such Term Loan Lender
became a Term Loan Lender under this Agreement, as such amount may be
adjusted from time to time in accordance with the provisions of Section 14.7
hereof, and (b) at any time after the making of the Term Loan, that
portion of the Term Loan made by and owing to such Term Loan Lender, in each
case as the same may be adjusted from time to time in accordance with the
terms hereof.”


 


5

















 


(n)   Term Loan
Interest Rate. The definition of “Term Loan Interest Rate” set
forth in Section 1.202 of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:


 


“1.202  “Term Loan Interest Rate” shall mean,
for any month during which any Obligations related to the Term Loan are
outstanding, a per annum rate equal to two and one-half (2.50%) percent per
annum in excess of the Adjusted Eurodollar Rate (when calculated using the
Eurodollar Rate existing as of the last day of the month ended immediately
prior to such month and an Interest Period of one month); provided, that,
(a) at Agent’s option or, upon the written direction of Required Term Loan
Lenders, the Term Loan Interest Rate shall be increased by two (2.0) percentage
points either (i) for the period on and after the date of termination or
non-renewal hereof until such time as all Obligations arising under the Term
Loan are indefeasibly paid and satisfied in full in immediately available funds,
or (ii) for the period from and after the date of the occurrence of any
Event of Default, and for so long as such Event of Default is continuing and (b) notwithstanding
anything to the contrary contained herein, if any of the conditions described
in Sections 3.3(b)(i), 3.3(b)(ii) or 3.3(b)(iii) hereof exist with
respect to Eurodollar Rate Loans, or if the adoption of or any change in any
law, treaty, rule or regulation or final, non-appealable determination of
an arbitrator or a court or other Governmental Authority or in the
interpretation or application thereof, in each case, occurring after the Fourth
Amendment Effective Date shall make it unlawful for a Term Loan Lender to
maintain loans based on the Adjusted Eurodollar Rate, then such Term Loan
Lender may, at its option, after notice to Agent and Borrowers, convert the
interest rate on the Term Loan owing to such Term Loan Lender on the last day
of the then-current Interest Period to the Prime Rate (or at the option of such
Term Loan Lender, after notice to Agent, for the period from and after the date
of the occurrence of any Event of Default, and for so long as such Event of
Default is continuing as determined by Agent, to two (2%) percent per annum in
excess of the Prime Rate).”


 


(o)   Term Loan
Maturity Date. The definition of “Term Loan Maturity Date” set
forth in Section 1.204 of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:


 


“1.204  “Term Loan Maturity Date” shall mean March 17,
2009.”


 


(p)   Total
Commitment. The definition of “Total Commitment” set forth in Section 1.206
of the Loan Agreement is hereby deleted in its entirety and replaced with the
following:


 


“1.206  “Total Commitment” shall mean, as to
each Lender, the sum of such Lender’s Revolving Loan Commitment, if any, plus
such Lender’s Term Loan Commitment, if any, as set forth on Exhibit A to
the Fourth Amendment, or on Schedule 1 to the Assignment and Acceptance
Agreement pursuant to which such Lender became a Lender under this Agreement,
as such amounts may be adjusted from time to time in accordance with the
provisions of Section 14.7 hereof.”


 


6

















 


1.3   Interpretation.
Capitalized terms used herein which are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Loan Agreement.


 


2.     New
Term Loan. Section 2.3 of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:


 


“2.3  Term Loan.


 


(a)  On the Fourth
Amendment Effective Date, subject to the terms and conditions contained herein,
in the Fourth Amendment and in the other Financing Agreements, each Term Loan
Lender party to this Agreement on such date severally (and not jointly) agrees
to make an additional term loan to Borrowers in an amount equal to such Term
Loan Lender’s Pro Rata Share of $37,500,000 (collectively referred to
hereinafter as the “Term Loan”). Except as Agent and Term Loan Lenders may otherwise
agree, each Term Loan Lender shall make the amount of such Term Loan Lender’s
Term Loan available to Agent in immediately available funds by no later than
12:00 noon New York time on the Fourth Amendment Effective Date. After Agent’s
receipt of the proceeds, Agent shall make the proceeds of the Term Loan
available to Borrowers as provided in Section 6.5 hereof. The Term Loan
shall be (i) repaid, together with all accrued and unpaid interest thereon
and all other Obligations outstanding with respect thereto (other than
contingent indemnification obligations and other contingent Obligations related
thereto which expressly survive the repayment of the Term Loan), in accordance
with this Agreement, any Registered Term Note, and the other Financing
Agreements, and (ii) secured by all of the Collateral.


 


(b)  The proceeds of
the Term Loan, together with cash held by Borrowers, shall be used on the Fourth
Amendment Effective Date to repay in full the Existing Term Loan and all
accrued interest and fees related thereto. Borrower hereby authorizes and
directs the disbursement of the proceeds of the Term Loan, together with cash
it has in its deposit accounts on the Fourth Amendment Effective Date, to make
the payments to the parties set forth on Exhibit B to the Fourth Amendment.


 


(c)  On and after the Fourth
Amendment Effective Date, the principal amount of the Term Loan shall be repaid
in thirteen (13) consecutive quarterly installments (or earlier as provided
herein) payable on the first day of each calendar quarter commencing April 1,
2006, of which (i) the first twelve (12) installments shall each be in the
amount of $1,500,000 and (ii) the last installment shall be in the amount
of the entire unpaid principal amount of the Term Loan, together with all
accrued and unpaid interest thereon and all other Obligations with respect
thereto (other than contingent indemnification obligations and other contingent
Obligations related thereto which expressly survive the repayment of the Term
Loan), shall be due and payable on the earlier of (A) the Term Loan Maturity
Date, or (B) the date of termination of this Agreement, whether by its
terms, by prepayment, or by acceleration. Subject to the provisions of Sections
2.6(d) and (e) below, the Term Loan may be prepaid in whole or
in part at any time without premium or penalty, but once repaid may not
be reborrowed.


 


7

















 


(d)  Borrowers may, at
their option, make a prepayment of all or any portion of the outstanding
balance of the Term Loan:


 


(i)  so long as: (A) at
all times during the thirty (30) day period immediately prior to such payment
and after giving effect to such payment, Borrowers have Excess Availability
plus Qualified Cash of no less than $40,000,000; (B) Borrowers’ EBITDA for
the twelve (12) month period most recently ended is $55,000,000 or more; and (C) both
before and after giving effect to such payment, no Default or Event of Default
exists or would occur;


 


(ii)  with the net cash
proceeds of any issuance or sale of, or capital contribution in respect of, any
Capital Stock of NY&Co after the date hereof in each case, to the extent
the transaction giving rise to such proceeds is not prohibited under the terms
of the Financing Agreements or is otherwise consented to by Agent in writing;
or


 


(iii)  with the net
cash proceeds of a refinancing of the Term Loan on terms and conditions
satisfactory to Agent.


 


(e)  Agent, on behalf
of Borrowers, agrees to record the Term Loan on the Register. The Term Loan
recorded on the Register (the “Registered Term Loan”) may not be evidenced
by promissory notes other than a Registered Term Note (as defined below). Upon
the registration of a Term Loan, any promissory note (other than a Registered
Term Note) evidencing the same shall be null and void and shall be returned to
Borrowers. Borrowers agree, at the request of the Required Term Loan Lenders,
to execute and deliver to Term Loan Lenders a promissory note in registered form to
evidence such Registered Term Loan (i.e., containing registered note language)
and registered as provided in Section 14.7(b) hereof (a “Registered
Term Note”), payable to the order of each Term Loan Lender and otherwise duly
completed. Once recorded on the Register, the Obligations evidenced by such
Registered Term Note may not be removed from the Register so long as it
remains outstanding, and a Registered Term Note may not be exchanged for a
promissory note that is not a Registered Term Note.


 


(f)  Within ten (10) days
following the receipt by Borrowers of the Net Cash Proceeds from the incurrence
or issuance by Borrowers of any Indebtedness for borrowed money described in
clause (a) of the definition of Indebtedness on or after the date of the Fourth
Amendment (which shall exclude for purposes of this Section 2.3(f) the
Indebtedness permitted under Sections 9.9(e), (f), (g), (h) and (i)), Borrowers
shall, absolutely and unconditionally and without notice or demand, prepay the
then outstanding principal amount of the Term Loan in an amount equal to fifty
(50%) percent of the amount by which such Net Cash Proceeds exceed $20,000,000;
provided, that, in the event that all or a portion of the Net
Cash Proceeds from the incurrence or issuance of such Indebtedness is used by
Borrowers to build a distribution center, such prepayment shall be in an amount
equal to fifty (50%) percent of the amount by which such Net Cash Proceeds
exceed the sum of (x) the amount of such Net Cash Proceeds used by Borrowers to
build such distribution center (up to $30,000,000), and (y) $20,000,000.


 


8

















 


(g)  Within ten (10) days
following the receipt by Borrowers of the Net Cash Proceeds from the sale by
Borrowers of any assets or properties of Borrowers (other than as permitted in Section 9.7(b) hereof)
on or after the date of the Fourth Amendment, Borrowers shall, absolutely and
unconditionally and without notice or demand, prepay the then outstanding
principal amount of the Term Loan in an amount equal to fifty (50%) percent of
the amount of such Net Cash Proceeds; provided, that, (i) in
the event of a sale of the trademarks listed on Exhibit C to the Fourth
Amendment, such prepayment shall be in an amount equal to such percentage of
the Net Cash Proceeds in excess of $5,000,000; and (ii) so long as no
Default or an Event of Default has occurred and is continuing, on the date any
Borrower receives Net Cash Proceeds from the sale of any Equipment or Real
Property of such Borrower, such Net Cash Proceeds may, at the option of such
Borrower, be applied to acquire replacement property or assets of a like kind
to the property or assets so disposed, provided, that (A) Agent
shall have a first priority, valid and perfected security interest in such
replacement property or assets, and (B) such Borrower shall deliver to
Agent a certificate within ten (10) days after the date of receipt of such
Net Cash Proceeds stating that such Net Cash Proceeds shall be used to acquire
such replacement property or assets of a like kind to the property or assets so
disposed within one hundred eighty (180) days after the date of receipt of such
Net Cash Proceeds (which certificate shall set forth an estimate of the Net
Cash Proceeds to be so expended), (C) if all or any portion of such Net
Cash Proceeds are not so used within such one hundred eighty (180) day period,
such unused Net Cash Proceeds shall be applied to prepay the Term Loan and the
Obligations related thereto in accordance with this Section 2.3(g), and (D) pending
such reinvestment, such Net Cash Proceeds shall be applied as a prepayment of
Revolving Loans.


 


(h)  In the event that at
any time on or after July 1, 2006 (i) the sum of Borrowers’ Excess
Availability and Qualified Cash is at any time less than $50,000,000, and (ii) EBITDA
of Borrowers when calculated for the twelve (12) consecutive fiscal month
period most recently ended for which Agent has received financial statements of
Borrowers is less than $65,000,000, within ten (10) days thereafter, Borrowers
shall, absolutely and unconditionally without notice or demand, prepay the then
outstanding principal amount of the Term Loan in an amount such that, after
giving effect thereto, the outstanding principal amount of the Term Loan shall
be equal to $25,000,000, provided, that,


 


(A)  in the event that
as of any date that such mandatory prepayment is due as set forth above, the
conditions to optional prepayments by Borrowers in respect of the Term Loan set
forth in Section 2.3(d)(i) above would not be satisfied after giving
effect to such mandatory prepayment, then payments in respect of such mandatory
prepayment shall instead be due and payable on each date thereafter that all or
any portion of such mandatory prepayment otherwise due on the date set forth
above may be made to the extent that after giving effect thereto the
conditions to optional prepayments in Section 2.3(d)(i) would be
satisfied, and Borrowers shall make such payments in respect of such mandatory
prepayment until the aggregate amount of all of such payments equals the amount
required to have been paid as of the original due date for such mandatory
prepayment;


 


9

















 


(B)  in the event that
Borrowers are not required to make a mandatory prepayment under this Section 2.3(h) on
the due date as set forth above, then on and after such due date, the amount of
the minimum Excess Availability that Borrowers are required to maintain under Section 9.17
hereof shall be increased by the amount of the mandatory prepayment that would
have otherwise been paid under this Section 2.3(h) on the such due
date, provided, that, (1) the amount of the minimum Excess Availability
required to be maintained under Section 9.17 shall thereafter be reduced
to the extent of payments received by Agent in respect of such mandatory
prepayment as provided in clause (A) above, and (2) in no event shall
the amount of the minimum Excess Availability that Borrowers are required to
maintain under Section 9.17 hereof be reduced to less than $7,500,000.


 


(i)  Each such
prepayment required pursuant to clauses (f) and (g) of this Section 2.3
shall be accompanied by a certificate signed by each Borrower’s chief financial
officer certifying the manner in which the Net Cash Proceeds from the
transactions described in (f) and (g) of this Section 2.3 and
the resulting prepayment were calculated.


 


(j)  Each prepayment of principal under this Section 2.3
shall be made together with accrued and unpaid interest thereon to the date of
such prepayment. Each prepayment set forth in this Section 2.3 shall be
applied against the remaining installments (if any) of principal due on the
Term Loan in the inverse order of maturity, and to the extent that the Term
Loan has been repaid in full, Agent shall apply such amounts to the
Obligations, whether or not then due, in such order or manner as Agent shall
determine, or at Agent’s option, to be held as cash collateral for the
Obligations. Nothing contained in this Section 2.3 shall be construed to
constitute a consent, implied or otherwise, to any such issuance, incurrence or
sale otherwise prohibited by the terms and conditions of this Agreement.”


 


3.     Servicing
Fees. Section 3.2(b)(ii) of the Loan Agreement is hereby amended
by deleting such Section in its entirety and replacing it with the
following:  “(ii) [Reserved]”.


 


4.     Conditions
Precedent to All Loans and Letter of Credit Accommodations. Section 4.2(d) of
the Loan Agreement is hereby amended by deleting the reference to “$7,500,000”
and replacing it with “$7,500,000, subject to adjustment pursuant to Section 2.3(h) hereof,”.


 


5.     Payments.
Section 6.4(b)(i) of the Loan Agreement is hereby amended by deleting
the reference to “Ableco” and replacing it with “Wachovia”.


 


6.     Representations
and Warranties.


 


6.1   Financial
Statements; No Material Adverse Change. Section 8.3 of the Loan
Agreement is hereby amended by deleting “and Ableco” from such Section.


 


6.2   Restrictions
on Subsidiaries. Section 8.14 of the Loan Agreement is hereby amended
by deleting “the Ableco Loan Documentation” from such Section.


 


10





















 


6.3   Material
Contracts. Section 8.15 of the Loan Agreement is hereby amended by
deleting any reference to “the Ableco Loan Documentation” from such Section.


 


7.     Affirmative
and Negative Covenants


 


7.1   Financial
Statements and Other Information.


 


(a)  Section 9.6(a) of the Loan Agreement is hereby
amended by deleting each reference to “and Ableco” from such Section.


 


(b)  Section 9.6(f) of the Loan Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the
following: “(f) [Reserved]”.


 


7.2   Encumbrances.
Section 9.8(m) of the Loan Agreement is hereby amended by deleting such Section in
its entirety and replacing it with the following: “(m)  [Reserved]”.


 


7.3   Indebtedness.


 


(a)  Section 9.9(c) of
the Loan Agreement is hereby amended by deleting the reference to “and Ableco”
from such Section.


 


(b)  Section 9.9(d) of the Loan Agreement is hereby amended
by deleting such Section in its entirety and replacing it with the
following:  “(d)  [Reserved]”.


 


7.4   Prepayments
and Amendments; Loans, Investments, Etc. Section 9.10(a)(ii) of
the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following: 
“(ii) [Reserved]”.


 


7.5   Dividends
and Redemptions. Section 9.11(i) of the Loan Agreement is hereby amended
by deleting such Section in its entirety and replacing it with the
following:  “(i) [Reserved]”.


 


7.6   Limitation
of Restrictions Affecting Subsidiaries. Section 9.16(d)(vii) of
the Loan Agreement is hereby amended by deleting such Section in its
entirety and replacing it with the following: 
“(vii) [Reserved]”.


 


7.7   Minimum
Excess Availability. Section 9.17 of the Loan Agreement is hereby
amended by deleting the reference to “$7,500,000” and replacing it with “$7,500,000,
subject to adjustment pursuant to Section 2.3(h) hereof,”.


 


7.8   After
Acquired Real Property. Sections 9.20 of the Loan Agreement is hereby
amended by deleting the references to “and Ableco” and “and Ableco’s” from such
Section.


 


7.9   Costs
and Expenses. Section 9.21 of the Loan Agreement is hereby amended by
deleting the reference to “and Ableco” from such Section.


 


8.     Events
of Default. Section 10.1(d) of the Loan Agreement is hereby
amended by deleting the reference to “Ableco and” from such Section.


 


11

















 


9.     Remedies.
Section 10.2(d) of the Loan Agreement is hereby amended by deleting
such Section in its entirety and replacing it with the following:  “(d)  [Reserved]”.


 


10.   Amendments
and Waivers.


 


10.1 Section 11.3(a)(iii)(E) of
the Loan Agreement is hereby amended by deleting the reference to “Ableco or”
from such Section.


 


10.2 Section 11.3(a)(iv)(B) of
the Loan Agreement is hereby amended by deleting the reference to “Ableco,”
from such Section.


 


11.   Successor
Agent. Section 12.13(b) of the Loan Agreement is hereby amended
by deleting such Section in its entirety and replacing it with the
following:  “(b)  [Reserved]”.


 


12.   Term.
Sections 14.1(a) and (b) of the Loan Agreement are hereby deleted in
their entirety and replaced with the following:


 


“(a)  This Agreement
and the other Financing Agreements shall become effective as of the date set
forth on the first page hereof and shall continue in full force and effect
for a term ending on March 17, 2009 (the “Renewal Date”), and from year to
year thereafter, unless sooner terminated pursuant to the terms hereof. Notwithstanding
the foregoing, the entire unpaid principal amount of the Term Loan, together
with all accrued and unpaid interest thereon and all other Obligations with
respect thereto, shall be due and payable on the Term Loan Maturity Date,
unless this Agreement and the other Financing Agreements are sooner terminated
pursuant to the terms hereof. Agent may, at its option (or shall at the
direction of any Revolving Loan Lender in writing received by Agent at least
sixty (60) days prior to the Renewal Date or the anniversary of any Renewal
Date, as the case may be), terminate this Agreement and the other
Financing Agreements, or Borrowers may terminate this Agreement and the
other Financing Agreements, in each case, effective on the Renewal Date or on
the anniversary of the Renewal Date in any year by giving to the other party at
least sixty (60) days prior written notice; provided, that, this
Agreement and all other Financing Agreements still in effect on such date, if
any, must be terminated simultaneously. In addition, Borrowers may terminate
this Agreement at any time upon ten (10) days prior written notice to
Agent (which notice shall be irrevocable) and Agent may, at its option, and
shall at the direction of Required Revolving Loan Lenders, terminate this
Agreement at any time on or after the occurrence and during the continuance of
an Event of Default, subject to any cure periods specified in Section 10.1
hereof. Upon the Renewal Date or any other effective date of termination of the
Financing Agreements, Borrowers shall pay to Agent all outstanding and unpaid
Obligations (other than contingent indemnification obligations and other
contingent Obligations which expressly survive the termination of this
Agreement and the other Financing Agreements) and shall furnish cash collateral
to Agent (or at Agent’s option, a letter of credit issued for the account of
Borrowers and at Borrowers’ expense, in form and substance satisfactory to
Agent, by an issuer acceptable to Agent and payable to Agent as beneficiary) in
such amounts as Agent determines are reasonably necessary to secure Agent,
Lenders and Issuing Bank from loss, cost, damage or expense, including
attorneys’ fees and expenses, in connection with any contingent


 


12

















 


Obligations, including
issued and outstanding Letter of Credit Accommodations and checks or other
payments provisionally credited to the Obligations and/or as to which Agent or
any Lender has not yet received final payment and any continuing obligations of
Agent or any Lender pursuant to any Deposit Account Control Agreement. The
amount of such cash collateral (or letter of credit, as Agent may determine)
as to any Letter of Credit Accommodations shall be in the amount equal to one
hundred ten (110%) percent of the amount of the Letter of Credit Accommodations
plus the amount of any fees and expenses payable in connection therewith
through the end of the latest expiration date of the Letters of Credit giving
rise to such Letter of Credit Accommodations. Such payments in respect of the
Obligations and cash collateral shall be remitted by wire transfer in Federal
funds to the Agent Payment Account or such other bank account of Agent, as
Agent may, in its discretion, designate in writing to Borrowers for such
purpose. Interest shall be due until and including the next Business Day, if
the amounts so paid by Borrowers to the Agent Payment Account or other bank
account designated by Agent are received in such bank account later than 12:00
noon, New York time.


 


(b)  [Reserved]”.


 


13.   Notices.
Section 14.3 of the Loan Agreement is hereby amended by deleting such Section in
its entirety and replacing it with the following:


 


“14.3  Notices. Except as otherwise provided
herein, all notices, requests and demands hereunder shall be in writing and
deemed to have been given or made:  if
delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of
receipt; if by nationally recognized overnight courier service with
instructions to deliver the next Business Day, one (1) Business Day after
sending; and if by certified mail, return receipt requested, five (5) days
after mailing. All notices, requests and demands upon the parties are to be
given to the following addresses (or to such other address as any party may designate
by notice in accordance with this Section):


 


If to Borrowers:                    Lerner New York, Inc.

Lernco, Inc.

450 West 33rd Street

New York, NY 10001

Attention:  Chief Financial Officer

Telephone No.: (212) 884-2110

Telecopy No.: (212) 884-2103


 


with a copy to:                      Kirkland & Ellis LLP

Citigroup Center

153 East 53rd Street

New York, NY 10022


Attention:  Michael T. Edsall, Esq.

Telephone No.: (212) 446-4800

Telecopy No.:  (212) 446-4900


 


13

















 


If to
Agent:                           Wachovia
Bank, National Association, as Agent

1133 Avenue of the Americas

New York, New York 10036

Attention:  Portfolio Manager — Lerner
New York, Inc.

Telephone No.: (212) 545-4280

Telecopy No.: (212) 545-4283”


 


14.   Effect
of Ableco Intercreditor Agreement. Section 14.10 of the Loan Agreement
is hereby amended by deleting such Section in its entirety and replacing
it with the following:  “14.10 [Reserved]”.


 


15.   Schedules
to Loan Agreement and Information Certificates.


 


15.1 Schedules
to Loan Agreement. Schedules 5.2(d), 5.2(e), 8.13, 8.15 and 8.16 to the
Loan Agreement are hereby deleted in their entirety and replaced with the
information set forth on Schedule 1 hereto.


 


15.2 Schedules
to Information Certificates.


 


(a)   Schedules 5, 6,
16, 18 and 25 to the Information Certificate of Lerner are hereby deleted in
their entirety and replaced with the information set forth on Schedule 2
hereto.


 


(b)   Schedule 18
to the Information Certificate of Lernco is hereby deleted in its entirety and
replaced with the information set forth on Schedule 3 hereto.


 


16.   Amendment
Fees. Borrowers shall pay to Agent the fees and amounts set forth in the Fourth
Amendment Fee Letter in the amounts and at the times specified therein. To the
extent payment in full of the applicable fee is received by Agent from
Borrowers on or about the date hereof, Agent shall pay to each Lender its share
of such fees in accordance with the terms of the arrangements of Agent with
such Lender.


 


17.   Conditions
Precedent. The provisions contained herein shall be effective as of the
date hereof, but only upon the satisfaction of each of the following conditions
precedent, in a manner satisfactory to Agent:


 


17.1 Agent
shall have received an original of this Amendment, duly authorized, executed
and delivered by Borrowers and Lenders, and an original of the attached
Acknowledgment, duly authorized, executed and delivered by Guarantors;


 


17.2 Agent
shall have received an original of the Fourth Amendment Fee Letter, duly
authorized, executed and delivered by Borrowers,


 


17.3 the
representations and warranties set forth herein and in the Loan Agreement (as
amended hereby) that are qualified as to materiality or Material Adverse Effect
shall be true and correct and the representations and warranties that are not
so qualified shall be true and correct in all material respects, in each case
with the same effect as though such representations and warranties had been
made on and as of the date hereof and after giving effect thereto, except to
the extent that any such representations or warranties expressly relate solely
to an earlier date


 


14





















 


(in which case such
representations or warranties shall have been true and correct on and as of
such earlier date);


 


17.4 Agent
shall have received, in form and substance satisfactory to Agent, all
consents, waivers, acknowledgments and other agreements from Fourth persons
which Agent may deem necessary or desirable in order to effectuate the
provisions or purposes of this Amendment; and


 


17.5 as
of the date of this Amendment, no Default or Event of Default shall exist or
shall have occurred and be continuing.


 


18.   Additional
Representations, Warranties and Covenants. Each Borrower, jointly and
severally, represents, warrants and covenants with and to Agent and Lenders as
follows, which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof, and the truth and accuracy of,
or compliance with each, together with the representations, warranties and
covenants in the other Financing Agreements, being a continuing condition of
the making of Loans by Lenders to Borrowers:


 


18.1 Prepayment
of Existing Term Loan. On the Fourth Amendment Effective Date, all of the
conditions set forth in Section 2.3(d) of the Loan Agreement (as in
effect immediately prior to the amendment of such Section as provided for
herein and the Fourth Amendment Effective Date) have been satisfied.


 


18.2 Delivery
of Tradename Appraisal. Within ninety (90) days of the date hereof,
Borrowers shall deliver or cause to be delivered to Agent a written current
appraisal of the “New York & Company” tradename valued under the
relief from royalty method, which appraisal shall be in form and scope
reasonably acceptable to Agent and prepared by Valuation Research, Inc. or
such other appraiser acceptable to Agent, addressed to Agent and Lenders and
upon which Agent and Lenders are expressly permitted to rely.


 


18.3 Authority.
Each Borrower has the requisite corporate power and authority to execute and
deliver this Amendment, and to perform its obligations hereunder and under
the Financing Agreements (as amended or modified hereby) to which it is a
party, and the execution, delivery and performance by each Borrower of this
Amendment have been duly approved by all necessary corporate action and no
other corporate proceedings are necessary to consummate such transactions.


 


18.4 Enforceability.
This Amendment has been duly executed and delivered by each Borrower and this
Amendment and each Financing Agreement (as amended or modified hereby) is the
legal, valid and binding obligation of each Borrower, enforceable against each
Borrower in accordance with its terms, and is in full force and effect.


 


18.5 Due
Execution. The execution, delivery and performance of this Amendment are
within the power of each Borrower, have been duly authorized by all necessary
corporate action, have received all necessary governmental approval, if any,
and do not contravene any law or any contractual restrictions binding on any
Borrower.


 


15





















 


18.6 Absence
of Defaults. No Default or Event of Default exists or has occurred and is continuing
as of the date of this Amendment.


 


19.   Choice
of Law. The validity of this Amendment, its construction, interpretation
and enforcement, the rights of the parties hereunder, 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.


 


20.   Counterparts.
This Amendment may be executed in any number of counterparts and by
different parties and separate counterparts, each of which when so executed and
delivered, shall be deemed an original, and all of which, when taken together,
shall constitute one and the same instrument. Delivery of an executed counterpart of
a signature page to this Amendment by telefacsimile or other method of
electronic transmission shall be effective as delivery of a manually executed
counterpart of this Amendment.


 


21.   Reference
to and Effect on the Financing Agreements.


 


21.1 Upon
and after the effectiveness of this Amendment, each reference in the Loan
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Loan Agreement, and each reference in the other Financing
Agreements to “the Loan Agreement”, “thereof’ or words of like import referring
to the Loan Agreement, shall mean and be a reference to the Loan Agreement as
modified and amended hereby.


 


21.2 Except
as specifically amended pursuant hereto, no other changes or modifications to
the Financing Agreements are intended or implied and the Loan Agreement and all
of the other Financing Agreements, are and shall continue to be in full force
and effect and are hereby in all respects ratified and confirmed and shall
constitute the legal, valid, binding and enforceable obligations of Borrowers
to Agent, Documentation Agent and the Lenders.


 


21.3 The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
Agent, Documentation Agent or any Lender under any of the Financing Agreements,
nor constitute a waiver of any provision of any of the Financing Agreements.


 


21.4 To
the extent that any terms and conditions in any of the Financing Agreements
shall contradict or be in conflict with any terms or conditions of the Loan
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Loan Agreement as modified or amended hereby.


 


22.   Ratification.
Each Borrower hereby restates, ratifies and reaffirms each and every term and
condition set forth in the Loan Agreement, as amended hereby, and the Financing
Agreements effective as of the date hereof.


 


23.   Integration.
This Amendment, together with the other Financing Agreements, incorporates all
negotiations of the parties hereto with respect to the subject matter hereof
and is the final expression and agreement of the parties hereto with respect to
the subject matter hereof.


 


16

















 


24.   Severability.
In case any provision in this Amendment shall be invalid, illegal or
unenforceable, such provision shall be severable from the remainder of this
Amendment and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


25.   Binding
Effect. This Amendment shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors and assigns.


 


26.   Headings.
The headings listed herein are for convenience only and do not constitute
matters to be construed in interpreting this Amendment.


 


27.   Further
Assurances. The parties hereto shall execute and deliver such additional
documents and take such additional action as may be reasonably necessary
or desirable to effectuate the provisions and purposes of this Amendment.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


17

















 


IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be executed on the day and year first written.


 


 


	
   

  	
  LERNER NEW YORK, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald W. Ristau

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  COO, CFO & Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
  LERNCO, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald W. Ristau

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  
									



 


 


[SIGNATURES CONTINUED ON NEXT
PAGE]


 

















 


[SIGNATURES CONTINUED FROM
PREVIOUS PAGE]


 


 


	
  AGREED AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION, successor by merger to

  Congress Financial Corporation, as Agent

  and as a Lender

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John Williammee, Jr.

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  
	
   

  	
   

  
	
  THE CIT GROUP/BUSINESS CREDIT,

  INC., as Documentation Agent and as a

  Lender

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Manuel Borges

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  
	
   

  	
   

  
	
  LASALLE RETAIL FINANCE, a division

  of LaSalle Business Credit, Inc., as agent

  for Standard Federal Bank, National

  Association, as a Lender

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Mark Twomey

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Assistant Vice President

  	
   

  	
   

  
														



 

















 


EXHIBIT A

TO

FOURTH AMENDMENT TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


Commitments


 


	
  Lender

  	
   

  	
  Revolving Loan

  Commitment

  	
   

  	
  Term Loan

  Commitment

  	
   

  	
  Total

  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wachovia
  Bank, National Association

  	
   

  	
  $

  	
  37,500,000

  	
   

  	
  $

  	
  37,500,000

  	
   

  	
  $

  	
  75,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The CIT
  Group/Business Credit, Inc.

  	
   

  	
  $

  	
  30,000,000

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  30,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LaSalle
  Retail Finance, a division of LaSalle Business Credit, Inc., as agent
  for Standard Federal Bank, National Association

  	
   

  	
  $

  	
  22,500,000

  	
   

  	
  $

  	
  0

  	
   

  	
  $

  	
  22,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total
  Commitments:

  	
   

  	
  $

  	
  90,000,000

  	
   

  	
  $

  	
  37,500,000

  	
   

  	
  $

  	
  127,500,000

  	
   

  



 

















 


EXHIBIT B

TO

FOURTH AMENDMENT

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


Payees


 


Ableco Finance LLC


Azure Funding


Bernard National Loan Investors, Ltd


Fortress Credit Opportunities I LP


Oak Hill Credit Partners I, Limited


Oak Hill Credit Partners II, Limited


Oak Hill Credit Partners II, Limited


 

















 


EXHIBIT C

TO

FOURTH AMENDMENT

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


Trademarks


 


	
  Name of Trademark

  	
   

  	
  Registration Numbers and Jurisdictions

  
	
   

  	
   

  	
   

  
	
  Lerner

  	
   

  	
  See Schedule 29
  to the Information Certificate of Lernco

  
	
   

  	
   

  	
   

  
	
  Lerner New York

  	
   

  	
  See Schedule 29
  to the Information Certificate of Lernco

  



 

















 


SCHEDULE 1

TO

FOURTH AMENDMENT

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


Schedules
5.2(d), 5.2(e), 8.13, 8.15 and 8.16 to Loan Agreement


 


 


See attached


 

















 


AMENDED AND RESTATED SCHEDULE 5.2(e) 


TO THE LOAN AGREEMENT


 


Investment Property


 


1.     Lerner
New York, Inc. Citifunds Investment Cash Reserve – Class S (money market
account)


 


2.     Lerner
New York, Inc. Federated Tax-Free Obligation – Institutional Fund (Bear
Stearns)


 

















 


AMENDED AND RESTATED SCHEDULE 8.13 


TO THE LOAN AGREEMENT


 


Collective Bargaining Agreements


 


1.             Collective
Bargaining Agreement between Local 1102, RWDSU, UFCW AFL-CIO and Lerner Stores,
Inc. and New York & Company (New York City Metropolitan Area, Maryland,
Pennsylvania and Upstate New York), dated September 1, 2002. The Agreement is
under renegotiation. A signed extension agreement in effect until March 31,
2006.


 


2.             Collective
Bargaining Agreement, dated January 15, 2004, between Lerner New York, Inc. and
International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America, UAW-AFL-CIO, and its Local Union 2179. The Agreement is
effective from January 15, 2004 to January 14, 2007.


 


3.             Agreement,
dated February 6, 2003, by and between Lerner New York, Inc. and the New
England Joint Board, affiliated with the Retail, Wholesale and Department Store
Union/UFCW, AFL-CIO, CLC. The Agreement is effective from February 6, 2003
through February 5, 2006.


 

















 


AMENDED AND RESTATED SCHEDULE 8.15 


TO THE LOAN AGREEMENT


 


Material Contracts


 


1.              Amended
and Restated Private Label Credit Card Program Agreement Between World
Financial Network National Bank and New York & Company, Inc. Dated as of
November 1, 2004.


 


2.             Transition
Services Agreement, dated as of November 27, 2002, by and between Lerner New
York Holdings, Inc. and Limited Brands, Inc.


 


3.             Information
Technology:


 


a)     Master
Services Agreement, dated April 8, 2003 between Infocrossing, Inc. and NY &
Co. Group, Inc.


 


b)    Database
Service Agreement, dated September 1, 2003 between ADS Alliance Data Systems,
Inc. and NY & Co. Group, Inc.


 

















 


AMENDED AND RESTATED SCHEDULE 8.16 


 


TO THE LOAN AGREEMENT


 


Credit Card Agreements


 


1.             Merchant
Services Bankcard Agreement, dated September 11, 2002, between Limited Brands,
Inc., Lerner New York, Inc. (as a Customer listed in Attachment I), JP Morgan
Chase Bank and Chase Merchant Services L.L.C.


 


2.             American
Express Service Agreement by and among American Express Travel Related
Services, Inc., The Limited, Inc. and its subsidiaries.


 


3.             Merchant
Services Agreement, dated June 21, 1991, between Lerner New York, Inc. and
Discover Card Services, Inc.


 


4.             Amended and
Restated Private Label Credit Card Program Agreement Between World Financial
Network National Bank and New York & Company, Inc. Dated as of November 1,
2004.


 


5.             Co-Branded
Credit Card Program Agreement Between World Financial Network National Bank and
New York & Company, Inc. Dated as of November 1, 2005.


 

















 


SCHEDULE 2

TO

FOURTH AMENDMENT

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


Schedules 5,
6, 16, 18 and 25 to Information Certificate of Lerner


 


 


See attached


 

















 


AMENDED AND RESTATED SCHEDULE 5 TO THE


INFORMATION CERTIFICATE OF LERNER NEW YORK,
INC.


 


Alabama


Arizona


Arkansas


California


Colorado


Connecticut


Delaware


Florida


Georgia


Idaho


Illinois


Indiana


Iowa


Kansas


Kentucky


Louisiana


Maine


Maryland


Massachusetts


Michigan


Minnesota


Mississippi


Missouri


Nebraska


Nevada


New Hampshire


New Jersey


New Mexico


New York


North Carolina


North Dakota


Ohio


Oklahoma


Oregon


Pennsylvania


Rhode Island


South Carolina


South Dakota


Tennessee


Texas


Utah


Virginia


Washington


West Virginia


Wisconsin


 

















 


AMENDED AND RESTATED SCHEDULE 6 TO THE


INFORMATION CERTIFICATE OF LERNER NEW YORK,
INC.


 


Alabama


Arizona


Arkansas


California


Colorado


Connecticut


Delaware


Florida


Georgia


Idaho


Illinois


Indiana


Iowa


Kansas


Kentucky


Louisiana


Maine


Maryland


Massachusetts


Michigan


Minnesota


Mississippi


Missouri


Nebraska


Nevada


New Hampshire


New Jersey


New Mexico


New York


North Carolina


North Dakota


Ohio


Oklahoma


Oregon


Pennsylvania


Rhode Island


South Carolina


South Dakota


Tennessee


Texas


Utah


Virginia


Washington


West Virginia


Wisconsin


 

















 


AMENDED AND RESTATED SCHEDULE 16 TO THE 


INFORMATION CERTIFICATE OF LERNER NEW YORK,
INC.


 


1. Custom Brokers


 


a) Barthco


 


COLUMBUS OFFICE


6431 Alum Creek Drive


Suite H


Groveport, OH 43125


Phone: 614-409-9460  Fax:
614-409-9540


 


CHICAGO OFFICE


1255-1285 Mark Street


Bensenville, IL 60106


Phone: 630-694-1250   Fax:
630-694-1407


 


NEW YORK OFFICE


JFK International Airport


390 Franklin Avenue


Franklin Square, NY 11010


Phone: 516-616-2900  Fax:
516-616-2999


 


MIAMI OFFICE


1825 NW 87 Ave


Miami, FL 33172


Phone: 305-471-0071  Fax:
305-471-1161


 


SEATTLE OFFICE


18900 8th Avenue South


Suite 400


SeaTac, WA 98148


Phone: 206-243-4004  Fax:
206-244-0378


 


b) Exel Global Logistics


 


COLUMBUS OFFICE


2144A John Glenn Avenue


Columbus, OH  43217


Phone:  614-409-4500  Fax: 
614-409-2701


 


CHICAGO OFICE


90 Division Street, Suite 105


Bensenville


Illinois 60106


Phone:  630-616-6800  Fax: 
630-595-2239


 

















 


2. Freight Forwarders - OCEAN CARRIERS


 


a) Maersk Line


 


Elizabeth Hassert


Strategic Account Manager


Maersk, Inc.


2021 Spring Road Suite 500 Oak Brook, IL 60523-1859


PH: 630-645-3622


FX: 630-645-3667


 


b) Mitsui


Thomas M. Kelly


Vice President, Midwest


Mitsui OSK Lines (America), Inc.


188 Undustrial Drive


Suite 300


Elmhurst, IL 60126


PH: 630-592-7301


FX: 630-592-7402


 


c) P&O Nedlloyd


Chris Dombalis


Senior Vice President


Sales and Marketing, North America


P&O Nedlloyd Limited


One Meadowlands Plaza


East Rutherford, NJ 07073


PH: 201-896-6769


FX 201-896-6371


 


d) APL


Tom Egold


Account Executive


APL Liner


8332 Forward Pass Road,


Indianapolis, IN 46217


PH: 317-887-6456


FX: 317-887-6457


 


e) NYK Lines


Gary Garback


NYK Line (North America) Inc.


377 East Butterfield Road


Fifth Floor


Lombard, IL 60148


PH: 630-435-7803


FX: 630-435-3100


 


f) APL-Logistics (ocean consolidator)


Tony Zasimovich


Vice President, North America Sales and Customer Service


APL-Logistics


1111 Broadway


Oakland, CA 94607


PH:  510-272-8843


FX:  510-272-2462


 

















 


3. Freight Forwarders - AIRFREIGHT FORWARDERS


 


a) Morrison Express


Doug Haring


Vice President


USA Sales and marketing


Morrison Express Corp (USA)


2000 Hughes Way


El Segundo, CA 90245


PH:  310-322-8999 ext 230


FX: 310-322-6688


 


b) BAX Global


Brady Borycki


BAX Global


11101 Metro Airport Center Drive Ste. 108


Romulus, MI 48174


PH: 734-229-3349


FX: 734-955-2010


 


c) STAR Trans International Ltd


Anthony Chan


Star Airfreight Co. Ltd


149-35  177th Street


Jamaica, New York  11434


PH: 718-656 5360


FX: 718-656 2597


 


d) EGL – United States


Eagle Global Logistics


Attn: Ron Scott


6700 Port Road


Groveport, Ohio 43125


PH: 614-489-5177


FX: 614-489-5171


 


e) FedEX Corporation


942 South Shady Grove Road


Memphis, TN 38120


PH: 901-369-3600


 


f) Panalpina


950 Tower Lane, Suite 1600


Foster City, CA 94404


PH: 650-653-6600


FX: 650-653-6735


Email: info.noram@panalpina.com


 

















 


g) Sovereign


4348 Albany Post Road


Hyde Park, NY 12538


PH: 845-229-8808


FX: 845-229-8828


 


h) Expo


29, Josier Street, Nungambakkam,


Chennai 600 034


PH: + 91 44 28223458


FX: + 91 44 28223463


Email: cs@expofreight.com


 


i) Speedmark


1525 Adrian Road,


Burlingame, CA 94010


PH: 650-652-0288


FX: 650-652-0290


Email: info.uac@speedmark.com


 

















 


SCHEDULE 18 TO THE INFORMATION


CERTIFICATE OF LERNER NEW YORK, INC.


 


The following replaces Section 18 of the Information Certificate of
Lerner New York, Inc. dated March 16, 2004:


 


	
  Name of Entity

  	
   

  	
  Chief Executive Office

  	
   

  	
  Jurisdiction of

  Incorporation

  	
   

  	
  Ownership Percentage

  or Relationship

  	
   

  
	
  NY & Co.
  Group, Inc.

  	
   

  	
  450 West 33rd
  Street

  New York, NY 10001

  	
   

  	
  Delaware

  	
   

  	
  Ultimate
  Parent / 100%

  	
   

  
	
  Lerner New
  York Holding, Inc.

  	
   

  	
  450 West 33rd
  Street

  New York, NY 10001

  	
   

  	
  Delaware

  	
   

  	
  Parent /
  100%

  	
   

  
	
  Lernco, Inc.

  	
   

  	
  1105 North
  Market Street

  Wilmington, DE 19899

  	
   

  	
  Delaware

  	
   

  	
  Subsidiary
  of Parent / 100%

  	
   

  
	
  Nevada
  Receivable Factoring, Inc.

  	
   

  	
  3800 Howard
  Hughes

  Parkway, 7th Floor

  Las Vegas, Nevada

  	
   

  	
  Nevada

  	
   

  	
  Subsidiary
  of Parent / 100%

  	
   

  
	
  Associated
  Lerner Shops of America, Inc.

  	
   

  	
  450 West 33
  Street

  New York, NY 10001

  	
   

  	
  New York

  	
   

  	
  Subsidiary /
  100%

  	
   

  
	
  Lerner New
  York GC, LLC

  	
   

  	
  10 West
  Broad Street,

  Suite 2100

  Columbus, Ohio 43215

  	
   

  	
  Ohio

  	
   

  	
  Subsidiary /
  100%

  	
   

  
	
  Jasmine
  Company, Inc

  	
   

  	
  450 West 33rd
  Street

  New York, NY 10001

  	
   

  	
  Massachusetts

  	
   

  	
  100%

  	
   

  



 

















 


AMENDED AND RESTATED SCHEDULE 25 TO THE 


INFORMATION CERTIFICATE OF LERNER NEW YORK,
INC.


 


Litigation


 


A case has been filed by
the Center for Environmental Health against Lerner New York, Inc. and
several other retailers of jewelry products in California. It alleges that lead
in one of Lerner New York, Inc.’s jewelry products (a metal charm necklace
suspended on a flexible cord) sold in California violates the state’s
Proposition 65 statute, which precludes the sale of products in California that
results in exposure to listed chemicals absent a specified warning label. The
case is a companion case to two similar cases filed by the California Attorney
General and an organization called As You Sow against several retail outlets
selling such jewelry.


 


The Company was not
named as a party in either of the companion cases, but the matters have been
consolidated for pre-trial purposes. Violation of the statute exposes the
seller to fines as well as injunctive relief. The complaint does not include a
request for a specific fine amount. The case against Lerner New York, Inc.
is in the process of mediation that is intended to resolve the case without
substantial additional litigation.


 


There are other various
claims, lawsuits and pending actions against the Company arising in the normal
course of the Company’s business. It is the opinion of management that the
ultimate resolution of these matters will not have a material effect on the
Company’s financial condition, results of operations or cash flows.


 

















 


SCHEDULE 3

TO

FOURTH AMENDMENT

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


Schedule 18
to Information Certificate of Lernco


 


 


See attached


 

















 


SCHEDULE 18 TO THE INFORMATION


CERTIFICATE OF LERNCO, INC


 


The following replaces Section 18 of the Information Certificate of
Lernco, Inc. dated March 16, 2004:


 


	
  Name of Entity

  	
   

  	
  Chief Executive Office

  	
   

  	
  Jurisdiction of

  Incorporation

  	
   

  	
  Ownership Percentage

  or Relationship

  	
   

  
	
  NY & Co. Group, Inc.

  	
   

  	
  450 West 33rd Street

  New York, NY  10001

  	
   

  	
  Delaware

  	
   

  	
  Ultimate Parent / 100%

  	
   

  
	
  Lerner New York Holding, Inc.

  	
   

  	
  450 West 33rd Street

  New York, NY 10001

  	
   

  	
  Delaware

  	
   

  	
  Parent / 100% 

  	
   

  
	
  Lerner New York, Inc

  	
   

  	
  450 West 33rd Street

  New York, NY 10001

  	
   

  	
  Delaware

  	
   

  	
  Subsidiary of Parent / 100%

  	
   

  
	
  Nevada Receivable Factoring, Inc.

  	
   

  	
  3800 Howard Hughes Parkway, 7th Floor

  Las Vegas, Nevada

  	
   

  	
  Nevada

  	
   

  	
  Subsidiary of Parent / 100%

  	
   

  
	
  Associated Lerner Shops of America, Inc.

  	
   

  	
  450 West 33 Street 

  New York, NY 10001.

  	
   

  	
  New York

  	
   

  	
  Subsidiary / 100%

  	
   

  
	
  Lerner New York GC, LLC

  	
   

  	
  10 West Broad Street, Suite 2100

  Columbus, Ohio  43215

  	
   

  	
  Ohio

  	
   

  	
  Subsidiary / 100%

  	
   

  
	
  Jasmine Company, Inc

  	
   

  	
  450 West 33rd Street

  New York, NY  10001

  	
   

  	
  Massachusetts

  	
   

  	
  100%

  	
   

  



 

















 


ACKNOWLEDGMENT
BY GUARANTORS


 


Dated as of January 4, 2006


 


Each of the undersigned, being a Guarantor
(each a “Guarantor” and collectively, the “Guarantors”) under their respective
Amended and Restated Guaranty and Security Agreements, each dated as of March 16,
2004, as heretofore amended, made in favor of Agent (as amended, modified or
supplemented, each a “Guaranty” and collectively, the “Guaranties”), hereby (a) acknowledges
and agrees to the foregoing Fourth Amendment to Amended and Restated Loan and
Security Agreement, dated of even date herewith (the “Amendment”), and (b) confirms
and agrees that its Guaranty is and shall continue to be, in full force and
effect and is hereby ratified and confirmed in all respects except that upon
the effectiveness of and on and after the date of the Amendment, each reference
in such Guaranty to the Loan Agreement (as defined in the Amendment), “thereunder”,
“thereof’ or words of similar import referring to the “Loan Agreement”, shall
mean and be a reference to the Loan Agreement as amended or modified by the
Amendment. Although Agent has informed Guarantors of the amendments to the Loan
Agreement as set forth above, and Guarantors have acknowledged the same, each
Guarantor understands and agrees that none of Agent, Documentation Agent or any
Lender has any duty under the Loan Agreement, the Guaranties or any other
agreement with any Guarantor to so notify any Guarantor or to seek such an acknowledgement,
and nothing contained herein is intended to or shall create such a duty as to
any advances or transaction hereafter.


 


 


	
  NEW YORK & COMPANY, INC.

  	
  NEVADA RECEIVABLE FACTORING, INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ronald W. Ristau

  	
   

  	
  By:

  	
  /s/ Ronald W. Ristau

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  COO, CFO & Secretary

  	
   

  	
  Title:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  LERNER NEW YORK HOLDING, INC.

  	
  LERNER NEW YORK GC, LLC.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ronald W. Ristau

  	
   

  	
  By:

  	
  /s/ Ronald W. Ristau

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  COO & Secretary

  	
   

  	
  Title:

  	
  COO, CFO & Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ASSOCIATED LERNER SHOPS OF

  AMERICA, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ronald W. Ristau

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Secretary