<PAGE>
                                                                    EXHIBIT 4(b)

                     AMENDMENT NO. 1 TO DEBTOR IN POSSESSION
                           LOAN AND SECURITY AGREEMENT


         This Amendment No. 1 to Debtor in Possession Loan and Security
Agreement, dated as of February 26, 2002 (this "Amendment"), is by and among (a)
JACOBSON STORES INC., JACOBSON CREDIT CORP. and JACOBSON STORES REALTY COMPANY,
each a debtor and debtor-in-possession (each individually a "Borrower" and
collectively, the "Borrowers"); (b) FLEET RETAIL FINANCE, INC., a Delaware
corporation, as administrative agent (in such capacity, the "Administrative
Agent"), as collateral agent (in such capacity, the "Collateral Agent") and as
documentation agent (in such capacity, the "Documentation Agent") for the
Lenders and (c) the Lenders party to the Loan and Security Agreement described
below. Capitalized terms used herein without definition shall have the same
meaning as in the Loan and Security Agreement.

         WHEREAS, the Borrowers, the Administrative Agent, the Documentation
Agent, the Collateral Agent and the Lenders are parties to that certain Debtor
in Possession Loan and Security Agreement, dated as of January 30, 2002 (as
amended and in effect from time to time the "Loan and Security Agreement"),
pursuant to which the Administrative Agent and the Lenders, upon the terms and
conditions set forth therein, have agreed to make loans and otherwise extend
credit to the Borrowers; and

         WHEREAS, the Borrowers and the Lenders have agreed to amend the Loan
and Security Agreement on the terms and conditions set forth herein.

         NOW, THEREFORE, the parties hereto agree as follows:

         SECTION 1. Amendments to the Loan and Security Agreement.


                  SECTION 1.1 Definitions.


                  (a) Article 1: of the Loan and Security Agreement is hereby
         amended by deleting the definition of "Bankruptcy Breach" set forth
         such Article 1: in its entirety, and the Loan and Security Agreement is
         hereby further amended by deleting the reference to "Bankruptcy Breach"
         set forth in Section 16:16-4 and all other sections of the Loan and
         Security Agreement.

                  (b) Article 1: of the Loan and Security Agreement is hereby
         amended by deleting the definition of "Carve Out Reserve" set forth in
         such Article 1: in its entirety and substituting in lieu thereof the
         following new definition:

                  "'CARVE  OUT RESERVE': The sum of (a) fees required to be paid
                           pursuant to 28 U.S.C. Section 1930(a) and any fees
                           and expenses payable by the Borrowers to the Clerk of
                           the Bankruptcy Court and (b) the Professional Expense
                           Cap."
<PAGE>
                                      -2-

                  (c) Article 1: of the Loan and Security Agreement is hereby
         further amended by deleting clause (A) of the definition of "Ineligible
         Professional Expenses" set forth in Article 1: in its entirety and
         substituting in lieu thereof the following clause (A):

                  "(A) preventing, hindering or delaying, whether directly or
                  indirectly, the Lenders' or the Administrative Agent's
                  enforcement or realization upon any of the Collateral".

                  (d) Article 1: of the Loan and Security Agreement is hereby
         further amended by adding the following new clause (d) to the
         definition of "Permitted Encumbrances" set forth in Article 1:

                  "(d) purchase money security interests in or purchase money
                  mortgages on property acquired or leased, provided that the
                  aggregate principal amount of Indebtedness secured by such
                  purchase money security interests in or purchase money
                  mortgages shall not exceed $50,000 at any time outstanding."

                  (e) Article 1: of the Loan and Security Agreement is hereby
         further amended by adding the following new clause (g) to the
         definition of "Permitted Indebtedness" set forth in Article 1:

                  "(g) Indebtedness incurred in connection with the acquisition
                  of any property by any of the Borrowers or under any leases,
                  provided that the aggregate principal amount of such
                  Indebtedness shall not exceed $50,000 at any time
                  outstanding."

                  (f) Article 1: of the Loan and Security Agreement is hereby
         further amended by deleting the definition of "Priority Professional
         Expenses" set forth in Article 1 in its entirety and substituting in
         lieu thereof the following new definition:

                  "'PRIORITY PROFESSIONAL EXPENSES': At the time of reference
                           thereto, accrued and unpaid allowed fees, costs and
                           reasonable expenses of the members of the Creditors'
                           Committee and professionals retained in the
                           Proceedings pursuant to Sections 327 and 1103 of the
                           Bankruptcy Code consisting of attorneys, accountants,
                           financial advisors and consultants retained by the
                           Borrowers or the Creditors' Committee; provided,
                           however, that the amount of Priority Professional
                           Expenses shall not exceed the Professional Expense
                           Cap for purposes of the Carve Out Reserve. The term
                           does not include any Ineligible Professional Expenses
                           or the expenses of any professionals engaged by
                           members of the Creditors' Committee."

                  (g) Article 1: of the Loan and Security Agreement is hereby
         further amended by deleting the definition of "Professional Expense
         Cap" set forth in Article 1: in its entirety and substituting in lieu
         thereof the following new definition:

                  "'PROFESSIONAL EXPENSE CAP': $2,000,000 minus (a) any amounts
                           deposited by the Administrative Agent to the
                           Carve-Out Account (as defined in the Final
<PAGE>
                                      -3-


                  Borrowing Order) for Priority Professional Expenses and (b)
                  after the occurrence and continuance of any Event of Default,
                  any payment of accrued and unpaid allowed Priority
                  Professional Expenses whether incurred prior to or following
                  the occurrence and continuance of an Event of Default (other
                  than payments made from (i) the Carve-Out Account (as defined
                  in the Final Borrowing Order) or (ii) the application of
                  retainers paid to professionals prior to the commencement of
                  the Proceedings)."

         SECTION 1.2. Fees for L/C's. Section 2:2-20 of the Loan and Security
Agreement is hereby amended by deleting clauses (a)(i) and (ii) in their
entirety and substituting in lieu thereof the following new clauses (a)(i) and
(ii):

                  "(i) Documentaries: Four percent (4%) per annum.

                  (ii) Standbys: Four percent (4%) per annum."

         SECTION 1.3. Business Plan. The Loan and Security Agreement is hereby
amended by deleting Section 5:5-23 in its entirety and substituting in lieu
thereof the following new Section 5:5-23:

                  "5-23 REVISED BUSINESS PLAN. On or prior to March 12, 2002,
         the Borrowers shall have delivered to the Administrative Agent a
         revised Business Plan for the period through the Maturity Date which
         revised Business Plan shall be in form and substance satisfactory to
         the Administrative Agent and each of the Lenders."

         SECTION 1.4. Rejection of Leases. Section 5:5-31 of the Loan and
Security Agreement is hereby amended by adding the following text immediately
following "Section 365 of the Bankruptcy Code" in the second sentence of such
Section 5:5-31:

         "and to the extent that the Borrowers shall have failed to file any
         motions pursuant to Section 12:12-3(c)(i) and (ii)".

         SECTION 1.5. Superpriority Claims and Collateral Security. Section
9:9-1 of the Loan and Security Agreement is hereby amended by adding the
following text immediately following the last sentence of such Section 9:9-1:

         "After the occurrence and continuance of an Event of Default, within
         one Business Day after notice to the Administrative Agent by counsel to
         the Debtors or counsel to the Creditors' Committee given in accordance
         with the provisions set forth in paragraph 9 of the Final Borrowing
         Order, the Administrative Agent shall deposit into the Carve-Out
         Account (as defined in the Final Borrowing Order) first proceeds
         received from a Liquidation in an amount not to exceed the Professional
         Expense Cap in effect at such time plus any fees required to be paid
         pursuant to 28 U.S.C. section 1930(a) and any fees and expenses payable
         by the Borrowers to the Clerk of the Bankruptcy Court."
<PAGE>
                                      -4-



         SECTION 1.6. Events of Default. Article 11: of the Loan and Security
Agreement is hereby amended by deleting the first sentence of the lead-in
paragraph of such Article 11: and substituting in lieu thereof the following new
sentence:

         "The occurrence and continuance of any event described in Article 11:
         respectively shall constitute an 'EVENT OF DEFAULT' herein, and each
         reference to the occurrence of an Event of Default in this Agreement
         and the other Loan Documents shall mean the occurrence and continuance
         of an Event of Default".

         SECTION 1.7. Sale of Collateral.

         (a) Section 12:12-3 of the Loan and Security Agreement is hereby
further amended by deleting clause (c) of such Section 12:12-3 in its entirety
and substituting in lieu thereof the following new clause (c):

         "(c) The Administrative Agent may:

                  (i) By written notice to the Borrowers and the Creditors'
                  Committee, require the Borrowers to file a motion seeking to
                  retain one or more agents to sell, lease, or otherwise dispose
                  of the Collateral on terms acceptable to the Administrative
                  Agent. The Borrowers shall file such motion within ten (10)
                  Business Days of the Administrative Agent's request and shall
                  diligently prosecute such motion. If the Borrowers fail to so
                  file the motion, the Administrative Agent may file and
                  prosecute such a motion in the name of the Borrowers.

                  (ii) By written notice to the Borrowers and the Creditors'
                  Committee, require the Borrowers to file a motion or motions
                  seeking to sell, assume, assign, or otherwise dispose of any
                  or all of the Real Estate (including, without limitation,
                  leasehold interests) of the Borrowers pursuant to Section 363
                  and 365 of the Bankruptcy Code, on terms acceptable to the
                  Administrative Agent. The Borrowers shall file such motion or
                  motions within ten (10) business days of the Administrative
                  Agent's request and shall diligently prosecute such motion. If
                  the Borrowers fail to so file such motion(s), the
                  Administrative Agent may, file and prosecute such a motion(s)
                  in the name of the Borrowers.

                  All proceeds realized from any of the foregoing shall be
                  turned over to the Administrative Agent for application to the
                  Liabilities under, and in accordance with the provisions of
                  this Agreement and the other Loan Documents, including,
                  without limitation, Section 14:14-8. The Administrative Agent
                  shall consult with counsel for the Creditors' Committee in
                  connection with the exercise of any of its remedies provided
                  hereunder and solicit such counsel's advice as to the manner
                  to maximize the return on the Collateral, but nothing
                  contained herein shall obligate the Administrative Agent to
                  undertake any specific action by the
<PAGE>
                                      -5-


                  Creditors' Committee or limit the rights of the Administrative
                  Agent hereunder."

         (b) Section 12:12-3 of the Loan and Security Agreement is hereby
further amended by adding the following new clause (h) to such Section 12:12-3:

         "Notwithstanding anything herein or in the other Loan Documents to the
         contrary, in the event that the Administrative Agent in the exercise of
         the Administrative Agent's rights and remedies upon an Event of Default
         itself seeks to conduct going out of business sales of the Collateral
         at the Borrowers' premises, the Administrative Agent shall file a
         motion with the Bankruptcy Court with respect to the conduct of such
         sales to be heard on an expedited basis (subject to the Bankruptcy
         Court's calendar) but not sooner than five (5) Business Days after such
         motion is filed with the Bankruptcy Court."

         SECTION 1.8. Occupation of Business Location. Section 12:12-4 of the
Loan and Security Agreement is hereby amended by deleting the first sentence of
such Section 12:12-4 and substituting in lieu thereof the following new
sentence:

         "In connection with the Administrative Agent's exercise of the
         Administrative Agent's rights under this Article 12:, upon written
         notice to the landlord of any leased premises that an Event of Default
         has occurred and is continuing and that the automatic stay has been
         lifted, the Administrative Agent may, subject to any separate agreement
         by and between such landlord and the Administrative Agent, enter upon,
         occupy, and use any premises owned or occupied by each Borrower, and
         may exclude each Borrower from such premises or portion thereof as may
         have been so entered upon, occupied or used by the Administrative
         Agent, and shall be entitled to all of such Borrower's rights and
         privileges as lessee under such lease and without interference from the
         landlords thereunder; provided that the Administrative Agent shall only
         pay rent and additional rent obligations of the Borrowers that first
         arise after the Administrative Agent's written notice referenced above
         and that are payable during the period of such occupancy by the
         Administrative Agent, calculated on a per diem basis; provided further
         that landlords of nonresidential real property shall retain all rights
         available to them pursuant to section 365 of the Bankruptcy Code,
         including without limitation, the right to compel payment of
         administrative rent from the Borrowers and the right to compel
         assumption or rejection of nonresidential real property leases."

         SECTION 1.9. Notices. Section 18:18-1 of the Loan and Security
Agreement is hereby amended by adding the following text to such Section
18:18-1:

         "If to the Creditors' Committee:
                                 Committee

                                    c/o Jay Randall Indyke, Esq. and Robert A.
                                    Boghosian, Esq., counsel to the Committee
                                    Kronish, Lieb, Weiner and Hellman, LLP
<PAGE>
                                      -6-


                                    1114 Avenue of the Americas
                                    New York, New York 100036-7798
                                    Fax: (212) 479-6275".

         SECTION 1.10. Rules of Construction. Section 20:20-13 of the Loan and
Security Agreement is hereby amended by adding the following new clause (s) to
such Section 20:20-13:

         "(s) To the extent any terms and conditions of this Agreement or any of
         the other Loan Documents are in conflict with the terms and conditions
         of the Final Borrowing Order as such Final Borrowing Order is entered
         by the Bankruptcy Court on February 26, 2002, the provisions of the
         Final Borrowing Order as entered shall control."

         SECTION 2. REVOLVING CREDIT EARLY TERMINATION FEE UNDER THE PREPETITION
LOAN AGREEMENT. By its signature below, each of the Banks party to the
Prepetition Loan Agreement acknowledges and agrees that no "Revolving Credit
Early Termination Fee" (as defined in the Prepetition Loan Agreement) shall be
due and payable pursuant to Section 2.15 of the Prepetition Loan Agreement as a
result of the occurrence of the "End Date" (as defined in the Prepetition Loan
Agreement) on the date hereof.

         SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective as of the date hereof upon satisfaction of each of the following
conditions precedent:

                  (a) The Administrative Agent shall have received a counterpart
         signature page to this Amendment duly executed by each of the
         Borrowers, the Lenders and the Administrative Agent.

                  (b) The Final Borrowing Order shall have been entered in the
         Proceedings, which Final Borrowing Order shall incorporate, among other
         things, this Amendment.

         SECTION 4. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers hereby
represents and warrants to the Administrative Agent and the Lenders as follows:

                  (a) Representations and Warranties in the Loan and Security
         Agreement. The representations and warranties of the Borrowers
         contained in the Loan and Security Agreement were true and correct in
         all material respects as of the date when made and continue to be true
         and correct in all material respects on the date hereof, except to the
         extent of changes resulting from transactions or events contemplated by
         the Loan and Security Agreement and the other Loan Documents and
         changes occurring in the ordinary course of business that singly or in
         the aggregate are not materially adverse to the Borrowers, or to the
         extent that such representations and warranties relate expressly to an
         earlier date.

                  (b) Ratification, Etc. Except as expressly amended or waived
         hereby, the Loan and Security Agreement and the other Loan Documents,
         and all documents, instruments and agreements related thereto, are
         hereby ratified and confirmed in all
<PAGE>
                                      -7-


         respects and shall continue in full force and effect. The Loan and
         Security Agreement shall, together with this Amendment, be read and
         construed as a single agreement. All references to the Loan and
         Security Agreement in the Loan and Security Agreement, the Loan
         Documents or any related agreement or instrument shall hereafter refer
         to the Loan and Security Agreement as amended hereby.

                  (c) Authority, Etc. The execution and delivery by each of the
         Borrowers of this Amendment and the performance by such Person of all
         of its agreements and obligations under the Loan and Security Agreement
         as amended hereby are within the corporate authority of such Person and
         have been duly authorized by all necessary corporate action on the part
         of such Person.

                  (d) Enforceability of Obligations. This Amendment and the Loan
         and Security Agreement as amended hereby constitute the legal, valid
         and binding obligations of each of the Borrowers enforceable against
         such Person in accordance with their terms, except as enforceability is
         limited by bankruptcy, insolvency, reorganization, moratorium or other
         laws relating to or affecting generally the enforcement of, creditors'
         rights and except to the extent that availability of the remedy of
         specific performance or injunctive relief is subject to the discretion
         of the court before which any proceeding therefor may be brought.

                  (e) No Default. No Default or Event of Default has occurred
         and is continuing, and no Default or Event of Default will exist after
         execution and delivery of this Amendment.

         SECTION 5. MISCELLANEOUS PROVISIONS.

                  (a) Except as expressly provided in this Amendment, all of the
         terms, conditions and provisions of the Loan and Security Agreement and
         the other Loan Documents shall remain the same. It is declared and
         agreed by each of the parties hereto that the Loan and Security
         Agreement, as amended hereby, shall continue in full force and effect
         and that this Amendment and the Loan and Security Agreement shall be
         read and construed as one instrument. This Amendment shall constitute a
         "Loan Document" under and as defined in the Loan and Security
         Agreement.

                  (b) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
         ACCORDING TO, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
         (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).

                  (c) This Amendment may be executed in any number of
         counterparts (which may be delivered via telecopier), but all such
         counterparts together constitute but one instrument. In making proof of
         this Amendment it shall not be necessary to produce or account for more
         than one counterpart signed by each party hereto by and against which
         enforcement hereof is sought.

                  (d) Headings or captions used in this Amendment are for
         convenience of reference only and shall not define or limit the
         provisions hereof.
<PAGE>
                                      -8-



                  (e) Pursuant to Section 20:20-9 of the Loan and Security
         Agreement, all reasonable costs and expenses incurred or sustained by
         the Administrative Agent or any Lender in connection with this
         Amendment, including the fees and disbursements of legal counsel for
         the Administrative Agent or such Lender in producing, reproducing and
         negotiating the Amendment, will be for the account of the Borrowers
         whether or not the transactions contemplated by this Amendment are
         consummated.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.


                                                  THE BORROWERS' REPRESENTATIVE:

                                                            JACOBSON STORES INC.


                                By  /s/   Kevin C. Binkley
                                    ------------------------------------------

                        Print Name: Kevin C. Binkley
                                    ------------------------------------------

                             Title:  VP-Treasurer
                                    -------------------------------------------



                                                                  THE BORROWERS:

                                                            JACOBSON STORES INC.

                                By  /s/   Kevin C. Binkley
                                    ------------------------------------------

                        Print Name: Kevin C. Binkley
                                    ------------------------------------------

                             Title:  VP-Treasurer
                                    -------------------------------------------



                                                           JACOBSON CREDIT CORP.

                                By  /s/   Kevin C. Binkley
                                    ------------------------------------------

                        Print Name: Kevin C. Binkley
                                    ------------------------------------------

                             Title:  VP-Treasurer
                                    -------------------------------------------



                                                  JACOBSON STORES REALTY COMPANY

                                By  /s/   Kevin C. Binkley
                                    ------------------------------------------

                        Print Name: Kevin C. Binkley
                                    ------------------------------------------

                             Title:  VP-Treasurer
                                    -------------------------------------------
<PAGE>
                                      -2-




                  ADMINISTRATIVE AGENT, COLLATERAL AGENT AND DOCUMENTATION AGENT

                                                       FLEET RETAIL FINANCE INC.


                                By  /s/   James J. Ward
                                    -------------------------------------------

                        Print Name:     James J. Ward
                                    -------------------------------------------

                             Title:     Director
                                    -------------------------------------------


                                                                    THE LENDERS:

                                                       FLEET RETAIL FINANCE INC.


                                By  /s/   James J. Ward
                                    ------------------------------------------

                        Print Name:     James J. Ward
                                    ------------------------------------------

                             Title:     Director
                                    ------------------------------------------


                                                    FOOTHILL CAPITAL CORPORATION


                                By  /s/   Eileen Quinn
                                    ------------------------------------------

                        Print Name:     Eileen Quinn
                                    ------------------------------------------

                             Title:     Vice President
                                    ------------------------------------------


                                                          HELLER FINANCIAL, INC.

                                By  /s/   Richard J. Holston
                                    ------------------------------------------

                        Print Name:     Richard J. Holston
                                    ------------------------------------------

                             Title:     AVP
                                    ------------------------------------------
<PAGE>
                                      -3-



                                                      STANDARD FEDERAL BANK N.A.
                                                  (f/k/a Michigan National Bank)


                                By  /s/   Matthew Barbuscak
                                    ------------------------------------------

                        Print Name:     Matthew Barbuscak
                                    ------------------------------------------

                             Title:     Vice President
                                    ------------------------------------------


                                                   ORIX FINANCIAL SERVICES, INC.


                                By  /s/   Dawn M. Dieter
                                    ------------------------------------------

                        Print Name:     Dawn M. Dieter
                                    ------------------------------------------

                             Title:     Vice President
                                    ------------------------------------------


                                                              THE PROVIDENT BANK


                                By  /s/   Cary M Sierzputowski
                                    ------------------------------------------

                        Print Name:     Cary M Sierzputowski
                                    ------------------------------------------

                             Title:     Vice President
                                    ------------------------------------------


                                       IBJ WHITEHALL BUSINESS CREDIT CORPORATION


                                By  /s/   Bruce Kasper
                                    ------------------------------------------

                        Print Name:     Bruce Kasper
                                    ------------------------------------------

                             Title:     Vice President
                                    ------------------------------------------


                                                                   COMERICA BANK


                                By  /s/   Andrew Ottaway
                                    ------------------------------------------

                        Print Name:     Andrew Ottaway
                                    ------------------------------------------
<PAGE>
                                      -4-



                             Title:     Vice President
                                    ------------------------------------------