Exhibit 10.18


FIRST MODIFICATION AGREEMENT


This FIRST MODIFICATION
AGREEMENT is entered into as of September 26, 2005, by and among MOTHERS
WORK, INC., a Delaware corporation, CAVE SPRINGS, INC., a Delaware corporation
(each a “Borrower”), and MOTHERS WORK CANADA, INC., a Delaware corporation (“Guarantor”),
each of which has its principal executive offices at 456 North Fifth Street,
Philadelphia, Pennsylvania 19123; and FLEET RETAIL GROUP, LLC, a Delaware
limited liability company f/k/a Fleet Retail Finance, Inc., with an
address of 40 Broad Street, Boston, MA 02109, as Administrative Agent,
for the benefit of the Lenders; FLEET RETAIL GROUP, LLC, as Collateral Agent
for the benefit of Lenders and the Administrative Agent; and FLEET RETAIL
GROUP, LLC, as a Lender.


WHEREAS, the Lender established
a revolving line of credit pursuant to the Amended and Restated Loan and
Security Agreement dated as of October 15, 2004 (together with any
amendments thereto, the “Loan Agreement”) by and among Fleet Retail Group, Inc.
n/k/a Fleet Retail Finance, LLC, as Administrative Agent, Collateral Agent, and
Lender, and the Borrower and Guarantors;


WHEREAS, the Borrowers and
Guarantor have requested that the Lenders modify the Loan Agreement as set
forth herein on the terms and subject to the conditions hereof; and


WHEREAS, subject to the terms
and conditions in this Agreement, the Agents and Lender are willing to modify
the terms of the Loan Agreement in order to accommodate the Borrowers’ request;


NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Agents, Lender and the
Borrowers and Guarantor mutually agree as follows:


1.     Definitions.   All
capitalized terms used herein shall have the same meaning as set forth in the
Loan Agreement, unless otherwise defined herein.


2.     Effective Date:   The “Effective
Date” of this Agreement shall be June 22, 2005, upon the Administrative
Agent’s receipt of this First Modification Agreement, duly executed by all
parties hereto, together with all exhibits and schedules hereto.


3.     Modifications to Loan Agreement.


a)     Article I: Definition of “Fixed Charge Coverage Ratio”.   Article I
of the Loan Agreement is hereby amended to strike and delete the definition of “Fixed
Charge Coverage Ratio” therefrom and to replace it with the following:


“Fixed Charge Coverage Ratio”:   For any twelve month period, the ratio
of Borrowers’ consolidated (a) EBITDA minus Gross
Non-Financed Capital Expenditures minus the
payment of any dividends or other distributions on capital stock of the Lead
Borrower (except distributions in such stock), plus
(or minus) the increase (or decrease) in
total deferred rent liability, to (b) scheduled cash interest expense, plus scheduled principal payments on account of current maturities
of long term Indebtedness, plus, without
duplication, payments for the scheduled redemption or acquisition of
Securities, plus income taxes paid in cash, all as
determined in accordance with GAAP.


b)     Article I: Definition of “Gross Non-Financed Capital Expenditures”.   Article I
of the Loan Agreement is hereby amended to insert the following definition in
appropriate alphabetical order:


“Gross Non-Financed Capital Expenditures”:   The
amount equal to: (a) Capital Expenditures minus (b) only to the extent
included in clause (a) hereof, the amount of Capital Expenditures financed
through Indebtedness.



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c)     Article I: Definition of “Net Capital Expenditures”.   Article I
of the Loan Agreement is hereby amended to insert the following definition in
appropriate alphabetical order:


“Net Capital Expenditures”:   The
amount equal to: (a) Capital Expenditures minus (b) the amount of
tenant improvement allowances received in cash, to the extent not already
deducted from clause (a) hereof.


d)     Article I: Definition of “Pro Forma Fixed Charge Coverage Ratio”.   The
definition of “Pro Forma Fixed Charge Coverage Ratio” in Article I of the
Loan Agreement is hereby stricken and deleted in its entirety and replaced with
the following in lieu thereof:


“Pro Forma Fixed Charge Coverage Ratio”:   For
any twelve month period, the ratio of Borrowers’ consolidated (a) EBITDA
during such period minus projected
Gross Non-Financed Capital Expenditures for the following twelve month period minus projected Distributions for the following twelve month
period plus (or minus)
the projected increase (or decrease) in total deferred rent liability for the
following twelve month period, to (b) projected cash interest expense for
the following twelve month period, plus projected
principal payments on account of current maturities of long term Indebtedness
for the following twelve month period, plus projected
income taxes paid in cash for the following twelve month period, all as
determined in accordance with GAAP. Any projections used in computing Pro Forma
Fixed Charge Coverage Ratio shall be determined by the Borrowers and acceptable
to the Administrative Agent in its reasonable discretion.


e)     Section 4.21: Advances to employees.   Section 4.21
of the Loan Agreement is hereby amended to strike and delete clause (c) therefrom
and to replace it with the following:


“(c) Additional advances to the Obligors’
employees approved by the Chief Financial Officer, in an amount not more than
$1,000,000 in the aggregate.”


f)      Exhibit 5.12(a): Maximum Capital Expenditures Covenant.   Section 2
of Exhibit 5.12(a) is hereby amended to replace the term “Capital
Expenditures” with the term “Net Capital Expenditures” in the last line of
clause (B) of such Section 2, and in the second, third, and fourth
lines of the last paragraph of such Section 2.


4.     General Representations and Warranties.   Each
Borrower and Guarantor hereby further represents and warrants to the Agents and
Lender as follows:


a)     Representations and Warranties: No Event of
Default.   The representations and warranties herein, in the
Loan Agreement and in each other Loan Document and certificate or other writing
delivered by the Borrowers and Guarantor to the Administrative Agent on or
prior to the Effective Date of this Agreement in connection therewith shall be
correct and accurate on and as of the Effective Date of this Agreement as
though made on and as of such date (except to the extent such representation or
warranty expressly related to an earlier date, in which case such
representation and warranty shall have been correct and accurate in all
material respects as of such earlier date); and no Event of Default shall have
occurred and be continuing as of the Effective Date of this Agreement or would
result from this Agreement becoming effective in accordance with its terms.


b)     Organization, Good Standing, Etc.   Each
Borrower and Guarantor: (i) is a corporation, duly incorporated, validly
existing and in good standing under the laws of its state of formation, (ii) has
all requisite power and authority to execute, deliver and perform this
Agreement, and to perform the Loan Agreement, as amended hereby, and (iii) is
duly qualified to do business and is in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, expect where
the failure to do so would not have a Material Adverse Effect.



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c)     Authorization, Etc.   The
execution, delivery and performance by each Borrower and Guarantor of this
Agreement, and the performance by each Borrower and Guarantor of the Loan
Agreement, as amended hereby, (i) have been duly authorized by all
necessary action on the part of each Borrower and Guarantor, (ii) do not
and will not contravene any Borrower’s or Guarantor’s certificate of
incorporation, or by-laws, or other organizational documents, (iii) do not
and will not contravene in any material respect any applicable laws or any
contractual restriction binding on or otherwise affecting it or any of its
properties, and (iv) do not and will not result in or require the creation
of any lien or other encumbrance (other than pursuant to any Loan Documents)
upon or with respect to any of its properties.


d)     Government Approvals.   No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
agency or other regulatory body is required in connection with the due
execution, delivery and performance by any Borrower or Guarantor of this
Agreement, or for the performance of the Loan Agreement, as amended hereby,
except where the failure to obtain such authorizations or approval, or the
failure to take such other action would not have a Material Adverse Effect.


5.     Enforceability, Etc.   Except
as otherwise expressly provided herein, the Loan Agreement and the other Loan
Documents are, and shall continue to be, in full force and effect and are
hereby ratified and confirmed in all respects, except that on and after the
Effective Date hereof (i) all references in the Loan Agreement to “this
Agreement”, “hereto”, “hereof”, “hereunder”, or words of like import referring
to the Loan Agreement shall mean the Loan Agreement as amended by this
Agreement and (ii) all references in the other Loan Documents to the “Loan
Agreement”, “thereto”, “thereof”, “thereunder” or words of like import
referring to the Loan Agreement shall mean the Loan Agreement as amended by
this Agreement. Except as expressly provided herein, the execution, delivery
and effectiveness of this Agreement shall not operate as an amendment of any
right, power or remedy of the Agents or any Lender under the Loan Agreement or
any other Loan Document, nor constitute an amendment of any provision of the
Loan Agreement or any other Loan Documents.


6.     General Provisions.


a)     Integration; Amendment; Waivers.   This
Agreement and Loan Documents set forth in full are terms of agreement between
the parties and are intended as the full, complete and exclusive contract
governing the relationship between the parties, superseding all other
discussions, promises, representations, warranties, agreements and the
understandings between the parties with respect thereto. No term of the Loan
Documents may be modified or amended, nor may any rights thereunder be waived,
except in a writing signed by the party against whom enforcement of the
modification, amendment or waiver is sought. Any waiver of any condition in, or
breach of, any of the foregoing in a particular instance shall not operate as a
waiver of other or subsequent conditions or breaches of the same or a different
kind. The Agents’ or any Lender’s exercise or failure to exercise any rights
under any of the foregoing in a particular instance shall not operate as a
waiver of its right to exercise the same or different rights in subsequent
instances. Except as expressly provided to the contrary in this Agreement, or
in another written agreement, all the terms, conditions, and provisions of the
Loan Documents shall continue in full force and effect. If in this Agreement’s
description of an agreement between the parties, rights and remedies of the
Agents or Lenders or obligations of the Borrowers or Guarantor are described
that also exist under the terms of the other Loan Documents, the fact that this
Agreement may omit or contain a briefer description of any rights, remedies and
obligations shall not be deemed to limit any of such rights, remedies and
obligations contained in the other Loan Documents.



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b)     Payment of Expenses.   The Borrowers shall pay all
reasonable attorneys’ fees arising under or in connection with the negotiation,
preparation, execution, delivery, and enforcement of this Agreement and any and
all consents, waivers or other documents or instruments relating thereto.


c)     No Third Party Beneficiaries.   Except as may be
otherwise expressly provided for herein, this Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement.


d)     Separability.   If any provision of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal or
unenforceable, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.


e)     Counterparts.   This Agreement may be executed in any
number of counterparts, which together shall constitute one and the same
agreement.


f)      Time of Essence.   Time is of the essence in each of the
Liabilities of the Borrowers and Guarantor and with respect to all conditions
to be satisfied by the Borrowers and Guarantor.


g)     Construction; Voluntary Agreement; Representation by Counsel.   This
Agreement has been prepared through the joint efforts of all the parties. Neither
its provisions nor any alleged ambiguity shall be interpreted or resolved
against any party on the ground that such party’s counsel was the draftsman of
this Agreement. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose. Each of the parties declares that such party has carefully read this
Agreement and the agreements, documents and instruments being entered into in
connection herewith and that such party knows the contents thereof and sign the
same freely and voluntarily. The parties hereto acknowledge that they have been
represented in negotiations for and preparation of this Agreement and the
agreements, documents and instrument being entered into in connection herewith
by legal counsel of their own choosing, and that each of them has read the same
and had their contents fully explained by such counsel and is fully aware of
their contents and legal effect.


h)     Governing Law; Forum Selection.   This Agreement has
been entered into and shall be governed by the laws of the State of New York.


i)      Further Assurances.   The Borrower agrees to take all
further actions and execute all further documents as the Agents may from time
to time reasonably request to carry out the transactions contemplated by this
Agreement.


j)      Notices.   All notices, requests and demands to or upon
the respective parties hereto shall be given in accordance with the Loan
Agreement.


k)     Mutual Waiver of Right to Jury Trial.   THE AGENTS,
LENDERS AND THE BORROWERS AND GUARANTOR EACH HEREBY WAIVES THE RIGHT TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO: (I) THIS AGREEMENT, OR ANY OF THE AGREEMENTS, INSTRUMENTS OR
DOCUMENTS REFERRED TO HEREIN; OR (II) ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN THEM; OR (III) ANY CONDUCT, ACTS OR
OMISSIONS OF THE AGENTS, LENDERS OR THE BORROWERS OR GUARANTOR OR ANY OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER
PERSONS AFFILIATED WITH THEM; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING
IN CONTRACT OR TORT OR OTHERWISE.



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l)      Copies and Facsimiles.   This Agreement and all
documents which have been or may be hereinafter furnished by the Borrowers and
Guarantor to the Agents may be reproduced by the Agents by any photographic,
photostatic, microfilm, xerographic or similar process, and any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course
of business).



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Intentionally Left Blank



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This
First Modification Agreement is executed under seal as of the date written
above.




	
  

  	
  Mothers Work, Inc.

  
	
   

  	
  (“Borrower”)

  
	
   

  	
  By:

  	
  /s/ EDWARD M. KRELL

  
	
   

  	
   

  	
  Name:

  	
  Edward M. Krell

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President—CFO

  
	
   

  	
  Cave
  Springs, Inc.

  
	
   

  	
  (“Borrower”)

  
	
   

  	
  By:

  	
  /s/ EDWARD M. KRELL

  
	
   

  	
   

  	
  Name:

  	
  Edward M. Krell

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President—CFO

  
	
   

  	
  Mothers
  Work Canada, Inc.

  
	
   

  	
  (“Borrower”)

  
	
   

  	
  By:

  	
  /s/ EDWARD M. KRELL

  
	
   

  	
   

  	
  Name:

  	
  Edward M. Krell

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President—CFO

  
	
   

  	
  Fleet
  Retail Group, Inc.

  
	
   

  	
  f/k/a FLEET RETAIL FINANCE INC.

  
	
   

  	
  (“Administrative Agent”, “Collateral Agent”, and
  “Lender”)

  
	
   

  	
  By:

  	
  /s/ SALLY A. SHEEHAN

  
	
   

  	
   

  	
  Name:

  	
  Sally Sheehan

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  






 



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