Exhibit
10.7


AMENDMENT
NO. 1 TO LETTER AGREEMENT OF EMPLOYMENT


Amendment (this “Amendment”), made as of this
December 22, 2006, by and among Lerner New York, Inc. (the “Company”)
and Sandra Brooslin Viviano (“Executive”).


R E C I T A L S


 


WHEREAS, Executive is party to that certain Letter
Agreement of Employment between the Company and Executive dated March 13, 2006
(the “Agreement”).


WHEREAS, the Company and Executive wish to amend the
Agreement in order to clarify treatment of certain payments under the Agreement
in order to make them compliant with Section 409A of the Internal Revenue Code
of 1986, as amended.


NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
to the following:


1.                                       Amendment.


(a)                                  The
current Section 7 of the Agreement will be renumbered Section 7.1.


(b)                                 A
new Section 7.2 shall be added to the Agreement immediately following
Section 7.1 as follows:


“Severance Pay of Key
Employee.  If on the date of your
termination of employment by the Company: (i) a distribution of compensation to
which you become entitled under this Agreement upon your termination of
employment (including but not limited to severance or other termination
benefits) would be “nonqualified deferred compensation” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and
the Treasury Regulations issued thereunder, including Proposed Regulation
Section 1.409A-1(b)(9)(iii) (or any successor provision), which describes
certain separation pay arrangements that do not
provide for the deferral of compensation, and (ii) you are a “key employee”, as
defined in Code Section 416(i) without regard to paragraph (5) thereof, then
such distribution shall not be made before the date which is six months after
the date of your termination of employment (or, if earlier, your death).  All distributions to which you otherwise
would be entitled during such period shall be made on the date which is six
months after the date of your termination of employment (or, if earlier, your
death).  Any distributions thereafter
owed to you under this Agreement will be made in accordance with the Company’s
normal payroll policies and procedures.”


(c)                                  A
new Section 8 shall be added to the Agreement immediately following Section 7.2
as follows:


“Application of Code
Section 409A.  It is the Company’s
intent that compensation and benefits to which you are entitled under this
Agreement not be treated as “nonqualified
deferred compensation” under Code Section 409A (or any regulations or other
guidance promulgated thereunder) and that any ambiguities in the construction
of this Agreement be interpreted in order to effectuate such intent.  In the event that the Company determines, in
its sole discretion, that any compensation or benefits to which you are
entitled under this Agreement could be treated as “nonqualified deferred
compensation” under Code Section 409A unless this Agreement is amended or
modified, the Company













 


may, in its sole
discretion, amend or modify this Agreement without obtaining any additional
consent from you, so long as such amendment or modification does not materially
affect the net present value of the compensation or benefits to which you
otherwise would be entitled under this Agreement.”


(d)                                 All
section references thereafter shall be updated to reflect the above additions.


2.                                       Agreement
Otherwise Unchanged.  All other
provisions of the Agreement shall remain in full force and effect.


3.                                       Governing
Law. All issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.


4.                                       Counterparts.
This Amendment may be executed in separate counterparts each of which shall be
an original and all of which taken together shall constitute one and the same
agreement.


5.                                       Waiver
of Jury Trial. Each of the parties hereto waives any right it may have to
trial by jury in respect of any litigation based on, arising out of, under or
in connection with this Agreement or any course of conduct, course of dealing,
verbal or written statement or action of any party hereto.


*   *  
*   *   *



 2
 









 


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


	
  

  	
  By:

  	
  /s/ Richard
  P. Crystal

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Richard P. Crystal

  
	
   

  	
  Title:

  	
  Chairman, President and Chief

  
	
   

  	
   

  	
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sandra
  Brooslin Viviano

  	
   

  
	
   

  	
  Name:

  	
  Sandra Brooslin Viviano

  
					



 


 



 3