Document:

Exhibit
10.3

Executed

SECOND AMENDED AND
RESTATED

COLLATERAL ASSIGNMENT OF TRADEMARKS

(SECURITY AGREEMENT)

THIS SECOND AMENDED AND RESTATED COLLATERAL ASSIGNMENT
OF TRADEMARKS (SECURITY AGREEMENT) (this “Agreement”), dated August 22, 2007,
is made among LERNCO, INC., a Delaware corporation (“Lernco”), and Jasmine
Company, Inc., a Massachusetts corporation (“Jasmine” and together with Lernco,
each individually a “Pledgeor” and collectively, “Pledgors”), each with
offices at 450 West 33rd Street, New York, New York 10001, in favor of
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, with an
office at 1133 Avenue of the Americas, New York, New York 10036, in its
capacity as agent (in such capacity, “Pledgee”), for the Lenders and
Bank Product Providers (as defined in the Loan Agreement).

W  I  T  N  E  S  S  E  T  H:

WHEREAS, Lernco has previously entered into the
Amended and Restated Collateral Assignment of Trademarks (Security Agreement),
dated as of March 16, 2004 (the “Existing Security Agreement”), in order
to further evidence Lernco’s grant in favor of Pledgee, of a security interest
in the Trademarks (as defined herein) and the goodwill and certain other assets
with respect to the Trademarks, as further set forth therein.

WHEREAS, Pledgee,
Pledgors, Lerner New York, Inc. (“Lerner” and together with Pledgors,
collectively, “Borrowers”), Guarantors, and the Persons from time to time party
thereto as lenders (“Lenders”), have amended and restated or are about
to amend and restate the existing financing arrangements of Pledgee, Lenders,
Borrowers and Guarantors pursuant to which Lenders (or Pledgee on behalf of
Lenders) may make loans and advances and provide other financial accommodations
to Borrowers as set forth in the Second Amended and Restated Loan and Security
Agreement, dated as of the date hereof, by and among Pledgee, Lenders,
Borrowers and Guarantors (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, the “Loan
Agreement”) and other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto, including, but not limited to, this Guarantee (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,  Lernco
owns all right, title, and interest in and to, among other things, all the
trademarks, United States trademarks and trademark registrations, and the
trademark applications and tradenames, set forth on Exhibit A-1
hereto (the “Lernco Trademarks”) and Jasmine owns all right, title, and
interest in and to, among other things, all the trademarks, United States
trademarks and trademark registrations, and the trademark applications and
tradenames, set forth on Exhibit A-2 hereto (the “Jasmine
Trademarks”, and collectively, together with the Lernco Trademarks”, the “Trademarks”);
and

WHEREAS, in furtherance of the terms of the Financing
Agreements and in consideration of Pledgee and the Lenders entering into the
Loan Agreement, Pledgors and Pledgee wish to amend and restate the Existing
Security Agreement.

NOW THEREFORE, for valuable consideration received and
to be received, and as security for the full payment and performance of the
Obligations (as defined in the Loan Agreement) arising from the Loan Agreement,
and to induce Pledgee and the Lenders to make and continue to make loans and
advances to the Borrowers under the Loan Agreement, Pledgors and Pledgee hereby
amend and restate the Existing Security Agreement in its entirety as set forth
in this Agreement and Pledgors hereby grant to Pledgee, for itself and the
ratable benefit of the Lenders and Bank Product Providers, a security interest
in:

(a)           the Trademarks;

(b)           all registrations of
the Trademarks in any State of the United States and any foreign countries and
localities;

(c)           all tradenames,
trademarks and trademark registrations hereafter adopted or acquired and used,
including, but not limited to, those which are based upon or derived from the
Trademarks or any variations thereof (the “Future Trademarks”);

(d)           all extensions,
renewals, and continuations of the Trademarks and Future Trademarks and the
registrations referred to in clause (b) above;

(e)           all rights to sue
for past, present and future infringements of the Trademarks and Future
Trademarks;

(f)            all packaging,
labeling, trade names, service marks, logos, and trade dress including or
containing the Trademarks and Future Trademarks, or a representation thereof,
or any variation thereof;

(g)           all licenses and
other agreements under which each Pledgor is licensor, but only to the extent
that the grant of a security interest therein would not be prohibited by or be
a breach of terms thereof, and all fees, rents, royalties, proceeds or monies
thereunder, relating to the Trademarks and Future Trademarks and the use
thereof; and

(h)           all goodwill of each
Pledgor’s business connected with, symbolized by or in any way related to the
items set forth in clauses (a) through (g) above.

All of the foregoing items set forth in clauses (a)
through (h) are hereinafter referred to collectively as the “Collateral.”

AND Pledgors hereby covenants with Pledgee as follows:

1.             Pledgors’
Obligations.  Each Pledgor agrees
that, notwithstanding this Agreement, it will perform and discharge and remain
liable for all its covenants, duties, and obligations arising in connection
with the Collateral and any licenses and agreements related thereto.  Pledgee shall have no obligation or liability
in connection with the Collateral or any licenses or 

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agreements
relating thereto by reason of this Agreement or any payment received by Pledgee
or any Lender relating to the Collateral, nor shall Pledgee or any Lender be
required to perform any covenant, duty, or obligation of each Pledgor arising
in connection with the Collateral or any license or agreement related thereto
or to take any other action regarding the Collateral or any such licenses or
agreement.

2.             Representations and Warranties.  Each Pledgor represents and warrants to
Pledgee that:

(a)           Pledgors are the
owner of the Collateral, and no adverse claims have been made with respect to
its title to or the validity of the Collateral;

(b)           the Trademarks are
the only trademarks, trademark registrations, trademark applications and trade
names in which Pledgors have all right, title and interest;

(c)           none of the
Collateral is subject to any prior mortgage, pledge, lien, security interest,
lease, charge, encumbrance or license (by Pledgors as licensor), except for
Pledgee’s interests granted hereunder and under the Existing Security
Agreement; and

(d)           when this Agreement
is filed in the United States Patent and Trademark Office (the “Trademark
Office”) and the Pledgee has taken the other actions contemplated in this
Agreement and by the Financing Agreements, if, and to the extent that a
security interest may be perfected in such Collateral under applicable law this
Agreement will create a legal and valid perfected and continuing lien on and
security interest in the Collateral in favor of Pledgee (except for any
non-U.S. Trademarks), enforceable against Pledgors and all third parties,
subject to no other prior mortgage, lien, charge, encumbrance, or security or
other interest.

3.             Covenants. 
Each Pledgor will maintain the Collateral, defend the Collateral against
the claims of all persons, and will maintain and renew all registrations of the
Collateral; notwithstanding the foregoing, Pledgors will not be required to
maintain, renew or defend any Collateral which, in Pledgors’ reasonable
judgment, no longer has any material economic value.  Pledgors will maintain at least the same
standards of quality (which Pledgee has reviewed) for the goods and services in
connection with which the Trademarks are used as Pledgors maintained for such
goods and services prior to entering into this Agreement.  Pledgee shall have the right to enter upon
Pledgors’ premises as provided in the Financing Agreements to monitor such
quality standards.  Without limiting the
generality of the foregoing, and so long as any Trademark or Future Trademark,
in Pledgors’ reasonable judgment, has material economic value, Pledgors shall not
permit the expiration, termination or abandonment of such Trademark or Future
Trademark without the prior written consent of Pledgee.  If, before the Obligations have been
satisfied in full and the Financing Agreements have been terminated, Pledgors
shall be licensed to use any new trademark, or become entitled to the benefit
of any trademark application or trademark registration, the provisions of
Section 1 hereof shall automatically apply thereto and Pledgors shall give
Pledgee prompt notice thereof in writing.

4.             Use Prior to Default.  Effective until Pledgee’s exercise of its
rights and remedies upon an Event of Default under and as defined in the
Financing Agreements (an “Event of 

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Default”),
Pledgors shall be entitled to use the Collateral in the ordinary course of its
business, subject to the terms and covenants of the Financing Agreements and
this Agreement.

5.             Remedies Upon
Default.  Whenever any Event of
Default shall occur and be continuing, Pledgee shall have all the rights and
remedies granted to it in such event by the Financing Agreements, which rights
and remedies are specifically incorporated herein by reference and made a part
hereof, and any and all rights and remedies of law available to Pledgee.  Pledgee in such event may collect directly
any payments due to Pledgors in respect of the Collateral and may sell,
license, lease, assign, or otherwise dispose of the Collateral in the manner
set forth in the Financing Agreements. 
Each Pledgor agrees that, in the event of any disposition of the
Collateral upon and during the continuance of any such Event of Default, it
will duly execute, acknowledge, and deliver all documents necessary or
advisable to record title to the Collateral in any transferee or transferees
thereof, including, without limitation, valid, recordable assignments of the
Trademarks or Future Trademarks.  In the
event Pledgors fail or refuse to execute and deliver such documents, each
Pledgor hereby irrevocably appoints Pledgee as its attorney-in-fact, with power
of substitution, to execute, deliver, and record any such documents on each
Pledgor’s behalf as provided in the Financing Agreements.  Notwithstanding any provision hereof to the
contrary, during the continuance of an Event of Default, Pledgors may sell any
merchandise or services bearing the Trademarks and Future Trademarks in the
ordinary course of its business and in a manner consistent with its past
practices, until it receives written notice from Pledgee to the contrary.  The preceding sentence shall not limit any right
or remedy granted to Pledgee with respect to each Pledgor’s inventory under the
Financing Agreements or any other agreement now or hereinafter in effect.

6.             Cumulative
Remedies.  The rights and remedies
provided herein are cumulative and not exclusive of any other rights or
remedies provided by law.  The rights and
remedies provided herein are intended to be in addition to and not in
substitution of the rights and remedies provided by the Financing Agreements or
any other agreement or instrument delivered in connection therewith.

7.             Amendments and
Waivers.  This Agreement may not be
modified, supplemented, or amended, or any of its provisions waived except in a
writing signed by Pledgors and Pledgee. 
Pledgors hereby authorize Pledgee to modify this Agreement by amending
Exhibit A hereto to include any Future Trademarks.

8.             Waiver of Rights.  No course of dealing between the parties to
this Agreement or any failure or delay on the part of any such party in
exercising any rights or remedies hereunder shall operate as a waiver of any
rights and remedies of such party or any other party, and no single or partial
exercise of any rights or remedies by one party hereunder shall operate as a
waiver or preclude the exercise of any other rights and remedies of such party
or any other party.  No waiver by Pledgee
of any breach or default by Pledgors shall be deemed a waiver of any other
previous breach or default or of any breach or default occurring thereafter.

9.             Assignment.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto; provided, however, that no interest herein or in or to
the Collateral may be assigned by Pledgors without the prior written 

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consent of
Pledgee; and, provided further, that Pledgee may assign the rights and benefits
hereof to any party acquiring any interest in the Obligations or any part
thereof.

10.           Future Acts.  Until the Obligations shall have been paid in
full, Pledgors shall have the duty to make applications on material
unregistered, but registrable as trademarks, Collateral owned by each Pledgor
in any location where each Pledgor does business, to prosecute such
applications diligently, and to preserve and maintain all rights in the
material Trademarks and the other material Collateral, except to the extent
Pledgors reasonably determine that such Trademarks do not have any material
economic value.  Any expenses incurred in
connection with such applications and other actions shall be borne by Pledgors.  Pledgors shall not abandon any right to file
a trademark application or registration for any trademark, or abandon any such
pending trademark application or registration, without the consent of Pledgee,
except to the extent that Pledgors reasonably determines that the trademark
covered by such application or registration has no material economic value.

11.           Enforcement.  Upon Pledgors’ failure to do so after Pledgee’s
demand, or upon the occurrence and during the continuance of an Event of
Default, Pledgee shall have the right but shall in no way be obligated to bring
suit in its own name to enforce the Trademarks and Future Trademarks and any
license thereunder, having material economic value to the Pledgee, in which
event Pledgors shall at the request of Pledgee do any and all lawful acts and
execute any and all proper documents required by Pledgee in aid of such
enforcement and Pledgors shall promptly, upon demand, reimburse and indemnify
Pledgee or its agents for all costs and expenses incurred by Pledgee in the
exercise of its rights under this Section 11.

12.           Release.  At such time as Pledgors shall completely
satisfy all of the non-contingent Obligations, and the Financing Agreements
have been terminated, other than upon enforcement of Pledgee’s remedies under
the Financing Agreements after an Event of Default, Pledgee will, at Pledgors’
sole cost and expense, execute and deliver to each Pledgor a release or other
instrument as may be necessary or proper to release each Pledgor’s lien in the
Collateral, subject to any dispositions thereof which may have been made by
Pledgee pursuant hereto and as may be necessary to record such release with the
U.S. Patents and Trademarks Office, or equivalent authority.

13.           Severability.  If any clause or provision of this Agreement
shall be held invalid or unenforceable, in whole or in part, in any
jurisdiction, such invalidity or unenforceability shall attach only to such
clause or provision, or part thereof, in such jurisdiction, and shall not in
any manner affect such or any other clause or provision in any other
jurisdiction.

14.           Notices.  All notices, requests and demands to or upon
Pledgors or Pledgee under this Agreement shall be given in the manner
prescribed by the Financing Agreements.

15.           Governing Law.
 This Agreement shall be governed by and
construed, applied, and enforced in accordance with the federal laws of the
United States of America applicable to trademarks and the laws of the State of
New York, except that no doctrine of choice of law shall be used to apply the
laws of any other State or jurisdiction. 
The parties agree that all actions or proceedings arising in connection
with this Agreement shall be tried and litigated only in the state and federal
courts located in the State of New York, New York County, or in the United 

 5
 

States District
Court for the Southern District of New York, whichever Pledgee may elect
(except that Pledgee shall have the right to bring any action or proceeding
against any Pledgor or its property in the courts of any other jurisdiction
which Pledgee deems necessary or appropriate in order to realize on the
Collateral or to otherwise enforce its rights against any Pledgor or its
property).  PLEDGORS AND PLEDGEE EACH
WAIVES THE RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION ARISING UNDER THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING,
AND ANY RIGHT EITHER MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS,
LACK OF PERSONAL JURISDICTION, OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING
IS BROUGHT IN ACCORDANCE WITH THIS SECTION.

16.           Counterparts,
etc.  This Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this
Agreement by telefacsimile shall have the same force and effect as the delivery
of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart
of this Agreement by telefacsimile shall also deliver an original executed
counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of this Agreement.

17.           Supplement.  This Agreement is a supplement to, and is
hereby incorporated into, the Financing Agreements and made a part thereof.

18.           Interpretation.  To the extent that any covenants set forth in
Section 3 hereto, or representations or warranties set forth in Section 2
hereto are in direct conflict with the terms of any covenants, representations or
warranties contained in the Financing Agreements, the terms of this Agreement
shall control.  To the extent any other
provisions of this Agreement are in direct conflict with the terms of any other
provisions of the Financing Agreements, the terms of the Financing Agreements
shall control.

19.           Acknowledgment
and Restatement.

(a)           Each Pledgor hereby acknowledges, confirms and agrees that each Pledgor
is indebted to Pledgee and Lenders in respect of any obligations,
liabilities or indebtedness for loans, advances and letter of credit
accommodations to Pledgee under the Existing Loan Agreement, the Existing  Security Agreement or the other Existing  Financing Agreements, together with all
interest accrued and accruing thereon, and all fees, costs, expenses and other
charges relating thereto, all of which are unconditionally owing by each
Pledgor to Pledgee without offset, defense, or counterclaim of any kind, nature
or description whatsoever. Each Pledgor hereby ratifies, assents, adopts and
agrees to pay all of the Obligations arising before, on or after the date
hereof.

(b)           Each Pledgor hereby acknowledges, confirms and agrees that
Pledgee has and shall continue to have, for itself and the benefit of Lenders,
valid, enforceable and perfected first priority security interests in and liens
upon all of the Collateral heretofore granted to Pledgee pursuant to the
Existing  Security Agreement to secure
all of the Obligations subject only to liens permitted under the Loan Agreement
and the other Financing Agreements.

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(c)           Each Pledgor hereby acknowledges, confirms and agrees
that: (i) the Existing  Security
Agreement has been duly executed and delivered by Pledgors and is in full force
and effect as of the date hereof; (ii) the agreements and obligations of
Pledgors contained in the Existing 
Security Agreement constitute legal, valid and binding obligations of
Pledgors enforceable against it in accordance with the terms thereof, and
Pledgors have no valid defense, offset or counterclaim to the enforcement of
such obligations; and (iii) Pledgee and Lenders are entitled to all of the
rights, remedies and benefits provided for in the Existing  Security Agreement.

(d)           Except as otherwise stated in Section 19(b) hereof and in
this Section 19(d), as of the date hereof, the terms, conditions, agreements,
covenants, representations and warranties set forth in the Existing  Security Agreement are hereby amended and
restated in their entirety, and as so amended and restated, are replaced and
superseded by the terms, conditions agreements, covenants, representations and
warranties set forth in this Agreement, except that nothing herein shall impair
or adversely affect the continuation of the liability of Pledgors for the
obligations or the security interests and liens heretofore granted, pledged or
assigned to Pledgee for itself and the benefit of Lenders.  The amendment and restatement contained
herein shall not, in any manner, be construed to constitute payment of, or
impair, limit, cancel or extinguish, or constitute a novation in respect of,
the indebtedness and other obligations and liabilities of Pledgors evidenced by
or arising under the Existing  Security
Agreement and any of the other Existing 
Financing Agreements to which Pledgors are a party, and the liens and
security interests securing such indebtedness and other obligations and
liabilities shall not in any manner be impaired, limited, terminated, waived or
released.

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IN WITNESS WHEREOF, the parties have entered into this
Agreement as of the date first written above.

	
  

  	
  PLEDGORS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LERNCO, INC.,

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald W. Ristau

  
	
   

  	
  Name:

  	
  Ronald W. Ristau

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JASMINE COMPANY, INC.,

  
	
   

  	
  a Massachusetts corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald W. Ristau

  
	
   

  	
  Name: 

  	
  Ronald W. Ristau

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PLEDGEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION, as 

  
	
   

  	
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laurence Forte

  
	
   

  	
  Name: 

  	
  Laurence Forte

  
	
   

  	
  Title:

  	
  Managing DirectorExhibit
10.4

[Execution]

AMENDED AND RESTATED

COLLATERAL ASSIGNMENT OF
TRADEMARKS

(SECURITY AGREEMENT)

THIS AMENDED AND RESTATED COLLATERAL ASSIGNMENT OF
TRADEMARKS (SECURITY AGREEMENT) (this “Agreement”), dated August 22,
2007, is made among LERNER NEW YORK, INC., a Delaware corporation (“Pledgor”),
with an office at 450 West 33rd Street, New York,
New York 10001, in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association, with an office at 1133 Avenue of the Americas, New York,
New York 10036, in its capacity as agent (in such capacity, “Pledgee”),
for the Lenders and Bank Product Providers (as defined in the Loan Agreement).

W
I  T  N  E  S  S  E  T  H:

WHEREAS, Pledgor has previously entered into the
Collateral Assignment of Trademarks (Security Agreement), dated as of November
27, 2002 (the “Existing Security Agreement”), in order to further
evidence Pledgor’s grant in favor of Pledgee, of a security interest in the
Trademarks (as defined herein) and the goodwill and certain other assets with
respect to the Trademarks, as further set forth therein.

WHEREAS, Pledgee,
Pledgor, Lernco, Inc. (“Lernco”) and Jasmine Company, Inc. (“Jasmine”
and together with Pledgor, and Lernco, collectively, “Borrowers”), Guarantors,
and the Persons from time to time party thereto as lenders (“Lenders”),
have amended and restated or are about to amend and restate the existing
financing arrangements of Pledgee, Lenders, Borrowers and Guarantors pursuant
to which Lenders (or Pledgee on behalf of Lenders) may make loans and advances
and provide other financial accommodations to Borrowers as set forth in the
Second Amended and Restated Loan and Security Agreement, dated as of the date
hereof, by and among Pledgee, Lenders, Borrowers and Guarantors (as the same
now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, the “Loan Agreement”) and other
agreements, documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related thereto,
including, but not limited to, this Guarantee (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, Pledgor owns all right, title, and interest
in and to, among other things, all the trademarks, United States trademarks and
trademark registrations, and the trademark applications and tradenames, set
forth on Exhibit A hereto (the “Trademarks”); and

WHEREAS, in furtherance of the terms of the Financing
Agreements and in consideration of Agent and the Lenders entering into the Loan
Agreement, Pledgor and Pledgee wish to amend and restate the Existing Security
Agreement.

NOW THEREFORE, for valuable consideration received and
to be received, and as security for the full payment and performance of the
Obligations (as defined in the Loan Agreement) arising from the Loan Agreement,
and to induce Pledgee and the Lenders to make and continue to make loans and
advances to the Borrowers under the Loan Agreement, Pledgor and Pledgee hereby
amend and restate the Existing Security Agreement in its entirety as set forth
in this Agreement and Pledgor hereby grants to Pledgee, for itself and the
ratable benefit of the Lenders and Bank Product Providers, a security interest
in:

(a)           the Trademarks;

(b)           all registrations of the Trademarks in any
State of the United States and any foreign countries and localities;

(c)           all tradenames, trademarks and trademark
registrations hereafter adopted or acquired and used, including, but not
limited to, those which are based upon or derived from the Trademarks or any
variations thereof (the “Future Trademarks”);

(d)           all extensions, renewals, and continuations
of the Trademarks and Future Trademarks and the registrations referred to in
clause (b) above;

(e)           all rights to sue for past, present and
future infringements of the Trademarks and Future Trademarks;

(f)            all packaging, labeling, trade names,
service marks, logos, and trade dress including or containing the Trademarks
and Future Trademarks, or a representation thereof, or any variation thereof;

(g)           all licenses and other agreements under
which Pledgor is licensor, but only to the extent that the grant of a security
interest therein would not be prohibited by or be a breach of terms thereof,
and all fees, rents, royalties, proceeds or monies thereunder, relating to the
Trademarks and Future Trademarks and the use thereof; and

(h)           all goodwill of Pledgor’s business connected
with, symbolized by or in any way related to the items set forth in clauses (a)
through (g) above.

All of the foregoing items set forth in clauses (a)
through (h) are hereinafter referred to collectively as the “Collateral.”

AND Pledgor hereby covenants with Pledgee as follows:

1.             Pledgor’s
Obligations.  Pledgor agrees that,
notwithstanding this Agreement, it will perform and discharge and remain liable
for all its covenants, duties, and obligations arising in connection with the
Collateral and any licenses and agreements related thereto.  Pledgee shall have no obligation or liability
in connection with the Collateral or any licenses or agreements relating
thereto by reason of this Agreement or any payment received by Pledgee or any
Lender relating to the Collateral, nor shall Pledgee or any Lender be required
to perform any covenant, duty, or obligation of Pledgor arising in connection
with the Collateral or any license or 

 2
 

agreement
related thereto or to take any other action regarding the Collateral or any
such licenses or agreement.

2.             Representations
and Warranties.  Pledgor represents
and warrants to Pledgee that:

(a)           Pledgor is the owner of the Collateral, and
no adverse claims have been made with respect to its title to or the validity
of the Collateral;

(b)           the Trademarks are the only trademarks,
trademark registrations, trademark applications and trade names in which
Pledgor has all right, title and interest;

(c)           none of the Collateral is subject to any
prior mortgage, pledge, lien, security interest, lease, charge, encumbrance or
license (by Pledgor as licensor), except for Pledgee’s interests granted
hereunder and under the Existing Security Agreement; and

(d)           when this Agreement is filed in the United
States Patent and Trademark Office (the “Trademark Office”) and the
Pledgee has taken the other actions contemplated in this Agreement and by the
Financing Agreements, if, and to the extent that a security interest may be
perfected in such Collateral under applicable law this Agreement will create a
legal and valid perfected and continuing lien on and security interest in the
Collateral in favor of Pledgee (except for any non-U.S. Trademarks),
enforceable against Pledgor and all third parties, subject to no other prior
mortgage, lien, charge, encumbrance, or security or other interest.

3.             Covenants.  Pledgor will maintain the Collateral, defend
the Collateral against the claims of all persons, and will maintain and renew
all registrations of the Collateral; notwithstanding the foregoing, Pledgor
will not be required to maintain, renew or defend any Collateral which, in
Pledgor’s reasonable judgment, no longer has any material economic value.  Pledgor will maintain at least the same
standards of quality (which Pledgee has reviewed) for the goods and services in
connection with which the Trademarks are used as Pledgor maintained for such
goods and services prior to entering into this Agreement.  Pledgee shall have the right to enter upon
Pledgor’s premises as provided in the Financing Agreements to monitor such
quality standards.  Without limiting the
generality of the foregoing, and so long as any Trademark or Future Trademark,
in Pledgor’s reasonable judgment, has material economic value, Pledgor shall
not permit the expiration, termination or abandonment of such Trademark or
Future Trademark without the prior written consent of Pledgee.  If, before the Obligations have been
satisfied in full and the Financing Agreements have been terminated, Pledgor
shall be licensed to use any new trademark, or become entitled to the benefit
of any trademark application or trademark registration, the provisions of
Section 1 hereof shall automatically apply thereto and Pledgor shall give
Pledgee prompt notice thereof in writing.

4.             Use Prior to
Default.  Effective until Pledgee’s
exercise of its rights and remedies upon an Event of Default under and as
defined in the Financing Agreements (an “Event of Default”), Pledgor
shall be entitled to use the Collateral in the ordinary course of its business,
subject to the terms and covenants of the Financing Agreements and this
Agreement.

5.             Remedies Upon
Default.  Whenever any Event of
Default shall occur and be continuing, Pledgee shall have all the rights and
remedies granted to it in such event by the Financing Agreements, which rights
and remedies are specifically incorporated herein by 

 3
 

reference and made a part
hereof, and any and all rights and remedies of law available to Pledgee.  Pledgee in such event may collect directly
any payments due to Pledgor in respect of the Collateral and may sell, license,
lease, assign, or otherwise dispose of the Collateral in the manner set forth
in the Financing Agreements.  Pledgor
agrees that, in the event of any disposition of the Collateral upon and during
the continuance of any such Event of Default, it will duly execute,
acknowledge, and deliver all documents necessary or advisable to record title
to the Collateral in any transferee or transferees thereof, including, without
limitation, valid, recordable assignments of the Trademarks or Future
Trademarks.  In the event Pledgor fails
or refuses to execute and deliver such documents, Pledgor hereby irrevocably
appoints Pledgee as its attorney-in-fact, with power of substitution, to
execute, deliver, and record any such documents on Pledgor’s behalf as provided
in the Financing Agreements. 
Notwithstanding any provision hereof to the contrary, during the
continuance of an Event of Default, Pledgor may sell any merchandise or
services bearing the Trademarks and Future Trademarks in the ordinary course of
its business and in a manner consistent with its past practices, until it
receives written notice from Pledgee to the contrary.  The preceding sentence shall not limit any
right or remedy granted to Pledgee with respect to Pledgor’s inventory under
the Financing Agreements or any other agreement now or hereinafter in effect.

6.             Cumulative
Remedies.  The rights and remedies
provided herein are cumulative and not exclusive of any other rights or
remedies provided by law.  The rights and
remedies provided herein are intended to be in addition to and not in
substitution of the rights and remedies provided by the Financing Agreements or
any other agreement or instrument delivered in connection therewith.

7.             Amendments and
Waivers.  This Agreement may not be
modified, supplemented, or amended, or any of its provisions waived except in a
writing signed by Pledgor and Pledgee. 
Pledgor hereby authorizes Pledgee to modify this Agreement by amending
Exhibit A hereto to include any Future Trademarks.

8.             Waiver of Rights.  No course of dealing between the parties to
this Agreement or any failure or delay on the part of any such party in
exercising any rights or remedies hereunder shall operate as a waiver of any
rights and remedies of such party or any other party, and no single or partial
exercise of any rights or remedies by one party hereunder shall operate as a
waiver or preclude the exercise of any other rights and remedies of such party
or any other party.  No waiver by Pledgee
of any breach or default by Pledgor shall be deemed a waiver of any other
previous breach or default or of any breach or default occurring thereafter.

9.             Assignment.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto; provided, however, that no interest herein or in or to
the Collateral may be assigned by Pledgor without the prior written consent of
Pledgee; and, provided further, that Pledgee may assign the rights and benefits
hereof to any party acquiring any interest in the Obligations or any part
thereof.

10.           Future Acts.  Until the Obligations shall have been paid in
full, Pledgor shall have the duty to make applications on material
unregistered, but registrable as trademarks, Collateral owned by Pledgor in any
location where Pledgor does business, to prosecute such applications
diligently, and to preserve and maintain all rights in the material Trademarks
and the other 

 4
 

material Collateral,
except to the extent Pledgor reasonably determines that such Trademarks do not
have any material economic value.  Any
expenses incurred in connection with such applications and other actions shall
be borne by Pledgor.  Pledgor shall not
abandon any right to file a trademark application or registration for any
trademark, or abandon any such pending trademark application or registration,
without the consent of Pledgee, except to the extent that Pledgor reasonably
determines that the trademark covered by such application or registration has
no material economic value.

11.           Enforcement.  Upon Pledgor’s failure to do so after Pledgee’s
demand, or upon the occurrence and during the continuance of an Event of
Default, Pledgee shall have the right but shall in no way be obligated to bring
suit in its own name to enforce the Trademarks and Future Trademarks and any
license thereunder, having material economic value to the Pledgee, in which
event Pledgor shall at the request of Pledgee do any and all lawful acts and
execute any and all proper documents required by Pledgee in aid of such
enforcement and Pledgor shall promptly, upon demand, reimburse and indemnify
Pledgee or its agents for all costs and expenses incurred by Pledgee in the
exercise of its rights under this Section 11.

12.           Release.  At such time as Pledgor shall completely
satisfy all of the non-contingent Obligations, and the Financing Agreements
have been terminated, other than upon enforcement of Pledgee’s remedies under
the Financing Agreements after an Event of Default, Pledgee will, at Pledgor’s
sole cost and expense, execute and deliver to Pledgor a release or other
instrument as may be necessary or proper to release Pledgor’s lien in the
Collateral, subject to any dispositions thereof which may have been made by
Pledgee pursuant hereto and as may be necessary to record such release with the
U.S. Patents and Trademarks Office, or equivalent authority.

13.           Severability.  If any clause or provision of this Agreement
shall be held invalid or unenforceable, in whole or in part, in any
jurisdiction, such invalidity or unenforceability shall attach only to such
clause or provision, or part thereof, in such jurisdiction, and shall not in
any manner affect such or any other clause or provision in any other
jurisdiction.

14.           Notices.  All notices, requests and demands to or upon
Pledgor or Pledgee under this Agreement shall be given in the manner prescribed
by the Financing Agreements.

15.           Governing Law.  This Agreement shall be governed by and
construed, applied, and enforced in accordance with the federal laws of the
United States of America applicable to trademarks and the laws of the State of
New York, except that no doctrine of choice of law shall be used to apply the
laws of any other State or jurisdiction. 
The parties agree that all actions or proceedings arising in connection
with this Agreement shall be tried and litigated only in the state and federal
courts located in the State of New York, New York County, or in the United
States District Court for the Southern District of New York, whichever Pledgee
may elect (except that Pledgee shall have the right to bring any action or
proceeding against Pledgor or its property in the courts of any other
jurisdiction which Pledgee deems necessary or appropriate in order to realize
on the Collateral or to otherwise enforce its rights against Pledgor or its
property).  PLEDGOR AND PLEDGEE EACH
WAIVES THE RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION ARISING UNDER THIS AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING,
AND ANY 

 5
 

RIGHT EITHER MAY HAVE TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, LACK OF PERSONAL JURISDICTION, OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 15.

16.           Counterparts, etc.  This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same agreement.  Delivery of an executed counterpart of this
Agreement by telefacsimile shall have the same force and effect as the delivery
of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart
of this Agreement by telefacsimile shall also deliver an original executed
counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of this Agreement.

17.           Supplement.  This Agreement is a supplement to, and is
hereby incorporated into, the Financing Agreements and made a part thereof.

18.           Interpretation.  To the extent that any covenants set forth in
Section 3 hereto, or representations or warranties set forth in Section 2
hereto are in direct conflict with the terms of any covenants, representations
or warranties contained in the Financing Agreements, the terms of this Agreement
shall control.  To the extent any other
provisions of this Agreement are in direct conflict with the terms of any other
provisions of the Financing Agreements, the terms of the Financing Agreements
shall control.

19.           Acknowledgment and
Restatement.

(a)           Pledgor hereby
acknowledges, confirms and agrees that Pledgor is indebted to Pledgee
and Lenders in respect of any obligations, liabilities or indebtedness for
loans, advances and letter of credit accommodations to Pledgee under the
Existing Loan Agreement, the Existing 
Security Agreement or the other Existing 
Financing Agreements, together with all interest accrued and accruing
thereon, and all fees, costs, expenses and other charges relating thereto, all
of which are unconditionally owing by Pledgor to Pledgee without offset,
defense, or counterclaim of any kind, nature or description whatsoever. Pledgor
hereby ratifies, assents, adopts and agrees to pay all of the Obligations
arising before, on or after the date hereof.

(b)           Pledgor hereby acknowledges, confirms and
agrees that Pledgee has and shall continue to have, for itself and the benefit
of Lenders, valid, enforceable and perfected first priority security interests
in and liens upon all of the Collateral heretofore granted to Pledgee pursuant
to the Existing  Security Agreement to
secure all of the Obligations subject only to liens permitted under the Loan
Agreement and the other Financing Agreements.

(c)           Pledgor hereby acknowledges, confirms and
agrees that: (i) the Existing  Security
Agreement has been duly executed and delivered by Pledgor and is in full force
and effect as of the date hereof; (ii) the agreements and obligations of
Pledgor contained in the Existing 
Security Agreement constitute legal, valid and binding obligations of
Pledgor enforceable against it in accordance with the terms thereof, and
Pledgor has no valid defense, offset or counterclaim to the enforcement of such
obligations; and (iii) Pledgee and Lenders are 

 6
 

entitled to all of the rights, remedies and benefits provided for in
the Existing  Security Agreement.

(d)           Except as otherwise stated in Section 19(b)
hereof and in this Section 19(d), as of the date hereof, the terms, conditions,
agreements, covenants, representations and warranties set forth in the
Existing  Security Agreement are hereby
amended and restated in their entirety, and as so amended and restated, are
replaced and superseded by the terms, conditions agreements, covenants,
representations and warranties set forth in this Agreement, except that nothing
herein shall impair or adversely affect the continuation of the liability of
Pledgor for the obligations or the security interests and liens heretofore
granted, pledged or assigned to Pledgee for itself and the benefit of Lenders.  The amendment and restatement contained
herein shall not, in any manner, be construed to constitute payment of, or
impair, limit, cancel or extinguish, or constitute a novation in respect of,
the indebtedness and other obligations and liabilities of Pledgor evidenced by
or arising under the Existing  Security
Agreement and any of the other Existing 
Financing Agreements to which Pledgor is a party, and the liens and
security interests securing such indebtedness and other obligations and
liabilities shall not in any manner be impaired, limited, terminated, waived or
released.

[REMAINDER OF PAGE
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 7

IN WITNESS WHEREOF, the parties have entered into this
Agreement as of the date first written above.

	
  

  	
  PLEDGORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LERNER NEW YORK, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald W. Ristau

  
	
   

  	
  Name: 

  	
  Ronald W. Ristau

  
	
   

  	
  Title:

  	
  President, Chief Financial Officer and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PLEDGEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION, as 

  
	
   

  	
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Laurence Forte

  
	
   

  	
  Name: 

  	
  Laurence Forte

  
	
   

  	
  Title:

  	
  Managing Director

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