May 16, 1997 Mr. John White CFO United Grocers, Inc. P.O. Box 22187 6433 S.E. Lake Rd. Portland, Oregon 97222 VIA FAX Dear John: Currently, United Grocers, Inc. and NCB have a `covenant package' as part of their Loan Sale and Purchase Agreement dated...

                            National Cooperative Bank
                        0000 Xxx Xxxxxx, X.X., Xxxxx 000
                             Xxxxxxxxxx, X.X. 00000
                                 (000) 000-0000
                               Fax (000) 000-0000


                                  May 16, 1997



Mr. Xxxx Xxxxx
CFO
United Grocers, Inc.
P.O. Box 22187
6433 S.E. Lake Rd.
Portland, Oregon  97222

VIA FAX

Dear Xxxx:

Currently,  United  Grocers,  Inc. and NCB have a `covenant  package' as part of
their Loan Sale and Purchase  Agreement  dated May 13,  1994.  This letter shall
serve to modify the ratio of consolidated  Net Income available to Fixed Charges
as follows:

                           The  company  will  keep and  maintain  the  ratio of
                  consolidated  net Income  Available  for Fixed Charges for the
                  immediately  preceding  12-month  period to Fixed  Charges for
                  such 12-month period at not less than 1.4 to 1.0, except for:

                  (a) quarters  ending  September  27, 1996;  December 28, 1996;
         March 28, 1997;  and June 28, 1997,  wherein the ratio of  Consolidated
         Net Income  Available for Fixed Charges for the  immediately  preceding
         12-month  period to Fixed Charges for such 12-month period shall not be
         less than 1.0 to 1.0;

                  (b)  quarter  ending  October  3, 1997,  wherein  the ratio of
         Consolidated Net Income Available for Fixed Charges for the immediately
         preceding  12-month  period to Fixed Charges for such  12-month  period
         shall not be less than 1.15 to 1.0;

                  (c)  quarter  ending  January  2, 1998,  wherein  the ratio of
         Consolidated Net Income Available for Fixed Charges for the immediately
         preceding  12-month  period to Fixed Charges for such  12-month  period
         shall not be less than 1.20 to 1.0; and

                  (d)  quarter  ending  April  3,  1998,  wherein  the  ratio of
         Consolidated Net Income Available for Fixed Charges for the immediately
         preceding  12-month  period to Fixed Charges for such  12-month  period
         shall not be less than 1.25 to 1.0.






Further,  this letter modifies only the Fixed Charge ratio.  All other covenants
in the Loan Purchase and Sale Agreement remain unchanged or modified.

Sincerely,


/s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx
Vice President


Agreed and Accepted to:

By: /s/ Xxxx X. Xxxxx                         By: /s/ Xxxxxx X. Xxxxxxxx

Title: Vice President                         Title: Managing Director

Date: 5/19/97                                 Date: 5-20-97