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Exhibit 10.1
AMENDMENT XX. 0
XXXXXXXXX XX. 0 dated as of January 31, 1997, between UNITED
RETAIL GROUP, INC. (the "Company"); each of the Subsidiaries of the Company
identified under the caption "SUBSIDIARY GUARANTORS" on the signature pages
hereto (individually, a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors" and, together with the Company, the "Obligors"); and THE
CHASE MANHATTAN BANK (successor in interest of The Chase Manhattan Bank, N.A.),
as collateral agent for itself under the Letter of Credit Agreement (the
"Collateral Agent").
The Company, the Subsidiary Guarantors and the Collateral
Agent are parties to a Letter of Credit Agreement dated as of February 24, 1992
(as heretofore amended, the "Letter of Credit Agreement"), providing, subject to
the terms and conditions thereof, for letters of credit to be issued by the
Collateral Agent to the Company in an aggregate face amount not exceeding
$25,000,000.
The Company has requested the Collateral Agent to consent to
certain amendments to the Letter of Credit Agreement, all on the terms and
conditions set forth herein and, accordingly, the parties hereto agree as
follows:
Section 1. Definitions. Terms defined in the Letter of Credit
Agreement are used herein as defined therein unless amended hereby.
Section 2. Amendments. Subject to the execution and delivery
hereof by the Company, each Subsidiary Guarantor and the Collateral Agent (and
the payment to the Collateral Agent of an amendment fee in the amount of
$10,000), but effective as of the date hereof, the Letter of Credit Agreement is
hereby amended as follows:
A. Definitions. The definition of "Fixed Charges Ratio" in
Section 1.01 of the Letter of Credit Agreement is hereby amended in its entirety
to read as follows:
"Fixed Charges Ratio" shall mean, for any period of
determination thereof, (a) Cash Flow for the period of four consecutive
fiscal quarters then ended plus the aggregate amount of payments by the
Company and its Subsidiaries made in respect of Operating Lease
Obligations during such period to (b) Fixed Charges for such period;
provided however, that, up to and including the fiscal month ending
January 3, 1998, Fixed Charges Ratio shall mean, for any period of
determination thereof, (a) Cash Flow for the period of 12 consecutive
fiscal months then ended, if the determination date is the end of a
fiscal month or, if otherwise, as at
Amendment No. 9 to Letter of Credit Agreement
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the end of the preceding fiscal month for the period of 12 consecutive
fiscal months then ended; plus the aggregate amount of payments by the
Company and its Subsidiaries made in respect of Operating Lease
Obligations during such period to (b) Fixed Charges for such period.
B. Tangible Net Worth. Section 9.11 of the Letter of
Credit Agreement is hereby amended in its entirety to read as
follows:
"9.11 Tangible Net Worth. The Company will not permit Tangible
Net Worth on any date (each such date a 'Determination Date') to be
less than $70,000,000 plus for each complete fiscal year ending after
February 3, 1996 and on or before such Determination Date for which Net
Income shall be positive, an amount equal to 50% of such Net Income
minus as at the last day of the fiscal year ending February 1, 1997,
and any date thereafter, any write-down in the deferred tax asset
account resulting from management options associated with the IPO as
determined by the Company's auditors and reflected on its balance sheet
as at the last day of such fiscal year."
C. Fixed Charges Ratio. Section 9.12 of the Letter of Credit
Agreement is hereby amended in its entirety to read as follows:
"9.12 Fixed Charges Ratio. The Company will not permit the
Fixed Charges Ratio on any date on or after February 1, 1997 to be less
than 1.0 to 1."
D. Capital Expenditures. Section 9.13 of the Letter of Credit
Agreement is hereby amended (i) by deleting subsection (a) thereof and
substituting the following therefor:
"(a) Capital Expenditures of the Company and its
Subsidiaries (i) in the fiscal year ending February 1, 1997,
in an aggregate amount not exceeding $6,500,000, (ii) in the
fiscal year ending January 31, 1998, in an aggregate amount
not exceeding $6,500,000 and (iii) thereafter, in an aggregate
amount not exceeding $10,000,000 in any other fiscal year;"
and (ii) by deleting subsection (c) thereof and substituting the
following therefor:
"(c) additional Capital Expenditures made during the
period from and after February 1, 1997 in an aggregate amount
not exceeding (i) $10,000,000 plus (ii) if Adjusted Cash Flow
for such period is positive,
Amendment No. 9 to Letter of Credit Agreement
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75% of Adjusted Cash Flow for such period; provided that the
Company has delivered audited financial statements pursuant to
Section 9.01(b) hereof for the fiscal year ending February 1,
1997."
E. Cash Flow. Section 9.22 of the Letter of Credit Agreement
is hereby amended in its entirety to read as follows:
"9.22 Cash Flow. The Company shall not permit the Cash Flow
for the following respective periods to be less than the amounts
indicated below opposite the respective periods:
Period Amount
------ ------
From December 1, 1996
through February 1, 1997 $1,000,000
January 5, 1997
through March 1, 1997 ($9,000,000)
From February 2, 1997
through March 29, 1997 ($1,500,000)
From March 2, 1997
through May 3, 1997 $3,000,000
From March 30, 1997
through May 31, 1997 $3,400,000
From May 4, 1997
through June 28, 1997 $4,300,000
From June 1, 1997
through August 2, 1997 $0
From June 29, 1997
through August 30, 1997 ($4,500,000)
From August 3, 1997
through September 27, 1997 ($1,600,000)
From August 31, 1997
through November 1, 1997 $0
From September 28, 1997
through November 29, 1997 $ 500,000
From November 2, 1997
through January 3, 1998 $8,000,000
Amendment No. 9 to Letter of Credit Agreement
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From November 30, 1997
through January 31, 1998 $2,600,000".
F. Liquidity. Section 9.23 of the Letter of Credit
Agreement is hereby amended in its entirety to read as follows:
"9.23 Liquidity. The Company will not permit the sum of (x)
the aggregate amount of cash and Cash Equivalents held by the Company
and its Subsidiaries plus (y) the aggregate unused amount of the
obligation of the Banks to extend credit under the Credit Agreement (by
means of Loans or Letters of Credit) under the caption "Commitment" (as
the same may be reduced at any time or from time to time pursuant to
Section 2.04 thereto) to be less than the amounts indicated below at
any time during each respective period:
Period Amount
------ ------
From December 29, 1996
through February 1, 1997 $21,000,000
From February 2, 1997
through March 1, 1997 $16,000,000
From March 2, 1997
through March 29, 1997 $16,300,000
From March 30, 1997
through May 3, 1997 $15,100,000
From May 4, 1997
through May 31, 1997 $20,500,000
From June 1, 1997
through June 28, 1997 $26,700,000
From June 29, 1997
through August 2, 1997 $25,500,000
From August 3, 1997
through August 30, 1997 $21,800,000
From August 31, 1997
through September 27, 1997 $21,200,000
From September 28, 1997
through November 1, 1997 $15,600,000
From November 2, 1997
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through November 29, 1997 $13,800,000
From November 30, 1997
through January 3, 1998 $31,500,000
From January 4, 1998
through January 31, 1998 $26,600,000"
Section 3. Miscellaneous. Except as herein provided, the
Letter of Credit Agreement shall remain unchanged and in full force and effect.
This Amendment No. 9 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and any
of the parties hereto may execute this Amendment No. 9 by signing any such
counterpart. This Amendment No. 9 shall be governed by, and construed in
accordance with, the law of the State of New York.
Amendment No. 9 to Letter of Credit Agreement
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 9 to be duly executed and delivered as of the day and year first
above written.
UNITED RETAIL GROUP, INC. THE CHASE MANHATTAN BANK,
individually and as
Collateral Agent
By /s/ XXXXXX X. XXXXXX By /s/ XXXXX XXXXX
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Title: Vice Chairman Title: Vice President
Each of the Subsidiary Guarantors, by its signature below,
hereby consents to the foregoing Amendment No. 9 for purposes of its Guarantee
under Section 6 of the Letter of Credit Agreement and agrees that the
obligations of the Company under the Letter of Credit Agreement, as amended by
said Amendment No. 9, shall constitute "Guaranteed Obligations" for all purposes
of said Section 6 and the Security Documents (as defined in the Letter of Credit
Agreement).
SUBSIDIARY GUARANTORS
UNITED RETAIL HOLDING UNITED RETAIL INCORPORATED
CORPORATION (formerly (formerly known as Sizes
known as Sizes Unlimited Unlimited, Inc.)
Holding Corporation)
By /s/ XXXXXXX X. XXXXXXX By /s/ XXXXXXX X. XXXXXXX
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Title: President Title: President
SMART SIZE, INC. UNITED RETAIL LOGISTICS
OPERATIONS INCORPORATED
(formerly known as Sizes
Unlimited Florida, Inc.)
By /s/ XXXXXXX X. XXXXXXX By /s/ XXXXXXX X. XXXXXXX
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Title: President Title: President
UNITED DISTRIBUTION THE AVENUE, INC.
SERVICES,INC.
By /s/ XXXXXXX X. XXXXXXX By /s/ XXXXX XXXXXX
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Title: President Title: President
Amendment No. 9 to Letter of Credit Agreement
