AMENDMENT TO RIGHTS AGREEMENT
AMENDMENT
TO RIGHTS AGREEMENT
THIS
AMENDMENT dated as of
September 10,
2007 (this “Amendment”), amends the Rights Agreement, dated as of
September 14, 1999 (the “Agreement”), by and between United Retail Group,
Inc. a Delaware corporation (the “Company”), and Continental Stock
Transfer & Trust Company, a New York banking corporation (the “Rights
Agent”). All capitalized terms used but not defined in this
Amendment shall have the meanings ascribed to them in the
Agreement.
WHEREAS,
Redcats USA, Inc., a
Delaware corporation (“Parent”), Boulevard Merger Sub, Inc., a newly
formed Delaware corporation and a wholly owned subsidiary of Parent (“Merger
Sub”), and the Company are entering into an Agreement and Plan of Merger
(the “Merger Agreement”), dated as of the date hereof, pursuant to which
(i) Merger Sub will commence a cash tender offer (the “Offer”) to
purchase all of the issued and outstanding shares of common stock of the
Company
(“Common Stock”) and (ii) following the consummation of the Offer, Merger
Sub will merge with and into the Company with the Company surviving as a
wholly
owned subsidiary of Parent (the “Merger”);
WHEREAS,
concurrently with the
execution of the Merger Agreement, Parent, Merger Sub, the Company and Xx.
Xxxxxxx Xxxxxxxx are entering into a share tender agreement, dated as of
the
date hereof (the “Tender Agreement”), pursuant to which Xx. Xxxxxxxx will
tender his shares of Common Stock in the Offer;
WHEREAS,
pursuant to resolutions
adopted on September 10, 2007 (the “Board Resolutions”), the Board of Directors
of the Company has approved the Merger Agreement and the Tender
Agreement;
WHEREAS,
Section 27(a) of the
Agreement provides that prior to the Distribution Date, and subject to the
to
the penultimate sentence of such Section 27(a) of the Agreement, the Rights
Agent shall, if the Company so directs, supplement or amend any provision
of the
Agreement without the approval of any holders of certificates representing
shares of Common Stock;
WHEREAS,
no Distribution Date has
occurred and no person is an Acquiring Person; and
WHEREAS,
pursuant to the Board
Resolutions, the Board of Directors of the Company has unanimously determined
that an amendment to the Agreement as set forth herein is necessary and
desirable in connection with the Merger Agreement, the Tender Agreement and
the
transactions contemplated by the Merger Agreement (including the Offer and
the
Merger) and the Tender Agreement, and the Company and the Rights Agent desire
to
evidence such amendment in writing.
NOW,
THEREFORE, in accordance with
the
procedures for amendment of the Agreement set forth in Section 27 thereof,
and
in consideration of the foregoing and the mutual agreements herein set forth
and
for other good and valuable consideration, the parties hereto hereby agree
as
follows:
1. Amendment
of the Agreement.
(a) Section
1 of the Agreement is hereby
amended and supplemented to add the following definitions in the appropriate
locations:
“Redcats”
shall
mean Redcats USA, Inc.,
a Delaware corporation, or any of its subsidiaries, including Merger
Sub.
“Merger”
shall
mean the “Merger” as such
term is defined in the Merger Agreement.
“Merger
Agreement” shall mean the
Agreement and Plan of Merger, dated as of September 10, 2007, by and among
the
Company, Redcats and Merger Sub, as it may be amended from time to
time.
“Merger
Sub” shall mean Boulevard Merger
Sub, Inc., a newly formed Delaware corporation and wholly owned subsidiary
of
Redcats.
“Offer”
shall
mean the “Offer” as such
term is defined in the Merger Agreement.
“Tender
Agreement” shall mean the Tender
Agreement, by and among the Company, Redcats, Merger Sub and Xxxxxxx Xxxxxxxx,
dated as of September 10, 2007, as it may be amended from time to
time.
(b) The
definition of Acquiring Person
in Section 1 of the Agreement is
hereby amended and supplemented by
adding the following
sentence at the end thereof:
“Notwithstanding
anything in this
Agreement to the contrary, none of Redcats, Merger Sub or their Affiliates
or
Associates shall be, or shall be deemed to be, an Acquiring Person for purposes
of this Agreement by virtue of one or more of (i) the approval, execution
or
delivery of the Merger Agreement or the Tender Agreement, (ii) the public
or
other announcement of the Merger Agreement, the Tender Agreement, or any
transaction contemplated by or arising in connection with the Merger Agreement
(including the Offer and the Merger) or the Tender Agreement, or (iii) the
consummation of the Offer, the Merger, or any transaction contemplated by
or
arising in connection with the Merger Agreement (including the Offer and
the
Merger) or the Tender Agreement (each such event and any combination of such
events, an “Exempt Event”)”
(c) The
definition of Section 11(a)(ii) Event
in
Section 1 of the Agreement is
hereby amended and supplemented by
adding the following
proviso immediately following the words “Section 11(a)(ii) hereof”:
“;
provided,
however,
that notwithstanding anything in this
Agreement to the contrary, in no event shall any Exempt Event be, or deemed
to
be, or result in, a Section 11(a)(ii) Event.”
(d) The
definition of Section 13 Event in
Section 1 of the Agreement is hereby amended and supplemented by adding the
following proviso immediately following the words “Section 13(a)
hereof”:
“;
provided,
however,
that notwithstanding anything in this
Agreement to the contrary, in no event shall any Exempt Event be, or deemed
to
be, or result in, a Section 13 Event.”
(e) The
definition of Stock Acquisition Date
in Section 1 of the Agreement is hereby amended and supplemented by adding
the
following proviso immediately following the words “has become an Acquiring
Person”:
“;
provided,
however,
that notwithstanding anything in this
Agreement to the contrary, a Stock Acquisition Date has not occurred and
shall
not be deemed to have occurred as the result of an Exempt
Event.”
(f) Section
3(a) of the Agreement is hereby
amended and supplemented by adding the following proviso immediately following
the words “the earliest of (i), (ii) and (iii) being herein referred to as the
“Distribution Date”” in the fifth parenthetical of Section
3(a):
“;
provided,
however,
that notwithstanding anything in this
Agreement to the contrary, a Distribution Date has not occurred and shall
not be
deemed to have occurred as the result of an Exempt Event.”
(g) Section
3 of the Agreement is hereby
amended and supplemented to add the following Section 3(d):
“(d)
Nothing in this Agreement shall be
construed to give any holder of Rights or any other Person any legal or
equitable rights, remedies or claims under this Agreement by virtue of an
Exempt
Event.”
(h) Section
11(a) of the Agreement is hereby
amended and supplemented to add the following clause at the end thereof as
Section 11(a)(iv):
“(iv)
Notwithstanding anything in this
Agreement to the contrary, in no event shall any Exempt Event be, or deemed
to
be, or result in, a Section 11(a)(ii) Event, and this Section 11(a) shall
not
apply to any Exempt Event.”
(i) Section
13 of the Agreement is hereby
amended and supplemented to add the following clause at the end thereof as
Section 13(f):
“(f)
Notwithstanding anything in this
Agreement to the contrary, in no event shall any Exempt Event be, or deemed
to
be, or result in, a Section 13 Event, and this Section 13 shall not apply
to any
Exempt Event.”
(j) Section
23 of the Agreement is hereby
amended and supplemented to add the following Section 23(c):
“(c)
Notwithstanding anything herein to the contrary, immediately prior to the
Effective Time (as defined in the Merger Agreement), this Agreement shall
terminate and shall have no further force and effect and the Rights shall
expire
and become null and void, without any payment, liability or obligation on
the
part of the Company, the Rights Agent or the holders of any
Rights.”
2. Governing
Law. This Amendment shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed
by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
3. Execution
in Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which together
shall
constitute one instrument.
4. Effectiveness. This
Amendment shall be deemed effective as of, and immediately prior to, the
execution and delivery of the Merger Agreement. Except as amended
hereby, the Agreement shall remain in full force and effect and shall be
otherwise unaffected hereby. If for any reason the Merger Agreement
is terminated in accordance with its terms, then this Amendment shall become
null and void and be of no further force and effect and the Agreement shall
remain exactly the same as it existed immediately prior to the execution
of this
Amendment.
5. Severability. If
any term, provision, covenant or restrictions of this Amendment is held by
a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and
shall
in no way be affected, impaired or invalidated.
[signature
page follows]
IN
WITNESS WHEREOF,
the parties hereto have
caused this Amendment to be duly executed as of the day and year first above
written.
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UNITED
RETAIL GROUP, INC.
By:
/s/ Raphael Benaroya_
Name:
Xxxxxxx Xxxxxxxx
Title:
Chairman, President and Chief Executive Officer
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CONTINENTAL
STOCK TRANSFER & TRUST COMPANY
By:
/s/ Xxxx X.Zimkind___
Name:
Xxxx X. Xxxxxxx
Title:
Vice President
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