This RIGHT OF FIRST REFUSAL between LIMITED DIRECT ASSOCIATES, L.P.
(the "Stockholder") and UNITED RETAIL GROUP, INC. (the "Corporation"),
dated September 17, 1999.
WHEREAS, the Stockholder holds shares of Common Stock, $.001 par
value per share ("Shares"), of the Corporation;
WHEREAS, the Shares are traded on the NASDAQ National Market System
("NASDAQ"); and
WHEREAS, from time to time the Stockholder may desire to sell Shares
and the Corporation may desire to repurchase Shares.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
SECTION 1. Fee. The Corporation paid the Stockholder $1,000, receipt
of which is hereby acknowledged, in consideration of the issuance and
delivery of this Right of First Refusal.
SECTION 2. Rights of First Refusal. (a) Subject to the provisions of
Section 2(b) and 2(c), if the Stockholder wishes to sell or otherwise
transfer any or all of the Shares then owned by it, it shall first give
notice (the "Transfer Notice") to the Corporation specifying the number of
Shares it wishes to transfer (the "Transfer Shares"), the identity of the
proposed transferee, the proposed consideration per Share to be received
(which proposed consideration shall be deemed to be the "Transfer Price",
except as otherwise provided in Section 2(b), and except that if all or any
part of the proposed consideration to be received is not cash, the
corresponding portion of the Transfer Price shall be the amount of cash
equal to the fair value of such non-cash consideration), and any other
material terms and conditions of the proposed transfer, and containing an
irrevocable offer (open to acceptance for a period of three business days
after the date such Transfer Notice is given) to sell any or all of the
Transfer Shares to the Corporation at the Transfer Price.
(b) Anything in Section 2(a) to the contrary notwithstanding, if the
Stockholder wishes to transfer shares in transactions to be executed on
NASDAQ, the Transfer Notice shall so state and shall specify the number of
Shares the Stockholder wishes to sell on NASDAQ and the closing price for
Shares on NASDAQ on the day the Transfer Notice is given (which closing
price shall be deemed to be the "Transfer Price"), and the Transfer Notice
need not contain any other information, and such Transfer Notice shall
constitute an irrevocable offer (open to acceptance until 9:15 a.m. Eastern
Time on the business day following the date such Transfer Notice is given)
to sell any or all of the Transfer Shares to the Corporation at the
Transfer Price.
(c) Anything in Section 2(a) and 2(b) to the contrary
notwithstanding, the Stockholder shall have the unconditional right at any
time to donate Shares to operating charities and charitable foundations,
and to transfer Shares to any affiliate of the Stockholder, and such
donations and transfers shall not be subject to the terms and provisions of
this Right of First Refusal, provided that in the case of a transfer to an
affiliate, such affiliate shall be bound by this Right of First Refusal.
(d) The number of Transfer Shares shall in no event be less than
25,000 Shares, unless the Stockholder holds fewer than 25,000 Shares, in
which event the Transfer Notice must be for all Shares owned by the
Stockholder.
(e) The Corporation shall have the right to purchase any or all of
the Transfer Shares; provided that the Corporation must determine the
number of the Transfer Shares it will purchase and evidence its irrevocable
acceptance of the offer and its agreement to purchase such Transfer Shares
by delivering to the Stockholder, prior to the expiration of the period
during which the offer remains open for acceptance pursuant to Section 2(a)
or 2(b), notice (the Notice of Acceptance) of the number of Transfer Shares
the Corporation has elected to purchase.
(f) The closing of the purchase by the Corporation of any Transfer
Shares that it elects to purchase shall be effected in accordance with the
same procedures that would apply to a trade on NASDAQ, including as to
timing of settlement (T+3) and form of payment (immediately available
funds), through such broker as the Stockholder may designate by notice to
the Corporation from time to time. In the event that either the Stockholder
shall default in the delivery of the Transfer Shares or the Corporation
shall default in the delivery of funds, the other party and its broker
shall be entitled to the same rights and remedies as would be available to
such party if such failure occurred in connection with a sale on NASDAQ.
The Corporation hereby acknowledges that certain certificates representing
Shares are legended and waives any default by the Stockholder resulting
from the existence of such legends.
(g) If, at the expiration of the period during which the offer
remains open for acceptance pursuant to Section 2(a) or 2(b), the
Corporation has either not delivered a Notice of Acceptance of the offer
contained in a Transfer Notice or has delivered a Notice of Acceptance with
respect to fewer than all of the Transfer Shares, then the Stockholder
shall have 90 days in which to sell any or all of the Transfer Shares not
accepted for purchase by the Corporation at a price not lower than the
Transfer Price, unless such Transfer Shares are sold on NASDAQ, in which
case at whatever price is obtainable on NASDAQ. If, at the end of such
90-day period, the Stockholder has not completed the transfer of all of
such Transfer Shares, it shall no longer be permitted to transfer any such
Transfer Shares without again complying with this Right of First Refusal in
its entirety.
(h) If the Stockholder determines at any time within such 90-day
period that it is impractical to sell all or any part of such Transfer
Shares in accordance with Section 2(g), it may terminate all attempts to
sell such Transfer Shares and recommence the procedures of this Right of
First Refusal in their entirety without waiting for the expiration of such
90-day period by delivering written notice of such decision to the
Corporation.
SECTION 3. Severability; Governing Law. If any provision of this
Right of First Refusal shall be determined to be illegal and unenforceable
by any court of law, the remaining provisions shall be severable and
enforceable in accordance with their terms. This Right of First Refusal
shall be governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 4. Benefits of Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective
successors and assigns.
SECTION 5. Notices. All notices and communications to be given or to
otherwise be made to any party shall be effective upon delivery if
contained in a written instrument delivered by fax, e-mail, in person or by
a recognized national courier service, charges prepaid, addressed to:
(a) If to the Corporation:
United Retail Group, Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: Chief Administrative Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxx.xxx
with a copy to:
United Retail Group, Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxxx@xxxxxxxxxxxx.xxx
(b) If to the Stockholder:
Limited Direct Associates, L.P.
c/o The Limited, Inc.
Three Limited Parkway
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Vice Chairman
Telephone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxx.xxx
with a copy to:
The Limited, Inc.
Three Limited Parkway
Attention: Xxxxxxx Xxxxxxxx
Treasurer
Xxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
E-mail: xxxxxxxxx@xxxxxxx.xxx
provided that Transfer Notices with respect to proposed sales on NASDAQ and
Notices of Acceptance in response to such Transfer Notices shall be
delivered by fax and e-mail.
SECTION 6. Modification; Amendment. Except as otherwise provided
herein, neither this Right of First Refusal nor any provision hereof can be
modified, changed, discharged or terminated except by an instrument in
writing signed by the party to be bound.
SECTION 7. Disclosure; Public Announcements. None of the parties
hereto shall furnish copies of, disclose the terms or existence of or make
any public announcement regarding this Right of First Refusal without first
identifying the persons to which such copies are proposed to be furnished
and delivering the text of any such proposed disclosure or public
announcement to the other parties hereto and receiving the prior written
consent of such other parties to such furnishing, disclosure or public
announcement, which consent shall not be unreasonably withheld or delayed.
SECTION 8. Term. Unless extended by written consent of each party
hereto, this Right of First Refusal shall expire on September 17, 2000.
SECTION 9. Captions and References to Sections. The captions herein
are inserted for convenience only and shall not define, limit, extend or
describe the scope of this Right of First Refusal or affect the
construction hereof.
SECTION 10. Entire Agreement. This Right of First Refusal sets forth
the entire understanding of the parties with respect to the subject matter
hereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter
hereof other than those expressly set forth herein. This Right of First
Refusal supersedes all prior agreements and understandings between the
parties with respect to its subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Right of
First Refusal on the date first above written.
LIMITED DIRECT ASSOCIATES, L.P.
By: LIMITED DIRECT, INC.
By:________________________
Title:
UNITED RETAIL GROUP, INC.
By:_______________________________
Vice Chairman and
Chief Administrative Officer
