Raphael Benaroya
Amendment to Employment Agreement

This document (the “Amendment”) constitutes an amendment to the Employment
Agreement, as restated on June 15, 2007 (the “Current Agreement”), between
Raphael Benaroya (the “Executive”) and United Retail Group, Inc. (the
“Company”), effective as of, and subject to, the occurrence of the “Acceptance
Time” (as such term is defined in the Agreement and Plan of Merger (the “Merger
Agreement”) by and among Redcats USA, Inc. (“Parent”), Boulevard Merger Sub,
Inc. and the Company).  To the extent this Amendment conflicts with any
provision of the Current Agreement or addresses subject matters not addressed in
the Current Agreement, this Amendment shall govern.  Otherwise, the Current
Agreement shall remain in effect until and unless terminated in accordance with
its terms.  Capitalized terms that are used and not defined herein shall have
the meaning set forth in the Merger Agreement.

Parties:
 
Raphael Benaroya, the Company and Parent.
 
“Contract Term” (as defined in the Current Agreement):
 
·
 
Amended to mean the period of time commencing at the Acceptance Time and ending
on a date that is on or after the first anniversary of the Acceptance Time and
on or prior to the second anniversary of the Acceptance Time, as determined by
the President and Chief Executive Officer (the "CEO") of Parent (such date, the
“End Date”).
 
·
On or prior to the date that is 60 days prior to the first anniversary of the
Acceptance Time, the CEO shall notify the Executive in writing of the date that
shall be the End Date.  If the Executive ceases to be employed by the Company
following receipt of such notice (except if the Executive is terminated by the
Company for Cause or the Executive terminates his employment other than pursuant
to Section 14(c)(ii) of the Current Agreement (as amended)) and prior to the End
Date, then, in addition to any payments set forth below, the Company shall pay
to the Executive as of the date of such termination of employment an amount
equal to the portion of the Executive’s Annual Base Salary that would otherwise
have been paid to the Executive had he remained employed by the Company through
the End Date, and shall continue through the End Date to provide the benefits to
which the Executive would have been entitled had he continued working through
the End Date.
 
Transaction Payment:
 
·
The “Transaction Payment” shall mean $3,500,000.
 
·
The Transaction Payment will be paid at the Accep-

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tance Time
Position & Duties:
 
Section 3(a) of the Current Agreement shall be amended as follows:
 
 
·
References to the Company’s Board of Directors in Section 3(a) of the Current
Agreement shall be replaced with references to the CEO;
 
·
The following shall be added at the end of the second sentence of Section 3(a)
(with the terms “Merger” and “Parent” having the definitions ascribed to them in
this Amendment): “, taking into account the Merger and the fact that the Company
is no longer a stand-alone publicly traded company. Additionally, the Executive
shall assist Parent in the integration of the Company and Parent including, but
not limited to, assisting Parent in realizing synergies in connection with the
Merger.”
Compensation:
 
·
Annual base salary of $760,929, payable in equal monthly installments  (“Annual
Base Salary”), not subject to increase.
 
·
An annual bonus for each of the first two full years immediately following the
Acceptance Time in the amount of $600,000, with the first such bonus being
referred to herein as the “Year-One Bonus” and the second such bonus being
referred to herein as the “Year-Two Bonus.”
 
·
The Year-One Bonus shall be paid on the first anniversary of the Acceptance Date
and the Year-Two Bonus shall be paid on the second anniversary of the Acceptance
Date, subject in each case to the Executive’s continued employment with the
Company through such date (except as set forth under Severance below).
 
Definition of Cause:
 
Section 1(f) of the Current Agreement shall be modified as follows:
 
 
·
Paragraph (ii) thereof shall be modified to read as follows: “(A) the Executive
has willfully and continuously failed to perform his material duties to the
Company or (B) the Executive has failed in any material respect to follow
specific directions of the President and Chief Executive Officer of Parent in
the performance of his duties, in either case of (A) or (B) (i) other than any
such failure resulting from the Executive's incapacity due to physical or mental
illness and (ii)

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following delivery of written notice to the Executive from the Board of Parent
identifying such failure in detail and identifying the manner in which such
failure can be cured (if capable of cure) and the failure of the Executive to
cure such failure in the manner so identified within fourteen (14) days
following the delivery of such notice; or”
 
 
·
Paragraph (iii) thereof shall be modified to read as follows: “the Executive has
engaged in willful misconduct in the performance of his duties to the Company in
any material respect and material economic harm to the Company has resulted.”
 
 
·
Paragraph (iv) thereof shall be deleted in its entirety.
 
 
The parties hereto agree that any breach (including a material breach) of this
Amendment or the Current Agreement by the Executive following the Acceptance
Time that does not constitute “Cause” (as modified above) shall not relieve the
Company or Parent of its or their obligations under the Current Agreement or
this Amendment.
 
Termination:
 
·
Sections 7, 8 and 14(a), (c) (other than for purposes of clause 14(c)(ii), which
shall remain in effect as amended below solely for purposes of references
thereto in this Amendment), (d), (e) and (f)(ii) (other than (f)(ii)(A), (C) and
(D)) of the Current Agreement shall be deleted.  Section 14(g)(iv) shall remain,
and additionally shall be incorporated by reference into Section 14(f)(ii).
 
·
The reference to Section 4 in clause 14(c)(ii)(A) shall refer to the Executive’s
compensation as set forth above.
 
·
In no event shall (i) the fact that the Company is no longer a stand-alone
publicly traded company or (ii) the Executive’s failure to be Chairman of the
Board constitute a breach by the Company for purposes of Section 14(c)(ii) of
the Current Agreement.
 
Change of Control:
 
Section 15(d) shall be amended to read in its entirety as set forth on Annex A
hereto.
 
Severance:
 
·
If the Executive remains employed with the Company through the End Date, then
the Company shall pay to the Executive, promptly following (but in any event no

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later than 15 days after) the End Date, a lump sum cash amount (the “Severance
Payment”) equal to (x) minus (y) (but not less than zero), where (x) is
$4,700,000 and (y) is the aggregate amount of the Transaction Payment, the
Year-One Bonus and the Year-Two Bonus paid to the Executive pursuant to this
Amendment through the End Date.
 
·
If the Executive’s employment ceases prior to the End Date for any reason
(including, without limitation, as a result of the Executive’s death or
“Permanent Disability” (as defined in the Current Agreement)) other than (i)
being terminated by the Company for Cause or (ii) being terminated by the
Executive other than pursuant to Section 14(c)(ii) of the Current Agreement (as
amended), if applicable, then the Company shall pay to the Executive, promptly
following (but in any event no later than 15 days after) such termination, a
lump sum cash amount equal to (x) minus (y) (but not less than zero), where (x)
is $4,700,000 and (y) is the aggregate amount of the Transaction Payment, the
Year-One Bonus and the Year-Two Bonus paid to the Executive pursuant to this
Amendment through the date of such termination.
 
·
The payments to the Executive pursuant to the preceding two bullets are referred
to below as “Severance.”
 
Transfer of Insurance:
 
In the event that the Executive’s employment with the Company terminates on the
End Date, or prior to the End Date unless (i) the Executive is terminated by the
Company for Cause or (ii) the Executive terminates his employment other than
pursuant to Section 14(c)(ii) of the Current Agreement (as amended), then the
Company will transfer to the Executive ownership of all term life insurance
policies (including any “key man” policies) insuring the life of the Executive
and then held by the Company; provided, that (i) such transfer is allowed under
the terms of the applicable policies and (ii) the Executive shall pay any costs
incurred in connection with such transfer.
 
No Mitigation; No Offset:
 
·
The Executive shall be under no obligation to seek other employment and there
shall be no offset against any amounts due the Executive under this Amendment or
the Current Agreement on account of any remuneration attributable to any
subsequent employment that the Executive may obtain. Additionally, amounts owed
to the Executive under this Amendment or the

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Current Agreement shall not be offset by any claims the Company or Parent may
have against the Executive.
 
·
Section 14(f)(i) of the Current Agreement shall be deleted and replaced with the
preceding bullet.
 
Restrictive Covenants:
 
·
The Executive shall be bound by the provisions of Sections 11(a) and (d) of the
Current Agreement, during the Contract Term and for 36 months thereafter;
provided, however, that in the event of a termination of employment pursuant to
which the Executive is entitled to receive Severance, the Executive shall be
bound by the provisions of such Sections 11(a) and (d) only in the event that
the Company shall timely remit the Severance.
 
·
Section 11(e) of the Current Agreement shall be deleted and replaced with the
preceding bullet.
 
Tax Considerations:
 
This Amendment is intended to comply with the requirements of Section 409A of
the Internal Revenue Code of 1986, as amended, (the "Code"), and the regulations
and guidance issued thereunder, and shall be interpreted in a manner consistent
therewith.  In the event the parties determine in good faith that there is a
reasonable likelihood that any portion of this Amendment does not comply with
final regulations or other guidance under Section 409A, the parties agree that
they shall further amend this agreement and that such amendment shall be drafted
in compliance with Section 409A, but in such manner as will preserve the terms
and intent of this Amendment to the extent reasonably possible and in such a
manner that will not result in a material negative economic impact to the
Company or the Executive.
 
 
Notwithstanding any provision of this Amendment to the contrary, (i) the Current
Agreement and this Amendment are intended to provide payments that shall not
constitute "parachute payments" within the meaning of Section 280G of the Code
and (ii) in the event that the parties determine in good faith that there is a
likelihood that any payments to the Executive hereunder will constitute
parachute payments, the parties agree that they shall amend the Current
Agreement and this Amendment in such manner as they shall determine is
reasonably necessary to cause such payments to not be so treated; provided
however (1)

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in no event shall the sum of the Transaction Payment and the One-Year Bonus be
less than $4.1 million and (2) in no event shall the sum of the Transaction
Payment, the One-Year Bonus and the Two-Year Bonus be less than $4.7 million, or
be paid to the Executive later than the earlier of the End Date or the
termination of the Executive's employment other than by the Company for Cause or
by the Executive other than pursuant to Section 14(c)(ii) of the Current
Agreement (as amended).
     
Other Definitions:
 
·
“Affiliated Companies” shall mean, with respect to the Company, any corporation,
limited partnership, general partnership, association, joint-stock company,
joint venture, trust, bank, trust company, land trust, business trust, fund or
any organized groups of persons, whether or not a legal entity, that is directly
or indirectly controlled by, controlling or under common control with the
Company.
 
·
“Business of the Company” shall mean the operation of a retail operation which
markets and sells apparel for women principally in sizes 14 and larger and any
other future business in which the Company and its subsidiaries and Affiliated
Companies engage that produces more than 10% of the Company’s or Parent’s
consolidated sales.
 
Compensation Arrangement
 
The Company represents and warrants to Parent and the Executive that the
Compensation Committee of the Board of Directors of the Company, consisting
solely of independent directors, has approved by resolution the Employment
Agreement and this Amendment and the transactions contemplated thereby and
hereby as an employment compensation, severance or other employee benefit
arrangement, in accordance with the requirements of Rule 14d-10(d)(2) under the
Securities Exchange Act of 1934, as amended, and the instructions thereto.
 
Notices
 
Section 21 of the Current Agreement shall be amended to read in its entirety as
follows:
 
   
“all notices, requests and other communications to any party hereunder shall be
in writing and shall be deemed given if delivered personally or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses:

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If to Parent or the Company, to:
Redcats USA, Inc.
463 Seventh Avenue
New York, NY 10018
Attention:  Chief Executive Officer
 
 
   
with a copy (which shall not constitute notice) to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention:  Michael J. Segal, Esq.
 
 
   
If to the Executive, to the address of the Executive most recently on the books
and records of the Company.
 
 
   
with a copy (which shall not constitute notice) to:
Katten Muchin Rosenman LLP
575 Madison Ave
New York, New York 10022
Attention:  Edward J. Rayner, Esq.”
 
                             

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By signing below, the parties hereto agree to be bound by the terms of this
Amendment as described above.
 
Signed,
 

 
Redcats USA, Inc.
 
By:
/s/ Raphael Benaroya
By:
/s/ Faintreny Eric  
Raphael Benaroya
 
Name: Faintreny Eric
 
 
United Retail Group, Inc.
 
 
By:
/s/ George Remeta  
Name: George Remeta

 
Date: September 10, 2007

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ANNEX A

In the event that any payment or benefit received or to be received by Executive
pursuant to the terms of the Current Agreement or this Amendment (the "Contract
Payments") or in connection with the Executive's termination of employment or
contingent upon a Change of Control of the Company pursuant to any plan or
arrangement or other agreement with the Company (or any affiliate) ("Other
Payments" and, together with the Contract Payments, the "Payments") would be
subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the
Code, as determined as provided below, the Company shall pay to Executive, at
the time specified below, an additional amount (the "Gross-Up Payment") such
that the net amount retained by the Executive, after deduction of the Excise Tax
on the Payments and any federal, state and local income or other tax and Excise
Tax upon the payment provided for by this paragraph, and any interest, penalties
or additions to tax payable by the Executive with respect thereto, shall be
equal to the total value of the Payments at the time such Payments are to be
made.  All financial determinations required to be made under this Annex A,
including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized certified public
accounting firm designated by the Company and reasonably acceptable to the
Executive (the “Accounting Firm”).  The Accounting Firm shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment
or such earlier time as is requested by the Company.  All fees and expenses of
the Accounting Firm shall be borne solely by the Company.  Any determination by
the Accounting Firm shall be binding upon the Company and the Executive.  For
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to pay federal income tax at the highest marginal rates of federal
income taxation applicable to individuals in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
effective rates of taxation applicable to individuals as are in effect in the
state and locality of the Executive's residence or place of employment in the
calendar year in which the Gross-Up Payment is to be made, net of the maximum
reduction in federal income taxes that can be obtained from deduction of such
state and local taxes, taking into account any limitations applicable to
individuals subject to federal income tax at the highest marginal rates.
 
The Gross-Up Payments provided for in the preceding paragraph shall be made
prior to the imposition upon the Executive or payment by the Executive of any
Excise Tax.
 
The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
a Gross-Up Payment. Such notification shall be given as soon as practicable but
no later than 30 days after the Executive is informed in writing of such claim
and shall apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid.  The Executive shall not pay such claim
prior to the expiration of the 30 day period following the date on which the
Executive gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
 
give the Company any information reasonably requested by the Company relating to
such claim;
 
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take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company and reasonably satisfactory to the Executive;
 
cooperate with the Company in good faith in order to effectively contest such
claim; and
 
permit the Company to participate in any proceedings relating to such claim;
 
provided, however, that the Company shall bear and pay directly all costs and
expenses (including, but not limited to, additional interest and penalties and
related legal, consulting or other similar fees) incurred in connection with
such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or other tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.
 
The Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive on an interest-free basis, and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or other tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and provided, further, that if the Executive is required to extend the statute
of limitations to enable the Company to contest such claim, the Executive may
limit this extension solely to such contested amount. The Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority. In addition, no position may be taken nor
any final resolution be agreed to by the Company without the Executive's consent
if such position or resolution could reasonably be expected to adversely affect
the Executive (including any other tax position of the Executive unrelated to
the matters covered hereby).
 
As a result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Company or the Tax Counsel
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts its remedies and the Executive thereafter is required to pay to the
Internal Revenue Service an additional amount in respect of any Excise Tax, the
Company or the Tax Counsel shall determine the amount of the Underpayment that
has occurred and any such Underpayment shall promptly be paid by the Company to
or for the benefit of the Executive.
 
 
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The Executive shall file his tax returns in a manner consistent with the
position taken by the Company in respect of the matters described in this Annex
A.
 

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