<PAGE>   1
                                                         [Execution Counterpart]


                                 AMENDMENT NO. 9


                  AMENDMENT NO. 9 dated as of May 30, 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"); each of
the lenders that is a signatory hereto identified under the caption "BANKS" on
the signature pages hereto; and THE CHASE MANHATTAN BANK (successor in interest
of The Chase Manhattan Bank, N.A.), as agent for the Banks (the "Agent") and as
collateral agent for the Banks under the Credit Agreement and for itself under
the Letter of Credit Agreement (the "Collateral Agent").

                  The Company, the Subsidiary Guarantors, the Banks, the Agent
and the Collateral Agent are parties to a Credit Agreement dated as of February
24, 1992 (as heretofore amended, the "Credit Agreement"), providing, subject to
the terms and conditions thereof, for extensions of credit (by making of loans
and issuing letters of credit) to be made by said Banks to the Company in an
aggregate principal or face amount not exceeding $15,000,000.

                  The Company has requested the Banks to consent to certain
amendments to the 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 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, the Majority Banks and the
Agent (and the payment to the Agent of an amendment fee in the amount of
$10,000), but effective as of the date hereof, the Credit Agreement is hereby
amended as follows:

                  A. Fixed Charges Ratio. Section 9.12 of the 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 during the period from and including
         May 1, 1997 to and including July 5, 1997 to be less than .95 to 1, and
         will not permit the Fixed Charges Ratio on any other date on or after
         February 1, 1997 to be less than 1.0 to 1."




                       Amendment No. 9 to Credit Agreement
<PAGE>   2
                                      - 2 -




                  B. Cash Flow. Section 9.22 of the 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:

<TABLE>
<CAPTION>
                           Period                              Amount
                           ------                              ------
<S>                                                       <C>
                  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                    $ 2,700,000

                  From May 4, 1997
                    through July 5, 1997                    $ 2,100,000

                  From June 1, 1997
                    through August 2, 1997                  $         0

                  From July 6, 1997
                    through August 30, 1997                ($ 4,500,000)

                  From August 3, 1997
                    through October 4, 1997                ($ 1,600,000)

                  From August 31, 1997
                    through November 1, 1997                $         0

                  From October 5, 1997
                    through November 29, 1997               $   500,000

                  From November 2, 1997
                    through January 3, 1998                 $ 8,000,000

                  From November 30, 1997
                    through January 31, 1998                $ 2,600,000".
</TABLE>




                       Amendment No. 9 to Credit Agreement
<PAGE>   3
                                      - 3 -




                  Section 3. Miscellaneous. Except as herein provided, the
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 Credit Agreement
<PAGE>   4
                                      - 4 -




                  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 Agent
                                         and Collateral Agent


By  /s/  George Remeta                  By  /s/  Carol A. Ulmer
  -------------------------               -------------------------
  Name:  George Remeta                    Name:  Carol A. Ulmer
  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 Credit Agreement and agrees that the obligations of the
Company under the 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 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/  Kenneth P. Carroll             By  /s/  Kenneth P. Carroll
  -------------------------               -------------------------
  Name:  Kenneth P. Carroll               Name:  Kenneth P. Carroll
  Title: President                        Title: President


SMART SIZE, INC.                        UNITED RETAIL LOGISTICS
                                          OPERATIONS INCORPORATED
                                          (formerly known as Sizes
                                          Unlimited Florida, Inc.)


By  /s/  Kenneth P. Carroll             By  /s/  Kenneth P. Carroll
  -------------------------               -------------------------
  Name:  Kenneth P. Carroll               Name:  Kenneth P. Carroll
  Title: President                        Title: President




                       Amendment No. 9 to Credit Agreement
<PAGE>   5
                                      - 5 -




UNITED DISTRIBUTION                     THE AVENUE, INC.
  SERVICES,INC.


By  /s/  Kenneth P. Carroll             By  /s/  Barry Goldin
  -------------------------               -------------------------
  Name:  Kenneth P. Carroll               Name:  Barry Goldin
  Title: President                        Title: President




                       Amendment No. 9 to Credit Agreement