Document:

exv10w9

Exhibit 10.9

FIRST AMENDMENT TO LEASE

     THIS FIRST AMENDMENT TO LEASE (“Amendment”), dated and effective as of April 1, 2002, by and
between West Virginia Economic Development Authority, a West Virginia public corporation and
government instrumentality, having its principal office at 160 Association Drive, Charleston. West
Virginia 25311-1217 (hereinafter referred to as “Landlord”), and Pennsylvania Fashions, Inc., a
Pennsylvania corporation, having its principal office at 155 Thornhill Drive. Warrendale,
Pennsylvania 15086 (hereinafter referred to as ‘Tenant”).

          WITNESSETH THAT:

          WHEREAS, Landlord and Tenant are parties to that certain Lease dated June 28, 1999, for an
approximately 189,600 square foot building and associated improvements located at the Three
Springs Industrial and Business Park in Weirton, Brooke County, West Virginia (“Lease”);

          WHEREAS, on February 4, 2002, Tenant filed a voluntary petition for relief under Chapter 11
of Title 11 of the United States Code, 11 U.S.C. Section 101, et seq., as amended;

          WHEREAS, by Order entered on April 1, 2002, the Bankruptcy Court extended the time for the
Tenant to reject or assume nonresidential real estate leases until August 5, 2002; and

          WHEREAS, Landlord and Tenant agree to amend the Lease to temporarily modify the Base Rent,
all as provided for herein.

     NOW, THEREFORE, for and in consideration of the foregoing preambles, of the mutual promises
and covenants contained herein, of Ten Dollars ($10.00) cash in hand paid by Tenant to Landlord,
and the other good and valuable consideration, the receipt and sufficiency of all of which is
hereby acknowledged, the parties hereby agree as follows:

     1. Base Rent, The Base Rent set forth in Section 4.01 of the Lease is hereby modified
as follows:

          a. The Base Rent is reduced to $420,000 per year, payable monthly in advance in the sum of
$35,000 per month, effective with the April 15, 2002 payment, and continuing through and including
the March 15, 2003 payment.

          b. The Base Rent is reduced to $444,000 per year, payable monthly in advance in the sum of
537,000 per month, effective with the April 15, 2003 payment, and continuing through and including
the January 15, 2004 payment.

          c. Effective with the February 15, 2004 payment, the Base Rent payments shall resume as set
forth in Section 4.01 of the Lease, and shall continue thereafter in full force and effect for the
remaining Term of the Lease.

 

 

     2. Duration of Amendment. This Amendment shall continue and remain effective provided
that the Lease is assumed by the Tenant by the earlier of the date that the Tenant’s Chapter 11
plan of reorganization is confirmed by the Bankruptcy Court or June 30, 2003, whichever occurs
first. In the event that the Lease is not assumed by the Tenant on the earlier of the date that the
Tenant’s Chapter 11 plan of reorganization is confirmed or June 30, 2003, then this Amendment
shall automatically terminate and be null, void and of no further effect without any additional
action by the parties. Should this Amendment terminate as provided herein, then Landlord shall
retain the right to claim all amounts of reduced Basic Rent under the Lease for the post-petition
period as an administrative expense in the Chapter 11 bankruptcy case of the Tenant.

     3. Notice Address.

          a. Landlord’s address as set forth in Section 24.01 of the Lease is hereby
modified by deleting the reference to the Landlord Notice address and replacing it with the
following:

West Virginia Economic Development Authority

NorthGate Business Park

160 Association Drive

Charleston, West Virginia 25311-1217

Attn: Executive Director

          b. Tenant’s address as set forth in Section 24.01 of the Lease is hereby
modified by deleting all reference to the Tenant Notice address and the associated copies in their
entirety and replacing them with the following.

Pennsylvania Fashions, Inc.

155 Thornhill Drive

Warrendale, PA 15086

Attn: Real Estate Legal Department

     4. Reservation of Rights. Landlord understands and acknowledges that Tenant has
commenced proceedings under Chapter 11 of the United States Bankruptcy Code and that nothing herein
shall constitute an assumption of the Lease or constitute a post-petition new lease under
applicable Bankruptcy laws. Landlord acknowledges that Tenant expressly reserves all rights and
remedies available to it as a Debtor-in-Possession under applicable Bankruptcy laws with regard to
the rejection or assumption of the Lease.

     5. Waiver of Pre-petitions Claims. Landlord hereby agrees to waive all pre- petition
claims for amounts due and owing under the Lease.

     6. Effect of Amendment. All other terms and conditions of the Lease shall remain and
continue in full force and effect and shall be deemed unchanged except to the extent amended
herein.

2

 

     IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be executed and
delivered by their duly authorized officers as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	West Virginia Economic Development Authority	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Deborah J. Orcutt	 	 	 	/s/ David A. Warner	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	David A. Warner	 	 	 	 
	 

	 	 	 	Its:
	 	Executive Director	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	Pennsylvania Fashions, Inc.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ K.W.	 	 	 	/s/ Rick C. Welker	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Rick C. Welker	 	 	 	 
	 

	 	 	 	Its:
	 	Senior Vice President & CFO	 	 	 	 

3exv10w10

EXHIBIT 10.10

rue21, inc.

155 Thornhill Road

Warrendale, PA 15086

May __, 2003

Saunders Karp & Megrue, LLC

667 Madison Avenue

New York, NY 10021

Dear Ladies and Gentlemen:

     This letter agreement confirms our understanding that rue21, inc., a Pennsylvania corporation
(f/k/a Pennsylvania Fashions, Inc.) on behalf of itself and its subsidiaries and affiliates
(collectively, the “Company”) has engaged you (the “Advisor”) to provide financial advisory
services to the Company upon the request of the Company from time to time. These services are to be
provided in connection with ongoing business and financial matters, including operating and cash
flow requirements, corporate liquidity and other ordinary and necessary corporate finance
concerns (including acquisition, advisory and finance matters).

     In consideration for the Advisor agreeing to provide such advisory services, the Company agrees to
pay the Advisory an annual fee of $250,000, payable annually in advance, with the first such
payment to be made on the date hereof; provided that if the Company’s secured financing,
agreements do not permit the payment of all or any portion of such annual fee, then such unpaid
fees will accrue and become due and payable by the Company at such time as the Company’s secured
financing agreements do permit such payment.

     The annual fee is for financial advisory services to be rendered by the Advisor and its
employees and partners and not for any other services or any such services to be rendered by any
other person. Directors of the Company who are representatives of the Advisor, or any of its
affiliates, will not be entitled to receive compensation for serving as directors of the Company
(it being understood that such directors will be entitled, however, to customary indemnification
agreements with the Company). Any additional services to be provided by or on behalf of the
Advisor, and any additional fee therefor, will be agreed to in writing by the parties.

     The Company agrees to reimburse the Advisor on the date hereof for all of the reasonable
out-of-pocket expenses incurred by the Advisor and its affiliates (including without limitation,
the fees and disbursements of counsel and other expenses incurred in
carrying out the Advisor’s
due diligence investigation) in connection with the agreements entered into by the Company. The
Company also agrees to reimburse the Advisor promptly upon request from time to time for all
additional reasonable out-of-pocket expenses incurred by the Advisor in connection with the
services to be rendered by the Advisor pursuant to its engagement hereunder.

 

 

Saunders Karp & Megrue, LLC

May _, 2003

Page 2

     The Company also agrees to indemnify the Advisor and certain other persons and to limit the
Advisor’s liability to the Company as set forth in Schedule I hereto which constitutes an
integral part of this letter. The Company’s agreements contained or referred to in this paragraph
shall survive any termination of this agreement.

     This letter agreement shall continue from the date hereof through the date on which the Advisor and
its affiliates beneficially own, collectively, less than 25% of the voting common stock of
Pennsylvania Fashions, Inc. owned beneficially by them, collectively, on the date hereof (as
adjusted for any stock split, stock dividend or reclassification involving the voting common stock
of the Company).

     This letter agreement will constitute the entire agreement between the parties hereto and will not
be amended except in writing by the Company and the Advisor. This agreement will be governed by,
and construed in accordance with, the laws of the State of New York without regard to the conflict
of laws rules of such state.

     If the foregoing accurately describes our agreement with respect to the foregoing, please so
indicate by signing this letter in the space indicated below.

	 	 	 	 	 
	 	Very truly yours,

rue21, inc.

 	 
	 	By:  	/s/
Robert N. Fisch
 	 
	 	 	Name:  	Robert N. Fisch 	 
	 	 	Title:  	President 	 
	 

ACCEPTED AND AGREED:

SAUNDERS KARP & MEGRUE, LLC

	 	 	 	 	 
	By:

	 	/s/ Illegible
	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

 

 

SCHEDULE I

     rue21, inc., a Pennsylvania corporation (f/k/a Pennsylvania Fashions, Inc.) (the “Company”)
will indemnify and hold harmless Saunders Karp & Megrue, LLC (the “Advisor”), its affiliates and
the respective partners, agents and employees of the Advisor and their respective affiliates
(together with the Advisor, collectively, the “Advisor Group”) from and against any claims,
liabilities, damages, losses and expenses, including reasonable fees and expenses of counsel,
arising out of or in connection with the services rendered by the
Advisor Group under this
agreement, and will reimburse the Advisor Group for all such fees and expenses, including the
reasonable fees and expenses of counsel, as they are incurred by the Advisor Group in connection
with pending or threatened litigation whether or not the Advisor Group is a party thereto. The
Company will not, however, be responsible for any claims, liabilities, damages, losses or expenses
to the extent that such claims, liabilities, damages, losses or expenses are finally determined by
a court of competent jurisdiction to result primarily from the Advisor Group’s gross negligence or
bad faith. The foregoing agreement will be in addition to any rights that the Advisor Group may
have at common law or otherwise, including, but not limited to, any right to contribution.

     Notwithstanding anything else contained herein, the Company also agrees that the Advisor Group
will have no liability to the Company in connection with the services rendered hereunder (whether
in tort, contract or otherwise) for claims, liabilities, damages, losses, or expenses, including
reasonable fees and expenses of counsel, incurred by the Company
unless, and to the extent, they
are finally determined by a court of competent jurisdiction to result primarily from the Advisor
Group’s gross negligence or bad faith.

     If indemnification is to be sought hereunder by a member of the Advisor Group, then
such member shall notify the Company of the commencement of any action or proceeding in
respect thereof; provided, however, that the failure to so notify the Company shall not
relieve the Company from any liability that it may otherwise have to such indemnified
person, except to the extent the Company shall have been materially prejudiced by such
failure. Following such notification, the Company may elect in writing to assume the
defense of such action or proceeding, and upon such election, it will not be liable for
any legal costs subsequently incurred by such member (other than reasonable costs of
investigation) in connection therewith, unless (i) the Company has failed to provide
counsel reasonably satisfactory to such member in a timely manner or (ii) counsel that has
been provided by the Company reasonably determines that its representation of such member
would present it with a conflict of interest. In any litigation or proceeding, the Company
will not be responsible for the fees and expenses of more than one counsel (together with
local counsel) for all members of the Advisor Group claiming indemnification hereunder in
any one jurisdiction, unless any of such members has a separate and conflicting defense with
regard to such litigation or proceedings, as reasonably determined by the counsel that has
been provided by the Company. The Company will not be liable for any settlement of any
litigation or proceeding effected without its prior written consent, which, consent will
not be unreasonably withheld or delayed. Should the Company assume the defense of any action, the Company will not, without the
Advisor Group’s prior written consent, settle, compromise, consent to the entry of any
judgment in or otherwise seek to terminate such action if such settlement, compromise,
consent or termination imposes obligations on any member of the Advisor Group (through
injunctive relief or otherwise) other than the payment of money or does not unconditionally
release the Advisor Group from liability.

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