FY2002 10K Exhibit 10.46




Exhibit 10.46



Second AMENDMENT TO CREDIT AGREEMENT

SECOND AMENDMENT, dated as of March 22, 2002 (this "Amendment"), to the
Credit Agreement referred to below, is entered into by and among GOTTSCHALKS INC., a Delaware
corporation ("Borrower"); GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (in its individual capacity, "GE Capital"), for itself, as a
Lender, and as Agent for Lenders; The CIT GROUP/BUSINESS CREDIT, INC., as a Lender; LASALLE RETAIL
FINANCE, a division of LASALLE BUSINESS CREDIT, Inc, as agent for STANDARD FEDERAL BANK NATIONAL
ASSOCIATION, as a Lender; and FOOTHILL CAPITAL CORPORATION, as a Lender.

W I T N E S S E T H

WHEREAS, Borrower, Agent and Lenders are parties to that certain Credit Agreement dated as of
January 31, 2002 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"); 

WHEREAS, Borrower, Kimco Capital Corporation ("Kimco"), a Delaware corporation,
for itself, as a Lender, and as Agent for Lenders, and the other Lenders signatory thereto from time
to time, are entering into that certain Credit Agreement dated as of March 22, 2002 (the
"Kimco Credit Agreement"); 

WHEREAS, concurrently herewith, Agent, each Lender and Kimco are entering into that certain
Intercreditor Agreement dated as of March 22, 2002; and

WHEREAS, Borrower, Agent and Lenders have agreed to amend the Credit Agreement in the manner, and
on the terms and conditions, provided for herein;

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:



	Definitions.  Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Credit Agreement.

	Amendment to Section 5.18 of the Credit Agreement.  Section 5.18(c) of the Credit
Agreement is hereby amended as of the Amendment Effective Date by replacing the reference to
"sixty (60) days" (appearing in Section 5.18(c)) with "ninety (90) days".

	Amendment to Section 6.3 of the Credit Agreement.  Section 6.3 of the Credit Agreement is
hereby amended as of the Amendment Effective Date by adding the following as clause (c)
thereof:

"(c)   In connection with and to effect the refinancing of the Heller Notes pursuant to
Section 6.3(a)(v)(1) and provided that Borrower shall at all times cause any Kimco
Indebtedness or Liens relating thereto to be subject to an intercreditor agreement in form and
substance reasonably acceptable to Agent, Borrower may incur and permit to exist the Kimco
Indebtedness, and, in connection with such Kimco Indebtedness (and pursuant to Section
6.7(c)) , Borrower may (i) grant a senior security interest in the Kimco Mortgaged Properties to
the Kimco Lenders as security for the Kimco Indebtedness, provided, that Borrower
concurrently grants (pursuant to execution and delivery of Mortgages in form and substance
satisfactory to Agent) a junior security interest in the Kimco Mortgaged Properties to Agent, for
itself and for the benefit of Lenders, to secure the Obligations under the Loan Documents and,
within five (5) Business Days thereafter causes the delivery and/or occurrence of the additional
requirements relating thereto set forth in Section 5.9(b) (or, with respect to title
insurance policies, obtains within such five (5) Business Day period a signed commitment from the
applicable title insurance company for the issuance of such title insurance, in form and substance
reasonably acceptable to Agent), and (ii) grant a junior security interest to the Kimco Lenders in
other of the Borrower's assets as security for the Kimco Indebtedness, provided, that, prior
to granting any such junior security interest to the Kimco Lenders, Borrower shall have delivered
written notice thereof (or, with respect to the initial grant of security interests to the Kimco
Lenders in connection with the execution and delivery of the Kimco Credit Agreement, copies of the
relevant documents granting the same) to Agent and shall have granted a security interest in all
such other assets to the Agent, for itself and for the benefit of Lenders, to secure the
Obligations, in accordance with Section 5.9 hereof and otherwise in form and substance satisfactory
to the Agent, that shall at all times be senior in all respects to any such security interest
granted to the Kimco Lenders."

	Amendment to Section 6.19 of the Credit Agreement.  Section 6.19 of the Credit Agreement
is hereby amended as of the Amendment Effective Date by deleting subparagraph (a) and replacing it
with the following:

"(a)No Credit Party shall change or amend the terms of the Kimco Indebtedness or any
Subordinated Debt, or any indenture, mortgage or agreement in connection with any such Indebtedness
(including, with respect to the Kimco Indebtedness, the Kimco Credit Agreement and the "Loan
Documents" as defined therein) if the effect of such amendment is to:  (i) increase the
interest rate on such Indebtedness; (ii) change the dates upon which payments of principal or
interest are due on such Indebtedness other than to extend such dates; (iii) change any default
or event of default other than to delete or make less restrictive any default provision therein, or
add any covenant with respect to such Indebtedness; (iv) change the redemption or prepayment
provisions of such Indebtedness other than to extend the dates therefor or to reduce the premiums
payable in connection therewith; (v) grant any security or collateral to secure payment of such
Indebtedness except, with respect to Kimco Indebtedness, as permitted under Section 6.3(c)
and 6.7(c) hereof; or (vi) change or amend any other term if such change or amendment
would materially increase the obligations of the Credit Party thereunder or confer additional
material rights on the holder of such Indebtedness in a manner adverse to any Credit Party, Agent or
any Lender." 

	Amendment to Annex A to the Credit Agreement.  Annex A to the Credit Agreement is hereby
amended as of the Amendment Effective Date by:

	Deleting the definition of Mortgaged Properties and replacing it with the following:

""Mortgaged Properties" has the meaning assigned to it in Section
5.9(b) hereto and shall include, in addition (for all uses of such term other than in Section
5.9(b)), any other Real Estate of any Credit Party which may from time to time become subject to
a mortgage in the favor of the Agent securing the Obligations."

	Adding in alphabetical order the following definitions for the terms "Kimco",
"Kimco Credit Agreement", "Kimco Indebtedness", "Kimco Lenders" and
"Kimco Mortgaged Properties" that shall read in full as follows:

""Kimco" means Kimco Capital Corporation, a Delaware corporation."


 ""Kimco Credit Agreement" means that certain Credit Agreement, dated March
22, 2002, among Borrower, Kimco, for itself as a Kimco Lender, and as agent for the Kimco Lenders,
and the other Kimco Lenders signatory thereto from time to time, as it may be amended or otherwise
modified from time to time subject to Section 6.19 hereof." 

 ""Kimco Indebtedness" means Indebtedness of Borrower to the Kimco Lenders
pursuant to the Kimco Credit Agreement and documents relating thereto, in an aggregate principal
amount not to exceed $16,000,000."

""Kimco Lenders" means "Lenders" as defined in the Kimco Credit
Agreement."

""Kimco Mortgaged Properties" means the parcels of real property owned or
leased by Borrower and located at the following addresses: (i) 313 Madonna Road, San Luis Obispo,
California, 93405; (ii) 1673 West Lacey Blvd., Hanford, California 93230; and (iii) 10317 Silverdale
Way North, Silverdale, Washington 98383, together with all buildings, improvements, appurtenances,
fixtures, easements and other rights incidental to the ownership of such parcels of real property or
any of the foregoing, including, without limitation, the benefits under all reciprocal easement
agreements or similar documents related to each of the foregoing properties."

	Amendment to Annex E of the Credit Agreement.  Annex E of the Credit Agreement is hereby
amended as of the Amendment Effective Date to delete paragraph (h) in its entirety and replace it
with the following new paragraph (h) that shall read in full as follows:

"(h)Debt and Equity Notices.  To Agent, as soon as practicable, copies of all
material written notices given or received by any Credit Party with respect to any such Person's (i)
Indebtedness permitted under Sections 6.3(a)(v)(1), (vii) or (ix) hereof (including the Kimco
Indebtedness), (ii) Stock, or (iii) Subordinated Debt, and, within 2 Business Days after any Credit
party obtains knowledge of any matured or unmatured event of default with respect to any such
Indebtedness permitted under Sections 6.3(a)(v)(1), (vii) or (ix) hereof or Subordinated
Debt, notice of such event of event of default."


	Representations and Warranties.  To induce Agent and Lenders to enter into this
Amendment, Borrower hereby represents and warrants that:

	The execution, delivery and performance by Borrower of this Amendment are within Borrower's
corporate power and have been duly authorized by all necessary corporate and shareholder
action.
	This Amendment has been duly executed and delivered by or on behalf of Borrower.
	This Amendment constitutes a legal, valid and binding obligation of Borrower enforceable against
Borrower in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights
generally and by general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
	No Default has occurred and is continuing after giving effect to this Amendment.
	No action, claim or proceeding is now pending or, to the knowledge of Borrower, threatened
against Borrower, at law, in equity or otherwise, before any court, board, commission, agency or
instrumentality of any federal, state, or local government or of any agency or subdivision thereof,
or before any arbitrator or panel of arbitrators, (i) which challenges Borrower's right, power, or
competence to enter into this Amendment or, to the extent applicable, perform any of its obligations
under this Amendment, the Credit Agreement as amended hereby or any other Loan Document, or the
validity or enforceability of this Amendment, the Credit Agreement as amended hereby or any other
Loan Document or any action taken under this Amendment, the Credit Agreement as amended hereby or
any other Loan Document or (ii) which if determined adversely, is reasonably likely to have or
result in a Material Adverse Effect after giving effect to this Amendment.  To the knowledge of
Borrower, there does not exist a state of facts which is reasonably likely to give rise to such
proceedings.



	No Other Amendments.  Except as expressly amended herein, the Credit Agreement shall be
unmodified and shall continue to be in full force and effect in accordance with its terms.

	Expenses.  Borrower hereby reconfirms its obligations pursuant to Section 11.3 of the
Credit Agreement to pay and reimburse Agent for all reasonable costs and expenses (including,
without limitation, reasonable fees of counsel) incurred in connection with the negotiation,
preparation, execution and delivery of this Amendment and all other documents and instruments
delivered in connection herewith. 

	Effectiveness.  This Amendment shall become effective as of March 22, 2002 (the
"Amendment Effective Date") only upon satisfaction in full in the judgment of the
Lender of each of the following conditions on or prior to March 22, 2002:


	Documents.  Agent shall have received this Amendment duly executed and delivered by
Agent, all Lenders and Borrower and consented and agreed to by GCRC.

	Payment of Expenses.  Borrower shall have paid to Agent and Lenders all costs, fees and
expenses owing in connection with this Amendment and the other Loan Documents and due to Agent or
Lenders (including, without limitation, reasonable legal fees and expenses), in each case to the
extent billed to Borrower or otherwise scheduled to be paid on or before the Amendment Effective
Date.

	Representations and Warranties.  All representations and warranties of or on behalf of
the Credit Parties or GCRC in this Amendment and all the other Loan Documents shall be true and
correct in all material respects with the same effect as though such representations and warranties
had been made on and as of the date hereof and on and as of the date that the other conditions
precedent in this Section 10 have been satisfied.

In the event that each of the foregoing conditions precedent has not been satisfied on or prior
to March 22, 2002, this Amendment shall become, upon written notice by Agent to Borrower, null and
void and of no force or effect.

	GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK.

	Counterparts.  This Amendment may be executed by the parties hereto on any number of
separate counterparts and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.

 

 

 

[Signature Page to Follow]


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered as of the day and year first above written.
GOTTSCHALKS INC.

By:  /s/ Michael S. Geele

Title:Senior Vice President

Chief Financial Officer


  

GENERAL ELECTRIC CAPITAL

CORPORATION,

as Agent and Lender


By: /s/ Todd Gronski

Title:  Its Duly Authorized Signatory


 

THE CIT GROUP/BUSINESS CREDIT INC.,

as Lender


By: /s/  Thomas H. Hopkins

Title:Vice President

FOOTHILL CAPITAL CORPORATION,

as Lender


By: /s Juan Barrera

Title:  Assistant Vice President

LASALLE RETAIL FINANCE, a division of LASALLE BUSINESS CREDIT, INC., as agent for
STANDARD FEDERAL BANK NATIONAL ASSOCIATION N.A.,

as Lender


By: /s/ David Molinario

Title:  Vice President












Acknowledgment, Consent and Agreement to Second Amendment to Credit Agreement:

The undersigned hereby (i) acknowledges and consents to each of the amendments to the Credit
Agreement effected by this Amendment and (ii) confirms and agrees that its obligations under the
GCRC Letter shall continue without any diminution thereof and shall remain in full force and effect
on and after the effectiveness of this Amendment.

Acknowledged, consented and agreed to as of March 22, 2002.
GOTTSCHALKS CREDIT RECEIVABLES CORPORATION, a Delaware corporation


 

By: /s/ Michael S. Geele

Title:President