Document:

NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

     THIS NINTH AMENDMENT TO LOAN AND SECURITY
AGREEMENT (the "Amendment"), dated as of  June
28,  2000,  is  entered into between  CONGRESS
FINANCIAL  CORPORATION (WESTERN), a California
corporation ("Lender"), and GOTTSCHALKS  INC.,
a  Delaware corporation ("Borrower"), with its
corporate office located at 7 River Park Place
East, Fresno, California  93720.

                    RECITAL

      A.   Borrower and Lender have previously
entered  into  that certain Loan and  Security
Agreement dated December 20, 1996, as  amended
by  the  First Amendment to Loan and  Security
Agreement,  dated as of August 20,  1998,  the
Second   Amendment   to  Loan   and   Security
Agreement, dated as of September 1, 1998,  the
Third   Amendment   to   Loan   and   Security
Agreement, dated as of December 18, 1998,  the
Fourth   Amendment   to  Loan   and   Security
Agreement, dated as of January 29,  1999,  the
Fifth   Amendment   to   Loan   and   Security
Agreement,  dated  as of March  1,  1999,  the
Sixth   Amendment   to   Loan   and   Security
Agreement,  dated as of August 12,  1999,  the
Seventh   Amendment  to  Loan   and   Security
Agreement, dated as of March 27, 2000 and  the
Eighth   Amendment   to  Loan   and   Security
Agreement,  dated  as  of  May  19,  2000  (as
amended, supplemented or modified from time to
time, the "Loan Agreement"), pursuant to which
Lender  has  made certain loans and  financial
accommodations  available to Borrower.   Terms
used herein without definition shall have  the
meanings   ascribed  to  them  in   the   Loan
Agreement.

      B.    Borrower  is purchasing  37  store
locations,   together  with   the   associated
leases,  machinery, equipment,  installations,
furniture,  tools, spare parts,  supplies  and
maintenance   equipment   (collectively,   the
"Lamonts   Purchased  Store"),  from   Lamonts
Apparel, Inc., a Delaware corporation, in  its
capacity  as debtor-in-possession in Case  No.
00-00045 (TTG) (the "Bankruptcy Case")  in  the
United States Bankruptcy Court for the Western
District   of   Washington  (the   "Bankruptcy
Court"),  and  is  assuming  the  leases   and
certain  other contracts with respect  to  the
Lamonts  Purchased Stores, all  in  accordance
with the Asset Purchase Agreement dated as  of
April  24, 2000 between Lamonts Apparel,  Inc.
and  Borrower previously given to Lender  (the
"Purchase Agreement").

     C.   The Bankruptcy Court issued an Order
approving the transfer to Borrower of good and
marketable  title  to  the  Lamonts  Purchased
Stores and all assets related thereto free and
clear  of  any  liens  and  encumbrances  (the
"Order")  on  May  16, 2000, which  Order  was
acceptable to Lender.

      D.   An appeal of the Order was filed on
May  26,  2000,  which  appeal  abrogated  the
effectiveness of the Eighth Amendment pursuant
to  the  terms  of paragraph 5 thereof.   Such
appeal  was  dismissed by a  "Stipulation  and
Order  Dismissing  With  Prejudice  Appeal  By
Alamo  Group and Troutman Investment  Company"
entered  in the United States District  Court,
Western  District of Washington  on  June  28,
2000.

      E.    In  light of the dismissal of  the
appeal of the Order as described above, Lender
and  Borrower wish to amend the Loan Agreement
to  reinstate  the provisions  of  the  Eighth
Amendment, except the provisions of  paragraph
5  of  the  Eighth  Amendment  abrogating  the
effectiveness   of   the   Eighth    Amendment
immediately  upon the filing of an  appeal  of
the   Order.    The  parties  by  this   Ninth
Amendment  intend to remove the provisions  of
such  paragraph 5 of the Eighth Amendment  and
to  make  the other provisions of  the  Eighth
Amendment  effective as of May 19,  2000,  all
under  the terms and conditions set  forth  in
this   Amendment  and  the  Eighth   Amendment
(excluding  such  paragraph  5).   Lender  and
Borrower are entering into this Amendment with
the  understanding and agreement that,  except
as   specifically  provided  herein,  none  of
Lender's  rights or remedies as set  forth  in
the Loan Agreement is being waived or modified
by the terms of this Amendment.

      NOW, THEREFORE, in consideration of  the
foregoing  and  the  mutual  covenants  herein
contained,  and  for other good  and  valuable
consideration, the receipt and sufficiency  of
which  are  hereby acknowledged,  the  parties
hereby agree: (1) to remove the provisions  of
such paragraph 5 of the Eight Amendment and to
make   the  other  provisions  of  the  Eighth
Amendment  effective as of May 19,  2000;  (2)
all  conditions  to the effectiveness  of  the
Eighth Amendment (except such paragraph 5) are
conditions to the effectiveness of this  Ninth
Amendment;  and  (3)  except  as  specifically
provided  herein, none of Lender's  rights  or
remedies as set forth in the Loan Agreement is
being waived or modified by the terms of  this
Amendment.

      IN  WITNESS  WHEREOF, the  parties  have
entered  into this Amendment as  of  the  date
first above written.

BORROWER

Gottschalks INC.,
a Delaware corporation

By:  /s/ Michael S. Geele
Title:  SVP/CFO

LENDER

CONGRESS FINANCIAL CORPORATION
(WESTERN), a California corporation

By:  /s/ Kristine Metchikian
Title:   Vice PresidentSF\Gottschalks Inc.\Note\071800
                       6

                       Loan No.:  1910059-0004

                PROMISSORY NOTE

$10,000,000.00                                                July 24, 2000

      FOR VALUE RECEIVED, GOTTSCHALKS INC.,  a
Delaware  corporation ( "Maker"), promises  to
pay  to the order of HELLER FINANCIAL LEASING,
INC.,  a  Delaware corporation (together  with
any  holder  of  this Note, "Payee"),  at  its
office  located  at  500 West  Monroe  Street,
Chicago,  Illinois  60661, or  at  such  other
place   as  Payee  may  from  time   to   time
designate,     the    principal     sum     of
$10,000,000.00, together with interest thereon
at  a  rate  per annum equal to the Base  Rate
(hereafter defined), plus three percent  (3%),
payable in thirty-six (36) consecutive monthly
installments   of  principal   plus   interest
commencing  September 1, 2000, and  continuing
on  the  same day of each consecutive calendar
month  thereafter  until this  Note  is  fully
paid.  The first thirty-five (35) such monthly
installments  shall each be in  the  principal
amount  of $277,777.78, plus accrued interest,
and the final monthly installment shall be  in
the  amount  of  the entire  then  outstanding
principal balance hereunder, plus all  accrued
and unpaid interest, charges and other amounts
owing   hereunder   or  under   the   Security
Agreement (defined below).  All payments shall
be  applied  first  to interest  and  then  to
principal.  Interest shall be computed on  the
basis  of a 360-day year and charged  for  the
actual  number of days elapsed.   Maker  shall
make  an  interest  only  initial  payment  on
August  1, 2000, of all accrued interest  from
the date of this Note through July 31, 2000.

     "Base  Rate"  means,  for  each  calendar
month, a rate of interest equal to:

           (a) the rate of interest determined
by Payee at which deposits in U.S. Dollars are
offered  for  the  one month  interest  period
based  on information presented on the Reuters
Screen  LIBO  Page  as of 11:00  A.M.  (London
time)  on  the day which is two business  days
(not  counting Saturdays) prior to  the  first
day  of each calendar month; provided that  if
at  least two such offered rates appear on the
Reuters  Screen LIBO Page in respect  of  such
interest  period, the arithmetic mean  of  all
such  rates (as determined by Payee)  will  be
the  rate used; provided further that if there
are  fewer  than two offered rates or  Reuters
ceases to provide LIBOR quotations, such  rate
shall   be   the  average  rate  of   interest
determined by Payee at which deposits in  U.S.
Dollars are offered for the one month interest
period  by  Bankers  Trust Company  and  Chase
Bank,  N.  A. (or their respective successors)
to  banks with combined capital and surplus in
excess of $500,000,000 in the London interbank
market  as of 11:00 A.M. (London time) on  the
applicable  interest rate determination  date,
divided by

           (b) a number equal to 1.0 minus the
aggregate  (but  without duplication)  of  the
rates  (expressed  as a decimal  fraction)  of
reserve  requirements in  effect  on  the  day
which  is  two  business  days  prior  to  the
beginning  of each calendar month  (including,
without   limitation,   basic,   supplemental,
marginal  and  emergency  reserves  under  any
regulations of the Board of Governors  of  the
Federal  Reserve System or other  governmental
authority  having  jurisdiction  with  respect
thereto,  as  now  and from time  to  time  in
effect)  for  Eurocurrency funding  (currently
referred  to as "Eurocurrency liabilities"  in
Regulation D of such Board) which are required
to  be  maintained  by a member  bank  of  the
Federal Reserve System;

      (such rate to be adjusted to the nearest
one  sixteenth of one percent or, if there  is
no  nearest  one sixteenth of one percent,  to
the  next higher one sixteenth of one  percent
).

      For  the initial funding month  (or  any
fraction   thereof)  under  this   Note,   the
interest rate hereunder shall be the Base Rate
in  effect  on the day of funding, plus  three
percent (3%).

     It is the intent of the parties to comply
strictly    with   applicable   usury    laws.
Notwithstanding   anything   herein   to   the
contrary,   in   no   event   shall   interest
contracted  for, taken, charged,  reserved  or
received hereunder ever exceed the highest non-
usurious  interest permitted under  applicable
law  and if any such excess interest is taken,
received or collected, then such excess  shall
be  deemed the result of a mathematical  error
and  shall  be  applied  as  a  reduction   of
principal  and any remainder refunded  to  the
Maker.

      This  Note  is secured by the collateral
described in the Security Agreement dated July
24,   2000,  between  Maker  and  Payee   (the
"Security    Agreement"),    the    collateral
described  in  the  Security  Agreement  dated
December  16,  1994, between Maker  and  Payee
(the   "Hanford   Security  Agreement"),   the
collateral described in the Security Agreement
dated  September 30, 1996, between  Maker  and
Payee  (the  "SLO  Security  Agreement"),  the
collateral  described in the  Deed  of  Trust,
Security  Agreement, Assignment of Leases  and
Rents  and Fixture Filing recorded on December
16,  1994  in  the Official Records  of  Kings
County,  California, as Instrument No. 9424303
(the   "Hanford  Deed  of  Trust")   and   the
collateral   described  in  Deed   of   Trust,
Security  Agreement, Assignment of Leases  and
Rents  and Fixture Filing recorded on  October
1,  1996, in the Official Records of San  Luis
Obispo  County, California, as Instrument  No.
1996-049244   and  amended  by  that   certain
Amendment to Deed of Trust recorded  July  30,
1999  in  the  Official Records  of  San  Luis
Obispo  County, California, as Instrument  No.
1999-055875  (the  "SLO Deed  of  Trust;"  and
together  with  the  Security  Agreement,  the
Hanford  Security Agreement, the SLO  Security
Agreement, the Hanford Deed of Trust  and  all
related  documents and instruments, the  "Loan
Documents") to which reference is made  for  a
statement   of  the  nature  and   extent   of
protection  and  security  afforded,   certain
rights   of  Payee  and  certain  rights   and
obligations of Maker.

      Maker may not prepay all or any part  of
principal outstanding under this Note prior to
its   stated   maturity  except  strictly   in
accordance with the terms of Section 3 of  the
Security Agreement.

      Time  is  of  the  essence  hereof.   If
payment  of any installment or any  other  sum
due  under this Note or the Loan Documents  is
not  paid when due, Maker agrees to pay a late
charge  equal to the lesser of (i) five  cents
per  dollar on, and in addition to, the amount
of  each  such  payment, or (ii)  the  maximum
amount  Payee is permitted to charge  by  law.
In  the event of the occurrence of an Event of
Default    (as   defined   in   the   Security
Agreement),  then the entire unpaid  principal
balance   hereof  with  accrued   and   unpaid
interest thereon, together with all other sums
payable under this Note or the Loan Documents,
shall,  at  the  option of Payee  and  without
notice  or demand, become immediately due  and
payable,  such  accelerated  balance   bearing
interest  until  paid at  the  rate  of  three
percent   (3%)  per  annum  above   the   then
otherwise applicable interest rate hereunder.

      Maker  and all endorsers, guarantors  or
any  others who may at any time become  liable
for  the payment hereof hereby consent to  any
and  all extensions of time, renewals, waivers
and  modifications  of, and  substitutions  or
release  of security or of any party primarily
or  secondarily liable on, or with respect to,
this Note or any of the Loan Documents or  any
of  the terms and provisions thereof that  may
be made, granted or consented to by Payee, and
agree  that suit may be brought and maintained
against  any  one  or more  of  them,  at  the
election  of  Payee, without  joinder  of  the
others  as  parties thereto,  and  that  Payee
shall  not  be  required to  first  foreclose,
proceed   against,  or  exhaust  any  security
herefor, in order to enforce payment  of  this
Note  by  any one or more of them.  Maker  and
all  endorsers, guarantors or any  others  who
may  at any time become liable for the payment
hereof  hereby  severally  waive  presentment,
demand  for  payment,  notice  of  nonpayment,
protest,   notice   of  protest,   notice   of
dishonor,  and all other notices in connection
with  this  Note, filing of suit and diligence
in  collecting this Note or enforcing  any  of
the  security  herefor, and, without  limiting
any  provision  of any of the Loan  Documents,
agree  to  pay,  if  permitted  by  law,   all
expenses  incurred  in  collection,  including
reasonable  attorneys' fees, and hereby  waive
all  benefits  of valuation, appraisement  and
exemption laws.

      THIS  NOTE  SHALL  BE  GOVERNED  BY  AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
AND   DECISIONS  OF  THE  STATE  OF  ILLINOIS,
WITHOUT  REGARD TO PRINCIPLES OF CONFLICTS  OF
LAW.  AT PAYEE'S ELECTION AND WITHOUT LIMITING
PAYEE'S  RIGHT  TO COMMENCE AN ACTION  IN  ANY
OTHER  JURISDICTION, MAKER HEREBY  SUBMITS  TO
THE  EXCLUSIVE JURISDICTION AND VENUE  OF  ANY
COURT  (FEDERAL, STATE OR LOCAL) HAVING  SITUS
WITHIN THE STATE OF ILLINOIS, EXPRESSLY WAIVES
PERSONAL  SERVICE OF PROCESS AND  CONSENTS  TO
SERVICE  BY  CERTIFIED MAIL, POSTAGE  PREPAID,
DIRECTED  TO THE LAST KNOWN ADDRESS OF  MAKER,
WHICH SERVICE SHALL BE DEEMED COMPLETED WITHIN
TEN DAYS AFTER THE DATE OF MAILING THEREOF.

      MAKER HEREBY WAIVES ITS RIGHTS TO A JURY
TRIAL  OF  ANY CLAIM OR CAUSE OF ACTION  BASED
UPON OR ARISING OUT OF THIS NOTE.  THIS WAIVER
IS    INFORMED   AND   FREELY   MADE.    MAKER
ACKNOWLEDGES  THAT THIS WAIVER IS  A  MATERIAL
INDUCEMENT   TO   ENTER   INTO   A    BUSINESS
RELATIONSHIP, THAT PAYEE HAS ALREADY RELIED ON
THE  WAIVER  IN MAKING THE LOAN  EVIDENCED  BY
THIS  NOTE,  AND THAT PAYEE WILL  CONTINUE  TO
RELY  ON  THE  WAIVER  IN ITS  RELATED  FUTURE
DEALINGS.    MAKER   FURTHER   WARRANTS    AND
REPRESENTS  THAT IT HAS REVIEWED  THIS  WAIVER
WITH  ITS  LEGAL COUNSEL AND THAT IT KNOWINGLY
AND  VOLUNTARILY WAIVES ITS JURY TRIAL  RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

WITNESS / ATTEST                       GOTTSCHALKS INC., a Delaware
                                       corporation

                                       By:  /s/ Michael Geele
/s/ Warren Williams, Secretary
                                       Name:   Michael Geele

                                       Title:  Senior Vice President/Chief
                                       Financial Officer

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