Document:

02272002 8K Exhibit 10.2

                                                                      Exhibit 10.2

First AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT, dated as of February 22, 2002 (this
"Amendment"), to the Credit Agreement referred to below, is
entered 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; and The CIT GROUP/BUSINESS
CREDIT INC. dba Tyco Capital, 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"); 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 1.3(b) of the Credit Agreement.  Section
1.3(b)(ii)of the Credit Agreement is hereby amended as of the Amendment
Effective Date to read in full as follows:

"(ii)Immediately upon receipt by any Credit Party of cash proceeds
of any asset disposition (excluding proceeds of asset dispositions permitted by
Sections 6.8(a) or 6.8(b), or Park 41 Proceeds to the extent
delivered to The Harris Company in compliance with Section 6.7(f)) or any
sale of Stock of any Subsidiary of any Credit Party, Borrower shall prepay the
Loans in an amount equal to all such proceeds, net of (A) commissions and
other reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by Borrower in connection therewith
(in each case, paid to non-Affiliates), (B) transfer taxes, and
(C) amounts payable to holders of senior Liens (to the extent such Liens
constitute Permitted Encumbrances hereunder), if any.  With respect to any Park
41 Proceeds delivered to The Harris Company to be held as security for
obligations under the Harris Facilitation Agreement, Borrower shall cause the
remaining amount thereof (upon termination of the applicable Supporting Letters
of Credit and payment of then due and payable Harris Reimbursement Obligations)
to be delivered to Agent as a prepayment on the Loans.   Any prepayment pursuant
to this Section 1.3(b)(ii) shall be applied in accordance with
Section 1.3(c)."

	Amendment to Section 1.5 of the Credit Agreement.  Section 1.5(a) of
the Credit Agreement is hereby amended as of the Amendment Effective Date by
amending the paragraph appearing immediately after the first grid in such
Section 1.5(a) (commencing with the words "The Applicable Revolver LIBOR
Margin (set forth above and .") to read in full as follows:

"The Applicable Revolver LIBOR Margin (set forth above and in the grid
below) shall be reduced (i) by 0.25% effective prospectively from the date (the
"Initial Liquidity Hurdle Date") on which Borrower shall have
obtained Liquidity Event Proceeds from and after January 1, 2002 in an aggregate
cumulative amount equal to Five Million Dollars ($5,000,000), and (ii) by an
additional 0.25% effective prospectively from the date (the "Subsequent
Liquidity Hurdle Date") on which Borrower shall have obtained Liquidity
Event Proceeds from and after January 1, 2002 (including amounts calculated in
reaching the Initial Liquidity Hurdle Date) in an aggregate cumulative amount
equal to Ten Million Dollars ($10,000,000); provided, however,
that the Initial Liquidity Hurdle Date and the Subsequent Liquidity Hurdle Date,
as applicable, shall not be deemed to have occurred for any purpose under this
Agreement until and unless (1) Borrower shall have delivered evidence reasonably
satisfactory to Agent of receipt of the relevant Liquidity Event Proceeds, and
(2) except as permitted in Section 1.3(b)(ii) with respect to the Park 41
Proceeds, Borrower shall have applied the full amount of such Liquidity Event
Proceeds as a payment or prepayment on the Obligations (without a reduction in
the Tranche A Revolving Loan Commitments)."

	Amendment to Section 5.18 of the Credit Agreement.  Sections 5.18(c)
and 5.18(f) of the Credit Agreement are hereby amended as of the Amendment
Effective Date by replacing the references to "thirty (30) days"
(appearing in Section 5.18(c)) and to "twenty (20) days" (appearing in
Section 5.18(f)) with "sixty (60) days". 
	Amendment to Section 6.3 of the Credit Agreement.  Section 6.3(a) of the
Credit Agreement is hereby amended as of the Amendment Effective Date by adding
the following as clause (ix) thereof:

 "; and (ix) the Harris Reimbursement Obligations and, subject to the
prior written consent of Lenders, other reimbursement obligations (subject to
terms and conditions satisfactory to Lenders) in respect of Supporting Letters
of Credit issued pursuant to Annex B."

	Amendment to Section 6.4 of the Credit Agreement.  Section 6.4(a) of
the Credit Agreement is hereby amended as of the Amendment Effective Date by
deleting the words "Except as" appearing at the beginning thereof, and
replacing such deletion with the following:

"Except for the Harris Reimbursement Obligations or as"

	Amendment to Section 6.7 of the Credit Agreement.  Section 6.7 of the
Credit Agreement is hereby amended as of the Amendment Effective Date by adding
the following as clause (f) at the end of the first sentence thereof:

"; and (f) Liens on the Park 41 Proceeds securing the Harris
Reimbursement Obligations, so long as, prior to the occurrence of any sale of
Borrower's interest in Park 41, Borrower and The Harris Company shall have
agreed in writing, for the benefit of Agent and Lenders, that upon payment by
Borrower (including from Park 41 Proceeds) of all then due and payable Harris
Reimbursement Obligations (for all drawings by Agent up to and including such
payment date) and concurrent agreement by Agent to cause the cancellation of the
Supporting Letters of Credit relating thereto (without further drawings
thereon), such Liens shall be released and such Park 41 Proceeds (to the extent
not used for payment of Harris Reimbursement Obligations then due and payable)
shall be delivered to Agent as payment on the Obligations without delivery of
the same to The Harris Company (it being understood that any such payment of
Harris Reimbursement Obligations, other than out of such Park 41 Proceeds, and
cancellation of Supporting Letters of Credit shall be subject to the prior
written consent (in the sole discretion) of Lenders)." 

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

	Adding in alphabetical order the following definitions for the terms
"Additional L/C Obligations", "Additional Supported Letter of
Credit", "Harris Facilitation Agreement", "Harris
Reimbursement Obligations", "Park 41 Proceeds", "Supporting
Letter of Credit" and "Supporting L/C Amount":

" `Additional L/C Obligations' means Letter of Credit
Obligations to the extent attributable to Additional Supported Letters of
Credit.";

" `Additional Supported Letter of Credit' means a Letter of
Credit issued at the request of Borrower subject to the terms of the Agreement,
which Letter of Credit shall have been (a) designated by Borrower as an
"Additional Supported Letter of Credit" in its request for such
issuance, (b) supported by Supporting Letter(s) of Credit pursuant to Annex
B, and (c) issued to Persons and in form and substance, satisfactory to (and
approved in writing by) Lenders in their sole discretion.";

" `Harris Facilitation Agreement' means that certain Credit
Facilitation Agreement (in the form delivered to Agent on or before the
effective date of the First Amendment, dated as of February 22, 2002, to the
Agreement) between Borrower and The Harris Company, as it may be amended or
otherwise modified from time to time with the prior written consent of
Agent."

" `Harris Reimbursement Obligations' means the reimbursement
obligations of Borrower to The Harris Company in respect of drawings made by
Agent against Supporting Letters of Credit caused to be issued by The Harris
Company pursuant to the Harris Facilitation Agreement."; 

" `Park 41 Proceeds' means the net proceeds received by Borrower
in connection with a sale of its interest in Park 41permitted pursuant to
Section 6.8(c).";

 " `Supporting Letter of Credit' has the meaning assigned to it
in Annex B."; and

" `Supporting L/C Amount' means, at any time with respect to any
Supporting Letter of Credit, the undrawn face amount of such Supporting Letter
of Credit available for payment to Agent against a draft at sight, less any
reductions relating thereto which may be agreed upon by Agent and any guarantor
(or other Person obligated to reimburse the issuer for drawings under such
Supporting Letter of Credit) with respect to such Supporting Letter of Credit
(whether or not having the effect of reducing the amount which may be drawn
under such Letter of Credit), including any such reductions based on receipt by
Agent of Liquidity Event Proceeds."; 

	Amending the definition of "Borrowing Base" appearing therein to
read in full as follows:

 " `Borrowing Base' means as of any date of determination by
Agent, from time to time, an amount equal to the lesser at such time of:

(a) the sum of  (i) the Tranche B Loan Commitment, plus (ii) the
lesser of (1) up to 75% of the book value of Eligible Inventory, Eligible In-
Transit Inventory and Eligible L/C Inventory valued at the lower of cost
(determined on a first in, first out basis) or market, and (2) up to 85% of the
net recovery value of Eligible Inventory as determined by a third party
appraiser acceptable to Agent in its sole discretion; and 

(b)the lesser of (i) up to 82% of the book value of Eligible Inventory,
Eligible In-Transit Inventory and Eligible L/C Inventory valued at the lower of
cost (determined on a first in, first out basis) or market, and (ii) up to 92.5%
of the net recovery value of Eligible Inventory as determined by a third party
appraiser acceptable to Agent in its sole discretion;

in each case, (A) plus the Supporting L/C Amount; provided, that the amount
attributable to the Borrowing Base pursuant to this clause (A) may only
be utilized by Borrower in connection with the issuance of Additional Supported
Letters of Credit; and (B) less any Reserves established by Agent in its sole
discretion from time to time in connection with any Supporting Letter of Credit
or Additional Letter of Credit supported thereby, including Reserves in the
event the Supporting L/C Amount with respect to any Supporting Letter of Credit
exceeds the Additional L/C Obligations supported thereby (which Reserves shall
be applicable for all purposes under the Agreement other than the issuance of
Additional Supported Letters of Credit to be supported by any such excess
Supporting L/C Amount); and (C) less any other Reserves established by Agent at
such time, including, without limitation in the case of Eligible L/C Inventory
and/or Eligible In Transit Inventory, Reserves for duties, custom brokers,
freight, taxes, insurance and other charges and expenses pertaining to such
Inventory."; 

	Amending the definition of "Liquidity Event Proceeds" appearing
therein to read in full as follows:

" `Liquidity Event Proceeds' means net cash proceeds received by
Borrower (after payment of applicable commissions, costs, fees, expenses and
taxes) and applied by Borrower as a payment or prepayment, as applicable, on the
Obligations (or, with respect to the Park 41 Proceeds, applied by Borrower in
accordance with Section 1.3(b)(ii)), in each case as a result of any of
(a) the issuance or incurrence of Indebtedness (other than the Obligations)
permitted by this Agreement, (b) sales of assets (including sale/leasebacks)
permitted by this Agreement (other than sales permitted in Sections 6.8(a)
and 6.8(b)), (c) income tax refunds, and (d) issuances of equity securities
of Borrower permitted by this Agreement, in each case (other than with respect
to income tax refunds) to the extent substantiated with written agreements
executed prior to funding or receipt of payments, as applicable, in form and
substance reasonably satisfactory to Lenders."; and

	Amending the definition of "Restricted Payment" appearing therein
by adding the following as clause (h) thereof:

"; and (h) any payment on or with respect to reimbursement obligations
in respect of Supporting Letters of Credit, other than (1) payment of initial
reasonable issuance fees and (2) payment of, or delivery of cash collateral as
security with respect to, Harris Reimbursement Obligations to the extent
required pursuant to the Harris Facilitation Agreement and made exclusively from
Park 41 Proceeds."

	Amendment to Annex B to the Credit Agreement.  Annex B to the Credit
Agreement is hereby amended as of the Amendment Effective Date by amending
paragraph (a) thereof to read in full as follows:

"(a)Issuance. 

(i)Subject to the terms and conditions of the Agreement, Agent and
Tranche A Revolving Lenders agree to incur, from time to time prior to the
Commitment Termination Date, upon the request of Borrower and for Borrower's
account, Letter of Credit Obligations by causing Letters of Credit (including
Additional Supported Letters of Credit subject to paragraph (a)(iii)
below) to be issued by GE Capital or a Subsidiary thereof or a bank or other
legally authorized Person selected by Agent and mutually and reasonably
acceptable to Agent and Borrower (each, an "L/C Issuer") for
Borrower's account and guaranteed by Agent; it being understood that First Union
National Bank is mutually acceptable to Agent and Borrower as of the date
hereof; provided, that if the L/C Issuer is a Tranche A Revolving Lender, then
such Letters of Credit shall not be guaranteed by Agent but rather each Tranche
A Revolving Lender shall, subject to the terms and conditions hereinafter set
forth, purchase (or be deemed to have purchased) risk participations in all such
Letters of Credit issued with the written consent of Agent, as more fully
described in paragraph (b)(ii) below.  

(ii)The aggregate amount of all such Letter of Credit Obligations shall
not at any time exceed the least of (1) Twenty Million ($20,000,000) (the
"L/C Sublimit"), (2) the Maximum Amount less the aggregate
outstanding principal balance of the Revolving Credit Advances and the Swing
Line Loan, and less the Minimum Excess Availability, and (3) the Borrowing Base
less the aggregate outstanding principal balance of the Revolving Credit
Advances and the Swing Line Loan, and less the Minimum Excess Availability.   No
such Letter of Credit shall have an expiry date that is more than one year
following the date of issuance thereof, unless otherwise determined by the
Agent, in its sole discretion, and neither Agent nor Tranche A Revolving Lenders
shall be under any obligation to incur Letter of Credit Obligations in respect
of, or purchase risk participations in, any Letter of Credit having an expiry
date that is later than the Commitment Termination Date.

(iii)In the event Borrower desires the issuance of any Additional
Supported Letter of Credit, Borrower shall cause (or shall have caused), prior
and as a condition to the issuance of such Additional Supported Letter of
Credit, the delivery to Agent of a stand-by letter (or letters) of credit (each,
a "Supporting Letter of Credit") in support of the Additional
L/C Obligations relating thereto (and no other Obligations, except to the extent
the available amount thereof exceeds the amount required hereunder to support
such specific Additional L/C Obligations), which Supporting Letter(s) of Credit
shall be in an amount, issued by a Person, and subject to terms and conditions
(including as to duration), in each case satisfactory to Lenders in their sole
discretion. 

(iv)With respect to each Supporting Letter of Credit, Borrower
acknowledges that Agent may, at any time (including in the event Agent or any
Tranche A Revolving Lender shall be required to make any payment on or pursuant
to any Additional L/C Obligations supported by such Supporting Letter of
Credit), whether or not a Default or Event of Default shall have occurred, at
its option and subject only to the limitations set forth in the applicable
Supporting Letter of Credit, make any drawing on amounts available under such
Supporting Letter of Credit and apply such amounts to the Obligations in the
order set forth in Section 1.3(c) and/or, at the election of Agent,
directly to the corresponding Additional L/C Obligations relating
thereto."

	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 February
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 February 25, 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.

	Credit Facilitation Agreement.  Agent shall have received copies of
the Credit Facilitation Agreement between Borrower and The Harris Company, duly
executed by all parties thereto. 

	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 13 have been satisfied.

In the event that each of the foregoing conditions precedent has not been
satisfied on or prior to February 25, 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/  James Famalette 

       Name: James Famalette 

       Title:   President & CEO 

 

GENERAL ELECTRIC CAPITAL

CORPORATION,

as Agent and Lender

 

By:/s/ Todd Gronski

       Name:  Todd Gronski

       Title:  Its Duly Authorized Signatory

 

 

THE CIT GROUP/BUSINESS CREDIT INC.,

as Lender

 

By:/s/ Adrian Avalos

       Name:  Adrian Avalos

       Title:  Vice President

 

 

 

[Signature Page to First Amendment to Credit Agreement]

Acknowledgment, Consent and Agreement to First 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 February 22, 2002.
GOTTSCHALKS CREDIT RECEIVABLES CORPORATION, a Delaware corporation

 

By:/s/ Michael Geele

Name: Michael Geele

Title:PresidentCERTIFICATE OF LIMITED PARTNERSHIP
                                       OF
                        PAINEWEBBER/GEODYNE ENERGY INCOME
                            LIMITED PARTNERSHIP III-A

       The undersigned  General Partner hereby duly executes this Certificate of
Limited  Partnership of  PaineWebber/Geodyne  Energy Income Limited  Partnership
III-A (the  "Partnership"),  which is being filed with the Secretary of State of
Oklahoma in accordance with the Oklahoma  Revised  Uniform  Limited  Partnership
Act.

       1.    The name of the Partnership is  PaineWebber/Geodyne  Energy Income
Limited Partnership III-A.

       2. The address of the registered  office of the  Partnership is 320 South
Boston,  The Mezzanine,  Tulsa,  Oklahoma 74103,  and the name of the registered
agent whose business  office  address will be the same as the registered  office
address is Geodyne Production Company.

       3. The address of the principal  office of the  Partnership in the United
States  where its  partnership  records are to be kept or made  available is c/o
Geodyne  Production  Company,  320 South Boston Avenue,  the  Mezzanine,  Tulsa,
Oklahoma 74103-3708.

       4. The name,  the mailing  address and the street address of the business
or residence of each general partner of the Partnership are as follows:

Name                      Mailing Address            Business Address
----                      ---------------            ----------------
Geodyne Production        320 S. Boston Ave.         320 S. Boston Ave.
Company                   The Mezzanine              The Mezzanine
                          Tulsa, OK 74103-3708       Tulsa, 0K 74103-3708

       5.    The  latest  date upon which the  Partnership  is to  dissolve  is
November 20, 2009.

       SIGNED on this 20th day of November, 1989.

                                         GENERAL PARTNER:

                                         Geodyne Production Company
                                         a Delaware corporation

                                         By: /s/ Michael E. Luttrell
                                             -----------------------
                                             Michael E. Luttrell
                                             Executive Vice President

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