Document:

02052003 8K Exhibit 10.6

FIFTH AMENDMENT TO CREDIT AGREEMENT

FIFTH AMENDMENT, dated as of January 30, 2003 (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, Agent and Lenders are parties to that certain Consent and
Fourth Amendment to Credit Agreement dated as of even date herewith (the
"Consent and Fourth Amendment"); capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the Credit
Agreement); 

WHEREAS, in order to induce Agent and Lenders to enter into the Consent and
Fourth Amendment, Borrower has agreed to execute and deliver this Amendment.

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:

	Annex A to the Credit Agreement is hereby amended by deleting the
definition of "Minimum Excess Availability" and replacing it with the
following:

""Minimum Excess Availability" means Ten Million Dollars
($10,000,000)."

	Annex G to the Credit Agreement is hereby amended by adding the
following new sentence to the end of subsection (a) thereto:

"For the sole purpose of testing compliance in January 2003, the amount
(not to exceed $3,500,000) paid in cash by Borrower in respect of the make-whole
premiums to be paid to the securitization certificate holders pursuant to the
terms of that certain Agreement Regarding Prepayment of Fixed Base Certificate
and those certain Agreements Regarding Prepayment of Variable Base Certificates
shall be added back into the EBITDA calculation."

	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 January
30, 2003 (the "Amendment Effective Date") only upon
satisfaction in full in the judgment of the Agent of each of the following
conditions:

	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 8 have been satisfied.

	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 

       Title:  President & CEO

  

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/ Adrian Avalos

       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/ Daniel O'Rourke

       Title:  Vice President  

[GCRC Fifth Amendment]

Acknowledgment, Consent and Agreement to Fifth 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 January 30, 2003.
GOTTSCHALKS CREDIT RECEIVABLES CORPORATION, a Delaware corporation

 

By: /s/ Michael Geele

Title:  President02052003 8K Exhibit 10.7

ACKNOWLEDGMENT, RELEASE and AMENDMENT TO CREDIT
AGREEMENT

ACKNOWLEDGMENT, RELEASE AND AMENDMENT TO CREDIT AGREEMENT, dated as of
January 30, 2003 (this "Agreement"), to the Credit Agreement
referred to below, is entered into by and among GOTTSCHALKS INC., a Delaware
corporation ("Borrower"); KIMCO CAPITAL CORP., a Delaware
corporation (in its individual capacity, "Kimco"), for itself, as a
Lender, and as Agent for Lenders (the "Agent"); and the other Lenders
party thereto from time to time.

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 March 22, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"); 

WHEREAS, Borrower and Gottschalks Credit Receivables Corporation, a Delaware
corporation ("GCRC"), desire (i) to sell, free and clear of
Agent's Liens, all of their interests in the Account Portfolio Assets (as
defined in the Household Purchase Agreement defined below) to Household Bank
(SB), N.A. ("Household") pursuant to the terms and conditions
of that certain Purchase and Sale Agreement attached as Exhibit B hereto
(the "Household Purchase Agreement"), (ii) to provide for
certain temporary services by Borrower to Household pursuant to that certain
Interim Servicing Agreement attached as Exhibit C hereto (the
"Household Servicing Agreement") and (iii) to provide for the
termination of the Securitization Facility and the prepayment and cancellation
of the Certificates (as defined in that certain Escrow Agreement attached as
Exhibit D hereto (the "Escrow Agreement")) including,
without limitation, the Pledged Certificates (as defined in the GCRC Pledge
Agreement), pursuant to the terms and conditions of the Prepayment Agreements
(as defined in the Escrow Agreement);  

WHEREAS, in connection with the transactions contemplated by the Household
Purchase Agreement, Borrower desires to terminate the private label credit card
program presently in place pursuant to the Securitization Facility and enter
into a private label credit card program to be provided by Household pursuant to
that certain Credit Card Program Agreement attached as Exhibit A hereto (the
"Household Credit Card Agreement");

WHEREAS, Borrower has requested that Agent and each Lender release their
Liens on the Released Assets (as hereinafter defined), and Agent and each Lender
is willing to do so but only on the terms and conditions set forth herein;

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

	

RELATION TO THE CREDIT AGREEMENT; DEFINITIONS.

	Capitalized Terms.  For all purposes of this Amendment,
capitalized terms used herein without definition shall have the meaning
specified in the Credit Agreement, and if not defined therein then in the other
Loan Documents, as said agreements shall be in effect on the Effective Date (as
hereinafter defined) after giving effect to this Agreement.

	

ACKNOWLEDGEMENT, RELEASE AND, AMENDMENT

	Acknowledgement, Release and Amendment.  

	Upon (and subject to) the occurrence of the Effective Date (as hereinafter
defined), Agent and each Lender will and hereby does (a) acknowledge (i) the
execution and delivery by Borrower and GCRC, as applicable, of the Household
Credit Card Agreement, the Household Purchase Agreement, the Household Servicing
Agreement and the Prepayment Agreements, and to the sale of the Account
Portfolio Assets (as defined in the Household Purchase Agreement) upon each
Closing pursuant to the Household Purchase Agreement, and (ii) the
termination of the Securitization Facility and the prepayment and cancellation
of the Certificates (as defined in the Escrow Agreement) including, without
limitation, the Pledged Certificates (as defined in the GCRC Pledge Agreement),
and (b) release its Liens in that certain Collateral that constitutes Account
Portfolio Assets (as defined in the Household Purchase Agreement) existing as of
and sold at each Closing pursuant to the Household Purchase Agreement (such
assets herein referred to as "Released Assets").  Agent will,
at the Borrowers' sole expense, execute and deliver and/or cause to be filed
such documents as Borrower or Household may require, including the delivery of a
partial release of the Released Assets pursuant to a UCC financing statement
amendment in substantially the form of Exhibit E attached hereto,
provided, however, that the Liens of Agent for the benefit of the
Lenders shall automatically attach to the Borrower's interest in the proceeds
under the Household Purchase Agreement and, further provided, that this release
shall only apply to Released Assets.
	Agent and each Lender hereby acknowledge that Borrower intends to dissolve
GCRC and further acknowledges and agrees that upon such dissolution, the GCRC
Pledge Agreement shall be deemed terminated and of no further force or effect
and all Liens of the Agent on the Stock of GCRC shall be deemed terminated.
	Annex A to the Credit Agreement is hereby amended by deleting the last
sentence of the definition of "Accounts" and replacing it with the
following:

"For purposes of this Agreement, the term "Accounts" shall not
include (i) GCRC Receivables only to the extent such GCRC Receivables have been
sold or otherwise transferred to the Gottschalks Master Credit Card Trust
pursuant to the Receivables Purchase Agreement or (ii) any Released Assets (as
defined in that certain Consent and Amendment to Credit Agreement dated as of
January 30, 2003 among Borrower, Agent and the Lenders."

	Section 2(a)(i) of the Security Agreement is hereby deleted in its entirety
and replaced with the following:

"(i)all Accounts (including, without limitation, all Credit Card
Receivables and all GCRC Receivables which have not been sold or otherwise
transferred to the Gottschalks Master Credit Card Trust pursuant to the
Receivables Purchase Agreement, but not including any Released Assets (as
defined in that certain Acknowledgment, Release and Amendment to Credit
Agreement dated as of January 30, 2002 among Borrower, Agent and the
Lenders));"

	Limitation.  Except as expressly acknowledged, released or
amended under Section 2.1 hereof, all of the representations, warranties,
terms, covenants, conditions, and Events of Default of the Credit Agreement
shall remain unamended and unwaived and shall continue to be, and shall remain,
in full force and effect in accordance with their respective terms.  The
acknowledgement and release set forth herein shall be limited precisely as
provided for herein, and shall not be deemed a waiver of, amendment of, consent
to or modification of any other term, provision or Event of Default under the
Credit Agreement or of any term or provision of any other instrument referred to
therein or herein or of any transaction or further or future action on the part
of Borrower which would require the consent of the Agent or any Lender under the
Credit Agreement.

	

CONDITIONS

	Effective Date.  The consent, waiver, and release set forth in
this Agreement shall become effective as of the date first written above (the
"Effective Date") when (and only when) all of the conditions
set forth in this Section shall have been, or shall be concurrently with the
effectiveness hereof, satisfied or waived, in each case as determined by Agent
in its sole discretion.

	Execution and Delivery of Documents.  Agent shall have
received counterparts of this Agreement , duly executed by the parties
thereto.

	Initial Closing; Deposit of Estimated Initial Purchase Price
into Escrow Account.  The initial Closing shall have occurred under the
Household Purchase Agreement and the Estimated Initial Purchase Price (as
defined in the Household Purchase Agreement) shall have been deposited into the
Escrow Account (as defined in the Household Purchase Agreement).

	Effective Date under GE Documents.  The "Effective
Date" shall have occurred under that certain Consent and Fourth Amendment
to Credit Agreement among Borrower, General Electric Capital Corporation, and
certain other parties thereto dated as of the date hereof.

	

MISCELLANEOUS.

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

	The execution, delivery and performance by Borrower of this Agreement are
within Borrower's corporate power and have been duly authorized by all necessary
corporate and shareholder action.
	This Agreement has been duly executed and delivered by or on behalf of
Borrower.
	This Agreement 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
Agreement.
	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 Agreement or, to the extent applicable,
perform any of its obligations under this Agreement, the Credit Agreement as
amended hereby or any other Loan Document, or the validity or enforceability of
this Agreement, the Credit Agreement as amended hereby or any other Loan
Document or any action taken under this Agreement, 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 Agreement.  To the knowledge of Borrower, there does not exist a
state of facts which is reasonably likely to give rise to such
proceedings.

	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 Agreement and all other documents and instruments
delivered in connection herewith. 

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

	Counterparts; Telefacsimile Transmission.  This Agreement may
be executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties hereto may execute
this Agreement by signing any such counterpart.  Delivery of an executed
counterpart of this Agreement by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this Agreement.  Any party
delivering an executed counterpart of this Agreement by telefacsimile also shall
deliver an original executed counterpart of this Agreement, but the failure to
deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.

[Signature Page to Follow]

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

By: /s/ James Famalette 

       Title:  President & CEO

  

KIMCO CAPITAL CORP.,

as Agent and Lender

By:  /s/ Raymond Edwards

       Title:  Vice President  

 

[Signature Page to Acknowledgement, Release and
Amendment]

Acknowledgment, Consent and Agreement to Acknowledgement,
Release and Amendment to Credit Agreement:

The undersigned hereby acknowledges and consents to each of the
amendments to the Credit Agreement effected by this Amendment.

Acknowledged, consented and agreed to as of January __, 2003.
GOTTSCHALKS CREDIT RECEIVABLES CORPORATION, a Delaware corporation

 

By: /s/ Michael Geele

Title:  President

 

 

 

 

 

 

 

[GCRC Acknowledgement and Consent to Acknowledgement,
Release and Amendment]

Exhibit A

Household Credit Card Agreement

Exhibit B

Household Purchase Agreement

Exhibit C

Household Servicing Agreement

Exhibit D

Escrow Agreement

Exhibit E

Partial Release

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