Document:

Exhibit 10.3c

 

EXECUTION VERSION

 

AMENDMENT NO. 4 TO THE AMENDED AND RESTATED CREDIT
AGREEMENT

 

AMENDMENT NO. 4 TO THE AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 12,
2009 (this “Amendment”),
by and among STEEL DYNAMICS, INC., an Indiana corporation (the “Borrower”), the
banks, financial institutions and other lenders listed on the signature pages hereof,
NATIONAL CITY BANK (“National City”),
and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells
Fargo”), as co-administrative agents and NATIONAL CITY, as
paying agent (“Paying Agent”).

 

PRELIMINARY STATEMENTS:

 

(1)   The Borrower, the lenders listed on the
signature pages thereto, National City, as collateral agent (the “Collateral Agent”), National City
and Wells Fargo, as co-administrative agents, National City as paying agent,
Bank of America, N.A. (“Bank of America”),
General Electric Capital Corporation, Fifth Third Bank and BMO Capital Markets
Financing, Inc., as Documentation Agents, Bank of America and National
City, as syndication agents, and BAS and National City, as joint lead arrangers
are parties to that certain Amended and Restated Credit Agreement dated as of June 19,
2007, as amended by Amendment No. 1 dated as of July 11, 2007, as
further amended by Amendment No. 2 dated as of September 11, 2007 and
as further amended by Amendment No. 3 dated as of March 31, 2008 (as
supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”).  Capitalized terms not otherwise defined in
this Amendment have the same meanings as specified in the Credit Agreement.

 

(2)   The Borrower has requested that the Required
Lenders amend the Credit Agreement in certain respects, and the Required
Lenders have agreed, subject to the terms and conditions hereinafter set forth,
to amend the Credit Agreement as hereinafter set forth.

 

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

 

SECTION 1.       Amendments to the Credit Agreement.  Upon, and subject to, the satisfaction of the
conditions precedent set forth in Section 2 below, the Credit Agreement is
hereby amended as follows

 

(a)   Section 1.01 is hereby amended by (i) deleting
the definition of “Applicable
Term A Margin” appearing therein and (ii) inserting therein
in proper alphabetical order the following defined terms:

 

“ “Amendment No. 4” means
that certain Amendment No. 4 to this Agreement dated as of June 12,
2009 by and among the Borrower, National City, Wells Fargo and the Lenders
listed on the signature pages thereto.

 

“Amendment No. 4 Effective Date”
means the date on which the conditions to effectiveness set forth in Section 2
of Amendment No 4 have been satisfied.

 

 

“Borrowing Base” means the
aggregate of (a) 85% of the book value of accounts receivables that
constitute Collateral and (b) 65% of the book value of inventory that
constitutes Collateral.

 

“Borrowing Base Obligations”
means the sum of (a) the aggregate principal amount of outstandings under
the Revolving Credit Facility and the Term A Facility at such time (including
outstanding Letters of Credit and Swing Line Advances) plus (b) the
aggregate amount of obligations outstanding under Secured Cash Management
Agreements at such time plus (c) the aggregate Agreement Value of all
Secured Hedge Agreements at such time.

 

“First Lien Debt/Consolidated EBITDA Ratio”
means at any date of determination, the ratio of Consolidated Debt for Borrowed
Money of the Borrower and its Subsidiaries that is secured by a security
interest (which security interest is not expressly made subordinate and second
to the Liens securing the Obligations pursuant to an intercreditor agreement on
terms reasonably satisfactory to the Administrative Agent) on any real or
personal property of the Borrower and its Subsidiaries as at such date of
determination to Consolidated EBITDA of the Borrower and its Subsidiaries for
the most recently ended fiscal quarter of the Borrower for which financial
statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or
(c), as the case may be, and the immediately preceding three fiscal quarters.”

 

(b)   The definition of Applicable Margin appearing in Section 1.01
is hereby amended by deleting the first paragraph contained therein and
substituting in lieu thereof the following:

 

“ “Applicable Margin” means, in respect of the Revolving Credit Facility and the
Term A Advances, a percentage per annum determined by reference to the Total
Debt/Consolidated EBITDA Ratio as set forth below:

 

	
  “Total

  Debt/Consolidated

  EBITDA Ratio

  	
   

  	
  Base Rate

  Advances

  	
   

  	
  Eurodollar Rate Advances

  	
   

  
	
  Level
  I

  < than 5.0 : 1.0

  	
   

  	
  1.00

  	
  %

  	
  3.00

  	
  %

  
	
  Level
  II

  > 5.0 : 1.0,

  but < than 7.5 : 1.0

  	
   

  	
  1.25

  	
  %

  	
  3.25

  	
  %

  
	
  Level
  III

  > 7.5 : 1.0

  	
   

  	
  1.50

  	
  %

  	
  3.50

  	
  %”

  

 

(c)   The definition of Applicable Percentage
contained in Section 1.01 is hereby amended by deleting such definition in
its entirety and substituting in lieu thereof the following:

 

“ “Applicable
Percentage” means at all times, 0.50% per annum”

 

(d)   The definition of Net Cash Proceeds contained
in Section 1.01 is hereby amended and restated in its entirety to read as
follows:

 

“Net Cash
Proceeds” means (a) with respect to any Extraordinary
Receipt, the aggregate amount of cash and Cash Equivalents received in
connection therewith and (b) with respect to the incurrence or issuance of
any Debt, the excess of (x) the sum of the cash and Cash Equivalents
received in connection with such incurrence or issuance of Debt less (y) the
investment banking 

 

2

 

fees, underwriting discounts, commissions, costs and other
out-of-pocket fees and expenses incurred the Borrower or its Subsidiaries in
connection with such incurrence or issuance of Debt to the extent such amounts
were not deducted in determining the amount referred to in clause (x).

 

(e)   Section 2.06(b) is hereby amended
by (i) inserting the following new clause (v) therein and (ii) renumbering
the existing clauses (v) and (vi) accordingly:

 

“(v)      No
later than the fifth Business Day following the incurrence or issuance by the
Borrower or any of its Subsidiaries of any Debt (other than any Debt permitted
to be incurred or issued pursuant to clauses (i)(A), (i)(B), (ii)(A), (ii)(C) and
(iii)(A) of Section 5.02(b)), if as of the date of such incurrence,
before or after giving effect thereto, or as of such fifth Business Day, the
Total Debt/Consolidated EBITDA Ratio is greater than 5.00:1.00, then the
Borrower shall prepay an aggregate principal amount of Revolving Credit
Advances equal to 100% of all Net Cash Proceeds received therefrom by the
Borrower or its Subsidiaries.”

 

(f)    Section 2.06(b)(iv) is hereby
amended and restated in its entirety to read as follows:

 

“(iv)     If at any time the Borrowing Base Obligations exceed the
Borrowing Base at such time, then the Borrower shall immediately prepay such
excess first by prepaying the Revolving Credit Facility as set forth in clause (v) below
and second by prepaying the Term A Advances (which prepayments of Term A Advances
shall be applied to the remaining principal repayment installments of the Term
A Facility on a pro rata basis).”

 

(g)   Section 2.06(b)(v) is hereby
amended by (i) deleting the “or” appearing immediately before each
reference to clause (iv) contained therein and substituting in lieu
thereof a comma and (ii) inserting “or (v)” immediately after each
reference to clause (iv) contained therein.

 

(h)   Section 3.02(a)(iii) is hereby
amended and restated in its entirety to read as follows:

 

“(iii)     after giving effect to such Borrowing or issuance or renewal,
the Borrowing Base Obligations at such time will not exceed the Borrowing Base
at such time;”

 

(i)    Section 5.02(o) is hereby amended
and restated in its entirety to read as follows:

 

“(o)      The
Borrower shall not permit the Borrowing Base Obligations at any time to exceed
the Borrowing Base at such time.”

 

(j)    Section 5.03(d) is hereby amended
and restated in its entirety to read as follows:

 

“(d)         Monthly
Certificate.  Within 15 days after
the end of each month, a certificate of a Financial Officer of the Borrower, in
form and substance satisfactory to the Joint Lead Arrangers and the
Administrative Agents, demonstrating that the Borrowing Base at such time
exceeds Borrowing Base Obligations at such time.”

 

(k)   Section 5.04 is hereby amended and
restated in its entirety to read as follows:

 

“Section 5.04.  Financial Covenants.  So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, the Borrower will:

 

3

 

(a)           Total
Debt to Consolidated EBITDA Ratio. 
Maintain through the end of the four fiscal quarter period ended March 31,
2009 and beginning again with the period of four fiscal quarters ending December 31,
2010 and at all times thereafter, a Total Debt/Consolidated EBITDA Ratio of not
more than 5.00 : 1.00.

 

(b)           First
Lien Debt to Consolidated EBITDA Ratio. 
Maintain a First Lien Debt/Consolidated EBITDA Ratio at all times during
each period of four fiscal quarters ending on a date set forth below that is
not more than the ratio set forth below for such period:

 

	
  Four Fiscal Quarters Ending

  	
   

  	
  First Lien Debt/Consolidated EBITDA

  Ratio

  	
   

  
	
  April 1, 2009 through and including the
  fiscal quarter ending September 30, 2010

  	
   

  	
  2.50 : 1.00

  	
   

  
	
  December 31, 2010 and thereafter

  	
   

  	
  3.00 : 1.00

  	
   

  

 

(c)           Interest Coverage
Ratio.  Maintain an Interest Coverage
Ratio as of the end of each period of four fiscal quarters ending on a date set
forth below that is not less than the ratio set forth below opposite such
fiscal period:

 

	
  Four Fiscal Quarters Ending

  	
   

  	
  Interest Coverage Ratio

  	
   

  
	
  June 30, 2009 through and including the
  fiscal quarter ending on December 31, 2009

  	
   

  	
  1.25 : 1.00

  	
   

  
	
  March 31, 2010 through and including the
  fiscal quarter ending June 30, 2010

  	
   

  	
  2.00 : 1.00

  	
   

  
	
  September 30, 2010 and thereafter

  	
   

  	
  2.50 : 1.00

  	
   

  

 

SECTION 2.       Conditions
to Effectiveness of Amendments.  This
Amendment and the amendments to the Credit Agreement set forth herein shall
become effective on the date when each of the conditions set forth in this Section 2
shall have been satisfied:

 

(a)   Execution of Counterparts.  The Paying Agent shall have received
counterparts of (i) this Amendment executed by (A) the Borrower and (B) the
Required Lenders and (ii) the consent attached hereto (the “Consent”) executed by
each Guarantor.

 

(b)   Payment of Fees and Expenses.  The Borrower shall have paid:

 

(i)           to each Lender
executing this Amendment on or before 12:00 p.m. Eastern Standard Time on June 12,
2009 a fee equal to 0.25% of the of the aggregate principal amount of
outstanding Term A Advances owing to (immediately prior to giving effect to the
prepayment of Term A Advances referred to in clause (d) below), and the
Revolving Credit Commitments of, each such Lender

 

4

 

(ii)        to Banc of America
Securities LLC (the “Lead
Arranger”) for its own account such fees as have been separately
agreed in writing between the Borrower and the Lead Arranger,

 

(iii)       all costs and expenses
(including the reasonable fees and expenses of Shearman & Sterling
LLP) incurred by the Lead Arranger, Bank of America, as Syndication Agent, and
National City, as Co-Administrative Agent in connection with the preparation,
negotiation and execution of this Amendment or otherwise required to be paid
under the Loan Documents and remaining outstanding on or prior to the date of
this Amendment, in each case for which the invoice for such fees and expenses
shall have been presented to the Borrower.

 

(c)   Legal Opinions.  The Paying Agent and the Lead Arranger shall
have received favorable opinions of Barrett & McNagny, LLP and
Greenberg Traurig, LLP, counsel for the Loan Parties, addressed to the Lead
Arranger, the Administrative Agents and the Lenders party hereto, as to such
matters as the Administrative Agents or the Lead Arranger may reasonably
request.

 

(d)   Prepayment of Term A Advances.  The Borrower shall have prepaid the Term A
Advances in full, together with accrued and unpaid interest thereon; provided
that no more than $150,000,000 of proceeds under the Revolving Credit Facility
may be used in connection with such prepayment.

 

SECTION 3.       Novation of Commitments.  Effective as of the date hereof, ABN AMRO
Bank, N.V. wishes to and does hereby transfer by novation to RBS Citizens,
N.A., and RBS Citizens, N.A. wishes to and does hereby accept the transfer by
novation of, all the rights, liabilities, duties and obligations of ABN AMRO
Bank, N.V. under and in respect of the Loan Documents, including the
Commitments of, and the Advances owing to, ABN AMRO Bank, N.V..  Borrower wishes to and does hereby accept
this novation.

 

SECTION 4.       Representations and Warranties.  In order to induce the Lenders to execute and
deliver this Amendment, the Borrower represents and warrants to the Agents, the
Lenders and the Issuing Bank that, after giving effect to the terms of this
Amendment, the following statements are true and correct:  (a) the representations and warranties
set forth in Article IV of the Credit Agreement and in the other Loan
Documents are true and correct on the and as of the date of this Amendment as
if made on the date of this Amendment and after giving effect to this Amendment
(unless stated to relate solely to an earlier date, in which case such
representations and warranties were true and correct in all material respects
as of such earlier date) and (b) no Default has occurred and is
continuing.

 

SECTION 5.       Reference
to and Effect on the Credit Agreement and the Loan Documents.

 

(a)   On and after the effectiveness of this
Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”,
“hereof” or words of like import referring to the Credit Agreement and each
reference in the Notes and each of the other Loan Documents to “the Credit
Agreement”, “thereunder”, “thereof” or words of like import referring to the
Credit Agreement shall mean and be a reference to the Credit Agreement, as
amended by this Amendment.

 

(b)   The Credit Agreement, the Notes and each of
the other Loan Documents, as specifically amended by this Amendment (and as
contemplated to be amended, modified, supplemented, restated, substituted or
replaced by this Amendment) are, and shall continue to be, in full force and
effect and is hereby in all respects ratified and confirmed.  Without limiting the generality of the
foregoing, the Collateral Documents and all of the Collateral described therein
do and shall continue to secure the payment of all Obligations of the Loan
Parties under the Loan Documents (and as contemplated to be amended, modified,
supplemented, restated, substituted or replaced by this Amendment).

 

5

 

(c)   The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Lender or the Paying Agent under
any of the Loan Documents, nor constitute a waiver of any provision of any of
the Loan Documents.  On and after the
effectiveness of this Amendment, this Amendment shall for all purposes
constitute a Loan Document.

 

SECTION 6.       Execution
in Counterparts.  This Amendment may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement.  Delivery of an executed
counterpart of a signature page to this Amendment by telecopier, facsimile
or other electronic transmission (i.e. “pdf” or “tif”) shall be
effective as delivery of a manually executed counterpart of this Amendment.

 

SECTION 7.       Governing
Law.  This Amendment shall be
governed by, and construed in accordance with, the laws of the State of
New York.

 

[Remainder
of this page intentionally left blank.]

 

6

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.

 

	
   

  	
  STEEL
  DYNAMICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  

  	
  Theresa
  E. Wagler

  
	
   

  	
   

  	
  Title:  

  	
  Executive Vice President and

  Chief Financial Officer

  

 

[Amendment No. 4]

 

 

	
   

  	
  BANK
  OF AMERICA, N.A.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David McCauley

  
	
   

  	
   

  	
  Name:
  

  	
  David
  McCauley

  
	
   

  	
   

  	
  Title:  

  	
  Senior Vice
  President

  

 

[Amendment No. 4]

 

 

	
   

  	
  NATIONAL
  CITY BANK,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David G. McNeely

  
	
   

  	
   

  	
  Name:
  

  	
  David
  G. McNeely

  
	
   

  	
   

  	
  Title:  

  	
  Senior Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL
  CITY BANK,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David G. McNeely

  
	
   

  	
   

  	
  Name:
  

  	
  David
  G. McNeely

  
	
   

  	
   

  	
  Title:  

  	
  Senior Vice President

  

 

[Amendment No. 4]

 

 

	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Rosalie P. Hawley

  
	
   

  	
   

  	
  Name:

  	
  Rosalie
  P. Hawley

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Rosalie P. Hawley

  
	
   

  	
   

  	
  Name:

  	
  Rosalie
  P. Hawley

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

[Amendment No. 4]

 

 

	
   

  	
  ABN
  AMRO BANK N.V.,

  
	
   

  	
  as
  a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Scott Donaldson

  
	
   

  	
   

  	
  Name:

  	
  Scott
  Donaldson

  
	
   

  	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Todd Vaubel

  
	
   

  	
   

  	
  Name:

  	
  Todd
  Vaubel

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

[Amendment No. 4]

 

 

	
   

  	
  ABN
  AMRO BANK, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Scott
  Donaldson

  
	
   

  	
   

  	
  Title:Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Todd
  Vaubel

  
	
   

  	
   

  	
  Title:Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Ascension
  Loan Vehicle LLC, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Melissa James

  
	
   

  	
   

  	
  Title:Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BMO
  Capital Markets Financing, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Thad
  Rasche

  
	
   

  	
   

  	
  Title:Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CHANG
  HWA Commercial Bank LTD. Los Angeles Branch, as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Beverley
  Chen

  
	
   

  	
   

  	
  Title:VP &
  General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Citibank
  N.A., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Raymond G. Dunning

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  Export
  Development Canada, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Matthew
  Devine

  
	
   

  	
   

  	
  Title:Asset
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  Shawn Cusick

  
	
   

  	
   

  	
  Title:
  Loan Portfolio Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Firth
  Third Bank , as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:David
  O’Neal

  
	
   

  	
   

  	
  Title:Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  First
  Merit Bank, N.A. , as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Robert
  G. Morlan

  
	
   

  	
   

  	
  Title:Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Goldman
  Sachs Credit Partners, L.P., as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:John
  Makrinos

  
	
   

  	
   

  	
  Title:Authorized Signatory

  

 

 

	
   

  	
  Hua
  Han Commerical Bank Ltd. New York 

  Agency, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Henry
  Hsieh

  
	
   

  	
   

  	
  Title:Assistant
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Stacey
  Haimes

  
	
   

  	
   

  	
  Title:Executive
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Keybank
  National Association, as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Suzannah
  Harris

  
	
   

  	
   

  	
  Title:Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Mizuho
  Corporate Bank (USA), as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Bertram
  Tang

  
	
   

  	
   

  	
  Title:Senior
  Vice President & Team

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Morgan
  Stanley Bank, N.A., as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:James
  E. Boneffo

  
	
   

  	
   

  	
  Title:Authorized
  Signatory

  

 

 

	
   

  	
  Morgan
  Stanley Senior Funding, Inc. as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Stephen
  B King

  
	
   

  	
   

  	
  Title:Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The
  Norinchunkin Bank New York Branch as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Noritsugi
  Sato

  
	
   

  	
   

  	
  Title:General
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The
  Northern Trust Company. as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Phillip
  McCaulay

  
	
   

  	
   

  	
  Title:Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PNC
  Bank National Association. as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:David
  B Gookin

  
	
   

  	
   

  	
  Title:Senior
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Raymond
  James Bank FSB as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Joseph
  A Ciccolini

  
	
   

  	
   

  	
  Title:VP
  - Senior Corporate Banker

  
	
   

  	
   

  	
   

  

 

 

	
   

  	
  RBS
  Citizens, N.A. ,as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Andre
  A. Nazareth

  
	
   

  	
   

  	
  Title:Senior
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Scotiabanc
  Inc.. as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:J.F.
  Todd

  
	
   

  	
   

  	
  Title:Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Sun
  Trust Bank . as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Baerbel
  Freudenthaler

  
	
   

  	
   

  	
  Title:Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TD
  Bank, N.A. (fka TD Banknorth) as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:J.R.
  Riley

  
	
   

  	
   

  	
  Title:Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Taipei
  Fubon Commercial Bank Los Angeles Branch. as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Sophia
  Jing

  
	
   

  	
   

  	
  Title:FVP &
  GM

  

 

 

	
   

  	
  Union
  Bank of California. as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:Christopher
  Freeman

  
	
   

  	
   

  	
  Title:Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  US
  Bank National Association. as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:John
  Eyerman

  
	
   

  	
   

  	
  Title:Portfolio Manager

  

 

 

 

CONSENT

 

Dated as of June 12, 2009

 

Each of the undersigned, as Guarantor under the
Amended and Restated Subsidiary Guaranty and Grantor under the Amended and
Restated Security Agreement (as amended by the Amendment No. 3 to the
Credit Agreement and Amendment No. 1 to the Security Agreement dated as of
the March 31, 2008), for the benefit of the Paying Agent and the benefit
of the Lenders parties to the Credit Agreement referred to in the foregoing
Amendment, hereby consents to such Amendment and hereby confirms and agrees
that (a) notwithstanding the effectiveness of such Amendment, each of the
Amended and Restated Subsidiary Guaranty and Amended and Restated Security
Agreement is, and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects, except that, on and after the
effectiveness of such Amendment, each reference in the Amended and Restated
Subsidiary Guaranty and Amended and Restated Security Agreement to the “Credit
Agreement”, “thereunder”, “thereof” or words of like import shall mean and be a
reference to the Credit Agreement, as amended by such Amendment, and (b) the
Collateral Documents to which such Grantor is a party and all of the Collateral
described therein do, and shall continue to, secure the payment of all of the
Secured Obligations (in each case, as defined therein).

 

This Consent shall be governed by, and construed in
accordance with, the laws of the State of New York

 

[signature pages to follow]

 

[Amendment No. 4]

 

 

 

	
   

  	
  SDI
  INVESTMENT COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  NEW
  MILLENNIUM BUILDING SYSTEMS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  STEEL
  DYNAMICS, INC., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  STEEL
  DYNAMICS SALES NORTH AMERICA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  ROANOKE
  ELECTRIC STEEL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  JOHN
  W. HANCOCK, JR., LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ROANOKE
  ELECTRIC STEEL CORPORATION, MANAGER AND SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  NEW
  MILLENNIUM BUILDING SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SOCAR
  OF OHIO, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

[Amendment No. 4]

 

 

	
   

  	
  STEEL
  OF WEST VIRGINIA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SWVA,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  MARSHALL
  STEEL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  STEEL
  VENTURES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SHREDDED
  PRODUCTS II, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  STEEL
  DYNAMICS, INC., MANAGER AND SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  TECHS INDUSTRIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  ADMETCO,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

[Amendment No. 4]

 

 

	
   

  	
  AUBURN
  INVESTMENT COMPANY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  CAPITOL
  CITY METALS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  INDIANAPOLIS, SOLE MEMBER

  
	
   

  	
   

  
	
   

  	
  BY:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GLOBAL
  SHREDDING TECHNOLOGIES, LTD., LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  INDUSTRIAL
  SCRAP CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  INDUSTRIAL
  SCRAP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  JACKSON
  IRON & METAL COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

[Amendment No. 4]

 

 

	
   

  	
  LUCKY
  STRIKE METALS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  MICHIGAN
  PROPERTIES ECORSE, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  OMNISOURCE
  BAY CITY, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  JACKSON
  IRON & METAL COMPANY, INC., SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  OMNISOURCE
  ATHENS DIVISION, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  OMNISOURCE
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  OMNISOURCE
  INDIANAPOLIS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

[Amendment No. 4]

 

 

	
   

  	
  OMNISOURCE
  MEXICO, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  OMNISOURCE
  TRANSPORT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  OMNISOURCE,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  RECOVERY
  TECHNOLOGIES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SCIENTIFIC
  RECYCLING GROUP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  OMNISOURCE
  CORPORATION, SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SUPERIOR
  ALUMINUM ALLOYS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Name:
  Theresa E. Wagler

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

[Amendment No. 4]

 

 

	
   

  	
  OMNISOURCE
  SOUTHEAST, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Theresa
  E. Wagler, Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  COHEN &
  GREEN SALVAGE CO., INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Theresa
  E. Wagler, Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  LUMBERTON
  RECYCLING COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Theresa
  E. Wagler, Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  RAEFORD
  SALVAGE COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Theresa
  E. Wagler, Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  CAROLINAS
  RECYCLING GROUP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  OMNISOURCE
  SOUTHEAST, LLC, MANAGER AND SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Theresa
  E. Wagler, Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ATLANTIC
  SCRAP AND PROCESSING-WILMINGTON, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
  OMNISOURCE
  SOUTHEAST, LLC, MANAGER AND SOLE MEMBER

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Theresa E. Wagler

  
	
   

  	
   

  	
  Theresa E. Wagler, Vice President

  

 

[Amendment No. 4]June 16, 2009 8K Exhibit 10.1

                                                   Exhibit 10.1

May 20, 2009

Gottschalks Inc.

   7 River Park Place East

   Fresno, California 93729

   Attention: James R. Famalette, Chairman and Chief Executive Officer

Re:Purchase of Certain Nonresidential Real Property Interests of Gottschalks Inc. 

Dear Sir:

Reference is made to that certain Motion of Debtor and Debtor in Possession for Order: (A) Setting (1)
Date to Conduct Auction of Debtor's Interests in Nonresidential Real Property Leases, and (2) Hearing Date for Approval of Auction; (B)
Approving Bid Procedures and Terms of Auction; (C) Establishing Cure Amounts; (D) Authorizing Debtor to Enter into Lease
Termination Agreements; (E) Approving Abandonment of Personal Property; (F) Approving and Authorizing Sale of Leases to Highest
or Best Bidder Free and Clear of All Liens, Interests, Claims and Encumbrances Pursuant to Sections 105, 363, and 365 of the
Bankruptcy Code; (G) Waiving the Requirements of Federal Rules of Bankruptcy Procedure 6004(G) and 6006(D); and (H) Granting
Related Relief, filed by Gottschalks Inc., a Delaware corporation and debtor in possession (the "Company"),
with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") on April 21, 2009 (as
such motion may hereafter be amended by the Company and approved by final order of the Bankruptcy Court, the "Bid
Procedures Motion"), pursuant to which the Company seeks Bankruptcy Court authority to sell certain of the Company's real
property interests at an auction  (the "Auction") to be held on or about May 28, 2009, in accordance with the
Bidding Procedures attached as Exhibit B to the Bid Procedures Motion (as such procedures may hereafter be amended by the
Company and approved by order of the Bankruptcy Court, the "Bid Procedures"). In connection with the Auction,
and in accordance with the Bid Procedures as modified by this agreement, Forever 21 Retail, Inc., a California corporation, or its
permitted assignee in accordance with Section 12.1 below (the "Buyer"), is pleased to have the
opportunity to present this binding letter agreement (this "Agreement") for the acquisition of the three (3) fee simple
properties owned by the Company and identified on Exhibit A attached hereto (the "Fee Simple Interests")
and up to fourteen (14) of the Company's leasehold interests identified on Exhibit B attached hereto (the "Leasehold
Interests") and the related leases and other contracts listed on Exhibit C attached hereto (the
"Contracts" and, together with the Leasehold Interests and the Fee Simple Interests, the "Real Property
Interests"), all upon the terms and conditions set forth herein but subject to the Bid Procedures (collectively, the
"Acquisition"); provided, however, that in the event of any inconsistencies between this
Agreement and the Bid Procedures, this Agreement shall control. 

	Purchase and Sale of Designated Real Property Interests. Subject to the terms and conditions of
this Agreement, at Closing (as defined below), the Buyer shall purchase, and the Company shall sell, the Real Property Interests
described in Sections 1.1 and 1.2 below (the "Designated Real Property Interests"), free and
clear of all liens, claims, encumbrances and other interests of third parties pursuant to Sections 105, 363, and 365 of the United
States Bankruptcy Code (the "Bankruptcy Code").  The transactions contemplated hereby are valued collectively
and therefore constitute a package deal that must include each and every Designated Real Property Interest; provided,
however, that the Buyer may exercise its sole right to remove therefrom any Leasehold Interest (or Contract applicable
thereto) in accordance with Section 1.2.1, and; provided further, that, notwithstanding anything to the contrary in this
Agreement, but subject to the payment of the Break-Up Fee (as defined below) as and when required pursuant to Section
10.2.4, the Company shall be entitled at any time prior to the entry of the Sale Order (as defined below) to pursue, negotiate, enter
into and consummate any one or more Alternative Transactions (as defined below) in accordance with Section 8.1.1.

1.1.   Fee Simple Interests.  The Company shall sell, and the Buyer shall purchase, all of the
Company's right, title and interest of any kind or nature in and to the Fee Simple Interests, including all appurtenances thereto and
improvements thereon.  

1.1.1.   At Closing, the Company shall transfer and convey to the Buyer all of its right, title and interest in and to the
Fee Simple Interests, free and clear of all liens (including, without limitation, monetary liens representing monies owed), claims,
encumbrances and security interests except for the following matters, which are hereinafter referred to as the "Permitted
Exceptions":  

	those matters appearing on the Title Commitments (as defined below) not otherwise objected to in writing
by the Buyer  pursuant to Section 1.1.2;

	those matters appearing on the Title Commitments that are objected to in writing by the Buyer, as provided
in Section 1.1.2, but which the Company has been unable or unwilling to remove or cure, and subject to which the Buyer has
elected in writing to accept the conveyance of the Fee Simple Interests, as set forth in Section 1.1.2 below;

	the lien of all ad valorem real estate taxes and assessments not yet due and payable as of the date of
Closing, subject to adjustment as herein provided; and

	all local, state and federal laws, ordinances or governmental regulations, including but not limited to
building and zoning laws, ordinances and regulations, now or hereafter in effect relating to the Property.

1.1.2.   The Buyer and the Company shall work with the Title Company to cause the Title Company to provide
updated preliminary title reports, title commitments or proformas, together with all underlying documents relating
to the title exceptions identified therein (the "Title Commitments") as soon as practicable following the date
hereof. Within three (3) business days of receipt of any Title Commitment, the Buyer shall notify the Company of any materially
unsatisfactory matters appearing on such Title Commitment(s) that are objectionable to the Buyer (the "Title
Objections").  If the Buyer does not so notify the Company of its Title

                                                    2

Objections on or before the later of (i) the third
(3rd) business day after receipt of the Title Commitment(s) or (ii) May 22, 2009, the Buyer shall be deemed to have
accepted all matters referenced in such Title Commitment(s) and all such matters thereon shall be deemed Permitted Exceptions.  In
the event the Company receives any Title Objections from the Buyer, the Company may elect (but shall not be obligated) to attempt to
remove, or cause to be removed at its expense, any such Title Objections and shall give the Buyer written notice within three (3)
business days of receipt of notice of the Title Objections, (i) that the Company intends to cure any Title Objections (which may be by
order of the Bankruptcy Court), or (ii) that the Company elects not to or is unable to cure any Title Objections. If the Company fails to
notify the Buyer in writing of its election within said three (3) business day period, the Company shall be deemed to have elected not to
cause such exception to be cured.  The procurement by the Company of a commitment for the issuance of an endorsement to the Title
Policy (as defined below) satisfactory to Buyer and insuring Buyer against any title exception which was disapproved pursuant to this
Section 1.1.2 shall be deemed a cure by the Company of such disapproval.  If the Company gives the Buyer notice under
clause (ii) above, then the Buyer may elect by written notice to the Company, on or before the date that is three (3) business days prior
to the date of the Auction, as its sole and exclusive remedy therefore, to either (a) terminate this Agreement in accordance with
Section 10.1.4(a), or (b) waive such Title Objections, in which event such Title Objections shall be deemed Permitted
Exceptions and the Closing shall occur as herein provided without any reduction of or credit against the Purchase Price (as defined
below) except as otherwise provided in Section 3.1.1; provided, however, that prior to any termination of this
Agreement by the Buyer as contemplated by clause (a) above, the Company and the Buyer shall work in good faith to attempt to
resolve such Title Objections.  In the event the Buyer fails to notify the Company in writing on or before the date that is three (3)
business days prior to the date of the Auction of its election to terminate this Agreement or waive its Title Objections pursuant to the
foregoing sentence, such failure to respond shall be deemed a waiver by the Buyer as provided in clause (b) of the immediately
preceding sentence

1.1.3.   Evidence of delivery of such title shall be the issuance by Chicago Title Company (the "Title
Company"), at the Buyer's cost, of a CLTA Standard Coverage Owner's Policy of Title Insurance (the "Title
Policy") covering each of the Fee Simple Interests, with liability in the amount to be determined by the Buyer, insuring title to
the Fee Simple Interests to be vested in the Buyer, subject only to the Permitted Exceptions; provided, however, that if the Buyer has
delivered to the Title Company prior to the Closing a Survey in compliance with all applicable ALTA requirements, then the Buyer may
request that the foregoing policy be an ALTA Extended Coverage Owner's Policy of Title Insurance.    

1.2.   Leasehold Interests.  

1.2.1.   The Company shall assume and assign to the Buyer, pursuant to Section 365(f) of the Bankruptcy Code, all
of the Company's right, title and interest of any kind or nature in and to those Leasehold Interests (and corresponding Contracts) that
are selected by the Buyer following the date hereof (the Leasehold Interests so selected, the "Designated Leasehold
Interests" and the corresponding Contracts, the "Designated Contracts"), with such selection to be
memorialized thereafter by delivery of written notice thereof (the "Leasehold Designation Notice") from the Buyer to
the Company not later than two (2) business days prior to the Auction, and the Buyer shall assume and accept all liabilities and
obligations of the

                                                    3

Company arising out of the Designated Contracts from and after June 11, 2009.  Subject to Sections 1.2.2
and 3.3, the Company shall be responsible for all liabilities arising out of the Designated Contracts prior to June 11, 2009.  Any
Contract not included among the Designated Contracts shall be referred to herein as an "Excluded
Contract."

1.2.2.   Notwithstanding the foregoing, in the event the Buyer delivers the Leasehold Designation Notice to the
Company:

	 on or before May 20, 2009, at 10:00 a.m. (pacific daylight time), then, with respect to each of the
Designated Leasehold Interests that are:
(i) located outside of the State of California (the "PNW Designated Leasehold Interests"),
the Buyer shall be responsible for all rents, common area maintenance expenses or other occupancy costs and fees
("Incremental Occupancy Costs") otherwise owed by the Company under any Designated Contract applicable to
such PNW Designated Leasehold Interest that are accrued during (or are otherwise attributable to) the period beginning on and after
June 5th, 2009 (such date, the "PNW Allocation Date"); and 

(ii) located in the State of California, other than the Leasehold Interest located in Santa Maria, California (the
"California Designated Leasehold Interests"), the Buyer shall be responsible for all
Incremental Occupancy Costs otherwise owed by the Company under any Designated Contract applicable to such California
Designated Leasehold Interest that are accrued during (or are otherwise attributable to) the period beginning on and after the later of (x)
June 11, 2009, and (y) the date upon which the Liquidation Agent (as defined below) returns such California Designated Leasehold
Interest to the Company at the conclusion of each GOB Sale (as defined below) conducted at such California Designated Leasehold
Interest (such date, the "California Allocation Date"); or 

	after May 20, 2009, at 10:00 a.m. (pacific daylight time), then the Buyer shall be responsible for all
Incremental Occupancy Costs otherwise owed by the Company under any Contract that:
 (i) in the case of any Designated Contract, are accrued during (or are otherwise attributable to) the period
beginning on and after the PNW Allocation Date or the California Allocation Date (as the case may be); and 

                                                    4

(ii) in the case of any Excluded Contract, are accrued during (or are otherwise attributable to) the period
beginning on the date upon which the Liquidation Agent returns the Leasehold Interest corresponding to such Excluded Contract to the
Company at the conclusion of each GOB Sale conducted at such Leasehold Interest and ending on the effective date of rejection of
such Excluded Contract; or

	with respect to the Leasehold Interest located in Santa Maria, California (the "Santa Maria
Leasehold Interest"),

(i) on or before June 1, 2009, the Buyer shall be responsible for all Incremental Occupancy Costs otherwise
owed by the Company under any Designated Contract applicable to the Santa Maria Leasehold Interest that are accrued during (or are
otherwise attributable to) the period beginning on and after the later of (x) June 11, 2009, and (y) the date upon which the Liquidation
Agent (as defined below) returns the Santa Maria Leasehold Interest to the Company at the conclusion of each GOB Sale conducted at
the Santa Maria Leasehold Interest (such date, the "Santa Maria Allocation Date"); or 

(ii) after June 1, 2009, then the Buyer shall be responsible for all Incremental Occupancy Costs otherwise owed
by the Company under any Contract that: (A) in the case of any Designated Contract applicable to the Santa Maria Leasehold Interest,
are accrued during (or are otherwise attributable to) the period beginning on and after the Santa Maria Allocation Date; and (B) in the
case of any Excluded Contract applicable to the Santa Maria Leasehold Interest, are accrued during (or are otherwise attributable to)
the period beginning on the date upon which the Liquidation Agent returns the Santa Maria Leasehold Interest to the Company at the
conclusion of each GOB Sale conducted at the Santa Maria Leasehold Interest and ending on the effective date of rejection of such
Excluded Contract;

provided, however, that the foregoing obligations of the Buyer shall be reduced by the
amount of any similar payments otherwise actually received by the Company from its Liquidation Agent in respect of such Contracts for
such periods of time.

1.2.3.   With respect to the Leasehold Interest located in Yakima, Washington (the "Yakima Leasehold
Interest"), the Buyer shall have until on or before May 26, 2009, to notify to the Company in writing of the Buyer's intention
not to exercise its option to

                                                    5

select the Yakima Leasehold Interest pursuant to Section 1.2.1; otherwise, the Company shall
exercise its existing option to extend the term of its lease for the Yakima Leasehold Interest and, should the Buyer thereafter not
purchase the Yakima Leasehold Interest, the Buyer shall be responsible for any actual out-of-pocket damages to the Company
resulting therefrom, including any amounts payable and actually paid as a result of the rejection of any Contracts applicable to the
Yakima Leasehold Interest.

1.3.   Cure Amounts; Designated Leases.  

1.3.1.   The amounts necessary, pursuant to Section 365 of the Bankruptcy Code, to cure all defaults, if any, and to
pay all actual or pecuniary losses that have resulted from any such defaults under any Designated Contract (the "Cure
Amounts") shall be paid by the Buyer as and when determined by the Bankruptcy Court in the Sale Order (as defined below),
up to an amount not to exceed one hundred percent (100%) of the applicable Cure Amounts listed in Exhibit A to the Bid Procedures
Motion, on an aggregate basis, as allowed by the Bankruptcy Court (the "Cure Cap"); provided,
however, that in the event any Designated Contract (and the corresponding Cure Amount) is not listed in Exhibit A to the Bid
Procedures Motion, the Cure Cap shall be increased by the Cure Amount applicable to such Designated Contract (as determined by
the Bankruptcy Court), provided that the Company shall hereafter endeavor to provide the Buyer with an estimate of the Cure Amounts
applicable to any Designated Contract not listed on Exhibit A to the Bid Procedures Motion and the Buyer shall have standing to object
to the Bankruptcy Court's determination of any such Cure Amounts. In addition, Schedule 1.3.1 attached hereto specifies
those Contracts with respect to which any post-petition payments of any cure amounts have been made by the Company on or prior to
the date hereof, as well as the cure amounts so paid, and the Buyer hereby acknowledges and agrees that it shall reimburse the
Company at Closing for any such cure amounts so specified on Schedule 1.3.1 to the extent attributable to a Contract that is
designated by the Buyer as a Designated Contract in the Leasehold Designation Notice; provided, however, that the
aggregate amount of such reimbursements made by the Buyer to the Company at Closing shall be applied toward the Cure Cap so as
to avoid double-counting of any Cure Amounts. The Buyer will not pay cure costs for any Excluded Contract. 

1.3.2.   From and after the date hereof until Closing, except as otherwise provided for herein, the Company shall
not assume (or pay any cure amounts in connection therewith) or reject or seek to assume or reject any Contract without the prior
written approval of the Buyer. Notwithstanding the foregoing, nothing herein shall in any way restrict the Company's ability to reject,
terminate, amend, modify or assign (including assumption and assignment and sale to a third party purchaser) any Excluded Contract
following the Company's receipt of the Leasehold Designation Notice.

	Definitive Transfer Agreements; Further Conveyances and Assumptions.  

2.1.   Definitive Transfer Agreements.  At Closing, the purchase and sale of each of the Fee Simple
Interests shall be consummated pursuant to a Purchase and Sale Agreement, substantially in the form attached hereto as Exhibit
D (a "Purchase and Sale Agreement"), and the assignment and assumption of each of the Designated
Leasehold Interests (and corresponding Designated Contracts) shall be consummated pursuant to an Agreement of

                                                    6

Assumption and Assignment, substantially in the form attached hereto as Exhibit E (an "Assumption and Assignment
Agreement"). The Company and the Buyer shall execute Purchase and Sale Agreements for each of the Fee Simple
Interests and Assumption and Assignment Agreements for each of the Designated Leasehold Interests (and corresponding Designated
Contracts) (collectively, the "Definitive Transfer Agreements") no later than three (3)
business days in advance of the Sale Hearing.

2.2.   Further Conveyances and Assumptions. At Closing, and from time to time thereafter, the
Company and the Buyer shall, and the Company and the Buyer shall cause their respective affiliates to, execute, acknowledge and
deliver all such additional instruments and documents, and take such further actions, as may be reasonably necessary or appropriate to
sell, transfer, convey, assign and deliver fully to the Buyer and its respective successors or permitted assigns, all of the Company's
right, title and interest of any kind or nature in and to the Designated Real Property Interests and to assure fully to the Company and its
successors and permitted assigns, the assumption and acceptance of all of the liabilities and obligations of the Company arising out of
the Designated Contracts, and to otherwise make effective or evidence the Acquisition.

	Consideration.
3.1.   Purchase Price; Escrow Holder. 

3.1.1.   The aggregate consideration for the purchase and sale of the Designated Real Property Interests is
Seventeen Million Seven Hundred Thousand Dollars ($17,700,000.00) by wire transfer of immediately available funds (the
"Purchase Price"), which shall be due and payable by the Buyer at Closing and deliverable to the Company in
accordance with Sections 3.1.2 and 4.5; provided, however, that the Purchase Price shall be
subject to (i) the Damage Deposit, as set forth in Section 7.3.2, (ii) the Signage Removal Deposit, as set forth in Section
7.3.3, and (iii) the payment at Closing by the Escrow Holder (as defined below), on behalf of the Company, of any Outstanding Tax
Obligations (as defined below) to such tax authorities and in such amounts as are determined in good faith by the Escrow Holder and
jointly approved in writing by the Buyer and the Company at or prior to the Closing in accordance with Section 3.4. 

3.1.2.   Not later than three (3) business days in advance of the Sale Hearing, the Buyer shall open an escrow
("Escrow") with Chicago Title Insurance Company, 171 N. Clark Street, Chicago, IL 60601 (the "Escrow
Holder") by delivering to the Escrow Holder fully executed originals of this Agreement and each of the Definitive Transfer
Agreements. At or prior to Closing, the Buyer shall deposit into Escrow by wire transfer of immediately available funds an amount equal
to (a) the Purchase Price, minus (b) the Performance Deposit (as defined below) (such amount, the "Closing
Consideration"). Pending the Closing, the Escrow Holder shall hold the Closing Consideration in accordance with the terms
of this Agreement in an interest-bearing account reasonably acceptable to the Company and the Buyer, with all interest accrued
thereon to be deemed income of the Buyer.  At Closing, upon receipt of joint written confirmation from the Buyer and the Company of
the satisfaction or waiver of the conditions set forth in Section 5, the Escrow Holder shall deliver the Closing Consideration
(less the Damage Deposit, the Signage Removal Deposit and any Outstanding Tax

                                                    7

Obligations otherwise paid by the Escrow Holder in
accordance with Section 3.4) by wire transfer of immediately available funds to the account or accounts designated in writing
by the Company and General Electric Capital Corporation ("GECC"). The Company and the Buyer agree that the
duties of the Escrow Holder hereunder are purely ministerial in nature and shall be expressly limited to the safekeeping and disposition
of the Closing Consideration and the documents described herein in accordance with this Agreement.  The Escrow Holder shall incur
no liability in connection with the safekeeping or disposition of the Closing Consideration or the documents described herein for any
reason other than Escrow Holder's willful misconduct or gross negligence.  If the Escrow Holder is in doubt as to its duties or obligations
with regard to the Closing Consideration or the documents, or if the Escrow Holder receives conflicting instructions from the Company
and the Buyer with respect to the Closing Consideration or the documents described herein, then the Escrow Holder shall not be
required to disburse the Closing Consideration or release the documents and may, at its option, continue to hold the Closing
Consideration and the documents until both the Buyer and the Company agree as to their disposition, or until a final judgment is
entered by a court of competent jurisdiction directing their disposition, or the Escrow Holder may interplead the Closing Consideration
and the documents in accordance with the laws of any state in which the Designated Real Property Interests are located. The Buyer
shall be responsible for the payment of all costs and fees relating to the Escrow.

3.2.   Performance Deposit.  Within one (1) business day following the date upon which this Agreement
is fully executed by the Buyer and the Company, the Buyer shall deliver to the Company a cash deposit (the "Performance
Deposit") in the amount of One Million Seven Hundred and Seventy Thousand Dollars ($1,770,000.00), in order to secure
the performance of its obligations hereunder, which Performance Deposit shall be held in escrow by the Company in an interest-bearing
account reasonably acceptable to the Company and Buyer, in accordance with the terms, and conditions of this Agreement pending the
Closing. The Performance Deposit (together with any interest accrued thereon) shall be retained by the Company and credited against
the Purchase Price at Closing, or, in the event that this Agreement is terminated prior to the Closing, retained by the Company or
returned to the Buyer in accordance with Section 10.2; provided, however, that the Company hereby
reserves all of its rights with respect to the Performance Deposit and any interest accrued thereon.  All interest accrued on the
Performance Deposit shall be deemed income of the Company; and the Company shall be responsible for the payment of all costs and
fees imposed on the Performance Deposit account. 

3.3.   Prorations. With respect to each of the Designated Real Property Interests, all expenses of the
Company (other than Incremental Occupancy Costs, which shall be governed by Section 1.2.2, and taxes, which shall be
governed by Section 9) related to the ownership, occupancy, operation and/or management of such Designated Real Property Interest that are attributable to the
period:

3.3.1.   Before the later of (a) June 11, 2009, and (b) the date upon which the Liquidation Agent returns such
Designated Real Property Interest to the Company at the conclusion of each GOB Sale conducted at such Designated Real Property
Interest (such date, with respect to each of the Designated Real Property Interests, the "Proration Date") shall be
for the account of the Company; and

                                                    8

3.3.1.   On and after the Proration Date shall be for the account of the Buyer;  

provided, however, that all security deposits paid by the Company with respect to any leases,
subleases, licenses, occupancy agreements or tenancies (collectively, "Leases") applicable to any of the
Designated Leasehold Interests prior to the applicable Proration Date shall also be for the account of the Buyer. In accordance with,
and subject to, the foregoing principle, and with respect to each of the Designated Real Property Interests, all water and sewer charges,
utility charges, permit fees, deposits, advance or prepaid royalties, premiums and other prepaid expenses, common area maintenance
fees and rents applicable to such Designated Real Property Interest that are paid prior to the applicable Proration Date, by means of
estimated payments or otherwise, and are applicable to periods both before and after the applicable Proration Date (other than those
Incremental Occupancy Costs paid by the Buyer in accordance with Section 1.2.2) shall be prorated as of such date based on
the number of days elapsed prior to the applicable Proration Date, versus the number of days elapsed on and after the applicable
Proration Date.  The Company shall provide a good faith written estimate of all such prorations to Buyer within sixty (60) days after the
Closing; provided, however, that, with respect to each of the Designated Real Property Interests (on a store-by-store
basis) and except as otherwise provided in Section 1.2.2 with respect to Incremental Occupancy Costs and in Section
9 with respect to taxes, the Buyer shall only be responsible for paying expenses related to the ownership, occupancy, operation
and/or management of such Designated Real Property Interest that are accrued during (or otherwise attributable to) the period
beginning on and after the applicable Proration Date. Following delivery of the Company's estimate of prorations, the parties shall
negotiate in good faith to agree upon the proper allocation of such items in accordance with this Section 3.3.  If any errors or
omissions are made regarding adjustments and prorations pursuant to this Agreement, the parties shall make the appropriate
corrections promptly upon the discovery thereof.  If any estimates are made at the Closing regarding adjustments or prorations, the
parties shall reprorate and make the appropriate correction promptly when accurate information becomes available. Any corrected
adjustment or proration shall be paid in cash to the party entitled thereto within fifteen (15) days after written request therefor.  The
provisions of this Section 3.3 shall survive the Closing and the delivery of the Designated Real Property Interests. 

3.4.   Adjustments.  If, prior to the Closing Date, the Company fails to pay any taxes outstanding,
due and owing on the Designated Real Property Interests as of the Closing Date (collectively, the "Outstanding Tax
Obligations"), or to remove any tax lien attributable thereto, then at Closing the Escrow Holder shall, subject to the proration
provisions of Section 9.2, pay such portion of the Closing Consideration to such tax authorities, on behalf of the Company, as
is necessary to satisfy all Outstanding Tax Obligations and terminate all tax liens attributable thereto (as determined in good faith by the
Escrow Holder and jointly approved in writing by the Buyer and the Company at or prior to the Closing), and the proceeds of Escrow to
be otherwise distributed to the Company upon Closing shall be reduced by the amount so applied.   

                                                    9

	Closing.
4.1.   Closing.  Subject to the terms and conditions set forth herein and in the Definitive Transfer
Agreements, the consummation of the transactions contemplated hereby and thereby, including the Acquisition (the
"Closing") shall take place at the offices of O'Melveny & Myers LLP, 400 South Hope Street, Los Angeles,
California 90071, or such other place as may be agreed upon, at 11:00 a.m., local pacific time, on June 12, 2009, or such other later
date as may be agreed to by the Company and the Buyer (the "Closing Date"); provided,
however, that, with respect to each Designated Real Property Interest, delivery to the Buyer of possession of, and the Buyer's
right to occupy, such Designated Real Property Interest shall not become effective until such time as is specified in Section
7.3.1.

4.2.   The Closing shall take place through the Escrow Holder (the
"Closing Escrow"), which Closing Escrow shall be consistent with the terms of this Agreement.  The Closing
Escrow established shall be auxiliary to this Agreement, and this Agreement shall not be merged into nor in any manner superseded by
the Closing Escrow.  The Buyer may elect, at its sole option and in lieu of a Closing Escrow, to effectuate the Closing by the courier
delivery of Closing documents and other items to the Escrow Holder with such instructions as to disposition as may be reasonably
acceptable to the Buyer and the Company. 

4.3.   For the Closing, the Buyer shall bear all of the costs and expenses relating to the transactions and transfers
contemplated by this Agreement including, without limitation, (a) the cost of any title commitment or title policy which may be obtained
by the Buyer, (b) the cost of any surveys of the Real Property Interests obtained by the Buyer, (c) any charges of the Escrow Holder,
(d) any transfer taxes or similar taxes or charges imposed upon the assignment of the Designated Real Property Interest or any
of the other conveyances contemplated under this Agreement, and (e) any costs, expenses or charges in connection with any loan or
financing obtained by the Buyer, including, without limitation, the cost of any lender's policy of title insurance issued to any lender to the
Buyer.  

4.4.   The Company's Deliveries.  At the Closing, the Company shall deliver or cause to be delivered to
the Escrow Holder, on behalf and for the benefit of the Buyer, (A) all documents required to be delivered by the Company at
Closing under the Definitive Transfer Agreements, together with all other necessary instruments of assignment, conveyance and
transfer of the Designated Real Property Interests and the Designated Contracts, in form and substance reasonably acceptable to the
Buyer and (B) any transfer tax declarations or other filings, in form and substance reasonably acceptable to the Buyer, as may be
necessary to convey good title to the Designated Real Property Interests and the Designated Contracts to the Buyer, in each case in
accordance with the terms and conditions hereof and of the Definitive Transfer Agreements.

4.5.   The Buyer's Deliveries.  At the Closing, the Buyer shall deliver or
cause to be delivered to the Escrow Holder, on behalf and for the benefit of the Company, (A) the Closing Consideration, (B) all
documents required to be delivered by the Buyer at Closing under the Definitive Transfer Agreements, and (C) such other documents,
instruments and certificates as the Company may reasonably request to transfer, assign and delegate all of the liabilities and

                                                    10

obligations of the Company arising out of the Designated Contracts, in each case in accordance with the terms and conditions hereof
and of the Definitive Transfer Agreements. 

	Conditions to Closing.
5.1.   In addition to any other conditions to the Buyer's obligation to close set forth in this Agreement, the Buyer's
obligation to consummate the transactions contemplated by this Agreement, including the Acquisition, is subject to the fulfillment, at or
before the Closing Date, of the following conditions, any one or more of which (other than the condition contained in Section
5.1.6) may be waived by the Buyer in its sole discretion:

5.1.1.   All of the Company's representations and warranties contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date as if again made by the Company on and as of such date.

5.1.2.   All documents, instruments and assurances required hereunder to be delivered by the Company to the
Buyer or the Escrow Holder (as the case may be) on or prior to the Closing Date shall have been duly delivered to the Buyer or the
Escrow Holder in form and substance reasonably satisfactory to Buyer.

5.1.3.   All covenants and agreements of the Company under this Agreement required to be performed by it on or
before the Closing Date shall have been duly performed and satisfied in all material respects.

5.1.4.   The Company shall have delivered to Buyer updated "Phase I" environmental reports for the
Fee Simple Interests, as and to the extent requested by the Buyer pursuant to Section 7.2.2, which shall report no materially
unsatisfactory fact, circumstance, or condition in any of the Fee Simple Interests other than those (if any) already disclosed in the
Phase I environmental assessments provided to the Buyer on or prior to the date hereof.

5.1.5.   The Company or its noticing agent shall have delivered adequate notice to the Affected Parties (as defined
below) that are identified by the Buyer to the Company in accordance with Section 7.4.1 of (a) the Auction, (b) the Auction
results, (c) the Buyer's identity as the winning bidder for the Designated Real Property Interests, (d) the Sale Hearing to be conducted
by the Bankruptcy Court and a copy of the Sale Order (as defined below), and (e) any other necessary or required disclosures under
the Bankruptcy Code.  

5.1.6.   The Bankruptcy Court shall have entered an order (the "Sale Order") (i) approving the
Sale, free and clear of all claims, encumbrances and interests in form and substance reasonably acceptable to Buyer, (ii) providing that
all valid, enforceable and unavoidable liens otherwise affecting the Designated Real Property Interests and insurance thereon shall
instead attach at Closing to the Purchase Price with the same validity, force and effect as the same had with respect to the Designated
Real Property Interests, subject (a) in the case of the DIP Liens (as defined below), to the terms of the DIP Credit Agreement (as
defined below), the other Loan Documents (as defined below) and the Final Order (as defined below), and (b) in the case of any other
liens, to any and all defenses, claims and/or counterclaims or setoffs the Company may then possess, and (iii) containing all necessary
findings under 11 U.S.C.§ 363(m).

                                                    11

5.1.7.   The Sale Order shall provide for the waiver of the 10-day notice requirement of 6004(h) of the Federal
Rules of Bankruptcy Procedure.

5.2.   In addition to any other conditions to the Company's obligation to close set forth in this Agreement, the
Company's obligation to consummate the transactions contemplated by this Agreement, including the Acquisition, is subject to the
fulfillment, at or before the Closing Date, of the following conditions, any one or more of which (other than the condition contained in
Section 5.2.5) may be waived by the Company in its sole discretion:

5.2.1.   All of the Buyer's representations and warranties contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date as if again made by the Buyer on and as of such date.

5.2.2.   All documents, instruments and assurances required hereunder to be delivered by the Buyer to the
Company or the Escrow Holder (as the case may be) on or prior to the Closing Date shall have been duly delivered to the Company or
the Escrow Holder in form and substance reasonably satisfactory to Company.

5.2.3.   All covenants and agreements of the Buyer under this Agreement required to be performed by it on or
before the Closing Date shall have been duly performed and satisfied in all material respects.

5.2.4.   The Buyer shall have deposited the Closing Consideration into Escrow in accordance with Section
3.1.2, above.

5.2.5.   The Bankruptcy Court shall have entered the Sale Order.

	Representations and Warranties.
6.1.   Representations and Warranties of the Company. The Company represents and warrants to
the Buyer as follows:

6.1.1.   Corporate Organization.  The Company is a corporation duly incorporated and validly existing
under the laws of the State of Delaware.  Subject to any necessary authority from the Bankruptcy Court, the Company has the requisite
corporate power and authority to own its properties and assets and to conduct its business as now conducted and to carry out its
obligations under this Agreement and each of the Definitive Transfer Agreements.

6.1.2.   Authorization and Validity.  The Company has the corporate power and authority necessary to
enter into this Agreement and each of the Definitive Transfer Agreements and, subject to the Bankruptcy Court's entry of the Sale
Order, to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement and the Definitive Transfer
Agreements have been duly authorized by all necessary corporate action by the board of directors of the Company, and no other
corporate proceedings are necessary for the performance by the Company of its obligations under this Agreement and each of the
Definitive Transfer Agreements or the consummation by the Company of the transactions contemplated hereby and thereby, including
the Acquisition.  This Agreement and each of the Definitive

                                                    12

Transfer Agreements have been (or at the time of execution by the
Company, shall be) duly and validly executed and delivered by the Company and, subject to the Bankruptcy Court's entry of the Sale
Order and assuming due authorization, execution and delivery by the Buyer, are (or at the time of execution, shall be) valid and binding
obligations of the Company enforceable against the Company in accordance with their respective
terms.

6.1.3.   Leases.  Other than pursuant to the Agency Agreement (as defined below) (a) as of the Closing,
the Fee Simple Interests shall be delivered free and clear of all Leases, including the Leases identified on Schedule 6.1.3
attached hereto, (b) as of the Closing, the Company shall not be obligated to sell or offer for sale, and shall not have granted a right of
first refusal with respect to, any portion of the Fee Simple Interests to any party other than the Buyer, (c) to the knowledge of the
Company, there are no parties in adverse possession of the Real Property Interests, (d) as of the Closing, there shall be no third parties
in possession of the Real Property Interests; and (e) as of the Closing, no other party shall have been granted by the Company any
license, lease, or other right relating to the use or possession of the Real Property Interests beyond the Closing Date.  

6.1.4.   Tax Withholding.  The Buyer is not required to withhold taxes from the payment of sale proceeds
to the Company under the Internal Revenue Code of 1986 (as amended) or any applicable state, commonwealth or local tax laws.

6.2.   Representations and Warranties of the Buyer.  The Buyer hereby represents and warrants to the
Company as follows:

6.2.1.   Corporate Organization.  The Buyer is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of California. The Buyer has the requisite corporate power and authority to own its properties and
assets and to conduct its business as now conducted and to carry out its obligations under this Agreement and each of the Definitive
Transfer Agreements.

6.2.2.   Authorization and Validity.  The Buyer has the corporate power and authority necessary to enter
into this Agreement and each of the Definitive Transfer Agreements and to carry out its obligations hereunder and thereunder.  The
execution and delivery of this Agreement and the Definitive Transfer Agreements have been duly authorized by all necessary corporate
action by the board of directors of the Buyer, and no other corporate proceedings are necessary for the performance by the Buyer of its
obligations under this Agreement and each of the Definitive Transfer Agreements or the consummation by the Buyer of the transactions
contemplated hereby and thereby, including the Acquisition. This Agreement and each of the Definitive Transfer Agreements have been
(or at the time of execution by the Buyer, shall be) duly and validly executed and delivered by the Buyer and, assuming due
authorization, execution and delivery by the Company, are (or at the time of execution, shall be) valid and binding obligations of the
Buyer enforceable against the Buyer in accordance with their respective terms.

6.2.3.   Adequate Assurances Regarding Designated Contracts.  The Buyer is and will be capable of
satisfying the conditions contained in Sections 365(b)(1)(C) and 365(f) of the Bankruptcy Code with respect to the Designated
Contracts.

                                                    13

6.2.4.   Financial Capability.  The Buyer currently has or at Closing will have available funds necessary to
consummate the transactions contemplated hereby, including the acquisition of the Designated Real Property Interests, the assumption
of all of the liabilities and obligations of the Company arising out of the Designated Contracts, the payment to the Company of the
Purchase Price therefor and the payment of the Cure Amounts, and to perform its obligations under this Agreement and each of the
Definitive Transfer Agreements on the terms and subject to the conditions contemplated hereby and thereby.

	Covenants of the Parties.
7.1.   Commercially Reasonable Efforts.  The Company and the Buyer shall each cooperate with
one another in good faith and use all commercially reasonable efforts to (A) obtain all third party consents and approvals required to be
obtained to effect the transactions contemplated by this Agreement and the Definitive Transfer Agreements, including the Acquisition,
and (B) take, or cause to be taken, all action, and to do, or cause to be done, all things necessary or proper, consistent with applicable
law, to consummate and make effective in an expeditious manner the transactions contemplated by this Agreement and the Definitive
Transfer Agreements, including the Acquisition. In addition, the Buyer shall cooperate with the Company in good faith in connection with
the Company's performance under that certain Agency Agreement, dated as of March 31, 2009 (the "Agency
Agreement"), by and between the Company and a joint venture comprised of SB Capital Group, LLC, Tiger Capital Group,
LLC, Great American Group WF, LLC and Hudson Capital Partners, LLC (such joint venture, the "Liquidation
Agent"), and shall use all commercially reasonable efforts to take any action or refrain from taking any action, in each case
as may be reasonably requested by the Company, necessary or advisable in order to permit the Company to comply with its obligations
under the Agency Agreement. 

7.2.   Due Diligence. 

7.2.1.   From the date upon which this Agreement is fully executed and continuing until the Closing Date or earlier
termination of this Agreement, the Buyer shall have the right, at its sole cost and expense and subject to the conditions set forth in
Section 7.2.3 below, to inspect and review the physical condition of the Real Property Interests, including, without limitation,
title, survey, any environmental, geologic, engineering and maintenance reports and appraisals of the Real Property Interests, and any
other relevant information relating to the Real Property Interests, in each case to the extent in the Company's possession, which the
Buyer hereby acknowledges the Company has made available for review and inspection. In addition, the Company shall deliver any
electronic CAD files for the Leasehold Interests that are requested by the Buyer and that are in the Company's possession by no later
than May 22, 2009, and shall make commercially reasonable efforts to provide any other architectural, structural or engineering
materials that that are requested by the Buyer and that are in the Company's possession by no later than May 27, 2009.

7.2.2.   With respect to the Fee Simple Interests, the Buyer shall have the right prior to
the Closing Date to conduct, or request that the Company conduct on the Buyer's behalf (in each case at the Buyer's sole cost and
expense), a "Phase I" environmental assessment of such Fee Simple Interests, or to update any "Phase I"
environmental assessment provided to

                                                    14

the Buyer by the Company prior to the date hereof, but shall not be entitled to conduct any
additional or any extensive or invasive environmental testing or assessment without first obtaining the Company's prior written consent
thereto (including the scope of work for such proposed testing), which consent may be withheld at the Company's sole discretion,
unless the Buyer's "Phase I" environmental assessment notes a potential release of hazardous materials and/or a
recognized environmental condition, in which case the Buyer shall have a right to conduct such further testing to the extent
recommended in such "Phase I" environmental assessment.  

7.2.3.   The Buyer's right to conduct on-site due diligence on, at or otherwise with respect to the Real Property
Interests prior to the Closing Date shall be subject to the Buyer's continuing compliance with each and all of the following conditions:  (i)
the Company shall permit and cause the Buyer and its agents, consultants, engineers, representatives and contractors (collectively, the
Buyer's "Agents") to have reasonable access to the Real Property Interests during normal business hours upon at
least twenty-four (24) hours' advance notice, provided that, if the Company desires, a representative of the Company
accompanies the Buyer onto the Real Property Interests and, provided further, such notice shall detail the scope of the due
diligence the Buyer intends to conduct at that time; (ii) the Buyer shall at all times strictly comply with all laws, ordinances, rules and
regulations applicable to the Real Property Interests; (iii) promptly after any entry onto the Real Property Interests, the Buyer shall
restore or repair, in a good and workmanlike manner, any damage thereto caused by or otherwise arising from any act or omission by
the Buyer, its agents, representatives or contractors; (iv) neither the Buyer nor its Agents shall engage in any activities that would
cause the Company's rights, title, interests or obligations in or relating to any Real Property Interest to be adversely affected in any way,
including, without limitation, the assertion of any mechanic's liens, and the Buyer shall, without limitation, immediately remove and bond
over any liens, notices and claims of liens or other matters affecting any Real Property Interest which are caused by the acts or
omissions of the Buyer or its Agents, and (v) in the event this Agreement is terminated for any reason, the Buyer will deliver to the
Company, at no cost to the Company, copies of all environmental or other reports relating to the Real Property Interests prepared by or
on behalf of the Buyer. The Buyer hereby represents and warrants, for itself and on behalf of its Agents, that the Buyer and its Agents
each carry liability insurance in an amount not less than Two Million Dollars ($2,000,000) per occurrence and not less than
Five Million ($5,000,000) in the aggregate protecting the Buyer and such Agents from any loss, liability or claim arising from the
Buyer's or such Agents' entry onto the Real Property Interests, and hereby covenants that it shall provide the Company with a
certificate or other satisfactory proof of such insurance coverage as a condition of and prior to entering onto any Real Property Interest.
The Buyer shall indemnify, defend (through counsel reasonably approved by the Company), and hold harmless the Company from and
against all injury, liability or damage, whether to person or property, arising from any entry onto the Real Property Interests by the Buyer
or any of its Agents, the Buyer's inspections of the Real Property Interests pursuant to this Section 7.2, or a violation of any of
the provisions of this Section 7.2.  This Section 7.2 shall survive the Closing and the termination of this Agreement for
any reason for a period of two (2) years and shall be in addition to any other obligations or liabilities of the Buyer under this
Agreement.

7.3.   Occupancy of the Designated Real Property Interests; Condition at Closing. 

                                                    15

7.3.1.   Notwithstanding anything to the contrary herein or in any Definitive Transfer Agreement, the Buyer hereby
acknowledges and agrees that, with respect to each Designated Real Property Interest, the Buyer shall not be entitled to occupy such
Designated Real Property Interest until after (A) the Closing Date and (B) the earlier of (i) the date that is ten (10) business days
following the date upon which the Liquidation Agent returns such Designated Real Property Interest to the Company at the conclusion
of each "going out of business" or other liquidation sale (a "GOB Sale") conducted at such Designated
Real Property Interest, or (ii) July 31, 2009; provided, however, that (x) the Buyer shall have reasonable access
during this time on the terms and conditions set forth in Section 7.2 above, and (y) the Company shall give the Buyer written
notice of the anticipated end of the GOB Sale conducted at each Designated Real Property Interest four (4) days prior to the end of
such GOB Sale. 

7.3.2.   With respect to each Designated Real Property Interest, at the Company's sole cost and expense but
subject to Section 7.2, this Section 7.3 and the terms and conditions of the Definitive Transfer Agreement applicable
to such Designated Real Property Interest, the Company shall at Closing (or such later date upon which the Buyer is entitled to occupy
such Designated Real Property Interest pursuant to Section 7.3.1) cause such Designated Real Property Interest to be
transferred to the Buyer:

	in "broom clean" condition, as determined by the parties, who shall meet and confer to make
such determination in good faith after the Liquidation Agent returns such Designated Real Property Interest to the Company at the
conclusion of each GOB Sale conducted at such Designated Real Property Interest; 

	with all readily moveable personal property (including, without limitation, all fixtures for the display of
merchandise that are not affixed to the Designated Real Property Interest) removed; and

	except as may otherwise be identified by the Company and consented to by the Buyer in writing on or after
the date hereof, with those immovable fixtures identified on Schedule 7.3.2 attached hereto (collectively, "Immovable
Fixtures"), intact and with the same physical integrity as of the date of this Agreement (but subject to ordinary wear and tear
incurred from the date of this Agreement through Closing or such later date upon which the Buyer is entitled to occupy such Designated
Real Property Interest pursuant to Section 7.3.1).

In order to secure the Company's obligations to deliver possession of the Designated Real Property Interests to
the Buyer in accordance with this Section 7.3.2 and to timely provide the notices to the Buyer contemplated by clause (y) of
Section 7.3.1 above, Escrow Holder shall withhold from the Closing Consideration delivered to the Company at Closing an
amount equal to One Hundred Twenty-Five Thousand Dollars ($125,000) (the "Damage Deposit"), which amount
(or portion thereof) may, upon joint written instruction by the Company and the Buyer or an order of the Bankruptcy Court, be refunded
by the Escrow Holder to the Buyer for application

                                                    16

to (i) any out-of-pocket costs actually incurred by the Buyer as a direct result of the
Company's failure to deliver possession of the Designated Real Property Interests to the Buyer in accordance with this Section
7.3.2, or (ii) any actual damages incurred by the Buyer resulting from the Company's failure to timely provide to the Buyer any of
the notices contemplated by clause (y) of Section 7.3.1 above (which actual damages shall, with respect to each Designated
Real Property Interest for which such notice is not timely given in accordance clause (y) of Section 7.3.1 above, be deemed to
be an amount equal to the Incremental Occupancy Costs applicable to such Designated Real Property Interest that are actually
incurred by the Buyer and that are attributable to the period beginning on the date that is three (3) days prior to the end of the GOB
Sale conducted at such Designated Real Property Interest and ending on the date that the notice contemplated by clause (y) of
Section 7.3.1 above is delivered to the Buyer); provided, however, that the aggregate amount of the
Company's liability for failure to comply with this Section 7.3.2 or to timely provide the notices to the Buyer contemplated by
clause (y) of Section 7.3.1 above shall in no event exceed the Damage Deposit, the refund of which pursuant shall constitute
the Buyer's sole and exclusive remedy for any such failures. Any claim against the Damage Deposit shall be made by the Buyer not
later than thirty (30) days following the date upon which the Company delivered possession of all Designated Real Property Interests to
the Buyer, after which time any amounts then held by the Escrow Holder and attributable to the Damage Deposit shall promptly be
disbursed to the Company by wire transfer of immediately available funds to such account or accounts as the Company may designate
in writing to the Escrow Holder. 

7.3.3.   Notwithstanding anything to the contrary herein, and with respect to each of the Designated Real Property
Interests, the Buyer shall be solely responsible for the removal of all Company signage from such Designated Real Property Interest
(whether on the interior or exterior of such Designated Real Property Interest), as well as all costs and expenses related thereto (such
costs and expenses, the "Signage Removal Expenses"), not later than the earlier of (i) sixty (60) days following the
Closing (or such later date upon which the Buyer is entitled to occupy such Designated Real Property Interest pursuant to Section
7.3.1) and (ii) such other date as may be required under any Designated Contract applicable to such Designated Real Property
Interest. As an inducement to the Buyer's entry into this Agreement, the Escrow Holder shall withhold from the Closing Consideration
delivered to the Company at Closing an amount equal to Five Thousand Dollars ($5,000) per Designated Real Property Interest and
Eighty-Five Thousand Dollars ($85,000) in the aggregate (the "Signage Removal Deposit"), which amount (or
portion thereof) shall, upon joint written instruction by the Company and the Buyer or an order of the Bankruptcy Court, be refunded by
the Escrow Holder to the Buyer for application to any reasonable out-of-pocket Signage Removal Expenses actually incurred by the
Buyer in connection with the removal of all Company signage from the Designated Real Property Interests in accordance with this
Section 7.3.3. Any claim against the Signage Removal Deposit under this Section 7.3.3 shall be made by the Buyer
not later than ninety (90) days following the date upon which the Company delivered possession of all Designated Real Property
Interests to the Buyer, after which time any amounts then held by the Escrow Holder and attributable to the Signage Deposit shall
promptly be disbursed to the Company by wire transfer of immediately available funds to such account or accounts as the Company
may designate in writing to the Escrow Holder. 

                                                    17

7.4.   Notice to Affected Parties; Necessary Consents. 

7.4.1.   The Buyer shall identify to the Company in writing those persons, parties or entities (the "Affected
Parties") that, pursuant to any Designated Contracts, any underlying ground lease or any mortgage, deed of trust or other
financing instrument (including, without limitation, any ground lessors, lenders, and parties under any REA documents), have an
approval, review, consent or other right or option relating to (i) the assignment of the Designated Contracts, (ii) the intended use and
operation of each Designated Real Property Interest by the Buyer including, without limitation, any dark period during the design,
permitting and construction of the Buyer's alterations, and (iii) any remodeling, alterations, additions or improvements required by the
Buyer to convert the stores into the Buyer's intended use including, without limitation, the Buyer's exterior or mall entrance entry feature
and the Buyer's building signage (collectively, the "Alterations"), and which, in each case, the Buyer desires to
receive the Company's notice contemplated by Section 5.1.5. The Buyer hereby covenants and agrees to identify such
Affected Parties by written notice to the Company by no later than the date that is fourteen (14) days in advance of the Sale Hearing so
as to permit the Company to satisfy the condition set forth in Section 5.1.5.

7.4.2.   The Company shall make all commercially reasonable efforts to obtain, and the Buyer shall cooperate in
good faith with the Company in obtaining, (a) all required consents from counterparties to the Designated Contracts, including any REA
agreements associated with the Designated Real Property Interests, to the assumption by the Company and assignment to the Buyer
of the same, or (b) an order of the Bankruptcy Court to the effect that such consents shall not be required for the assumption by the
Company and assignment to the Buyer of the Designated Contracts.

	Other Agreements.
8.1.   Stalking Horse Protections. 

8.1.1.   The Company has selected the Buyer to serve, and the Buyer has consented to its selection and service,
subject to the conditions set forth in Section 5 above, as a "Stalking Horse Bidder," whereby this Agreement shall
serve as a base by which other offers for one or more potential Alternative Transactions (as defined below) may be measured and is
subject to competing offers for one or more Alternative Transactions, whether submitted before, during or after the Auction.
Notwithstanding anything herein or in the Definitive Transfer Agreements to the contrary, the Company may at any time prior to the
entry of the Sale Order furnish information concerning the Real Property Interests to any person in connection with a potential
Alternative Transaction and negotiate, enter into and consummate an Alternative Transaction.  The Company may also identify and
enter into agreements respecting a "back-up" bid relating to one or more Alternative Transactions, to become effective in the
event the Buyer fails to perform in accordance with the terms of this Agreement. Notwithstanding the foregoing, the Buyer's bid
reflected in this Agreement shall be treated as a package bid and should the Company consummate any Alternative Transaction
without the Buyer's consent, this Agreement shall be considered terminated and the Buyer shall be entitled to the Break-Up Fee to the
extent set forth herein.

                                                    18

8.1.2.   As consideration for and as a material inducement to the Buyer conducting its due diligence and entering
into this Agreement, provided that the Buyer is not in default under this
Agreement, the Buyer shall be entitled to receive (A) the Break-Up Fee (as defined in Section 10.2.4) and (B) the
return of the Performance Deposit (together with any interest accrued thereon) in the event this Agreement is terminated pursuant to
Section 10.1.5. In connection therewith, at a hearing to be scheduled before the Bankruptcy Court as soon as reasonably
practicable after the date upon which this Agreement is fully executed by the Company and the Buyer, the Company shall use its
commercially reasonable efforts to obtain an order from the Bankruptcy Court approving this Agreement (including the Break-Up Fee on
the terms and conditions set forth in Section 10.2.4).  In addition, the Break-Up Fee shall have been approved by the
Bankruptcy Court on the terms and conditions set forth in Section 10.2.4 prior to the date of the Auction.  

8.2.   Bankruptcy Court Approval.  To the extent it has not already done so, and subject to
Section 8.1, no later than three (3) business days following the conclusion of the Auction, the Company shall file with the
Bankruptcy Court one or more motions which, collectively, seek the entry of the Sale Order.  The Company and the Buyer shall use
commercially reasonable efforts to cooperate, assist and consult with each other to secure the entry of the Sale Order on or before
June 11, 2009, and to consummate the transactions contemplated by this Agreement, including furnishing affidavits or other documents
or information for filing with the Bankruptcy Court for the purposes, among others, of providing necessary assurances of performance
by the Buyer under this Agreement.  In the event that any orders of the Bankruptcy Court relating to this Agreement shall be appealed
by any person (or a petition for certiorari or motion for reconsideration, amendment, clarification, modification, vacation, stay, rehearing
or reargument shall be filed with respect to any such order), the Company and the Buyer will cooperate in taking such steps to diligently
defend against such appeal, petition or motion and the Company and the Buyer shall use their reasonable best efforts to obtain an
expedited resolution of any such appeal, petition or motion.  

	Taxes.
9.1.   Taxes Related to the Purchase of the Designated Real Property Interests.  Except to the
extent otherwise provided for in the Definitive Transfer Agreements, all recording and filing fees and all foreign, federal, state and local
sales, transfer, excise, value-added or other similar taxes, including, without limitation, all state and local taxes in connection with the
transfer of the Designated Real Property Interests, but excluding all income taxes and other fees based upon gain realized by the
Company as a result of the sale of the Designated Real Property Interests (collectively, "Transaction Taxes"), that
may be imposed by reason of the sale, transfer and assignment of Designated Real Property Interests, and which are not exempt under
Section 1146(c) of the Bankruptcy Code, shall be paid by the Buyer.  The Buyer and the Company agree to cooperate to determine the
amount of Transaction Taxes payable in connection with the transactions contemplated under this Agreement and the Definitive
Transfer Agreements, and the Company agrees to assist the Buyer reasonably in the preparation and filing of any and all required
returns for or with respect to such Transaction Taxes with any and all appropriate taxing authorities.

                                                    19

9.2.   Proration of Taxes.  Real and personal property taxes, ad valorem taxes, and franchise fees or
taxes that are imposed on a periodic basis (as opposed to a net income basis) (collectively, "Periodic Taxes") shall
be prorated between the Company and the Buyer for any taxable periods beginning prior to and ending on or after June 11, 2009 (such
taxable periods, "Straddle Periods").  Periodic Taxes attributable to Straddle Periods shall be prorated between the
Buyer and the Company based on the relative periods that the Designated Real Property Interests subject to such Periodic Taxes were
owned by the Company or the Buyer during the fiscal period of the taxing jurisdiction for which such taxes were imposed by such
jurisdiction (as such fiscal period is or may be reflected on the bill rendered by such taxing jurisdiction).  The amount of all such
prorations shall be settled and paid on the Closing Date; provided, however, that final payments with respect to
prorations that are not able to be calculated on the Closing Date shall be calculated and paid as soon as practicable
thereafter.

9.3.   Cooperation on Tax Matters.

9.3.1.   The Buyer and the Company agree to furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance relating to the Designated Real Property Interests as is reasonably necessary for the
preparation and filing of any tax return, claim for refund or other required or optional filings relating to tax matters, for the preparation for
and proof of facts during any tax audit, for the preparation for any tax protest, for the prosecution or defense of any suit or other
proceeding relating to tax matters and for the answer to any governmental or regulatory inquiry relating to tax matters.

9.3.2.   The Buyer agrees to retain possession, at its own expense, of all accounting, business, financial and tax
records and information (A) relating to the Designated Real Property Interests that are in existence on the Closing Date and transferred
to the Buyer hereunder, and (B) coming into existence after the Closing Date that relate to the Designated Real Property Interests
before the Closing Date, for a period of at least three (3) years from the Closing Date, and will give the Company notice and an
opportunity to retain any such records in the event that the Buyer determines to destroy or dispose of them after such period.  In
addition, from and after the Closing Date, the Buyer agrees that it will provide access to the Company and its attorneys, accountants
and other representatives (after reasonable notice and during normal business hours and without charge) to the books, records,
documents and other information relating to the Designated Real Property Interests as the Company may reasonably deem necessary
to (x) properly prepare for, file, prove, answer, prosecute and/or defend any such tax return, claim, filing, tax audit, tax protest, suit,
proceeding or answer or (y) administer or complete any cases under Chapter 11 of the Bankruptcy Code of the Company.  Such
access shall include, without limitation, access to any computerized information retrieval systems relating to the Designated Real
Property Interests.

9.4.   Allocation of Purchase Price and Purchase Price Allocation Forms.  The Buyer and the Company
agree to allocate the Purchase Price among the Designated Real Property Interests pursuant to a tax allocation that is reasonably
acceptable to the Buyer and the Company and which is to be delivered by Buyer to the Company no later than August 30, 2009.  The
Buyer and the Company agree that: (A) neither party shall take a position on any tax return, before any governmental body or in any
judicial proceeding that is inconsistent with the Allocation without the written consent of the other party or unless specifically required
pursuant

                                                    20

to a legally-binding determination by an applicable governmental body, (B) the parties shall cooperate with each other in
connection with the preparation, execution and timely filing of all tax returns related to the Allocation, and (C) the parties shall promptly
advise each other regarding the existence of any tax audit, controversy or litigation related to the Allocation. 

	Termination.

10.1.   Conditions of Termination. At any time before the Closing, this Agreement may be
terminated:

10.1.1.   By mutual written consent of the Company and the Buyer;

10.1.2.   By either the Company or the Buyer, by written notice to the other party, on the last business day prior to
the date of the Auction, if an order from the Bankruptcy Court approving the Break-Up Fee has not then been obtained pursuant to
Section 8.1; provided, however, that a party shall not have the right to terminate this Agreement under this
Section 10.1.2 if such party is then in material breach of this Agreement;

10.1.3.   By the Company, by written notice to the Buyer, 

	if the Company has previously provided the Buyer with written notice of (i) the Buyer's material breach of
any of its representations or warranties contained in Section 6.2 or in any of the Definitive Transfer Agreements, or (ii) the
Buyer's failure to perform any material covenant of the Buyer contained in this Agreement or any of the Definitive Transfer Agreements,
and the Buyer has failed within five (5) business days after such notice to remedy such breach or perform such covenant; or

	after the date that is ten (10) business days following the date of the Sale Hearing (the "Approval
Termination Date"), if the Sale Order has not been obtained by such date; 

provided, however, that the Company shall not have the right to terminate this Agreement
under this Section 10.1.3 if the Company is then in material breach of this Agreement;

10.1.4.   By the Buyer, by written notice to the Company, 

	on or before the date that is three (3) business days prior to the Auction, on the basis of (i) a
materially unsatisfactory fact, circumstance, or condition in any of the
Fee Simple Interests that is discovered during the Buyer's due diligence investigation pursuant to Section 7.2, (ii) any update
to the Buyer's "Phase I" environmental assessments reporting a materially unsatisfactory fact, circumstance, or condition in
any of the Fee Simple Interests not already disclosed in the Phase I environmental assessments provided to Buyer previously pursuant
to Sections 5.1.4 and 7.2.2

                                                    21

hereof, or (iii) the Company's election not to or inability to cure a Title Objection as provided in Section 1.1.2;

	if the Buyer has previously provided the Company with written notice of (i) the Company's material breach
of any of its representations or warranties contained in Section 6.1 or in any of the Definitive Transfer Agreements, or (ii) the
Company's failure to perform any material covenant of the Company contained in this Agreement or any of the Definitive Transfer
Agreements, and the Company has failed within five (5) business days after such notice to remedy such breach or perform such
covenant; or

	after the Approval Termination Date if the Sale Order has not been obtained by such date; 

provided, however, that the Buyer shall not have the right to terminate this Agreement under
this Section 10.1.4 if the Buyer is then in material breach of this Agreement; or

10.1.5.   Automatically, upon the consummation by the Company of any alternative transaction, or series of
alternative transactions, with one or more third party purchasers involving the sale and/or assignment of any one or more of the Real
Property Interests to such third party purchaser(s) (an "Alternative Transaction") without the Buyer's consent to
such Alternative Transaction; provided, however, that notwithstanding the foregoing, the Company's consummation
of the sale and/or assignment to any third party purchaser of any Leasehold
Interest (and any corresponding Contracts) that is not included among the Designated Leasehold Interests identified in the
Buyer's Leasehold Designation Notice shall not constitute an Alternative Transaction, shall not automatically terminate this Agreement,
and shall not trigger the payment of the Break-Up Fee.

10.2.   Effect of Termination; Remedies.

10.2.1.   In the event of termination pursuant to Section 10.1, this Agreement and each of the
Definitive Transfer Agreements (if such have been executed prior to such termination) shall become null and void and have no effect
(other than Section 7.2, Section 10 and Section 12 of this Agreement, which shall survive termination), with
no liability on the part of the Company or the Buyer, or their respective affiliates, with respect to this Agreement or any of the Definitive
Transfer Agreements, except for (A) the obligations of the Buyer under Section 7.2, (B) the liability of a party for its own
expenses pursuant to Section 12.4, and (C) any liability provided for in Sections 10.2.2 through
Section 10.2.4, inclusive. 

10.2.2.   If this Agreement is terminated pursuant to Sections 10.1.1, 10.1.2,
Sections 10.1.3(b), or 10.1.4, then the Performance Deposit, together with any interest accrued thereon, shall
be returned to the Buyer.

10.2.3.   If this Agreement is terminated pursuant to Sections 10.1.3(a), then the Company (A) shall
be paid the Performance Deposit, together with any interest accrued thereon, and (B) shall in addition have the right to pursue actual
damages, if any, above the Performance Deposit, resulting from such termination.

                                                    22

10.2.4.   If this Agreement is terminated pursuant to Section 10.1.5, provided that the Buyer is not
then in default under this Agreement, then the Buyer shall be entitled, as its sole and exclusive remedy, to (A) a break-up fee in cash
equal to Three Hundred Fifty-four Thousand Dollars ($354,000.00) (the "Break-Up Fee"), payable to the Buyer
exclusively out of the proceeds of the Alternative Transaction(s) giving rise to such termination, and (B) return of the Performance
Deposit, together with any interest accrued thereon, in each case due and payable to the Buyer on the first business day following the
date upon which the Company consummates the Alternative Transaction(s) giving rise to such termination.

	Certain Covenants of the Company.
11.1.   At all times between the date of execution of this Agreement and the earlier of the Closing or the
delivery of any of the Designated Real Property Interests in "broom clean" condition pursuant to Section 7.3.2, the
Company shall keep, pay and perform (or cause to be kept, paid or performed) all of the obligations to be kept, paid and performed by
the Company under the Contracts and the other property documents relating to the Real Property Interests, including, without limitation,
any REA documents (the "Other Property Documents"), except to the extent (a) otherwise expressly authorized by
the terms of this Agreement and the Bid Procedures, (b) required pursuant to the terms of the Agency Agreement, or (c) the Company
is otherwise relieved of satisfying such obligations under the Bankruptcy Code.

11.2.   Except as otherwise expressly authorized by the terms of this Agreement and
the Bid Procedures (including, without limitation, the pursuit, negotiation, entry into and/or consummation of any one or more Alternative
Transactions in accordance with Section 8.1.1), or as required pursuant to the terms of the Agency Agreement or an order of
the Bankruptcy Court, at all times between the date of execution of this Agreement and the Closing, the Company shall not do or agree
to any of the following without first obtaining the Buyer's prior written consent, which consent may be withheld in the Buyer's sole and
absolute discretion: (i) terminate, amend, modify or assign any Designated Contract relating to the Designated Real Property
Interests (including, without limitation, the Other Property Documents) subsequent to the Closing Date; or (ii) sell, lease, encumber or
grant any interest in the Designated Real Property Interests or any part thereof in any form or manner whatsoever, or otherwise agree
to or enter into any agreement affecting the Designated Real Property Interests which will materially diminish or otherwise materially
and adversely affect the Buyer's interest in or to the Designated Real Property Interests subsequent to the Closing Date or which will
otherwise materially and adversely affect the Designated Real Property Interests after the Closing (including, without limitation, any
material use restrictions that would be binding upon the Buyer or the Designated Real Property Interests after the
Closing).

	Miscellaneous.
12.1.   Successors and Assigns.  No party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other party hereto, and any such attempted assignment without such prior
written consent shall be void and of no force and effect; provided, however, that the Buyer may, upon written notice
to the Company, assign its rights and obligations under this Agreement to one or more wholly-owned subsidiaries; and,
provided, further, that the Company may, upon written notice to the Buyer, assign its rights

                                                    23

and obligations under this
Agreement to any trustee appointed by the Bankruptcy Court.  This Agreement shall inure to the benefit of and shall be binding upon
the successors and permitted assigns of the parties hereto.

12.2.   Governing Law; Jurisdiction.  This Agreement shall be construed, performed and enforced in
accordance with, and governed by, the Laws of the State of Delaware (without giving effect to the principles of conflicts of laws thereof)
except that the transfer of the Real Property Interests shall be governed by the Laws of the State of California, and except to the extent
that the laws of such States are superseded by the Bankruptcy Code.  For so long as the Company is subject to the jurisdiction of the
Bankruptcy Court, the parties hereto irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in
connection with the Agreement, and consent to the exclusive jurisdiction of, the Bankruptcy Court.  After the Company is no longer
subject to the jurisdiction of the Bankruptcy Court, the parties hereto irrevocably elect as the sole judicial forum for the adjudication of
any matters arising under or in connection with this Agreement, and consent to the jurisdiction of, any state or federal court having
competent jurisdiction over the State of Delaware.

12.3.   WAIVER OF JURY TRIAL.  EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE DEFINITIVE TRANSFER AGREEMENTS AND ANY OF THE
ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT
MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.3.

12.4   Expenses.  Except as otherwise provided herein, each of the parties hereto shall pay its own
expenses in connection with this Agreement and the transactions contemplated hereby, including, without limitation, any legal and
accounting fees, whether or not the transactions contemplated hereby are consummated.  The Buyer shall pay the cost of all surveys,
title insurance policies and title reports ordered by the Buyer.

12.5.   Broker's and Finder's Fees.  Each of the parties represents and warrants that it has dealt with no
broker or finder in connection with any of the transactions contemplated by this Agreement other than, in the case of the Company,
DJM Asset Management, LLC, whose fees and expenses shall, as between the parties hereto, be the responsibility of the Company,
and, insofar as such party knows, no other broker or other person is entitled to any commission or finder's fee in connection with any of
the transactions contemplated hereby.

12.6.   Severability.  In the event that any part of this Agreement is declared by any court or other judicial
or administrative body to be null, void or unenforceable, said

                                                    24

provision shall survive to the extent it is not so declared, and all of the
other provisions of this Agreement shall remain in full force and effect only if, after excluding the portion deemed to be unenforceable,
the remaining terms shall provide for the consummation of the transactions contemplated hereby in substantially the same manner as
originally set forth at the later of the date this Agreement was executed or last amended.

12.7.   Notices

12.7.1.   All notices, requests, demands and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given: (A) on the date of service, if served personally on the party to whom notice is to be given; (B)
on the date of delivery or refusal, as confirmed by Federal Express or similar overnight courier or the Express Mail service maintained
by the United States Postal Service; or (C) on the date of delivery or refusal as evidenced by return receipt, if mailed to the party to
whom notice is to be given, by first class mail, registered or certified, return receipt requested, postage prepaid and properly addressed,
to the party as follows:

If to the Company:

Gottschalks Inc.

7 River Park Place East

Fresno, California 93729

Attention:James R. Famalette

Chairman and Chief Executive Officer

Facsimile:(559) 434-4666

With a copy to (which copy alone shall not constitute notice):

O'Melveny & Myers LLP

400 South Hope Street

Los Angeles, California 90071

Attention:C. James Levin, Esq., and Stephen H. Warren, Esq.

Facsimile:(213) 430-6407

With a copy to the Counsel to the Official Committee of Unsecured Creditors of the Company (which copy alone shall not constitute
notice):

Cooley Godward Kronish LLP

1114 Avenue of the Americas

New York, NY 10036

Attention:Lawrence C. Gottlieb, Esq., and Michael Klein, Esq.

Facsimile:(212) 479-6275

If to the Buyer:

Forever 21 Retail, Inc.

                                                    25

2001 S. Alameda Street

Los Angeles, California 90058

Attention:Lawrence H. Meyer

Executive Vice President

Facsimile:(213) 741-8860

With a copy to (which copy alone shall not constitute notice):

Latham & Watkins LLP

   355 South Grand Avenue

   Los Angeles CA 90071

   Attention: Peter M. Gilhuly, Esq.

   Facsimile:(213) 891-8763

With a copy to (which copy alone shall not constitute notice):

Alyssa Schaffer, Lease Administrator

25613 Gale Drive

Stevenson Ranch, CA 91381

Facsimile:(661) 260-1594

Email:alyssa@ansleasing.com

12.7.2.   Any party may change its address for the purpose of this Section 12.7 by giving the other
party written notice of its new address in the manner set forth above.

12.8.   Amendments; Waivers.  This Agreement may be amended or modified, and any of the terms,
covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties hereto,
or in the case of a waiver, by the party waiving compliance; provided, however, that the amendment or waiver of
Section 12.12 shall also require the written consent of GECC.  Any waiver by any party of any condition, or of the breach of
any provision, term, covenant, representation or warranty contained in this Agreement, in any one or more instances, shall not be
deemed to be or construed as a furthering or continuing waiver of any such condition, or of the breach of any other provision, term,
covenant, representation or warranty of this Agreement.

12.9.   Specific Performance.  The parties agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the
parties shall be entitled to specific performance of the terms hereof, this being in addition to any other remedies to which they are
entitled at law or equity.

12.10.   Time of Essence.  Time is of the essence in the performance of each and every term of this
Agreement.

12.11.   Entire Agreement.  This Agreement, the Definitive Transfer Agreements, and the Bid Procedures
contain the entire understanding between the parties hereto with respect to the transactions contemplated hereby and supersede and
replace all prior and

                                                    26

contemporaneous agreements and understandings, oral or written, with regard to such transactions.  All exhibits or
schedules hereto and any documents and instruments delivered pursuant to any provision hereof are expressly made a part of this
Agreement as fully as though completely set forth herein.

12.12   Security Interest.  Notwithstanding anything to the contrary contained
herein, the Company and the Buyer hereby acknowledge and agree that the security interests and liens in favor of GECC, in its
capacity as agent for the lenders (the "Lenders") party to that certain Senior Secured, Super-Priority, Debtor-in-
Possession Credit Agreement, dated as of January 16, 2009 (as amended or otherwise modified from time to time, the "DIP
Credit Agreement"), by and among the Company, the Lenders, GECC (in its capacity as a Lender and as agent for the
Lenders), and The CIT Group/Business Credit, Inc. (in its capacity as syndication agent), that are outstanding as of the Closing Date
under the DIP Credit Agreement, the other Loan Documents (as defined in the DIP Credit Agreement) and the Final Order (as defined
in the DIP Credit Agreement) (collectively, the "DIP Liens") shall attach (and be perfected) at Closing to the
Purchase Price with the same validity, force and effect as the same had with respect to the Designated Real Property Interests, subject
to the terms of the DIP Credit Agreement, the other Loan Documents and the Final Order. Notwithstanding anything to the contrary
herein, GECC is a third-party beneficiary of the agreements set forth in this Section 12.12 and may enforce this Agreement
directly.

12.13.   Parties in Interest.  Except as otherwise expressly provided in this Agreement, nothing herein
is intended to or shall confer any rights or remedies under or by reason of this Agreement on any persons other than the Company and
the Buyer and their respective successors and permitted assigns.  Nothing in this Agreement is intended to or shall relieve or discharge
the obligations or liability of any third persons to the Company or the Buyer.  This Agreement is not intended to nor shall it give any third
persons any right of subrogation or action over or against the Company or the Buyer.

12.14.   Headings.  The section headings in this Agreement are for reference purposes only and shall not
affect the meaning or interpretation of this Agreement.

12.15.   Counterparts and Facsimile.  This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute the same instrument.  The facsimile transmission of any original signed
counterpart of this Agreement, and the retransmission of any signed facsimile transmission, shall be treated for all purposes as the
delivery of an original signed counterpart.

 [Signature Page Follows]

                                                    27

Please confirm your acceptance of the foregoing by signing the enclosed copy of this Agreement in the space
provided below and returning the copy to the undersigned. We look forward to speaking with you about this Agreement. 

Very truly yours, 

FOREVER 21 RETAIL, INC.

By:    /s/ Do Won Chang

   Name:Do Won Chang

   Title:Chief Executive Officer

ACCEPTED AND AGREED 

   AS OF MAY 20, 2009:

GOTTSCHALKS INC.

By:/s/ James R. Famalette

       Name:James R. Famalette

       Title:Chairman and Chief Executive Officer

Copies to:

Mark D. Collins, Richards, Layton & Finger, P.A.

   Greg Ambro, Gottschalks Inc.

   Michael Jerbich, DJM Asset Management, LLC

   Peter M. Gilhuly, Heather L. Fowler, Latham & Watkins LLP 

   Lawrence Gottlieb, Michael Klein, Cooley Godward Kronish LLP 

   Robert A.J. Barry, Sandra J. Vrejan, Bingham McCutchen LLP

                                                    S-1

EXHIBIT A:  Fee Simple Interests

	
San Luis Obispo Promenade Property, 313 Madonna Road, San Luis Obispo, California 93405.

	
Yuba Sutter Mall Property, 905 Colusa Avenue, Yuba City, California 95991. 

	
Hanford Mall Property, 1673 West Lacey Blvd, Hanford, California 93230.

                                                    A-1

EXHIBIT B:  Leasehold Interests

Leases and all amendments thereto at the following locations:

	
Store No.
	
Property/Lease Description

	
03
	
Visalia, Shopping Center, 2211 S. Mooney Blvd, Visalia, California 93277.

	
04
	
Santa Maria, Shopping Center, 100 Town Center East, Santa Maria, California 93454.

	
05
	
Fashion Fair, Fresno, Shopping Center, 755 E. Shaw Avenue, Fresno, California 93710.

	
07
	
Chico, Shopping Center, 1962 East 20th Street, Chico, California 95928.

	
09
	
Sacramento, Country Club Plaza, Shopping Center, 2300 Watt Avenue, Sacramento, California 95825.

	
10
	
Bakersfield Valley Plaza, Shopping Center, 2801 Ming Avenue, Bakersfield, California 93304.

	
16
	
Modesto Vintage Fair, Shopping Center, 3401 Dale Road, Suite 200, Modesto, California 95356.

	
20
	
San Luis Obispo, Shopping Center, 313 Madonna Road, San Luis Obispo, California 93405.

	
39
	
Davis, Shopping Center, 875 Russell Blvd, #2, Davis, California 65616. 

	
42
	
Riverside, Shopping Center, 3635 Riverside Plaza, Riverside, California 92506.

	
45
	
Hemet, Shopping Center, 2200 W. Florida Ave, Hemet, California 92545.

	
66
	
Yakima, Shopping Center, 2533 Main Street, Union Gap, Washington 98903.

	
72
	
Dimond, Shopping Center, 800 E. Dimond Blvd, #1, Anchorage, AK 99515.

	
89
	
Riverpark, Shopping Center, 7890 N. Blackstone, Fresno, California 93720.

                                                   B-1

EXHIBIT C: Contracts

Contracts Relating to Fee Simple Interests

	
Store No.
	
Store Name
	
Agreement

	
14
	
Yuba City
	
Construction, Operation and Reciprocal Easement Agreement, The Mall at Yuba City, dated February 5, 1989, by
and between Yuba Plaza Associates, Ltd., J.C. Penney, Inc., Sears, Roebuck and Co. and Gottschalks, Inc.

Amendment No. 1 to Construction, Operation and Reciprocal Easement Agreement, The Mall at Yuba City, entered into December
6, 2002, by and between Yuba Plaza Associates, Ltd., J.C. Penney, Inc., Sears, Roebuck and Co. and Gottschalks, Inc.

Amendment No. 2 to Construction, Operation and Reciprocal Easement Agreement, Yuba Sutter Mall - Yuba City, California
(Formerly "The Mall at Yuba City"), entered into March 27, 2009, by and between Steadfast Yuba City I, LLC and Steadfast
Yuba City II, LLC, J.C. Penney, Inc., Sears, Roebuck and Co. and Gottschalks, Inc.

	
20
	
San Luis Obispo
	
Amended and Restated Construction, Operation and Reciprocal Easement Agreement, entered in as of July 30,
1999, by and among MBK Southern California, Ltd. (Successor in interest to MONY Life Insurance Company [formerly known as The
Mutual Life Insurance Company of New York], Gottschalk's, Inc. and Nesbitt Partners San Luis Obispo Venture Ltd.

	
29
	
Hanford
	
Construction, Operation and Reciprocal Easement Agreement, Hanford Mall, entered into January 30, 1992, by
and between Hanford Mall Associates, Gottschalks, Inc. and Mervyn's (Hanford Mall Associates, assigned its interest to Hanford Mall
Partners, L.P., pursuant to an Assignment of Operating Agreements, made as of January 27, 1998).

Amendment No. 1 to Construction, Operation and Reciprocal Easement Agreement, Hanford Mall entered into December 30, 1992,
by and between Hanford Mall Associates, Gottschalks, Inc., Mervyn's.

Amended and Restated Construction, Operation and Reciprocal Easement Agreement, Hanford Mall, entered into July 30, 1999, by
and between Hanford Mall Partners, L.P., Gottschalks, Inc., Mervyn's, and Sears, Roebuck and Co.

Separate Agreement, entered into 1992, by and between Gottschalks, Inc. and Hanford Mall Associates, L.P. (Hanford Mall
Associates, L.P. assigned its interest to Hanford Mall Partners, L.P., pursuant to an Assignment of Operating Agreements, made as of
January 27, 1998).

Contracts Relating to Leasehold Interests

	
Store No.
	
Store Name
	
Agreement

	
05
	
Fashion Fair
	
Second Amendment to and Restatement of Construction, Operation and Reciprocal Easement Agreements
(Fresno Fashion Fair), dated July 1, 1982, among Triple "F" Investments, The MacDonald Group, Ltd, Carter Hawley

                                                   C-1

	
 
	
 
	

Hale Stores, Inc., J.C. Penney Company, Inc., and R.H. Macy & Co., Inc., as amended.

Letter Agreement (re: Improvement Rent), dated May 15, 1998, between Macerich Fresno Limited Partnership, successor in
interest to MCA Fresno Associates, L.P., and Gottschalks, Inc.

	
07
	
Chico
	
Construction, Operation and Reciprocal Easement Agreement and Second Amendment to and Restatement of
Declaration of Easements (Chico Mall), dated September 30, 1992, by and between Chico Mall Associates and J.C. Penney Properties,
Inc.

	
09
	
Sacramento
	
Reciprocal Grant of Easements and Declaration of Establishment of Restrictions and Covenants Affecting Land
known as Country Club Plaza, dated December 31, 1968, by and among E. Phillip Lyon and Lillian Lyon, his wife,  and Sheldon M.
Gordon and Jane W. Gordon, his wife, as tenants in common, New York Life Insurance Company and Broadway-Hale Stores, Inc.,
Security Pacific National Bank, as Trustee for Continental Assurance Company, Beneficiary, W. Kevin Casey and James F. Thacher,
joint tenants, as Trustee for New England Mutual Life Insurance Company, Beneficiary under two deeds of trust, Western Title
Insurance Company, as Trustee for The Franklin Life Insurance Company, Beneficiary, as Trustee for Earl Cohen, Ida R. Cohen, his
wife, James J. Cordano, June Cordano, his wife, Norman L. Iverson and Marie K. Iverson, his wife, Sol Mindlin and Doris Mindlin, his
wife, Herbert L. Wallerstein, Jr., and Norma C. Wallerstein, his wife, Martin H. Webster and Miriam G. Webster, his wife, Beneficiaries,
J.C. Penney Company, Inc., Michael J. King and Gertrude Lucille King , his wife, and Burrell I. Lusk and Maybelle G. Lusk, his wife, as
amended.

	
10
	
Bakersfield Valley Plaza
	
Third Amendment to and Restatement of Declaration of Restrictions and Covenants Affecting Land and
Construction and Operating Agreement, dated as of May 13, 1987, among Valza Corp, Carter Hawley Hale Stores, Inc., J. C. Penney
Properties, Inc., Sears, Roebuck and Co., and The May Department Stores Company.

	
16
	
Modesto Vintage Fair
	
First Amendment to and Restatement of Construction, Operation and Reciprocal Easement Agreement (Modesto,
California) (Vintage Faire Associates), dated as of March 1, 1977, among Sears Roebuck and Co., J.C. Penney Company, Inc., R.H.
Macy & Co., Inc. and Carter Hawley Hale Stores, Inc.

	
20
	
San Luis Obispo
	
Amended and Restated Construction, Operation and Reciprocal Easement Agreement, entered in as of July 30,
1999, by and among MBK Southern California, Ltd. (successor in interest to MONY Life Insurance Company [formerly known as The
Mutual Life Insurance Company of New York], Gottschalk's, Inc. and Nesbitt Partners San Luis Obispo Venture Ltd.

	
72
	
Dimond
	
Agreement for Covenants, Conditions and Restrictions, dated April 6, 1990, by and between Joe C. Ashlock and
Patty Ashlock, husband and wife, and Dimond Center, Ltd.

 

 

                                                    C-2

EXHIBIT D: Purchase and Sale Agreement

PURCHASE AND SALE AGREEMENT

(California Property)

This Purchase and Sale Agreement (the "Agreement") is entered into by and between
Gottschalks Inc., a Delaware corporation ("Seller"), and Forever 21 Retail, Inc., a California corporation
("Buyer"), as of ____________, 2009 ("Effective Date"). This Agreement is entered into
pursuant to that certain Asset Purchase Agreement, dated as of May __, 2009 (the "APA"), by and between Seller
and Buyer.

RECITALS

WHEREAS, Seller owns certain real property commonly known as ________________ (the
"Land"), which is improved with one or more buildings, structures, "Immoveable Fixtures" (as
defined in the APA) and/or other improvements affixed to or located on the Land (the "Improvements"; the Land
and the Improvements are referred to as the "Property"), all as more particularly described herein; 

WHEREAS, pursuant to the APA, Seller has (among other matters) agreed to sell to Buyer, and Buyer has
(among other matters) agreed to purchase from Seller, all of Seller's interests in the Property; and

WHEREAS, on or before the date hereof, Buyer has opened an escrow ("Escrow") with
Chicago Title Insurance Company, 700 South Flower Street, Suite 800, Los Angeles, California 90017 ("Escrow
Holder"), through which Escrow the purchase and sale of the Property shall be consummated at Closing (as defined below)
in accordance with the terms and subject to the conditions set forth herein and in the APA;

NOW, THEREFORE, for and in good consideration, the sufficiency of which is hereby acknowledged, Buyer
and Seller agree as follows:

ARTICLE 1 

AGREEMENT OF SALE

1.1   Seller agrees to sell and Buyer agrees to purchase all of Seller's right, title and interests in and to the
Property described herein, including all Appurtenances (defined below) thereon, under the terms and conditions set forth in this
Agreement and in the APA.

1.2   The legal description of the Land is attached hereto as Exhibit "A".  

1.3   The term "Property" also includes:

1.3.1   all of Seller's privileges, rights and easements appurtenant to the Land, including without limitation all
minerals, oil, gas, and other hydrocarbon substances on and under the Land; all development rights, air rights, water, water rights, and
water stock relating to

                                                    D-1

the Land; all right, title, and interest of Seller in and to any streets, alleys, passages, water and sewer taps,
sanitary or storm drain capacity or reservations and rights under utility agreements, and other easements and other rights-of-way
included in, adjacent to or used in connection with the beneficial use and enjoyment of the Land (collectively, the
"Appurtenances");

1.3.2   all Immoveable Fixtures; and

1.3.3   subject to Buyer's obligation to pay any Cure Amounts applicable thereto in accordance with Section 1.3.1
of the APA, all intangible rights, entitlements and contract rights (including, but not limited to, any reciprocal easement agreements
associated with the Property), if any, owned by Seller and related to the Land and/or the Improvements (excluding all signage rights,
contracts related to advertising, rights to display or operate commercial advertising on the Land or the Improvements and other similar
rights) (collectively, the "Rights"), but only to the extent such Rights are assignable and not otherwise
rejected in connection with Seller's bankruptcy proceedings.

ARTICLE 2 

TITLE MATTERS

2.1   At the Closing (as defined below), Seller agrees to convey or cause to be conveyed to Buyer, and
Buyer agrees to accept, title to the Land and Improvements in such form as is provided for in the APA and that Chicago Title Company
(the "Title Company") is willing to insure.  In connection therewith, and in accordance with Section 1.1.2 of the APA,
Buyer has obtained and delivered to Seller prior to the Effective Date a commitment for title insurance from the Title Company, attached
hereto as Exhibit "B" (the "Title Commitment"), which Buyer and Seller hereby agree and acknowledge
to be in a form satisfactory to both parties.

2.2   In addition to Section 2.1 above, Buyer and Seller hereby agree and acknowledge that the
Property is to be transferred at the Closing free and clear of all liens (including, without limitation, monetary liens representing monies
owed), claims, encumbrances and security interests except for the "Permitted Exceptions" (as defined in the APA)
thereto, in accordance with Section 1.1.1 of the APA.

ARTICLE 3 

CLOSING DATE

Subject to the terms and conditions set forth herein and in the APA, the closing and the conveyance of title
under this Agreement (the "Closing") shall take place on such date (the "Closing Date") and at
such time and location as is permitted under the APA.

ARTICLE 4 

REPRESENTATIONS AND WARRANTIES; COVENANTS

4.1   Buyer hereby represents and warrants to Seller that it is a sophisticated real property buyer, that the
principals of Buyer are experienced in the ownership, operation and

                                                    D-2

management of retail-oriented non-residential real property and are
aware of the economic, market and political risks inherent in the ownership, operation and management of the Property, and that Buyer
does not rely on any representation of Seller (except as set forth in this Article 4 or Section 6 of the APA) but has instead
conducted a thorough independent due diligence inquiry of all material factors affecting the value and potential of the
property.

4.2   Seller hereby represents and covenants that from and after the Effective Date through the Closing Date,
Seller will maintain or cause to be maintained in full force and effect comprehensive general liability casualty and other insurance on the
Property in commercially reasonable amounts.

4.3   Seller hereby covenants to deliver the Property to Buyer in accordance with Section 7.3.2 of the
APA.

4.4   Notwithstanding anything contained in this Agreement to the contrary, except for any representations and
warranties expressly made by Seller in this Agreement or in the APA, it is understood and agreed that neither Seller nor any of its
respective agents, employees or contractors has made and is not now making, and Buyer has not relied upon and will not rely upon
(directly or indirectly), any warranties or representations of any kind or character, express or implied, oral or written, past, present or
future, with respect to the Property, including warranties or representations as to (a) matters of title, (b) environmental matters relating
to the Property or any portion thereof, (c) geological conditions, including subsidence, subsurface conditions, water table, underground
water reservoirs, limitations regarding the withdrawal of water and earthquake faults and the resulting damage of past and/or future
earthquakes, (d) whether, and to the extent to which, the Property or any portion thereof is affected by any stream (surface or under
ground), body of water, flood prone are, floodplain, floodway or special flood hazard, (e) drainage, (f) soil conditions, including the
existence of instability, past soil repairs, soil additions or conditions of soil fill, or susceptibility to landslides, or the sufficiency of any
undershoring, (g) zoning to which the Property or any portion thereof may be subject, (h) the availability of any utilities to the property or
any portion thereof including water, sewage, gas and electric, (i) usages of adjoining property; (j) access to the Property or any portion
thereof, (k) any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Property or any
part thereof, (l) the presence of hazardous substances in or on, under or in the vicinity of the Property, (m) the condition or use of the
Property or compliance of the Property with any or all past, present or future federal, state or local ordinances, rules, regulations or
laws, building, fire or zoning ordinances, codes or other similar laws, (n) the existence or non-existence of underground storage tanks,
(o) any other matter affecting the stability or integrity of the Property, (p) the potential for development of the Property, (q) the existence
of vested land use, zoning or building entitlements affecting the Property, (r) the merchantability of the Property or fitness or the
Property for any particular purpose (Buyer affirming the Buyer has not relied on the skill or judgment of Seller or any of its respective
agents, employees or contractors to select or furnish the Property for any particular purpose, and that Seller makes no warranty that the
Property is fit for any particular purpose), or (s) tax consequences (including the amount, use or provisions relating to any tax credits).
Buyer further acknowledges that any information of any type which Buyer has received or may receive from Seller or any of its
respective agents, employees or contractors, including any environmental reports and surveys, is furnished on the express condition
that Buyer shall not rely thereon, but

                                                    D-3

shall make an independent verification of the accuracy of such information, all such information
being furnished without any representation or warranty whatsoever. 

4.5   The representations set forth in this Article 4 shall survive Closing and delivery of the Deed (as
defined below) for a period of thirty (30) days.  Following such thirty (30) day period, neither party shall bring a claim against the other
party for any violation or misrepresentation of any representation or warranty in this Article 4.

ARTICLE 5 

CLOSING

5.1   Buyer and Seller shall promptly on the Escrow Holder's request execute such additional escrow
instructions as are reasonably required to consummate the transactions contemplated by this Agreement and are not inconsistent with
this Agreement.

5.2   At the Closing, Seller shall deliver or cause to be delivered to the Escrow Holder the following:

5.2.1   The duly executed and acknowledged deed, in the form attached hereto as Exhibit "C" (the
"Deed"), conveying the portions of the Property which constitute real property under California law to Buyer subject
only to the Permitted Exceptions;

5.2.2   A duly executed and acknowledged instrument in the form attached hereto as Exhibit "D"
("Bill of Sale") conveying the Immoveable Fixtures and any other portions of the Property (other than the Rights)
which do not constitute real property under California law to Buyer;

5.2.3   A duly executed assignment and assumption agreement (the "Assignment of Contracts and
Intangibles") in the form attached hereto as Exhibit "E" conveying the Rights under California law to
Buyer;

5.2.4   Certificates required by  1445 of the Internal Revenue Code of 1986 in the form attached hereto as Exhibit
"F", and the California Revenue and Taxation Code  18815 in a form reasonably agreed to by the parties, each executed by
Seller (collectively "Nonforeign Certifications"), to relieve Buyer of any potential transferee's withholding liability
under such statutes; 

5.2.5   Such affidavits as may be customarily and reasonably required by the Title Company; 

5.2.6   An executed closing statement reasonably acceptable to Seller; and 

5.2.7   Such additional documents, including written Escrow instructions consistent with this Agreement, as may
be necessary or desirable to convey the Property in accordance with this Agreement.

                                                    D-4

5.3   At the Closing, Buyer shall deliver or cause to be delivered to the Escrow Holder the following:

5.3.1   Such proof of Buyer's authority and authorization to enter into and perform under this Agreement, and such
proof of power and authority of the individuals executing or delivering any instruments, documents, or certificates on behalf of Buyer to
act for and bind Buyer as may reasonably be required by Seller and the Escrow Holder;

5.3.2   Such other instruments and documents, including written Escrow instructions consistent with this
Agreement, as may be reasonably required to consummate the transaction in accordance with this Agreement.

5.4   Following the Escrow Holder's receipt of (a) all documents identified in Sections 5.2 and
5.3, (b) the Closing Consideration (as defined in the APA) in accordance with Section 4.5 of the APA, (c) written confirmation
from the Title Company that it is ready, willing, and able to issue the Title Policy (as defined in the APA), and (d) all written instructions
required to be delivered to the Escrow Holder by Buyer, by Seller and by Buyer and Seller jointly at or before Closing in accordance
with the terms of the APA, then, and only then, the Escrow Holder shall close Escrow by:

5.4.1   Recording the Deed;

5.4.2   Confirming the Title Company's issuance of the Title Policy to Buyer; and

5.4.3   Delivering to Buyer the Bill of Sale, the Assignment of Contracts and Intangibles, the Nonforeign
Certification and copies of all recorded documents related to the transfer or encumbering of the Property.

Thereafter, Escrow Holder shall deliver signed closing statements showing all receipts and disbursements to
Buyer and Seller and shall file with the Internal Revenue Service (with copies to Buyer and Seller) any required reporting
statements.

ARTICLE 6 

RISK OF LOSS

6.1   Except as otherwise provided for in the APA, the risk of loss or damage to the Property by fire or other
casualty, until Closing, is assumed by Seller, but without any obligation of Seller to repair or replace any such loss or damage unless
Seller elects to do so as hereinafter provided. Seller shall notify Buyer of the occurrence of any such loss or damage to the Property
within 10 days after such occurrence but in any event no less than three (3) business days prior to the date of Closing, whichever first
occurs; provided, however, that in the event such loss or damage occurs within three (3) business days of the
Closing, Seller shall notify Buyer thereof as soon as is reasonably practicable in advance of the Closing, and by such notice shall state
whether or not Seller elects to repair or restore the Property, as the case may be. If Seller elects to make such repairs and restorations,
Seller's notice shall set forth an adjourned date for the Closing, which shall be not more than 60 days after the date of the giving of
Seller's notice. If Seller either does not elect to do so or, having elected to make such repairs and restorations, fails

                                                    D-5

to complete the
same on or before said adjourned date for the Closing, Buyer may by written notice to Seller in advance of the Closing elect to (i)
complete the purchase of the Property in accordance with this Agreement, or (ii) elect to terminate this Agreement without penalty and
abandon the purchase of the Property (but not terminate the APA or the other Definitive Transfer Agreements (as defined in the APA)
or abandon the other transactions contemplated thereby), in each case without reduction in the Purchase Price (as defined in the APA).
In the event Buyer elects to complete the purchase of the Property as contemplated in clause (i) above, and Seller carries hazard
insurance covering such loss or damage, Seller shall (A) pay any insurance deductible in connection therewith to Buyer at Closing, and
(B) assign to Buyer all of Seller's right, title and interest in and to any claims and proceeds Seller may have with respect to any casualty
insurance policies or condemnation awards which are attributable to the loss of or damage to all or any part of the Property, and shall
turn over to Buyer at the Closing the net proceeds actually collected by Seller under the provisions of such hazard insurance policies to
the extent that they are attributable to loss of or damage to the Property, less any sums theretofore expended by Seller in repairing or
replacing such loss or damage or in collecting such proceeds.

6.2   If notice of any action, suit or proceeding shall be given after the date hereof but prior to the Closing for the
purpose of a material taking in eminent domain or condemning any material part of the Property, then the award with respect to such
condemnation, taking or change, except for any expense theretofore incurred by Seller for restoration or safety in connection therewith
(which sum shall be reimbursed by Buyer to Seller at Closing), shall be assigned (without representation or warranty by or recourse
against Seller) to Buyer without further consideration, and this Agreement shall continue in full force and effect without any modification
or abatement of the Purchase Price or any liability or obligation on the part of Seller by reason of such taking, and the definition of
"Property" shall be accordingly amended.

ARTICLE 7 

"AS IS" PURCHASE; RELEASE

7.1   Except as otherwise provided for in this Agreement or in the APA, and as a material inducement to
Seller's execution and delivery of this Agreement and performance of its duties under this Agreement: BUYER HAS AGREED TO
ACCEPT POSSESSION OF THE PROPERTY ON THE CLOSING DATE ON AN "AS IS" BASIS.  SELLER AND BUYER
AGREE THAT THE PROPERTY SHALL BE SOLD "AS IS, WHERE IS, WITH ALL FAULTS" WITH NO RIGHT OF SET-
OFF OR REDUCTION IN THE PURCHASE PRICE (EXCEPT AS PROVIDED IN SECTION 3.1.1 OF THE APA), AND, EXCEPT AS
SET FORTH IN SECTION 6.1 OF THE APA OR ARTICLE 4 OF THIS AGREEMENT, SUCH SALE SHALL BE WITHOUT
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED (INCLUDING, WITHOUT LIMITATION, WARRANTY
OF INCOME POTENTIAL, OPERATING EXPENSES, USES, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE),
AND SELLER DISCLAIMS AND RENOUNCES ANY SUCH REPRESENTATION OR WARRANTY.

7.2   Except as otherwise specifically provided for in this Agreement or in the APA, effective from and after the
Closing, Buyer hereby waives, releases, acquits, and forever

                                                    D-6

discharges Seller, and Sellers agents, directors, officers, and employees
to the maximum extent permitted by law, of and from any and all claims, actions, causes of action, demands, rights, liabilities, damages,
losses, costs, expenses, or compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, that it now has or
that may arise in the future because of or in any way growing out of or connected with the APA, this Agreement and the Property
(including without limitation the condition of the Property), except matters arising from Seller's fraud or intentional misrepresentation.
BUYER EXPRESSLY WAIVES ITS RIGHTS GRANTED UNDER CALIFORNIA CIVIL CODE  1542 AND ANY OTHER PROVISION
OF LAW THAT PROVIDES A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT BUYER DOES NOT KNOW OR
SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY IT MUST HAVE
MATERIALLY AFFECTED ITS AGREEMENT TO RELEASE SELLER.

Seller and Buyer have each initiated this Section 7.2 to further indicate their awareness and
acceptance of each and every provision of this Agreement.  The provisions of this Section 7.2 shall survive the Closing.

Seller's Initials:  _____

Buyer's Initials:  _____

ARTICLE 8 

MISCELLANEOUS

8.1   Buyer agrees that it shall not record this Agreement or any memorandum hereof.  If Buyer violates the
provisions of the preceding sentence, Buyer shall promptly thereafter cause all such recordings to be duly removed of record promptly,
at its sole cost and expense.

8.2   This Agreement is entered into after full investigation, neither party relying upon any statement or
representations made by Seller or Buyer or anyone else not embodied in this Agreement or the APA.   

8.3   This Agreement and the exhibits attached hereto, as well as the APA, contain the entire understanding
between the parties hereto with respect to the transactions contemplated hereby and supersede and replace all prior and
contemporaneous agreements and understandings, oral or written, with regard to such transactions; provided,
however, that this Agreement is subject in all respects to the terms and conditions of the APA and, in the event of any conflict
with or inconsistency between this Agreement and the APA, the APA shall control.  All exhibits or schedules hereto and any documents
and instruments delivered pursuant to any provision hereof are expressly made a part of this Agreement as fully as though completely
set forth herein.  This Agreement may be amended or modified, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party
waiving compliance.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of
which together shall constitute one and the same instrument.

                                                    D-7

8.4   Failure of either party to object to any act or omission on the part of the other party, no matter how long the
same may continue, shall not be deemed to be a waiver by such party of any of its rights hereunder unless expressly provided to the
contrary herein.  Any waiver by any party of any condition, or of the breach of any provision, term, covenant, representation or warranty
contained in this Agreement, in any one or more instances, shall not be deemed to be or construed as a furthering or continuing waiver
of any such condition, or of the breach of any other provision, term, covenant, representation or warranty of this Agreement.

8.5   In the event that any part of this Agreement is declared by any court or other judicial or administrative body
to be null, void or unenforceable, said provision shall survive to the extent it is not so declared, and all of the other provisions of this
Agreement shall remain in full force and effect only if, after excluding the portion deemed to be unenforceable, the remaining terms
shall provide for the consummation of the transactions contemplated hereby in substantially the same manner as originally set forth at
the later of the date this Agreement was executed or last amended.

8.6   None of the provisions, representations, warranties, covenants and agreements of this Agreement shall
survive the Closing and delivery of the Deed or earlier termination of this Agreement unless expressly provided herein to the contrary;
provided, however, that notwithstanding the foregoing, this Article 8 shall survive the Closing and delivery of
the Deed or earlier termination of this Agreement.

8.7   Time is of the essence in the performance of each and every term of this Agreement.

8.8   In the event of any action or proceeding to enforce a term or condition of this Agreement, any alleged
disputes, breaches, defaults, or misrepresentations in connection with any provision of this Agreement or any action or proceeding in
any way arising from this Agreement, the prevailing party in such action, or the non-dismissing party when the dismissal occurs other
than by a settlement, shall be entitled to recover the reasonable costs and expenses, including without limitation reasonable attorney
fees and costs of defense paid or incurred in good faith.  The "prevailing party," for purposes of this Agreement, shall be
deemed to be that party who obtains substantially the result sought, whether by settlement, dismissal, or judgment.

8.9   This Agreement is binding upon and made solely for the benefit of Seller, Buyer and their respective heirs,
personal representatives, successors and permitted assigns. Nothing in this Agreement is intended to or shall confer any rights or
remedies under or by reason of this Agreement on any persons other than Seller and Buyer and their respective successors and
permitted assigns.  Nothing in this Agreement is intended to or shall relieve or discharge the obligations or liability of any third persons
to Seller or Buyer.  This Agreement is not intended to nor shall it give any third persons any right of subrogation or action over or
against Seller or Buyer. 

8.10   No party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto, and any such attempted assignment without such prior written consent shall be void and of no force
and effect; provided, however, that Buyer may, upon written notice to Seller, assign its rights and obligations under this

                                                    D-8

Agreement to one or more wholly-owned subsidiaries; and, provided, further, that Seller may, upon written notice
to Buyer, assign its rights and obligations under this Agreement to any trustee appointed by United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court").  This Agreement shall inure to the benefit of and shall be binding
upon the successors and permitted assigns of the parties hereto. Notwithstanding the foregoing, no such assignment shall release
Buyer from any obligation or covenant hereunder.

8.11  The section headings in this Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.

8.12   All notices, requests, demands and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given: (A) on the date of service, if served personally on the party to whom notice is to be given; (B)
on the date of delivery or refusal, as confirmed by Federal Express or similar overnight courier or the Express Mail service maintained
by the United States Postal Service; or (C) on the date of delivery or refusal as evidenced by return receipt, if mailed to the party to
whom notice is to be given, by first class mail, registered or certified, return receipt requested, postage prepaid and properly addressed,
to the party as follows:

If to Seller:

Gottschalks Inc.

7 River Park Place East

Fresno, California 93729

Attention:James R. Famalette

Chairman and Chief Executive Officer

Facsimile:(559) 434-4666

With a copy to (which copy alone shall not constitute notice):

O'Melveny & Myers LLP

400 South Hope Street

Los Angeles, California 90071

Attention:C. James Levin, Esq., and Stephen H. Warren, Esq.

Facsimile:(213) 430-6407

With a copy to the Counsel to the Official Committee of Unsecured Creditors of the Company (which copy alone shall not constitute
notice):

Cooley Godward Kronish LLP

   1114 Avenue of the Americas

   New York, NY 10036

   Attention:Lawrence C. Gottlieb, Esq., 

Michael Klein, Esq.

   Facsimile:(212) 479-6275

If to Buyer:

Forever 21 Retail, Inc.

                                                    D-9

2001 S. Alameda Street

Los Angeles, California 90058

Attention:Lawrence H. Meyer

Executive Vice President

Facsimile:(213) 741-8860

With a copy to (which copy alone shall not constitute notice):

Latham & Watkins LLP

   355 South Grand Avenue

   Los Angeles, California 90071

   Attention: Peter M. Gilhuly, Esq.

   Facsimile:(213) 891-8763

If to Escrow Holder:

Chicago Title Insurance Company

700 South Flower Street, Suite 800

Los Angeles, California 90017

Attention:Lizeth Villalobos

                        Maurice Neri

Facsimile:(213) 612-4116

8.13   This Agreement shall be governed by the laws of the State of California, without cognizance to conflicts of
laws rules, except to the extent that the laws of such State are superseded by the United States Bankruptcy Code. For so long as Seller
is subject to the jurisdiction of the Bankruptcy Court, the parties hereto irrevocably elect as the sole judicial forum for the adjudication of
any matters arising under or in connection with the Agreement, and consent to the exclusive jurisdiction of, the Bankruptcy Court.  After
Seller is no longer subject to the jurisdiction of the Bankruptcy Court, the parties hereto irrevocably elect as the sole judicial forum for
the adjudication of any matters arising under or in connection with this Agreement, and consent to the jurisdiction of, any state or
federal court having competent jurisdiction over the State of California.

8.14   In the event of any reduction in the assessed valuation of the Property for the fiscal year in which title
closes or for fiscal years ending prior the Closing, the net amount of any tax savings shall (a) with respect to fiscal years ending prior
the Closing, be payable to Seller, and (b) with respect to the fiscal year in which the Closing shall occur, after deduction of expenses
and attorneys' fees, be adjusted between Seller and Buyer in accordance with Section 9 of the APA.

8.15   This Agreement has been executed after negotiation and the opportunity by both parties to have this
Agreement reviewed and revised by legal counsel of their choice.  None of the provisions of this Agreement shall be interpreted or
construed against a party hereto solely by virtue of the fact that any such provision shall have been drafted by legal counsel
representing such party.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

                                                    D-10

	 	 	
SELLER:

	 	 	
GOTTSCHALKS INC., a Delaware corporation

	 	 	
By: ______________________

Name: _______________________

Title: _____________________

	 	 	
BUYER:

	 	 	
FOREVER 21 RETAIL, INC., a California corporation

	 	 	
By: ______________________

Name: _______________________

Title: _____________________

 

                                                    D-11

EXHIBIT E: Assumption and Assignment Agreement

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

Forever 21 Retail, Inc.

   Attn: Lawrence Meyer

   2001 S. Alameda Street

   Los Angeles, California 90058

(Above Space for Recorder's Use Only)

ASSIGNOR MAY HAVE CLAIMS UNDER THE

LEASES FOR CHARGES PAID BY THE

ASSIGNOR WHICH CLAIMS MAY BE

DISPUTED.  THESE CLAIMS WILL BE RETAINED

BY ASSIGNOR.

AGREEMENT OF ASSUMPTION AND ASSIGNMENT OF LEASE

THIS ASSUMPTION AND ASSIGNMENT AGREEMENT (this "Agreement") is
made as of this ___ day of __________, 2009, by and between Gottschalks Inc., a Delaware corporation having its offices located at 7 River Park Place, Fresno,
California 93720 ("Assignor"), and Forever 21 Retail, Inc., a California corporation, having its offices located at
2001 S. Alameda Street, Los Angeles, California 90058 ("Assignee").

I.The Lease

Assignor, a debtor in possession, is a tenant under those certain
Leases (collectively, the "Leases") described on Exhibit A attached hereto and incorporated herein (as the same may have been amended, supplemented or extended from time to time) together with the
Designated Contracts (as defined in the APA (defined below) and as set forth on Exhibit B), for the
premises located at the addresses set forth on Exhibit A and more specifically described in each Lease (collectively, the "Premises").  The landlord under each Lease is set forth on Exhibit A
("Landlord").

II.Assignor's Bankruptcy Case

Assignor has filed proceedings under Chapter 11 of the Title 11 of the United States Code, 11
U.S.C.    101 - 1330 (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court").  Assignor continues to operate its business and manage its properties as a
debtor-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code.  No trustee has been appointed in Assignor's Chapter 11
case.

                                                    E-1

 On _________, 2009, an auction of certain of Assignor's leases was conducted in accordance with an
order entered by the Bankruptcy Court on _________, 2009 (Docket No. ____) (the "Procedures Order")
establishing procedures for the sale of Assignor's remaining unexpired nonresidential real property leases at auction pursuant to
Sections 105, 363 and 365 of the Bankruptcy Code and Rules 6004 and 6006 of the Federal Rules of Bankruptcy Procedure, and
Assignee was determined to be the Successful Bidder at the auction for the Leases.

Assignor proposes to sell and Assignee to purchase all of Assignor's rights title and interest in, to and
under the Leases and certain fee simple properties pursuant to an Asset Purchase Agreement dated May __, 2009 between Assignor
and Assignee (the "APA").  Assignor and Assignee are asking the Bankruptcy Court to approve the assumption of
the Leases by Assignor and the assignment thereof to Assignee pursuant to the terms of the APA at a hearing scheduled for
_________, 2009 (the "Sale Hearing").  

III.Assignor's Assignment of the Leases

Assignee desires to have Assignor assign to it, pursuant to section 365(f) of the Bankruptcy
Code, on the terms and conditions set forth herein and in the APA, all of
Assignor's right, title and interest of any kind or nature in and to the Leases and the Designated Contracts including, without limitation, the right to possession.

NOW, THEREFORE, pursuant to the terms
set forth below and for the consideration set forth below, the parties hereto agree as follows:

A.  Assignment.  As of the Closing Date (as defined in the APA), Assignor hereby assumes the
Leases and Designated Contracts pursuant to 11 U.S.C. Section 365.  As of the Closing Date, Assignor assigns, transfers, conveys
and sets over unto Assignee, its successors and assigns, all of Assignor's right, title, and interest in, to and under the Leases and Designated
Contracts including, without limitation, all of Assignor's right, title and interest in the buildings and improvements located on each
Premises and in and to all security deposits made by Assignor under the Leases, for the remainder of each Lease or Designated Contract term (the "Assignment") and Assignee hereby accepts the
Assignment.  Assignee hereby recognizes and acknowledges that each Landlord's right to full performance of all terms, conditions and
covenants of the applicable Lease remains in effect on and after the Closing Date.  Except to the extent otherwise agreed in writing by
the applicable Landlord or as modified by the Sale Order (defined below), Assignee and its successors and
assigns hereby accepts the foregoing assignment and assumes all of the terms, conditions and covenants of each applicable Lease as tenant under such Lease.  Further, pursuant to section 365(f) of the Bankruptcy
Code, on and after the Closing Date, Assignor and its estate shall be relieved from any liability for any breach of any Lease occurring
after the Closing Date, and Assignee agrees to indemnify, defend and hold Assignor harmless from and against (i) any default in the
performance of such terms, conditions and covenants occurring after the Closing Date for any default resulting
from Assignee's action or non-action or (ii) against any expense, loss, damage, claim, causes of action, and demand arising out of
or connected with Assignee's breach under any Lease after the Closing Date.
To the extent any Landlord and Assignor have agreed to the cure amount as full satisfaction of such Landlord's claim for monies owed
under the applicable Lease by Assignor, payment of such amount by Assignor to such Landlord together with the assumption and

                                                    E-2

assignment of such Lease to Assignee pursuant to this Agreement shall relieve Assignee of all liability arising under such Lease on
account of any and all claims or defaults accruing prior to the Closing Date.

B.Consideration.  Assignee and Assignor agreed to the
transactions contemplated in the APA that included the purchase of certain fee simple interests in addition to the Leases and
Designated Contracts (collectively, the "Real Property Interests").  The total
consideration to be paid by Assignee to Assignor (the "Purchase Price") for the Real
Property Interests is Seventeen Million Seven Hundred Thousand Dollars ($17,700,000.00) as set forth in the APA.    

C.Bankruptcy Court Approval.  This Agreement is contingent upon Assignor obtaining an order of the Bankruptcy Court (the "Sale Order") authorizing: (1) Assignor to enter into
this Agreement and, (2) the assumption and assignment of the Leases and Designated Contracts pursuant hereto.  Assignor shall promptly make reasonable efforts to obtain
approval of the Assignment at the Sale Hearing.  

D.Free and Clear of Liens and Encumbrances.  Upon entry of the Sale Order, each Lease shall be free and clear of any liens, security interests, pledges or other interests,
all such interests to attach to the proceeds paid to Assignor by Assignee.

E.Adequate Assurance Data.  As a condition of the bidding
procedures approved by the Bankruptcy Court (the "Bidding Procedures") and in compliance with said Bidding
Procedures, prior to or with the execution of this Agreement, Assignee has supplied Assignor with: (i) the full name and identity of the
proposed Assignee of each Lease; (ii) a current financial statement or such other proof of financial condition of the proposed Assignee
or guarantor, if any; and (iii) a written statement of the proposed Assignee's
expected use of each Premises.  Assignee hereby accepts and agrees to be bound by the applicable bid
procedures set forth in the Bidding Procedures. 

F.Use.   Assignee shall use the Premises for such purposes as are authorized under the
Lease or applicable law.  More specifically, Assignee intends to use the Premises for the purpose set forth on Exhibit A.

G.Possession.  Assignor agrees to provide Assignee with possession of each Premises on
the later of (A) the Closing Date and (B) the earlier of (i) the date that is ten (10) business days following the
conclusion of the GOB Sale (as defined in the APA), or (ii) July 31, 2009.

H.Initial Rent.  Assignee shall be responsible for, and shall pay, rent and
other obligations and charges due under each Lease to the applicable Landlord (in accordance with the terms of each Lease) as
provided in Section 1.2 of the APA. 

I.Commission.  With the exception of consulting fees payable
by Assignor to DJM Asset Management, LLC, any commission due and payable as a result of this Agreement shall be paid by
Assignee.  Assignee hereby indemnifies Assignor and its estate for any claims of brokerage or other fees, other than that made by DJM
Asset Management, LLC. 

                                                    E-3

J.Miscellaneous.

(1)This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware and to the extent permissible and not inconsistent with the laws of the State of Delaware, under the laws of the state where
the Premises are located.  The parties agree that the Bankruptcy Court shall
have exclusive jurisdiction over any disputes hereunder, and they each hereby consent to such jurisdiction.

(2)This Agreement, together with the APA, sets forth the entire agreement and understanding of
the parties with respect to the transactions contemplated hereby and supersedes any prior instruments, arrangements and
understandings relating to the subject matter hereof, except each Lease and all amendments thereto.  In the event of any
inconsistencies between this Agreement and the APA, the APA shall control. 

(3)This Agreement may be executed with counterpart signature
pages or in more than one counterpart, all of which shall be deemed one and the same agreement, and shall become effective when
one or more counterparts have been signed by each of the parties and delivered to all the parties.

(4)Any notice, demand, request or
other communication that any party hereto may be required or may desire to give hereunder ("Notice" or
"Notices") shall be in writing and shall be given as follows: (a) by hand delivery or (b) by overnight mail via Federal Express or other reputable express courier service:

If to Assignor:
Gottschalks Inc.

7 River Park Place

Fresno, CA 93720

Attention:Greg Ambro

Telephone:(559) 434-4744

Facsimile:(559) 434-4666

with a copy to:

O'Melveny & Myers LLP

400 South Hope Street

Los Angeles, CA 90071

Attention: James Levin, Esq.

Telephone:(213) 430-6578

Facsimile:(213) 430-6407

Attention: Steven H. Warren, Esq.

Telephone:(213) 430-7875

Facsimile:(213) 430-6407

                                                    E-4

With a copy to the Counsel to the Official Committee of Unsecured Creditors of the Company (which copy alone shall not constitute
notice):

Cooley Godward Kronish LLP

   1114 Avenue of the Americas

   New York, NY 10036

   Attention:Lawrence C. Gottlieb, Esq.

   Michael Klein, Esq.

   Facsimile:(212) 479-6275

If to Escrow Agent:

Chicago Title Insurance Company

700 South Flower Street, Suite 800

Los Angeles, California 90017

Attention:Lizeth Villalobos

Maurice Neri

Facsimile:(213) 612-4116

If to Assignee:

Forever 21 Retail, Inc.

2001 S. Alameda Street

Los Angeles, California 90058

Attention:  Lawrence Meyer

Facsimile:(213) 741-8860

with a copy to:

Latham & Watkins LLP

355 South Grand Avenue

Los Angeles, California 90071-1560

Attention:  Peter M. Gilhuly, Esq.

Facsimile:(213) 891-8763

with a copy to:

Alyssa Schaffer, Lease Administrator

25613 Gale Drive

Stevenson Ranch, CA 91381

Facsimile:(661) 260-1594

or at such other address or to such other addressee or to such other facsimile number as the party to
be served with Notice shall have furnished in writing to the party seeking or desiring to serve Notice as a place for the service of Notice.
Notices shall be deemed to have been received (a) on the next business day if given by overnight mail, or (b) on the same day, if given
by hand delivery.

                                                    E-5

IN WITNESS WHEREOF, this Assignment has been duly executed this ______ day of _________, 2009.

	
ASSIGNOR:

	
GOTTSCHALKS INC.,

a Delaware corporation

 

 
By:__________________________

Name:

Title:

	
ASSIGNEE:

	
FOREVER 21, INC.,

                a California corporation

 

 
By:__________________________

Name:

Title:

                                                    E-6

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