Ninth Amendment to Loan and Security Agreement between Gottschalks Inc. and Congress Financial Corporation (Western)

Summary

This amendment is between Gottschalks Inc. and Congress Financial Corporation (Western). It updates their existing Loan and Security Agreement to reinstate the terms of a previous amendment, following the dismissal of a legal appeal related to Gottschalks' purchase of store locations from Lamonts Apparel, Inc. The amendment removes a provision that made the prior amendment ineffective if an appeal was filed, and confirms that all other lender rights remain unchanged. The agreement ensures the continued effectiveness of the loan terms as previously amended.

EX-10.43 3 0003.txt NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT THIS NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment"), dated as of June 28, 2000, is entered into between CONGRESS FINANCIAL CORPORATION (WESTERN), a California corporation ("Lender"), and GOTTSCHALKS INC., a Delaware corporation ("Borrower"), with its corporate office located at 7 River Park Place East, Fresno, California 93720. RECITAL A. Borrower and Lender have previously entered into that certain Loan and Security Agreement dated December 20, 1996, as amended by the First Amendment to Loan and Security Agreement, dated as of August 20, 1998, the Second Amendment to Loan and Security Agreement, dated as of September 1, 1998, the Third Amendment to Loan and Security Agreement, dated as of December 18, 1998, the Fourth Amendment to Loan and Security Agreement, dated as of January 29, 1999, the Fifth Amendment to Loan and Security Agreement, dated as of March 1, 1999, the Sixth Amendment to Loan and Security Agreement, dated as of August 12, 1999, the Seventh Amendment to Loan and Security Agreement, dated as of March 27, 2000 and the Eighth Amendment to Loan and Security Agreement, dated as of May 19, 2000 (as amended, supplemented or modified from time to time, the "Loan Agreement"), pursuant to which Lender has made certain loans and financial accommodations available to Borrower. Terms used herein without definition shall have the meanings ascribed to them in the Loan Agreement. B. Borrower is purchasing 37 store locations, together with the associated leases, machinery, equipment, installations, furniture, tools, spare parts, supplies and maintenance equipment (collectively, the "Lamonts Purchased Store"), from Lamonts Apparel, Inc., a Delaware corporation, in its capacity as debtor-in-possession in Case No. 00-00045 (TTG) (the "Bankruptcy Case") in the United States Bankruptcy Court for the Western District of Washington (the "Bankruptcy Court"), and is assuming the leases and certain other contracts with respect to the Lamonts Purchased Stores, all in accordance with the Asset Purchase Agreement dated as of April 24, 2000 between Lamonts Apparel, Inc. and Borrower previously given to Lender (the "Purchase Agreement"). C. The Bankruptcy Court issued an Order approving the transfer to Borrower of good and marketable title to the Lamonts Purchased Stores and all assets related thereto free and clear of any liens and encumbrances (the "Order") on May 16, 2000, which Order was acceptable to Lender. D. An appeal of the Order was filed on May 26, 2000, which appeal abrogated the effectiveness of the Eighth Amendment pursuant to the terms of paragraph 5 thereof. Such appeal was dismissed by a "Stipulation and Order Dismissing With Prejudice Appeal By Alamo Group and Troutman Investment Company" entered in the United States District Court, Western District of Washington on June 28, 2000. E. In light of the dismissal of the appeal of the Order as described above, Lender and Borrower wish to amend the Loan Agreement to reinstate the provisions of the Eighth Amendment, except the provisions of paragraph 5 of the Eighth Amendment abrogating the effectiveness of the Eighth Amendment immediately upon the filing of an appeal of the Order. The parties by this Ninth Amendment intend to remove the provisions of such paragraph 5 of the Eighth Amendment and to make the other provisions of the Eighth Amendment effective as of May 19, 2000, all under the terms and conditions set forth in this Amendment and the Eighth Amendment (excluding such paragraph 5). Lender and Borrower are entering into this Amendment with the understanding and agreement that, except as specifically provided herein, none of Lender's rights or remedies as set forth in the Loan Agreement is being waived or modified by the terms of this Amendment. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree: (1) to remove the provisions of such paragraph 5 of the Eight Amendment and to make the other provisions of the Eighth Amendment effective as of May 19, 2000; (2) all conditions to the effectiveness of the Eighth Amendment (except such paragraph 5) are conditions to the effectiveness of this Ninth Amendment; and (3) except as specifically provided herein, none of Lender's rights or remedies as set forth in the Loan Agreement is being waived or modified by the terms of this Amendment. IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written. BORROWER Gottschalks INC., a Delaware corporation By: /s/ Michael S. Geele Title: SVP/CFO LENDER CONGRESS FINANCIAL CORPORATION (WESTERN), a California corporation By: /s/ Kristine Metchikian Title: Vice President