EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Eighth Amendment")
is entered into as of October 11, 1995 by and between Shawmut Capital
Corporation, a Connecticut corporation, as successor-in-interest to Barclays
Business Credit, Inc., a Connecticut corporation ("Lender"), and Gottschalks,
Inc., a Delaware corporation ("Borrower"), with reference to the following
facts:
RECITALS
A. Lender and Borrower entered into that certain Loan and Security
Agreement, dated as of March 30, 1994, as amended by (i) that certain First
Amendment to Loan and Security Agreement dated as of May 12, 1994, (ii) that
certain Second Amendment to Loan and Security Agreement dated as of October 12,
1994, (iii) that certain Third Amendment dated as of October 12, 1994, dated
as of December 30, 1994, (iv) that certain Fourth Amendment to Loan and
Security Agreement dated as of March 22, 1995, (v) that certain Fifth Amendment
to Loan and Security Agreement dated as of March 31, 1995, (vi) that certain
Sixth Amendment to Loan and Security Agreement dated as of July 31, 1995, and
(vii) that certain Seventh Amendment to Loan and Security Agreement dated as
of August 9, 1995, pursuant to which Lender agreed to provide certain financial
accommodations to Borrower on the terms and conditions set forth therein (said
Loan and Security Agreement, as from time to time in effect, together with all
exhibits and schedules thereto, is hereinafter referred to as the "Loan
Agreement").
B. Lender and Borrower desire to amend certain aspects of their
financing arrangements under the Loan Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the
agreements contained herein, Lender and Borrower hereby agree as follows:
1. Use of Terms Defined in the Loan Agreement. All capitalized
terms that are defined in the Loan Agreement and that are used without
definition herein shall have the respective meanings given to them in the Loan
Agreement.
2. Amendment to the Loan Agreement.
2.1 Section 8.3(D) of the Loan Agreement is hereby deleted
in its entirety and the following is substituted therefor:
(D) Minimum Earnings.
(i) Maintain at all times not less that the following
Consolidated Adjusted Net Earnings from Operations for the
corresponding periods set forth below.
Fiscal Period Amount
September 1995 <$1,500,000>
October 1995 <$1,500,000>
November 1995 <$1,500,000>
December 1995 <$1,500,000>
Each Fiscal <$2,500,000>
(ii) Maintain at all times, on a fiscal quarter-to-date
basis, not less than the following Consolidated Adjusted
Net Earnings from Operations during the corresponding fiscal
quarters set forth below:
Fiscal Period Amount
Each fiscal quarter <$3,500,000>
From the third fiscal
quarter of Fiscal Year
ending January 1996
through and including
the third fiscal quarter
Of Fiscal Year ending
January 1997
Each fiscal quarter <$2,000,000>
thereafter
(iii) Maintain at all times not less than the following
Consolidated Adjusted Net Earnings from Operations for the period
of twelve (12) consecutive Fiscal Periods including and ending with
the corresponding Fiscal Periods set forth below:
Fiscal Period Amount
August 1995 $1,500,000
September 1995 through <$2,500,000>
November 1996
Each Fiscal Period $0.00
thereafter
2.2 Section 8.3(G) of the Loan Agreement is hereby deleted
in its entirety and the following is substituted therefor.
(G) Times Interest Earned Ratio. Maintain at all
times (i) from the September 1995 Fiscal Period through and
including the October 1995 Fiscal Period a Times Interest Earned
Ratio of not less than 1 to 1, (ii) from the November 1995 Fiscal
period through and including the October 1996 Fiscal Period a Times
Interest Earned Ratio of not less than .70 to 1, and (iii) after
the October 1996 Fiscal Period a Times Interest Earned Ratio of not
less than 1 to 1.
3. Continuing Representations of Borrower. Borrower
hereby represents and warrants to Lender that as of the date hereof all
representations and warranties contained in the Loan Agreement are true,
complete and correct, and no Default or Event of Default has occurred and is
continuing.
4. Incorporation into the Loan Agreement. The terms and
conditions of this Eight Amendment shall be incorporated by reference in the
Loan Agreement as though set forth in full therein. In the event of any
inconsistency between the provisions of this Eighth Amendment and any other
provision of the Loan Agreement, the terms and provisions of this Eighth
Amendment shall govern and control. Except to the extent specifically amended
or superseded by the terms of this Eighth Amendment, all of the provisions of
the Loan Agreement shall remain in full force and effect to the extent in
effect on the date hereof. Except to the extent, if any, specifically dealt
with herein, this Eighth Amendment does not constitute an amendment or waiver
by Lender of any provision of the Loan Agreement, or of any Default, Event of
Default, or other default by Borrower thereunder. The Loan Agreement, as
modified by this Eighth Amendment, together with the other Loan Documents,
constitutes the complete agreement among the parties and supersedes any prior
written or oral agreements, writings, communications, or understandings of the
parties with respect to the subject matter thereof.
5. Section Headings. The headings of the Sections hereof
are for convenience only, are without substantive meaning, and shall not be
used in interpreting any provision of this Eighth Amendment or the Loan
Agreement.
6. Counterparts. This Eight Amendment may be executed in
counterparts, each of which shall be deemed to be an or original but all of
which shall be one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Eighth Amendment to Loan and Security Agreement as of the day and year first
written above.
("Lender")
SHAWMUT CAPITAL CORPORATION
By s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Senior Vice President
("Borrower")
GOTTSCHALKS INC.
By s/Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
Senior Vice President and
Chief Financial Officer
