EXHIBIT M
XXXX OF SALE AND ASSIGNMENT
For good and valuable consideration, receipt of which
is hereby
acknowledged, and pursuant to the Asset Purchase
Agreement dated
as of July 21, 1998 (the "Agreement"), by and among
GOTTSCHALKS
INC., a Delaware corporation ("Buyer"), THE XXXXXX
COMPANY, a
California corporation ("Seller"), and EL CORTE INGLES,
S.A., a
Spanish corporation and the parent of Seller ("ECI"),
and
intending to be legally bound hereby, Seller does
hereby
unconditionally and irrevocably sell, convey, grant,
assign and
transfer to Buyer, its successors and assigns, all of
Seller's
legal, beneficial and other right, title and interest
in and to
the business and assets, properties, rights, interests,
privileges, claims and contracts of every kind and
nature,
tangible and intangible, of Seller including, without
limitation,
the items described more particularly in Schedule 1
attached
hereto and incorporated herein by reference
(collectively, the
"Purchased Assets").
Terms used herein and not defined have the meanings
assigned to
them in the Agreement. Nothing herein is intended to
limit or
supersede or enlarge or modify in any way the
representations and
warranties of Seller set forth in the Agreement.
Notwithstanding anything to the contrary contained in
this Bill
of Sale and Assignment, the "Purchased Assets" do not
include,
and Seller does not hereby sell, convey, assign or
transfer to
Buyer any of Seller's right, title or interest in or
to, the
Excluded Assets described in Schedule 2 attached hereto
and
incorporated herein by reference.
Seller hereby represents and warrants that (i) the
Purchased
Assets are free and clear of any Encumbrance (as
defined in the
Agreement), except Permitted Exceptions, (ii) that it
has good
and marketable title to the Purchased Assets, and no
agreements
or understandings exist which limit or restrict the
right of
Seller to transfer the Purchased Assets to Buyer, and
(iii) the
Purchased Assets are the assets described in Section
2.1(a) of
the Agreement.
Seller, for itself and its respective successors and
assigns,
hereby covenants and agrees that, without further
consideration,
at any time and from time to time after the date
hereof, it will
execute and deliver to Buyer such further instruments
of sale,
conveyance, assignment and transfer, and take such
other action,
all upon the reasonable request of Xxxxx, in order more
effectively to sell, convey, grant, assign, transfer
and deliver
all or any portion of the Purchased Assets to Buyer,
and to
assure and confirm to any other person the ownership of
the
Purchased Assets by Buyer, and to permit Buyer to
exercise any of
the franchises, rights, licenses or privileges intended
to be
sold conveyed, assigned, transferred and delivered by
Seller to
Buyer pursuant to this Bill of Sale and Assignment.
IN WITNESS WHEREOF, Xxxxxx has caused this Bill of Sale
and
Assignment to be executed this _____ day of ______,
1998.
THE XXXXXX COMPANY
By:
Name:
Title:
ACCEPTED AND AGREED:
XXXXXXXXXXX INC.
By: ________________________
Name: ______________________
Title: _____________________
EXHIBIT N
SPECIAL POWER OF ATTORNEY
THE XXXXXX COMPANY, a California corporation
("Seller"), does
hereby constitute and appoint XXXXXXXXXXX INC., a
Delaware
corporation ("Buyer"), the true and lawful
attorney-in-fact of
Seller in its name, place and stead,
(i) to execute, acknowledge and deliver
all such
further assignments, transfers, conveyances, deeds,
bills of sale
or other instruments, documents or assurances as may be
required
to transfer to or vest in Buyer or to protect the
right, title
and interest of Buyer in the Purchased Assets conveyed
(or
intended to be conveyed) by Seller to Buyer pursuant to
the Asset
Purchase Agreement dated as of July 21, 1998 by and
among Buyer,
Seller and El Corte Ingles, S.A., a Spanish corporation
and the
parent of Seller (the "Agreement");
(ii) to enforce the provisions of insurance
policies
included in the Purchased Assets; and
(iii) to accept and endorse and deposit for Xxxxx's
own
account instruments, drafts, checks, notes and other
similar
items payable to Seller (or presented in payment to
Buyer) for
any of the Purchased Assets.
This power of attorney may be exercised on behalf of
Buyer by any
officer or employee of Buyer by affixing the manual or
facsimile
signature of any such officer or employee of Buyer to
any such
instrument or other document.
Seller further gives and grants to its said
attorney-in-fact full
power and authority to do and perform every act
necessary and
proper to be done in the exercise of the foregoing
powers as
fully as Seller might or could do, with full power of
substitution and revocation, hereby ratifying and
confirming all
that said attorney-in-fact shall lawfully do or cause
to be done
by virtue hereof.
This Special Power of Attorney is coupled with an
interest and is
irrevocable.
[Remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, Xxxxxx has executed this Special
Power of
Attorney this ____ day of _______, 1998, at
________________________.
THE XXXXXX COMPANY
By:
Name:
Title:
STATEMENT OF WITNESSES
I declare under penalty of perjury under the laws of
California
that the person who signed or acknowledged this
document is
personally known to me (or proved to me on the basis of
convincing evidence) to be the principal, that the
principal
signed or acknowledged this power of attorney in my
presence and
that the principal appears to be of sound mind and
under no
duress, fraud or undue influence.
Signature: ______________________________
Print Name: ______________________________
Date: ____________________________________
Residence Address: _______________________
__________________________________________
__________________________________________
Signature: ______________________________
Print Name: ______________________________
Date: ____________________________________
Residence Address: _______________________
__________________________________________
__________________________________________
STATE OF )
) SS
COUNTY OF )
On _____________________, 19__, before me
____________________, a
Notary Public for the State of California, personally
appeared
___________________, known to me to be the
________________________________ and
_________________________,
respectively, of THE XXXXXX COMPANY, the corporation
that
executed the within power of attorney, and acknowledged
to me
that such corporation executed the same.
_____________________________
Notary Public for the
State
of California
[SEAL]
My Commission Expires
_____________________________
See Cal. Civ. Code 1190.
EXHIBIT O
ASSUMPTION AGREEMENT
For good and valuable consideration, receipt of which
is hereby
acknowledged, and pursuant to the Asset Purchase
Agreement dated
as of July 21, 1998 (the "Agreement"), by and among
GOTTSCHALKS
INC., a Delaware corporation ("Buyer"), THE XXXXXX
COMPANY, a
California corporation ("Seller"), and EL CORTE INGLES,
S.A., a
Spanish corporation and the parent of Seller, Seller
hereby
assigns and Buyer hereby assumes and agrees to pay and
otherwise
perform the liabilities and obligations (the "Assumed
Liabilities") set forth on Exhibit A, attached hereto
and
incorporated herein by this reference.
Upon the reasonable request of Seller at any time, and
from time
to time, after the date hereof, without further
consideration,
Xxxxx shall execute and deliver such further
instruments of
assumption and take such other actions as Seller
reasonably may
require for Buyer to more effectively evidence the
assumption of
the Assumed Liabilities.
This Assumption Agreement shall be binding upon and
inure to the
benefit of Xxxxx and Xxxxxx and their respective
successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Assumption Agreement to be executed this ___ day of
____________,
1998.
GOTTSCHALKS INC.
By:
THE XXXXXX COMPANY
By:
By:
EL CORTE INGLES, S.A.
By:
EXHIBIT P
FORM OF ESTOPPEL CERTIFICATE FOR ACQUIRED LEASES
TO: Gottschalks Inc.
0 Xxxxx Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Re: Xxxxx described in Schedule 1 hereto (the "Lease")
with
respect to certain premises (the "Leased Premises") in
the
[name of shopping center] (the "Shopping
Center"),
[city] , California
The undersigned (the "Landlord"), the landlord under
the Lease
covering the Leased Premises, has been informed by The
Xxxxxx
Company ("Xxxxxx"), the tenant under the Lease, that
Xxxxxx has
assigned or will assign the Lease to Gottschalks Inc.
("Gottschalks") and that Xxxxxxxxxxx has assumed or
will assume
the obligations of Xxxxxx under the Lease
(collectively, the
"Assignment"). After the Assignment, Xxxxxxxxxxx will
continue
to operate the department store currently operated by
Xxxxxx on
the Leased Premises. The department store will be
operated under
the trade name "Xxxxxx-Xxxxxxxxxxx".
As a condition precedent to the Assignment, Xxxxxxxxxxx
is
requiring and will be relying on this Landlord Estoppel
Certificate (this "Certificate"). Accordingly,
Landlord hereby
certifies to Xxxxxxxxxxx the following as of the date
hereof:
1. Landlord is the lessor under the Lease, pursuant
to which
Xxxxxx leases the Leased Premises. The Lease has not
been
modified, changed, altered, supplemented or amended in
any
respect, nor have any provisions thereof been waived,
except as
described in Schedule 1 hereto.
2. The Lease is valid and in full force and effect on
the date
hereof. Landlord does not have any other agreements
with Xxxxxx
with respect to the Lease or the Leased Premises.
3. Xxxxxx is the current tenant under the Lease. All
rent and
other sums (including, but not limited to, taxes,
utilities,
maintenance fees, and insurance) due and payable under
the Lease
have been paid through the date of this Certificate.
No rents or
other charges (including, but not limited to, taxes,
utilities,
maintenance fees, and insurance) have been prepaid,
other than as
provided in the Lease.
4. No event has occurred and no condition exists that
constitutes, or that would constitute with the giving
of notice
or the lapse of time or both, a default by Landlord or,
to the
best knowledge of Landlord, by Xxxxxx under the Lease.
Landlord
has no existing credits, defenses, offsets or
counterclaims
against the enforcement of the Lease by Xxxxxx.
5. All work required to be performed by Xxxxxx under
the Lease
has been completed, and all conditions of the Lease
required to
be satisfied by Xxxxxx have been satisfied, other than
ongoing
obligations such as the payment of rent.
6. The Lease term commenced on _____________________,
_______,
and, exclusive of unexercised renewal options (as
identified
below) contained in the Lease, the Lease expires on
_______________. Xxxxxx has ______ remaining option(s)
to renew
the term of the Lease for ______ year(s) each.
7. The security deposit held by Landlord under the
Lease is
$________________.
8. Xxxxxxxx has no knowledge of and has received no
notice of
any assignment, hypothecation or pledge of Xxxxxx'x
interest in
the Lease.
9. Landlord has not received any notice of any
present
violation of any laws, regulations, or ordinances
relating to the
use or condition of the Leased Premises or the Shopping
Center.
10. Landlord does not currently engage in or permit,
and has not
in the past engaged in or permitted, within or upon the
Leased
Premises or the Shopping Center, any use or disposal of
any toxic
or hazardous substances which are regulated under any
federal,
state, county or municipal laws, regulations, or
ordinances,
other than minimal, non-reportable quantities of
substances used
in the ordinary course of business. To Landlord's
knowledge, no
occupant of any portion of the Shopping Center has used
or
disposed of any toxic or hazardous substances on the
Shopping
Center premises, other than minimal, non-reportable
quantities of
substances used by such occupants in the ordinary
course of
business.
11. Landlord is not the subject of any voluntary
actions or, to
Landlord's knowledge, involuntary actions under any
insolvency or
bankruptcy laws.
12. This Certificate binds Landlord and its
representatives,
successors and assigns. Landlord shall notify all
successor
owners, assignees and mortgagees of the existence and
terms of
this Certificate. Xxxxxxxx understands that
Xxxxxxxxxxx is
relying upon the truth of the statements made in this
Certificate
in entering into the Assignment, and this Certificate
shall inure
to the benefit of Xxxxxxxxxxx, Xxxxxx and their
respective
representatives, successors and assigns. The
undersigned has the
power and authority to render this Certificate on
behalf of
Landlord.
Date: __________________, 1998 LANDLORD:
[NAME OF LANDLORD]
By:
__________________________
Name:
Title:
SCHEDULE 1
Description of Lease
[Insert description of Lease]
EXHIBIT Q
FORM OF ESTOPPEL CERTIFICATE FOR MALL AGREEMENTS
TO: Gottschalks Inc.
0 Xxxxx Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Re: Reciprocal Easement Agreement - [name of
shopping
center] (the "Shopping Center"),
[city]
, California
The undersigned has been informed by The Xxxxxx Company
("Xxxxxx") that Gottschalks Inc. ("Gottschalks")
intends to
purchase substantially all of the assets of Xxxxxx (the
"Acquisition"). Xxxxxx presently [owns/leases] and
operates a
department store in the Shopping Center. After the
Acquisition,
Gottschalks will continue to operate the department
store
currently operated by Xxxxxx in the Shopping Center.
The
department store will be operated under the trade name
"Xxxxxx-
Xxxxxxxxxxx".
The Shopping Center premises are encumbered and
benefitted by
that certain [title of
reciprocal
easement agreement] described
in Schedule
1 hereto (the "REA"). As a condition precedent to the
Acquisition, Xxxxxxxxxxx is requiring and will be
relying on this
Estoppel Certificate (this "Certificate").
The undersigned, a "Party" to the REA [and a party to
the
Additional Agreement described in Schedule 2 hereto
(the
"Additional Agreement")], hereby confirms, as of the
date of this
Certificate, as follows:
1. To the knowledge of the undersigned, no party is
in default
under the REA [or the Additional Agreement].
2. There has been no assignment, modification or
amendment of
the REA [or the Additional Agreement].
3. The REA [and the Additional Agreement] [is/are] in
full
force and effect.
This Certificate is for the benefit of and may be
relied upon by
Xxxxxxxxxxx and its successors and assigns from time to
time.
Very truly yours,
By:
Name:
Title:
Date: ____________________, 1998
SCHEDULE 1
Description of REA
[Insert description of REA]
EXHIBIT R
[Form for ECI Leases] KDW Draft 7/17/98
LANDLORD AGREEMENT
CONGRESS FINANCIAL CORPORATION, a Delaware
corporation
("Congress") has entered into financing arrangements
with
XXXXXXXXXXX INC., a Delaware corporation ("Debtor")
pursuant to
which Congress has been granted a security interest in
any or all
of Debtor's or its affiliates' personal property,
including, but
not limited to, inventory and equipment (hereinafter
"Personal
Property"). For purpose of this Agreement, the term
"Personal
Property" does not include plumbing and electrical
fixtures,
heating, ventilation and air conditioning, wall and
floor
coverings, walls or ceilings and other fixtures not
constituting
trade fixtures. Some of the Personal Property has or
may from
time to time become affixed to or be located on, wholly
or in
part, the real property leased by Debtor or its
affiliates
located at [Street Address of Property], the legal
description of
which is attached as Exhibit A (the "Premises"). The
undersigned is the owner or lessor of the Premises.
In order for Congress to consider making loans or
providing
other financial accommodations to Debtor or its
affiliates in
reliance upon the Personal Property as collateral, the
undersigned agrees as follows:
1. The undersigned waives and relinquishes any
landlord's
lien, rights of levy or distraint, claim, security
interest or
other interest the undersigned may now or hereafter
have in or
with respect to any of the Personal Property, whether
for rent or
otherwise.
2. The Personal Property may be installed in or
located on
the Premises and is not and shall not be deemed a
fixture or part
of the real property but shall at all times be
considered
personal property.
3. Congress, at its option, may either and use
the
Premises for the purpose of repossessing, removing,
selling or
otherwise dealing with any of the Personal Property,
and such
license shall be irrevocable and shall continue from
the date
Congress enters the Premises for a period of up to
ninety (90)
days after the receipt by Congress of written notice
from the
undersigned directing removal of the Personal Property;
provided,
that, (a) for each day that Congress uses the Premises
pursuant
to the rights granted to it hereunder, unless the
undersigned has
otherwise been paid rent in respect of any of such
period,
Congress shall pay the regularly scheduled rent
provided under
the lease relating to the Premises between the
undersigned and
Debtor (the "Lease"), prorated on a per diem basis to
be
determined on a thirty (30) days month, without thereby
assuming
the Lease or incurring any other obligations of Debtor
and (b)
any damage to the Premises caused by Congress or its
representatives will be repaired by Congress at its
sole expense.
4. The undersigned agrees to send notice in
writing of any
default under the Lease to:
Congress Financial Corporation
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxxx
Upon receipt of such notice, Congress shall
have the
right, but not the obligation, to cure such default
within ten
(10) days thereafter. Any payment made or act done by
Congress
to cure any such default shall not constitute an
assumption of
the Lease or any obligations of Debtor.
5. This waiver may not be changed or terminated
orally or
by course of conduct and is binding upon the
undersigned and the
heirs, personal representatives, successors and assigns
of the
undersigned and inures to the benefit of Congress and
the
successors and assigns of Congress.
6. LANDLORD WAIVES ANY RIGHT TO A JURY TRIAL OF
ANY CLAIM
OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT.
Dated this _____ day of July, 1998.
EL CORTE INGLES, S.A.
By: _________________________________
Name: _______________________________
Title: ________________________________
EXHIBIT A
Legal Property Description
STATE OF CALIFORNIA )
)
SS.
COUNTY OF _______________ )
On __________________________ before me,
_______________________________________________________
Date
Name and Title of Officer (e.g. "Xxxx Xxx, Notary
Public")
personally appeared
_________________________________________________________________
__________
Name of Signer(s)
[ ] personally known to me -- OR -- [ ]
proved
to me the basis of satisfactory evidence to the
person(s)
whose name(s) is/are subscribed to the within
instrument
and acknowledged to me that he/she/they executed the
same
in his/her/their authorized capacity(ies) and that by
his/her/their
signature(s) on the instrument person(s), or the entity
upon
behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
_________________________________________________
Signature of Notary Public
___________________________
OPTIONAL
Though the data below is not required by law, it may
prove
valuable to persons relying on the document and could
prevent
fraudulent reattachment of this form.
CAPACITY(IES) CLAIMED BY SIGNER(S)
DESCRIPTION OF ATTACHED DOCUMENT
[ ] Individual
[ ] Corporate Officer
Landlord Agreement
____________________________________________
_________________________________________
Title(s)
Title of Type of Document
[ ] Partner(s) [ ] Limited
[ ] General
__________________________________________
Number of
Pages
[ ] Attorney-in-Fact
[ ] Trustee(s)
[ ] Guardian/Conservator
[ ] Other _________________________________
__________________________________________
Date of
Document
Signer is Representing:
Name of Person(s) or Entity(ies)
_____________________________________________
___________________________________________
Signer(s) Other Than Named
Above
_____________________________________________
EXHIBIT S
[Form for Acquired Leases] KDW Draft 7/17/98
LANDLORD AGREEMENT
CONGRESS FINANCIAL CORPORATION, a Delaware
corporation
("Congress") has entered into financing arrangements
with
XXXXXXXXXXX INC., a Delaware corporation ("Debtor")
pursuant to
which Congress has been or may be granted a security
interest in
any or all of Debtor's or its affiliates' personal
property,
including, but not limited to, inventory and equipment
(hereinafter "Personal Property"). For purpose of this
Agreement, the term "Personal Property" does not
include plumbing
and electrical fixtures, heating, ventilation and air
conditioning, wall and floor coverings, walls or
ceilings and
other fixtures not constituting trade fixtures. Some
of the
Personal Property has or may from time to time become
affixed to
or be located on, wholly or in part, the real property
leased by
Debtor or its affiliates located at [Street Address of
Property],
the legal description of which is attached as Exhibit A
(the
"Premises"). The undersigned is the owner or lessor of
the
Premises.
In order for Congress to consider making loans or
providing
other financial accommodations to Debtor or its
affiliates in
reliance upon the Personal Property as collateral, the
undersigned agrees as follows:
1. The undersigned waives and relinquishes any
landlord's
lien, rights of levy or distraint, claim, security
interest or
other interest the undersigned may now or hereafter
have in or
with respect to any of the Personal Property, whether
for rent or
otherwise.
2. The Personal Property may be installed in or
located on
the Premises and is not and shall not be deemed a
fixture or part
of the real property but shall at all times be
considered
personal property.
3. Congress, at its option, may either and use
the
Premises for the purpose of repossessing, removing,
selling or
otherwise dealing with any of the Personal Property,
and such
license shall be irrevocable and shall continue from
the date
Congress enters the Premises for a period of up to
ninety (90)
days after the receipt by Congress of written notice
from the
undersigned directing removal of the Personal Property;
provided,
that, (a) for each day that Congress uses the Premises
pursuant
to the rights granted to it hereunder, unless the
undersigned has
otherwise been paid rent in respect of any of such
period,
Congress shall pay the regularly scheduled rent
provided under
the lease relating to the Premises between the
undersigned and
Debtor (the "Lease"), prorated on a per diem basis to
be
determined on a thirty (30) days month, without thereby
assuming
the Lease or incurring any other obligations of Debtor
and (b)
any damage to the Premises caused by Congress or its
representatives will be repaired by Congress at its
sole expense.
4. The undersigned agrees to send notice in
writing of any
default under the Lease to:
Congress Financial Corporation
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxxx
Upon receipt of such notice, Congress shall
have the
right, but not the obligation, to cure such default
within ten
(10) days thereafter. Any payment made or act done by
Congress
to cure any such default shall not constitute an
assumption of
the Lease or any obligations of Debtor.
5. This waiver may not be changed or terminated
orally or
by course of conduct and is binding upon the
undersigned and the
heirs, personal representatives, successors and assigns
of the
undersigned and inures to the benefit of Congress and
the
successors and assigns of Congress.
6. LANDLORD WAIVES ANY RIGHT TO A JURY TRIAL OF
ANY CLAIM
OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT.
Dated this _____ day of July, 1998.
[NAME OF LANDLORD]
By: ________________________________
Name: ______________________________
Title: _______________________________
EXHIBIT A
Legal Property Description
STATE OF CALIFORNIA )
)
SS.
COUNTY OF _______________ )
On __________________________ before me,
_______________________________________________________
Date
Name and Title of Officer (e.g. "Xxxx Xxx, Notary
Public")
personally appeared
_________________________________________________________________
__________
Name of Signer(s)
[ ] personally known to me -- OR -- [ ]
proved
to me the basis of satisfactory evidence to the
person(s)
whose name(s) is/are subscribed to the within
instrument
and acknowledged to me that he/she/they executed the
same
in his/her/their authorized capacity(ies) and that by
his/her/their
signature(s) on the instrument person(s), or the entity
upon
behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
_________________________________________________
Signature of Notary Public
_________________________________________________________________
___________________________
OPTIONAL
Though the data below is not required by law, it may
prove
valuable to persons relying on the document and could
prevent
fraudulent reattachment of this form.
CAPACITY(IES) CLAIMED BY SIGNER(S)
DESCRIPTION OF ATTACHED DOCUMENT
[ ] Individual
[ ] Corporate Officer
Landlord Agreement
____________________________________________
_________________________________________
Title(s)
Title of Type of Document
[ ] Partner(s) [ ] Limited
[ ] General
__________________________________________
Number of
Pages
[ ] Attorney-in-Fact
[ ] Trustee(s)
[ ] Guardian/Conservator
[ ] Other _________________________________
__________________________________________
Date of
Document
Signer is Representing:
Name of Person(s) or Entity(ies)
_____________________________________________
___________________________________________
Signer(s) Other Than Named Above
_____________________________________________
EXHIBIT T
FORM OF OPINION OF
McPETERS XxXXXXXXXX SHIMOFF & XXXX
_____________ __, 1998
Gottschalks Inc.
0 Xxxxx Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
We have acted as general counsel for The Xxxxxx
Company, a
California corporation ("Seller") and as U.S. counsel
to El Corte
Ingles, S.A., a Spanish corporation and the parent of
Seller
("ECI"), in connection with the sale by Seller and the
purchase
by Xxxxxxxxxxx Inc., a Delaware corporation ("Buyer"),
of
substantially all of the assets of Seller and the
assumption by
Buyer of certain specified liabilities of Seller
pursuant to the
Asset Purchase Agreement dated as of July 21, 1998, by
and among
Buyer, Seller and ECI (the "Asset Purchase Agreement).
This
opinion is being delivered to you at the request of ECI
and
Seller pursuant to Section 9.2(d) of the Asset Purchase
Agreement. Capitalized terms used herein without
definition have
the same meanings as set forth in the Asset Purchase
Agreement.
In our capacity as such counsel we have examined
originals or
copies certified or otherwise identified to our
satisfaction as
being true copies of such records, documents or other
instruments
necessary or appropriate to enable us to render the
opinions
expressed below. These records, documents and
instruments
include the following:
(a) Certificate of Incorporation of Seller, as amended
to date;
(b) the Bylaws of Seller and ECI, as amended to date;
(c) all records of proceedings and actions of the
Board of
Directors and shareholders of Buyer relating to the
Asset
Purchase Agreement and the transactions contemplated
thereby;
(d) the Asset Purchase Agreement;
(e) the Tradename License Agreement;
(f) the Employee Lease Agreement;
(g) the Registration Rights Agreement;
(h) the Standstill Agreement; and
(i) the Stockholders' Agreement.
Documents (d) - (i) are collectively referred to as the
"Transaction Documents".
We have assumed the genuineness of all signatures
(except for
those of the officers of Seller and ECI executing the
Transaction
Documents), the authenticity of all items submitted to
us as
originals, the conformity with originals of all items
submitted
to us as copies. As to material matters of fact, we
have, when
relevant facts were not independently established,
relied upon
the [Officer's Certificate of Seller], dated as of
______, 1998
and the [Officers' Certificate of ECI], dated as of
________,
1998 furnished to us by Seller and ECI respectively,
copies of
each of which have been delivered to you.
On the basis of such examination and our consideration
of such
questions of law as we have deemed relevant in the
circumstances,
we are of the opinion, subject to the assumptions and
limitations
set forth herein, that:
1. Seller is a corporation duly organized, validly
existing and
in good standing under the laws of the State of
California.
Seller has the corporate power to own its properties
and conduct
its business. Seller has the corporate power and
corporate
authority to enter into the Seller Transaction
Documents and to
carry out the provisions of the Seller Transaction
Documents.
2. Neither the execution and delivery of any of the
Transaction
Documents nor the consummation of the transactions
contemplated
thereby will conflict with or result in a breach by
Seller or
constitute a default under, the Articles of
Incorporation or
Bylaws of Seller, or result in the imposition of any
Encumbrance
against any asset of Seller, or violate any Order or
United
States federal or California law applicable to Seller
or any of
Seller's assets.
3. Each of the Seller Transaction Documents have been
duly
authorized by all necessary corporate action on the
part of
Seller. Each of the Seller Transaction Documents has
been duly
executed and delivered by Seller, and the Seller
Transaction
Documents each constitute the legally valid and binding
obligation of Seller, enforceable against Seller in
accordance
with their respective terms, except as limited by
bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting
creditors' rights generally. We advise you that the
enforceability of each of the Seller Transaction
Documents is
subject to the effect of general principles of equity,
including,
without limitation, concepts of materiality,
reasonableness, good
faith and fair dealing, and the possible unavailability
of
specific performance or injunctive relief, regardless
of whether
considered in a proceeding in equity or at law.
4. Each of the Asset Purchase Agreement, the
Standstill
Agreement, the Stockholders' Agreement, the Assumption
Agreement
and the New Leases (the "ECI Transaction Documents")
has been
duly executed and delivered by ECI, and the ECI
Transaction
Documents each constitute the legally valid and binding
obligation of ECI, enforceable against ECI in
accordance with
their respective terms, except as limited by
bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting
creditors' rights generally. We advise you that the
enforceability of each of the ECI Transaction Documents
is
subject to the effect of general principles of equity,
including,
without limitation, concepts of materiality,
reasonableness, good
faith and fair dealing, and the possible unavailability
of
specific performance or injunctive relief, regardless
of whether
considered in a proceeding in equity or at law.
5. Except for those approvals and consents that have
been
obtained, the consummation of the sale of the Purchased
Assets
and Assumed Liabilities by Seller and ECI pursuant to
the
Transaction Agreements does not require any order,
consent,
approval of, or filing or registration with any
Governmental
Entity. All required proceedings and other action to
assure
compliance with applicable bulk sales laws have been
duly taken.
In rendering the opinions expressed in Clauses 3 and 4,
we have
assumed that each of the Transaction Documents to which
Xxxxx is
a party has been duly authorized, executed and
delivered by
Xxxxx, that Xxxxx has the requisite power and authority
to
execute, deliver and perform each of the Transaction
Documents to
which it is a party, that each of the Transaction
Documents to
which Buyer is a party constitutes the legal, valid and
binding
obligation of Buyer, enforceable against it in
accordance with
its terms (as similarly qualified), and that Buyer has
obtained
all necessary Approvals and Permits required to be
obtained by
Buyer in order to acquire the Purchased Assets and
Assumed
Liabilities.
We express no opinion concerning (a) the laws of any
jurisdiction
other than California, the General Corporation Law of
Delaware
and the United States or (b) securities or antitrust
law matters.
This opinion is solely for your benefit in connection
with your
acquisition of the Purchased Assets and assumption of
Assumed
Liabilities and related transactions and may not be
relied upon
by, nor may copies be delivered to, any person other
than a
permitted assignee under the Asset Purchase Agreement,
or used
for any other purpose, without our prior written
consent.
Respectfully submitted,
EXHIBIT U
EMPLOYEE LEASE AGREEMENT
This Employee Lease Agreement (the "Agreement") is
entered into
as of _______________, 1998, by and between Gottschalks
Inc., a
Delaware corporation ("Recipient"), and The Xxxxxx
Company, a
California corporation ("Provider").
R E C I T A L S
WHEREAS, Recipient and Provider are parties to an Asset
Purchase
Agreement (the "Purchase Agreement") pursuant to which
Recipient
will acquire substantially all of the assets of
Provider's
department store business.
WHEREAS, the execution and delivery of this Agreement
by the
parties hereto is a condition to the Closing (as
defined in the
Purchase Agreement).
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual promises
contained
herein and intending to be legally bound, the parties
agree as
follows:
1. Transition Services. The Provider shall provide the
Recipient
with the services of the Provider's employees named on
Exhibit A
(the "Employees") which exhibit is attached hereto and
made a
part hereof. The services to be provided by each of
the
Employees shall also be set forth on Exhibit A. The
Provider
shall use its best efforts to assure that each Employee
performs
such services in the same manner that such Employee
performed
such services prior to the Closing Date (as defined in
the
Purchase Agreement), except as such services may be
modified by
the Recipient. Recipient shall provide written notice
to the
Provider (with a copy to the affected Employee) of any
such
modification.
2. Term. The Provider shall provide the services of
each of the
Employees to the Recipient for a term commencing at the
Closing
Date and ending with respect to each of the Employees
as of a
date to be determined by the Recipient (the
"Termination Date").
The Recipient shall provide written notice to the
Provider (with
a copy to the affected Employee) of each Employee's
Termination
Date at least three days prior to the Termination Date
for the
relevant Employee. In no event shall any Termination
Date be
more than ninety days after the Closing Date. The
Provider shall
use its best efforts to retain the services of each
Employee
until his or her Termination Date.
3. Benefits. Unless otherwise requested by Recipient,
the
Provider shall furnish and keep in full force and
effect with
respect to each Employee (and, with respect to group
health
insurance, his or her eligible dependents) from the
Closing Date
until the Employee's Termination Date such group
health,
disability and life insurance, vacation, holiday and
sick pay
policies, workers' compensation insurance, 401(k)
savings plan,
general liability insurance and, with respect to any
Employee who
was an officer of the Provider immediately prior to the
Closing,
such car allowance as was in effect with respect to
such Employee
immediately prior to the Closing Date.
4. Service Fee. The Recipient shall pay to the
Provider for each
payroll period the amount set forth in Exhibit A for
each
Employee who has not reached his or her Termination
Date (the
"Fee"). The Recipient may issue a single check
covering the Fee
for all of the Employees for a payroll period. The
amount set
forth on Exhibit A for each of the Employees shall be
limited to
the following items (the "Reimbursable Expenses") with
respect to
each of the Employees:
(a) his or her salary for the payroll period;
(b) the Provider's share of the Employee's payroll
taxes;
(c) any costs incurred by the Provider for the payroll
period to
provide the Employee with the benefits set forth in
Section 3 of
this Agreement; and
(d) any reasonable and necessary costs incurred by the
Provider
for the payroll period to administer this Agreement
including but
not limited to payroll processing costs for the
Employees (but
excluding any personnel costs of Provider of employees
whose
services are not provided to Recipient hereunder).
The Fee may be prorated for any payroll period in which
an
Employee's services are not provided to the Recipient
for a full
payroll period. For any payroll period which includes
an
Employee's final date of employment with the Provider,
the Fee
shall also include any accrued vacation pay of such
Employee
attributable to the term of this Agreement.
5. Billing and Payment. The Provider shall receive
payment of
the Fee for each payroll period at its office no later
than three
days before the date on which payroll checks are to be
distributed to the Employees. The Provider shall
provide to the
Recipient immediately following the distribution of
payroll
checks a record of the exact amounts paid by the
Provider for the
Reimbursable Expenses for the applicable payroll
period. If the
amount actually paid by the Provider for a particular
payroll
period for the Reimbursable Expenses differs from the
Fee paid to
the Provider by the Recipient for that payroll period,
the
Recipient shall make the appropriate adjustment in the
payment of
the Fee for the following payroll period. If at the
end of the
final payroll period in which this Agreement is in
effect, the
aggregate amount of Fees paid by the Recipient to the
Provider
differs from the aggregate amount of Reimbursable
Expenses paid
by the Provider, any excess amount received by the
Provider shall
be promptly refunded to the Recipient or any amount due
the
Provider shall be promptly paid to the Provider.
6. Independent Contractor Status. The parties
acknowledge that
Provider is an independent contractor of the Recipient
and that
all of the Employees are employees of Provider only.
Notwithstanding the foregoing, Recipient may offer any
Employee
employment with the Recipient commencing immediately
following
the Employee's Termination Date. The Provider shall
not
represent itself as having any relationship to the
Recipient
other than that of an independent contractor for the
limited
purposes described in this Agreement. During the term
of this
Agreement and upon each Employee's Termination Date,
the Provider
shall comply with all federal, state and local laws
applicable to
its employment of the Employees, including but not
limited to the
continuation of medical coverage requirements of
federal law.
The Provider shall be responsible for the payment of
all
salaries, federal, state and local payroll taxes and
all benefits
described in Section 3 for and on behalf of the
Employees.
7. Severance Obligations. Each of the Employees who
continues to
be employed by the Provider and provide services to the
Recipient
pursuant to this Agreement from the Closing Date until
his
Termination Date shall be entitled to receive severance
pay from
the Provider in accordance with the Provider's
severance pay
policy in effect immediately prior to the Closing Date.
Amounts
paid to the Employees pursuant to the preceding
sentence shall be
treated as "Severance Amounts" for purposes of applying
the
provisions of Section 8.4(c) of the Purchase Agreement.
8. Indemnification.
(a) Recipient shall indemnify and hold the Provider
harmless for
any penalty, claim, liability, deficiency, damages,
loss or
litigation costs (including without limitation
reasonable
attorneys' fees) arising from: (i) the performance by
Provider of
its obligations under this Agreement in accordance with
its
terms; (ii) the performance of services by the
Employees in
accordance with this Agreement; (iii) any act, incident
or injury
(other than a failure described in Section 8(b) below)
arising
out of and relating to the performance of services in
accordance
with this Agreement; and (iv) Recipient's failure to
fulfill its
obligations under this Agreement.
(b) Provider shall indemnify and hold the Recipient
harmless for
any penalty, claim, liability, deficiency, damages,
loss or
litigation costs (including without limitation
reasonable
attorneys' fees) arising from the Provider's failure to
fulfill
its obligations under this Agreement.
9. Notices. All notices, requests, claims, demands and
other
communications hereunder shall be in writing and shall
be deemed
to have been given upon delivery in person or by
telecopier or
other standard form of telecommunications, or by
registered or
certified mail, postage prepaid, return receipt
requested,
addressed as follows:
(a) If to Recipient:
Gottschalks Inc.
0 Xxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Attention: General Counsel
(b) If to Provider:
The Xxxxxx Company
_________________
_________________
Attention: ____________________
10. Counterparts. This Agreement may be executed in
any number
of separate counterparts signed by one or more of the
parties
hereto, each such counterpart being deemed to be an
original
instrument, and all such counterparts shall together
constitute
the same agreement.
11. Binding Effect; Assignability. This Agreement
shall be
binding on and inure solely to the benefit of the
parties hereto,
their respective successors and permitted assigns, and
is not
intended to create rights for any third party. This
Agreement
and the rights and obligations hereunder may not be
assigned by
either party hereto, whether by operation of law or
otherwise,
without the written consent of the other party and any
such
attempt at assignment shall be void and unenforceable.
12. Governing Law. This Agreement shall be governed by
and
construed in accordance with the laws of the state of
California,
except to the extent that such laws are preempted by
federal law.
13. Entire Agreement. This Agreement constitutes the
entire
agreement between the parties hereto relating to the
subject
matter hereof and supersedes all prior or
contemporaneous
agreements and understandings of the parties relating
thereto.
14. Modification and Amendment. Neither this Agreement
nor any
of the terms hereof may be terminated, amended,
supplemented,
waived or modified orally, but only by an instrument in
writing
signed by the party against which the enforcement of
such
termination, amendment, supplement, waiver or
modification is
sought. No failure on the part of either party to
exercise, no
delay in exercising, no partial exercise of, and no
course of
dealing with respect to, any right, power or privilege
under this
Agreement shall operate as a waiver thereof.
15. Dispute Resolution. The provisions of sections
13.1, 13.3
and 13.4 of the Purchase Agreement are incorporated by
references
herein as if set forth in full herein.
16. Severability. Every section, paragraph, clause and
subclause
of this Agreement shall as far as possible be deemed to
be
severable from every other section, paragraph, clause
and
subclause. If for any reason any such section,
paragraph, clause
or subclause is held by a court of competent
jurisdiction or a
competent administrative body to be illegal, unlawful,
void,
voidable, invalid or unenforceable, then (i) such
holding shall
not (unless it expressly provides to the contrary)
render
illegal, unlawful, void, voidable, invalid or
unenforceable any
other such section, paragraph, clause or subclause, and
(ii) the
parties hereby agree to negotiate in good faith to
replace the
section, paragraph, clause or subclause that is the
subject
matter of the holding with a similar but permissible
provision.
17. Headings. The headings contained in this Agreement
are for
reference purposes only and shall not affect in any way
the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have signed this
Agreement
on the date first set forth above.
GOTTSCHALKS INC.
By
Its
THE XXXXXX COMPANY
By
Its
E X H I B I T A
Name of Employee Services
Payroll Period
Service Fee
EXHIBIT V
INVESTMENT REPRESENTATIONS AND CERTIFICATION
The undersigned, The Xxxxxx Company, a
California
corporation ("Seller") hereby certifies to and agrees
with
Xxxxxxxxxxx Inc., a Delaware corporation ("Buyer") as
follows,
and makes the following representations to Buyer, with
the intent
that Buyer rely thereon to determine Seller's
suitability as an
investor in Buyer and to assure compliance with
applicable
securities laws. This certificate is being delivered
pursuant to
Section 9.2(f) of the Asset Purchase Agreement by and
among
Buyer, Seller and El Corte Ingles, S.A., a Spanish
corporation
and the parent of Seller dated as of July 21, 1998 (the
"Agreement"; capitalized terms used but not defined
herein have
the meanings set forth in the Agreement).
1. Seller has been provided copies of, and has
read and
understood the Agreement and all exhibits and schedules
attached
thereto, other agreements contemplated thereby to which
Seller or
any of its Affiliates or Associates is a party, the
Buyer
Disclosure Schedule and all other information
concerning Buyer
that has been provided to Seller in writing in
connection
therewith.
2. Seller has such knowledge and experience in
business
and financial matters that Seller is capable of
utilizing the
information provided about Buyer to evaluate the risks
and merits
of the exchange of the Purchased Assets for Buyer's
Common Stock
and the 8% Subordinated Note and Seller's other rights
and duties
under the Agreement and hereunder.
3. Seller has adequate means of providing for
Seller's
current financial needs and possible contingencies and
has no
need in the foreseeable future to sell or pledge any
securities
issued by Buyer.
4. Seller is acquiring certain of Buyer's
securities
pursuant to the Agreement for Seller's own account for
investment
without a view to or for sale in connection with any
distribution
thereof, and will not sell or distribute any of such
securities
in violation hereof or of the Agreement, the
Stockholders'
Agreement, the Securities Act, the General Rules and
Regulations
of the SEC promulgated thereunder, or any other
applicable
securities laws, including but not limited to those of
the United
States, the State of California and the State of
Delaware.
5. Xxxxxx acknowledges and agrees that:
(a) Notwithstanding anything in this Section 5,
Seller's
rights with respect to the Buyer's Common Stock are
limited by
the Stockholders' Agreement;
(b) Buyer's Common Stock must be held, and
neither such
stock nor any interest therein may be sold, transferred
or
otherwise disposed of, unless any transfer thereof is
then
registered or qualified under the Securities Act and
any other
applicable state securities laws or Buyer has received
a written
opinion of Seller's counsel, satisfactory to counsel
for Buyer,
to the effect that an exemption from such registration
and
qualification is available with respect to such action;
(c) if such opinion relies on the exemption from
registration in Section 4(1) or 4(2) of, or any rule
interpretation derived therefrom under, the Securities
Act (or
any analogous exemptions under state securities laws)
Seller
shall obtain, to the extent required by such opinion or
by Buyer,
and deliver to Buyer a copy of the prospective
transferee's: (i)
representations to Buyer, similar to those contained
herein or
otherwise customary in the circumstances as to the
transferee's
non-distributive intent, sophistication, understanding
of (and
ability to bear) risk, and access to information, (ii)
acknowledgement concerning restrictions on transfer of
Buyer's
Common Stock and (iii) assumption of obligations of
Seller
hereunder;
(x) Xxxxx's registrar and transfer agent will
maintain a
stop transfer order against the registration or
transfer of
Buyer's Common Stock held by Seller to assure
compliance with
applicable securities laws; and
(e) the certificate(s) representing Xxxxx's
Common Stock to
be held by Seller will bear a legend in substantially
the
following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN
REGISTERED OR QUALIFIED UNDER ANY STATE OR FEDERAL LAW
AND
NEITHER THE SHARES NOR ANY INTEREST THEREIN MAY BE SOLD
OR
TRANSFERRED WITHOUT COMPLYING WITH SUCH LAWS AND
PROVIDING TO THE
ISSUER A WRITTEN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER
THAT AN EXEMPTION FROM REGISTRATION OR QUALIFICATION
UNDER
APPLICABLE STATE AND FEDERAL LAWS IS THEN AVAILABLE.
THESE
SECURITIES ARE SUBJECT TO CERTAIN OTHER RESTRICTIONS
PURSUANT TO
AN AGREEMENT BETWEEN THE ISSUER, HOLDER AND CERTAIN EL
CORTE
INGLES, S.A. DATED AS OF __________, 1998.
6. Seller does not have in mind any sale of
Buyer's Common
Stock either currently or after the passage of a fixed
or
determinable period of time or upon the occurrence or
nonoccurrence of any specific event or circumstance;
has no
present or contemplated agreement, undertaking,
arrangement,
obligation, indebtedness or commitment providing for,
or which is
likely to compel a disposition of Buyer's Common Stock
or any
interest therein, by pledge or otherwise; and is not
aware of any
circumstances presently in existence that are likely in
the
future to prompt such a transfer or other disposition
thereof.
7. Seller agrees to indemnify Buyer and hold
Xxxxx
harmless from and against any Losses incurred on
account of or
arising out of any inaccuracy in Seller's declarations,
representations, and covenants set forth herein, the
disposition
of any of Buyer's Common Stock Seller will receive
contrary to
his foregoing declarations, representations, and
covenants, and
any action, suit or proceeding based upon the claim
that Seller's
declarations, representations, or covenants were
inaccurate or
misleading or otherwise cause for obtaining damages or
redress
from Buyer or the disposition of any of Buyer's Common
Stock or
any part thereof in violation hereof or of any
securities laws.
Executed this __________ day of _______, 1998.
THE XXXXXX COMPANY
By__________________________
Name:
Title:
EXHIBIT W
FORM OF OPINION OF
[ECI'S COUNSEL]
_____________ __, 1998
Gottschalks Inc.
0 Xxxxx Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
We have acted as counsel for El Corte Ingles, S.A., a
Spanish
corporation ("ECI"), in connection with the sale by The
Xxxxxx
Company, a California corporation and a wholly-owned
subsidiary
of ECI ("Seller"), and the purchase by Gottschalks
Inc., a
Delaware corporation ("Buyer"), of substantially all of
the
assets of Seller and the assumption by Buyer of certain
specified
liabilities of Seller pursuant to the Asset Purchase
Agreement
dated as of July 21, 1998, by and among Buyer, Seller
and ECI
(the "Asset Purchase Agreement"). This opinion is being
delivered
to you at the request of ECI and Seller pursuant to
Section
9.2(d) of the Asset Purchase Agreement. Capitalized
terms used
herein without definition have the same meanings as set
forth in
the Asset Purchase Agreement.
In our capacity as such counsel we have examined
originals or
copies certified or otherwise identified to our
satisfaction as
being true copies of such records, documents or other
instruments
necessary or appropriate to enable us to render the
opinions
expressed below. These records, documents and
instruments
include the following:
(a) Certificate of Incorporation of ECI [or Spanish
equivalent],
as amended to date;
(b) the Bylaws of ECI [or Spanish equivalent], as
amended to
date;
(c) all records of proceedings and actions of the
Board of
Directors of ECI relating to the Asset Purchase
Agreement and the
transactions contemplated thereby;
(d) the Asset Purchase Agreement;
(e) the Standstill Agreement; and
(f) the Stockholders' Agreement.
Documents (d) - (f) are collectively referred to as the
ECI
Transaction Documents.
We have assumed the genuineness of all signatures
(except those
of the officers of Xxxxxx and ECI executing the ECI
Transaction
Documents), the authenticity of all items submitted to
us as
originals, the conformity with originals of all items
submitted
to us as copies [and the due authority of all persons
executing
the same]. As to material matters of fact, we have,
when
relevant facts were not independently established,
relied upon
the [Officer's Certificate of Seller], dated as of
______, 1998
and the [Officers' Certificate of ECI], dated as of
________,
1998 furnished to us by Seller and ECI respectively,
copies of
each of which have been delivered to you.
On the basis of such examination and our consideration
of such
questions of law as we have deemed relevant in the
circumstances,
we are of the opinion, subject to the assumptions and
limitations
set forth herein, that:
1. ECI is duly organized, existing and in good
standing under
the laws of Spain with corporate power to own its
properties and
conduct its business. ECI has the corporate power and
corporate
authority to enter into each of the ECI Transaction
Documents and
to carry out the provisions of each of the ECI
Transaction
Documents.
2. Neither the execution and delivery of any of the
ECI
Transaction Documents nor the consummation of the
transactions
contemplated thereby will conflict with or result in a
breach by
ECI or constitute a default under, the charter
documents of ECI
or any material agreement or instrument to which ECI is
a party
or is bound, or result in the imposition of any
Encumbrance
against any asset of ECI, or violate any Order or Law
applicable
to ECI.
3. Each of the ECI Transaction Documents has been
duly
authorized by all necessary corporate action on the
part of ECI.
4. Except for those approvals and consents that have
been
obtained, the performance of ECI under the ECI
Transaction
Documents does not require any order, consent, approval
of, or
filing or registration with any Governmental Entity of
Spain.
5. A money judgment obtained in the courts of the
United States
against ECI will be recognized and enforceable against
ECI and
its assets in the courts of Spain. A arbitration award
obtained
from a United States arbitrator pursuant to the terms
of the ECI
Transaction Documents against ECI will be recognized
and
enforceable against ECI and its assets in the courts of
Spain, if
that arbitration award meets the requirements of the
U.N.
Convention on the Recognition and Enforcement of
Foreign Aribtral
Awards.
We express no opinion concerning the laws of any
jurisdiction
other than Spain.
This opinion is solely for your benefit in connection
with your
acquisition of the Purchased Assets and assumption of
Assumed
Liabilities and related transactions and may not be
relied upon
by, nor may copies be delivered to, any person other
than a
permitted assignee under the Asset Purchase Agreement,
or used
for any other purpose, without our prior written
consent.
Respectfully submitted,
EXHIBIT X
FORM OF OPINION OF O'MELVENY & XXXXX LLP
_________________ __, 1998
The Xxxxxx Company
El Corte Ingles, S.A.
Ladies and Gentlemen:
We have acted as counsel for Gottschalks Inc., a
Delaware
corporation ("Buyer"), in connection with the
acquisition by
Buyer of substantially all of the assets of The Xxxxxx
Company, a
California corporation ("Seller") pursuant to the Asset
Purchase
Agreement dated as of July 21, 1998, (the "Asset
Purchase
Agreement"), by and among Buyer, Seller and El Corte
Ingles,
S.A., a Spanish corporation and the parent of Seller
("ECI"). We
are providing this opinion to you at the request of
Buyer
pursuant to Section 9.3(c) of the Asset Purchase
Agreement.
Except as otherwise indicated, capitalized terms used
in this
opinion and defined in the Asset Purchase Agreement
will have the
meanings given in the Asset Purchase Agreement.
In our capacity as such counsel, we have examined
originals or
copies of those corporate and other records and
documents we
considered appropriate including the following:
(a) Certificate of Incorporation of Buyer, as amended
to date;
(b) the Bylaws of Buyer, as amended to date;
(c) all records of proceedings and actions of the
Board of
Directors of Buyer relating to the Asset Purchase
Agreement and
the transactions contemplated thereby;
(d) the Asset Purchase Agreement;
(e) the Tradename License Agreement;
(f) the Employee Lease Agreement;
(g) the Registration Rights Agreement;
(h) the Standstill Agreement;
(i) the Stockholders' Agreement; and
(j) the 8% Subordinated Note.
Documents (d) - (j) are collectively referred to as the
Buyer
Transaction Documents.
As to relevant matters, we have relied upon, among
other things,
the Buyer's factual representations in the Officers'
Certificate
of Buyer. In addition, we have obtained and relied
upon those
certificates of public officials we considered
appropriate.
We have assumed the genuineness of all signatures
(other than the
signatures of persons signing the Buyer Transaction
Documents and
the 8% Subordinated Note on behalf of Buyer), the
authenticity of
all documents submitted to us as originals and the
conformity
with originals of all documents submitted to us as
copies. To
the extent the Buyer's obligations depend on the
enforceability
of the Buyer Transaction Documents against the other
parties to
the Buyer Transaction Documents, we have assumed that
the Buyer
Transaction Documents are enforceable against the other
parties
thereto. On the basis of such examination, our reliance
upon the
assumptions in this opinion and our consideration of
those
questions of law we considered relevant, and subject to
the
limitations and qualifications in this opinion, we are
of the
opinion that:
1. Buyer has been duly incorporated and is validly
existing in
good standing under the laws of the State of Delaware,
with
corporate power to enter into the Buyer Transaction
Documents,
and to perform its obligations under the Buyer
Transaction
Documents.
2. The execution, delivery and performance of the
Buyer
Transaction Documents have been duly authorized by all
necessary
corporate action on the part of the Buyer, and the
Buyer
Transaction Documents have been duly executed and
delivered by
the Buyer.
3. Each Buyer Transaction Document constitutes the
legally
valid and binding obligation of Buyer, enforceable
against Buyer
in accordance with its terms, except as may be limited
by
bankruptcy, insolvency, reorganization, moratorium or
similar
laws relating to or affecting creditors' rights
generally
(including, without limitation, fraudulent conveyance
laws) and
by general principles of equity, including, without
limitation,
concepts of materiality, reasonableness, good faith and
fair
dealing and the possible unavailability of specific
performance
or injunctive relief, regardless of whether considered
in a
proceeding in equity or at law.
4. Buyer's execution and delivery of, and performance
of its
obligations, on or prior to the date of this opinion,
under the
Buyer Transaction Documents do not (i) violate the
Buyer's
Certificate of Incorporation and Bylaws, (ii) violate,
breach or
result in a default under, any existing obligation of
or
restriction on the Buyer under any other agreement (the
"Other
Agreements") listed in an exhibit to Buyer's most
recent annual
report on Form 10-K or (iii) breach or otherwise
violate any
existing obligation of or restriction on Buyer under
any order,
judgment or decree of any California or federal court
or
governmental authority binding on Buyer identified the
Officers'
Certificate of Buyer.
5. The execution by Xxxxx of, and performance of its
obligations under, the Asset Purchase Agreement do not
violate
any California or federal statute, rule or regulation
that we
have, in the exercise of customary professional
diligence,
recognized as applicable to Buyer or to transactions of
the type
contemplated by the Asset Purchase Agreement.
6. The shares of Buyers' common stock to be issued as
payment,
in part, for the Purchased Assets have been duly
authorized by
all necessary corporate action on the part of Buyer
and, upon
payment for and delivery of the shares of common stock
in
accordance with the Asset Purchase Agreement and the
countersigning of the certificate or certificates
representing
the shares of common stock by a duly authorized
signatory of the
registrar for Buyer's common stock, the shares will be
validly
issued, fully paid and non-assessable.
Our opinion in paragraph 3 above as to the
enforceability of the
Buyer Transaction Documents is subject to (i) public
policy
considerations, statues or court decisions that may
limit the
rights of a party to obtain indemnification against its
own
negligence, willful misconduct or unlawful conduct;
(ii) the
unenforceability under certain circumstances of
provisions
imposing penalties, liquidated damages, acceleration of
future
amounts due (other than principal) without appropriate
discount
to present value, late charges, prepayment charges and
increased
interest rates upon default; (iii) the unenforceability
under
certain circumstances of choice of law provisions; and
(iv) with
respect to the Registration Rights Agreement, the
unenforceability of the indemnity provisions contained
therein as
they relate to the federal securities law.
We express no opinion with respect to your ability to
collect
attorneys' fees and costs in an action involving the
Buyer
Transaction Documents if you are not the prevailing
party in that
action (we call your attention to the effect of Section
1717 of
the California Civil Code, which provide that where a
contract
permits on party thereto to recover attorneys' fees,
the
prevailing party in any action to enforce any provision
o the
contract shall be entitled to recover its reasonable
attorneys'
fees).
We express no opinion as to any provision of the Buyer
Transaction Documents requiring written amendments or
waivers of
the Buyer Transaction Documents insofar as it suggests
that oral
or other modifications, amendments or waivers could not
be
effectively agreed upon by the parties or that the
doctrine of
promissory estoppel might not apply.
We express no opinion (i) concerning federal or state
securities
law or regulations, (ii) federal or state antitrust,
unfair
competition or trade practice laws or regulations or
federal or
state laws and regulations concerning filing
requirements.
We advise you that Section 12.4 of the Asset Purchase
Agreement,
which provides for exclusive jurisdiction of the courts
of the
State of California, may not be binding on the courts
in the
forum selected or excluded.
The law covered by this opinion is limited to the
present federal
law of the United States and the present law of the
States of
California and the General Corporation Law of Delaware.
We
express no opinion as to the laws of any other
jurisdiction and
no opinion regarding the statues, administrative
decisions,
rules, regulation or requirements of any county,
municipality,
subdivision or other local authority of any
jurisdiction.
This opinion is furnished by us as counsel for Xxxxx
and may be
relied upon you only in connection with the
transactions
contemplated by the Asset Purchase Agreement. This
opinion may
not be used or relied upon by you for any other purpose
or by any
other person, nor may copies by delivered to any other
person,
without in each instance our prior written consent.
Respectfully submitted,
