Form 8-K



 



Exhibit 10.1



IRON AGE CORPORATION

Robinson Plaza Three, Suite 400

Pittsburgh, Pennsylvania 15205


                    As of August 25, 2003


 


Wells Fargo Foothill, Inc.

One Boston Place, Suite 1800

Boston, Massachusetts 02108

Attention: Vice President


     Re: Loan and Security Agreement


Ladies and Gentlemen:


     Reference is made to the Loan and Security Agreement, dated as of
September 23, 2002, as amended by the First Amendment to the Loan and Security
Agreement and Limited Waiver dated as of May 12, 2003, the Letter Agreement
dated May 29, 2003, and the Letter Agreement dated June 26, 2003 (the “June
Letter Agreement”) (as so amended and modified, the “Loan Agreement”), each by
and among, on the one hand, the lenders identified on the signature pages
thereof (such lenders, together with their respective successors and assigns,
are referred to hereinafter each individually as a “Lender” and collectively as
the “Lenders”), and Wells Fargo Foothill, Inc., a California corporation
formerly known as Foothill Capital Corporation, as the arranger and
administrative agent for the Lenders (the “Agent”), and, on the other hand,
Iron Age Corporation, a Delaware corporation (“Iron Age”), Falcon Shoe Mfg.
Co., a Maine corporation (together with Iron Age, each individually a
“Borrower” and collectively, jointly and severally, as “Borrowers”), and Iron
Age Holdings Corporation, a Delaware corporation (“Parent”). All capitalized
terms used herein and not otherwise defined herein are used herein as defined
in the Loan Agreement.


     Iron Age hereby (a) notifies the Agent and the Lenders that the Borrowers
will not be able to comply with the requirements of paragraph 4(a) of the June
Letter Agreement with respect to their delivery to the Agent and the Lenders of
the Transaction and Note Restructuring Documents described therein and (b)
agrees to immediately proceed with a Restructuring Plan in accordance with
paragraph 4(c) of the June Letter Agreement.


     Accordingly, the Borrowers hereby agree with the Agent and the Lenders as
follows:


Acknowledgments.


The Borrowers hereby acknowledge and agree that


 






 


     the Borrowers will not be able to comply with the requirements of
paragraph 4(a) of the June Letter Agreement with respect to their delivery to
the Agent and the Lenders of the Transaction and Note Restructuring Documents
described therein, and


     the Borrowers shall immediately proceed with a Restructuring Plan in
accordance with paragraph 4(c) of the June Letter Agreement.


The Agent and the Lenders hereby acknowledge and agree that no Event of Default
shall occur as a result of the failure by the Borrowers to deliver to the Agent
and the Lenders the Transaction and Note Restructuring Documents in accordance
with paragraph 4(a) of the June Letter Agreement.


Forbearance Fee. The Borrowers shall, upon execution by the Borrowers of this
letter agreement, pay to the Agent for the account of the Lenders (to be
allocated among the Lenders pro rata based upon the aggregate unpaid principal
amount of each Lender’s Advances and Term Loans) the remaining portion of the
Forbearance Fee in the amount of $271,382 set forth in paragraph 2(b) of the
June Letter Agreement.


Restructuring Plan.


The Agent and the Lenders hereby acknowledge that the Borrowers have delivered
to the Agent and the Lenders a preliminary Restructuring Plan.


The Borrowers hereby


     agree to (A) make such revisions to the preliminary Restructuring Plan as
the Agent and the Lenders may reasonably require, (B) provide to the Agent and
the Lenders a final Restructuring Plan that has been approved by the holders of
the Parent Notes and the Iron Age Notes, which final Restructuring Plan shall
be in form and substance satisfactory to the Agent and the Lenders in their
reasonable discretion and (C) consummate the final Restructuring Plan prior to
the expiration of the Waiver Period, and


     reaffirm their obligations under paragraph 4(d) of the June Letter
Agreement to (A) participate in conference calls with the Agent and the Lenders
at least weekly to report on the status of the Restructuring Plan and (B) fully
cooperate with the Agent and the Lenders in connection with the Restructuring
Plan.


 






 


Supplemental Information. The Borrowers hereby agree to provide to the Agent
and the Lenders, from time to time and by such dates as the Agent and the
Lenders may request, supplemental information reports (each a “Report”)
regarding the final Restructuring Plan and/or other matters relating to the
business of the Borrowers. The Borrowers hereby acknowledge and agree that
their obligation to deliver a Report in accordance with this paragraph 4 is in
addition to the obligations of the Borrowers set forth in paragraph 3 hereof.


Calculation of Excess Availability. The Agent and the Lenders hereby agree
that the June Letter Agreement is hereby amended by deleting in its entirety
clause (i)(B) of paragraph 6(b) therein and substituting in lieu thereof “(B)
any expenditures (including, without limitation, in respect of professional
fees, retainers and success fees) actually made by the Loan Parties in
connection with the Transaction, the Note Restructuring and the Restructuring
Plan in an aggregate amount not to exceed $1,400,000, and”.


Representations and Warranties. Each Borrower hereby represents and warrants
to the Agent and the Lenders as follows:


The representations and warranties contained in Section 5 of the Loan Agreement
and in each other Loan Document and certificate or other writing delivered to
the Agent or any Lender on or prior to the date hereof are true and correct in
all material respects on and as of the date hereof as though made on and as of
such date, except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties are true and correct in all material respects on and as of such
date).


No Default or Event of Default (other than the Existing Defaults) has occurred
and is continuing on the date hereof, or will result from this letter agreement
becoming effective in accordance with its terms.


Effectiveness. This letter agreement shall become effective upon receipt by
the Agent of (a) counterparts of this letter agreement fully executed by each
of the Lenders, the Borrowers and the Guarantors and (b) the remaining portion
of the Forbearance Fee in accordance with paragraph 2 hereof.


Miscellaneous.


Continued Effectiveness of the Loan Agreement. Except as otherwise expressly
provided herein, (i) the Loan Agreement and the other Loan Documents are, and
shall continue to be, in full force and effect and are hereby ratified and
confirmed in all respects, except that on and after the date hereof (A) all
references in the Loan Agreement to “this Agreement”, “hereto”, “hereof”,
“hereunder” or words of like import referring to the Loan Agreement shall mean
the Loan Agreement as amended by this letter agreement and (B) all references
in the other Loan Documents to the “Loan Agreement”, “thereto”, “thereof”,
“thereunder” or words of like import referring to the Loan Agreement shall mean
the Loan Agreement as amended by this letter agreement, (ii) to the extent that
the Loan Agreement or any other Loan Document purports to pledge to the Agent,
or to grant to the Agent a security interest in or lien on, any collateral as
security for the Obligations, such pledge or grant of a security interest or
lien is hereby ratified and confirmed in all respects, and (iii) the execution,
delivery and effectiveness of this letter agreement shall not operate as an
amendment of any right, power or remedy of the Agent or the Lenders under the
Loan Agreement or any other Loan Document, nor constitute an amendment of any
provision of the Loan Agreement or any other Loan Document.


 







 


No Waiver. This letter agreement is not a waiver of, or consent to, any
Default or Event of Default now existing or hereafter arising under the Loan
Agreement or any other Loan Document and the Agent and the Lenders expressly
reserve all of their rights and remedies under the Loan Agreement and the other
Loan Documents, under applicable law or otherwise.


Letter Agreement as Loan Document. Each Borrower hereby acknowledges and
agrees that this letter agreement constitutes a “Loan Document” under the Loan
Agreement. Accordingly, it shall be an Event of Default under the Loan
Agreement if any Borrower fails to perform, keep, or observe any term,
provision, condition, covenant, or agreement contained in this letter agreement
or if any representation or warranty made by any Borrower under or in
connection with this letter agreement shall have been untrue, false or
misleading in any material respect when made.


Release. For and in consideration of the agreements contained in this letter
agreement and other good and valuable consideration, the Borrowers and the
Guarantors (collectively, the “Releasors”) unconditionally and irrevocably
release, waive and forever discharge the Agent, each Agent-Related Person, each
Lender and each Lender-Related Person, together with each of their respective
successors, assigns, subsidiaries, affiliates, agents and attorneys
(collectively, the “Released Parties”), from: (i) any and all liabilities,
obligations, duties, promises or indebtedness of any kind of the Released
Parties to the Releasors or any of them and (ii) all claims, offsets, causes of
action, suits or defenses of any kind whatsoever (if any), which the Releasors
or any of them might otherwise have against the Released Parties or any of
them, in either case (i) or (ii) on account of any condition, act, omission,
event, contract, liability, obligation, indebtedness, claim, cause of action,
defense, circumstance or matter of any kind (x) which existed, arose or
occurred at any time from the beginning of the world to the effective date of
this letter agreement or (y) which could hereafter arise as a result of the
execution of (or the observance of the terms of) this letter agreement, the
Loan Agreement or any of the other Loan Documents.


Counterparts. This letter agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this letter agreement by telefacsimile or electronic mail shall be equally as
effective as delivery of an original executed counterpart of this letter
agreement.


Governing Law. This letter agreement shall be governed by, and construed in
accordance with, the law of the State of New York.


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     This letter agreement (a) supersedes all prior discussions, agreements,
commitments, arrangements, negotiations or understandings, whether oral or
written, of the parties with respect thereto, (b) shall be binding upon the
parties and their respective successors and assigns, and (c) may not be relied
upon or enforced by any other person or entity. If this letter agreement
becomes the subject of a dispute, each of the parties hereto hereby waives
trial by jury. This letter agreement may be amended, modified or waived only
in a writing signed by the parties hereto.



	 	 	 	 	 
	 	 	Very truly yours,
	 
	 
	 	 	IRON AGE CORPORATION
	 
	 
	 	 	By:	 	/s/ Bart R. Huchel



Name: Bart R. Huchel

Title: CFO
	 
	 
	 	 	FALCON SHOE MFG. CO.
	 
	 
	 	 	By:	 	/s/ Bart R. Huchel



Name: Bart R. Huchel

Title: Treasurer





	 	 	 
	Consented to and agreed

as of the date first above written:
	 
	 
	IRON AGE HOLDINGS CORPORATION
	 
	 
	By:	 	/s/ Bart R. Huchel



Name: Bart R. Huchel

Title: CFO
	 
	 
	IRON AGE INVESTMENT COMPANY
	 
	 
	By:	 	
/s/ Bart R. Huchel



Name: Bart R. Huchel

Title: President
	 
	 
	IA VISION ACQUISITION, CO.
	 
	 
	By:	 	
/s/ Bart R. Huchel



Name: Bart R. Huchel

Title: VP & Treasurer



 






 




	 	 	 
	Agreed and accepted

as of the date first above written:
	 
	 
	WELLS FARGO FOOTHILL, INC.,

as Agent and Lender
	 
	 
	By:	 	
/s/ Paul G. Chao



Name: Paul G. Chao

Title: VP
	 
	 
	CREDIT SUISSE FIRST BOSTON INTERNATIONAL,

as a Lender
	 
	 
	By:	 	
/s/ Ethan R. Garber



Name: Ethan R. Garber

Title: VP
	 
	 
	H/Z ACQUISITION PARTNERS, LLC,

as a Lender
	 
	 
	By:	 	Highbridge/Zwirn Capital Management, LLC
	 
	 
	By:	 	
/s/ Daniel Zwirn



Name: Daniel Zwirn

Title: Managing Principal