EXHIBIT 10.13
RELEASE AGREEMENT
September 23, 2002
To the Loan Parties
party to the Credit Agreement
referred to below
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of April
24, 1998 (as heretofore amended, supplemented or otherwise modified, the "Credit
Agreement") among the undersigned and you. All capitalized terms herein not
otherwise defined shall have the meanings attributed to them in the Credit
Agreement or, if not defined therein, in the Loan Documents (as defined in the
Credit Agreement).
In consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the undersigned agrees as follows:
1. REPAYMENT
The Borrower has advised the Lender Parties that it intends to
repay all amounts due under the Loan Documents, including without limitation,
principal, interest, fees, costs and other amounts (the "Obligations") and has
requested that the Lender Parties provide the Borrower with appropriate pay-off
figures for the principal, interest and other amounts owing by the Loan Parties
to the Lender Parties under the Loan Documents. The pay-off figures for the
Lender Parties as of 12:00 p.m. (New York time) September 23, 2002 (the
"Computation Date") under the Loan Documents are as follows (collectively,
together with any additional interest accruing, or fees and expenses incurred
after the Computation Date that must be paid by the Loan Parties, the "Pay-Off
Amount"):
(a) Principal, interest and fees to BNP Paribas (on behalf of itself
and the other Lender Parties): $27,610,137.62; and
(b) Attorneys fees and expenses to Shearman & Sterling: $23,693.40.
The account number of BNP Paribas for purposes of receiving the
Pay-Off Amount is:
BNP Paribas, New York
ABA No.: 000-000-000
Account No.: 103 130 00103
Attention: Loan Servicing Clearing Account
Reference: Iron Age - Credit Facility Prepayment
The account number of Shearman & Sterling for purposes of
receiving the Pay-Off Amount is:
Attention: Shearman & Sterling General 1 Account
ABA No.: 000000000
Account No.: 00000000
Reference: 00590/00074 Invoice No.: 2225974
From and after the Computation Date and until the date on
which the Pay-Off Amount is paid in full in cash (the "Pay-Off Date"), interest
shall continue to accrue on the unpaid principal amount of the Obligations at
the rate set forth in the Credit Agreement. Upon request of the Borrower, the
Agent on behalf of the Lender Parties shall provide the Borrower with a revised
figure for the amount of interest to be paid as part of the Pay-Off Amount plus
any additional fees and expenses incurred since the Computation Date that must
be paid as part of the Pay-Off Amount.
The Borrower agrees to pay to the Agent in full in cash the
Pay-Off Amount, including any additional interest accruing after the Computation
Date, on or prior to 12:00 p.m. (New York time) on the Pay-Off Date.
2. RELEASE
Subject to satisfaction of the conditions set forth in
paragraph 5, each of the Lender Parties hereby terminates and releases any and
all security interests in, liens upon, rights of set-off against and pledges of,
all mortgages and properties and assets of the Loan Parties, heretofore granted,
pledged, mortgaged, assigned to, or otherwise claimed by the Lender Parties,
whether personal, real or mixed, tangible or intangible, pursuant to the Loan
Documents, other than the L/C Collateral Account (as defined below). Subject to
satisfaction of the conditions set forth in paragraph 5, the Lender Parties
hereby direct the Agent and the Agent also hereby terminates and releases any
blocked accounts or other arrangements for the receipt or transfer to the Agent
of remittances or proceeds from customers of the Loan Parties under the Security
Agreement and agrees and acknowledges that it will deliver any documentation as
shall be reasonably required by the Borrower to effect such termination and
release.
2
3. INDEMNIFICATION FOR RETURNED ITEMS AND OPERATION OF ACCOUNT
(a) The Loan Parties agree to indemnify the Lender Parties from
and hold the Lender Parties harmless against all loss, cost,
refund or dishonor of any cheques or other items which have
been credited by the Lender Parties to the account of the Loan
Parties, together with any reasonable expenses or other
reasonable and customary charges incident thereto.
(b) The Lender Parties agree to close all accounts in the name of
the Borrower related to the Credit Agreement (excluding the
L/C Cash Collateral Account (as defined below) to be closed in
accordance with Section 7 below) and to remit any cash
remaining therein to the Borrower (or to such other designee
as the Borrower shall direct).
4. DELIVERY OF DOCUMENTS
Concurrently with the satisfaction of the conditions set forth
in paragraph 5, the Agent:
(a) agrees to deliver to the Borrower (or to such other designee
as the Borrower shall direct), at the expense of the Borrower,
the originals of all stock certificates, promissory notes and
other instruments pledged to and held by the Agent, as set
forth in Schedule I hereto;
(b) authorizes the Borrower or Foothill Capital Corporation to
file: (i) UCC termination statements as to the financing
statements filed in favor of the Agent, (ii) a release of
Intellectual Property Security Agreement filed in favor of the
Agent at the United States Patent and Trademark office, and
(iii) releases as to the Personal Property Security Act
filings in Canada in favor of the Agent; and
(c) agrees to deliver to the Borrower a discharge of the Mortgage.
5. CONDITIONS PRECEDENT
The effectiveness of the releases contained in paragraph 2
above and the delivery of any release document by the Agent pursuant to
paragraph 4 above are subject to and conditioned upon the receipt by the Agent
on behalf of the Lender Parties of: (i) the Pay-Off Amount in cash or other
immediately available funds in accordance with paragraph 1 above, (ii) an
original of this Release Agreement duly executed by the parties hereto, and
(iii) cash collateral in the amount of $375,000 in the cash collateral account
with BNP Paribas, New York at its offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX
00000, Account No. 453 142 2469 02, ABA No. 000-000-000, Reference: Iron Age -
Cash Collateral Account (the "L/C Cash Collateral Account"), in respect of the
Letter of Credit issued pursuant to Section 2.01(c) of the Credit Agreement (the
"Existing Letter of Credit").
6. PROCEEDS OF COLLATERAL
Each of the Lender Parties agrees that it shall have no
security interest in any cheques, remittances or other items which are proceeds
of accounts and other collateral released pursuant hereto which are received or
collected by such Lender Party on and after the date hereof and that such Lender
Party will notify the Borrower of the Lender Party's receipt of such items and
act upon the Borrower's reasonable instructions with respect to disposition of
such items.
7. FURTHER ASSURANCES
The Lender Parties further agree, and direct the Agent, to
furnish, at the Borrower's expense, additional releases, discharges and/or
termination statements as the Borrower or Foothill Capital Corporation may
reasonably request and such other and further documents, instruments and
agreements as may be reasonably requested by the Borrower, in order to effect
and evidence more fully the matters covered hereby.
The Lender Parties agree, and direct the Agent, upon the
earlier of (i) the termination or the expiration of the Existing Letter of
Credit and (ii) the receipt of a letter of credit from a financial institution
reasonably acceptable to the Issuing Bank, issued to the Issuing Bank for the
benefit of the Lender Parties, to close the L/C Cash Collateral Account and to
remit any cash remaining therein to the Borrower (or to such other designee as
the Borrower shall direct). The Borrower agrees to pay the actual legal fees
(not exceeding $2500) of legal counsel to the Issuing Bank in connection with
the negotiation of such supporting letter of credit. The parties hereto
acknowledge and agree that until the Existing Letter of Credit is terminated or
expires in accordance with its terms the Loan Documents shall remain in full
force and effect.
8. COUNTERPARTS
This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original hereof and admissible into
evidence and all of which together shall be deemed to be a single instrument and
an executed facsimile copy shall constitute an original executed copy.
9. CONSTRUCTION
All references to "Lender Parties", "Borrower" or "Loan
Parties" herein shall include their respective successors or assigns.
10. GOVERNING LAW
This Agreement shall be governed by, and construed and
interpreted in accordance with the laws of the State of New York.
Yours truly,
BNP PARIBAS, as Agent, Swing Line Bank
and as Lender
By:
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Name:
Title:
By:
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Name:
Title:
KEY CORPORATE CAPITAL INC.
By:
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Name:
Title:
PNC BANK, NATIONAL ASSOCIATION, as
Issuing Bank and as Lender
By:
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Name:
Title:
UBS AG, STAMFORD BRANCH
By:
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Name:
Title:
By:
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Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By:
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Name:
Title:
ACKNOWLEDGED AND AGREED:
IRON AGE CORPORATION
By:
-----------------------------------
Name:
Title:
IRON AGE HOLDINGS CORPORATION
By:
-----------------------------------
Name:
Title:
IRON AGE INVESTMENT COMPANY
By:
-----------------------------------
Name:
Title:
FALCON SHOE MFG. CO.
By:
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Name:
Title:
SCHEDULE I
I. Pledged Shares
PERCENTAGE OF
STOCK ISSUED AND
CLASS OF CERTIFICATE NUMBER OUTSTANDING
GRANTOR STOCK ISSUER STOCK NO. OF SHARES SHARES OF ISSUER
------- ------------ ----- --- --------- ----------------
Iron Age Holdings Iron Age Corporation Com. 1 1,000 100%
Corporation
Iron Age Falcon Shoe Mfg. Co. Com. 64 9,800 100%
Corporation
Iron Age Iron Age Investment Company Com. 1 & 2 1,000 100%
Corporation (943 & 57)
Iron Age Iron Age Canada Ltd. Com. C-3 66 66%
Corporation
Iron Age Iron Age de Mexico S.A. de C.V. Com. 4 65 66%
Investment Company
II. Pledged Indebtedness
Issuer Grantor Description of Debt
------ ------- -------------------
Iron Age Canada Ltd. Iron Age Corporation Grid Note
Iron Age Mexico, S.A. Iron Age Corporation Grid Note
de C.V.
Iron Age Corporation Iron Age Investment Company Grid Note
Iron Age Corporation Falcon Shoe Mfg. Co. Grid Note
Falcon Show Mfg. Co. Iron Age Corporation Grid Note
