EXHIBIT 10.10
IRON AGE CORPORATION
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dated as of September 23, 2002
CONFIDENTIAL
Foothill Capital Corporation
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Re: SIDE LETTER
Ladies and Gentlemen:
Reference hereby is made to that certain Loan and Security
Agreement, dated as of even date herewith (the "LOAN AGREEMENT"), 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 FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and
administrative agent for the Lenders ("AGENT"), and, on the other hand, IRON AGE
CORPORATION, a Delaware corporation ("IRON AGE"), FALCON SHOE MFG., CO., a Maine
corporation ("FALCON" and together with Iron Age, each individually a "BORROWER"
and collectively, jointly and severally, as "BORROWERS"), and IRON AGE HOLDINGS
CORPORATION, a Delaware corporation ("PARENT"). Capitalized terms used herein
but not specifically defined herein shall have the meanings ascribed to them in
the Loan Agreement.
The Agent, the Parent and the Borrowers hereby agree as
follows:
1. The ratio referred to in SECTION 2.1(C) of the Loan
Agreement as agreed upon between Agent and Administrative Borrower shall be 3.50
: 1.0, PROVIDED that, at the time of the determination thereof, (a) no Event of
Default shall have occurred and be continuing, (b) the Parent or Iron Age has
applied not less than $1,000,000 of the proceeds of the Advances or the Term
Loans to the repurchase of Parent Notes and (c) EBITDA of the Parent and its
Subsidiaries is not less than $10,000,000 for the trailing 12 month period.
2. In accordance with SECTION 3.1(Z)(II) of the Loan
Agreement, Parent shall use its reasonable best efforts to repurchase up to
$28,000,000 of face amount of its Parent Notes prior to December 31, 2003.
Foothill Capital Corporation
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3. The aggregate amount of distributions and dividends
referred to in SECTION 7.11(B)(II) of the Loan Agreement as agreed upon between
Parent and Agent is $8,500,000.
4. The Senior Debt Ratio referred to in SECTION 7.11(B)(II)(B)
of the Loan Agreement as agreed upon between Parent and Agent is the Senior Debt
Ratio calculated pursuant to paragraph 7 of this letter agreement.
5. The face amount of Parent Notes referred to in SECTION
7.17(B)(I) of the Loan Agreement as agreed upon between Parent and Agent is
$28,000,000.
6. The amount of the proceeds of the Advances and the Term
Loans referred to in SECTION 7.17(B)(I) of the Loan Agreement as agreed upon
between Parent and Agent is $5,500,000 of the proceeds of the Advances and
$3,000,000 of the proceeds of the Term Loan B.
7. Notwithstanding anything to the contrary contained in
SECTION 7.20(B) of the Loan Agreement, so long as no Event of Default shall have
occurred and be continuing, the maximum Senior Debt Ratio shall be increased
from 3.25 : 1.00 to 3.50 : 1.00 at the end of any Fiscal Month of the Parent for
the trailing 12 month period ending at the end of such Fiscal Month if either
(a) at the time of the determination thereof, both (i) the Parent or Iron Age
has applied not less than $1,000,000 of the proceeds of the Advances or the Term
Loans to the repurchase of Parent Notes and (ii) EBITDA of the Parent and its
Subsidiaries is not less than $10,000,000 for the trailing 12 month period, or
(b) the Agent, in its sole discretion, elects to accommodate the Borrowers'
seasonal borrowing needs.
Foothill Capital Corporation
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This letter agreement shall be construed under and governed by
the laws of the State of New York, and may be executed in any number of
counterparts and by different parties on separate counterparts. Each of such
counterparts shall be deemed to be an original, and all of such counterparts,
taken together, shall constitute but one and the same agreement. Delivery of an
executed counterpart of this letter by telefacsimile shall be equally effective
as delivery of a manually executed counterpart.
Very truly yours,
IRON AGE HOLDINGS CORPORATION
a Delaware corporation
By:
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Name:
Title:
IRON AGE CORPORATION
a Delaware corporation
By:
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Name:
Title:
FALCON SHOE MFG. CO.
a Maine corporation
By:
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Name:
Title:
Accepted and agreed to
as of the date first above written:
FOOTHILL CAPITAL CORPORATION
a California corporation
By:
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Name:
Title:
