SECOND AMENDED AND RESTATED

                    REVOLVING CREDIT AND TERM LOAN AGREEMENT



         This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of the 30th

day of October, 2003, by and among PHOENIX FOOTWEAR GROUP, INC., a corporation

formed under the laws of the State of Delaware ("Borrower") and MANUFACTURERS

AND TRADERS TRUST COMPANY, a bank formed under the laws of the State of New York

("Bank").



                                    RECITALS:



         A.       Borrower and Bank are parties to a First Amended and Restated

Revolving Credit and Term Loan Agreement dated March 30, 2000, as amended (the

"Prior Agreement"), pursuant to which Bank has made loans to Borrower for the

purposes described therein.



         B.       Borrower has requested that the Prior Agreement be amended in

its entirety to, among other things:



                  (i)      provide a revolving credit facility in the maximum

                           principal amount of $15,000,000 (during the months of

                           June through January) to $18,000,000 (during the

                           months of February through May);



                  (ii)     continue the two existing term loan facilities in the

                           original principal amounts of $2,250,000 and

                           $3,000,000, respectively;



                  (iii)    provide an additional term loan facility in the

                           principal amount of $1,500,000; and



                  (iv)     make certain changes to the terms and conditions of

                           the Prior Agreement.



         NOW, THEREFORE, Borrower and the Bank hereby agree that the Prior

Agreement (including all Schedules and Exhibits thereto) is hereby amended and

restated in its entirety as follows:



                                    ARTICLE I



                                   DEFINITIONS



         1.1      The following terms shall have the following meanings unless

otherwise expressly stated herein:



                  "Affiliate" means any entity which directly or indirectly, or

through one or more intermediaries, Controls or is Controlled By or is Under

Common Control with Borrower.



                  "Agreement" means this Second Amended and Restated Revolving

Credit and Term Loan Agreement, as further amended, modified or restated from

time to time.



{PAGE}



                                        2



                  "Average Borrowed Funds to EBITDA Ratio" means as of the

applicable measurement date, the Average Borrowed Funds as of such date divided

by EBITDA for the twelve (12) Fiscal Month period ended as of such date.



                  "Average Borrowed Funds" means as of the last day of any

Fiscal Quarter, the average of the aggregate amounts of Borrowed Funds of the

Borrower as of such day, and as of the last day of each of the eleven (11)

immediately preceding Fiscal Months.



                   "Authorized Person" means James Riedman, or Kenneth Wolf each

of whom are authorized by the Borrower to request Loans and Letters of Credit,

and any additional person who the Borrower notifies the Bank of in writing is

authorized to do the same.



                  "Bank" means Manufacturers and Traders Trust Company.



                  "Borrowed Funds" means, as of the measurement date, without

duplication, on a consolidated basis, Borrower's and its Subsidiaries' (1)

indebtedness or liability for borrowed money, including Obligations under the

Loan Documents; (2) obligations evidenced by bonds, debentures, notes, or other

similar instruments; (3) obligations for the deferred purchase price of property

or services (excluding trade obligations); (4) obligations as lessee under

capital leases; (5) current liabilities in respect of unfunded vested benefits

under Plans covered by ERISA; (6) obligations under letters of credit (other

than the Comerica L/Cs and Earn-Out Letter of Credit; (7) obligations under

acceptance facilities; (8) all guaranties, endorsements (other than for

collection or deposit in the ordinary course of business), and other contingent

obligations to purchase, to provide funds for payment, to supply funds to invest

in any person or entity, or otherwise to assure a creditor against loss; (9)

obligations secured by any Liens, whether or not the obligations have been

assumed; (10) all purchase money mortgages, outstanding under asset

securitization vehicles, conditional sales contracts and similar title retention

debt instruments; and (11) the Contingent Earn-Out Amounts.



                  "Borrower" means Phoenix Footwear Group, Inc. and its

successors, legal representatives and assigns.



                  "Borrower's 401(k) Plan " means the Borrower's defined

contribution 401(k) savings plan.



                  "Borrowing Base" means the sum of the following:



                           (a)      80% of the Eligible Accounts of Borrower and

Guarantors;



                           (b)      plus the lesser of (i) $3,500,000 and (ii)

50% of the Eligible Inventories of Borrower and its Subsidiaries that are used

in their business other than the Trask Business or the Royal Business;



                           (c)      plus the lesser of (i) $1,500,000 and (ii)

50% of the Eligible Inventories of Borrower and its Subsidiaries that are used

in the Trask Business;



                           (d)      plus the lesser of (i) $1,500,000 and (ii)

50% of the Eligible Inventories of Borrower and its Subsidiaries that are used

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC