IRON AGE CORP
GUARANTEE
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>10
<FILENAME>j9642601exv10w8.txt
<DESCRIPTION>GUARANTEE
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.8

                                    GUARANTEE
                               ("this Guarantee")

                  THIS GUARANTEE is dated as of September 23, 2002, and made by
Iron Age Canada Ltd. (the "CANADIAN SUBSIDIARY") in favour of Foothill Capital
Corporation, a California corporation ("FOOTHILL") as agent on behalf of the
Lender Group (in such capacity, the "AGENT").

                  WHEREAS:

A. Pursuant to the terms of a loan and security agreement as amended, restated,
supplemented or otherwise modified from time to time (the "LOAN AGREEMENT")
dated as of September 23, 2002 by and between Foothill, the lenders signatory
thereto (the "LENDERS"), Iron Age Holdings Corporation (the "PARENT") and its
wholly-owned subsidiaries, Iron Age Corporation ("IRON AGE") and Falcon Shoe
Mfg. Co. ("FALCON" and together with Iron Age, each a "BORROWER" and
collectively the "BORROWERS"). Foothill has agreed to act as a manager and a
administrative agent for the Lenders to the Borrowers;

B. The Canadian Subsidiary is a corporation incorporated under the laws of
Canada pursuant to the Canada Business Corporations Act with its chief executive
office located at 560 Bryne Drive, Unit 3, Barrie, Ontario, L4N 9P6. The
Canadian Subsidiary is a subsidiary of Iron Age and is a part of the Parent's
corporate and operational group which includes the Borrowers (the "IRON AGE
GROUP") and which receives services and support from the Parent. By virtue of it
being part of the Iron Age Group, the Canadian Subsidiary derives economic
benefit from the Advances to the Borrowers;

C. As a condition of and as security for the Advances, the Agent and the Lenders
require the Canadian Subsidiary to guarantee repayment of the Advances, interest
thereon calculated in accordance with the Loan Agreement and all other
Obligations (collectively the "DEBT") and to guarantee the observance, payment
and performance by the Borrowers of all the obligations, payments and otherwise
to the Agent, the Lenders and the Lender Group under the Loan Agreement, and the
Loan Documents (together with the Debt, collectively the "GUARANTEED
OBLIGATIONS");

D. The Parent is also a guarantor of the Guaranteed Obligations;

E. All capitalized terms used but not defined herein have the meaning ascribed
to such terms in the Loan Agreement.

                  FOR VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, the Canadian Subsidiary hereby agrees with the
Agent and the Lenders as follows:

1. The Canadian Subsidiary irrevocably, absolutely and unconditionally
guarantees to the Agent and the Lenders the due payment by the Borrowers to the
Agent, the Lenders and
<PAGE>
                                      -2-

the Lender Group of the Guaranteed Obligations and the due performance by the
Borrowers of the Guaranteed Obligations.

2. This Guarantee is a continuing guarantee and is not limited by amount, time
or otherwise.

3. The Canadian Subsidiary hereby acknowledges that certain of the rights of
interest applicable as to the Guaranteed Obligations may be computed on the
basis of a year of 360 days or 365 days, as the case may be, and paid for the
actual number of days elapsed. For the purposes of the Interest Act (Canada),
whenever any interest is calculated using a rate based on a year of 360 days or
365 days, as the case may be, such rate determined pursuant to such calculation,
when expressed as an annual rate is equivalent to:

         (a)      the applicable rate based on a year of 360 days or 365 days,
                  as the case may be,

         (b)      multiplied by the actual number of days in a calendar year in
                  which the period for such interest is payable (or compounded),
                  and

         (c)      divided by 360 days or 365 days, as the case may be.

4. If any provision of this Guarantee would oblige the Canadian Subsidiary to
make any payment of interest or other amount payable to the Agent or any Lender
in an amount or calculated at a rate which would be prohibited by law or would
result in a receipt by the Agent or that Lender of "interest" at a "criminal
rate" (as such terms are construed under the Criminal Code (Canada)), then,
notwithstanding such provision, such amount or rate shall be deemed to have been
adjusted with retroactive effect to the maximum amount or rate of interest, as
the case may be, as would not be so prohibited by law or so result in a receipt
by the Agent or that Lender of "interest" at a "criminal rate", such adjustment
to be effected, to the extent necessary (but only to the extent necessary), as
follows:

                  (i)      first, by reducing the amount or rate of interest
                           required to be paid to the Agent or the affected
                           Lender; and

                  (ii)     thereafter, by reducing any fees, commissions,
                           premiums and other amounts required to be paid to the
                           Agent or the affected Lender which would constitute
                           interest for purposes of Section 347 of the Criminal
                           Code (Canada).

5. The liability of the Canadian Subsidiary hereunder shall bear interest from
the date written demand for payment is deemed to have been given by the Agent to
the Canadian Subsidiary at the Prime Interest Rate (defined below) plus 3% per
annum (the "INTEREST RATE"). "PRIME INTEREST RATE" as used in this Guarantee
shall mean the annual rate of interest announced from time to time by Canadian
Imperial Bank of Commerce as a reference rate then in effect for determining
interest rates on Canadian dollar commercial loans in Canada.

6. The Canadian Subsidiary will provide and grant forthwith to the Agent the
security described in the Loan Agreement, including, without limitation, a
general security
<PAGE>
                                      -3-

agreement as security for the obligations of the Canadian Subsidiary hereunder
to the Agent and the Lenders.

7. Without releasing, discharging, limiting or otherwise affecting in whole or
in part the obligations and liabilities of the Canadian Subsidiary hereunder and
without the consent of or notice to the Canadian Subsidiary, the Agent may as it
sees fit and regardless of whether the Canadian Subsidiary's risk is increased:

         (a)      grant time, renewals, extensions, indulgences, releases and
                  discharges to a Borrower or any other person or persons now or
                  hereafter liable to the Agent and the Lenders in respect of
                  the Guaranteed Obligations,

         (b)      take or refrain from taking security or collateral from a
                  Borrower or any other person or persons or from perfecting
                  such security or collateral in connection with the Guaranteed
                  Obligations,

         (c)      give up, modify, exchange, renew, release, discharge,
                  compromise, realize, enforce or otherwise deal with or do any
                  act or thing in respect of (with or without consideration) any
                  and all collateral, mortgages or other security given by a
                  Borrower or any other person or persons with respect to the
                  Guaranteed Obligations,

         (d)      accept compromises, settlements or arrangements from any of
                  the Borrowers or any other person or persons,

         (e)      exercise any right or remedy which it may have against a
                  Borrower or any other person or persons or with respect to any
                  security for the Guaranteed Obligations, including judicial
                  and non-judicial foreclosure,

         (f)      apply money at any time received from a Borrower or any person
                  or persons or from security upon such part of the Guaranteed
                  Obligations as the Agent may see fit or change any such
                  application in whole or in part from time to time as the Agent
                  may see fit,

         (g)      give credit or make advances to any Borrower, any Guarantor or
                  any other person, and discontinue, release, increase or
                  otherwise vary such credit, or

         (h)      otherwise deal with, or waive or modify its right to deal with
                  any of the Borrowers and any other person or persons and
                  securities as the Agent may see fit, and in no case shall the
                  Agent be responsible for nor the Canadian Subsidiary released
                  from its obligations hereunder by any neglect or omission of
                  the Agent with respect to any of the foregoing.

8. The Canadian Subsidiary renounces all benefits of discussion and division.

9. This Guarantee will not be considered as wholly or partially satisfied by the
payment or liquidation at any time or times of any sum or sums of money for the
time being due or remaining unpaid to the Agent, the Lenders and the Lender
Group, and all dividends,
<PAGE>
                                      -4-

compositions, proceeds of security valued and payments received by the Agent and
the Lenders from the Borrowers or from others or from estates shall be regarded
for all purposes as payments in gross without any right on the part of the
Canadian Subsidiary to claim in reduction of the liability under this Guarantee
the benefit of any such dividends, compositions, proceeds or payments or any
securities held by the Agent and the Lenders or proceeds thereof. Nothing but
the performance and payment in full of the Guaranteed Obligations shall release
the Canadian Subsidiary of its liability under the Guarantee.

10. All monies, advances, renewals and credits in fact borrowed or obtained by
the Borrowers from the Agent and the Lenders under the Loan Agreement or any
other Loan Document or under any security held from time to time by the Agent
for the Guaranteed Obligations will be deemed to form part of the Guaranteed
Obligations, notwithstanding any lack or limitation of status or of power,
incapacity or disability of any of the Borrowers or of the directors, partners
or agents thereof, or that a Borrower may not be a legal or suable entity, or
any irregularity, defect or informality in the borrowing or obtaining of such
money, advances, renewals or credits, the whole whether known to the Agent or
any Lender or not, and any sum which may not be recoverable from the Canadian
Subsidiary as guarantor shall be recoverable from the Canadian Subsidiary as
sole or principal debtor in respect thereof and vice versa and shall be paid to
the Agent as aforesaid and the Canadian Subsidiary shall indemnify the Agent in
respect of the due payment of such amount.

11. This Guarantee is in addition to and not in substitution for any other
guarantee by any other person(s), at any time held by the Agent or any Lender,
and any present or future obligation to the Agent or any Lender incurred or
arising otherwise than under a guarantee provided by the Canadian Subsidiary or
of any other obligant, whether bound with or apart from the Borrowers.

12. The Canadian Subsidiary hereby expressly authorizes and consents to the
Agent, from time to time, without giving notice to the Canadian Subsidiary, and
without in any way discharging, limiting or lessening the liability of the
Canadian Subsidiary under this Guarantee, omitting or refraining from proving
its full claim or any claim or omitting or refraining from valuing any security
held by it, in the event of the bankruptcy, liquidation, winding-up or other
distribution of assets of any of Borrowers or of any surety or guarantor for the
Guaranteed Obligations or omitting or refraining from contesting or challenging
any disposition, conveyance or transfer of assets, if a Borrower or any surety
or guarantor for the Guaranteed Obligations shall make a bulk sale of its assets
within the bulk transfer provisions of any applicable legislation or any
composition with creditors or scheme of arrangement.

13. The Canadian Subsidiary will be bound by any account settled between the
Agent and the Borrowers, and if no such account has been so settled any account
stated by the Agent will be accepted by the Canadian Subsidiary as prima facie
evidence of the amount which at the date of the account so stated is due by the
Borrowers to the Agent and the Lenders or remains unpaid by Borrowers to the
Agent and the Lenders, in the absence of manifest error.

14. The Canadian Subsidiary will not at any time claim to be subrogated in any
manner to the rights and position of the Agent and will not claim the benefit of
any security at any time held by the Agent until the Agent has received payment
in full of all monies, interest
<PAGE>
                                      -5-

and other amounts due to the Agent and the Lenders under or relating to the
Guaranteed Obligations.

15. The Agent will not be bound to exhaust its recourse against the Borrowers or
any other person or persons or the security or other securities it may hold, or
any of them, before requiring payment by the Canadian Subsidiary, and the Agent
may enforce the various remedies available to it and may realize upon the
various securities or any part of such securities in such order as the Agent may
determine.

16. No suit based upon this Guarantee shall be instituted until demand for
payment has been made, and demand for payment shall be deemed to have been
effectively made upon the Canadian Subsidiary by delivery of written demand to
the Canadian Subsidiary at the address of the Canadian Subsidiary last known to
the Agent. Moreover, when demand for payment has been made, the Canadian
Subsidiary shall also be liable to the Agent and the Lenders for all reasonable
legal fees and disbursements (on a solicitor and his own client basis) incurred
by or on behalf of the Agent and the Lenders instituted on the basis of this
Guarantee.

17. This Guarantee shall not be discharged, limited or otherwise affected by
anything done, suffered or permitted by the Agent or any Lender in connection
with the Borrowers, the Guaranteed Obligations or any security held by or
granted to the Agent to secure payment of the Guaranteed Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations and
liabilities of the Canadian Subsidiary hereunder shall not be released, limited
or otherwise affected by:

         (a)      the insolvency or bankruptcy or ceasing to exist of a Borrower
                  or any other person or persons,

         (b)      the appointment of a receiver for the assets of a Borrower or
                  any other person or persons,

         (c)      any extension, other indulgence, renewal, settlement,
                  discharge, compromise, waiver, subordination or release in
                  respect of any Guaranteed Obligations, security, person or
                  otherwise,

         (d)      any modification or amendment of or supplement to the
                  Guaranteed Obligations, including any increase or decrease in
                  the principal, the rates of interest or other amounts payable
                  thereunder,

         (e)      any change in the name of a Borrower or in the reorganization,
                  merger or amalgamation of a Borrower,

         (f)      the acquisition of a Borrower's business by any person or a
                  change in control of a Borrower,

         (g)      any change whatsoever in the objects, capital structure,
                  constitution or constating documents of a Borrower,
<PAGE>
                                      -6-

         (h)      any defect in, omission from, failure to file or register or
                  defective filing or registration of any instrument under which
                  the Agent has taken any security or collateral for payment of
                  or performance or observance of any of the Guaranteed
                  Obligations or of any other person who is or may become liable
                  in respect of the Guaranteed Obligations, or

         (i)      any other circumstance which might otherwise constitute a
                  legal or equitable defence available to, or a complete or
                  partial discharge of, the Borrowers in respect of the
                  Guaranteed Obligations, or both,

but shall, notwithstanding the happening of any such event before or after the
execution of this Guarantee, continue to apply to the Guaranteed Obligations.

18. This Guarantee will be operative and binding upon the Canadian Subsidiary,
and possession of this instrument by the Agent or its successors or assigns will
be conclusive evidence against the Canadian Subsidiary that this Guarantee was
not delivered in escrow or pursuant to any agreement that it should not be
effective until any conditions precedent or subsequent had been complied with.

19. The Canadian Subsidiary hereby waives notice of its acceptance of this
Guarantee, notice of transactions or obligations contracted or incurred by the
Borrowers, notice of default of the Borrowers and demand for payment upon the
Borrowers and the Canadian Subsidiary (except as required by Section 16 of this
Guarantee).

20. Taxes and Other Taxes

         (a)      Any and all payments to the Agent and the Lenders shall be
                  made free and clear of and without deduction or withholding
                  for any and all present or future taxes, levies, imposts,
                  deductions, charges or withholdings, and liabilities with
                  respect thereto (as such taxes, levies, imposts, deductions,
                  charges, withholdings and liabilities being hereinafter
                  referred to as "TAXES") imposed by the government of Canada
                  (or any political subdivision or taxing authority thereof or
                  therein), unless such Taxes are required by law or the
                  administration thereof to be deducted or withheld. If the
                  Canadian Subsidiary shall be required by law or the
                  administration thereof to deduct or withhold any such Taxes
                  from or in respect of any amount payable hereunder, then:

                  (i)      the amount payable shall be increased as may be
                           necessary so that after making all required
                           deductions or withholdings (including deductions or
                           withholdings applicable to additional amounts paid
                           under this paragraph), the Agent and the Lenders
                           shall receive an amount equal to the sum they would
                           have received if no such deduction or withholding had
                           been made, and

                  (ii)     the Canadian Subsidiary forthwith shall pay the full
                           amount deducted or withheld to the relevant taxation
                           or other authority in accordance with applicable law.
<PAGE>
                                      -7-

         (b)      The Canadian Subsidiary agrees to pay forthwith any present or
                  future stamp or documentary taxes or any other excise or
                  property taxes, charges or similar levies (all such taxes,
                  charges and levies being herein referred to as "OTHER TAXES")
                  imposed by the government of Canada (or any political
                  subdivision or taxing authority thereof or therein) which
                  arise from any payment made by the Canadian Subsidiary
                  hereunder or from the execution, delivery or registration of,
                  or otherwise with respect to this Guarantee.

         (c)      The Canadian Subsidiary agrees to indemnify the Agent and the
                  Lenders for the full amount of Taxes or Other Taxes not
                  deducted or withheld and paid by the Canadian Subsidiary in
                  accordance with subparagraph 20(a) or (b) hereof to the
                  relevant taxation or other authority and any Taxes or Other
                  Taxes imposed by any jurisdiction on the amounts payable by
                  the Canadian Subsidiary under this paragraph 20 paid by the
                  Agent or any Lender and any liability (including penalties,
                  interest and expenses) arising therefrom or with respect
                  thereto, whether or not any such Taxes or Other Taxes were
                  correctly or legally asserted. Payment under this
                  indemnification shall be made within 15 days from the date the
                  Agent or any Lender makes written demand therefor. A
                  certificate as to the amount of such Taxes or Other Taxes and
                  evidence of payment thereof submitted to the Canadian
                  Subsidiary by the Agent or any Lender shall be prima facie
                  evidence of the amount due from the Canadian Subsidiary to
                  such Person.

         (d)      The Canadian Subsidiary shall, upon the request of the Agent,
                  furnish to the Agent the original or a certified copy of a
                  receipt evidencing any payment of Taxes or Other Taxes made by
                  the Canadian Subsidiary as soon as such receipt becomes
                  available, together with a certificate of an officer of the
                  Canadian Subsidiary, which certificate indicates the amount of
                  Taxes or Other Taxes, as the case may be, withheld by the
                  Canadian Subsidiary in respect of payments made hereunder.

         (e)      Without prejudice to the survival of any other agreement or
                  obligation of the Canadian Subsidiary hereunder, the
                  obligations of the Canadian Subsidiary under this paragraph 20
                  shall survive the termination of this Guarantee and the
                  payment of the Guaranteed Obligations.

21. This Guarantee covers all agreements between the parties hereto concerning
the subject matter hereof, and none of the parties shall be bound by any
representation or promise made by any person relative thereto which is not
expressly embodied herein.

22. This Guarantee is governed by and shall be construed in accordance with the
laws of Ontario and the laws of Canada applicable therein, and the Canadian
Subsidiary attorns to the non-exclusive jurisdiction of the courts of Ontario in
respect of all disputes which may arise under this Guarantee, and irrevocably
agrees that such actions and proceedings may be heard and determined in such
courts, agrees to be bound by any judgement thereof and irrevocably waives, to
the fullest extent possible, the defence of forum non conveniens, provided,
however, that any party may serve legal process in any manner permitted by law
and that nothing herein shall limit
<PAGE>
                                      -8-

any party's right to bring proceedings against the other party or the property
or assets of such party in the courts of any other jurisdiction.

23. The Canadian Subsidiary hereby acknowledges the financial condition of each
of the Borrowers and for so long as any part of the Guaranteed Obligations or
any related amounts due, owing or accrued to the Agent and the Lenders remains
unpaid or outstanding, the Canadian Subsidiary assumes all responsibility for
being and keeping itself informed of the financial condition of each of the
Borrowers and of all circumstances bearing upon the nature, scope and extent of
the risk which the Canadian Subsidiary assumes and incurs under this Guarantee.

24. The Canadian Subsidiary represents and warrants to the Agent and the
Lenders, and acknowledges that they are relying upon such representations and
warranties, that:

         (a)      the Canadian Subsidiary has full power and capacity to enter
                  into this Guarantee and to carry out the obligations
                  contemplated herein,

         (b)      this Guarantee has been approved by all necessary corporate
                  action on the part of the Canadian Subsidiary, and, when
                  executed and delivered, will constitute a legal, valid and
                  binding obligation of the Canadian Subsidiary, enforceable by
                  the Agent in accordance with the terms of this Guarantee,
                  subject to applicable bankruptcy, insolvency and other laws
                  affecting the enforcement of creditor rights generally,

         (c)      the Notice, Certificate of Officer, Directors Resolution and
                  Shareholders Resolutions of the Canadian Subsidiary in
                  connection with the Guarantee have been properly executed in
                  accordance with the constating documents of the Canadian
                  Subsidiary,

         (d)      the execution of this Guarantee will not contravene any
                  material provision of any material law, regulation, order or
                  permit applicable to the Canadian Subsidiary, or result in a
                  breach of or constitute a default under or require any consent
                  under any material agreement or instrument to which the
                  Canadian Subsidiary is a party or by which the Canadian
                  Subsidiary is bound,

         (e)      Iron Age is the registered holder of all of the issued and
                  outstanding shares of the Canadian Subsidiary,

         (f)      the Canadian Subsidiary is duly licensed and registered to
                  carry on business in the jurisdictions in which it carries on
                  business,

         (g)      the Canadian Subsidiary is not an insolvent person (as defined
                  in the Bankruptcy and Insolvency Act of Canada) at the time of
                  giving this Guarantee,

         (h)      the giving of this Guarantee is not being made with the intent
                  to hinder, delay or defraud either present or future creditors
                  of the Canadian Subsidiary, and
<PAGE>
                                      -9-

         (i)      the chief executive office (within the meaning prescribed in
                  the Personal Property Security Act (Ontario)) of the Canadian
                  Subsidiary is 560 Bryne Drive, Unit 3, Barrie, Ontario, L4N
                  9P6.

25. The Agent may assign its rights under this Guarantee without notice to the
Canadian Subsidiary, provided that the assignee has also obtained the rights and
obligations of the Agent under the Loan Agreement.

26. This Guarantee enures to the benefit of the Agent and its respective
successors and assigns and is binding on the Canadian Subsidiary and its
respective successors and assigns.

27. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Agreement. Delivery of an
executed counterpart of this Agreement by facsimile transmission shall be
equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
facsimile transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this Agreement.

28. In the event that the Agent obtains any judgement in Canadian dollars in
respect of any liability of the Canadian Subsidiary in U.S. dollars, the Agent
and the Canadian Subsidiary agree that the rate of exchange to be used to
determine the amount of the judgement shall be the rate of exchange quoted by
the bankers of the Agent as the rate at which the Agent could purchase U.S.
dollars with Canadian dollars at noon on the banking day preceding the date on
which the judgement is rendered. If the amount of U.S. dollars purchased by the
Agent is less than the amount of U.S. dollars originally due to it, the Canadian
Subsidiary agrees, as a separate obligation, to indemnify the Agent and the
Lenders against such loss, and if the amount so purchased exceeds the sum
originally due to the Agent and the Lenders, the Agent agrees to promptly remit
such excess to the Canadian Subsidiary.

29. If any provision herein is determined to be void, voidable or unenforceable,
in whole or in part, such determination shall not affect or impair or be deemed
to affect or impair the validity of any other provision hereof and all the
provisions hereof are hereby declared to be separate, severable and distinct.

30. The Agent's rights or remedies hereunder shall not be exhausted by the
exercise of any such rights or remedies or by any action or by any number of
successive actions against the Canadian Subsidiary in respect of the Canadian
Subsidiary's obligations hereunder.

31. Upon the bankruptcy, liquidation, winding-up or other distribution of assets
of any of the Borrowers or any surety or guarantor for the Guaranteed
Obligations, or in the event that any of the Borrowers or any surety or
guarantor for the Guaranteed Obligations shall make a bulk sale of its assets
within the bulk transfer provisions of any applicable legislation or any
composition with creditors or scheme of arrangement, the Agent shall have the
right to prove and rank for the full amount of the Guaranteed Obligations,
including in its claim all sums paid by
<PAGE>
                                      -10-

the Canadian Subsidiary to the Agent and the Lenders under this Guarantee, and
to receive all dividends or other payments in respect of such claim (and in the
case of any bulk sales, the Agent shall have the right to challenge any such
sales), until all of the Guaranteed Obligations has been paid in full, and the
Canadian Subsidiary hereby assigns and transfers to the Agent until such time as
all of the Guaranteed Obligations has been paid in full all of its rights to
prove and rank for such sums paid by the Canadian Subsidiary to the Agent and
the Lenders and to receive the full amount of all dividends and payments in
respect thereto.

32. The Canadian Subsidiary shall continue to be liable, up to the limit of the
liability under this Guarantee, less any payments made by the Canadian
Subsidiary to the Agent and the Lenders, for any balance which may be owing to
the Agent and the Lenders by the Borrowers after payment of such dividends or
other payments to the Agent and the Lenders. In the event of the valuation by
the Agent of any of its security and/or retention thereof by the Agent, such
valuation and/or retention shall not, as between the Agent and the Canadian
Subsidiary, be considered as payment or satisfaction or reduction of the
Guaranteed Obligations or any part thereof.

33. The Canadian Subsidiary will not engage in any fundamental corporate change
including, without limitation, any amalgamation, continuation, reorganization,
arrangement, reduction in capital, liquidation, dissolution or winding-up,
except as permitted under the Loan Agreement.

34. No failure or delay on the part of the Agent to exercise any right provided
for in or contemplated by this Guarantee shall operate as a waiver thereof
unless made in writing and signed by the Agent and, in that event, such waiver
shall operate only as a waiver of the right expressly referred to therein.

35. This Guarantee may not be amended, altered or qualified except by a
memorandum in writing signed by all of the parties hereto and any amendment,
alteration or qualification hereof shall be null and void and shall not be
binding upon any party who has not signed such memorandum.

36. The Canadian Subsidiary shall and will, from time to time and at all times
hereafter upon every reasonable written request so to do, cause such meetings to
be held, resolutions passed and by-laws enacted, exercise its vote and
influence, make, do, execute and deliver, or cause to be made, done, executed
and delivered, all such further papers, acts, deeds, assurances and things as
may be necessary or desirable in the opinion of the Agent or its counsel, acting
reasonably, for implementing and carrying out more effectually the true intent
and meaning of this Guarantee.

37. Time shall be strictly of the essence of this Guarantee and of every part
thereof and no extension or variation of this Guarantee shall operate as a
waiver of this provision.

38. The Canadian Subsidiary hereby acknowledges receipt of a fully signed copy
of this Guarantee.
<PAGE>
                                      -11-

39. The parties acknowledge that they have required that this Agreement and all
related documents be prepared in English. Les parties reconnaissent avoir exige
que la presente convention et tons les documents connexes soient rediges en
anglais.

                  IN WITNESS WHEREOF the Canadian Subsidiary has executed, and
delivered this Guarantee as of the date given above.

IRON AGE CANADA LTD.                )
by its authorized signatories:      )
                                    )
Bart R. Huchel___________________   )
Authorized Signatory                )
                                    )
William J. Mills_________________   )
Authorized Signatory                )

</TEXT>
</DOCUMENT>
