Amended and Restated Asset Purchase Agreement

On July 9, 2009, Chambers and Tandy entered into an Amended and Restated Asset Purchase Agreement (the "Amended Purchase Agreement") which amended and restated the Original Purchase Agreement. The Amended Purchase Agreement provided for the additional sale of Chambers' Wrangler brand business together with the private label business. Chambers conducted the Wrangler business under a License Agreement dated January 1, 2007 between Chambers and Wrangler pursuant to which Chambers had the right to sell Wrangler branded products to the mass market (the "Mass License") and a License Agreement dated January 1, 2008 between Chambers and Wrangler pursuant to which Chambers had the right to sell to the western store market (the "Western License").

On July 9, 2009, the transactions contemplated by the Amended Purchase Agreement were closed and in accordance therewith Chambers sold to Tandy substantially all of its assets (excluding, among other assets, accounts receivable, cash and cash equivalents). Also Tandy assumed all of Chambers obligations arising after the closing under vendor and customer purchase orders, Chambers' Maquiladora Agreement and certain leases.

Pursuant to the Amended Purchase Agreement, in partial payment of the purchase price, Tandy paid to Chambers at the closing approximately $3.5 million in immediately available funds, including approximately $2.6 million for inventory. During the first 30 days after closing, Tandy has the right to audit the cost component of the inventory payment. As additional purchase price consideration, during the first 12 months after the closing Tandy is obligated to pay Chambers on a monthly basis 21.5% of the net revenue that Tandy recognizes from sales during this period of Chambers former products. These generally include private label products previously sold by Chambers, Chambers trademark branded products and Wrangler branded products to the mass merchandise market and the western market. Tandy is obligated to pay Chambers minimum earn-out payments that in the aggregate are not less than $2.0 million.

Concurrently with the closing of the Chambers asset sale, Chambers, Tandy and Wrangler entered into an Amendment, Assignment and Assumption of License Agreement pursuant to which Chambers assigned to Tandy all of its rights and Tandy assumed all of Chambers remaining obligations (other than the remaining quarterly royalty obligations due Wrangler which continues to be Chambers' responsibility except in the case of a default on the license by Tandy) under the Mass License (which was amended to extend through and including June 30, 2010). Also, the same parties entered into an Amendment, Assignment and Assumption of License Agreement pursuant to which Chambers assigned to Tandy all of its rights and Tandy assumed all of Chambers remaining obligations under the Western License

The Amended Purchase Agreement contains limited representations and warranties, covenants and indemnification. At the closing, Phoenix Footwear executed and delivered its Guaranty dated July 9, 2008 guaranteeing Chambers post-closing obligations under the Amended Purchase Agreement.

Forbearance Agreement and First Amendment to Credit and Security Agreement

Under the terms of the Amendment, the following changes were made to the Credit Agreement:

• the maximum availability under the line of credit was reduced to $6.5 million (subject to a borrowing base limit),

• the borrowing base was revised to reflect the Chambers asset sale and certain other requirements,

• the interest rate applicable to outstanding advances was changed to a daily three month LIBOR rate plus 5.50%,

• a new affirmative covenant was added that requires Phoenix Footwear to provide Wells Fargo with certain budgets and projections on a weekly basis and to participate in weekly teleconference calls,

. . .

On July 9, 2009, Chambers sold substantially all of its assets (other than accounts receivable, cash and cash equivalents) to Tandy. The description of the transaction and the closing thereof set forth in Item 1.01 is hereby

As reported under Section 1-Item 1.01 "Entry into a Material Definitive Agreement" above, with the Chambers asset sale completed, Chambers plans to wind-down its business by collecting its accounts receivable and Tandy earn-out payments and settling its accounts payable. In Item 2.05 of the April 2009 Form 8-K, Phoenix Footwear reported that it expected to incur a total cost of between $900,000 and $1.3 million on a pre-tax basis over several quarters in connection with the winding down of Chamber's activities. The following information updates, amends and restates in its entirety the disclosures under Item 2.05 of the April 2009 Form 8-K.

For consolidated financial statement reporting purposes, commencing with the first quarter of the 2009 fiscal year (which ended April 4, 2009), Phoenix Footwear began reporting Chambers as discontinued operations. In connection with this discontinuance, the Phoenix Footwear estimates that it will incur a pre-tax charge of between $2.1 million and $2.5 million which will be recorded and reported in the second and third quarters of the 2009 fiscal year. The charge is expected to be comprised of approximately $500,000 to $600,000 of cash restructuring charges (related to severance payments and other costs associated with exiting the business) to be paid during the third and fourth quarters of the 2009 fiscal year and approximately $1.6 million to $1.8 million of non-cash restructuring charges (including write-offs of fixed assets, net of gain, and inventory).

Pursuant to authority granted by the Compensation Committee by the Company's Board of Directors, on July 13, 2009, the Company increased the annual base salary of Dennis T. Nelson, the Company's Chief Financial Officer, Secretary and Treasurer, from $145,000 to $175,000.

On July 9, 2009, Phoenix Footwear issued a press release announcing that Chambers entered into the Amended Purchase Agreement and closed the Chambers asset sale A copy of the press release is filed as Exhibit 99.1 to this Current Report on

Form 8-K/A and is incorporated by reference into this Item 8.01.

(d) Exhibits

Exhibit
Number       Description
2.1          Amended and Restated Asset Purchase Agreement between Chambers Belt
             Company and Tandy Brands Accessories, Inc. dated July 9, 2009
             (Exhibits and Schedules have been omitted pursuant to Regulation S-K
             Item 601(b)(2), but will be provided to the Commission upon request)

10.2         Guaranty, dated as of July 9, 2009 by Phoenix Footwear Group, Inc. in
             favor of Tandy Brands Accessories, Inc.

10.3         Amendment, Assignment and Assumption Agreement dated July 9, 2009
             among Chambers Belt Company, Tandy Brands Accessories, Inc. and
             Wrangler Apparel, Inc.

10.4         Amendment, Assignment and Assumption Agreement dated July 9, 2009
             among Chambers Belt Company, Tandy Brands Accessories, Inc. and
             Wrangler Apparel, Inc.


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10.5    Amendment and Forbearance Agreement dated July 9, 2009 among Phoenix
        Footwear Group, Inc. and its subsidiaries and Wells Fargo National Bank
        Association
99.1    Press Release dated July 9, 2009

This report contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, or Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are intended to be covered by the safe harbors created thereby. These forward-looking statements include, but are not limited to, statements regarding the proposed sale of the Phoenix Footwear's Chambers division, the likelihood and timing of the closings of the transactions and/or statements preceded by, followed by or that include the words "believes," "could," "expects," "anticipates," "estimates," "intends," "plans," "projects," "seeks," "exploring," or similar expressions. No assurances can be given that the future results or events covered by such forward-looking statements will be achieved or that the transactions described herein will be consummated. Further, investors are cautioned that all forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. More information about potential factors that could affect the Phoenix Footwear's business and financial results is included in the documents that the Phoenix Footwear files with the Securities and Exchange Commission (the "SEC") on Forms 10-K, 10-Q and 8-K, including under the heading "Cautionary Statement Concerning Forward-Looking Information" contained in the Phoenix Footwear's Annual Report on Form 10-K for the fiscal year ended January 3, 2009 filed with the SEC, all of which are available at the SEC's website (http://www.sec.gov). All forward-looking statements included in this filing are based on information available at the time of this filing, and the Phoenix Footwear assumes no obligation to update any forward-looking statements after the date of this report.