EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of April 4, 2002, is made and entered into by and among Bakers Footwear
Group, Inc., a Missouri corporation (the "Company"), Special Situations Fund
III, L.P., Special Situations Cayman Fund, L.P., Special Situations Private
Equity Fund, L.P., a Delaware limited partnership, The Crown Advisors LLC, a
Delaware limited liability company, Crown Investment Partners, LP, a Delaware
limited partnership, Eagle Fund I LP, a Missouri limited partnership and Xxxxxx
Xxxxxx (each a "Holder" and collectively "Holders").
RECITALS
WHEREAS, the Company and Holders have entered into that
certain Debenture Purchase Agreement dated as of April 4, 2002 (the "Purchase
Agreement") pursuant to which the Holders have purchased subordinated
convertible debentures ("Debentures") from the Company; and
WHEREAS, in connection with the Purchase Agreement, the
Company has agreed, on the terms and conditions set forth herein, to register
shares of its voting common equity as set forth below;
NOW THEREFORE, in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1. DEFINITIONS. As used in these provisions, the following
terms shall have the following meanings:
"Business Day" shall mean any day which is not a
Saturday, Sunday or other day on which banking institutions doing
business in St. Louis, Missouri and New York, New York, are authorized
or obligated by law or required by executive order to be closed.
"Common Stock" shall mean the Class A common stock,
par value $0.001, of the Company, and any other securities into which
or for which such common stock has been converted or exchanged pursuant
to a plan of recapitalization, reorganization, merger, sale of assets,
or otherwise.
"Conversion Securities" shall have the meaning
ascribed thereto in the Debentures.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated
thereunder.
"Holder" shall mean any of the persons or entities
referred to above, so long as such person or entity holds any
Registrable Securities, and any person or entity
owning Registrable Securities who is a permitted assignee of rights
under Section 11 of this Agreement.
"IPO" shall mean the completion of a public offering
of the Company's common equity pursuant to a registration statement
under the Securities Act (other than such an offering on Form S-4 or
Form S-8, or any successor forms).
The terms "register," "registered," and
"registration" shall mean a registration effected by the preparation
and filing of a Registration Statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of
such Registration Statement by the SEC.
"Registrable Securities" shall mean the Conversion
Securities received upon conversion of the Debentures by any Holder or
Holders and any securities of the Company issued by the Company with
respect to, in exchange for, or in replacement of such Conversion
Shares following such conversion. The term "Registrable Securities"
excludes, however, any security (i) the sale of which has been
effectively registered under the Securities Act and which has been
disposed of in accordance with a Registration Statement, (ii) that has
been sold by a Holder in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section
4(1) thereof (including, without limitation, transactions pursuant to
Rules 144 and 144A) such that the further disposition of such
securities by the transferee or assignee is not restricted under the
Securities Act, or (iii) that may be sold by the holder without
restriction pursuant to Rule 144(k).
"Registration Expenses" shall mean all expenses
incident to the Company's performance of or compliance with these
provisions, including without limitation all (i) registration,
qualification and filing fees; (ii) fees and expenses of compliance
with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of
any Registrable Securities being registered); (iii) printing expenses,
messenger, telephone and delivery expenses; (iv) internal expenses of
the Company (including, without limitation, all salaries and expenses
of employees of the Company performing legal or accounting duties); (v)
fees and disbursements of counsel for the Company and customary fees
and expenses for independent certified public accountants retained by
the Company (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public
accountants of comfort letters customarily requested by underwriters);
(vi) fees and expenses of listing or including any Registrable
Securities on any securities exchange or national market system on or
in which the shares of Common Stock are then listed or included; (viii)
reasonable fees and expenses of one counsel for the Holders and (ix)
fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, but excluding any underwriting fees, stock
transfer taxes, discounts or commissions attributable to the sale of
any Registrable Securities and reasonable fees and expenses of
underwriters' counsel (other than as provided in clause (ii) above).
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"Registration Rights" shall mean the rights of the
Holders to cause the Company to register Registrable Securities
pursuant to Sections 2 and 3 of this Agreement.
"Registration Statement" shall mean any registration
statement or similar document that covers any of the Registrable
Securities pursuant to the provisions of this Agreement, including the
prospectus or preliminary prospectus included as a part therein, all
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits to such Registration Statement
and all material incorporated by reference in such Registration
Statement.
"SEC" shall mean the Securities and Exchange
Commission or any successor entity.
"Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
2. DEMAND REGISTRATION.
(a) For a period beginning 30 days after an IPO and
ending three years after an IPO, if at any time, the Company shall receive a
written request from any Holder(s) of Registrable Securities (collectively, the
"Initiating Holders") collectively representing at least 50% of the Registrable
Securities then outstanding, that the Company file a Registration Statement
covering the registration of the amount of Registrable Securities specified in
such written registration request, then the Company shall (i) within ten (10)
days of the receipt of such registration request, give written notice of such
registration request to all Holders of Registrable Securities, (ii) use
reasonable best efforts to file, and cause to become effective a Registration
Statement as required by Section 4, and (iii) use reasonable best efforts to
include in such registration all Registrable Securities with respect to which
the Company receives, within the fifteen (15) days immediately following the
giving of such notice by the Company, a request for inclusion in the
registration from the Holder(s) thereof. Each such request from a Holder of
Registrable Securities for inclusion in the registration shall also specify the
aggregate amount of Registrable Securities proposed to be registered for the
account of such Holders.
(b) If the Initiating Holders intend to distribute
the Registrable Securities covered by the registration request by means of an
underwritten public offering, the Initiating Holders shall so advise the Company
as a part of its request made pursuant to Section 2(a) hereof and the Company
shall include such information in its written notice to the Holders required
under Section 2(a) hereof. In the event that the Initiating Holders intend to
distribute the Registrable Securities by means of an underwritten offering, the
right of any Holder to include its Registrable Securities in such registration
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to sell Registrable Securities
through such underwriting (including the Company and the Initiating Holder as
provided in Section 4(g) of these provisions and any other holder of shares of
Common Stock permitted to participate in such registration pursuant to this
Section 2(b)) shall enter into an underwriting
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agreement in customary form with the underwriter or underwriters selected by the
Initiating Holder for such underwriting (provided the same are underwriters of
recognized national standing reasonably acceptable to the Company and that such
underwriters enter into a confidentiality agreement in form and substance
reasonably acceptable to the Company), upon the terms and conditions agreed upon
between the Company and such underwriter(s).
Notwithstanding any other provision of this Section 2, if, in
connection with any underwritten offering, the underwriter(s) advise the
Initiating Holders in writing that marketing or other factors require that less
than 100% of the Registrable Securities requested by the Holder or Holders of
Registrable Securities be included in the underwriting, then the Company shall
so advise all Holders of Registrable Securities that would otherwise be
underwritten pursuant hereto, and the amount of Registrable Securities that may
be included in the underwriting shall be allocated among all Holders thereof,
including the Initiating Holder, in proportion (as nearly as practicable) to the
amount of Registrable Securities which each Holder requested be included in such
registration. If the amount of Registrable Securities to be underwritten has not
been so limited, the Company and other holders may include shares of Common
Stock for its own account (or for the account of other holders) in such
registration if the underwriter(s) so agree and to the extent that, in the
opinion of such underwriter(s), the inclusion of such additional amount will not
adversely affect the offering of the Registrable Securities included in such
registration.
(c) The Holders of Registrable Securities will be
entitled to request pursuant to this Section 2, two (2) registrations, but in no
event may the Holders of Registrable Securities be entitled to request more than
one (1) such registration in any six month period.
3. INCIDENTAL REGISTRATION. For a period beginning 180 days
after the commencement of an IPO and ending three years following an IPO, in the
event that (but without any obligation to do so) the Company proposes to
register any shares of Common Stock in connection with the public offering of
such shares solely for cash on any form of Registration Statement (other than
(i) a registration pursuant to a Registration Statement on Form S-4 or Form S-8
(or any successor forms) or (ii) any form that does not include substantially
the same information, other than information relating to the selling holders or
their plan of distribution, as would be required to be included in a
Registration Statement covering the sale of Registrable Securities or (iii) in
connection with any dividend reinvestment or similar plan, or (iv) for the sole
purpose of offering securities to another entity or its security holders in
connection with the acquisition of assets or securities of such entity or any
similar transaction), the Company shall promptly give each Holder written notice
of such registration at least twenty (20) days before the anticipated filing
date of any such Registration Statement. Upon the written request of any Holder
within ten (10) days after the receipt by such Holder of such notice from the
Company, the Company shall use reasonable efforts to cause to be registered
under the Securities Act all of the Registrable Securities that such Holder has
so requested to be registered. The Company shall not be required to proceed
with, or maintain the effectiveness of, any registration of its securities after
giving the notice herein provided, and the right of any Holder to have
Registrable Securities included in such Registration Statement shall be
conditioned upon participation in any underwriting to the extent provided
herein. The Company shall not be required to include any Registrable Securities
in such underwriting unless the Holders thereof enter into an underwriting
agreement with the underwriter(s) selected by the Company in customary form, and
upon terms and conditions
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agreed upon between the Company and such underwriter(s) (except as to monetary
obligations of the Holders not contemplated by Section 8 of these provisions).
Notwithstanding any other provision of this Section 3, if the underwriter or the
Company determines in good faith that marketing conditions or other relevant
factors made advisable a limitation of the number of shares to be underwritten,
then the underwriter or the Company may allocate the shares which the
underwriter indicates can be sold as follows: if the Registration Statement
relates to the sale of shares by the Company, first, to the Company and second
to the Holders; provided, however, that in the event that all of the Registrable
Securities which the Holders wish to include in such Registration Statement
cannot be included in such Registration Statement, the shares shall be allocated
among the Requesting Holders as indicated above, and third, to any other holder
of securities wishing to include shares in such Registration Statement (the
"Other Holders"), and if the Registration Statement relates to securities being
registered pursuant to a demand right granted to Other Holders, first, to the
Other Holders, second, to the Holders; provided, however, that in the event that
all of the Registrable Securities which the Holders wish to include in such
Registration Statement cannot be included in such Registration Statement, the
shares shall be allocated among the Requesting Holders as indicated above, and
third, to the Company. Any Holder that disapproves of the terms of the
underwriting may elect to withdraw therefrom by written notice to the Company
and the underwriter. Any securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
4. Registration on Form S-3. If at any time (i) a Holder or
Holders request that the Company file a registration statement on Form S-3 or
any successor thereto for a public offering of all or any portion of the shares
of Registrable Securities held by such requesting Holder or Holders, and (ii)
the Company is a registrant entitled to use Form S-3 or any successor thereto to
register such shares, then the Company shall use its best efforts to register
under the Securities Act on Form S-3 or any successor thereto, for public sale
in accordance with the method of disposition specified in such notice, the
number of Registrable Securities specified in such notice.
5 Penalties. If the Company is obligated to file a
Registration Statement covering Registrable Securities hereunder and such
Registration Statement is not filed with the SEC on or prior to the thirtieth
day following receipt of a demand for such Registration Statement (the "Filing
Deadline"), the Company will make pro rata payments to each Holder, as
liquidated damages and not as a penalty, in an amount equal to 1.0% of the
aggregate amount invested by such Holder for each 30-day period or pro rata for
any portion thereof following the date by which such Registration Statement
should have been filed for which no Registration Statement is filed with respect
to the Registrable Securities. In addition, if any such Registration Statement
is not declared effective on or prior to the 90th day following receipt of a
demand for such Registration Statement (the "Effectiveness Deadline"), the
Company will make pro rata payments to each Holder, as liquidated damages and
not as a penalty, in an amount equal to 1.0% of the aggregate amount invested by
such Holder for each 30-day period or pro rata for any portion thereof following
the date by which such Registration Statement should have been declared
effective but has not been declared effective by the SEC. Such payments shall
not constitute the Holders' exclusive remedy for such events. Such payments
shall be made to each Holder in cash. Notwithstanding the foregoing, in the
event of an underwriting public offering undertaken by the Holders, the
underwriters, the Requesting Holders and the Company will agree to a reasonable
schedule for filing and effectiveness at the commencement of the offering
process.
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6. REGISTRATION PROCEDURE. Whenever required under these
provisions to effect the registration of any Registrable Securities, the Company
shall:
(a) with respect to a demand registration pursuant to
Section 2, (i) prepare and file with the SEC within 30 days of
receiving a request as described in Section 2, a Registration Statement
with respect to such Registrable Securities (which Registration
Statement shall, pursuant to Rule 416 under the Securities Act, cover
an indeterminate number of additional securities as may be issuable
upon the occurrence of an event specified in Rule 416), (ii) cause such
Registration Statement to become effective with 90 days of receiving a
request, and (iii) keep such Registration Statement effective for up to
180 days or such shorter period as shall be required to sell all of the
Registrable Securities covered by such Registration Statement (except
as provided in Section 6 hereof) or, in the case of a Registration
Statement on Form S-3 (or any successor form) until all of the
Registrable Securities covered thereby have either been sold pursuant
to such Registration Statement or no longer constitute Registrable
Securities hereunder;
(b) prepare and file with the SEC such amendments,
post-effective amendments and supplements to such Registration
Statement and the prospectus used in connection with such Registration
Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities covered by such Registration Statement and as may be
necessary to keep the Registration Statement effective for the period
specified above;
(c) notify the Holders when a Registration Statement
or any post-effective amendment thereto is declared effective by the
SEC;
(d) provide copies to and permit counsel designated
by the Holders to review each Registration Statement and all amendments
and supplements thereto no fewer than seven (7) days prior to their
filing with the SEC and not file any document to which such counsel
reasonably objects;
(e) furnish to the Holders and their legal counsel
(i) promptly after the same is prepared and publicly distributed, filed
with the SEC, or received by the Company (but not later than two (2)
Business Days after the filing date, receipt date or sending date, as
the case may be, one (1) copy of any Registration Statement and any
amendment thereto, each preliminary prospectus and Prospectus and each
amendment or supplement thereto, and each letter written by or on
behalf of the Company to the SEC or the staff of the SEC, and each item
of correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought
confidential treatment), and (ii) such number of copies of a
Prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as each Holder may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Holder that are covered by the
related Registration Statement;
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(f) promptly after the filing of any document that is
to be incorporated by reference into a Registration Statement or
prospectus, provide copies of such document to the Holder(s) of
Registrable Securities covered thereby and any underwriter;
(g) register and qualify the securities covered by
such Registration Statement under such other securities or blue sky
laws of such jurisdictions as shall be reasonably requested by the
Holder(s); provided, however, that the Company shall not be required to
qualify to do business, file a general consent to service of process or
subject itself to taxation in any such states or jurisdictions where it
would not otherwise be required to so qualify to do business or consent
to service of process or subject itself to taxation;
(h) cooperate with the Holder(s) of Registrable
Securities and the underwriters, if any, participating in the
disposition of such Registrable Securities and their respective counsel
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc.;
(i) in the event the Company selects an underwriter
for the offering, the Company shall enter into and perform its
reasonable obligations under an underwriting agreement, in usual and
customary form, including, without limitation, customary
indemnification and contribution obligations, with the underwriter of
such offering;
(j) if required by the underwriter, or if any Holder
is described in the Registration Statement as an underwriter, the
Company shall furnish, on the effective date of the Registration
Statement (except with respect to clause (i) below) and on the date
that Registrable Securities are delivered to an underwriter, if any,
for sale in connection with the Registration Statement (including any
Holder deemed to be an underwriter), (i) (A) in the case of an
underwritten offering, an opinion, dated as of the closing date of the
sale of Registrable Securities to the underwriters, from independent
legal counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the underwriters
and the Holders participating in such underwritten offering or (B) in
the case of an "at the market" offering, an opinion, dated as of or
promptly after the effective date of the Registration Statement to the
Holders, from independent legal counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance
as is customarily given in a public offering, addressed to the Holders,
and (ii) a letter, dated as of the effective date of such Registration
Statement and confirmed as of the applicable dates described above,
from the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering,
addressed to the underwriters (including any Holder deemed to be an
underwriter);
(k) use commercially reasonable efforts to (i)
prevent the issuance of any stop order or other suspension of
effectiveness and, (ii) if such order is issued, obtain the withdrawal
of any such order at the earliest possible moment;
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(l) use commercially reasonable efforts to cause all
Registrable Securities covered by a Registration Statement to be listed
on each securities exchange, interdealer quotation system or other
market on which similar securities issued by the Company are then
listed;
(m) notify each Holder of Registrable Securities
covered by such Registration Statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act,
of the occurrence of any event as a result of which the prospectus
included in such Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing
and take such action as may be required to cure such defect;
(n) permit a representative of any Holder of
Registrable Securities, any underwriter participating in any
disposition pursuant to such registration, and any attorney or
accountant retained by such Holder or underwriter, to participate, at
such person's own expense, in the preparation of the Registration
Statement, and cause the Company's employees to supply all information
reasonably requested by any such representative, underwriter, attorney
or accountant in connection with such registration;
(o) otherwise use commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC under the
Securities Act and the Exchange Act, take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as
soon as reasonably practicable, but not later than the Availability
Date (as defined below), an earnings statement covering a period of at
least twelve (12) months, beginning after the effective date of each
Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act (for the purpose of
this subsection 3(k), "Availability Date" means the 45th day following
the end of the fourth fiscal quarter that includes the effective date
of such Registration Statement, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year, "Availability
Date" means the 90th day after the end of such fourth fiscal quarter);
and
(p) With a view to making available to the Holders
the benefits of Rule 144 (or its successor rule) and any other rule or
regulation of the SEC that may at any time permit the Holders to sell
Registrable Securities to the public without registration, the Company
covenants and agrees to: (i) make and keep public information
available, as those terms are understood and defined in Rule 144, until
the earlier of (A) six months after such date as all of the Registrable
Securities may be resold pursuant to Rule 144(k) or any other rule of
similar effect or (B) such date as all of the Registrable Securities
shall have been resold; (ii) file with the SEC in a timely manner all
reports and other documents required of the Company under the Exchange
Act; and (iii) furnish to each Holder upon request, as long as such
Holder owns any Registrable Securities, (A) a written statement by the
Company that it has complied with the reporting requirements of the
Exchange Act, (B) a copy of the Company's most recent Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in
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order to avail such Holder of any rule or regulation of the SEC that
permits the selling of the Registrable Securities without registration.
7. RIGHT TO WITHDRAW REGISTRATION REQUEST. The Holders of a
majority in interest of the Registrable Securities to be registered pursuant to
Section 2 hereof may withdraw a request for registration thereunder if at the
time of such withdrawal, the Holders have learned of a material adverse change
in the condition, business, or prospects of the Company from information not
known to the Holders at the time of their request, or, in the reasonable opinion
of the underwriter(s), there has been a material deterioration in market
conditions since the time of the Holders request. Any such withdrawn request
will not count as a registration request under Section 2(c).
8. RIGHT TO WITHDRAW REGISTRATION. Notwithstanding anything
herein to the contrary, the Company may delay, suspend or withdraw any
registration or qualification of Registrable Securities required pursuant these
provisions for a period not to exceed thirty (30) consecutive days or a total of
more than sixty (60) days in any twelve (12) month period if the Company in good
faith determines that any such registration would materially and adversely
affect any material corporate event or would otherwise require disclosure of
non-public information which the Company determines, in its reasonable judgment,
is not in the best interests of the Company and its stockholders at such time;
provided, however, that the Company uses its commercially reasonable efforts to
minimize the delay period. In addition, the Company shall not be required to
register Registrable Securities pursuant to Section 2 hereof for 180 days after
the effective date of a Registration Statement referred to in Section 3 hereof
pursuant to which the Holders were afforded the opportunity to register all of
the Registrable Securities.
9. CERTAIN OBLIGATIONS OF HOLDERS.
(a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to these provisions with respect to any
Registrable Securities that each Holder thereof furnish to the Company such
information regarding itself, the Registrable Securities held by it, the
intended method of disposition of such Registrable Securities as shall be
required to effect the registration of such Holder's Registrable Securities, and
such other information as the Company or the underwriter(s) may reasonably
request.
(b) Each Holder agrees that, upon receipt of any notice from
the Company (which may be oral) of the occurrence of any event of the kind
described in Section 4(h) hereof (provided, that the Company need not describe
any such event), such Holder shall forthwith discontinue disposition of
Registrable Securities pursuant to the then current prospectus until (i) such
Holder is advised in writing by the Company that a new Registration Statement
covering the reoffer of Registrable Securities has become effective under the
Securities Act, or (ii) such Holder receives copies of a supplemented or amended
prospectus contemplated by Section 4 hereof, or (iii) until such Holder is
advised in writing by the Company that the use of the then current prospectus
may be resumed.
(c) No Holder may use any confidential information received by
it pursuant to this iAgreement (including, without limitation, any notice
referred to in Section 4(h)
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or Section 7(b) hereof) in violation of the Exchange Act or reproduce, disclose,
or disseminate such information to any other person (other than his or her
attorneys, agents and representatives having a need to know, and then only if
they expressly agree to be bound hereby), unless such information has been made
available to the public generally (other than by such recipient in violation of
this Section 7) or such recipient is required to disclose such information by a
governmental body or regulatory agency or by law in connection with a
transaction that is not otherwise prohibited hereby, and then only after
reasonable notice to the Company and it has been provided a reasonable
opportunity to object to such disclosure, with the reasonable cooperation and
assistance of such Holder. The obligations in this Section 7(c) shall survive
the expiration or termination of this Agreement.
(d) The Holders shall not have any right to take any action to
restrain, enjoin or otherwise delay any registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Agreement.
10. REGISTRATION EXPENSES. In the case of any registration of
Registrable Securities required pursuant to these provisions, the Company shall
pay all Registration Expenses regardless of whether the Registration Statement
becomes effective, but shall not pay any underwriting fees, stock transfer
taxes, discounts or commissions attributable to the sale of any Registrable
Securities, the fees and expenses of underwriters' counsel, or the fees and
expenses of more than one counsel for the requesting Holder(s).
11. EFFECTIVENESS OF REGISTRATION. Notwithstanding the
obligation of the Company to effect only two requested registrations set forth
in Section 2 hereof, a registration requested pursuant to Section 2 hereof shall
not be deemed to have been effected if (i) the Registration Statement has not
been kept effective for the period required under Section ___(a) of these
provisions, (ii) the offering of Registrable Securities pursuant to such
registration is interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court, (iii) the
conditions to the closing of any such registration that is underwritten are not
satisfied, or (iv) fewer than fifty percent (50%) of the Registrable Securities
registered in connection with such registration are sold or fewer than fifty
percent (50%) of the shares of Common Stock requested by the Holders to be
registered pursuant to Section 2 are included in the Registration Statement.
12. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. In the event any
Registrable Securities are included in a Registration Statement pursuant to
these provisions, the Company hereby agrees to indemnify and hold harmless each
Holder, its partners, directors, officers, managers or members and employees and
each person, if any, who "controls" (within the meaning of the Securities Act)
such Holder (the "Holder Indemnitees") against all losses, claims, damages, or
liabilities, joint or several, or actions in respect thereof ("Losses") to which
such Holder Indemnitees may become subject under the Securities Act, or
otherwise, insofar as such Losses arise out of, or are based upon, any untrue
statement or alleged untrue statement of any material fact contained in such
Registration Statement, any related preliminary prospectus, or any related
prospectus or any amendment or supplement thereto, or arise out of, or are based
upon, the
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omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, and will reimburse such
Holder Indemnitees for any legal or other expenses reasonably incurred by it or
them in connection with investigating or defending any such Losses; provided,
however, that the Company will not be so liable to the extent that any such
Losses arise out of, or are based upon, an untrue statement or alleged untrue
statement of a material fact or an omission or alleged omission to state a
material fact in such Registration Statement, such preliminary prospectus, or
such prospectus, or any such amendment or supplement thereto in reliance upon,
and in conformity with, written information furnished to the Company or an
underwriter by or on behalf of a Holder specifically for use therein; provided
further, that the Company shall not be liable, and this indemnification
agreement shall not apply, to the extent that any such Losses are solely
attributable to the failure of such Holder (or underwriter or agent acting on
its behalf) to deliver a final prospectus (or amendment or supplement thereto)
that corrects a material misstatement or omission contained in the preliminary
prospectus (or final prospectus) provided that the Company provided the Holder
with such corrected prospectus (or amendment or supplement thereto) prior to the
time a prospectus was required to be delivered by the Holder and notified the
Holder in accordance with the provisions hereof not to use such superseded
preliminary prospectus (or final prospectus). The Company hereby agrees to
indemnify underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, their respective
officers and directors and each person who "controls" (within the meaning of the
Securities Act) such persons to the same extent as provided above with respect
to the indemnification of the Holder Indemnitees, if so requested, except with
respect to information furnished in writing specifically for use in any
prospectus or Registration Statement by any selling Holders or any such
underwriters.
(b) INDEMNIFICATION BY THE HOLDER OF REGISTRABLE
SECURITIES. In the event any Registrable Securities of a Holder are included in
a Registration Statement pursuant to these provisions, with respect to
information provided by such Holder in writing specifically for inclusion in the
Registration Statement, any related preliminary prospectus, or any related
prospectus or any supplement or amendment thereto, such Holder shall severally
indemnify and hold harmless the Company, and its directors, officers and
employees and each person, if any, who "controls" (within the meaning of the
Securities Act) the Company (the "Company Indemnitees") against any Losses to
which the Company or such other person entitled to indemnification hereunder may
become subject under the Securities Act, or otherwise, insofar as such Losses
arise out of, or are based upon, any untrue statement or alleged untrue
statement of any material fact contained in such Registration Statement, such
preliminary prospectus, or such prospectus, or any such amendment or supplement
thereto, or arise out of, or are based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading; and such Holder shall reimburse the Company Indemnitees for any
legal or other expenses reasonably incurred by it or them in connection with
investigating or defending any such Losses, in each case to the extent, but only
to the extent, that such Losses arise out of, or are based upon, an untrue
statement or alleged untrue statement of a material fact or an omission or
alleged omission to state a material fact in such Registration Statement, such
preliminary prospectus, or such prospectus or any such amendment or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company or an underwriter by or on
11
behalf of a Holder specifically for use therein. The Company shall be entitled
to receive indemnities from underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution, to
the same extent as provided above with respect to the information so furnished
in writing by such persons specifically for inclusion in any prospectus or
Registration Statement. The Holder shall also indemnify underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in the distribution, their officers and directors and each person
who "controls" (within the meaning of the Securities Act) such persons to the
same extent as provided above with respect to the indemnification of the
Company, if so requested. In no event shall the liability of a Holder be greater
in amount than the dollar amount of the proceeds (net of all expense paid by
such Holder and the amount of any damages such Holder has otherwise been
required to pay by reason of such untrue statement or omission) received by such
Holder upon the sale of the Registrable Securities included in the Registration
Statement giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly
after receipt by an indemnified party hereunder of notice of any claim or the
commencement of any action by a claimant not an indemnified party hereunder
("Third-Party Claim"), the indemnified party shall, if a claim for
indemnification in respect thereof is to be made by such indemnified party
against an indemnifying party, promptly notify such indemnifying party in
writing of such Third-Party Claim as soon as is reasonably practicable after
said claim is actually known to the indemnified party; provided, however, that
the right of an indemnified party to be indemnified hereunder in respect of
Third-Party Claims shall not be adversely affected by such indemnified party's
failure to notify the indemnifying party of such Third-Party Claim unless, and
then only to the extent that, an indemnifying party is actually damaged or
suffers any loss or incurs any additional expense as a result thereof. If any
such Third-Party Claim is brought against an indemnified party, and it promptly
notifies the indemnifying party thereof, the indemnifying party shall be
entitled to assume the defense thereof with counsel selected by the indemnifying
party and reasonably satisfactory to the indemnified party. After the
indemnifying party gives notice to the indemnified party of its election to
assume the defense of such Third-Party Claim, (i) the indemnifying party shall
not, except as provided below, be liable to the indemnified party for any legal
or other expense subsequently incurred by the indemnified party in connection
with the defense thereof, (ii) the indemnifying party shall not be liable for
the costs and expenses of any settlement of such claim or action unless such
settlement was effected with the written consent of the indemnifying party or
the indemnified party waived any rights to indemnification hereunder in writing,
in which case the indemnified party may effect a settlement without such consent
at its own cost and expense, and (iii) the indemnified party shall be obligated
to cooperate with the indemnifying party in the investigation of such claim or
action; provided, however, that the Holder Indemnitees may employ their own
counsel to participate in the defense of a Third-Party Claim if they have been
advised by counsel in writing that, in the reasonable judgment of such counsel,
it is advisable for such Holder Indemnitees to be represented by separate
counsel due to the presence of a conflict of interest between such Holder
Indemnitees and the indemnifying party, and in such event the reasonable fees
and expenses of such separate counsel shall be paid by the Company; provided
further, that the Company shall not be liable for the reasonable fees and
expenses of more than one separate counsel at any time for all such Holder
Indemnitees. An indemnifying party shall not, without the prior written consent
of the indemnified parties, settle, compromise or consent to the entry of any
judgment with respect to any pending or threatened Third-Party Claim in respect
12
of which indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such Third-Party
Claim) unless such settlement, compromise or consent includes a release of such
indemnified party reasonably acceptable to such indemnified party from all
liability arising out of such Third-Party Claim, or unless the indemnifying
party shall confirm in a written agreement reasonably acceptable to such
indemnified party that, notwithstanding any federal, state or common law, such
settlement, compromise or consent shall not adversely affect the right of any
indemnified party to indemnification or contribution as provided in these
provisions.
(d) CONTRIBUTION. If for any reason the
indemnification provided for in Sections 10(a) or (b) hereof is unavailable to
an indemnified party or is insufficient to hold it harmless as contemplated
therein (other than due to the failure to give timely notice as provided above),
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such losses in such proportion as is
appropriate to reflect not only the relative benefits received by the
indemnifying party and the indemnified party, but also the relative fault of the
indemnifying party and the indemnified party, as well as any other relevant
equitable considerations. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f)) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a Holder be
greater in amount than the dollar amount of the proceeds (net of all expenses
paid by such Holder and the amount of any damages such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission) received by it upon the sale of the Registrable Securities
giving rise to such contribution obligation.
(e) SURVIVAL OF INDEMNIFICATION. The obligations
under this Section 10 shall survive the completion of any offering of
Registrable Securities covered by a Registration Statement pursuant to these
provisions, and otherwise.
13. ASSIGNMENT OF REGISTRATION RIGHTS. The Registration Rights
may be assigned by the Holder to a transferee or assignee of Registrable
Securities, provided that (i) the Company is, promptly upon such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the Registrable Securities with respect to which such Registration
Rights are being assigned, (ii) the transfer of such Registrable Securities is
effected in accordance with all applicable securities laws, (iii) immediately
following such transfer the further disposition of such Registrable Securities
by the transferee or assignee is restricted under the Securities Act, and (iv)
the transferee executes an agreement to be bound by this Agreement, an executed
counterpart of which shall be furnished to the Company, provided that no rights
shall be transferred to a purchaser of Registrable Securities sold pursuant to a
registration statement under the Securities Act or pursuant to a transaction
under Rule 144 thereunder.
14. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this
Agreement may be amended or the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Holders of 50%
of the Registrable Securities then outstanding. Any amendment or waiver effected
in accordance with this Section 12 shall be binding upon each Holder of any
Registrable Securities, each future Holder of such securities and the Company.
13
15. MISCELLANEOUS.
(a) Notices. All notices, demands, requests, or other
communications which may be or are required to be given, served, or sent by any
party to any other party pursuant to this Agreement shall be in writing and
shall be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery (including delivery
by courier), or facsimile transmission, addressed as follows:
If to the Company:
Xxxxx X. Xxxxxx, Chairman of the Board and
Chief Executive Officer
Bakers Footwear Group, Inc.
0000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxx Xxxx LLP
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attn: J. Xxxx Xxxxxx
If to any Holder, at its last known address appearing on the
books of the Company maintained for such purpose, with a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxx X. Xxxxxxxx
Each party may designate by notice in writing a new address, and new counsel, to
which any notice, demand, request or communication may thereafter be so given,
served or sent. Each notice, demand, request or communication shall be deemed to
have been duly given three (3) business day after being deposited in the mail,
postage prepaid, if mailed; when delivered by hand, if personally delivered
(including delivery by courier); or upon receipt, if sent by facsimile (followed
by a confirmation copy sent by overnight courier).
From time to time as the Company may request, each Holder shall provide to the
Company such evidence or documentation reasonably satisfactory to the Company,
in its sole discretion, certified by an appropriate officer of such Holder,
regarding the amount of Common Stock beneficially owned by such Holder and its
status as an "affiliate" under the Securities Act.
(b) Separability. It is the desire and intent of the parties
hereto that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any
14
particular provision of this Agreement shall be adjudicated by a court of
competent jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, shall be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
(c) Entire Agreement. This Agreement represents the entire
agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the parties hereto with respect to the
subject matter hereof.
(d) Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(e) Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be one and the same agreement, and shall
become effective when original or telecopied counterparts have been signed by
each of the parties and delivered to each other party.
(f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York without
regard to the choice of law principles thereof. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York located in New York County and the United States District Court for the
Southern District of New York for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Agreement.
Each of the parties hereto irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court. Each party hereto irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such courts and irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.
(g) Calculation of Time Periods. Except as otherwise
indicated, all periods of time referred to herein shall include all Saturdays,
Sundays and holidays; provided, however, that if the date to perform the act or
give any notice with respect to this Agreement shall fall on a day other than a
Business Day, such act or notice may be timely performed or given if performed
or given on the next succeeding Business Day.
(h) Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
15
(i) Assignments and Transfers by the Company. This Agreement
may not be assigned by the Company without the prior written consent of each
Holder.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY LEFT BLANK.]
16
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first set forth above.
BAKERS FOOTWEAR GROUP, INC.
By /s/ XXXXX XXXXXX
-----------------------------
Name:
Title:
SPECIAL SITUATIONS FUND III, L.P.
By /s/ XXXXXX XXXXX
-----------------------------
Name: Xxxxxx Xxxxx
Title: General Partner
SPECIAL SITUATIONS CAYMAN FUND,
L.P.
By /s/ XXXXXX XXXXX
-----------------------------
Name: Xxxxxx Xxxxx
Title: General Partner
SPECIAL SITUATIONS PRIVATE EQUITY
FUND, L.P.
By /s/ XXXXXX XXXXX
-----------------------------
Name: Xxxxxx Xxxxx
Title: General Partner
EAGLE FUND I, L.P., by Eagle Fund
L.L.C., its general partner, by
Mississippi Valley Capital
Company, its sole member
By /s/ XXXXX XXXXXX
-----------------------------
Name: Xxxxx Xxxxxx
Title: President
By /s/ XXXXX X. XXXXX
-----------------------------
Name: Xxxxx X. Xxxxx
Title: President, The Crown
Advisors, LLC
CROWN INVESTMENT PARTNERS, LP
By /s/ XXXXX X. XXXXX
-----------------------------
Name: Xxxxx X. Xxxxx
Title: President of the General
Partner
By /s/ XXXXXX XXXXXX
-----------------------------
Name: Xxxxxx Xxxxxx
17
