EXHIBIT 4.2.1
EXECUTION COPY
SECOND REGISTRATION RIGHTS AGREEMENT
This SECOND REGISTRATION RIGHTS AGREEMENT (this "Agreement"),
dated as of January 2, 2004, is made and entered into by and among Bakers
Footwear Group, Inc., a Missouri corporation (the "Company"), Special Situations
Fund III, L.P., a Delaware limited partnership, Special Situations Cayman Fund,
L.P., a Delaware limited partnership, 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, SWB Holdings, Inc., a Missouri corporation, and Xxxxxx Xxxxxx (each
a "Holder" and collectively "Holders").
RECITALS
WHEREAS, the Company and Holders 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 (the "2002 Debentures") from the Company;
WHEREAS, in connection with the Purchase Agreement, the
Company agreed to register for resale under the Securities Act shares of its
voting common equity issuable to the Holders upon conversion of the 2002
Debentures, pursuant to that certain Registration Rights Agreement, dated April
4, 2002 (the "2002 Registration Rights Agreement");
WHEREAS, the Holders have agreed with the Company to exchange
their 2002 Debentures for new subordinated convertible debentures (the "New
Debentures") pursuant to that certain Convertible Debenture Exchange Agreement,
dated as of even date herewith (the "Exchange Agreement");
WHEREAS, the Company has filed a registration statement on
Form S-1 (No. 333-86322, as amended from time to time, the "Existing
Registration Statement") with the SEC under the Securities Act, which Existing
Registration Statement has not yet been declared effective by the SEC;
WHEREAS, in connection with the Exchange Agreement, the
parties have agreed to amend the 2002 Registration Rights Agreement in its
entirety and to replace it with this Second Registration Rights Agreement,
provided that the Company consummates an IPO (as defined herein) on or before
April 4, 2004; and
WHEREAS, in the event that the Company shall not have
consummated an IPO (as defined herein) on or before April 4, 2004, the parties
agree that this Agreement shall be void, and the 2002 Registration Rights
Agreement shall remain unmodified and in full force and effect in accordance
with its terms.
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 New Debentures.
"Effectiveness Date" shall mean the date the Existing
Registration Statement is declared effective by the SEC.
"Effectiveness Period" shall mean the period from the
Effectiveness Date until the date which is two years after the
Effectiveness Date or such earlier date when all Registrable Securities
covered by the Registration Statement have been sold or may be sold
without restriction pursuant to Rule 144(k) as determined by counsel to
the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company's transfer agent and the
affected Holders.
"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 9 of
this Agreement.
"IPO" shall mean a firm commitment underwritten
initial public offering of the Company's common equity pursuant to a
registration statement filed by the Company 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 New Debentures by any Holder
or Holders and any securities of the
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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 Rule 144) 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).
"Registration Rights" shall mean the rights of the
Holders to cause the Company to register Registrable Securities
pursuant to this Agreement.
"Registration Statement" shall mean any registration
statement or similar document filed with the SEC under the Securities
Act 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.
"Rule 144" shall mean Rule 144 under the Securities
Act, respectively, or a successor rule.
"SEC" shall mean the Securities and Exchange
Commission or any successor entity.
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"Securities Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
2. REGISTRATION.
(a) On or prior to the Effectiveness Date, the Company
shall prepare and file with the SEC a Registration Statement covering the resale
of all Registrable Securities on a continuous basis pursuant to Rule 415 under
the Securities Act which shall contain, subject to written comments received
from the SEC upon any review of such Registration Statement, the "Plan of
Distribution" attached hereto as Exhibit A. Subject to paragraph 2(c) below, the
Company shall cause such Registration Statement to be declared effective under
the Securities Act as promptly as practicable after the Effectiveness Date, and
shall use its commercially reasonable efforts to keep the Registration Statement
continuously effective under the Securities Act during the Effectiveness Period.
(b) Subject to paragraph 2(c) below, if the Company is
obligated to file a Registration Statement pursuant to paragraph 2(a) and such
Registration Statement is not filed with the SEC on or prior to the tenth day
following the Effectiveness Date (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 principal amount of the New Debentures
held by such Holder immediately prior to the conversion thereof into Conversion
Securities (less any such principal amount that such Holder transfers on or
prior to the Filing Deadline), 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 later to occur of (1) the date that is
ninety (90) days following the date of the consummation of the IPO pursuant to
the Underwriting Agreement (the "Underwriting Agreement") among the Company,
Xxxx Xxxx & Co., Inc. and BB&T Capital Markets, a Division of Xxxxx &
Xxxxxxxxxxxx, Inc., as representatives of the several Underwriters to be named
in Schedule A thereto (the "Underwriters") and (2) June 30, 2004 (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.
(c) Notwithstanding any other provision of this
Agreement, if the underwriters or the Company at any time determine in good
faith not to proceed with an IPO as a result of marketing conditions or other
relevant factors that make it impracticable or inadvisable so to proceed, the
Company shall not be required to proceed with, or to maintain the effectiveness
of, any registration statement, including without limitation, the Existing
Registration Statement.
3. REGISTRATION PROCEDURE. When required under Section 2
to effect the registration of Registrable Securities, the Company shall:
(a) prepare and file with the SEC, 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
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issuable upon the occurrence of an event specified in Rule 416) and
shall use its commercially reasonable efforts to keep the Registration
Statement continuously effective under the Securities Act during the
Effectiveness Period;
(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
Effectiveness Period;
(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;
(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.;
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(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;
(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;
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(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 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 order to avail such Holder of any rule or
regulation of the SEC that permits the selling of the Registrable
Securities without registration.
(q) at such time as the Company is a registrant
entitled to use Form S-3 or any successor thereto to register the
Registrable Securities, use its commercially reasonable efforts so to
register such Registrable Securities under the Securities Act for
resale to the public.
4. 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.
5. CERTAIN OBLIGATIONS OF HOLDERS.
(a) It shall be a condition precedent to the
obligations of the Company hereunder to include any Registrable Securities of a
Holder in a Registration Statement that the
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Holder of such Registrable Securities 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 3(m) 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 3 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 Agreement or the Exchange Agreement
(including, without limitation, any notice referred to in Section 3(m) or 5(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 5)
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. Each
Holder agrees to comply with the Securities Act and other applicable laws in
connection with the offer or sale of any Registrable Securities. The obligations
in this Section 5(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.
6. 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 be obligated to 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).
7. "MARKET STAND-OFF" (LOCK-UP) AGREEMENT. Each Holder
shall enter into a "lock-up" agreement with the managing underwriters of the
IPO, substantially in the form attached hereto as Exhibit B. The Company may
impose stop-transfer instructions with respect to the securities subject to the
foregoing restriction until the end of the required stand-off period and shall
lift such stop-transfer restrictions immediately upon the end of such period.
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8. 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 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
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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 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 expenses 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
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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
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 8(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 8 shall survive the completion of any offering of Registrable
Securities covered by a Registration Statement pursuant to these provisions, and
otherwise.
9. 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.
10. 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
11
and Holders of 50% of the Registrable Securities then outstanding. Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon each
Holder of any Registrable Securities, each future Holder of such securities and
the Company.
11. 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:
Bakers Footwear Group, Inc.
0000 Xxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Chairman of the Board and Chief
Executive Officer 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 days 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 particular
12
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 with respect to the subject matter hereof
and shall supersede any and all previous contracts, arrangements or
understandings between the parties hereto with respect to the subject matter
hereof, including without limitation, the 2002 Registration Rights Agreement;
provided, however that in the event that an IPO is not consummated on or before
April 4 2004, this Agreement shall terminate and be deemed void ab initio, and
the 2002 Registration Rights Agreement shall remain unmodified and in full force
and effect in accordance with its terms.
(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
13
carry out the transactions contemplated hereby and to evidence the fulfillment
of the agreements herein contained.
(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.]
14
IN WITNESS WHEREOF, the parties hereto have executed this Second
Registration Rights Agreement as of the date first set forth above.
BAKERS FOOTWEAR GROUP, INC.
By /s/ Xxxxx X. Xxxxxx
---------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman and CEO
SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.
By: /s/ Xxxxxx Xxxxx
---------------------
Name: Xxxxxx Xxxxx
------------------
Title (if applicable):
Address:
SPECIAL SITUATIONS CAYMAN FUND, L.P.
By: /s/ Xxxxxx Xxxxx
---------------------
Name: Xxxxxx Xxxxx
-------------------
Title (if applicable):
Address:
SPECIAL SITUATIONS FUND III, L.P.
By: /s/ Xxxxxx Xxxxx
---------------------
Name: Xxxxxx Xxxxx
-------------------
Title (if applicable):
Address:
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxx
Address: 0 Xx. Xxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
THE CROWN ADVISORS, LLC
By /s/ Xxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxx
-----------------------------------------
Title (if applicable): President
Address:540 Xxxxxxxxx Xxxxxx Xx. Xxx 000
Xx. Xxxxx, XX 00000
CROWN INVESTMENT PARTNERS, LP
By /s/ Xxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxx
------------------------------------------
Title (if applicable): Managing Member of the General
Partner
Address:540 Xxxxxxxxx Xxxxxx Xx., Xxx 000
Xx. Xxxxx, XX 00000
SWB HOLDINGS, INC.
By:/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title (if applicable):
Address: 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
EXHIBIT A
PLAN OF DISTRIBUTION
The selling stockholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling shares of common
stock or interests in shares of common stock received after the date of this
prospectus from a selling stockholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares of common stock or interests in
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These dispositions may
be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time
of sale, or at negotiated prices.
The selling stockholders may use any one or more of the following
methods when disposing of shares or interests therein:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell the
shares as agent, but may position and resell a portion of the block as principal
to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- short sales;
- through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
- broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling stockholders may, from time to time, pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock, from
time to time, under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act
amending the list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under this prospectus. The
selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.
In connection with the sale of our common stock or interests therein,
the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling stockholders from the sale of the
common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this offering. Upon
any exercise of the warrants by payment of cash, however, we will receive the
exercise price of the warrants.
The selling stockholders also may resell all or a portion of the shares
in open market transactions in reliance upon Rule 144 under the Securities Act
of 1933, provided that they meet the criteria and conform to the requirements of
that rule.
The selling stockholders and any underwriters, broker-dealers or agents
that participate in the sale of the common stock or interests therein may be
"underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act.
Selling stockholders who are "underwriters" within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.
To the extent required, the shares of our common stock to be sold, the
names of the selling stockholders, the respective purchase prices and public
offering prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if
applicable, the common stock may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states the
common stock may not be sold unless it has been registered or qualified for sale
or an exemption from registration or qualification requirements is available and
is complied with.
We have advised the selling stockholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus (as it may be supplemented
or amended from time to time) available to the selling stockholders for the
purpose of satisfying the prospectus delivery requirements of the Securities
Act. The selling stockholders
may indemnify any broker-dealer that participates in transactions involving the
sale of the shares against certain liabilities, including liabilities arising
under the Securities Act.
We have agreed to indemnify the selling stockholders against
liabilities, including liabilities under the Securities Act and state securities
laws, relating to the registration of the shares offered by this prospectus.
We have agreed with the selling stockholders to keep the registration
statement of which this prospectus constitutes a part effective until the
earlier of (1) such time as all of the shares covered by this prospectus have
been disposed of pursuant to and in accordance with the registration statement
or (2) the date on which the shares may be sold pursuant to Rule 144(k) of the
Securities Act.
EXHIBIT B
January ___, 2004
Xxxx Xxxx & Co., Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned is exchanging convertible debentures (the "2002
Debentures") of Bakers Footwear Group, Inc., a Missouri corporation (the
"Company"), which were originally acquired on April 4, 2002 pursuant to a
private placement by the Company, for New Debentures pursuant to a Convertible
Debenture Exchange Agreement dated as of the date hereof. The undersigned
understands that the Company proposes to engage in an underwritten public
offering of newly issued shares of the Company's Common Stock, $.0001 per share
(the "Proposed Offering"), pursuant to a registration statement on Form S-1
(File No. 333-86322) filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended. In connection with the Proposed Offering,
the Company will enter into an Underwriting Agreement (the "Underwriting
Agreement") among the Company, Xxxx Xxxx & Co., Inc. and BB&T Capital Markets, a
Division of Xxxxx & Xxxxxxxxxxxx, Inc., as representatives of the several
Underwriters to be named in Schedule A thereto (the "Underwriters"), relating to
the Proposed Offering.
In order to induce the Underwriters to enter into the proposed
Underwriting Agreement and to consummate the Proposed Offering, the undersigned
hereby agrees not to, without the prior written consent of Xxxx Xxxx & Co. Inc.,
during the Lock-Up Period (as defined below), directly or indirectly offer,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of
or otherwise dispose of or transfer any shares of the Company's Common Stock or
securities convertible into or exchangeable for shares of the Company's Common
Stock, including without limitation the New Debentures, now owned or acquired
upon conversion of the New Debentures by the undersigned (collectively, the
"Company Securities") or file any registration statement with respect to any of
the foregoing, or enter into any swap or other agreement that transfers, in
whole or in part, directly or indirectly, the economic consequences of ownership
of the Company Securities, whether any such swap or transaction is to be settled
by delivery of Company Securities, in cash or otherwise, except that the
undersigned may (x) transfer Company Securities as a bona fide gift or gifts,
provided that the undersigned provides prior written notice of such gift or
gifts to Xxxx Xxxx & Co., Inc. and the donee or donees thereof agree(s) to be
bound by the restrictions set forth herein, or (y) exercise options to purchase
the Company's Common Stock, which options have been issued as of the date
hereof.
For purposes hereof, the "Lock-Up Period" shall mean the period
commencing on the date hereof and ending on the later to occur of (1) the date
that is ninety (90) days following the date of the consummation of the Proposed
Offering pursuant to the Underwriting Agreement and (2) June 30, 2004.
Furthermore, the undersigned hereby agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent against the
transfer of the Company Securities in violation of this agreement.
___________________
