REGISTRATION RIGHTS AGREEMENT
Exhibit
4.6
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of the
1st day of February, 2008, by and among Bakers Footwear Group, Inc., a Missouri
corporation (the “Company”), and each of the holders of the Shares (as defined below) set forth on
Exhibit A hereto (each a “Securityholder” and, collectively, the “Securityholders”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Second Lien Credit Agreement, dated as of February 1, 2008
(the “Credit Agreement”), by and among the Securityholders and the Company, the Securityholders
have been issued Subordinated Term Notes of the Company in the aggregate principal amount of
$7,500,000;
WHEREAS, in connection with the transactions contemplated by the Credit Agreement, the
Securityholders or their designees have received an aggregate of 350,000 shares of the Company’s
Common Stock (the “Shares”); and
WHEREAS, as a condition to closing the transactions contemplated by the Credit Agreement, the
parties agreed to execute and deliver this Agreement setting forth certain rights of the
Securityholders with respect to registration under the Securities Act of 1933, as amended, of the
shares of Common Stock issued to the Securityholders.
NOW, THEREFORE, in consideration of these premises, the covenants and agreements herein
contained, and other good and valuable consideration, the receipt and sufficiency of which hereby
are acknowledged, the parties hereto agree as follows:
The Company and the Securityholders hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
following meanings:
“Credit Agreement” is defined in the recitals to this Agreement.
“Commission” means the U.S. Securities and Exchange Commission, or any other Federal agency
then administering the Securities Act.
“Common Stock” means shares of the Company’s common stock, par value $0.0001 per share, and
any stock or securities issued with respect to such Common Stock by reason of a stock dividend,
stock split, combination of shares, recapitalization, reclassification, merger, consolidation,
corporate reorganization or otherwise.
“Discontinuation Event” means (i) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to be made to such Registration Statement or
Prospectus; (ii) the issuance by the Commission of any stop order suspending the effectiveness of
such Registration Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iii) the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding
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for such purpose; (iv) the occurrence of any event or passage of time that makes the financial
statements included in such Registration Statement ineligible for inclusion therein; (v) upon
discovery that, or upon the happening of an event or the passage of time as a result of which any
statement made in such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference is untrue in any material respect or that requires any
revisions to such Registration Statement, Prospectus, Free Writing Prospectus or other documents so
that, in the case of such Registration Statement, Prospectus, or Free Writing Prospectus, as the
case may be, it will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; and/or (vi) the Company in good
faith determines that any such Registration Statement, Prospectus or Free Writing Prospectus, or
the use thereof, would materially and adversely affect any material corporate event as would
otherwise require disclosure of non-public information which the Company determines, in its
reasonable discretion, is not in the best interests of the Company at such time.
“Effectiveness Date” means a date no later than one hundred twenty (120) days following the
date hereof.
“Effectiveness Period” shall have the meaning set forth in Section 2(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor
statute, and the rules and regulations of the Commission issued thereunder.
“Filing Date” means a date no later than the earlier of (i) ninety (90) days following the
date hereof and (ii) five business days after the Company files its Form 10-K for fiscal year 2007
with the Commission.
“Free Writing Prospectus” shall have the meaning ascribed to such term in Rule 405 of the
Securities Act.
“Holder” or “Holders” means (a) the Securityholder, (b) any employee, director, officer or
affiliate of the Securityholder to the extent that any of them hold Registrable Securities.
“Person” means any individual, corporation, partnership, limited liability company, trust or
any other incorporated or unincorporated entity or organization of any kind.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or
threatened.
“Prospectus” means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a prospectus filed
as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the Registration Statement,
and all other amendments and supplements to the Prospectus, including post-effective amendments,
and all material incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
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“Registration Expenses” shall mean all reasonable and customary expenses of the Company
incident to performance of or compliance with this Agreement, including, without limitation:
(i) all Commission, stock exchange or registration and filing fees; (ii) filings pursuant to the
policy of the National Association of Securities Dealers, Inc. with respect to the review of
corporate financing; (iii) all fees and expenses incurred in connection with compliance with state
securities or “blue sky” laws (including reasonable fees and disbursements of counsel in connection
with “blue sky” qualification of any of the Registrable Securities and the preparation of a Blue
Sky Memorandum); (iv) all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, Prospectus, certificates and
other documents relating to the performance of and compliance with this Agreement; (v) all fees and
expenses incurred in connection with the listing, if any, of any of the Registrable Securities on
any securities exchange or exchanges or automated quotation system; and (vi) the fees and
disbursements of counsel for the Company, the independent public accountants of the Company and one
counsel for the Holders of the Registrable Securities included in such registration. Registration
Expenses shall specifically exclude underwriting discounts and commissions or fees of underwriters,
selling brokers, dealers, managers or similar securities industry professionals relating to the
sale or disposition of Registrable Securities by the Holders and transfer and income taxes, if any,
relating to the sale or disposition of Registrable Securities by the Holders.
“Registrable Securities” means the Shares (and any securities issued with respect to the
Shares as a result of any stock splits, combinations, reorganization or recapitalization); provided
that a security shall cease to be a Registrable Security upon (i) a sale pursuant to a Registration
Statement or Rule 144 under the Securities Act, or similar rule, which results in the Shares sold
no longer being deemed “restricted securities” or (ii) such security becoming eligible for sale
under Rule 144 without volume limitation, manner of sale or current information requirements, but
only to the extent that the Company has caused (or offered to cause) the certificates representing
such shares of Common Stock to be reissued to the Holder without restrictive legend.
“Registrable Securities Value” means the aggregate value of all then currently Registrable
Securities which shall be deemed to equal to $2.74 per share.
“Registration Statement” means each registration statement required to be filed hereunder in
respect of the Registrable Securities, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated by reference in
such registration statement.
“Required Holders” means the Holders then holding a majority in interest of the Registrable
Securities.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.
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“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.
“Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations of the Commission issued thereunder.
“Trading Market” means any of the NASD OTC Bulletin Board, NASDAQ Capital Market, the NASDAQ
Global Market, The NASDAQ Global Select Market, the American Stock Exchange or the New York Stock
Exchange.
2. Registration.
(a) On or prior to the Filing Date the Company shall prepare and file with the Commission a
Registration Statement covering all Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if
the Company is not eligible to register for resale the Registrable Securities on Form S-3, in which
case such registration shall be on Form S-1 or such other appropriate form for which the Company
then qualifies or that counsel for the Company shall deem appropriate, which form shall be
available for the sale of the Registrable Securities in accordance with the methods of distribution
thereof intended by the Holders, which methods shall be communicated in writing as a plan of
distribution in advance to the Company and shall be subject to comments of the staff of the
Commission). Such Registration Statement may also include additional shares of Common Stock
pursuant to “piggyback” or similar registration rights previously granted by the Company, but only
to the extent that the Company in good faith determines that it is required by the terms of such
“piggy back” or similar rights to include additional shares in such Registration Statement.
Notwithstanding anything to the contrary contained herein, the Company shall not be required to
register any Registrable Securities, taking into account the nature of the securities and manner of
disposition proposed by such Holders, to the extent that the Commission or its staff advises the
Company in writing that the Registrable Securities may not be registered for sale as proposed, or
objects to such registration in writing, or to the extent that such registration is not allowed by
law or applicable regulation. If any Registrable Securities otherwise required to be registered
hereunder are not able to be registered pursuant to the prior sentence, then such securities shall
not be required to be registered until the later to occur of both(a) such securities becoming
registrable (taking into account the nature of securities and the method of distribution proposed)
under applicable law, regulation or Commission comment, as applicable, and (b) written notice to
the Company requesting such registration.
The Company shall use reasonable best efforts to cause the Registration Statement to become
effective and remain effective as provided herein. The Company shall use its reasonable best
efforts to cause the Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than the Effectiveness
Date. The Company shall use its reasonable best efforts to keep the Registration Statement
continuously effective under the Securities Act, except as provided herein, until the date which is
the earlier date of when (i) all Registrable Securities have been sold, (ii) the date on which all
of the Shares are no longer Registrable Securities, or (iii) two years from the date hereof (the
“Effectiveness Period”).
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(b) If: (i) the Registration Statement is not filed on or prior to the Filing Date; (ii) the
Registration Statement is not declared effective by the Commission by the Effectiveness Date; (iii)
after the Registration Statement is filed with and declared effective by the Commission, the
Registration Statement ceases to be effective (by suspension or otherwise) or cannot, by virtue of
the provisions of Section 9(d) hereof, be used by the Holders due to any Discontinuation Event, as
to all Registrable Securities to which it is required to relate at any time prior to the expiration
of the Effectiveness Period (without being succeeded immediately by an additional registration
statement filed and declared effective) for a period of time which shall exceed 60 days in the
aggregate per year or more than 30 consecutive calendar days (defined as a period of 365 days
commencing on the date the Registration Statement is declared effective); or (iv) the Common Stock
is not listed or quoted, or is suspended from trading on any Trading Market for a period of five
(5) consecutive Trading Days (provided the Company shall not have been able to cure such trading
suspension within 30 days of the notice thereof or list the Common Stock on another Trading
Market); (any such failure or breach being referred to as an “Event,” and for purposes of clause
(i) or (ii) the date on which such Event occurs, or for purposes of clause (iii) the date which
such 60 day or 30 consecutive day period (as the case may be) is exceeded or for purposes of clause
(iv) the date on which such five (5) Trading Day period is exceeded, being referred to as “Event
Date”), then:
until the applicable Event is cured, the Company shall pay to each Holder an amount in cash,
as liquidated damages and not as a penalty, equal to two percent (2.0%) of the Registrable
Securities Value held by such Holder for each thirty (30) day period (prorated for partial periods
and computed on a daily basis; provided that if the Registration Statement is not filed on or prior
to the Filing Date, then for any liquidated damages with respect to such failure to file,
liquidated damages shall be calculated as if the Filing Date was sixty (60) days after the date
hereof. While such Event continues, such liquidated damages shall be paid not less often than each
thirty (30) days. Any unpaid liquidated damages as of the date when an Event has been cured by the
Company shall be paid within three (3) business days following the date on which such Event has
been cured by the Company.
(c) Within five business days of the Effectiveness Date, the Company shall cause its counsel
to issue a blanket opinion, in such form as is reasonably requested by the Securityholders, to the
transfer agent stating that the applicable shares are subject to an effective registration
statement and can be reissued free of restrictive legend upon notice of a sale by the Holder and
confirmation by the Holder that it has complied with the prospectus delivery requirements, provided
that the Company has not advised the transfer agent orally or in writing that the opinion has been
withdrawn. Copies of the blanket opinion required by this Section 2(c) shall be delivered to the
Holder within the five business day time frame set forth above.
3. Registration Procedures. If and whenever the Company is required by the provisions
hereof to effect the registration of any Registrable Securities under the Securities Act (including
the registration required to be filed before the Filing Date pursuant to Section 2 above), the
Company will, as soon as reasonably possible:
(a) prepare and file with the Commission the Registration Statement with respect to such
Registrable Securities, respond as promptly as reasonably possible to any comments received from
the Commission, and use its reasonable best efforts to cause the Registration Statement to become
and remain effective for the Effectiveness Period with respect thereto, and
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promptly provide to the Holders copies of all filings and Commission letters of comment relating
thereto;
(b) prepare and file with the Commission such amendments and supplements to the Registration
Statement and the Prospectus used in connection therewith as may be reasonably necessary to comply
with the provisions of the Securities Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement and to keep such Registration Statement effective
until the expiration of the Effectiveness Period;
(c) furnish to the Holders such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as each Holder reasonably may
request to facilitate the public sale or disposition of the Registrable Securities covered by the
Registration Statement;
(d) use its reasonable best efforts to register or qualify for unsolicited purchase and sale
the Registrable Securities covered by the Registration Statement under the securities or “blue sky”
laws of such jurisdictions within the United States as any Holder may reasonably request, provided,
however, that the Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not so qualified;
(e) list the Registrable Securities covered by the Registration Statement with any Trading
Market on which the Common Stock of the Company is then listed;
(f) immediately notify the Holders at any time when a Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event of which the Company has
knowledge as a result of which the Prospectus contained 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 light of the
circumstances then existing;
(g) make available for inspection by the Holders and any attorney, accountant or other agent
retained by the Holders or any agent for the Holders designated in the Credit Agreement, all
publicly available, non-confidential financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company’s officers, directors and employees to supply all
publicly available, non-confidential information reasonably requested by the attorney, accountant
or agent of the Holders;
(h) to the extent reasonably requested by the Holders, enter into an underwriting agreement in
customary form and participate in “road shows” and similar presentations reasonably requested by
any underwriters; and
(i) cause the Company’s counsel and independent accountants to deliver to any underwriters
and/or the Holders opinions and comfort letters in customary form as reasonably requested by the
Holders or by any underwriting agreement entered into by the Holders and the Company.
4. Registration Expenses. The Company shall be responsible for and shall promptly pay
all Registration Expenses relating to the Company’s compliance with Sections 2 and 3 of this
Agreement.
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5. Rule 144 Reporting. With a view toward making available to the Holders the
benefits of certain rules and regulations of the Commission that may permit the sale of the Common
Stock to the public without registration, the Company agrees to use its reasonable best efforts to:
(a) make and keep current public information available, within the meaning of Rule 144 or any
similar or analogous rule promulgated under the Securities Act until the earlier of: (i) six months
after such date as all of the Registrable Securities may be resold pursuant to Rule 144 or any
other rule of similar effect without volume limitations or current information requirements, or
(ii) such date as all of the Registrable Securities shall have been resold;
(b) file with the Commission, in a timely manner, all reports and other documents required of
the Company under the Securities Act and the Exchange Act; and
(c) so long as any party hereto owns any Registrable Securities, furnish to such party
forthwith upon request, a written statement by the Company as to its compliance with the reporting
requirements of Rule 144, the Securities Act and the Exchange Act; a copy of the most recent annual
or quarterly report of the Company; and such other reports and documents as such party may
reasonably request in availing itself of any rule or regulation of the Commission allowing it to
sell any such securities without registration.
6. Obligations of the Holders.
(a) Each Holder shall furnish in writing to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such registration as the
Company may be reasonably required to effect such registration. At least seven (7) business days
prior to the first anticipated filing date of any Registration Statement, the Company shall notify
each Holder of the information the Company requires from such Holder if such Holder elects to have
any of the Registrable Securities included in the Registration Statement. Each Holder shall
provide such information to the Company at least two (2) business days prior to the first
anticipated filing date of such Registration Statement if such Holder elects to have any of the
Registrable Securities included in the Registration Statement. The Company shall not be required
to include the Registrable Securities of a Holder in a Registration Statement and shall not be
required to pay any liquidated damages or other damages under this Agreement to a Holder resulting
from any delay in registration caused by the failure of such Holder to furnish to the Company such
information at least two (2) business days prior to such filing date.
(b) Each Holder, by its acceptance of the Registrable Securities, agrees to cooperate with the
Company as reasonably requested by the Company in connection with the preparation and filing of a
Registration Statement hereunder, unless such Holder has notified the Company in writing of its
election to exclude all of its Registrable Securities from such Registration Statement.
(c) Each Holder agrees that, upon receipt of any notice (which may be oral as long as written
notice is provided by the next day) from the Company of the happening of a Discontinuation Event
(which notice shall contain an explanation of the nature of the Discontinuation Event without
providing material non-public information), such Holder will
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immediately discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities, until otherwise notified in writing by the Company
or until such Holder’s receipt of the copies of the supplemented or amended prospectus filed with
the SEC and until any related post-effective amendment is declared effective.
(d) The Holder acknowledges and agrees that, as described in Schedule 6(d) hereto,
other security holders of the Company have the right to include such securities, in addition to the
Registrable Securities, in any Registration Statement filed or maintained by the Company pursuant
to this Agreement.
(e) No Holder may use any confidential information received by it pursuant to this Agreement
in violation of the Exchange Act, or other applicable state or federal securities law 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 hereof) 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 in all material respects with the
Securities Act and other applicable laws in connection with the offer or sale of any Registrable
Securities; provided, however, that any failure to comply that is due to any breach by the Company
of its obligations hereunder or under applicable securities laws (including any misstatements or
omission of material facts by the Company in its public disclosure documents) shall not constitute
a breach of this Section 6(e) by the Holder. The obligations in this Section 6(e) shall survive the
expiration or termination of this Agreement.
Notwithstanding any of the foregoing, nothing herein shall obligate the Company to provide to
the Holders, or any advisors or representatives or underwriters any material nonpublic information.
The Company shall not disclose material nonpublic information to the Holders, or to advisors to or
representatives of the Holders, pursuant to this Agreement unless prior to disclosure of such
information the Company identifies such information as being material nonpublic information and
provides the Holders, such advisors and representatives with the opportunity to accept or refuse to
accept such material nonpublic information for review and any Holder wishing to obtain such
information enters into an appropriate confidentiality agreement with the Company with respect
thereto.
7. Indemnification.
(a) In connection with any registration or qualification of the Registrable Securities under
this Agreement, (i) the Company shall indemnify and hold harmless each of the Holders, including
but not limited to each Person, if any, who controls a Holder within the meaning of Section 15 of
the Securities Act, against all losses, claims, damages, liabilities and expenses (including but
not limited to reasonable expenses incurred in investigating, preparing and defending against any
claim) to which a Holder or such controlling person may become subject under the Securities Act,
the Exchange Act or otherwise, insofar as the same arise out of or are based upon or are caused by
any untrue statement or alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus (as amended or supplemented if the Company shall have
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furnished any amendments or supplements thereto) or Free Writing Prospectus furnished by the
Company pursuant to this Agreement or insofar as the same arise out of or are based upon or are
caused by any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses are ultimately determined to have arisen out of or were
based upon or were caused by any untrue statement or alleged untrue statement or omission or
alleged omission made in conformity with written information furnished to the Company by or on
behalf of any Holder or such control person specifically for inclusion in any Registration
Statement, Prospectus (and any amendments or supplements thereto) or Free Writing Prospectus (it
being understood that the Holders have approved the plan of distribution included in the
Registration Statement for this purpose and shall be deemed to have been specifically furnished by
such Holders), or in the case of an occurrence of a Discontinuation Event, the use by such Holder
of an outdated or defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by such Holder of an amended or
supplemented Prospectus, but only if and to the extent that following the receipt of such amended
or supplemented Prospectus the misstatement or omission giving rise to such liability would have
been corrected, (ii) each Holder, severally and not jointly, shall indemnify the Company, its
affiliates, any person who signed any Registration Statement, and their respective officers,
directors and control persons against all such losses, claims, damages, liabilities and expenses
(including but not limited to reasonable expenses incurred in investigating, preparing and
defending against any claim) insofar as the same are ultimately determined to have arisen out of or
were based upon or were caused by any such untrue statement or alleged untrue statement or any such
omission or alleged omission based upon written information furnished to the Company by or on
behalf of such Holder or any such control person specifically for the inclusion in any Registration
Statement, Prospectus (and any amendments or supplements thereto) or Free Writing Prospectus, (it
being understood that the Holders have approved the plan of distribution included in the
Registration Statement for this purpose and shall be deemed to have been specifically furnished by
such Holders), or in the case of an occurrence of a Discontinuation Event, the use by such Holder
of an outdated or defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by such Holder of an amended or
supplemented Prospectus, but only if and to the extent that following the receipt of such amended
or supplemented Prospectus the misstatement or omission giving rise to such liability would have
been corrected.
(b) Notice of, and Procedures for, Collecting Indemnification. Promptly upon receipt
by a party indemnified under this Agreement of notice of the commencement of any action against
such indemnified party in respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Agreement, such indemnified party shall notify the indemnifying party
in writing of the commencement of such action, but the failure so to notify the indemnifying party
shall not relieve it of any liability which it may have to any indemnified party under this
Agreement unless such failure shall materially and adversely affect the defense of such action. In
case notice of commencement of any such action shall be given to the indemnifying party as above
provided, the indemnifying party shall be entitled to participate in and, to the extent it may
wish, jointly with any other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of such counsel
(other than reasonable expenses incurred in investigating, preparing and defending against any
claim) shall be paid by the indemnified party unless (i) the indemnifying party agrees to pay the
same, (ii) the indemnifying
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party fails to assume the defense of such action with counsel reasonably satisfactory to the
indemnified party (in which case the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party), or (iii) the named parties to any such
action (including any impleaded parties) have been advised by such counsel that representation of
such indemnified party and the indemnifying party by the same counsel would be inappropriate under
applicable standards of professional conduct (in which case the indemnifying party shall not have
the right to assume the defense of such action on behalf of such indemnified party). In the event
that either of the circumstances described in clauses (ii) and (iii) of the sentence immediately
preceding shall occur, the indemnified party shall have the right to select a separate counsel and
to assume such legal defense and otherwise to participate in the defense of any such action, with
the reasonable expenses and fees of such separate counsel and other reasonable expenses related to
such participation to be reimbursed by the indemnifying party as incurred. No indemnifying party
shall be liable for any settlement entered into without its consent, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the provisions of this Section 7, no Holder
shall be required to indemnify any person or entity in excess of the amount of the aggregate net
proceeds received by such Holder in respect of Registrable Securities in connection with any such
registration under the Securities Act.
(c) Contribution. If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) and (b) hereof, other than as expressly
set forth above, in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result of such losses,
claims or damages (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Holder(s) on the other hand from the offering of
the Registrable Securities, and any other securities included in the Registration Statement which
gave rise to such losses, claims, damages, liabilities or expenses, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Holder(s) on the other in connection with the
statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as
well as any other relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Holder(s) on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the Company bears to
the total net proceeds from the offering (before deducting expenses) received by the Holders, in
each case as set forth in the table on the cover page of the prospectus. The relative fault of the
Company on the one hand and the Holder(s) on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company or by the Holder(s) and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission
8. Representations and Warranties. The Common Stock of the Company is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act and the Company has filed all reports
required to be filed under the Exchange Act for the twelve months preceding the date hereof on a
timely basis or has timely filed a valid extension of such time of filing and has filed such
reports prior to the expiration of any such extension. The Company has filed (i) its Annual Report
on Form 10-K for its fiscal year ended February 3, 2007 and (ii) its Quarterly Reports on Form 10-Q
for each of its first three fiscal quarters after February 3, 2007 (collectively, the “SEC
Reports”). Each SEC
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Report was, at the time of its filing, in substantial compliance with the requirements of its
respective form and none of the SEC Reports, nor the financial statements (and the notes thereto)
included in the SEC Reports, as of their respective filing dates, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports comply as to form
in all material respects with applicable accounting requirements and the published rules and
regulations of the Commission or other applicable rules and regulations as in effect at the time of
filing. Such financial statements have been prepared in accordance with generally accepted
accounting principles (“GAAP”) applied on a consistent basis during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the
case of unaudited interim statements, to the extent they may not include footnotes or may be
condensed) and fairly present in all material respects the financial condition, the results of
operations and the cash flows of the Company and its subsidiaries, on a consolidated basis, as of,
and for, the periods presented in each such SEC Report, subject, in the case of unaudited
statement, to normal, immaterial, year-end audit adjustments and the absence of complete footnotes.
9. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder, of any of their
respective obligations under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, will be entitled to specific performance of its rights under this
Agreement.
(b) No Piggyback on Registrations. Except as and to the extent specified in
Schedule 6(d) hereto, neither the Company nor any of its security holders (other than the
Holders in such capacity pursuant hereto) may include securities of the Company in any Registration
Statement other than the Registrable Securities, and the Company shall not after the date hereof
enter into any agreement providing any such right for inclusion of shares in the Registration
Statement relating to the Registrable Securities to any of its security holders. Except as and to
the extent specified in Schedule 6(d) hereto, the Company has not previously entered into
any agreement granting any registration rights with respect to any of its securities to any Person
that have not been fully satisfied.
(c) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the occurrence of a
Discontinuation Event, such Holder will forthwith discontinue disposition of such Registrable
Securities under the applicable Registration Statement until such Holder’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing
(the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that are incorporated or
deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company
may provide appropriate stop orders to enforce the provisions of this paragraph. The Company
agrees to use its reasonable best efforts to immediately cure any such Discontinuation
11
Event and to use its reasonable best efforts to immediately provide copies of any such supplement
or amendment or use its reasonable best efforts to immediately deliver the Advice to each Holder.
(e) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Required Holders. Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates exclusively to the
rights of certain Holders and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of the immediately
preceding sentence.
(f) Notices. Any notice or request hereunder may be given to the Company or the
Securityholders at the respective addresses set forth below or as may hereafter be specified in a
notice designated as a change of address under this Section 9(f). Any notice or request hereunder
shall be given by registered or certified mail, return receipt requested, hand delivery, overnight
mail, Federal Express or other national overnight next day carrier (collectively, “Courier”) or
telecopy or electronic mail. Notices and requests shall be, in the case of those by hand delivery,
deemed to have been given when delivered to any party to whom it is addressed, in the case of those
by mail, deemed to have been given three (3) business days after the date when deposited in the
mail, in the case of a Courier, the next business day following timely delivery of the package with
the Courier, and, in the case of a telecopy or electronic mail, when confirmed. The address for
such notices and communications shall be as follows:
If to the Company:
|
Bakers Footwear Group, Inc. | |
| 0000 Xxxxx Xxxxxx | ||
| Xx. Xxxxx, XX 00000 | ||
| Attention: Xxxxx X. Xxxxxx, Chief Executive Officer | ||
| Fax Number: (000) 000-0000 | ||
| Email Address: xxxxxxx@xxxxxx.xxx | ||
With a Copy to:
|
Xxxxx Xxxx LLP | |
| Xxxxxxx X. Xxxx, Esq. | ||
| 000 X. Xxxxxxxx, Xxxxx 0000 | ||
| Xx. Xxxxx, XX 00000 | ||
| Fax Number: (000) 000-0000 | ||
| Email Address: xxxxxx@xxxxxxxxx.xxx | ||
If to a Securityholder:
|
To the address set forth under such Securityholder’s name on the signature pages hereto. |
|
If to any other Person who is
then the registered Holder:
|
To the address of such Holder as it
appears in the stock transfer books of the Company |
12
or such other address as may be designated in writing hereafter in accordance with this Section
9(f) by such Person.
(g) Successors and Assigns.
(i) Assignments and Transfers by Holders. The provisions of this Agreement shall be
binding upon and inure to the benefit of the Holders and their respective successors and assigns.
Each Holder may transfer or assign, in whole or from time to time in part, to one or more persons,
which shall be (A) an “accredited investor” as defined in Rule 501(a) of Regulation D, as amended
under the Securities Act, (B) shall be an employee, director, officer or Affiliate of Private
Equity Management Group, LLC, (C) shall not be a direct competitor of the Company, and (D) which
shall agree in writing to be bound by the terms and conditions of this Agreement, an executed
counterpart of which shall be furnished to the Company, its rights hereunder in connection with the
transfer of Registrable Securities by Holder to such person, provided that the Holder complies with
all laws applicable thereto and provides written notice of assignment to the Company promptly after
such assignment is effected.
(ii) Assignments and Transfers by the Company. This Agreement may not be assigned by
the Company (whether by operation of law or otherwise) without the prior written consent of the
Required Holders, provided, however, that the Company may assign its rights and delegate its duties
hereunder to any surviving or successor corporation in connection with a merger or consolidation of
the Company with another corporation, or a sale, transfer or other disposition of all or
substantially all of the Company’s assets to another corporation, without the prior written consent
of the Required Holders, after notice duly given by the Company to each Holder.
(h) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and, all of which
taken together shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.
(i) Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of California, without regard to the principles of conflicts of
law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement shall be commenced exclusively in the
state and federal courts sitting in Los Angeles, California. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in Los Angeles,
California for the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not
to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any
such court, that such Proceeding is improper. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service
shall
13
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law.
(j) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(k) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(l) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
(m) Entire Agreement. This Agreement is intended by the parties as a final expression
of their agreement and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein. This
Agreement supersedes all prior agreements and understandings between the parties with respect to
such subject matter.
*********
*
*
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above written.
| BAKERS FOOTWEAR GROUP, INC. | |||||||
| By: | /s/ Xxxxx X. Xxxxxx
|
||||||
| Name: | Xxxxx X. Xxxxxx | ||||||
| Title: | Chairman, Chief Executive Officer and President | ||||||
| Address: | 0000 Xxxxx Xxxxxx | ||||||
| Xx. Xxxxx, Xxxxxxxx 00000 | |||||||
| Fax Number: | (000) 000-0000 | ||||||
| Email Address: | xxxxxxx@xxxxxx.xxx | ||||||
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above written.
| SECURITYHOLDER: | ||||||
| Private Equity Management Group, Inc. | ||||||
| By: | /s/ Xxxxx Xxxx
|
|||||
| Name: | Xxxxx Xxxx | |||||
| Title: | Chairman, CEO | |||||
| Address: | 0 Xxxx Xxxxx, Xxxxx 000 | |||||
| Xxxxxx, Xxxxxxxxxx 00000 | ||||||
| Fax Number: | 000-000-0000 | |||||
| Email Address: | xxxxx@xxxxxxxx.xxx | |||||
EXHIBIT A
Securityholders
Private Equity Management Group, Inc.
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx Xxxxxx, Esq., General Counsel
Fax No.: (000) 000-0000
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx Xxxxxx, Esq., General Counsel
Fax No.: (000) 000-0000
Schedule 6(d)
1. Registration rights granted to prior holders of the Company’s subordinated convertible
debentures (2004):
The Company granted certain demand and other registration rights to the prior holders of its
subordinated convertible debentures due 2007 under the terms and conditions of a certain Second
Registration Rights Agreement dated January 2, 2004 by and among the Company and the selling
shareholders (incorporated by reference to Exhibit 4.2.1 of Amendment No. 3 to the Company’s
Registration Statement on Form S-1 (File No. 333-86332), filed with the SEC on January 8, 2004)
(“Second Registration Rights Agreement”).
The Company registered 653,331 shares of common stock pursuant to this agreement. See
Post-Effective Amendment No. 5 on Form S-3 to Registration Statement on Form S-1 (File No.
333-112386) and prospectus dated May 9, 2005 (the “2005 Debenture Shares Registration Statement”).
2. Registration rights granted to representatives of the underwriters in connection with the
Company’s initial public offering:
The Company granted certain demand, piggy-back and other registration rights in connection with the
warrants issued in connection with our initial public offering pursuant to the terms of that
certain Representatives’ Warrant Agreement, dated February 10, 2004 by and among the Company, Xxxx
Xxxx & Co., Inc. and BB&T Capital Markets, a Division of Xxxxx & Xxxxxxxxxxxx, Inc. (incorporated
by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K for the fiscal year ended
January 3, 2004 filed on April 2, 2004 (File No. 000-50563)) (“Representatives’ Warrant
Agreement”). In connection with the Company’s initial public offering, the Company issued to the
representatives of the underwriters and their designees warrants to purchase up to 216,000 shares
of common stock, subject to anti-dilution adjustments, at an exercise price equal to $12.7875 per
share. Warrants to purchase up to 121,500 shares of common stock remain unexercised. The warrant
holders may exercise the warrants at any time during the four-year period commencing on February
10, 2005. The warrant holders are entitled to receive, at any time and from time to time, shares
of common stock under a cashless exercise provision based on the value of the warrants at the time
of exercise. The Company is obligated to register the shares underlying these warrants and has
other obligations to the representatives of the underwriters pursuant to the Representatives’
Warrant Agreement.
Under the terms of the Representatives’ Warrant Agreement, the Company is required for a period of
five years after February 10, 2004, (i) at the request of a majority of the warrant holders, to use
its best efforts to file one registration statement, at its expense, covering the sale of the
shares of common stock underlying the warrants and (ii) at the request of any holders of warrants,
to file additional registration statements covering the shares of common stock underlying the
warrants at the expense of those holders. The Company is required to maintain the effectiveness of
any demand registration statement for up to nine consecutive months. Except for the registration
rights that it granted to the prior holders of its previously outstanding subordinated convertible
debentures, the Company generally agreed not to make any registered offering of its securities,
with limited exceptions, or to include any other shares on any such demand registration statement,
at any time that the Company is required to maintain the effectiveness of a demand registration
statement under the agreement, without first obtaining the consent of a majority of the holders of
warrants
1
and warrant shares that are not then held by the public or by the Company or other excepted persons
who have a relationship with the Company and the Company’s affiliates. See Section 7.4(g) of the
Representatives’ Warrant Agreement. In connection with the Company’s April 8, 2005 private
placement, the majority-in-interest of the warrant holders waived certain of these rights.
In addition, the Company is required to include the shares of common stock underlying the warrants
in any appropriate registration statement that it files during the six years following the
consummation of the Company’s initial public offering. In connection with the April 2005 private
placement, in addition to the registration rights described above, the Company agreed to register
the shares underlying the warrants described above. The Company has registered for resale the
shares underlying these warrants in a registration statement which also relates to the common stock
and warrants issued in our April 8, 2005 private placement although the above described
registration rights still exist. See Amendment No. 1 to Registration Statement on Form S-3 (File
No. 333-124672) and prospectus dated May 25, 2005 and prospectus supplement thereto dated February
21, 2006 (the “2005 PIPE Registration Statement”).
The Company is required to provide 30 days prior written notice to the Holders under the
Representatives’ Warrant Agreement prior to filing any other registration statement and to afford
each of the Representatives and such Holders of the Warrants and/or Warrant Shares the opportunity
to have any such Warrant Shares registered under such registration statement.
3. Registration rights granted in connection with April 2005 private placement
transaction:
In connection with the Company’s private placement in April 2005, the Company issued, to the
investors and the placement agent in that offering, warrants to purchase 250,000 shares and 125,000
shares, respectively, of our common stock, subject to anti-dilution and other adjustments, at an
exercise price of $10.18 per share. The warrants issued in the private placement are generally
exercisable until April 8, 2010. We generally have the right to call the warrants issued in April
2005 to the investors, but not the placement agent, at a redemption price equal to $0.01 per share,
which will likely cause their exercise into shares of common stock, in the event that the closing
bid price of a share of our common stock equals or exceeds $25.00 per share for any 20 consecutive
trading days commencing after the registration statement relating to the shares is declared
effective.
Under the terms of the investor warrants, we are required to exercise such right within one
business day immediately following the end of any such 20 day trading period. The private placement
warrant holders are entitled to receive shares of our common stock under a cashless exercise
provision if the registration statement required by the applicable registration rights agreement
was not declared effective by April 8, 2006, or if sales of such shares cannot be made for any
reason, subject to limited exceptions. The cashless exercise provision of the warrants issued to
the placement agent is generally available to the placement agent and not subject to restrictions.
We were obligated to register the shares issued and underlying the warrants issued in the private
placement and have other obligations to the investors and the placement agent pursuant to the
Registration Rights Agreement dated April 8, 2005 by and among the Company, the Investors named
therein and Xxxx Xxxx & Co., Inc. (incorporated by reference to Exhibit 4.2 to the Company’s
Current Report on Form 8-K (File No. 000-50563), filed on April 13, 2005) (the “2005 Registration
Rights Agreement”). Under the 2005 Registration Rights Agreement, the Company must file a
registration statement upon the written demand of any Investor (as defined therein).
2
Also pursuant to the 2005 Registration Rights Agreement, the Company filed, at its expense, a
registration statement with the SEC which was declared effective on May 25, 2005 and covers the
resale of the shares of common stock issued in the April 2005 private placement, the shares of
common stock underlying the warrants issued to the investors and the placement agent in the April
2005 private placement and the 216,000 shares of common stock underlying the warrants granted to
the representatives of the underwriters in connection with our initial public offering. Investor
warrants relating to up to 137,500 shares of our common stock and placement agent warrants relating
to up to 125,000 shares of our common stock are outstanding, respectively.
Although the Company has already registered the shares of common stock sold in connection with the
Company’s 2005 private placement, the warrants issued to the investors and the shares of common
stock issuable upon the exercise of the placement agent warrants, the above described registration
rights still exist.
4. Registration rights granted in connection with June 2007 issuance of the Company’s
subordinated convertible debentures:
Reference is made to that certain Registration Rights Agreement dated June 26, 2007 by and among
the Company and the securityholders named therein (incorporated by reference to Exhibit 4.5 of the
Company’s Current Report on Form 8-K filed with the SEC on July 2, 2007) (the “Debenture
Registration Rights Agreement”).
On June 26, 2007 the Company issued $4 million aggregate principal amount of subordinated
convertible debentures (the “Debentures”) in a private placement. The Debentures are convertible
into shares of the Borrower’s common stock at any time. The initial conversion price is $9.00 per
share, subject to the limitations and adjustments provided in the Debentures. Based on the initial
conversion price, the Debentures are convertible into an aggregate of 444,441 shares of the
Borrower’s common stock, after eliminating fractional shares. The Borrower generally has the
right, but not the obligation, to call the Debentures at any time prior to conversion if the
closing price of the Borrower’s common stock (as adjusted for stock dividends, subdivisions or
combinations) is equal to or above $16.00 per share for each of 20 consecutive trading days and
certain other equity conditions and other conditions are met.
The conversion price, and thus the number of shares into which the Debentures are convertible, is
subject to anti-dilution adjustments relating to stock dividends, or subdivisions or combination of
the Borrower’s capital stock.
In addition, the Debentures contain a weighted average conversion price adjustment generally for
future issuances, at prices less than the then current conversion price, of common stock or
securities convertible into, or options to purchase, shares of common stock, excluding generally
currently outstanding options, warrants or performance shares and any future issuances pursuant to
any properly authorized equity compensation plans. The conversion price of the Debentures will be
affected by the term loan transaction, although the exact impact will not be calculated until after
closing.
The Company also entered into the Debenture Registration Rights Agreement with the debenture
holders in respect of the shares of common stock underlying the Debentures. As described in more
detail below, the Debenture Registration Rights Agreement generally provides for certain demand
3
and “piggy-back” registration rights for a period of up to two years after all of the principal
amount of the Debentures cease to be outstanding. The Company also has certain other ongoing
obligations, including providing the debenture holders with specified notices and certain
information, making required SEC filings, indemnifying the Debenture holders for certain
liabilities and generally paying expenses of the Debenture holders. Under the Debenture
Registration Rights Agreement, the Company has the right to suspend use of the registration
statement for not more than 30 consecutive days or for a total of more than 60 days in any 12 month
period in certain circumstances.
Under the Registration Rights Agreement, the Company must file a registration statement upon the
written demand of the holders of a majority of the Registrable Securities (as defined therein)
until two years after all of the principal amount of the Debentures ceases to be outstanding.
Furthermore, the Debenture holders have piggy-back registration rights until two years after all of
the principal amount of the Debentures ceases to be outstanding. The Company is required to
provide 30 days prior written notice to the Debenture holders prior to filing any other
registration statement and to afford each of the securityholders the opportunity to have their
Registrable Securities registered under such registration statement.
4
