REGISTRATION RIGHTS
AGREEMENT
THIS REGISTRATION
RIGHTS AGREEMENT (this “Agreement”) is made and entered
into as of the 1 st 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”).
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.
(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 secur
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