-1-

 
Indebtedness shall be junior in right of payment and exercise of remedies to the SeniorIndebtedness. Without limiting the foregoing, any lien on, security interest in or mortgage orpledge of any of the property or assets of the Company to or for the benefit of the SubordinatedCreditors securing any of the Subordinated Indebtedness, whether now existing or arising in thefuture, is expressly subordinate and junior in priority of payment and exercise of remedies to anyliens, security interests, mortgages or pledges of any of the assets of the Company, both nowexisting and arising in the future, securing any of the Senior Indebtedness; notwithstanding theforegoing, the Company hereby agrees that it shall not give or permit to be given, and eachSubordinated Creditor hereby agree that it shall not take, any collateral for the SubordinatedIndebtedness.**2.****Payments**. **(a)** Subject to Section 2(b) below, for so long as any Senior Indebtednessremains outstanding, and notwithstanding anything to the contrary set forth in theSubordinated Debentures (as amended pursuant to the Debentures Second Amendment) or anyother document governing the Subordinated Indebtedness to the contrary, theSubordinated Creditors shall be entitled to receive and retain only (i) those regularlyscheduled payments (without acceleration) of interest on the Subordinated Indebtedness(the “**Scheduled Interest Payments**”), to the extent and in the manner set forth in theSubordinated Debentures, and (ii) so long as the Subordinated Debenture PaymentConditions have been met, the Subordinated Debenture 2012 Required Payment. As usedherein, “**Subordinated Debenture Payment Conditions**” means no Suspension Event hasoccurred and is continuing, and the ratio of the Company’s EBITDA (calculated as setforth in Exhibit 5.11(a)(ii)) to its Interest Expense, as calculated on a trailingtwelve month basis for the period ending May 26, 2012, is equal to or greater than1.0:1.0. As used herein, the “**Subordinated Debenture 2012 Required Payment**” means apayment of principal required to be made by the Company pursuant to the SubordinatedDebentures in the amount of $1,000,000, which payment is due on June 30, 2012.  **(b)** Notwithstanding the provisions of Section 2(a) above, the Company andthe Subordinated Creditors covenant to and agree with the Senior Lender that upon theoccurrence of a default or Event of Default under the Loan Agreement (collectively, a“**Default**”), the Subordinated Creditors’ right to receive and retain the ScheduledInterest Payments and the Subordinated Debenture 2012 Required Payment (and any otherpayments) under the Subordinated Debentures shall immediately cease. The SubordinatedCreditors agree not to demand, accept or receive any payment in respect of theSubordinated Indebtedness after the occurrence of a Default including, withoutlimitation, any payment received through the exercise of any right of setoff,counterclaim, cross-claim or otherwise, or any collateral therefor, while any SeniorIndebtedness remains outstanding, provided that Subordinated Creditor may exercisethose remedies set forth in Section 9 below. Without limiting the foregoing,the Company agrees that no amount shall be paid, whether in cash, property, securitiesor otherwise, by the Company to the Subordinated Creditors after the occurrence of aDefault in respect of the Subordinated Indebtedness, while any Senior Indebtednessremains outstanding, without the prior written consent of the Senior Lender.
-2-

 
**3.****Bankruptcy, Insolvency, etc**. **(a)** In the event of an insolvency, bankruptcy, receivership, liquidation,reorganization or other similar proceedings relative to the Company or to its assets,or in the event of any proceedings for voluntary liquidation, dissolution or otherwinding up of the Company, whether or not involving insolvency or bankruptcy (any suchproceeding referenced above being referred to herein as an “**Insolvency Proceeding**”), solong as any Senior Indebtedness is outstanding, the Senior Lender shall be entitled inany such Insolvency Proceedings to receive payment in full in cash of all SeniorIndebtedness before the Subordinated Creditors are entitled in such InsolvencyProceedings to receive any payment on account of the Subordinated Indebtedness, otherthan any payment consisting solely of any securities of the Company issued inconnection with an Insolvency Proceeding, the payment of which securities is junior orotherwise subordinated, at least to the same extent provided in this Agreement, to thepayment of any and all of the Senior Indebtedness (collectively, “**SubordinatedSecurities**”), and to that end in any such Insolvency Proceedings, so long as any SeniorIndebtedness remains outstanding, any payment or distribution of any kind or character,whether in cash or in other property (other than Subordinated Securities), to which anySubordinated Creditor would be entitled on account of the Subordinated Indebtedness butfor the provisions hereof, shall be delivered to the Senior Lender to the extentnecessary to make payment in full in cash of all Senior Indebtedness remaining unpaid,after giving effect to any concurrent payment or distribution to the holders of SeniorIndebtedness.  **(b)** Upon the commencement of an Insolvency Proceeding, the Subordinated Creditorsshall be deemed, as security for the Senior Indebtedness and in order to effectuate thesubordination set forth above, to have assigned the Subordinated Indebtedness to theSenior Lender and granted to the Senior Lender as of the date of the commencement ofsuch Insolvency Proceeding the right to collect all payments and distributions of anykind and description (other than Subordinated Securities), whether in cash or otherproperty, paid or payable in respect of any claims or demands of the SubordinatedCreditors against the Company arising from the Subordinated Indebtedness. Upon thecommencement of an Insolvency Proceeding, each Subordinated Creditor shall also bedeemed to have granted to the Senior Lender the full right (but not the obligation), inits own name or in its name as attorney in fact for such Subordinated Creditor, tocollect and enforce claims and demands of such Subordinated Creditor arising from theSubordinated Indebtedness by suit, proof of claim in bankruptcy or other liquidation,reorganization or Insolvency Proceedings or otherwise. Each Subordinated Creditor byits execution of this Agreement also hereby grants to the Senior Lender: (i) theexclusive right to vote any and all claims of such Subordinated Creditor in anyInsolvency Proceedings involving the Company with respect to the election of a trusteeor similar official and with respect to any proposed plan of reorganization of theCompany; and (ii) the exclusive right to object to any proposed plan of reorganizationof the Company to which such Subordinated Creditor would have the right to object inany Insolvency Proceeding.**4.****Turn-Over of Payments Received by Subordinated Creditors**. In the event thatnotwithstanding the provisions of the Loan Agreement and this Agreement, the Company shall make anypayment to a Subordinated Creditor on account of the Subordinated Indebtedness not expressly
-3-

 
authorized hereby, such payment shall be held in trust by such Subordinated Creditor, for thebenefit of the Senior Lender, and shall be paid over immediately (without necessity of demand) tothe Senior Lender for application in accordance with the Loan Agreement to the payment of allSenior Indebtedness remaining due and payable until the same shall have been paid in full, in cash,after giving effect to any concurrent payment or distribution to the holders of such SeniorIndebtedness. In the event of the failure of a Subordinated Creditor to endorse any instrument forthe payment of money so received by such Subordinated Creditor on account of the SubordinatedIndebtedness, the Senior Lender is irrevocably appointed attorney-in-fact for such SubordinatedCreditor with full power to make such endorsement and with full power of substitution.**5.****Obligations Absolute**. The provisions of this Agreement are for the purpose of definingthe relative rights of the Senior Lender on the one hand and the Subordinated Creditors on theother hand with respect to the enforcement of rights and remedies and priority of payment of theSenior Indebtedness and the Subordinated Indebtedness. Nothing herein shall impair, as between theCompany and the Subordinated Creditors, the obligations of the Company, which are unconditional andabsolute, to pay to the holder thereof the principal and interest thereon and any other liabilitiesencompassed in the Subordinated Indebtedness, all in accordance with their respective terms,subject to the prior payment in full in cash of the Senior Indebtedness.**6.****Subordination Not Affected**. Without the necessity of any reservation of rights againstor any notice to or further assent by any Subordinated Creditor, (i) any demand for payment of anySenior Indebtedness made by the Senior Lender may be rescinded in whole or in part by the SeniorLender, (ii) the Senior Lender may exercise or refrain from exercising any rights and/or remediesagainst the Company and others, if any, liable under the Senior Indebtedness, and (iii) the SeniorIndebtedness and any agreement or instrument evidencing, securing, or otherwise relating to theSenior Indebtedness (including without limitation, the Loan Agreement and the other LoanDocuments), or any collateral security therefor or guaranty thereof or other right of any naturewith respect thereto, may be amended, extended, modified, continued, accelerated, compromised,waived, surrendered or released by the Senior Lender, in any manner the Senior Lender deems in itsbest interests, all without impairing, abridging, releasing or affecting in any manner thesubordination of the Subordinated Indebtedness to the Senior Indebtedness provided for herein.Without limiting the foregoing, the Subordinated Creditors waive any and all notice of thecreation, amendment, restatement, extension, acceleration, compromise, continuation, waiver,surrender, release or modification of any nature of the Senior Indebtedness, the Loan Agreement orthe other Loan Documents, and notice of or proof of reliance by the Senior Lender upon thesubordination provided for herein. The Senior Indebtedness shall conclusively be deemed to havebeen created, contracted and incurred in reliance upon the provisions of this Agreement.**7.****Warranties, Representations, Covenants and Acknowledgments of the SubordinatedCreditors**. **(a)** Each Subordinated Creditor represents to the Senior Lender that allIndebtedness of the Company to such Subordinated Creditor is evidenced by aSubordinated Debenture**.**Each Subordinated Creditor further represents that saidIndebtedness has not heretofore been assigned, pledged to, or subordinated in favor of,any other Person.  **(b)** Each Subordinated Creditor hereby covenants and agrees that it will not amendor permit amendment of the terms of its Subordinated Debenture or any other agreement,document
-4-

 
   or instrument hereafter evidencing any Subordinated Indebtedness, without the priorwritten consent of the Senior Lender, including, without limitation, any amendmentthat would:(i) increase the principal amount of the Subordinated Indebtedness; (ii)increase the rate of interest accruing on the Subordinated Indebtedness; (iii)change in any manner the dates upon which any principal or interest payment on theSubordinated Indebtedness is due; (iv) change in any manner, or add, any affirmativeor negative covenants, events of default, redemption provisions or subordinationprovisions of any Subordinated Indebtedness; (v) take any collateral for theSubordinated Indebtedness; or (vi) except as set forth in the SubordinatedDebentures, the Subordinated Convertible Debenture Purchase Agreement dated June 13,2007 by and among the Company and the Subordinated Creditors and the RegistrationRights Agreement dated June 26, 2007 among the Company and the SubordinatedCreditors (in each case, as each of the foregoing agreements is in effect on thedate of execution thereof) give to the Subordinated Creditors the right to purchase,or to cause the Company to issue, equity interests in the Company.  **(c)** The execution, delivery and performance of this Agreement has been dulyauthorized by all necessary corporate, partnership or other action on the part of eachSubordinated Creditor, and this Agreement constitutes a valid and binding obligation ofsuch Subordinated Creditor, enforceable against it in accordance with its terms.  **(d)** Each Subordinated Creditor covenants and agrees that it will not assign,pledge, sell, transfer or otherwise dispose of any of the Subordinated Indebtedness orinterests therein, whether through assignment or participation or otherwise, except toa Person who first becomes a party hereto and accepts without qualification allobligations of such Subordinated Creditor hereunder.  **(e)** Each Subordinated Creditor acknowledges and agrees that this Agreement is a“subordination agreement” within the meaning of Section 510(a) of the United StatesBankruptcy Code, 11 U.S.C. §510(a).**8.****Validity and Enforceability of Liens Securing Senior Indebtedness; Cooperation with SeniorLender****.** **(a)** No Subordinated Creditor will in any Insolvency Proceeding or other eventdescribed in Section 2 or otherwise, challenge, oppose or contest (or join inany challenge, opposition or contest by any third party, or encourage any third partyto challenge, oppose or contest) the Senior Indebtedness or the perfection,superiority, priority, validity or enforceability of any security interest or liengranted to the Senior Lender pursuant to the Loan Agreement, the Security Documents orother Loan Documents, nor will any Subordinated Creditor challenge the validity orenforceability of such Loan Agreement, Security Documents or other Loan Documents, orany provision thereof. Each Subordinated Creditor hereby acknowledges that theprovisions of this Agreement are intended to be enforceable at all times, whetherbefore or after any Insolvency Proceeding or other event described in Section 2of this Agreement. Each Subordinated Creditor hereby waives any right to require theSenior Lender to marshal the collateral for such Senior Indebtedness.
-5-

 
 **(b)** Without limiting the foregoing, no Subordinated Creditor will challenge oroppose (or join with any party challenging or opposing) or take any action whatsoeverto impair the exercise by the Senior Lender of the rights and remedies granted to theSenior Lender in the Loan Document.**9.****Limitations on Remedies**. **(a)** Upon the occurrence of any default or event of default (a “**SubordinatedDefault**”) in respect of the Subordinated Indebtedness, no Subordinated Creditor shall(a) accelerate all or any portion of the Subordinated Indebtedness; (b) commence orjoin (unless the Senior Lender shall also join), in its capacity as a holder of theSubordinated Indebtedness, in any involuntary proceeding against the Company or any ofits Subsidiaries under any bankruptcy, reorganization, readjustment of debt,arrangement of debt, receivership, liquidation or insolvency law or statute of anyfederal or state government; or (c) commence any action or proceeding against theCompany or any of its Subsidiaries to enforce payment of all or any part of theSubordinated Indebtedness or take any other actions against the Company or itsSubsidiaries permitted under the Subordinated Debentures and/or under applicable law,and/or reduce such claims to a judgment against the Company (each of the foregoing, an“**Enforcement Action**”), for a period (the “**Standstill Period**”), commencing on the dateof receipt by the Senior Lender from the Subordinated Creditors of written notice (a“**Default Notice**”) of such Subordinated Default and ending on the earlier to occur of(i) 180 days after receipt by Senor Lender of such Default Notice and (ii) anInsolvency Proceeding.  **(b)** Notwithstanding the provisions of Section 9(a) above: **(i)** During any Standstill Period, the Subordinated Creditors shallaccept any cure of the applicable Subordinated Default(s) proffered by SeniorLender which restores the Subordinated Creditors to the position they wouldhave been but for such default or event of default; and  **(ii)** If the applicable Subordinated Default has occurred under theSubordinated Indebtedness solely as a result of a cross-default to the SeniorIndebtedness, then: **(A)** If Senior Lender shall waive such default underthe Senior Indebtedness, or amend the Senior Indebtedness with theeffect that such default no longer exists, such waiver or amendmentshall be deemed effective under the Subordinated Indebtedness as welland the applicable Subordinated Default shall be deemed to no longerexist; and  **(B)** Notwithstanding the expiration of theapplicable Standstill Period, Subordinated Creditors shall not bepermitted to take any Enforcement Action with respect to theSubordinated Indebtedness unless the Senior Indebtedness has beenaccelerated. **(c)** Nothing contained in this Section 9 shall limit or impair the obligations andagreements of the Subordinated Creditors set forth in any other Section of thisAgreement.
-6-

 
**10.****Assignments and Appointments**. Each Subordinated Creditor, for itself and itssuccessors and assigns, hereby irrevocably authorizes and directs the Senior Lender, and anytrustee or debtor in possession in bankruptcy, receiver, custodian or assignee for the benefit ofcreditors of the Company, whether in voluntary or involuntary liquidation, dissolution orreorganization, on his or its behalf, to take such action as may be necessary or appropriate toeffectuate the subordination provided for in this Agreement and irrevocably appoints the SeniorLender and any such trustee, receiver, custodian or assignee, attorney-in-fact for such purposewith full powers of substitution and revocation.**11.****No Impairment**. No right of the Senior Lender to enforce subordination as hereinprovided shall at any time or in any way be affected or impaired by any failure to act on the partof the Company, or by any non-compliance by the Company with any of the terms, provisions andcovenants of the agreement, documents and instruments evidencing the Subordinated Indebtedness,regardless of any knowledge thereof that the Senior Lender may have or be otherwise charged with,or by any action which the Senior Lender may take or refrain from taking with respect to the SeniorIndebtedness or the Subordinated Indebtedness.**12.****Further Assurances**. In order to carry out the terms and intent of this SubordinationAgreement more effectively, the Subordinated Creditors will take all actions and execute allfurther documents and instruments reasonably necessary or convenient to preserve for the SeniorLender the benefits of this Agreement.**13.****Waivers, etc**. No action which the Senior Lender, or the Company with the consent ofthe Senior Lender, may take or refrain from taking with respect to any Senior Indebtedness, or anypromissory note or notes representing the same, or any collateral therefor, including any waiver orrelease thereof (or any waiver of any provision thereof or default of any agreement or agreements(including guaranties) in connection therewith, shall affect this Agreement or the rights of theSenior Lender or the obligations of the Subordinated Creditors hereunder. No waiver shall bedeemed to be made by the Senior Lender of any of its rights hereunder unless the same shall be inwriting and then only with respect to the specific instance involved, and shall in no way impair oroffset the rights of the Senior Lender or the obligations of the Subordinated Creditors in anyother respect or at any other time.**14.****Notices**. **(a)** **By the Senior Lender to the Subordinated Creditors**. The Senior Lender shallprovide the Subordinated Creditors with notice of any Default simultaneously withgiving notice to the Company, provided that any failure by the Senior Lender to givesuch notice shall not affect or limit the Senior Lender’s rights hereunder.  **(b)** **By the Subordinated Creditors to the Senior Lender**. The Subordinated Creditorsshall provide the Senior Lender with notice of any default relating to any SubordinatedIndebtedness simultaneously with giving notice to the Company.  **(c)** **By the Company to the Senior Lender**. The Company shall provide the SeniorLender with copies of all notices of any default received by it from the SubordinatedCreditor immediately upon its receipt thereof.
-7-

 
 **(d)** **By the Company to the Subordinated Creditors**. The Company shall provide theSubordinated Creditors with copies of all notices of any default given by it to theSenior Lender or received by it from the Senior Lender immediately upon its delivery orreceipt thereof.  **(e)** **Method**. Except as otherwise provided herein, all demands or notices hereundershall be in writing and shall be deemed to have been sufficiently given or served forall purposes hereof if personally delivered or mailed or transmitted by telecopy if thesender on the same day sends a confirming copy of such communication by a recognizedovernight delivery services (charges prepaid), recognized overnight delivery services(charges prepaid) or first class mail, postage prepaid, to them at their respectiveaddresses as set forth on the signature pages hereto and incorporated herein byreference, or at such other address as the party to whom such notice is directed mayhave designated in writing to the other party hereto. A notice shall be deemed to havebeen given upon the earlier to occur of (i) three (3) days after the date on which itis deposited in the U.S. mails or (ii) receipt by the party to whom such notice isdirected.**15.****Miscellaneous**. This Agreement shall be binding upon the Subordinated Creditors and theCompany and their respective heirs, legal representatives, successors and assigns and shall inureto the benefit of the Senior Lender and its legal representatives, successors and assigns(including without limitation any transferee of any Senior Indebtedness). The Senior Lender mayassign this Agreement or its rights thereunder without the consent of the Subordinated Creditors orthe Company. This Agreement may be executed in any number of counterparts and by the differentparties hereto on separate counterparts, each of which when so executed and delivered shall be anoriginal, but all of the counterparts shall together constitute and the same instrument.**16.****Governing Law, Jurisdiction, Waiver of Jury Trial**. This Agreement, including thevalidity hereof and the rights and obligations of the parties hereunder, shall be construed inaccordance with and governed by the internal laws of the Commonwealth of Massachusetts (withoutregard to conflicts of law principles). Each Subordinated Creditor, to the extent that suchSubordinated Creditor may lawfully do so, hereby consents to service of process, and to be sued, inthe Commonwealth of Massachusetts and consents to the jurisdiction of the courts of theCommonwealth of Massachusetts and the United States District Court for the District ofMassachusetts, as well as to the jurisdiction of all courts to which an appeal may be taken fromsuch courts, for the purpose of any suit, action or other proceeding arising out of any of suchSubordinated Creditor’s obligations hereunder or with respect to the transactions contemplatedhereby, and expressly waives any and all objections as to venue in any such courts. EachSubordinated Creditor further agrees that a summons and complaint commencing an action orproceeding in any of such courts shall be properly served and confer personal jurisdiction ifserved personally or by certified mail at the address set forth below under the signature of suchSubordinated Creditor or as otherwise provided under the laws of the Commonwealth of Massachusetts.**EACH OF THE COMPANY AND THE SUBORDINATED CREDITORS IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURYIN ANY SUIT, ACTION, OR OTHER PROCEEDING HEREAFTER INSTITUTED BY OR AGAINST IT IN RESPECT OF ITSOBLIGATIONS HEREUNDER OR THE TRANSACTIONS CONTEMPLATED HEREBY.****17.****Acknowledgment by Company**. The Company covenants and agrees not to make anydistribution or payment to any Subordinated Creditor in violation of the terms of this Agreement.
-8-

 
**18.****Existing Subordination Agreement Amended and Restated****.**This Agreement shall amend andrestate the Existing Subordination Agreement in its entirety and the rights and obligations of theparties under the Existing Subordination Agreement shall be subsumed within, and be governed by,this Agreement; provided, however, that this Agreement shall not be deemed toevidence or result in a novation of the obligations of the Subordinated Creditors under theExisting Subordination Agreement.
-9-

 
This Agreement is executed as a sealed instrument as of the ____ of June, 2011.     **COMPANY****BAKERS FOOTWEAR GROUP,INC.**  By:  /s/ Peter A. Edison   Name:  Peter A. Edison  Title:  Chairman and Chief Executive Officer      Address:  2815 Scott AvenueSt.Louis, Missouri63103  Telephone:   314-621-0699 Telecopier:    314-641-0390 
 

 
     **SUBORDINATED CREDITOR:**LINN H. BEALKE REVOCABLE TRUST  By:  /s/ Linn H. Bealke   Name:  Linn H. Bealke  Title:  Trustee      Address:              Telephone:     Telecopier:       
 

 
**SUBORDINATED CREDITOR:**BEATRICEC. EDISON IRREVOCABLE GST TRUST FOR BERNARD A. EDISONDATED 8-31-59     By:  /s/ Bernard Edison   Name:     Title:         Address:              Telephone:     Telecopier:       
 

 
**SUBORDINATED CREDITOR:**     By:  /s/ Julian I. Edison   Name:  Julian I. Edison      Address:              Telephone:     Telecopier:       
 

 
**SUBORDINATED CREDITOR:**LOUIS N. GOLDRING REVOCABLE TRUST DTD. 4/15/97     By:  /s/ Louis N. Goldring   Name:  Louis N. Goldring   Title:  Trustee       Address: [illegible]St. Louis, Mo 63124         Telephone:  [illegible]  Telecopier:       
 

 
**SUBORDINATED CREDITOR:**     By:  /s/ Scott C. Schnuck   Name:   Scott C. Schnuck       Address:              Telephone:     Telecopier:       
 

 
**SUBORDINATEDCREDITOR:**ANDREW N. BAUR REVOCABLE TRUST     By:  /s/ Richard D. Baur   Name:  Richard D. Baur   Title:  Trustee       Address: 165N. Meramec Suite 210St. Louis, MO 63105     Telephone:  314-721-9696   Telecopier:    314-721-9697   
 

 
**SUBORDINATED CREDITOR:**MISSISSIPPI VALLEY CAPITAL, LLC     By:  /s/ Scott D. Fesler   Name:  Scott D. Fesler   Title:  Manager       Address: 101S. Hanley Rd.Suite 1250St. Louis, MO 63105     Telephone:  314-727-4555   Telecopier:       
 

 
**SENIOR LENDER****BANK OF AMERICA, N. A.**     By:  /s/ Christine M. Scott   Name:  Christine Scott   Title:   Senior Vice President-Director       Address: 100 Federal Street, 9th FloorBoston, Massachusetts 02110     Telephone:  (617) 434-4078   Telecopier:    (617) 434-4312