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for such purpose; (iv) the occurrence of any event or passage of time that makes the financialstatements included in such Registration Statement ineligible for inclusion therein; (v) upondiscovery that, or upon the happening of an event or the passage of time as a result of which anystatement made in such Registration Statement or Prospectus or any document incorporated or deemedto be incorporated therein by reference is untrue in any material respect or that requires anyrevisions to such Registration Statement, Prospectus, Free Writing Prospectus or other documents sothat, in the case of such Registration Statement, Prospectus, or Free Writing Prospectus, as thecase may be, it will not contain any untrue statement of a material fact or omit to state anymaterial fact required to be stated therein or necessary to make the statements therein, in lightof the circumstances under which they were made, not misleading; and/or (vi) the Company in goodfaith determines that any such Registration Statement, Prospectus or Free Writing Prospectus, orthe use thereof, would materially and adversely affect any material corporate event as wouldotherwise require disclosure of non-public information which the Company determines, in itsreasonable 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 thedate 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 successorstatute, 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 thedate hereof and (ii) five business days after the Company files its Form 10-K for fiscal year 2007with the Commission.          “*Free Writing Prospectus*” shall have the meaning ascribed to such term in Rule 405 of theSecurities Act.          “*Holder*” or “*Holders*” means (a) the Securityholder, (b) any employee, director, officer oraffiliate of the Securityholder to the extent that any of them hold Registrable Securities.          “*Person*” means any individual, corporation, partnership, limited liability company, trust orany other incorporated or unincorporated entity or organization of any kind.          “*Proceeding*” means an action, claim, suit, investigation or proceeding (including, withoutlimitation, an investigation or partial proceeding, such as a deposition), whether commenced orthreatened.          “*Prospectus*” means the prospectus included in the Registration Statement (including, withoutlimitation, a prospectus that includes any information previously omitted from a prospectus filedas part of an effective registration statement in reliance upon Rule 430A promulgated under theSecurities Act), as amended or supplemented by any prospectus supplement, with respect to the termsof 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 suchProspectus.
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          “*Registration Expenses*” shall mean all reasonable and customary expenses of the Companyincident 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 thepolicy of the National Association of Securities Dealers, Inc. with respect to the review ofcorporate financing; (iii) all fees and expenses incurred in connection with compliance with statesecurities or “blue sky” laws (including reasonable fees and disbursements of counsel in connectionwith “blue sky” qualification of any of the Registrable Securities and the preparation of a BlueSky Memorandum); (iv) all expenses of any Persons in preparing or assisting in preparing, wordprocessing, printing and distributing any Registration Statement, Prospectus, certificates andother documents relating to the performance of and compliance with this Agreement; (v) all fees andexpenses incurred in connection with the listing, if any, of any of the Registrable Securities onany securities exchange or exchanges or automated quotation system; and (vi) the fees anddisbursements of counsel for the Company, the independent public accountants of the Company and onecounsel for the Holders of the Registrable Securities included in such registration. RegistrationExpenses shall specifically exclude underwriting discounts and commissions or fees of underwriters,selling brokers, dealers, managers or similar securities industry professionals relating to thesale 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 theShares as a result of any stock splits, combinations, reorganization or recapitalization); providedthat a security shall cease to be a Registrable Security upon (i) a sale pursuant to a RegistrationStatement or Rule 144 under the Securities Act, or similar rule, which results in the Shares soldno longer being deemed “restricted securities” or (ii) such security becoming eligible for saleunder Rule 144 without volume limitation, manner of sale or current information requirements, butonly to the extent that the Company has caused (or offered to cause) the certificates representingsuch shares of Common Stock to be reissued to the Holder without restrictive legend.          “*Registrable Securities Value*” means the aggregate value of all then currently RegistrableSecurities which shall be deemed to equal to $2.74 per share.          “*Registration Statement*” means each registration statement required to be filed hereunder inrespect of the Registrable Securities, including the Prospectus, amendments and supplements to suchregistration statement or Prospectus, including pre- and post-effective amendments, all exhibitsthereto, and all material incorporated by reference or deemed to be incorporated by reference insuch registration statement.          “*Required Holders*” means the Holders then holding a majority in interest of the RegistrableSecurities.          “*Rule 144*” means Rule 144 promulgated by the Commission pursuant to the Securities Act, assuch Rule may be amended from time to time, or any similar rule or regulation hereafter adopted bythe Commission having substantially the same effect as such Rule.          “*Rule 415*” means Rule 415 promulgated by the Commission pursuant to the Securities Act, assuch Rule may be amended from time to time, or any similar rule or regulation hereafter adopted bythe 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, assuch Rule may be amended from time to time, or any similar rule or regulation hereafter adopted bythe Commission having substantially the same effect as such Rule.          “*Securities Act*” means the Securities Act of 1933, as amended, or any successor statute, andthe rules and regulations of the Commission issued thereunder.          “*Trading Market*” means any of the NASD OTC Bulletin Board, NASDAQ Capital Market, the NASDAQGlobal Market, The NASDAQ Global Select Market, the American Stock Exchange or the New York StockExchange.     2. Registration.          (a) On or prior to the Filing Date the Company shall prepare and file with the Commission aRegistration Statement covering all Registrable Securities for an offering to be made on acontinuous basis pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except ifthe Company is not eligible to register for resale the Registrable Securities on Form S-3, in whichcase such registration shall be on Form S-1 or such other appropriate form for which the Companythen qualifies or that counsel for the Company shall deem appropriate, which form shall beavailable for the sale of the Registrable Securities in accordance with the methods of distributionthereof intended by the Holders, which methods shall be communicated in writing as a plan ofdistribution in advance to the Company and shall be subject to comments of the staff of theCommission). Such Registration Statement may also include additional shares of Common Stockpursuant to “piggyback” or similar registration rights previously granted by the Company, but onlyto 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 toregister any Registrable Securities, taking into account the nature of the securities and manner ofdisposition proposed by such Holders, to the extent that the Commission or its staff advises theCompany in writing that the Registrable Securities may not be registered for sale as proposed, orobjects to such registration in writing, or to the extent that such registration is not allowed bylaw or applicable regulation. If any Registrable Securities otherwise required to be registeredhereunder are not able to be registered pursuant to the prior sentence, then such securities shallnot be required to be registered until the later to occur of both(a) such securities becomingregistrable (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 tothe Company requesting such registration.          The Company shall use reasonable best efforts to cause the Registration Statement to becomeeffective and remain effective as provided herein. The Company shall use its reasonable bestefforts to cause the Registration Statement to be declared effective under the Securities Act aspromptly as possible after the filing thereof, but in any event no later than the EffectivenessDate. The Company shall use its reasonable best efforts to keep the Registration Statementcontinuously effective under the Securities Act, except as provided herein, until the date which isthe earlier date of when (i) all Registrable Securities have been sold, (ii) the date on which allof 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) theRegistration 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, theRegistration Statement ceases to be effective (by suspension or otherwise) or cannot, by virtue ofthe provisions of Section 9(d) hereof, be used by the Holders due to any Discontinuation Event, asto all Registrable Securities to which it is required to relate at any time prior to the expirationof the Effectiveness Period (without being succeeded immediately by an additional registrationstatement filed and declared effective) for a period of time which shall exceed 60 days in theaggregate per year or more than 30 consecutive calendar days (defined as a period of 365 dayscommencing on the date the Registration Statement is declared effective); or (iv) the Common Stockis 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 tradingsuspension within 30 days of the notice thereof or list the Common Stock on another TradingMarket); (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 whichsuch 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 “*EventDate*”), 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 RegistrableSecurities Value held by such Holder for each thirty (30) day period (prorated for partial periodsand computed on a daily basis; provided that if the Registration Statement is not filed on or priorto 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 datehereof. While such Event continues, such liquidated damages shall be paid not less often than eachthirty (30) days. Any unpaid liquidated damages as of the date when an Event has been cured by theCompany shall be paid within three (3) business days following the date on which such Event hasbeen cured by the Company.          (c) Within five business days of the Effectiveness Date, the Company shall cause its counselto issue a blanket opinion, in such form as is reasonably requested by the Securityholders, to thetransfer agent stating that the applicable shares are subject to an effective registrationstatement and can be reissued free of restrictive legend upon notice of a sale by the Holder andconfirmation by the Holder that it has complied with the prospectus delivery requirements, providedthat the Company has not advised the transfer agent orally or in writing that the opinion has beenwithdrawn. Copies of the blanket opinion required by this Section 2(c) shall be delivered to theHolder within the five business day time frame set forth above.     3. Registration Procedures. If and whenever the Company is required by the provisionshereof to effect the registration of any Registrable Securities under the Securities Act (includingthe registration required to be filed before the Filing Date pursuant to Section 2 above), theCompany will, as soon as reasonably possible:          (a) prepare and file with the Commission the Registration Statement with respect to suchRegistrable Securities, respond as promptly as reasonably possible to any comments received fromthe Commission, and use its reasonable best efforts to cause the Registration Statement to becomeand 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 relatingthereto;          (b) prepare and file with the Commission such amendments and supplements to the RegistrationStatement and the Prospectus used in connection therewith as may be reasonably necessary to complywith the provisions of the Securities Act with respect to the disposition of all RegistrableSecurities covered by the Registration Statement and to keep such Registration Statement effectiveuntil the expiration of the Effectiveness Period;          (c) furnish to the Holders such number of copies of the Registration Statement and theProspectus included therein (including each preliminary Prospectus) as each Holder reasonably mayrequest to facilitate the public sale or disposition of the Registrable Securities covered by theRegistration Statement;          (d) use its reasonable best efforts to register or qualify for unsolicited purchase and salethe 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 totransact 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 TradingMarket 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 requiredto be delivered under the Securities Act, of the happening of any event of which the Company hasknowledge as a result of which the Prospectus contained in such Registration Statement, as then ineffect, includes an untrue statement of a material fact or omits to state a material fact requiredto be stated therein or necessary to make the statements therein not misleading in light of thecircumstances then existing;          (g) make available for inspection by the Holders and any attorney, accountant or other agentretained by the Holders or any agent for the Holders designated in the Credit Agreement, allpublicly available, non-confidential financial and other records, pertinent corporate documents andproperties of the Company, and cause the Company’s officers, directors and employees to supply allpublicly available, non-confidential information reasonably requested by the attorney, accountantor agent of the Holders;          (h) to the extent reasonably requested by the Holders, enter into an underwriting agreement incustomary form and participate in “road shows” and similar presentations reasonably requested byany underwriters; and          (i) cause the Company’s counsel and independent accountants to deliver to any underwritersand/or the Holders opinions and comfort letters in customary form as reasonably requested by theHolders 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 payall Registration Expenses relating to the Company’s compliance with Sections 2 and 3 of thisAgreement.
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     5. Rule 144 Reporting. With a view toward making available to the Holders thebenefits of certain rules and regulations of the Commission that may permit the sale of the CommonStock 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 anysimilar or analogous rule promulgated under the Securities Act until the earlier of: (i) six monthsafter such date as all of the Registrable Securities may be resold pursuant to Rule 144 or anyother 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 ofthe Company under the Securities Act and the Exchange Act; and          (c) so long as any party hereto owns any Registrable Securities, furnish to such partyforthwith upon request, a written statement by the Company as to its compliance with the reportingrequirements of Rule 144, the Securities Act and the Exchange Act; a copy of the most recent annualor quarterly report of the Company; and such other reports and documents as such party mayreasonably request in availing itself of any rule or regulation of the Commission allowing it tosell any such securities without registration.     6. Obligations of the Holders.          (a) Each Holder shall furnish in writing to the Company such information regarding itself, theRegistrable Securities held by it and the intended method of disposition of the RegistrableSecurities held by it, as shall be reasonably required to effect the registration of suchRegistrable Securities and shall execute such documents in connection with such registration as theCompany may be reasonably required to effect such registration. At least seven (7) business daysprior to the first anticipated filing date of any Registration Statement, the Company shall notifyeach Holder of the information the Company requires from such Holder if such Holder elects to haveany of the Registrable Securities included in the Registration Statement. Each Holder shallprovide such information to the Company at least two (2) business days prior to the firstanticipated filing date of such Registration Statement if such Holder elects to have any of theRegistrable Securities included in the Registration Statement. The Company shall not be requiredto include the Registrable Securities of a Holder in a Registration Statement and shall not berequired to pay any liquidated damages or other damages under this Agreement to a Holder resultingfrom any delay in registration caused by the failure of such Holder to furnish to the Company suchinformation 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 theCompany as reasonably requested by the Company in connection with the preparation and filing of aRegistration Statement hereunder, unless such Holder has notified the Company in writing of itselection 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 writtennotice 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 withoutproviding material non-public information), such Holder will
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immediately discontinue disposition of Registrable Securities pursuant to the RegistrationStatement covering such Registrable Securities, until otherwise notified in writing by the Companyor until such Holder’s receipt of the copies of the supplemented or amended prospectus filed withthe 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 theRegistrable Securities, in any Registration Statement filed or maintained by the Company pursuantto this Agreement.          (e) No Holder may use any confidential information received by it pursuant to this Agreementin 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 boundhereby), unless such information has been made available to the public generally (other than bysuch recipient in violation hereof) or such recipient is required to disclose such information by agovernmental body or regulatory agency or by law in connection with a transaction that is nototherwise prohibited hereby, and then only after reasonable notice to the Company and it has beenprovided a reasonable opportunity to object to such disclosure, with the reasonable cooperation andassistance of such Holder. Each Holder agrees to comply in all material respects with theSecurities Act and other applicable laws in connection with the offer or sale of any RegistrableSecurities; provided, however, that any failure to comply that is due to any breach by the Companyof its obligations hereunder or under applicable securities laws (including any misstatements oromission of material facts by the Company in its public disclosure documents) shall not constitutea breach of this Section 6(e) by the Holder. The obligations in this Section 6(e) shall survive theexpiration or termination of this Agreement.     Notwithstanding any of the foregoing, nothing herein shall obligate the Company to provide tothe 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 orrepresentatives of the Holders, pursuant to this Agreement unless prior to disclosure of suchinformation the Company identifies such information as being material nonpublic information andprovides the Holders, such advisors and representatives with the opportunity to accept or refuse toaccept such material nonpublic information for review and any Holder wishing to obtain suchinformation enters into an appropriate confidentiality agreement with the Company with respectthereto.     7. Indemnification.          (a) In connection with any registration or qualification of the Registrable Securities underthis Agreement, (i) the Company shall indemnify and hold harmless each of the Holders, includingbut not limited to each Person, if any, who controls a Holder within the meaning of Section 15 ofthe Securities Act, against all losses, claims, damages, liabilities and expenses (including butnot limited to reasonable expenses incurred in investigating, preparing and defending against anyclaim) 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 byany untrue statement or alleged untrue statement of a material fact contained in any RegistrationStatement, 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 theCompany pursuant to this Agreement or insofar as the same arise out of or are based upon or arecaused by any omission or alleged omission to state therein a material fact required to be statedtherein 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 werebased upon or were caused by any untrue statement or alleged untrue statement or omission oralleged omission made in conformity with written information furnished to the Company by or onbehalf of any Holder or such control person specifically for inclusion in any RegistrationStatement, Prospectus (and any amendments or supplements thereto) or Free Writing Prospectus (itbeing understood that the Holders have approved the plan of distribution included in theRegistration Statement for this purpose and shall be deemed to have been specifically furnished bysuch Holders), or in the case of an occurrence of a Discontinuation Event, the use by such Holderof an outdated or defective Prospectus after the Company has notified such Holder in writing thatthe Prospectus is outdated or defective and prior to the receipt by such Holder of an amended orsupplemented Prospectus, but only if and to the extent that following the receipt of such amendedor supplemented Prospectus the misstatement or omission giving rise to such liability would havebeen corrected, (ii) each Holder, severally and not jointly, shall indemnify the Company, itsaffiliates, 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 anddefending against any claim) insofar as the same are ultimately determined to have arisen out of orwere based upon or were caused by any such untrue statement or alleged untrue statement or any suchomission or alleged omission based upon written information furnished to the Company by or onbehalf of such Holder or any such control person specifically for the inclusion in any RegistrationStatement, Prospectus (and any amendments or supplements thereto) or Free Writing Prospectus, (itbeing understood that the Holders have approved the plan of distribution included in theRegistration Statement for this purpose and shall be deemed to have been specifically furnished bysuch Holders), or in the case of an occurrence of a Discontinuation Event, the use by such Holderof an outdated or defective Prospectus after the Company has notified such Holder in writing thatthe Prospectus is outdated or defective and prior to the receipt by such Holder of an amended orsupplemented Prospectus, but only if and to the extent that following the receipt of such amendedor supplemented Prospectus the misstatement or omission giving rise to such liability would havebeen corrected.          (b) Notice of, and Procedures for, Collecting Indemnification. Promptly upon receiptby a party indemnified under this Agreement of notice of the commencement of any action againstsuch indemnified party in respect of which indemnity or reimbursement may be sought against anyindemnifying party under this Agreement, such indemnified party shall notify the indemnifying partyin writing of the commencement of such action, but the failure so to notify the indemnifying partyshall not relieve it of any liability which it may have to any indemnified party under thisAgreement unless such failure shall materially and adversely affect the defense of such action. Incase notice of commencement of any such action shall be given to the indemnifying party as aboveprovided, the indemnifying party shall be entitled to participate in and, to the extent it maywish, jointly with any other indemnifying party similarly notified, to assume the defense of suchaction at its own expense, with counsel chosen by it and reasonably satisfactory to suchindemnified party. The indemnified party shall have the right to employ separate counsel in anysuch 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 anyclaim) shall be paid by the indemnified party unless (i) the indemnifying party agrees to pay thesame, (ii) the indemnifying
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party fails to assume the defense of such action with counsel reasonably satisfactory to theindemnified party (in which case the indemnifying party shall not have the right to assume thedefense of such action on behalf of such indemnified party), or (iii) the named parties to any suchaction (including any impleaded parties) have been advised by such counsel that representation ofsuch indemnified party and the indemnifying party by the same counsel would be inappropriate underapplicable standards of professional conduct (in which case the indemnifying party shall not havethe right to assume the defense of such action on behalf of such indemnified party). In the eventthat either of the circumstances described in clauses (ii) and (iii) of the sentence immediatelypreceding shall occur, the indemnified party shall have the right to select a separate counsel andto assume such legal defense and otherwise to participate in the defense of any such action, withthe reasonable expenses and fees of such separate counsel and other reasonable expenses related tosuch participation to be reimbursed by the indemnifying party as incurred. No indemnifying partyshall be liable for any settlement entered into without its consent, which consent shall not beunreasonably withheld or delayed. Notwithstanding the provisions of this Section 7, no Holdershall be required to indemnify any person or entity in excess of the amount of the aggregate netproceeds received by such Holder in respect of Registrable Securities in connection with any suchregistration under the Securities Act.          (c) Contribution. If the indemnification provided for in this Section 7 isunavailable to an indemnified party under paragraphs (a) and (b) hereof, other than as expresslyset forth above, in respect of any losses, claims, damages, liabilities or expenses referred totherein, then an indemnifying party, in lieu of indemnifying such indemnified party, shallcontribute 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 benefitsreceived by the Company on the one hand and the Holder(s) on the other hand from the offering ofthe Registrable Securities, and any other securities included in the Registration Statement whichgave rise to such losses, claims, damages, liabilities or expenses, or (ii) if the allocationprovided by clause (i) above is not permitted by applicable law, in such proportion as isappropriate to reflect not only the relative benefits referred to in clause (i) above but also therelative fault of the Company on the one hand and the Holder(s) on the other in connection with thestatements or omissions that resulted in such losses, claims, damages, liabilities or expenses, aswell as any other relevant equitable considerations. The relative benefits received by the Companyon the one hand and the Holder(s) on the other shall be deemed to be in the same proportion as thetotal net proceeds from the offering (before deducting expenses) received by the Company bears tothe total net proceeds from the offering (before deducting expenses) received by the Holders, ineach case as set forth in the table on the cover page of the prospectus. The relative fault of theCompany 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 theomission or alleged omission to state a material fact relates to information supplied by theCompany or by the Holder(s) and the parties’ relative intent, knowledge, access to information andopportunity to correct or prevent such statement or omission     8. Representations and Warranties. The Common Stock of the Company is registeredpursuant to Section 12(b) or 12(g) of the Exchange Act and the Company has filed all reportsrequired to be filed under the Exchange Act for the twelve months preceding the date hereof on atimely basis or has timely filed a valid extension of such time of filing and has filed suchreports prior to the expiration of any such extension. The Company has filed (i) its Annual Reporton Form 10-K for its fiscal year ended February 3, 2007 and (ii) its Quarterly Reports on Form 10-Qfor each of its first three fiscal quarters after February 3, 2007 (collectively, the “SECReports”). Each SEC
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Report was, at the time of its filing, in substantial compliance with the requirements of itsrespective 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 ofa material fact or omitted to state a material fact required to be stated therein or necessary tomake the statements therein, in light of the circumstances under which they were made, notmisleading. The financial statements of the Company included in the SEC Reports comply as to formin all material respects with applicable accounting requirements and the published rules andregulations of the Commission or other applicable rules and regulations as in effect at the time offiling. Such financial statements have been prepared in accordance with generally acceptedaccounting 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 thecase of unaudited interim statements, to the extent they may not include footnotes or may becondensed) and fairly present in all material respects the financial condition, the results ofoperations 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 unauditedstatement, 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 theirrespective obligations under this Agreement, each Holder or the Company, as the case may be, inaddition 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 thisAgreement.          (b) No Piggyback on Registrations. Except as and to the extent specified inSchedule 6(d) hereto, neither the Company nor any of its security holders (other than theHolders in such capacity pursuant hereto) may include securities of the Company in any RegistrationStatement other than the Registrable Securities, and the Company shall not after the date hereofenter into any agreement providing any such right for inclusion of shares in the RegistrationStatement relating to the Registrable Securities to any of its security holders. Except as and tothe extent specified in Schedule 6(d) hereto, the Company has not previously entered intoany agreement granting any registration rights with respect to any of its securities to any Personthat have not been fully satisfied.          (c) Compliance. Each Holder covenants and agrees that it will comply with theprospectus delivery requirements of the Securities Act as applicable to it in connection with salesof Registrable Securities pursuant to the Registration Statement.          (d) Discontinued Disposition. Each Holder agrees by its acquisition of suchRegistrable Securities that, upon receipt of a notice from the Company of the occurrence of aDiscontinuation Event, such Holder will forthwith discontinue disposition of such RegistrableSecurities under the applicable Registration Statement until such Holder’s receipt of the copies ofthe 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, ineither case, has received copies of any additional or supplemental filings that are incorporated ordeemed to be incorporated by reference in such Prospectus or Registration Statement. The Companymay provide appropriate stop orders to enforce the provisions of this paragraph. The Companyagrees to use its reasonable best efforts to immediately cure any such Discontinuation
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Event and to use its reasonable best efforts to immediately provide copies of any such supplementor 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 theprovisions of this sentence, may not be amended, modified or supplemented, and waivers or consentsto departures from the provisions hereof may not be given, unless the same shall be in writing andsigned by the Company and the Required Holders. Notwithstanding the foregoing, a waiver or consentto depart from the provisions hereof with respect to a matter that relates exclusively to therights of certain Holders and that does not directly or indirectly affect the rights of otherHolders may be given by Holders of at least a majority of the Registrable Securities to which suchwaiver or consent relates; provided, however, that the provisions of this sentence may not beamended, modified, or supplemented except in accordance with the provisions of the immediatelypreceding sentence.          (f) Notices. Any notice or request hereunder may be given to the Company or theSecurityholders at the respective addresses set forth below or as may hereafter be specified in anotice designated as a change of address under this Section 9(f). Any notice or request hereundershall be given by registered or certified mail, return receipt requested, hand delivery, overnightmail, Federal Express or other national overnight next day carrier (collectively, “Courier”) ortelecopy 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 thoseby mail, deemed to have been given three (3) business days after the date when deposited in themail, in the case of a Courier, the next business day following timely delivery of the package withthe Courier, and, in the case of a telecopy or electronic mail, when confirmed. The address forsuch notices and communications shall be as follows:   *If to the Company:* Bakers Footwear Group, Inc.  2815 Scott Avenue  St. Louis, MO 63103  Attention: Peter A. Edison, ChiefExecutive Officer  Fax Number: (314) 641-0390  Email Address: pedison@bfgstl.com   *With a Copy to:* Bryan Cave LLP  William L. Cole, Esq.  211 N. Broadway, Suite 3800  St. Louis, MO 63102  Fax Number: (314) 259-2020  Email Address: wlcole@bryancave.com   *If to a Securityholder:* To the address set forth under suchSecurityholder’s name on the signaturepages hereto.   *If to any other Person who isthen the registered Holder:* To the address of such Holder as itappears in the stock transfer books of theCompany
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or such other address as may be designated in writing hereafter in accordance with this Section9(f) by such Person.          (g) Successors and Assigns.                    (i) Assignments and Transfers by Holders. The provisions of this Agreement shall bebinding 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 amendedunder the Securities Act, (B) shall be an employee, director, officer or Affiliate of PrivateEquity Management Group, LLC, (C) shall not be a direct competitor of the Company, and (D) whichshall agree in writing to be bound by the terms and conditions of this Agreement, an executedcounterpart of which shall be furnished to the Company, its rights hereunder in connection with thetransfer of Registrable Securities by Holder to such person, provided that the Holder complies withall laws applicable thereto and provides written notice of assignment to the Company promptly aftersuch assignment is effected.                    (ii) Assignments and Transfers by the Company. This Agreement may not be assigned bythe Company (whether by operation of law or otherwise) without the prior written consent of theRequired Holders, provided, however, that the Company may assign its rights and delegate its dutieshereunder to any surviving or successor corporation in connection with a merger or consolidation ofthe Company with another corporation, or a sale, transfer or other disposition of all orsubstantially all of the Company’s assets to another corporation, without the prior written consentof 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 ofcounterparts, each of which when so executed shall be deemed to be an original and, all of whichtaken together shall constitute one and the same Agreement. In the event that any signature isdelivered by facsimile transmission, such signature shall create a valid binding obligation of theparty executing (or on whose behalf such signature is executed) the same with the same force andeffect as if such facsimile signature were the original thereof.          (i) Governing Law. All questions concerning the construction, validity, enforcementand interpretation of this Agreement shall be governed by and construed and enforced in accordancewith the internal laws of the State of California, without regard to the principles of conflicts oflaw thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement anddefense of the transactions contemplated by this Agreement shall be commenced exclusively in thestate and federal courts sitting in Los Angeles, California. Each party hereto hereby irrevocablysubmits 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 anytransaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees notto assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of anysuch court, that such Proceeding is improper. Each party hereto hereby irrevocably waives personalservice of process and consents to process being served in any such Proceeding by mailing a copythereof via registered or certified mail or overnight delivery (with evidence of delivery) to suchparty at the address in effect for notices to it under this Agreement and agrees that such serviceshall
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constitute good and sufficient service of process and notice thereof. Nothing contained hereinshall 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 notexclusive of any remedies provided by law.          (k) Severability. If any term, provision, covenant or restriction of this Agreementis held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, theremainder of the terms, provisions, covenants and restrictions set forth herein shall remain infull force and effect and shall in no way be affected, impaired or invalidated, and the partieshereto shall use their reasonable efforts to find and employ an alternative means to achieve thesame or substantially the same result as that contemplated by such term, provision, covenant orrestriction. It is hereby stipulated and declared to be the intention of the parties that theywould have executed the remaining terms, provisions, covenants and restrictions without includingany of such that may be hereafter declared invalid, illegal, void or unenforceable.          (l) Headings. The headings in this Agreement are for convenience of reference onlyand shall not limit or otherwise affect the meaning hereof.          (m) Entire Agreement. This Agreement is intended by the parties as a final expressionof their agreement and intended to be a complete and exclusive statement of the agreement andunderstanding of the parties hereto in respect of the subject matter contained herein. ThisAgreement supersedes all prior agreements and understandings between the parties with respect tosuch subject matter.*********