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EXECUTIONCOPY       **Applicable Minimum****Applicable Period** **Amounts**February 1, 2009 to October 31, 2009 $(4,100,000)February 1, 2009 to January 30, 2010 $5,250,000 January 31, 2010 to May 1, 2010 $500,000 January 31, 2010 to July 31, 2010 $1,250,000 January 31, 2010 to October 31, 2010 $(4,100,000)November 1, 2010 to January 30, 2011 $5,250,000      (b) The revisions to the foregoing covenant and the information provided by Borrower to Lenderand Agent in connection therewith shall not be deemed to constitute a Material Adverse Change.3. **CONDITIONS PRECEDENT TO THIS THIRD AMENDMENT****.**The satisfaction of each of the followingshall constitute conditions precedent to the effectiveness of this Third Amendment and each andevery provision hereof:     (a) The representations and warranties in the Credit Agreement and the other Loan Documentsshall be true and correct in all material respects on and as of the date hereof, as though made onsuch date (except to the extent that such representations and warranties relate solely to anearlier date);     (b) The Borrower hereby represent and warrants that no Default or Event of Default hasoccurred and is continuing under the Credit Agreement as of the date hereof;     (c) No Event of Default shall have occurred and be continuing under the Second Amended andRestated Loan and Security Agreement dated as of August 31, 2006 between Bank of America, N.A.(“Bank of America”) and Borrower, as amended, as of the date hereof;     (d) No injunction, writ, restraining order, or other order of any nature prohibiting, directlyor indirectly, the consummation of the transactions contemplated herein shall have been issued andremain in force by any Governmental Authority against Borrower, Agent or any Lender;     (e) Borrower shall have paid Agent a fee equal to $15,000. The fee shall be fully earned andnon-refundable as of the date hereof;     (f) Borrower shall have executed and delivered this Third Amendment to Lender by no later thanSeptember 15, 2009; and     (g) Borrower and Lender shall have obtained Bank of America’s consent to this Third Amendment.4. **CONSTRUCTION****.**THIS THIRD AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCEWITH, THE LAW OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THESTATE OF CALIFORNIA.
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EXECUTIONCOPY5. **ENTIRE AMENDMENT; EFFECT OF THIRD AMENDMENT****.**This Third Amendment, and terms andprovisions hereof, constitute the entire agreement among the parties pertaining to the subjectmatter hereof and supersede any and all prior or contemporaneous amendments relating to the subjectmatter hereof. Except as expressly set forth in this Third Amendment, the Credit Agreement and theother Loan Documents shall remain unchanged and in full force and effect. To the extent any termsor provisions of this Third Amendment conflict with those of the Credit Agreement or the other LoanDocuments, the terms and provisions of this Third Amendment shall control. This Third Amendment isa Loan Document.6. **COUNTERPARTS; TELEFACSIMILE EXECUTION****.**This Third Amendment may be executed in anynumber of counterparts, all of which taken together shall constitute one and the same instrumentand any of the parties hereto may execute this Third Amendment by signing any such counterpart.Delivery of an executed counterpart of this Third Amendment by telefacsimile shall be equally aseffective as delivery of an original executed counterpart of this Third Amendment. Any partydelivering an executed counterpart of this Third Amendment by telefacsimile also shall deliver anoriginal executed counterpart of this Third Amendment, but the failure to deliver an originalexecuted counterpart shall not affect the validity, enforceability, and binding effect of thisThird Amendment.7. **MISCELLANEOUS**.     (a) Upon the effectiveness of this Third Amendment, each reference in the Credit Agreement to“this Agreement,” “hereunder,” “herein,” “hereof” or words of likeimport referring to the Credit Agreement shall mean and refer to the Credit Agreement as amended bythe First Amendment, Second Amendment, and this Third Amendment.     (b) Upon the effectiveness of this Third Amendment, each reference in the Loan Documents tothe “Credit Agreement,” “thereunder,” “therein,” “thereof” or wordsof like import referring to the Credit Agreement shall mean and refer to the Credit Agreement asamended by the First Amendment, Second Amendment, and this Third Amendment.[Signature Page Follows]
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EXECUTION COPY     IN WITNESS WHEREOF, the parties have caused this Third Amendment to be executed and deliveredas of the date first written above.         **BAKERS FOOTWEAR GROUP, INC.**           By: /s/ Peter Edison           Title:                    **PRIVATE EQUITY MANAGEMENT GROUP, INC.,**