Document:

exv4w6

Exhibit 4.6

SUBORDINATION AGREEMENT

Preliminary Statement

     This Subordination Agreement (this “Agreement”) is made as of August 25, 2010 by and among
Bakers Footwear Group, Inc. (the “Company”), Steven Madden, Ltd. (the “Subordinated Creditor”) and
Private Equity Management Group, Inc., as Administrative Agent for certain lenders described below
(the “Senior Lender”) (the Subordinated Creditor and the Senior Lender, collectively, the
“Creditors”). The Company, the Senior Lender and the lenders party thereto are parties to that
certain Second Lien Credit Agreement dated February 1, 2008 (as amended, restated, modified and/or
supplemented from time to time, the “Loan Agreement”). Capitalized terms used herein and not
otherwise defined shall have the same meanings ascribed to them in the Loan Agreement.

     Concurrently herewith, the Company and the Subordinated Creditor have entered into a Debenture
and Stock Purchase Agreement, pursuant to which the Company, subject to the terms and conditions
set forth therein, has agreed to sell to the Subordinated Creditor a debenture in the principal
amount of $5,000,000 (the “Subordinated Debenture”) and 1,844,860 shares of common stock, a copy of
which is attached hereto as Exhibit 1 (the “Purchase Agreement”).

     The Company has requested that the Senior Lender consent to, and the Senior Lender has agreed
to consent to, the Company borrowing under the Subordinated Debenture contingent upon, among other
things, the execution and delivery by the Subordinated Creditor and the Company of this Agreement.

     NOW THEREFORE, FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the willingness of the Senior Lender to consent to the
Company borrowing under the Subordinated Debenture, the Company and the Subordinated Creditor,
jointly and severally, agree with the Senior Lender as follows:

1. Subordination of Debt. The Subordinated Creditor hereby subordinates the Indebtedness
of the Company evidenced by the Subordinated Debenture (the “Subordinated Indebtedness”), to any
and all Indebtedness now or hereafter owing by the Company to the Senior Lender, whether direct or
indirect, absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, including principal, interest, charges, fees, costs, indemnities and
reasonable expenses, however evidenced, and whether as principal, surety, endorser, guarantor or
otherwise, whether now existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of the Loan Agreement and whether arising before, during or after the
commencement of any Insolvency Proceeding with respect to the Company (and including the payment of
any principal, interest, fees, cost, expenses and other amounts (including default rate interest)
which would accrue and become due but for the commencement of such Insolvency Proceeding whether or
not such amounts are allowed or allowable in whole or in part in any such Insolvency Proceeding
(collectively, the “Senior Indebtedness”) and agrees that the Subordinated Indebtedness shall be
junior in right of payment and in exercise of remedies to the Senior Indebtedness.

2. Encumbrances. Each Creditor hereby acknowledges that the other has been granted liens
upon assets of the Company to secure the Senior Indebtedness and the Subordinated Indebtedness,
respectively. Notwithstanding the foregoing, except as set forth in the Purchase Agreement as in
effect on the date hereof, Subordinated Creditor will not obtain, ask for or require any guaranty
of the Subordinated Indebtedness and will not obtain, ask for, or require any lien on any assets of
the Company as security for the Subordinated Indebtedness.

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3. Payments.

	 	(a)	 	Subject to Section 3(b) below, until such time as the Senior
Indebtedness is Paid in Full (as hereinafter defined), the Subordinated Creditor shall
be entitled to receive and retain only (i) those regularly scheduled payments (without
acceleration) of principal and interest on the Subordinated Indebtedness (the
“Scheduled Subordinated Indebtedness Payments”), to the extent and in the manner set
forth in the Purchase Agreement as in effect on the date hereof, and (ii) so long as
the Payment Conditions (as hereinafter defined) are satisfied, prepayments of the
Subordinated Indebtedness. “Paid in Full” or “Payment in Full” shall mean, with
respect to the Senior Indebtedness, that: (a) all of the Senior Indebtedness (other
than contingent indemnification obligations for which no underlying claim has been
asserted) has been indefeasibly paid, performed or discharged in full in cash, (b) no
Person has any further right to obtain any loans, letters of credit or other extensions
of credit under the documents relating to the Senior Indebtedness and (c) any and all
letters of credit or similar instruments issued under such documents have been expired
or cancelled and returned (or backed by stand-by letters of credit or cash
collateralized) in accordance with the terms of such documents.
	 
	 	(b)	 	Notwithstanding the provisions of Section 3(a) above, the Company and
the Subordinated Creditor covenant to and agree with the Senior Lender that upon the
occurrence of a default or Event of Default under the Loan Agreement (collectively, a
“Default”), and so long as, in the case of a default, such default remains uncured (or
such default and any resulting Event of Default have not been waived by the Senior
Lender), and in the case of an Event of Default, such Event of Default has not been
waived by the Senior Lender, the Subordinated Creditor’s right to receive and retain
the Scheduled Subordinated Indebtedness Payments and any prepayments (and any other
payments) under the Subordinated Debenture shall immediately cease. Subject to Section
3(c) below, the Subordinated Creditor agrees not to demand, accept or receive any
payment or prepayment in respect of the Subordinated Indebtedness after the occurrence
of a Default which remains uncured or which the Senior Lender has not waived, as
applicable, including, without limitation, any payment received through the exercise of
any right of setoff, counterclaim, cross-claim or otherwise, or any collateral
therefor, provided that the Subordinated Creditor may exercise those remedies set forth
in Section 11 below. Without limiting the foregoing, the Company agrees that,
subject to Section 3(c) below, no amount shall be paid in respect of the Subordinated
Indebtedness, whether in cash, property, securities or otherwise, by the Company to the
Subordinated Creditor after the occurrence of a Default which remains uncured or which
the Senior Lender has not waived, as applicable, without the prior written consent of
the Senior Lender.
	 
	 	(c)	 	Notwithstanding the foregoing provisions of Section 3(b), the Company may
resume and the Subordinated Creditor may accept Scheduled Subordinated Indebtedness
Payments (including any Scheduled Subordinated Indebtedness Payments which accrue
during any such time when the payment of such Scheduled Subordinated Indebtedness
Payments is prohibited pursuant to Section 3(b) above) and prepayments of the
Subordinated Indebtedness, provided that the Company may only make and the
Subordinated Creditor may only accept any payments which accrue during any such time
when the payment of such Scheduled Subordinated Indebtedness Payments is prohibited
pursuant to Section 3(b) above if the Payment Conditions are met. No Default shall be
deemed to have been cured or waived for purposes of this Section 3(c) unless and until
the Company and the Subordinated Creditor shall have received a written waiver or
notice of cure thereof from

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	 	 	 	the Senior Lender. The Company and/or the Senior Lender shall give the Subordinated
Creditor prompt notice of the occurrence of any Default and of any cure, waiver or
other termination thereof as provided in Section 16(a) hereof.
	 
	 	(d)	 	In the event that notwithstanding the provisions of the Loan Agreement and this
Agreement, the Company shall make any payment to the Subordinated Creditor on account
of the Subordinated Indebtedness not expressly authorized hereby, such payment shall be
held in trust by the Subordinated Creditor, for the benefit of the Senior Lender, and
shall be paid over immediately (without necessity of demand) to the Senior Lender for
application in accordance with the Loan Agreement to the payment of all Senior
Indebtedness remaining due and payable until the same shall have been Paid in Full,
after giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness. In the event of the failure of the Subordinated Creditor to
endorse any instrument for the payment of money so received by the Subordinated
Creditor on account of the Subordinated Indebtedness, the Senior Lender is irrevocably
appointed attorney-in-fact for the Subordinated Creditor with full power to make such
endorsement and with full power of substitution.
	 
	 	(e)	 	For the purposes of this Section 3, “Payment Conditions” shall mean (a) (i) no
Default exists or would arise from the making of such payment or prepayment, and (ii)
after giving effect to such payment or prepayment, Availability (as such term is
defined in that certain Second Amended and Restated Loan and Security Agreement dated
as of August 31, 2006 by and between the Company and Bank of America, N. A.) on a pro
forma basis for the 12 months following such payments is equal to or greater than
$3,500,000, or (b) the Senior Indebtedness has been Paid in Full.

4. INTENTIONALLY OMITTED.

5. 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 other
winding up of the Company, whether or not involving insolvency or bankruptcy (any such
proceeding referenced above being referred to herein as an “Insolvency Proceeding”), so
long as any Senior Indebtedness is outstanding and has not been Paid in Full, the
Senior Lender shall be entitled in any such Insolvency Proceedings to receive Payment
in Full in cash of all Senior Indebtedness before the Subordinated Creditor is entitled
in such Insolvency Proceedings to receive any payment on account of the Subordinated
Indebtedness, other than any payment consisting solely of any securities of the Company
issued in connection with an Insolvency Proceeding, the payment of which securities is
junior or otherwise subordinated, at least to the same extent provided in this
Agreement, to the payment of any and all of the Senior Indebtedness (collectively,
“Subordinated Securities”), and to that end in any such Insolvency Proceedings, so long
as any Senior Indebtedness remains outstanding, any payment or distribution of any kind
or character, whether in cash or in other property (other than Subordinated
Securities), to which the Subordinated Creditor would be entitled on account of the
Subordinated Indebtedness but for the provisions hereof, shall be delivered to the
Senior Lender to the extent necessary 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 Senior Indebtedness.

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	 	(b)	 	Upon the commencement of an Insolvency Proceeding, the Subordinated Creditor
shall be deemed, as security for the Senior Indebtedness and in order to effectuate the
subordination set forth above, to have assigned the Subordinated Indebtedness to the
Senior Lender and granted to the Senior Lender as of the date of the commencement of
such Insolvency Proceeding the right to collect all payments and distributions of any
kind and description (other than Subordinated Securities), whether in cash or other
property, paid or payable in respect of any claims or demands of the Subordinated
Creditor against the Company arising from the Subordinated Indebtedness. Upon the
commencement of an Insolvency Proceeding, the Subordinated Creditor shall also be
deemed to have granted to the Senior Lender the full right (but not the obligation), in
its own name or in its name as attorney in fact for the Subordinated Creditor, to
collect and enforce claims and demands of the Subordinated Creditor arising from the
Subordinated Indebtedness by suit, proof of claim in bankruptcy or other liquidation,
reorganization or Insolvency Proceedings or otherwise. The Subordinated Creditor by
its execution of this Agreement also hereby grants to the Senior Lender the exclusive
right to vote any and all claims of the Subordinated Creditor in any Insolvency
Proceedings involving the Company with respect to the election of a trustee or similar
official. The Subordinated Creditor shall be entitled to (i) vote any and all claims
of the Subordinated Creditor in any such Insolvency Proceeding with respect to any
proposed plan of reorganization of the Company, and (ii) object to any proposed plan of
reorganization of the Company to which the Subordinated Creditor would have the right
to object in any Insolvency Proceeding; provided that, in each case, the
Subordinated Creditor will not be entitled to exercise any such right if the result
thereof could reasonably be expected to materially and adversely affect the rights and
remedies of the Senior Lender under this Agreement, the Loan Agreement or any other
Loan Document or the ability of the Senior Lender to exercise the same.

6. INTENTIONALLY OMITTED.

7. Obligations Absolute. The provisions of this Agreement are for the purpose of defining
the relative rights of the Senior Lender on the one hand and the Subordinated Creditor on the other
hand with respect to the enforcement of rights and remedies and priority of payment of the Senior
Indebtedness and the Subordinated Indebtedness. Nothing herein shall impair, as between the
Company and the Subordinated Creditor, the obligations of the Company, which are unconditional and
absolute, to pay to the holder thereof the principal and interest thereon and any other liabilities
encompassed in the Subordinated Indebtedness, all in accordance with their respective terms,
subject to the prior payment in full in cash of the Senior Indebtedness.

8. Subordination Not Affected. Without the necessity of any reservation of rights against
or any notice to or further assent by the Subordinated Creditor, (i) any demand for payment of any
Senior Indebtedness made by the Senior Lender may be rescinded in whole or in part by the Senior
Lender, (ii) the Senior Lender may exercise or refrain from exercising any rights and/or remedies
against the Company and others, if any, liable under the Senior Indebtedness, and (iii) the Senior
Indebtedness and any agreement or instrument evidencing, securing, or otherwise relating to the
Senior Indebtedness (including without limitation, the Loan Agreement and the other Loan
Documents), or any collateral security therefor or guaranty thereof or other right of any nature
with 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 its
best interests, all without impairing, abridging, releasing or affecting in any manner the
subordination of the Subordinated Indebtedness to the Senior Indebtedness provided for herein.
Without limiting the foregoing, the Subordinated Creditor waives any and all notice of the
creation, amendment, restatement, extension, acceleration, compromise, continuation,

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waiver, surrender, release or modification of any nature of the Senior Indebtedness, the Loan
Agreement or the other Loan Documents, and notice of or proof of reliance by the Senior Lender upon
the subordination provided for herein. The Senior Indebtedness shall conclusively be deemed to
have been created, contracted and incurred in reliance upon the provisions of this Agreement.

9. Warranties, Representations, Covenants and Acknowledgments of the Subordinated Creditor.

	 	(a)	 	The Subordinated Creditor represents to the Senior Lender that all Indebtedness
of the Company to the Subordinated Creditor is evidenced by the Subordinated Debenture
and the other instruments executed and delivered in connection therewith. The
Subordinated Creditor further represents that said Indebtedness has not heretofore been
assigned, pledged to, or subordinated in favor of, any other Person, except for (i)
that certain Subordination Agreement dated as of the date hereof by and between the
Company, the Subordinated Creditor and Bank of America, N. A. and (ii) that certain
Subordination Agreement dated as of the date hereof by and between the Company, the
Subordinated Creditor and the holders of certain Subordinated Convertible Debentures
due June 30, 2012 and dated June 26, 2007 in the aggregate face amount of $4,000,000.
	 
	 	(b)	 	The Subordinated Creditor hereby covenants and agrees that it will not amend or
permit amendment of the terms of the Subordinated Debenture or any other agreement,
document or instrument hereafter evidencing any Subordinated Indebtedness, without the
prior written consent of the Senior Lender, if such amendment would: (i) increase the
principal amount of the Subordinated Indebtedness; (ii) increase the rate of interest
accruing on the Subordinated Indebtedness; (iii) accelerate in any manner the dates
upon which any principal or interest payment on the Subordinated Indebtedness is due
(other than with respect to the forgiveness of any of the Subordinated Indebtedness);
(iv) take any additional collateral for the Subordinated Indebtedness; or (v) add or
change in a manner adverse to the Company or the Senior Lender any covenant, agreement
or event of default under the Purchase Agreement or the Subordinated Debenture.
Notwithstanding anything to the contrary contained herein, the Subordinated Creditor
shall, at any time without the prior written consent of or notice to the Senior Lender,
be entitled to forgive part or all of the Subordinated Indebtedness.
	 
	 	(c)	 	The execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate, partnership or other action on the part of the
Subordinated Creditor, and this Agreement constitutes a valid and binding obligation of
the Subordinated Creditor, enforceable against it in accordance with its terms.
	 
	 	(d)	 	The Subordinated Creditor covenants and agrees that it will not assign, pledge,
sell, transfer or otherwise dispose of any of the Subordinated Indebtedness or
interests therein, whether through assignment or participation or otherwise, except to
a Person who first becomes a party hereto and accepts without qualification all
obligations of the Subordinated Creditor hereunder.
	 
	 	(e)	 	The Subordinated Creditor acknowledges and agrees that this Agreement is a
“subordination agreement” within the meaning of Section 510(a) of the United States
Bankruptcy Code, 11 U.S.C. §510(a).

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10. Validity and Enforceability of Encumbrances Securing Senior Indebtedness; Cooperation with
Senior Lender.

	 	(a)	 	(i) the Subordinated Creditor will not in any Insolvency Proceeding or other
event described in Section 5 or otherwise, challenge, oppose or contest (or
join in any challenge, opposition or contest by any third party, or encourage any third
party to challenge, oppose or contest) the Senior Indebtedness or the perfection,
superiority, priority, validity or enforceability of any security interest or lien
granted to the Senior Lender pursuant to the Loan Agreement, the Security Agreement or
other Loan Documents, nor will the Subordinated Creditor challenge the validity or
enforceability of such Loan Agreement, Security Agreement or other Loan Documents, or
any provision thereof, and (ii) the Senior Lender will not in any Insolvency Proceeding
or other event described in Section 5 or otherwise, challenge, oppose or
contest (or join in any challenge, opposition or contest by any third party, or
encourage any third party to challenge, oppose or contest) the Subordinated
Indebtedness or the perfection, superiority, priority, validity or enforceability of
any security interest or lien granted to the Subordinated Creditor pursuant to the
Purchase Agreement, or any documents executed in connection therewith, nor will the
Senior Lender challenge the validity or enforceability of the Purchase Agreement,
Subordinated Debenture, or any documents executed in connection therewith, or any
provision thereof. Each party hereby acknowledges that the provisions of this
Agreement are intended to be enforceable at all times, whether before or after any
Insolvency Proceeding or other event described in Section 5 of this Agreement.
The Subordinated Creditor hereby waives any right to require the Senior Lender to
marshal the Collateral.

	 	(b)	 	Without limiting the foregoing, the Subordinated Creditor will not challenge or
oppose (or join with any party challenging or opposing) or take any action whatsoever
to impair the exercise by the Senior Lender of the rights and remedies granted to the
Senior Lender in the Loan Documents; provided, however, that the Subordinated
Creditor shall have the right, but not the obligation, to cure a Default under the
Senior Indebtedness at any time during the period provided for the Company to cure such
Default under the Loan Documents; provided further, however, that the failure
by the Senior Lender to give the Subordinated Creditor notice of such Default as
provided in Section 16(a) hereof shall not affect or limit the Senior Lender’s rights
hereunder or under the Loan Agreement. In the event that such Default shall be so
cured, the rights of the Senior Lender in respect of such Default shall cease until the
occurrence of any other Default.

11. Limitations on Remedies.

	 	(a)	 	Upon the occurrence of any default or event of default (a “Subordinated
Default”) in respect of the Subordinated Indebtedness, the Subordinated Creditor shall
not exercise any Enforcement Action for a period (the “Standstill Period”), commencing
on the date of receipt by the Senior Lender from the Subordinated Creditor of written
notice (a “Default Notice”) of such Subordinated Default and ending on the earlier to
occur of (i) 120 days after receipt by Senior Lender of such Default Notice and (ii) an
Insolvency Proceeding; provided that in the event that as of any day during
such 120 day period the Subordinated Default that was the subject of the Default Notice
shall no longer be continuing, then the Standstill Period shall be deemed not to have
commenced, and provided further that such 120 day period shall be
tolled (x) for any period during which the Senior Lender or the Subordinated Creditor
are stayed by an Insolvency Proceeding

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	 		 	or an order issued by a court of competent jurisdiction from taking any Enforcement
Action and (y) for any period during which the Subordinated Creditor has otherwise
agreed to forbear from exercising its rights with respect to such Subordinated
Default. As used in this Agreement, the term “Enforcement Action” shall mean (a)
the acceleration of all or any portion of the Senior Indebtedness or Subordinated
Indebtedness, as applicable, (b) the commencement of or joinder in any involuntary
proceeding against the Company or any of its Subsidiaries under any bankruptcy,
reorganization, readjustment of debt, arrangement of debt, receivership, liquidation
or insolvency law or statute or any federal or state government, (c) the
commencement of any action or proceeding against the Company or any of its
Subsidiaries to enforce payment of all or any part of the Senior Indebtedness or
Subordinated Indebtedness, as applicable or the taking of any other actions against
the Company or its Subsidiaries permitted under the Loan Documents or the Purchase
Agreement, as applicable, and/or under applicable law, and/or the reduction of such
claims to a judgment against the Company, (d) any action by any Creditor to
foreclose on the lien of such Person in any Collateral, (e) any action by any
Creditor to take possession of, or sell or otherwise realize upon, or to exercise
any other rights or remedies with respect to, any Collateral, including any
disposition after the occurrence of a default of any Collateral by the Company with
the consent of, or at the direction of, such Creditor, or (f) the taking of any
other actions by a Creditor against any Collateral, including (other than for
purposes of perfection) the taking of control or possession of, or the exercise of
any right of setoff with respect to, any Collateral.
	 
	 	(b)	 	Notwithstanding the provisions of Section 11(a) above, during any
Standstill Period, the Subordinated Creditor shall accept any cure of the applicable
Subordinated Default(s) proffered by the Senior Lender which restores the Subordinated
Creditor to the position it would have been but for such default or event of default.
	 
	 	(c)	 	Nothing contained in this Section 11 shall limit or impair the obligations and
agreements of the Subordinated Creditors set forth in any other Section of this
Agreement.

12. Assignments and Appointments. The Subordinated Creditor, for itself and its successors
and assigns, hereby irrevocably authorizes and directs the Senior Lender, and any trustee or debtor
in possession in bankruptcy, receiver, custodian or assignee for the benefit of creditors of the
Company, whether in voluntary or involuntary liquidation, dissolution or reorganization, on his or
its behalf, to take such action as may be necessary or appropriate to effectuate the subordination
provided for in this Agreement and irrevocably appoints the Senior Lender and any such trustee,
receiver, custodian or assignee, attorney-in-fact for such purpose with full powers of substitution
and revocation.

13. No Impairment. No right of the Senior Lender to enforce subordination as herein
provided shall at any time or in any way be affected or impaired by any failure to act on the part
of the Company, or by any non-compliance by the Company with any of the terms, provisions and
covenants 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 Senior
Indebtedness or the Subordinated Indebtedness.

14. Further Assurances. In order to carry out the terms and intent of this Agreement more
effectively, each Creditor will take all actions and execute all further documents and instruments
reasonably necessary or convenient to preserve for the other party the benefits of this Agreement.

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15. Waivers, etc. No action which the Senior Lender, or the Company with the consent of
the Senior Lender, may take or refrain from taking with respect to any Senior Indebtedness, or any
promissory note or notes representing the same, or any collateral therefor, including any waiver or
release 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 the
Senior Lender or the obligations of the Subordinated Creditor hereunder. No waiver shall be deemed
to be made by the Senior Lender of any of its rights hereunder unless the same shall be in writing
and then only with respect to the specific instance involved, and shall in no way impair or offset
the rights of the Senior Lender or the obligations of the Subordinated Creditor in any other
respect or at any other time.

16. Notices.

	 	(a)	 	By the Senior Lender to the Subordinated Creditor. The Senior Lender shall
provide the Subordinated Creditor with notice of any Default simultaneously with giving
notice to the Company, provided that any failure by the Senior Lender to give such
notice shall not affect or limit the Senior Lender’s rights hereunder.
	 
	 	(b)	 	By the Subordinated Creditor to the Senior Lender. The Subordinated Creditor
shall provide the Senior Lender with notice of any Subordinated Default relating to any
Subordinated Indebtedness simultaneously with giving notice to the Company.
	 
	 	(c)	 	By the Company to the Senior Lender. The Company shall provide the Senior
Lender with copies of all notices of any Subordinated Default received by it from the
Subordinated Creditor immediately upon its receipt thereof.
	 
	 	(d)	 	By the Company to the Subordinated Creditor. The Company shall provide the
Subordinated Creditor with copies of all notices of any Default given by it to the
Senior Lender or received by it from the Senior Lender immediately upon its delivery or
receipt thereof.
	 
	 	(e)	 	Method. Except as otherwise provided herein, all demands or notices hereunder
shall be in writing and shall be deemed to have been sufficiently given or served for
all purposes hereof if personally delivered or mailed or transmitted by telecopy or
email if the sender on the same day sends a confirming copy of such communication by a
recognized overnight delivery services (charges prepaid), recognized overnight delivery
services (charges prepaid) or first class mail, postage prepaid, to them at their
respective addresses as set forth on the signature pages hereto and incorporated herein
by reference, or at such other address as the party to whom such notice is directed may
have designated in writing to the other party hereto. A notice shall be deemed to have
been given upon the earlier to occur of (i) three (3) days after the date on which it
is deposited in the U.S. mails or (ii) receipt by the party to whom such notice is
directed.

17. Miscellaneous. This Agreement shall be binding upon and shall inure to the benefit of
the Creditors and their respective heirs, legal representatives, successors and assigns (including
without limitation any transferee or refinancing lender of any Senior Indebtedness). The Senior
Lender may assign this Agreement or its rights thereunder without the consent of the Subordinated
Creditor or the Company. This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so executed and delivered
shall be an original, but all of the counterparts shall together constitute and the same
instrument.

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18. Governing Law, Jurisdiction, Waiver of Jury Trial. This Agreement, including the
validity hereof and the rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the internal laws of the State of California (without regard to
conflicts of law principles). The Subordinated Creditor, to the extent that the Subordinated
Creditor may lawfully do so, hereby consents to service of process, and to be sued, in the State of
California and consents to the jurisdiction of the courts of the State of California and the United
States District Court for the Central District of California, as well as to the jurisdiction of all
courts to which an appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of any of the Subordinated Creditor’s obligations hereunder or with
respect to the transactions contemplated hereby, and expressly waives any and all objections as to
venue in any such courts. The Subordinated Creditor further agrees that a summons and complaint
commencing an action or proceeding in any of such courts shall be properly served and confer
personal jurisdiction if served personally or by certified mail at the address set forth below
under the signature of the Subordinated Creditor or as otherwise provided under the laws of the
State of California. EACH OF THE COMPANY AND THE SUBORDINATED CREDITOR IRREVOCABLY WAIVES ALL RIGHT
TO A TRIAL BY JURY IN ANY SUIT, ACTION, OR OTHER PROCEEDING HEREAFTER INSTITUTED BY OR AGAINST IT
IN RESPECT OF ITS OBLIGATIONS HEREUNDER OR THE TRANSACTIONS CONTEMPLATED HEREBY.

19. Acknowledgment by Company. The Company covenants and agrees not to make any
distribution or payment to the Subordinated Creditor in violation of the terms of this Agreement.

20. Acknowledgement and Consent of Senior Lender. By execution hereof, in consideration of
Company’s agreement to prepay the Indebtedness owed by the Company to Senior Lender in the amount
of $229,166.87, which prepayment shall occur on January 3, 2011, and to the extent required by the
Loan Agreement and the documents entered into in connection with the Loan Agreement, the Senior
Lender hereby consents to the Company’s issuance of debt under the Subordinated Debenture without
requiring any prepayment of the proceeds to the Senior Lender and to the entry into the Purchase
Agreement, the Subordinated Debenture, the Collateral Assignment of Lease entered into in
connection with the Subordinated Debenture and to the transactions contemplated by the Purchase
Agreement.

21. Legends. The Subordinated Creditor covenants and agrees that until all of the Senior
Indebtedness is Paid in Full in cash, the Subordinated Debenture and each promissory note or other
instrument evidencing the Subordinated Indebtedness and each security agreement relating to the
Subordinated Indebtedness shall bear at all times, in a conspicuous manner, the following legend:

     “THIS SUBORDINATED DEBENTURE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE, IN THE
MANNER AND TO THE EXTENT SET FORTH IN (I) THAT SUBORDINATION AGREEMENT DATED AS OF AUGUST 25, 2010,
BY AND AMONG BAKERS FOOTWEAR GROUP, INC., STEVEN MADDEN, LTD., AND BANK OF AMERICA, N.A. (“BA”),
(II) THAT SUBORDINATION AGREEMENT DATED AS OF AUGUST 25, 2010, BY AND AMONG BAKERS FOOTWEAR GROUP,
INC., STEVEN MADDEN, LTD., AND PRIVATE EQUITY MANAGEMENT GROUP, INC. (“PEMG”), AND (III) THAT
SUBORDINATION AGREEMENT DATED AS OF AUGUST 25, 2010, BY AND AMONG BAKERS FOOTWEAR GROUP, INC.,
STEVEN MADDEN, LTD., AND THE HOLDERS OF CERTAIN SUBORDINATED CONVERTIBLE DEBENTURES DUE JUNE 30,
2012 AND DATED JUNE 26, 2007 IN THE AGGREGATE FACE AMOUNT OF $4,000,000 (THE “DEBENTURE HOLDERS”;
TOGETHER WITH BA AND PEMG, THE “SENIOR LENDERS”) (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED
FROM TIME TO TIME, COLLECTIVELY, THE “SUBORDINATION AGREEMENTS”), TO ALL INDEBTEDNESS OWED BY THE
MAKER OF THIS SUBORDINATED DEBENTURE TO THE SENIOR LENDERS, AND THE HOLDER OF THIS

9

 

SUBORDINATED DEBENTURE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE
SUBORDINATION AGREEMENTS.”

10

 

This Agreement is executed as a sealed instrument as of as of the date first written above.

	 	 	 	 	 
	COMPANY

BAKERS FOOTWEAR GROUP, INC.

 	 	 
	By:  	/s/
Peter Edison	 	 
	 	Name:  	Peter Edison 	 	 
	 	Title:  	Chief Executive Officer

Address: 2815 Scott Avenue

St. Louis, Missouri 63103

Telephone: 314-621-0699

Telecopier: : 314-641-0390 	 	 
	 

	 	 	 	 	 
	SUBORDINATED CREDITOR

STEVEN MADDEN, LTD.

 	 	 
	By:  	/s/
Arvind Dharia	 	 
	 	Name:  	Arvind Dharia 	 	 
	 	Title:  	Chief Financial Officer

Address: 52-16 Barnett Avenue

Long Island City, New York 11104

Telephone: 718-446-1800

Telecopier: 718-308-8201 	 	 
	 

[Signature Page to Subordination Agreement (Private Equity Management Group, Inc.)]

 

 

	 	 	 	 	 
	SENIOR LENDER

PRIVATE EQUITY MANAGEMENT GROUP, INC.,

as Administrative Agent

 	 	 
	By:  	/s/
Jim LeSieur	 	 
	 	Name:  	Jim LeSieur 	 	 
	 	Title:  	Chief Operating Officer

Address: One Park Plaza, Suite 500

Irvine, California 92614

Telephone: (949) 757-0977

Telecopier: (949) 757-0978 	 	 
	 

[Signature Page to Subordination Agreement (Private Equity Management Group, Inc.)]exv4w7

Exhibit
4.7

SUBORDINATION AGREEMENT

Preliminary Statement

     This Subordination Agreement (this “Agreement”) is made as of August 26, 2010 by and among
Bakers Footwear Group, Inc. (the “Company”), Steven Madden, Ltd. (the “Subordinated Creditor”) and
the holders of the Convertible Debentures (as hereinafter defined) (each, a “Senior Lender” and,
collectively, the “Senior Lenders”) (the Subordinated Creditor and the Senior Lenders,
collectively, the “Creditors”). The Company and the Senior Lenders are parties to one or more
Subordinated Convertible Debentures due June 30, 2012 and dated June 26, 2007 in the aggregate face
amount of $4,000,000 (collectively and as amended, restated, modified and/or supplemented from time
to time, the “Convertible Debentures”). Capitalized terms used herein and not otherwise defined
shall have the same meanings ascribed to them in the Convertible Debentures.

     Concurrently herewith, the Company and the Subordinated Creditor have entered into a Debenture
and Stock Purchase Agreement, pursuant to which the Company, subject to the terms and conditions
set forth therein, has agreed to sell to the Subordinated Creditor a debenture in the principal
amount of $5,000,000 (the “Subordinated Debenture”) and 1,844,860 shares of common stock, a copy of
which is attached hereto as Exhibit 1 (the “Purchase Agreement”).

     The Company has requested that the Senior Lenders consent to, and the Senior Lenders have
agreed to consent to, the Company borrowing under the Subordinated Debenture contingent upon, among
other things, the execution and delivery by the Subordinated Creditor and the Company of this
Agreement.

     NOW THEREFORE, FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the willingness of the Senior Lenders to consent to the
Company borrowing under the Subordinated Debenture, the Company and the Subordinated Creditor,
jointly and severally, agree with the Senior Lenders as follows:

1. Subordination of Debt. The Subordinated Creditor hereby subordinates the Indebtedness
of the Company evidenced by the Subordinated Debenture (the “Subordinated Indebtedness”), to any
and all Indebtedness now or hereafter owing by the Company to the Senior Lenders, whether direct or
indirect, absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, including principal, interest, charges, fees, costs, indemnities and
reasonable expenses, however evidenced, and whether as principal, surety, endorser, guarantor or
otherwise, whether now existing or hereafter arising, whether arising before, on or after the
Maturity Date of the Convertible Debentures and whether arising before, during or after the
commencement of any Insolvency Proceeding with respect to the Company (and including the payment of
any principal, interest, fees, cost, expenses and other amounts (including default rate interest)
which would accrue and become due but for the commencement of such Insolvency Proceeding whether or
not such amounts are allowed or allowable in whole or in part in any such Insolvency Proceeding
(collectively, the “Senior Indebtedness”) and agrees that the Subordinated Indebtedness shall be
junior in right of payment and in exercise of remedies to the Senior Indebtedness.

2. Encumbrances. Except as set forth in the Purchase Agreement as in effect on the date
hereof, Subordinated Creditor will not obtain, ask for or require any guaranty of the Subordinated
Indebtedness and will not obtain, ask for, or require any lien on any assets of the Company as
security for the Subordinated Indebtedness.

1

 

3. Payments.

	 	(a)	 	Subject to Section 3(b) below, until such time as the Senior
Indebtedness is Paid in Full (as hereinafter defined), the Subordinated Creditor shall
be entitled to receive and retain only (i) those regularly scheduled payments (without
acceleration) of principal and interest on the Subordinated Indebtedness (the
“Scheduled Subordinated Indebtedness Payments”), to the extent and in the manner set
forth in the Purchase Agreement as in effect on the date hereof, and (ii) so long as
the Payment Conditions (as hereinafter defined) are satisfied, prepayments of the
Subordinated Indebtedness. “Paid in Full” or “Payment in Full” shall mean, with
respect to the Senior Indebtedness, that: (a) all of the Senior Indebtedness (other
than contingent indemnification obligations for which no underlying claim has been
asserted) has been indefeasibly paid, performed or discharged in full in cash and (b)
no Person has any further right to obtain any loans, letters of credit or other
extensions of credit under the documents relating to the Senior Indebtedness.
	 
	 	(b)	 	Notwithstanding the provisions of Section 3(a) above, the Company and
the Subordinated Creditor covenant to and agree with the Senior Lenders that upon the
occurrence of a default or Event of Default under the Convertible Debentures
(collectively, a “Default”), and so long as, in the case of a default, such default
remains uncured (or such default and any resulting Event of Default have not been
waived by the Senior Lenders), and in the case of an Event of Default, such Event of
Default has not been waived by the Senior Lenders, the Subordinated Creditor’s right to
receive and retain the Scheduled Subordinated Indebtedness Payments and any prepayments
(and any other payments) under the Subordinated Debenture shall immediately cease.
Subject to Section 3(c) below, the Subordinated Creditor agrees not to demand, accept
or receive any payment or prepayment in respect of the Subordinated Indebtedness after
the occurrence of a Default which remains uncured or which the Senior Lenders has not
waived, as applicable, including, without limitation, any payment received through the
exercise of any right of setoff, counterclaim, cross-claim or otherwise, or any
collateral therefor, provided that the Subordinated Creditor may exercise those
remedies set forth in Section 11 below. Without limiting the foregoing, the
Company agrees that, subject to Section 3(c) below, no amount shall be paid in respect
of the Subordinated Indebtedness, whether in cash, property, securities or otherwise,
by the Company to the Subordinated Creditor after the occurrence of a Default which
remains uncured or which the Senior Lenders has not waived, as applicable, without the
prior written consent of the Senior Lenders.
	 
	 	(c)	 	Notwithstanding the foregoing provisions of Section 3(b), the Company may
resume and the Subordinated Creditor may accept Scheduled Subordinated Indebtedness
Payments (including any Scheduled Subordinated Indebtedness Payments which accrue
during any such time when the payment of such Scheduled Subordinated Indebtedness
Payments is prohibited pursuant to Section 3(b) above) and prepayments of the
Subordinated Indebtedness, provided that the Company may only make and the
Subordinated Creditor may only accept any payments which accrue during any such time
when the payment of such Scheduled Subordinated Indebtedness Payments is prohibited
pursuant to Section 3(b) above if the Payment Conditions are met. No Default shall be
deemed to have been cured or waived for purposes of this Section 3(c) unless and until
the Company and the Subordinated Creditor shall have received a written waiver or
notice of cure thereof from the Senior Lenders. The Company and/or the Senior Lenders
shall give the Subordinated Creditor prompt notice of the occurrence of any Default and
of any cure, waiver or other termination thereof as provided in Section 16(a)
hereof.

2

 

	 	(d)	 	In the event that notwithstanding the provisions of the Convertible Debentures
and this Agreement, the Company shall make any payment to the Subordinated Creditor on
account of the Subordinated Indebtedness not expressly authorized hereby, such payment
shall be held in trust by the Subordinated Creditor, for the benefit of the Senior
Lenders, and shall be paid over immediately (without necessity of demand) to the Senior
Lenders for application in accordance with the Convertible Debentures to the payment of
all Senior Indebtedness remaining due and payable until the same shall have been Paid
in Full, after giving effect to any concurrent payment or distribution to the holders
of such Senior Indebtedness. In the event of the failure of the Subordinated Creditor
to endorse any instrument for the payment of money so received by the Subordinated
Creditor on account of the Subordinated Indebtedness, the Senior Lenders are
irrevocably appointed attorney-in-fact for the Subordinated Creditor with full power to
make such endorsement and with full power of substitution.
	 
	 	(e)	 	For the purposes of this Section 3, “Payment Conditions” shall mean (a) (i) no
Default exists or would arise from the making of such payment or prepayment, and (ii)
after giving effect to such payment or prepayment, Availability (as such term is
defined in that certain Second Amended and Restated Loan and Security Agreement dated
as of August 31, 2006 by and between the Company and Bank of America, N. A.) on a pro
forma basis for the 12 months following such payments is equal to or greater than
$3,500,000, or (b) the Senior Indebtedness has been Paid in Full.

4. INTENTIONALLY OMITTED.

5. 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 other
winding up of the Company, whether or not involving insolvency or bankruptcy (any such
proceeding referenced above being referred to herein as an “Insolvency Proceeding”), so
long as any Senior Indebtedness is outstanding and has not been Paid in Full, the
Senior Lenders shall be entitled in any such Insolvency Proceedings to receive Payment
in Full in cash of all Senior Indebtedness before the Subordinated Creditor is entitled
in such Insolvency Proceedings to receive any payment on account of the Subordinated
Indebtedness, other than any payment consisting solely of any securities of the Company
issued in connection with an Insolvency Proceeding, the payment of which securities is
junior or otherwise subordinated, at least to the same extent provided in this
Agreement, to the payment of any and all of the Senior Indebtedness (collectively,
“Subordinated Securities”), and to that end in any such Insolvency Proceedings, so long
as any Senior Indebtedness remains outstanding, any payment or distribution of any kind
or character, whether in cash or in other property (other than Subordinated
Securities), to which the Subordinated Creditor would be entitled on account of the
Subordinated Indebtedness but for the provisions hereof, shall be delivered to the
Senior Lenders to the extent necessary 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 Senior Indebtedness.
	 
	 	(b)	 	Upon the commencement of an Insolvency Proceeding, the Subordinated Creditor
shall be deemed, as security for the Senior Indebtedness and in order to effectuate the
subordination set forth above, to have assigned the Subordinated Indebtedness to the

3

 

	 	 	 	Senior Lenders and granted to the Senior Lenders as of the date of the commencement
of such Insolvency Proceeding the right to collect all payments and distributions of
any kind and description (other than Subordinated Securities), whether in cash or
other property, paid or payable in respect of any claims or demands of the
Subordinated Creditor against the Company arising from the Subordinated
Indebtedness. Upon the commencement of an Insolvency Proceeding, the Subordinated
Creditor shall also be deemed to have granted to the Senior Lenders the full right
(but not the obligation), in their own name or in their name as attorney in fact for
the Subordinated Creditor, to collect and enforce claims and demands of the
Subordinated Creditor arising from the Subordinated Indebtedness by suit, proof of
claim in bankruptcy or other liquidation, reorganization or Insolvency Proceedings
or otherwise. The Subordinated Creditor by its execution of this Agreement also
hereby grants to the Senior Lenders the exclusive right to vote any and all claims
of the Subordinated Creditor in any Insolvency Proceedings involving the Company
with respect to the election of a trustee or similar official. The Subordinated
Creditor shall be entitled to (i) vote any and all claims of the Subordinated
Creditor in any such Insolvency Proceeding with respect to any proposed plan of
reorganization of the Company, and (ii) object to any proposed plan of
reorganization of the Company to which the Subordinated Creditor would have the
right to object in any Insolvency Proceeding; provided that, in each case,
the Subordinated Creditor will not be entitled to exercise any such right if the
result thereof could reasonably be expected to materially and adversely affect the
rights and remedies of the Senior Lenders under this Agreement, the Convertible
Debentures or any other Transaction Document or the ability of the Senior Lenders to
exercise the same.

6. INTENTIONALLY OMITTED.

7. Obligations Absolute. The provisions of this Agreement are for the purpose of defining
the relative rights of the Senior Lenders on the one hand and the Subordinated Creditor on the
other hand with respect to the enforcement of rights and remedies and priority of payment of the
Senior Indebtedness and the Subordinated Indebtedness. Nothing herein shall impair, as between the
Company and the Subordinated Creditor, the obligations of the Company, which are unconditional and
absolute, to pay to the holder thereof the principal and interest thereon and any other liabilities
encompassed in the Subordinated Indebtedness, all in accordance with their respective terms,
subject to the prior payment in full in cash of the Senior Indebtedness.

8. Subordination Not Affected. Without the necessity of any reservation of rights against
or any notice to or further assent by the Subordinated Creditor, (i) any demand for payment of any
Senior Indebtedness made by the Senior Lenders may be rescinded in whole or in part by the Senior
Lenders, (ii) the Senior Lenders may exercise or refrain from exercising any rights and/or remedies
against the Company and others, if any, liable under the Senior Indebtedness, and (iii) the Senior
Indebtedness and any agreement or instrument evidencing, securing, or otherwise relating to the
Senior Indebtedness (including without limitation, the Convertible Debentures and the other
Transaction Documents), or any collateral security therefor or guaranty thereof or other right of
any nature with respect thereto, may be amended, extended, modified, continued, accelerated,
compromised, waived, surrendered or released by the Senior Lenders, in any manner the Senior
Lenders deem in their best interests, all without impairing, abridging, releasing or affecting in
any manner the subordination of the Subordinated Indebtedness to the Senior Indebtedness provided
for herein. Without limiting the foregoing, the Subordinated Creditor waives any and all notice of
the creation, amendment, restatement, extension, acceleration, compromise, continuation, waiver,
surrender, release or modification of any nature of the Senior Indebtedness, the Convertible
Debentures or the other Transaction Documents, and notice of or proof of reliance by the

4

 

Senior Lenders upon the subordination provided for herein. The Senior Indebtedness shall
conclusively be deemed to have been created, contracted and incurred in reliance upon the
provisions of this Agreement.

9. Warranties, Representations, Covenants and Acknowledgments of the Subordinated Creditor.

	 	(a)	 	The Subordinated Creditor represents to the Senior Lenders that all
Indebtedness of the Company to the Subordinated Creditor is evidenced by the
Subordinated Debenture and the other instruments executed and delivered in connection
therewith. The Subordinated Creditor further represents that said Indebtedness has not
heretofore been assigned, pledged to, or subordinated in favor of, any other Person,
except for (i) that certain Subordination Agreement dated as of the date hereof by and
between the Company, the Subordinated Creditor and Bank of America, N. A. and (ii) that
certain Subordination Agreement dated as of the date hereof by and between the Company,
the Subordinated Creditor and Private Equity Management Group, Inc.
	 
	 	(b)	 	The Subordinated Creditor hereby covenants and agrees that it will not amend or
permit amendment of the terms of the Subordinated Debenture or any other agreement,
document or instrument hereafter evidencing any Subordinated Indebtedness, without the
prior written consent of the Senior Lenders, if such amendment would: (i) increase the
principal amount of the Subordinated Indebtedness; (ii) increase the rate of interest
accruing on the Subordinated Indebtedness; (iii) accelerate in any manner the dates
upon which any principal or interest payment on the Subordinated Indebtedness is due
(other than with respect to the forgiveness of any of the Subordinated Indebtedness);
(iv) take any additional collateral for the Subordinated Indebtedness; or (v) add or
change in a manner adverse to the Company or the Senior Lenders any covenant, agreement
or event of default under the Purchase Agreement or the Subordinated Debenture.
Notwithstanding anything to the contrary contained herein, the Subordinated Creditor
shall, at any time without the prior written consent of or notice to the Senior
Lenders, be entitled to forgive part or all of the Subordinated Indebtedness.
	 
	 	(c)	 	The execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate, partnership or other action on the part of the
Subordinated Creditor, and this Agreement constitutes a valid and binding obligation of
the Subordinated Creditor, enforceable against it in accordance with its terms.
	 
	 	(d)	 	The Subordinated Creditor covenants and agrees that it will not assign, pledge,
sell, transfer or otherwise dispose of any of the Subordinated Indebtedness or
interests therein, whether through assignment or participation or otherwise, except to
a Person who first becomes a party hereto and accepts without qualification all
obligations of the Subordinated Creditor hereunder.
	 
	 	(e)	 	The Subordinated Creditor acknowledges and agrees that this Agreement is a
“subordination agreement” within the meaning of Section 510(a) of the United States
Bankruptcy Code, 11 U.S.C. §510(a).

5

 

10. Validity and Enforceability of Encumbrances Securing Senior Indebtedness; Cooperation with
Senior Lenders.

	 	(a)	 	(i) the Subordinated Creditor will not in any Insolvency Proceeding or other
event described in Section 5 or otherwise, challenge, oppose or contest (or
join in any challenge, opposition or contest by any third party, or encourage any third
party to challenge, oppose or contest) the Senior Indebtedness, nor will the
Subordinated Creditor challenge the validity or enforceability of the Convertible
Debentures or other Transaction Documents, or any provision thereof, and (ii) the
Senior Lenders will not in any Insolvency Proceeding or other event described in
Section 5 or otherwise, challenge, oppose or contest (or join in any challenge,
opposition or contest by any third party, or encourage any third party to challenge,
oppose or contest) the Subordinated Indebtedness or the perfection, superiority,
priority, validity or enforceability of any security interest or lien granted to the
Subordinated Creditor pursuant to the Purchase Agreement, or any documents executed in
connection therewith, nor will the Senior Lenders challenge the validity or
enforceability of the Purchase Agreement, Subordinated Debenture, or any documents
executed in connection therewith, or any provision thereof. Each party hereby
acknowledges that the provisions of this Agreement are intended to be enforceable at
all times, whether before or after any Insolvency Proceeding or other event described
in Section 5 of this Agreement.
	 
	 	(b)	 	Without limiting the foregoing, the Subordinated Creditor will not challenge or
oppose (or join with any party challenging or opposing) or take any action whatsoever
to impair the exercise by the Senior Lenders of the rights and remedies granted to the
Senior Lenders in the Transaction Documents; provided, however, that the
Subordinated Creditor shall have the right, but not the obligation, to cure a Default
under the Senior Indebtedness at any time during the period provided for the Company to
cure such Default under the Transaction Documents; provided further, however,
that the failure by the Senior Lenders to give the Subordinated Creditor notice of such
Default as provided in Section 16(a) hereof shall not affect or limit the Senior
Lenders’ rights hereunder or under the Convertible Debentures. In the event that such
Default shall be so cured, the rights of the Senior Lenders in respect of such Default
shall cease until the occurrence of any other Default.

11. Limitations on Remedies.

	 	(a)	 	Upon the occurrence of any default or event of default (a “Subordinated
Default”) in respect of the Subordinated Indebtedness, the Subordinated Creditor shall
not exercise any Enforcement Action for a period (the “Standstill Period”), commencing
on the date of receipt by the Senior Lenders from the Subordinated Creditor of written
notice (a “Default Notice”) of such Subordinated Default and ending on the earlier to
occur of (i) 120 days after receipt by Senior Lenders of such Default Notice and (ii)
an Insolvency Proceeding; provided that in the event that as of any day during
such 120 day period the Subordinated Default that was the subject of the Default Notice
shall no longer be continuing, then the Standstill Period shall be deemed not to have
commenced, and provided further that such 120 day period shall be
tolled (x) for any period during which the Senior Lenders or the Subordinated Creditor
are stayed by an Insolvency Proceeding or an order issued by a court of competent
jurisdiction from taking any Enforcement Action and (y) for any period during which the
Subordinated Creditor has otherwise agreed to forbear from exercising its rights with
respect to such Subordinated Default.

6

 

	 	 	 	As used in this Agreement, the term “Enforcement Action” shall mean (a) the
acceleration of all or any portion of the Senior Indebtedness or Subordinated
Indebtedness, as applicable, (b) the commencement of or joinder in any involuntary
proceeding against the Company or any of its Subsidiaries under any bankruptcy,
reorganization, readjustment of debt, arrangement of debt, receivership, liquidation
or insolvency law or statute or any federal or state government, or (c) the
commencement of any action or proceeding against the Company or any of its
Subsidiaries to enforce payment of all or any part of the Senior Indebtedness or
Subordinated Indebtedness, as applicable or the taking of any other actions against
the Company or its Subsidiaries permitted under the Transaction Documents or the
Purchase Agreement, as applicable, and/or under applicable law, and/or the reduction
of such claims to a judgment against the Company.

	 	(b)	 	Notwithstanding the provisions of Section 11(a) above, during any
Standstill Period, the Subordinated Creditor shall accept any cure of the applicable
Subordinated Default(s) proffered by the Senior Lenders which restores the Subordinated
Creditor to the position it would have been but for such default or event of default.
	 
	 	(c)	 	Nothing contained in this Section 11 shall limit or impair the obligations and
agreements of the Subordinated Creditors set forth in any other Section of this
Agreement.

12. Assignments and Appointments. The Subordinated Creditor, for itself and its successors
and assigns, hereby irrevocably authorizes and directs the Senior Lenders, and any trustee or
debtor in possession in bankruptcy, receiver, custodian or assignee for the benefit of creditors of
the Company, whether in voluntary or involuntary liquidation, dissolution or reorganization, on his
or its behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in this Agreement and irrevocably appoints the Senior Lenders and any
such trustee, receiver, custodian or assignee, attorney-in-fact for such purpose with full powers
of substitution and revocation.

13. No Impairment. No right of the Senior Lenders to enforce subordination as herein
provided shall at any time or in any way be affected or impaired by any failure to act on the part
of the Company, or by any non-compliance by the Company with any of the terms, provisions and
covenants of the agreement, documents and instruments evidencing the Subordinated Indebtedness,
regardless of any knowledge thereof that the Senior Lenders may have or be otherwise charged with,
or by any action which the Senior Lenders may take or refrain from taking with respect to the
Senior Indebtedness or the Subordinated Indebtedness.

14. Further Assurances. In order to carry out the terms and intent of this Agreement more
effectively, each Creditor will take all actions and execute all further documents and instruments
reasonably necessary or convenient to preserve for the other party the benefits of this Agreement.

15. Waivers, etc. No action which the Senior Lenders, or the Company with the consent of
the Senior Lenders, may take or refrain from taking with respect to any Senior Indebtedness, or any
promissory note or notes representing the same, or any collateral therefor, including any waiver or
release 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 the
Senior Lenders or the obligations of the Subordinated Creditor hereunder. No waiver shall be
deemed to be made by the Senior Lenders of any of their rights hereunder unless the same shall be
in writing and then only with respect to the specific instance involved, and shall in no way impair
or offset the rights of the Senior Lenders or the obligations of the Subordinated Creditor in any
other respect or at any other time.

7

 

16. Notices.

	 	(a)	 	By the Senior Lenders to the Subordinated Creditor. The Senior Lenders shall
provide the Subordinated Creditor with notice of any Default simultaneously with giving
notice to the Company, provided that any failure by the Senior Lenders to give such
notice shall not affect or limit the Senior Lenders’ rights hereunder.
	 
	 	(b)	 	By the Subordinated Creditor to the Senior Lenders. The Subordinated Creditor
shall provide the Senior Lenders with notice of any Subordinated Default relating to
any Subordinated Indebtedness simultaneously with giving notice to the Company.
	 
	 	(c)	 	By the Company to the Senior Lenders. The Company shall provide the Senior
Lenders with copies of all notices of any Subordinated Default received by it from the
Subordinated Creditor immediately upon its receipt thereof.
	 
	 	(d)	 	By the Company to the Subordinated Creditor. The Company shall provide the
Subordinated Creditor with copies of all notices of any Default given by it to the
Senior Lenders or received by it from the Senior Lenders immediately upon its delivery
or receipt thereof.
	 
	 	(e)	 	Method. Except as otherwise provided herein, all demands or notices hereunder
shall be in writing and shall be deemed to have been sufficiently given or served for
all purposes hereof if personally delivered or mailed or transmitted by telecopy or
email if the sender on the same day sends a confirming copy of such communication by a
recognized overnight delivery services (charges prepaid), recognized overnight delivery
services (charges prepaid) or first class mail, postage prepaid, to them at their
respective addresses as set forth on the signature pages hereto and incorporated herein
by reference, or at such other address as the party to whom such notice is directed may
have designated in writing to the other party hereto. A notice shall be deemed to have
been given upon the earlier to occur of (i) three (3) days after the date on which it
is deposited in the U.S. mails or (ii) receipt by the party to whom such notice is
directed.

17. Miscellaneous. This Agreement shall be binding upon and shall inure to the benefit of
the Creditors and their respective heirs, legal representatives, successors and assigns (including
without limitation any transferee or refinancing lender of any Senior Indebtedness). The Senior
Lenders may assign this Agreement or their rights thereunder without the consent of the
Subordinated Creditor or the Company. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of the counterparts shall together constitute and the same
instrument.

18. Governing Law, Jurisdiction, Waiver of Jury Trial. This Agreement, including the
validity hereof and the rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the internal laws of the State of Missouri (without regard to
conflicts of law principles). The Subordinated Creditor, to the extent that the Subordinated
Creditor may lawfully do so, hereby consents to service of process, and to be sued, in the State of
Missouri and consents to the jurisdiction of the courts of the State of Missouri and the United
States District Court for the Eastern District of Missouri, as well as to the jurisdiction of all
courts to which an appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of any of the Subordinated Creditor’s obligations hereunder or with
respect to the transactions contemplated hereby, and expressly waives any and all objections as to
venue in any such courts. The Subordinated Creditor further agrees that a summons and

8

 

complaint commencing an action or proceeding in any of such courts shall be properly served and
confer personal jurisdiction if served personally or by certified mail at the address set forth
below under the signature of the Subordinated Creditor or as otherwise provided under the laws of
the State of Missouri. EACH OF THE COMPANY AND THE SUBORDINATED CREDITOR IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION, OR OTHER PROCEEDING HEREAFTER INSTITUTED BY OR
AGAINST IT IN RESPECT OF ITS OBLIGATIONS HEREUNDER OR THE TRANSACTIONS CONTEMPLATED HEREBY.

19. Acknowledgment by Company. The Company covenants and agrees not to make any
distribution or payment to the Subordinated Creditor in violation of the terms of this Agreement.
The Company further acknowledges and agrees that any payments or other amounts received by the
Senior Lenders which are required to be turned over or otherwise remitted by the Senior Lenders to
other creditors of the Company pursuant to the terms of the subordination agreements described in
Section 9 of this Agreement shall not be deemed to be payments on the Convertible Debentures.

20. Acknowledgement and Consent of Senior Lenders. By execution hereof, and to the extent
required by the Convertible Debentures and the documents entered into in connection with the
Convertible Debentures, the Senior Lenders hereby consent to the Company’s entry into the Purchase
Agreement, Subordinated Debenture, Collateral Assignment, Registration Rights Agreement, Voting
Agreement and the documents entered into or to be entered into in connection therewith, each in
substantially the forms as provided to the Senior Lender, and consent to the transactions
contemplated thereby. Without limiting the foregoing, the Senior Lenders acknowledge and consent
to (A) the Company’s issuance of indebtedness under the Subordinated Debenture, without requiring
any prepayment of the proceeds to the Senior Lenders, (B) the entry into the Collateral Assignment
Lease and the granting of a lien or collateral assignment to the Subordinated Creditor in the
Company’s lease in a store located in New York, New York, and (C) the granting of registration
rights to the Subordinated Creditor by the Company, including demand and piggyback rights which
rights will be in some respects senior to the registration rights held by the Senior Lenders and
any resulting limitations on the registration rights currently held by the Senior Lenders.

21. Legends. The Subordinated Creditor covenants and agrees that until all of the Senior
Indebtedness is Paid in Full in cash, the Subordinated Debenture and each promissory note or other
instrument evidencing the Subordinated Indebtedness and each security agreement relating to the
Subordinated Indebtedness shall bear at all times, in a conspicuous manner, the following legend:

     “THIS SUBORDINATED DEBENTURE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE, IN THE
MANNER AND TO THE EXTENT SET FORTH IN (I) THAT SUBORDINATION AGREEMENT DATED AS OF AUGUST 26, 2010,
BY AND AMONG BAKERS FOOTWEAR GROUP, INC., STEVEN MADDEN, LTD., AND BANK OF AMERICA, N.A. (“BA”),
(II) THAT SUBORDINATION AGREEMENT DATED AS OF AUGUST 26, 2010, BY AND AMONG BAKERS FOOTWEAR GROUP,
INC., STEVEN MADDEN, LTD., AND PRIVATE EQUITY MANAGEMENT GROUP, INC. (“PEMG”), AND (III) THAT
SUBORDINATION AGREEMENT DATED AS OF AUGUST 26, 2010, BY AND AMONG BAKERS FOOTWEAR GROUP, INC.,
STEVEN MADDEN, LTD., AND THE HOLDERS OF CERTAIN SUBORDINATED CONVERTIBLE DEBENTURES DUE JUNE 30,
2012 AND DATED JUNE 26, 2007 IN THE AGGREGATE FACE AMOUNT OF $4,000,000 (THE “DEBENTURE HOLDERS”;
TOGETHER WITH BA AND PEMG, THE “SENIOR LENDERS”) (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED
FROM TIME TO TIME, COLLECTIVELY, THE “SUBORDINATION AGREEMENTS”), TO ALL INDEBTEDNESS OWED BY THE
MAKER OF THIS SUBORDINATED DEBENTURE TO THE SENIOR LENDERS, AND THE HOLDER OF THIS

9

 

SUBORDINATED DEBENTURE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE
SUBORDINATION AGREEMENTS.”

10

 

This Agreement is executed as a sealed instrument as of as of the date first written above.

	 	 	 	 	 
	COMPANY

BAKERS FOOTWEAR GROUP, INC.

 	 	 
	By:  	/s/
Peter Edison	 	 
	 	Name:  	Peter Edison 	 	 
	 	Title:  	Chief Executive Officer
	 	 
	 	Address: 	2815 Scott Avenue

St. Louis, Missouri 63103
	 	 
	 	Telephone: 	314-621-0699

	 	 
	 	Telecopier: : 	 314-641-0390 
	 	 
	 
	SUBORDINATED CREDITOR

STEVEN MADDEN, LTD.

 	 	 
	By:  	/s/
Arvind Dharia	 	 
	 	Name:  	Arvind Dharia 	 	 
	 	Title:  	Chief Financial Officer
	 	 
	 	Address: 	52-16 Barnett Avenue

Long Island City, New York 11104

	 	 
	 	Telephone: 	718-446-1800
	 	 
	 	Telecopier: 	718-308-8201
	 	 
	 

[Signature Page to Subordination Agreement (Convertible Debenture Holders)]

 

	 	 	 	 	 
	Andrew N. Baur Revocable Trust

 	 	 
	By:  	/s/ Andrew N. Baur
 	 	 
	 	Name:  	Andrew N. Baur 	 	 
	 	Title:  	Trustee 	 	 

Address: [illegible]

Telephone:

Telecopier:

 

 

	 	 	 	 	 
	Mississippi Valley Capital, LLC

 	 	 
	By:  	/s/ Scott D. Fesler
 	 	 
	 	Name:  	Scott D. Fesler 	 	 
	 	Title:  	Manager 	 	 

	 	 	 

	Address:

	 	101 S. Hanley Rd

St. Louis, MO 63105
	 
	 	 
	Telephone:

	 	314-727-4555

Telecopier: _________________________

 

 

Beatrice C. Edison Irrevocable GST Trust for Bernard A. Edison Dated 8-31-59

	 	 	 	 	 
	By:  	/s/ Bernard Edison
 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 

Address: _________________________

________________________________

Telephone: _______________________

Telecopier: _______________________

 

 

Julian I. Edison

	 	 	 	 	 
	 	 	 
	By:  	/s/ Julian Edison
 	 	 
	 	Address: 	 	 	 
	 	Telephone: 	 	 	 
	 	Telecopier: 	 	 	 

 

 

	 	 	 	 	 

Scott C. Schnuck

	 	 	 	 	 
	 	 	 
	By:  	/s/ Scott Schnuck
 	 	 
	 	Address:  	 	 	 	 
	 	Telephone: 	 	 	 
	 	Telecopier: 	 	 	 	 

 

 

	 	 	 	 	 

Linn H. Bealke Revocable Trust

	 	 	 	 	 
	 	 	 
	By:  	/s/ Linn H. Bealke, Trustee
 	 	 
	 	Name:  	Linn H. Bealke Rev Trust 	 	 
	 	Title:  	TRUSTEE 	 	 
	 

Address: P.O. Box 707

     Saratosa, WY 82331

Telephone: 307-326-5435

	 	 	 	 	 
	 	Telecopier: 	 	 	 	 

 

 

Louis N. Goldring Revocable Trust Dtd. 4/15/97

	 	 	 	 	 
	 	 	 
	By:  	/s/ Louis Goldring
 	 	 
	 	Name:  	Louis Goldring 	 	 
	 	Title:  	Trustee 	 	 
	 

	 	 	 	 	 
	 	Address: 	 	 	 	 
	 
	 	Telephone: 	 	 	 	 
	 
	 	Telecopier:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00177-of-00352.parquet"}]]