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Steve Madden provides financial support to Bakers
28
Aug '10
Bakers Footwear Group, Inc., a leading specialty retailer of moderately priced fashion footwear for young women, announced that effective August 26, 2010, it obtained a $5 million debt and equity investment from Steven Madden, Ltd.

Bakers received net proceeds of approximately $4.6 million, net of transaction expenses, and will use the proceeds for working capital purposes. The $5 million note bears interest at 11% with principal payments due during 2017 through 2020 and is subordinate to Bakers' other outstanding debt.

Steve Madden will also be issued 1,844,860 shares of common stock as additional consideration for the loan, providing it with a 19.99% equity interest in Bakers. Steve Madden has agreed to vote its shares in the same manner as Peter Edison, Bakers' Chief Executive Officer (CEO).

"We are pleased to expand our 20 year partnership with Steve Madden, one of our largest suppliers, to include a financial investment,” said Peter Edison, Chief Executive Officer of Bakers.

"This investment has no financial covenants or sourcing, management, or governance conditions of any kind and represents a strong vote of confidence in our business. Bakers has had a business association with Steve from the day he started his company, and we look forward to continuing our excellent and enduring relationship with him and his team."

Edward Rosenfeld, Chairman and Chief Executive Officer of Steve Madden, commented, “We are very pleased to provide financial support to Bakers. Our companies have enjoyed a long-standing relationship, and we look forward to continued success. We believe this investment will be beneficial to both of our companies.”

The transaction documents contain customary and other provisions, including requiring repayment of the note in the event of a change of control (including if Peter Edison ceases to be CEO). Steve Madden also agreed to restrictions on transferring or acquiring additional Bakers securities.

Bakers also entered into various consents, waivers and agreements with all of its other senior lenders to accommodate the transaction. Details of those arrangements, additional information about the transaction and the related agreements entered into, and Bakers' covenant compliance are described in the Company's Current Report on Form 8-K filed.

The shares of common stock and note have not been registered under the Securities Act of 1933 (the "Securities Act"), or any state securities laws, and were made in a private transaction under Regulation D. Bakers has agreed to file a registration statement with the Securities and Exchange Commission upon request of the investor, subject to certain conditions, covering the resale of the common stock.

Until this registration statement is declared effective by the SEC, the shares of common stock may not be reoffered or resold in the United States unless the re-offer or resale is registered or unless an exemption from the registration requirements of the Securities Act and applicable state laws is available.

Bakers Footwear Group Inc


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