Consulting Agreement - Hycel Properties Co. and Build-A-Bear WOrkshop Inc.
HYCEL PROPERTIES CO.
101 South Hanley Road
Suite 1300
St. Louis, MO 63105-3494
Telephone 314 721-4800
Facsimile 314 721-3663
October 16, 2002
[HYCEL PROPERTIES LOGO]
Ms. Maxine Clark
President and CEB
Build-A-Bear Workshop, Inc.
1954 Innerbelt Business Center Dr.
St. Louis, MO 63114
Dear Maxine:
This letter, when countersigned by you, will confirm that Build-A-Bear Workshop,
Inc., a Delaware Corporation (the "Company"), has engaged Hycel Properties Co.,
a Missouri corporation ("Hycel"), as an independent contractor to serve as the
Company's exclusive real estate consultant.
1. Hycel's Real Estate Services
Hycel's services pursuant to this Agreement shall be to act as real estate
consultants for the purpose of locating store spaces for the Company in markets
identified by the Company as markets in which it wishes to conduct business.
Hycel will perform the terms of this Agreement, will exercise reasonable skill
and care for the Company and will promote the interests of the Company with the
utmost good faith, loyalty and fidelity. No offer of subagency will be made
without the Company's prior written approval. Hycel may also recommend markets.
Hycel will use reasonable efforts to find retail locations in those markets and
to this end will provide the following services:
(a) Identify and locate suitable locations for occupancy, such as malls,
specialty centers and other specific locations to meet the Company's
needs; and
(b) Obtain proposals for desired locations and negotiate all business
terms with the property owner's representative, subject to the
Company's approval.
<PAGE>
Ms. Maxine Clark
Build-A-Bear Workshop, Inc.
October 16, 2002
Page 2
2. Company to Furnish Information
The Company agrees to furnish to Hycel such information with respect to
the Company as Hycel may reasonably request in connection with the services to
be rendered by Hycel hereunder. The Company represents that all information
furnished to Hycel will be accurate and complete in all material respects to the
best of the Company's knowledge and belief, after reasonable investigation.
3. Exclusivity
During the term of this agreement, Hycel shall be the exclusive United
States agent for the Company in performing the types of services that Hycel is
to perform as set forth in paragraph 1 above.
During the term of this Agreement, Hycel shall not represent as agent,
finder, or broker any other person whose business, in whole or in part, is the
sale of, at retail, stuffed animals or whose major business is the sale of toys,
by doing any of the activities for such other company that Hycel is doing for
Company as set forth in paragraph 1 above.
4. Fees and Reimbursements of Expenses
(a) As compensation for Hycel's services under paragraph 1, the Company
shall pay or cause to be paid to Hycel fees as follows:
(i) Commencing on November 1, 2002, through and including December
31, 2005, a monthly fee due on the first of each month in the
amount of Four Thousand Dollars ($4,000.00).
(ii) For each lease executed by the Company, for a property in the
United States, a fee of Seven Thousand Five Hundred Dollars
($7,500,00), payable within ten (10) days after execution.
(iii) For each lease executed by the Company, for a property in
Canada, a fee of One Thousand Dollars ($1,000.00), payable
within Ten (10) days after execution.
<PAGE>
Ms. Maxine Clark
Build-A-Bear Workshop, Inc.
October 16, 2002
Page 3
(b) In addition, the Company shall pay all out-of-pocket expenses of
Hycel however, travel and other travel related expenses shall be reimbursed at
their cost plus ten percent (10%), whether or not a proposal to lease a certain
location is accepted. Any out-of-town travel and any other single out-of-pocket
expense item in excess of $750.00 shall be pre-approved by the Company. On a
monthly basis, the expenses under this paragraph 4(b) will be reimbursed by the
Company.
5. Term
The term of this Agreement shall commence on November 1, 2002 and shall
terminate on December 31, 2005. If a lease is subsequently accepted by the
Company that was negotiated by Hycel prior to the termination of this Agreement,
the fees and expenses referred to above will be due and payable upon the
execution of the lease. Any of the Company's obligations that have accrued prior
to the termination of this Agreement shall survive the termination of this
Agreement.
6. Assignment
This Agreement shall not be assigned by either the Company or Hycel
without the prior written consent of the other party, such consent not to be
unreasonably withheld; provided, however, if requested by Hycel, the Company
will consent to the assignment of this Agreement to another entity so long as
Hycel or Mark H. Zorensky owns at least fifty percent (50%) interest in such
entity.
7. Proprietary Information
The parties acknowledge that, during the course of Hycel's dealings on
behalf of Company as well as for the third parties, Hycel has developed or
become acquainted with, and in the future may develop or become acquainted with,
data, concepts, studies, demographics, and other information pertaining to
retail properties, tenants, rentals, sales, markets, businesses, and associated
industries (the "Property"). Hycel will use the Property in fulfilling its
obligations under this Agreement. Company agrees that the Property shall,
however, remain the exclusive property of Hycel, and Hycel shall have all
economic benefits resulting therefrom, including all rights to use the Property
in providing real estate consulting or other services for its own account, to
affiliates, or to third parties. Company further agrees to maintain in strict
confidence any of the Property disclosed to Company, and agrees to restrict
access to the Property to the employees and agents of Company on a
"need-to-know" basis, to require its employees and agents to maintain strict
confidentiality with respect to the Property, and to refrain from disclosing,
divulging or communicating the Property, directly or indirectly, to others
(unless compelled by court order or governmental authority).
<PAGE>
Ms. Maxine Clark
Build-A-Bear Workshop, Inc.
October 16, 2002
Page 4
8. Claims
Hycel and the Company will indemnify, defend and save harmless the other
from and against all "Claims" as that term is defined. Both parties agree to
defend at their cost any Claims against them with respect to the foregoing or in
which they may be impleaded. Each party shall pay, satisfy and/or discharge any
judgements, orders and decrees that may be rendered against themselves in
connection with the foregoing. As used herein, "Claims" shall mean all claims,
suits, proceedings, actions, demands, causes of action, responsibility,
liability, judgments, executions, damages, loss and expense (including
attorney's fees).
If this letter correctly sets forth the Company's understanding, please sign and
return one (1) copy of this letter. Upon receipt by Hycel this letter shall be
deemed a binding agreement in accordance with the laws of the State of Missouri.
The parties agree to submit to the jurisdiction of the courts in the State of
Missouri.
Sincerely,
HYCEL PROPERTIES CO.
/s/ Mark H. Zorensky
Mark H. Zorensky
President
MHZ/jap
ACCEPTED AND AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN BUILD-A-BEAR WORKSHOP,
INC.
BY: /s/ Maxine Clark
-----------------------
Name: Maxine Clark
Title: CEB