Secured Promissory Note - Build-A-Bear Workshop Inc. and Brian Vent
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, Brian Vent ("Borrower"), promises
to pay to Build-A-Bear Workshop, Inc. , a Delaware corporation ("Company"), or
its order, the principal amount of One Hundred Twenty-Four Thousand Nine Hundred
Ninety-Five and No/100 Dollars ($124,995) with interest from the date hereof on
the unpaid principal balance under this Note at 4.82% per annum. The principal
amount of this Note shall be due and payable on the earlier to occur of the
following dates (the "Maturity Date"): (1) September 19, 2006; (2) the date on
which the indebtedness under this Note is accelerated as provided for under this
Note or the Pledge Agreement (as defined below); (3) the ninetieth day following
the date of Borrower's termination of employment with Company (or one year
following the date of Borrower's termination of employment if disabled); or (4)
the first anniversary following the date of Borrower's death while he is
employed by the Company. All accrued and unpaid interest under this Note shall
be due and payable, concurrently with principal. On the Maturity Date the entire
remaining unpaid principal balance of this Note, together with any and all
accrued and unpaid interest and any and all costs and expenses provided for
under this Note and the Pledge Agreement, shall be due and payable.
All payments under this Note shall be made to Company or its order, in
lawful money of the United States of America and in immediately available funds
and delivered to Company by wire transfer to Company's account as set forth in
written instructions delivered by Company to Borrower prior to the Maturity Date
or at the offices of Company at its then principal place of business or at such
other place as Company or any holder hereof shall designate in writing for such
purpose from time to time. If a payment under this Note otherwise would become
due and payable on a Saturday, Sunday or legal holiday, the due date thereof
shall be extended to the next day which is not a Saturday, Sunday or legal
holiday, and interest shall be payable thereon during such extension. All
amounts due under this Note and the Pledge Agreement shall be payable without
defense, set off or counterclaim.
Each payment under this Note shall be applied in the following order:
(i) to the payment of costs and expenses provided for under this Note or the
Pledge Agreement; (ii) to the payment of accrued and unpaid interest; and (iii)
to the payment of outstanding principal. Company and each holder hereof shall
have the continuing and exclusive right to apply or reverse and reapply any and
all payments under this Note.
This Note shall be not assignable by either of Company or Borrower
without the written consent of the other.
Upon the occurrence of a default under this Note or the Pledge
Agreement, including, without limitation, failure to make any principal or
interest payment by the stated maturity (whether by acceleration, notice of
prepayment or otherwise) for such payment, interest shall thereafter accrue on
the entire unpaid principal balance under this Note, including, without
limitation, any delinquent interest which has been added to the principal amount
due under this Note pursuant to the terms hereof, at the rate set forth herein
plus 5 percent per annum (on the basis of a 360-day year and the actual number
of days elapsed). In addition, upon the occurrence
<PAGE>
of a default under this Note or the Pledge Agreement, the holder of this Note
may, at its option, without notice to or demand upon Borrower or any other
party, declare immediately due and payable the entire principal balance hereof
together with all accrued and unpaid interest thereon, plus any other amounts
then owing pursuant to this Note or the Pledge Agreement, whereupon the same
shall be immediately due and payable. On each anniversary of the date of any
default under this Note and while such default is continuing, all interest which
has become payable and is then delinquent shall, without curing the default
under this Note by reason of such delinquency, be added to the principal amount
due under this Note, and shall thereafter bear interest at the same rate as is
applicable to principal, with interest on overdue interest to bear interest, in
each case to the fullest extent permitted by applicable law, both before and
after default, maturity, foreclosure, judgment and the filing of any petition in
a bankruptcy proceeding. In no event shall interest be charged under this Note
which would violate any applicable law.
This Note is secured under that certain Repayment and Stock Pledge
Agreement, dated as of even date herewith, by and between Borrower and Company
(as amended from time to time, the "Pledge Agreement"). Reference is hereby made
to the Pledge Agreement for a description of the nature and extent of the
security for this Note and the rights with respect to such security of the
holder of this Note. This is a non-recourse note and, anything herein to the
contrary notwithstanding, Company agrees for itself, its representatives,
successors, endorsees and assigns that (a) neither Borrower nor his
representatives, successors or assignees shall be personally liable on this Note
and (b) in the event of default under this Note, Company (and any such
representative, successor, endorsee or assign) shall seek payment of amounts due
under this Note solely in accordance with the rights and remedies set forth in
the Pledge Agreement.
No waiver or modification of any of the terms of this Note shall be
valid or binding unless set forth in a writing specifically referring to this
Note and signed by a duly authorized officer of Company or any holder of this
Note, and then only to the extent specifically set forth therein.
If any default occurs in any payment due under this Note, Borrower and
all guarantors and endorsers hereof, and their successors and assigns, promise
to pay all costs and expenses, including attorney's fees, incurred by each
holder hereof in collecting or attempting to collect the indebtedness under this
Note, whether or not any action or proceeding is commenced. None of the
provisions hereof and none of the holder's rights or remedies under this Note on
account of any past or future defaults shall be deemed to have been waived by
the holder's acceptance of any past due installments or by any indulgence
granted by the holder to Borrower.
Borrower and all guarantors and endorsers hereof, and their successors
and assigns, hereby waive presentment, demand, diligence, protest and notice of
every kind (except such notices as may be required under the Pledge Agreement).
Borrower and all guarantors and endorsers hereof, and their successors and
assigns, hereby agree that failure of Company to exercise any of its rights
hereunder in any instance shall not constitute a waiver thereof in that or any
other instance. Borrower and all guarantors and endorsers hereof, and their
successors and assigns, hereby waive the right to plead any and all statutes of
limitations as a defense to a demand under this Note to the fullest extent
permitted by law.
2
<PAGE>
This Note shall inure to the benefit of Company, its successors and
assigns and shall bind the heirs, executors, administrators, successors and
assigns of Borrower. Each reference herein to powers or rights of Company shall
also be deemed a reference to the same power or right of such assignee, to the
extent of the interest assigned to them.
In the event any one or more provisions of this Note shall be held to
be illegal, invalid or otherwise unenforceable, the same shall not affect any
other provision of this Note and the remaining provisions of this Note shall
remain in full force and effect.
This Note shall be governed by and construed in accordance with the
laws of the State of Missouri, without giving affect to the principles thereof
relating to conflicts of law; provided, that Company and each holder hereof
reserves any and all rights it may have under federal law, including without
limitation those relating to the charging of interest.
3
<PAGE>
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
the day and year first above written.
/s/ Brian Vent
---------------------------------------------
Brian Vent
4