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EXHIBIT 10.4
TERM NOTE
$250,000 Malibu, California
May 12, 2000
FOR VALUE RECEIVED, Joel M. Bennett ("Borrower") hereby promises to pay
to JAKKS Pacific, Inc., a Delaware corporation, or assigns ("Holder"), the
principal amount of $250,000, together with interest accrued thereon from the
date hereof at the rate of 7% per annum, on May 12, 2002 (the "Maturity Date"),
subject, however, to the provisions of paragraph 1 hereof. This Note may be
prepaid, in whole or in part, at any time or times, without premium or penalty,
but any such prepayment shall include interest accrued to the date of such
prepayment on the principal amount so prepaid. Payment of this Note shall be
made in lawful money of the United States of America at Holder's office at 22761
Pacific Coast Highway, Malibu, California 90265, Attn: Chief Financial Officer,
or at such other place as Holder may from time to time direct by written notice
to Borrower.
1. All of Borrower's obligations hereunder shall be deemed fully paid,
satisfied and discharged, and this Note shall be cancelled:
(1) on the Maturity Date, if Borrower shall continue to be
employed in any capacity by Holder or a subsidiary thereof (excluding any leave
of absence or other interruption of service approved or permitted by Holder) on
such date; or
(2) on the Termination Date (as defined in the Employment Agreement
dated as of January 1, 2000 between Holder and Borrower (the "Employment
Agreement")), if Borrower's employment by Holder (or a subsidiary thereof) is
terminated prior to the Maturity Date for any reason other than Borrower's
voluntary resignation (excluding termination of employment by Borrower "for good
reason" as provided in Section 14 of the Employment Agreement) or "for cause" as
provided in Section 13 of the Employment Agreement.
2. If any one or more of the following events (each, an "Event of
Default") shall occur, the entire outstanding principal amount hereof and all
interest then accrued thereon shall immediately become due and payable upon
written notice to that effect given to Borrower by Holder, in the case of an
Event of Default described in subparagraph 2(b) or 2(e), and without any notice
or other act, in the case of an Event of Default described in subparagraph 2(a)
or 2(d):
(1) Borrower's failure to pay any installment of this Note within 15
days after the due date thereof;
(2) (i) Borrower's failure to pay when due any indebtedness, other
than this Note, evidenced or secured by any note, bond, debenture, loan
agreement,
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indenture, guaranty, trust agreement, mortgage or other instrument or agreement
in connection with the borrowing of money or the obtaining of advances or credit
to which Borrower is a party or by which he is bound, or to which any of his
properties or assets may be subject (a "Debt Instrument"), or Borrower's failure
to perform or comply with any condition or covenant thereof, so that, as a
result of any such failure, indebtedness evidenced or secured thereby in an
amount in excess of $500,000 may be declared due and payable prior to the date
on which such indebtedness would otherwise become due and payable; or
(ii) any event or condition referred to in any Debt Instrument
shall occur or fail to occur, so that, as a result thereof, indebtedness
evidenced or secured thereby in an amount in excess of $500,000 may be declared
due and payable prior to the date on which such indebtedness would otherwise
become due and payable.
(3) Borrower shall file a petition in bankruptcy, make an assignment
for the benefit of creditors, petition or apply for the appointment of a
receiver, conservator, trustee or other fiduciary agent for him or a substantial
part of his assets, or shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, composition, dissolution or
liquidation law, or if there shall have been filed by any other person any such
petition or application or any such proceeding shall have been commenced by any
other person against him, which petition, application or proceeding is not
vacated or dismissed for a period of 90 days or more; or Borrower shall consent
to, approve of, or acquiesce in, any such petition, application or proceeding or
the appointment of a receiver or conservator of, or trustee or other fiduciary
agent for, him or any substantial part of his assets, or shall suffer any such
appointment to continue undischarged for a period of 90 days or more; or an
order for relief shall have been entered against Borrower under the United
States Bankruptcy Code; or
(4) any judgment against Borrower or any attachment of, levy upon,
or execution against, any of his properties for any amount in excess of $500,000
shall not be paid, stayed on appeal, bonded, discharged, vacated or dismissed
within a period of 90 days.
3. Upon the occurrence of an Event of Default, Holder may accelerate
this Note and demand the prompt payment of all amounts due hereunder, and may
take any lawful action to compel the same, including, through an appropriate
suit, action or other proceeding. Borrower shall be liable for and promptly pay
to Holder its costs of collection, including without limitation reasonable
attorney's fees and court costs.
4. Any other provision hereof to the contrary notwithstanding, if any
law, or any rule or regulation thereunder, shall limit the maximum rate of
interest which may be charged on this Note to a rate less than that provided for
herein (but for the provisions of this paragraph), then the rate of interest
charged on this Note shall be reduced to
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such maximum lawful rate for so long as such interest rate shall be so limited
by law and shall thereafter return to the rate otherwise provided herein.
5. Borrower hereby waives presentment, demand for payment, protest,
notice of protest or dishonor and any other notice or demand (except as provided
in paragraph 4 hereof) in connection with the payment and performance of this
Note.
6. Any notice or demand required or permitted to be given or made
hereunder shall be deemed to have been duly given or made for all purposes if
(i) in writing and (A) sent by messenger or courier service against receipt, or
(B) sent by certified or registered mail, postage paid, return receipt
requested, or (ii) sent by telegram, telecopy, telex or similar electronic
means, provided that a written copy thereof is sent on the same day by
postage-paid first-class mail, to such party at the following address:
To Borrower at: 1145 Rosecreek Drive
Moorpark, California 93201
(310) 532-1092
To Holder at: 22761 Pacific Coast Highway
Malibu, California 90265
Attn: Chief Financial Officer
(310) 317-8527
or such other address as either party hereto may at any time, or from time to
time, direct by notice given to the other party in accordance with this
paragraph. The date of giving or making of any such notice or demand shall be,
in the case of clause (i)(A), the date of the receipt, in the case of clause
(i)(B), five business days after such notice or demand is sent, and, in the
case of clause (ii), the business day next following the day that notice or
demand is sent.
7. This Note shall be governed by, and interpreted in accordance with
the laws of the State of California, without regard to principles of choice or
conflict of laws.
IN WITNESS WHEREOF, Borrower has duly executed this Note as of the date
first written above.
/s/ JOEL M. BENNETT
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Joel M. Bennett