EXHIBIT 15(G)
LOCK BOX AGREEMENT
THIS LOCK BOX AGREEMENT ("Agreement"), dated as of October 12, 2001, by
and among JAKKS PACIFIC, INC., a Delaware corporation ("JAKKS"), FLYING COLORS
TOYS, INC., a Michigan corporation ("Flying Colors"), ROAD CHAMPS, INC., a
Delaware corporation ("Road Champs" and together with JAKKS and Flying Colors,
the "Customers"), and BANK OF AMERICA, N.A., as Administrative Agent (herein
called "Agent") under that certain Loan Agreement dated as of October 12, 2001
among Customers, Pentech International, Inc., a Delaware corporation, the
lenders referred to therein and Agent (the "Loan Agreement").
1. Agent agrees, subject to the terms and conditions of this Agreement,
to perform a lock box service, acting as a depository for the collection,
crediting and reporting of remittances addressed to Customers.
2. Customers will pay Agent such charges for the services furnished
hereunder as may be mutually agreed upon from time to time by Agent and
Customers.
3. Agent has arranged with the United States Post Office Department to
gather mail addressed to JAKKS at X.X. Xxx 00000 located at 0000 X. Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000 (the "JAKKS Lock Box"), to gather mail addressed to
Flying Colors at X.X. Xxx 00000 located at 0000 X. Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 (the "Flying Colors Lock Box") and to gather mail addressed to
Road Champs at X.X. Xxx 00000 located at 0000 X. Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000 (the "Road Champs Lock Box", and together with the JAKKS Lock Box and the
Flying Colors Lock Box, the "Lock Boxes"). All costs and charges incurred in
connection with the Lock Boxes shall be charged to separate account numbers
14590-08406 (for the JAKKS Lock Box), 14590-08411 (for the Flying Colors Lock
Box) and 14590-08406 (for the Road Champs Lock Box), in the name of the
Customers, and borne entirely by the Customers.
4. Agent will have exclusive and unrestricted access to the Lock Boxes
and will have complete and exclusive authority to receive, pick up and open all
regular, registered, certified or insured mail addressed to Customers at the
Lock Boxes.
5. In accordance with the terms of this Agreement, Agent will:
(a) Dispatch a messenger to the post office at least daily to
gather the mail addressed to Customers.
(b) Open and inspect the mail gathered from the Lock Boxes.
(c) Prepare a photocopy of each remitter's check and balance
such copies to the original checks.
(d) Prepare a summary advice of credit for each Lock Box each
business day and indicate the total amount of remittances credited to
special bank accounts established at Agent, Account No. 14590-08406 for
the JAKKS Lock Box (the "JAKKS Account"), Account No. 14590-08411 for
the Flying Colors Lock Box (the "Flying Colors Account") and Account No.
14590-08406 for the Road Champs Lock Box (the "Road Champs Account", and
together with the JAKKS Account and the Flying Colors Account, the
"Accounts"). These summary advice of credit, accompanied by supporting
adding machine tapes, photocopies, envelopes, and any other papers
received with the remittances will be forwarded to each respective
Customer at its address specified in Paragraph 11 below.
(e) Forward as expeditiously as possible to the respective
Customer at its address specified in Paragraph 11 below, all mail
received in that Customer's Lock Box that does not include remittances.
However, Agent will not be subject to any liability for delays that may
arise in this connection absent bad faith or actual malice.
(f) Return to the respective Customer at its address specified
in Paragraph 11 below all checks which appear to be irregular and which
irregularity cannot be reconciled by Agent through its normal operating
practices and procedures. However, Agent will not be subject to any
liability for delays that may arise in this connection absent bad faith
or actual malice.
(g) Withhold from deposit any remittances bearing the legend
"paid in full" or words of similar import. However, Agent cannot assume
liability for any such items inadvertently credited to the Accounts
absent bad faith or actual malice.
(h) Other than those items handled in accordance with
Subparagraphs (f) and (g) above, endorse each check made payable to the
respective Customer (or any other acceptable payee listed in
Subparagraph (m) below), or a reasonable variation thereof, as follows:
"Credited to the account of the within named payee."
Agent's appointment as agent to endorse such checks is for the
specific, limited and restricted purpose of endorsement for
deposit as described and shall at no time be interpreted as
authorizing Agent as such agent to commit Customers to
acceptance of any legend of any kind, nature or description
appearing on checks or other evidence of payment which are
deposited to the Accounts.
(i) Process all such endorsed checks and other evidences of
payment and credit the total amount to the Accounts. Such collection of
items, processing and crediting shall be subject to the terms and
conditions of Agent's standard deposit agreement as applied to deposits
normally received by Agent. No monies shall be withdrawn from the
Accounts except as provided in Subparagraph 5(j) below.
(j) No later than 12:00 noon (New York time) on the following
business day, after the previous day's collections are credited to the
account, the total prior day deposit(s) balance will be transferred to
account no. 14590-08406 with Agent (the "Concentration Account"). No
later than 5:00 p.m. (New York time) on the day such funds are credited
to the Concentration Account, if an Event of Default (as defined in the
Loan Agreement) has occurred or is continuing on that day, the balance
of the Concentration Account shall be applied by the Agent against the
outstanding principal balance of the Loans (as defined in the Loan
Agreement).
(k) Microfilm all checks for record purposes.
(l) Charge checks returned for any reason to the Customers'
Accounts, and mail such items to Customer at its address specified in
Paragraph 11 below along with a supporting advice of debit.
(m) Acceptable payees on checks to be processed through these
Lock Boxes are: (please list all names and abbreviations expected to be
on checks):
Any name
6. Customers and Agent each agree that: (a) each Customer will assume all of the
liabilities of a general endorser of any kind on all checks deposited to the
Account, (b) protest and notice of nonpayment and protest of any and all checks
deposited in or credited to the Account are hereby waived and (c) Customer will
have no control whatsoever over the Account until after this Agreement is
terminated in accordance with Paragraph 10 below.
7. Agent, with respect to the services provided herein, is acting as the agent
of Customers for the limited purpose of opening the Lock Boxes and the
processing of checks for payment in accordance herewith.
8. Agent shall not be liable for any loss in the event that any checks are
inadvertently processed contrary to the terms of this Agreement absent bad faith
or actual malice.
9. This Agreement may be modified from time to time only in a writing executed
by Agent and each Customer.
10. This Agreement shall continue in full force and effect until terminated by
Agent upon not less than thirty (30) days' written notice to each of the other
parties. Termination of this Agreement by Agent shall in no event affect any
obligation incurred hereunder prior to such termination.
11. Any notice required or permitted to be given under this Agreement shall be
effective and deemed given, if by mail, on the earlier of receipt or the third
business day after deposit in the United States mail with first class or airmail
postage prepaid; if given by telegraph or cable, when delivered to the telegraph
company with charges prepaid; if given by telex or telecopier, when sent; or if
given by personal delivery, when delivered; in each case addressed as follows:
to Agent as follows: Bank of America, N.A. #1459
Mail Code CA 9-156-MZ-07
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx,
Vice President
Facsimile: (000) 000-0000
to Customers as follows: JAKKS Pacific, Inc.
00000 Xxxxxxx Xxxxx Xxxxxxx,
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Flying Colors Toys, Inc.
00000 Xxxxxxx Xxxxx Xxxxxxx,
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Road Champs, Inc.
00000 Xxxxxxx Xxxxx Xxxxxxx,
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Each party hereto may change the address specified above by the
giving of a notice in writing to each of the other parties.
12. This agreement will become effective upon its receipt by Bank properly
executed by all of the parties hereto.
13. This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, Customers and Agent have executed this Agreement as
of the date first above written.
JAKKS PACIFIC, INC.,
a Delaware corporation
By /s/ XXXX X. XXXXXXX
Its EXEC. V.P./C.F.O.
FLYING COLORS TOYS, INC.,
a Michigan corporation
By /s/ XXXX X. XXXXXXX
Its EXEC. V.P./C.F.O.
ROAD CHAMPS, INC.,
a Delaware corporation
By /s/ XXXX X. XXXXXXX
Its EXEC. V.P./C.F.O.
BANK OF AMERICA, N.A.,
as Administrative Agent
By /s/ XXXXX X. XXXXXXX
Its V.P.
