FIFTH AMENDMENT TO LOAN AGREEMENT
This Fifth Amendment to Loan Agreement (this "Amendment") is entered
into as of October 29, 2004 by and among:
CITIZENS BANK OF MASSACHUSETTS (the "Lender") a Massachusetts
state chartered bank with offices at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000,
and
LOJACK CORPORATION (in such capacity, the "Lead Borrower"), a
Massachusetts corporation with its principal executive offices at 000
Xxxxxx Xxxxx Xxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxxxxxxx 00000, as agent
for the following (individually, a "Borrower" and collectively, the
"Borrowers"):
LOJACK CORPORATION, a Massachusetts corporation with its
principal executive offices at 000 Xxxxxx Xxxxx Xxxxx, Xxxxx
0000, Xxxxxxxx, Xxxxxxxxxxxxx 00000,
LOJACK INTERNATIONAL CORPORATION, a Delaware corporation with
its principal executive offices at 000 Xxxxxx Xxxxx Xxxxx,
Xxxxx 0000, Xxxxxxxx, Xxxxxxxxxxxxx 00000,
LOJACK GLOBAL LLC, a Delaware limited liability company with
its principal executive offices at 000 Xxxxxx Xxxxx Xxxxx,
Xxxxx 0000, Xxxxxxxx, Xxxxxxxxxxxxx 00000,
LOJACK OPERATING COMPANY, L.P., a Delaware limited partnership
with its principal executive offices at 000 Xxxxxx Xxxxx
Xxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxxxxxxx 00000,
VEHICLE RECOVERY SYSTEMS COMPANY, a corporation organized
under the laws of the province of Nova Scotia, Canada with its
principal executive offices at 000 Xxxxxx Xxxxx Xxxxx, Xxxxx
0000, Xxxxxxxx, Xxxxxxxxxxxxx 00000.
in consideration of the mutual covenants contained herein and the benefits to be
derived herefrom. Unless otherwise specified herein, all capitalized terms shall
have the same meaning as set forth in the Loan Agreement (as hereinafter
defined).
W I T N E S S E T H
WHEREAS, the Borrowers executed and delivered to the Lender a certain
Loan Agreement dated June 21, 2002, as amended by a certain First Amendment to
Loan Agreement dated July 30, 2002, as further amended by a certain Second
Amendment to Loan Agreement dated November 6, 2002, as further amended by a
certain Amendment No. 1 to Loan Agreement and Consent dated January 8, 2003, as
further amended by a certain Third Amendment to Loan Agreement dated January 21,
2003, and as further amended by a certain Fourth Amendment to Loan Agreement
dated June 8, 2004 (as amended, the "Loan Agreement"); and
WHEREAS, the Borrowers and the Lender have agreed to further amend the
Loan Agreement in order to, among other things, (i) reduce the amount of the
facility from $10,000,000 to $5,000,000, (ii) acknowledge that the loan facility
is now a demand facility and, accordingly, any outstanding loans or
advances thereunder shall be repaid upon the Lender's demand, (iii) acknowledge
that any further loans and advances made under the facility shall be at the sole
discretion of the Lender in each instance, and (iv) eliminate certain covenants,
including, without limitation, the financial performance covenants; and
WHEREAS, the Borrowers have determined that this Amendment is in the
Borrowers' best interests.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The Borrowers hereby certify to the Lender that, to the best of each
Borrower's knowledge and belief after due inquiry, the representations
and warranties contained in the Loan Agreement are true as of the date
hereof.
2. The Loan Agreement is hereby amended by deleting the definition of
"Maturity Date" appearing in Article 1 thereof in its entirety.
3. The Loan Agreement is hereby amended by deleting the definition of
"Revolving Credit Ceiling" appearing in Article 1 thereof in its
entirety and inserting in lieu thereof the following:
" "Revolving Credit Ceiling": $5,000,000.00."
4. The Loan Agreement is hereby amended by deleting the definition of
"Termination Date" appearing in Article 1 thereof in its entirety and
inserting in lieu thereof the following:
" "Termination Date": The earliest of (a) the
occurrence of any event described in Section 6:6-11 or (b)
the Lender's demand for payment in full."
5. The Loan Agreement is hereby amended by deleting Section 2:2-2 thereof
in its entirety and inserting in lieu thereof the following:
"2-2 No Commitment to Lend; Demand Facility.
(a) Notwithstanding anything to the contrary
contained in this Agreement, the Lender shall have no
obligation to make any loan or advance hereunder or issue any
L/Cs. The Lender and the Borrowers hereby acknowledge and
agree that the Lender's agreement to make any loans, advances
or other financial accommodations hereunder is discretionary
in each instance. Accordingly, there shall be no recourse to
the Lender, nor liability of the Lender, on account of any
delay in the Lender's making of, and/or any decline by the
Lender to make, any loan, advance or other financial
accommodation requested hereunder.
(b) In addition, and notwithstanding anything to the
contrary contained herein, the Borrowers hereby acknowledge
and agree that all loans, advances and other financial
accommodations made hereunder are repayable ON DEMAND.
Accordingly, upon the Lender's demand, Borrower shall
immediately pay to the Lender the full amount of all
Liabilities (including, without limitation, the outstanding
the face amount of any issued, but undrawn, L/Cs, which
amounts shall be held by the Lender as cash collateral for any
such issued, but undrawn, L/Cs pursuant to documentation
satisfactory to the Lender), any other amounts due on the
Termination Date as described in Section 9-2, and any other
amounts due hereunder."
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6. The Loan Agreement is hereby amended by deleting Section 2:2-7 thereof
in its entirety and inserting in lieu thereof the following:
"2-7. The Revolving Credit Note. The Borrowers' obligation to
repay loans and advances under the Revolving Credit, with
interest as provided herein, shall be evidenced by a demand
note (the "Revolving Credit Note") in the form of EXHIBIT
2:2-7, annexed hereto, executed by each Borrower. Neither the
original nor a copy of the Revolving Credit Note shall be
required, however, to establish or prove any Liability. In the
event that the Revolving Credit Note is ever lost, mutilated,
or destroyed, each Borrower shall execute a replacement
thereof and deliver such replacement to the Lender."
7. The Loan Agreement is hereby amended by deleting Section 2:2-14(b)(ii)
thereof in its entirety and inserting in lieu thereof the following:
"(ii) The expiry of the L/C is not later than the earlier of:
(A) Standby's: One (1) year from initial issuance.
(B) Documentary's: Sixty (60) days from issuance."
8. The Loan Agreement is hereby amended by deleting the following Sections
thereof in their entirety:
Section 4:4-4
Section 4:4-5
Section 4:4-16
Section 4:4-17
Section 4:4-18
Section 4:4-19
Section 4:4-20
Section 5:5-8
9. The Loan Agreement is hereby amended by adding the following sentence
at the end of Article 6 thereof:
" Nothing contained in this Article, or elsewhere in this
Agreement, shall affect the demand nature of all loans,
advances, and other financial accommodations made hereunder,
as such Liabilities are, by their terms, demand obligations."
10. The Loan Agreement is hereby amended by deleting Exhibit 2:2-7 thereto
in its entirety and inserting in lieu thereof Exhibit 2:2-7 hereto.
11. The Loan Agreement is hereby amended wherever necessary to reflect the
changes described above.
12. The Borrowers acknowledge and agree that the Borrowers have no offsets,
defenses, claims or counterclaims against the Lender with respect to
the Loan Agreement, this Amendment or any other document, instrument or
agreement executed and delivered by the Borrowers to the Lender in
connection therewith and, to the extent that the Borrowers have any
such offsets, defenses, claims or counterclaims, each Borrower hereby
affirmatively WAIVES any such offsets,
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defenses, claims or counterclaims and specifically RELEASES the Lender
from any such liability on account thereof.
13. This Amendment and all other documents, instruments or agreements
executed in connection herewith incorporate all discussions and
negotiations between the Borrowers and the Lender, either expressed or
implied, concerning the matters included herein, any statute, custom,
or usage to the contrary notwithstanding. No such discussions or
negotiations shall limit, modify or otherwise affect the provisions
hereof. No modification, amendment, or waiver of any provision of this
Amendment or the Loan Agreement or any provision under any other
agreement, document or instrument between the Borrowers and the Lender
shall be effective unless executed in writing by the party to be
charged with such modification, amendment or waiver, and if such party
be the Lender, then by a duly authorized officer thereof.
14. Except as specifically modified herein, the Loan Agreement shall remain
in full force and effect as originally written and the Borrowers hereby
ratify and confirm all terms and conditions contained therein.
15. This Amendment shall be construed in accordance with and governed by
the laws of the Commonwealth of Massachusetts and shall take effect as
a sealed instrument.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
as of the date first written above.
Lead Borrower:
LOJACK CORPORATION
By /s/ Xxxxx Xxxxxx
-------------------------------------
Duly Authorized
Print Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
Borrowers:
LOJACK CORPORATION
By /s/ Xxxxx Xxxxxx
-------------------------------------
Duly Authorized
Print Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
LOJACK INTERNATIONAL CORPORATION
By /s/ Xxxxx Xxxxxx
-------------------------------------
Duly Authorized
Print Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
LOJACK GLOBAL LLC
By: LOJACK CORPORATION, its sole Member
By /s/ Xxxxx Xxxxxx
-------------------------------------
Duly Authorized
Print Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
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LOJACK OPERATING COMPANY, L.P.
By: LOJACK CORPORATION, its General
Partner
By /s/ Xxxxx Xxxxxx
-------------------------------------
Duly Authorized
Print Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
VEHICLE RECOVERY SYSTEMS COMPANY
By /s/ Xxxxx Xxxxxx
------------------------------------
Duly Authorized
Print Name: Xxxxx Xxxxxx
Title: Chief Financial Officer
Lender:
CITIZENS BANK OF MASSACHUSETTS
By /s/ Xxxxx Xxxxxxx
-------------------------------------
Duly Authorized
Print Name: Xxxxx Xxxxxxx
Title: Vice President
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