Exhibit 10.1
LOAN AGREEMENT
This LOAN AGREEMENT (as amended from time to time, this "Agreement"),
replaces and supercedes an interim demand loan of October 4, 2001 (the "Bridge
Loan"), and is intended to take effect as of October 4, 2001 and is entered into
by and among Car Security S.A., an Argentina corporation (the "Borrower"), and
LoJack Recovery Systems Business Trust, a Massachusetts business trust and a
subsidiary of LoJack Corporation ("Lender").
WHEREAS, Borrower and Lender have agreed that Lender or its parent will
advance an aggregate of up to $1,750,000 to Borrower under certain conditions.
NOW, THEREFORE, in consideration of the undertakings herein, Borrower
and Lender (together, the "Parties") hereby agree as follows:
1. The Loan.
Subject to and on the terms and conditions of this Agreement:
(a) Lender agrees to lend to Borrower, and Borrower agrees to
borrow from Lender, an aggregate cash principal amount of up
to $l,750,000 (the "Loan"), which amount shall be advanced in
installments as set forth in Section 4 of this Agreement.
Advances pursuant to the Interim Loan shall be treated as
advances hereunder for all purposes.
(b) The Loan shall be made by Lender to Borrower in one or more
closings. The first closing shall be held at the offices of
Xxxxxxxx & Worcester LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, XX
00000, on the date hereof or on such other date as the parties
shall mutually agree ("First Closing"). All closings
subsequent to the First Closing ("Subsequent Closings") shall
take place on the date on which an Advance (as defined in
Section 4 hereof) is to be made as provided in Section 4. The
First Closing and all Subsequent Closings shall be referred to
herein as the "Closings."
(c) At the First Closing, all outstanding obligations of the
Borrower to the Lender relating to inventory, as set forth in
Schedule 1 hereof, shall be treated as an Advance hereunder.
(d) Lender shall, without limitation, have the power, in its sole
discretion, to amend, modify or waive (or give consents or
approvals under) the terms hereof, and to enforce or defer
enforcement, in whole or in part, of, Lender's rights
hereunder.
2. The Note.
The Loan shall be evidenced by an interest-bearing promissory note,
payable to the order of Lender in the form of Exhibit A attached
hereto, which shall be duly completed and dated as of the date on which
Lender becomes a party hereto and executed and delivered by Borrower at
the First Closing. The promissory note issued under this Agreement
shall be referred to as the "Note."
3. Interest.
Interest shall accrue and be payable by Borrower to Lender on the
outstanding and unpaid principal amount of the Loan at the rate of
0.7508 percent per month, compounded monthly, as provided in the Note,
with interest on Default (as herein defined) accruing at the rate set
forth in the Note.
4. Advances.
(a) Provided that no Default (as defined in Section 6) has
occurred or is continuing, Lender agrees to advance to
Borrower, solely in the form of inventory, the amount of the
Loan in installments, as requested by Borrower in accordance
with this Section 4 (each, an "Advance").
(b) Receipt by Borrower of inventory from Lender from time to time
shall be treated as an Advance hereunder. Such Advances may be
made upon such terms and conditions as prescribed by the
ordinary course of dealings between the Borrower and Lender.
Notwithstanding anything herein contained, Lender shall have
no obligation to provide additional inventory to Borrower upon
the occurrence or during the continuance of an Event of
Default.
(c) Borrower may make a request to purchase inventory to be
purchased by an Advance at any time, but not more frequently
than once per forty-five (45) days, commencing forty-five (45)
days from the date hereof, by delivering to Lender written
irrevocable notice requesting an Advance and stating the
requested amount of the Advance, which notice must be received
by Lender at least ten (10) business days prior to the
requested date of the Advance, and must be accompanied by a
certificate of the Secretary of Borrower certifying that
attached thereto is a true and complete copy of the
resolutions of the Board of Directors of Borrower authorizing
the request for an Advance. Lender may waive the restrictions
under this Section 4(b) in any instance in its sole
discretion.
5. Repayment of Loan.
(a) Borrower shall repay to Lender the principal amount of the
Loan and shall pay all interest accrued thereon and all other
amounts payable to Lender pursuant to the terms of this
Agreement or the Note (such principal, interest and other
amounts, collectively, the "Debt") on or before August 31,
2004 (the "Repayment Date"), subject to acceleration as
provided in Section 5(d).
(b) Borrower shall direct all available cash flow to the repayment
of the Debt; provided, however, that Borrower need not apply
cash flow to such repayments to the extent that such cash flow
has been otherwise allocated pursuant to (i) the Budget, or
(ii) the terms and conditions of the trust agreements between
Borrower and Banco de la Provincia de Cordoba, as Trustee,
including that certain Trust Agreement dated August 3, 2001
(collectively, the "Trust Agreements"). Nothing contained in
this Section 5(b) shall be construed as relieving Borrower's
obligation as set forth in Section 5(a).
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(c) Subject to the provisions of the Trust Agreements, the net
proceeds of: (i) any sale of Borrower assets outside the
course of ordinary business, (ii) any offering of equity
interests in the Borrower, (iii) any offering of debt
instruments of the Borrower, and (iv) any insurance or
condemnation awards, shall be applied to the repayment of the
Debt hereunder.
(d) Upon the occurrence of a Default (as defined in Section 6),
the Debt shall become due and payable immediately without
presentment, demand, protest or notice, all of which are
hereby waived by Borrower, (1) automatically in the case of
Section 6(f) or 6(g); and (2) at the election of Lender by
notice to Borrower in the case of Sections 6(a) through 6(e).
(e) Loans may be prepaid at any time, without premium or penalty,
upon three (3) business days notice, which notice of
prepayment shall be irrevocable.
6. Default; Consequences of Default.
Each of the following events shall constitute an immediate default (a
"Default") under this Agreement and the Note, unless waived by Lender:
(a) Borrower shall fail to pay any part of the Debt as and when
the same shall become due and such amount shall remain unpaid
for a period of five (5) days;
(b) any representation or warranty of Borrower contained in this
Agreement shall have been incorrect in any material respect as
of the date hereof;
(c) Borrower shall fail to provide Lender with immediate notice of
its failure or inability to comply with any provision of
Section 7 hereof;
(d) Borrower shall materially default in the observance or
performance of any other material agreement or covenant
contained in this Agreement, the Note, the License Agreement
or any other agreement with Lender or an affiliate of Lender,
and such default shall not have been cured or waived within
thirty (30) days of the occurrence of such default;
(e) Borrower shall materially deviate from such approved budget,
or shall materially fail to achieve the approved projected
cash flow for two consecutive quarters;
(f) the entry of any decree or order by a court having
jurisdiction adjudging Borrower a debtor or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of
Borrower under Argentina Bankruptcy law Nbr. 24,522, as
amended (the "Bankruptcy Law")] or any other applicable
federal or state law, the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or other similar
official of Borrower, or of any substantial part of the
property of Borrower, and the continuance of any such decree
or order unstayed, undischarged, or undismissed and in effect
for more than sixty (60) consecutive days; or
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(g) institution by Borrower of proceedings, under the Bankruptcy
Law or any other applicable federal or state law, seeking an
order for relief, or the consent of Borrower to the
institution of bankruptcy or insolvency proceedings against
Borrower, or the consent by Borrower to the filing of any such
petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of
or for Borrower or any substantial part of the property of
Borrower, or the making by Borrower of any assignment for the
benefit of creditors, or the admission by Borrower of
Borrower's inability to pay its debts generally as they become
due, or the taking of any action by Borrower in furtherance of
any such action.
7. Borrower Covenants.
So long as any amount of the Debt under any Note is outstanding:
(a) Borrower shall not, without the written permission of Lender,
create, incur, assume or suffer to exist any Indebtedness
other than (i) except trade debt which is current of not more
than $1,800,000 of which not more than $1,200,000 (the "Trust
Debt") held by various creditors is or may be made subject to
and with the benefit of the provisions of the trust agreements
with Banco Provincia de Cordoba as Trustee including the
agreement of August 3, 2001 (the "Trust Agreements") and (ii)
Indebtedness to Lender under this Agreement. For the purposes
of this Agreement, "Indebtedness" means (a) all indebtedness
of Borrower for borrowed money including trade liabilities
incurred in the ordinary course of business and payable in
accordance with customary practices, or (b) any other
indebtedness of Borrower which is evidenced by a note, bond,
debenture or similar instrument;
(b) Borrower shall submit its annual operating and capital plans
and budget to Lender;
(c) Borrower has as provided to Lender restated financials, which
it warrants to be correct, and a three-year budget (the
"Budget") and cash flow projection.
(d) Borrower shall make no payment under the Trust Agreements
which has not been previously provided for in the Budget. The
amounts due hereunder shall receive the benefit of the Trust
Agreements. Instructions or certificates for payments pursuant
to the Trust Agreements shall be made consistent with the
approved budget. All other existing and future debt shall be
subordinated in all respects to amounts due and other
obligations and rights hereunder;
(e) Borrower shall not engage in any transaction outside the
ordinary course of business without the prior written approval
of Lender. Lender's approval of any such transaction shall not
be construed to imply any obligation on Lender's part to
modify any provision of this Agreement. For purposes of this
section, a transaction outside the ordinary course of business
includes, without limitation, transactions wherein any party
therein is located outside the geographic boundaries of the
country of Argentina. Lender may, at its own discretion,
perform or participate directly or indirectly in any
transaction
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which Borrower is unable to complete for any reason
whatsoever, without compensation to Borrower therefor;
(f) Borrower shall not issue any debt security;
(g) Borrower shall not take any action that results in any merger,
other corporate reorganization, sale of control, or any
transaction in which all or substantially all of Borrower's
assets are sold;
(h) Borrower shall not redeem or repurchase any of its outstanding
stock;
(i) Borrower shall not enter into any agreement that would
restrict its ability to perform its obligations hereunder or
under any other Loan Document;
(j) Borrower shall not take any action which results in a material
change of its current line(s) of business;
(k) Borrower shall not declare or pay a dividend or make any
distribution with respect to Common Stock, whether in cash or
in kind;
(l) Borrower shall provide Lender and the reviewing accounting
firm with monthly financial statements, including a balance
sheet, income statement, and statement of cash flows, within
30 days after the end of each month, and shall provide such
other information regarding Borrower's condition and affairs,
as Lender may reasonably request, within two (2) days of such
request;
(m) Borrower shall provide Lender, within 45 days of the end of
each quarter, with quarterly financial statements, including a
balance sheet, income statement, and statement of cash flows,
which statements have been reviewed by a "Big Five" accounting
firm reasonably acceptable to Lender;
(n) Borrower shall provide Lender, within 90 days of the end of
each fiscal year, with audited financial statements, including
a balance sheet, income statement, and statement of cash
flows, which statements have been reviewed by Borrower's
outside auditors;
(o) Borrower shall adopt and implement those portions of the
accounting recommendations made by Deloitte and Touche LLP
that are specified by Lender;
(p) Borrower shall employ a "Big Five" accounting firm reasonably
acceptable to the Lender to serve as its outside auditor if,
and only if, Lender so requires pursuant to written notice
provided to Borrower;
(q) Borrower shall enter into and maintain in effect proprietary
information and invention agreements satisfactory to Lender
with executives and key employees including a non-compete
agreement for a period of one (1) year after leaving the
Borrower. All non-compete agreements shall provide that, for
the extent of their term, executives and key employees will
not own an interest in, be employed by, or be associated with,
any direct competitor of Borrower or of Lender.
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(r) Borrower shall give Lender immediate notice of any
noncompliance with covenants, and failure to give such notice
shall be a default. The giving of such notice, however, shall
not constitute a default, and default shall occur as provided
herein with respect to notice and subject to materiality
qualifications and after the expiration of cure periods.
(s) Borrower has provided to Lender information as to senior
management, and confidence in such management is material to
Lender in entering into this transaction. Any change in
management control not approved by Lender shall be a default;
(t) Borrower shall send all notices of meetings of its Board of
Directors, and copies of all materials sent to its Board of
Directors to two individuals which Lender shall designate from
time to time in writing. Such notices and materials shall be
sent to such individuals at the same time and in the same
manner as provided to the members of the Borrower's Board of
Directors. Borrower shall also permit such individuals to
attend all meetings of the Board of Directors. The two
individuals initially appointed by the Lender are Xxxxxxx
Xxxxxx and Xxxxx Xxxxx, each of which with an address of:
LoJack Recovery Systems Business Trust, Westwood Executive
Center, 000 Xxxxxx Xxxxx Xxxx, Xxxxx 0000, Xxxxxxxx, XX 00000,
Xxxxxx Xxxxxx of America. Telephone: 00 000 000-0000; Fax: 781
326-7255; and
(u) Borrower will provide such other information as Lender may
reasonably request from time to time. In addition, Lender may
examine the Borrower's books and records from time to time;
provided, however, that any of the aforementioned covenants of Borrower
may be waived pursuant to a written waiver signed by Lender.
8. Representations and Warranties.
As a material inducement to Lender to make the Loan, Borrower
represents and warrants to Lender, as of the date hereof, as follows:
(a) Borrower is duly organized and in good standing under the laws
of Argentina, with all power and authority to lawfully execute
and deliver this Agreement and the Note and to perform its
obligations hereunder and thereunder.
(b) This Agreement and the Note, and the execution and delivery of
the same by the undersigned officer of Borrower, have been
duly authorized by all necessary corporate action of Borrower,
are binding and enforceable on Borrower in accordance with
their terms, subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency and similar
laws affecting creditors' rights and general principles of
equity, and do not conflict with any other obligation or
commitment of Borrower to any third party.
(c) Since November 1, 2001, there has been no material adverse
change in the financial condition, business, operations or
prospects of Borrower other than
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those reflected in the financial statements of Borrower
provided to Lender at the Closing.
9. Closing Conditions.
The obligation of Lender to make Advances under the Loan at the
Closings is subject to the satisfaction or written waiver by Lender of
the following conditions:
(a) Prior to, or on the date of the First Closing:
(i) Lender shall have received from the Borrower: (A) two
copies of this Loan Agreement, duly executed by the Borrower,
(B) a Promissory Note in the amount of $1,750,000, duly
executed by the Borrower, (C) a Guarantee of the obligations
hereunder, duly executed by Xx. Xxxxxx Xxxxxxxxx and (D) a
Pledge Agreement pledging all of the shares of stock of the
Borrower, duly executed by Xx. Xxxxxx Xxxxxxxxx, Xx. Xxxxxxx
Xxxxxxx Rey, and Borrower. The documents referred to in
clauses (A)-to (D) above, as they may be amended from time to
time, are collectively referred to as the "Loan Documents".
(ii) Borrower shall have delivered to Lender a duly executed
amendment to that certain License Agreement, dated October 16,
1998, between Borrower and Lender (the "License Agreement")
stating that a default under this Agreement, or any other
agreement between Borrower and Lender, shall be an event of
default under the License Agreement.
(iii) Lender shall have received from Borrower's counsel an
opinion in form satisfactory to Lender.
(iv) Such other certificates and documents as Lender may
reasonably request.
(b) Lender shall have reasonably determined that there has not
been any material adverse change in or affecting Borrower's
business, financial condition or its prospects since the date
of the Bridge Loan.
(c) Prior to any Closing under this Agreement, Borrower shall have
delivered to Lender a certificate, signed by the President of
Borrower certifying that the representations and warranties
contained in Section 8 are true, complete and correct on and
as of such Closing with the same effect as though such
representations and warranties had been made on and as of such
date and that Borrower has complied with each of the covenants
contained in Section 7.
10. Further Assurances.
The Parties shall each execute and deliver such additional documents,
and take such additional actions, as may be necessary from time to time
to implement the provisions of this Agreement, provided that this
Section 10 shall not alter the obligations and rights of the Parties
hereunder.
11. Successors and Assigns.
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This Agreement and the Note shall be binding upon and inure to the
benefit of the successors, heirs, executors and administrators and the
permitted assigns and transferees (pursuant to Section 13 hereof) of
the Parties.
12. Amendment; Waivers.
No term or provision of this Agreement may be amended, modified or
waived without the prior written consent of Borrower and Lender. No
amendment, modification or waiver shall be deemed to have been made or
given by reason of any oral agreement or representation, course of
conduct, usage of trade, delay, forbearance or acquiescence of a Party,
whether on one or more occasions.
13. Assignment.
Neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned, by operation of law or otherwise, in whole
or in part, by Borrower.
14. Addresses for Notices, etc.
Any notices and other communications required or permitted under this
Agreement shall be effective only if in writing and delivered
personally or sent by telecopier, commercial overnight delivery service
or registered or certified mail, postage prepaid, addressed as follows:
(a) If to Lender, to:
LoJack Recovery Systems Business Trust
Westwood Executive Center
000 Xxxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Attention: Xxxxxx X. Xxxxx, President
Tel: 00 000 000-0000
Fax: 00 000-000-0000
with copies (in the same manner) to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: 00 000 000-0000
Telecopier: 00 000 000-0000
(b) If to Borrower to:
Car Security S.A.
Xxxxxxxxxx 0000
Xxxxxx Xxxxx, Xxxxxxxxx
Fax: 00-00-0000-0000
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with a copy (in the same manner) to:
Xxxxxx Xxxxxxxxx
Xx. X. Xxxxxxx 0000
Xxxxxx Xxxxx, Xxxxxxxx
Fax: 00-00-0000-0000
Unless otherwise specified herein, such notices or other communications
shall be deemed effective (i) on the date delivered, if delivered
personally, (ii) one business day after being sent, if sent by
telecopier with confirmation of good transmission and receipt, (iii)
two business days after being sent, if sent by commercial overnight
delivery service, and (iv) three business days after being sent, if
sent by registered or certified mail. Each of the Parties shall be
entitled to specify another address by giving notice as aforesaid to
each of the other Party hereto.
15. Severability.
The holding of any provision of this Agreement to be invalid or
unenforceable in any respect by a court of competent jurisdiction shall
not affect any other provisions and the other provisions of this
Agreement shall remain in full force and effect. In the event of any
such holding, it is the intent of the parties hereto that the
applicable provision be reformed by the court to the minimum extent
necessary (through adjustment of scope, duration, procedure or
otherwise) to render such provision valid and enforceable while as
closely as possible implementing the parties' intent as expressed in
this Agreement.
16. Expenses.
(a) Borrower agrees to pay (i) the legal fees of Xxxxxxxx &
Worcester LLP, and Marval, X'Xxxxxxx and Mairal, counsel to
Lender, (ii) the fees charged by Deloitte and Touche LLP,
accountants to the Lender, and (iii) all other reasonable
transaction costs directly incurred in connection with this
Agreement and the transactions contemplated hereby, whether or
not the transaction closes, provided, that Borrower will not
be obligated to pay such fees if Lender withdraws without
cause. The total amount of such fees shall be added to the
Debt outstanding hereunder and shall be treated in all
respects as an Advance.
(b) Borrower shall pay the reasonable costs and expenses
associated with the review of its quarterly financial
statements by a "Big Five" accounting firm, as provided in
Section 7(e) hereof.
(c) Borrower shall pay to Lender the reasonable cost and expenses
(including reasonable attorneys fees and disbursements)
incurred by Lender in connection with (i) the collection of
the Debt, (ii) preserving or exercising any of Lender's rights
and remedies relating to, enforcing or realizing upon any
endorsement, collateral or other security now or hereafter
securing the payment of, or otherwise now or hereafter
applicable to, the Debt, (iii) preserving or exercising any of
Lender's rights and remedies pursuant to any of the Loan
Documents, or (iv) defending against any claim, regardless of
the basis or outcome thereof, asserted against Lender as a
direct or indirect result
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of the execution and delivery of the Loan Documents and the
making of the Loan.
17. Payment.
All payments with respect to the Debt shall be paid in lawful tender of
the United States, in immediately available funds, to Lender at its
then effective address for notices under Section 14.
18. Remedies.
All of Lender's rights and remedies pursuant to the Loan Documents
shall be cumulative, and no such right or remedy shall be exclusive of
any other such right or remedy. No single or partial exercise of any
such right or remedy shall preclude any other or further exercise
thereof, or any exercise of any other such right or remedy.
19. Termination.
This Agreement shall terminate upon the final and indefeasible payment
in full of the Note. Within five (5) business days of termination, (a)
Lender shall cancel the Note and return the original Note indicated as
"Paid in Full" to Borrower.
20. Inconsistent Provisions.
The terms of the Loan Documents shall be cumulative except to the
extent they are specifically inconsistent with each other, in which
case the terms of this Agreement shall prevail.
21. Miscellaneous.
(a) This Agreement, the Note and the Shareholders' Agreement
contain the entire agreement between Borrower and Lender with
respect to the Loan, and supersede each course of dealing or
other conduct heretofore pursued, accepted or acquiesced in,
and each oral or written agreement and representation
heretofore made, by Lender with respect to the Loan, whether
or not relied or acted upon, including the Term Sheet.
(b) The words "including" and "include" when used in this
Agreement, the Proxy or the Note shall be deemed to be without
limitation.
22. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of The Commonwealth of Massachusetts, without
regard to principles of conflicts of laws.
23. Arbitration.
(a) All disputes arising under this Agreement shall be settled by
arbitration in Boston, Massachusetts, before a single
arbitrator pursuant to the commercial arbitration rules of the
American Arbitration Association provided, however, that
notwithstanding such rules, the parties to such arbitration
may conduct
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discovery as to relevant books, records and other documents in
connection therewith. Arbitration may be commenced at any time by
any party hereto giving written notice to each other party to a
dispute that such dispute has been referred to arbitration under
this Section 23.
(b) Within 10 business days after receipt of such notice, the Lender
and the Borrower shall designate in writing one arbitrator to
resolve the dispute; provided, that if the parties cannot agree
on an arbitrator within such 10-day period, the arbitrator shall
be selected by the American Arbitration Association. The
arbitrator so designated shall not be an employee, consultant,
officer, director, stockholder or an affiliate of any party
hereto.
(i) Within 15 business days after the designation of the
arbitrator, the arbitrator, the Lender and the Borrower shall
meet, at which time the Lender and the Borrower shall submit in
writing all disputed issues and a proposed ruling on each such
issue.
(ii) The arbitrator shall set a date for a hearing, which shall
be no later than 20 business days after the submission of written
proposals pursuant to clause (ii), to discuss each of the issues
identified by the Lender and the Borrower. Each such party shall
have the right to be represented by counsel. The arbitration shall
be governed by the rules of the American Arbitration Association;
provided, that the arbitrator shall have sole discretion with
regard to the admissibility of evidence.
(iii) The arbitrator shall use his best efforts to rule on each
disputed issue within 20 business days after the completion of the
hearings described in clause (iii). The arbitrator shall rule in
favor of the position of one party or the other in the matter, and
shall not "split" or compromise the position of the parties. The
determination of the arbitrator to the resolution of any dispute
shall be binding and conclusive upon all parties hereto. All
rulings of the arbitrator shall be in writing and shall be
delivered to the parties hereto.
(iv) The prevailing party in any arbitration shall be entitled to
an award of reasonable attorneys' fees incurred in connection with
the arbitration. The non-prevailing party shall pay such fees,
together with the fees of the arbitrator and the costs and
expenses of the arbitration.
(v) Any arbitration award may be entered in and enforced by any
court having jurisdiction thereover and shall be final and binding
upon the parties.
(c) To the extent that arbitration is not legally permitted, any
party may commence a civil action in a court of appropriate
jurisdiction to solve disputes hereunder. Nothing contained in
this Section 24 shall prevent the parties from settling any
dispute by mutual agreement at any time.
24. Counterparts.
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This Agreement may be executed by one or more of the Parties on
any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same
instrument.
[Signature page follows]
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IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement as of the date first above written.
BORROWER:
Car Security S.A.
By: ________________________________________
Name: Xxxxxx Xxxxxxxxx
Title:
LENDER:
LoJack Recovery Systems Business Trust
By: ______________________________________
Name: Xxxxxx X. Xxxxx
Title: President
STOCKHOLDERS:
Xxxxxx X. Xxxxxxxxx
________________________
Xxxxxxx Xxxxxxx Rey
________________________
Exhibit A
PROMISSORY NOTE
US$ 1,750,000
Westwood, MA September 5, 2002
CAR SECURITY S.A. ("Car Security"), domiciled at Xxxxxxx xxx Xxxxxxxxxx 0000,
0000 Xxxxxx Xxxxx, Xxxxxxxxx, hereby promises to unconditionally pay, on or
before August 31, 2004 (or sooner, in the event of acceleration for default
hereunder or under the Loan Agreement of even date) and WITHOUT PROTEST, to
LoJack Recovery Systems Business Trust, a Massachusetts business trust
("LoJack"), "NO A LA ORDEN", the amount of US$ One Million Seven Hundred Fifty
Thousand ($1,750,000 U.S. dollars), plus reasonable legal, accounting and all
other reasonable transaction costs directly incurred in connection with this
Note and the transactions contemplated hereby, or so much thereof as may from
time to time be advanced and remain unpaid hereunder. Said payment shall only be
made in U.S. dollars (effective payment in foreign currency clause, section 44,
third paragraph, Decree 5965/63) to the order of LoJack at its offices located
at Westwood Executive Center, 000 Xxxxxx Xxxxx Xxxx, Xxxxx 0000, Xxxxxxxx, XX
00000.
Car Security shall also pay LoJack financing interest at an interest rate fixed
at 0.7508 percent per month, compounded monthly.
In the event that, as a consequence of foreign exchange controls, restrictions
on the transfer of foreign currency from or to the Republic of Argentina or by
reason of any other action taken by a competent governmental body, we were
prevented from making the relevant payment in the currency agreed, we shall
deliver to the legitimated holder hereof, at the latter's option: a) External
Bonds of the Republic of Argentina or any other U.S. dollar-denominated
securities issued by the National Government of any series chosen by the
legitimated holder hereof, at its sole discretion, in such number and with such
nominal value as shall suffice so that upon the sale thereof in a foreign
market, at the option of the legitimated holder hereof, the proceeds in U.S.
dollars, net of all expenses, fees and/or taxes that may be payable by reason of
its transfer or sale, shall be equal to the amount in U.S. dollars payable; or
b) the amount in legal tender then in force in the Republic of Argentina as may
be required to acquire External Bonds of the Republic of Argentina or any other
U.S. dollar-denominated securities issued by the National Government of any
series chosen by the legitimated holder hereof, at its sole discretion, in such
number and with such nominal value as shall suffice so that upon the sale
thereof in a foreign market, at the option of the legitimated holder hereof, the
proceeds in U.S. dollars, net of all expenses, fees and/or taxes that may be
payable by reason of its transfer or sale, shall be equal to the amount in U.S.
dollars payable. In either case, any of the above procedures shall only be
regarded as a discharge of obligations once the legitimated holder hereof shall
have received the entire amount of U.S. dollars due hereunder.
Car Security expressly waives its right to invoke its inability to fulfill any
payment obligation based on acts of God or force majeure events (section 514 of
the Civil Code). Car Security further represents that, upon executing this
acknowledgement of obligations, it is fully familiar with the current economic
and financial conditions (including the exchange rate ratio among the Argentine
currency, the Euro and the U.S. dollar set forth in law 23.928 as amended by law
25.445), having considered all possible consequences arising from those acts and
having acted with the independent advice it has deemed convenient, for which
reason it expressly waives the right to invoke hardship ("teoria de la
imprevision") as contemplated in section 1198 of the Argentine Civil Code, the
unconscionability theory and/or any other doctrine, concept or theory already
established or which may be established in the future either by law, case law or
doctrine, which may in any way release Car Security from the full, total and
timely performance of its obligations as acknowledged hereunder.
In case of lack of payment upon presentation of this promissory note, penalty
interest shall accrue hereon at a rate equal to 1.5 times the interest rate
charged by the Banco de la Nacion Argentina (Lending Rate) for discount
transactions of 30-day negotiable instruments.
For all legal purposes arising from this Promissory Note, Car Security
establishes special domicile at Xxxxxxx xxx Xxxxxxxxxx 0000, 0000 Xxxxxx Xxxxx,
Xxxxxxxxx, where all notices served shall be deemed validly given. We expressly
accept that such domicile shall be regarded as our domicile ad litem for all
judicial purposes in the terms of section 40 and related sections of the
Argentine Code of Civil and Commercial Procedure. We submit to the jurisdiction
of the Ordinary First Instance Courts hearing Commercial Matters of the City of
Buenos Aires, expressly waiving any other venue or jurisdiction.
Pursuant to the provisions of section 36 of Executive Order 5965/63, the term
for presentation of this promissory note is extended to 5 years counted as from
the issuance date hereof.
This Promissory Note is issued under the terms of Decree 5965/63 of the Republic
of Argentina.
CAR SECURITY S.A.
__________________________
By: ______________________
Title: ___________________
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