Document:

ex10-1.htm

Exhibit 10.1

 

RELEASE AND SETTLEMENT AGREEMENT

This RELEASE AND SETTLEMENT AGREEMENT ("Agreement"), dated as of September 22, 2009, is entered into among LoJack Equipment Ireland, Limited ("LoJack Ireland"), LoJack Corporation ("LoJack Corp."), LoJack Cyprus Limited a.k.a "AnJie China Holdings Limited" ("LoJack Cyprus") and LoJack Operating Company, L.P. (together, "LoJack Entities")
and Kington Holdings Limited ("Kington"), Chinapac Limited ("Chinapac"), Pinpoint Vehicles Services Limited d.b.a. and a.k.a. "LoJack (HK)" ("PPVSL"), Pinpoint Vehicle Holdings Ltd. ("PPVHL"), The Location Group Ltd., The Location Company Limited, Global Team Services Ltd., Beijing LoJack Ki Electronic Technology Ltd. a.k.a. "Beijing LoJack Ki Company Ltd." ("LoJack Ki"), Beijing
Tracker Technology, Ltd. ("Beijing Tracker"), Kington Beijing Technology Co. Ltd. ("Kington Beijing"), Michael Tang, Jonathan Lewis-Evans, Alexander Key and Martin Fairbairn (together, "Kington Entities").

                      WHEREAS, the LoJack Entities and the Kington Entities contemplated a stolen vehicle recovery business in the People’s Republic of China ("Mainland China Business");

                      WHEREAS, in November 2006, LoJack Ireland and Kington entered into a Technology License, Patent, Trademark and Supply Agreement for the Mainland China Business (the “License Agreement”);

                      WHEREAS, Kington and other Kington entities in conjunction with the License Agreement and the Mainland China Business actually or allegedly entered into the following agreements:

	  	  	
1.
	
Loan Agreement dated November 12, 2006, and an amendment thereto dated April 2, 2007 by and between LoJack Corp. and Chinapac ("Loan Agreement");

	  	  	  	  
	  	  	
2.
	
Promissory Note in the amount of USD $750,000.00 dated November 12, 2006 from Kington as Borrower to LoJack Corp. ("Promissory Note");

	  	  	  	  
	  	  	
3.
	
Secured Promissory Note in the amount of USD $750,000.00 dated November 12, 2006 from Chinapac as Borrower to LoJack Corp. ("Secured Promissory Note");

	  	  	  	  
	  	  	
4.
	
Charge/Debenture dated November 12, 2006 between Chinapac as Borrower and LoJack Corp. as Lender ("Chinapac Charge/Debenture");

	  	  	  	  
	  	  	
5.
	
Charge/Debenture dated November 12, 2006 (and allegedly reissued December 17, 2007) between PPVSL as Guarantor and LoJack Corp. as Lender ("PPVSL Charge/Debenture");

  

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6.
	
Structure and Assets Pledge Letter dated November 12, 2006 from The Location Group Ltd., Global Team Services Ltd., The Location Company Limited, Chinapac, PPVHL, PPVSL and Kington to LoJack Corp. ("Pledge Letter");

	  	  	  	  
	  	  	
7.
	
Warrant to Subscribe to Shares dated November 12, 2006 from Kington as the Company to LoJack as the Subscriber ("Warrant");

	  	  	  	  
	  	  	
8.
	
Guarantee dated November 12, 2006 between PPVSL as Guarantor and LoJack Corp. as Lender ("PPVSL Guarantee");

	  	  	  	  
	  	  	
9.
	
Consulting Agreements dated September 1, 2005 among Michael Tang, Jonathan Lewis-Evans, Alexander Key and LoJack Cyprus and LoJack Corp. ("Consulting Agreements");

	  	  	  	  
	  	  	
10.
	
Settlement Agreement dated December 5, 2006 among LoJack Ireland, AnJie China Holdings Limited, LoJack Operating Company, L.P., Kington and Beijing LoJack Ki Company Ltd., among others ("DHCC Settlement Agreement"); and

	  	  	  	  
	  	  	
11.
	
Agreement made on or about November 12, 2006 referenced in the Hong Kong Action defined below (together with the License Agreement, the "Parties' Agreements")  ("November 12 Agreement").

                      WHEREAS, LoJack Ki was formed in part to hold the license for the Mainland China Business radio frequency and then was designated to serve certain operational functions for Kington in connection with
the Mainland China Business;

                      WHEREAS, Beijing Tracker was formed in part to provide certain services in connection with the Mainland China Business;

                      WHEREAS, Kington Beijing was formed in part to provide certain services in connection with the Mainland China Business;

                      WHEREAS, disputes have arisen among the parties hereto concerning the Parties' Agreements;

                      WHEREAS, Chinapac and Kington collectively owe the sum of approximately USD $953,762.86 with
further interest to accrue at a rate of USD $54.79 per diem through closing to LoJack Corp., which interest will be waived at Closing;

                      WHEREAS,  LoJack Ireland and Kington are parties to a certain arbitration proceeding before the International Centre for Dispute Resolution of the American
Arbitration Association, bearing case No. 50 133 T 00433 07 (the "Arbitration") concerning the termination of the License Agreement;

  

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                      WHEREAS, LoJack Ireland and Kington are also parties to a certain proceeding before the United States District Court for the District of Massachusetts bearing Docket
No. 1:09-11014 ("Federal Action");

                      WHEREAS, LoJack Corp. and Kington are parties to a certain proceeding before the Norfolk Superior Court in Dedham, Massachusetts bearing Docket No. 08-1815 ("Norfolk
Action");

                      WHEREAS, LoJack Ireland, LoJack Corp., Kington, Chinapac and PPVSL are named as parties to a certain proceeding filed with the High Court of the Hong Kong Special
Administrative Region, Action No. 1702 of 2009 ("Hong Kong Action");

                      WHEREAS, the parties wish to and have agreed to resolve, compromise, adjust, dispose of and finally settle all pending and any other potential claims and disputes
among themselves, including those arising under the Parties' Agreements and in the Arbitration, the Federal Action, the Norfolk Action and the Hong Kong Action subject to the terms hereof; and

                      WHEREAS, PPVSL and PPVHL conduct a business for the sale of LoJack and LoJack Ireland products in Hong Kong pursuant to a license agreement between LoJack International Corporation and Regency 2000,
Ltd. (now known as PPVSL) dated June 21, 1999 ("Hong Kong Business");

                      NOW THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties
agree as follows:

	  	  	
1.
	
Closing.  The closing of the transactions contemplated hereby (the "Closing") will take place three (3) business days from the date of the last signature affixed to this Release and Settlement
Agreement  or such other date as agreed to in writing by Kington and LoJack Ireland ("Closing Date").  At or prior to the Closing, all of the actions and payments required to be made pursuant to this Agreement specifically pursuant
to Sections 2, 4(a), 5 and 6 shall have taken place and be fully effective.  Any such action or payment shall be ineffective and void, and subject to rescission, unless all such actions and payments shall have taken place and be fully effective.

	  	  	  	  
	  	  	
2.
	
Actions Dismissed.  The Arbitration, Federal Action, Norfolk Action and Hong Kong Action (together, "Actions"), which the parties represent
are the only actions between, among or against the Parties, shall be dismissed with prejudice, and the parties shall take all necessary steps to cause such dismissal of their respective claims, including filing mutually agreeable stipulations of dismissal.

  

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The parties shall bear their own costs and attorneys' fees in connection with the above Actions and share equally the arbitrator's administrative costs and fees incurred in the Arbitration.

	 	 	 	 
	  	  	
3.
	
Agreements Terminated. Effective as of the Closing Date following the satisfaction of all conditions to close contained in this Agreement, including pursuant to Sections 2, 4, 5 and 6 of this Agreement, the Loan Agreement, the Promissory Note, the Secured Promissory
Note, the Chinapac Charge/Debenture, the PPVSL Guarantee, the Pledge Letter, the Warrant, the PPVSL Charge/Debenture, the Consulting Agreements, and the November 12, 2006 Agreement (together, the "Parties' Agreements") shall be deemed terminated and without any legal meaning or effect whatsoever as between the parties to this Release and Settlement Agreement.

	 	 	 	 
	  	  	
4.
	
Return of Inventory and Equipment.

 

	  	  	  	
(a)
	
The Kington Entities shall convey, transfer, assign and deliver to LoJack Ireland all of the Kington Entities' right, title and interest in and to any and all system inventory and equipment acquired from a LoJack Entity or utilizing or incorporating LoJack patents or proprietary information ("Return"), provided however that, as a condition to Closing,
the Return shall include only the inventory and equipment listed in Exhibit B under the heading "Available."  LoJack Ireland shall procure that its authorized representative at No. 7 Jiu Xian Qiao Bei Lu, Chao Yang Dist. Beijing collects the said inventory and equipment. 

	  	  	  	  	  
	  	  	  	
(b)
	
If, at the Closing, the Return shall not be complete, specifically with respect to the equipment listed in Exhibit B under the heading "Unavailable",the Kington Entities shall (i) pay at Closing to LoJack Ireland or its authorized representative the invoice price thereof; (ii) use all reasonable efforts to recover the same as soon as possible after
Closing; (iii) transfer to LoJack Ireland all assets and rights, including all monies, received in respect of such inventory and equipment and hold inventory and equipment in trust for LoJack Ireland; (iv) not use the same for any purpose whatsoever; (v) not attempt to disassemble, copy, or reverse engineer the same; (vi) deliver the inventory and equipment to LoJack Ireland or its authorized representative at the address aforesaid against repayment of the invoice price thereof. 

  

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5.
	
Payment.

	  	  	  	
(a)
	
At Closing, LoJack Corp. shall pay Kington the sum of USD $9,125,000.00 and LoJack Ireland shall pay Kington the sum of USD $9,125,000.00 for a total, net of any and all deductions, of USD $18,250,000.

	 	 	 	 	 
	  	  	  	  	
The payments shall be made by wire transfer to the IOLTA Account of Sally & Fitch LLP hereby designated by Kington and the payment shall be held, prior to closing, in escrow by a third-party Escrow Agent pursuant to an Escrow Agreement  and shall not be released by the Escrow Agent until after all other actions required to be taken pursuant
to this Agreement, specifically pursuant to Section 2, 4(a) and 6, shall have taken place and be fully effective.

	  	  	  	  	  
	  	  	  	
(b)
	
At Closing, LoJack Corp. shall deliver written documentation confirming the discharge and full forgiveness of any and all remaining balance of principal and interest due on (i) the Promissory Note in the original amount of USD $750,000.00 and (ii) the Secured Promissory Note in the original amount of USD $750,000.00.

	  	  	
6.
	
Releases.  The exchange among the parties of the consideration
provided for herein shall constitute a full and final resolution of all disputes among them including any and all Claims based on any event or matter occurring on or before the effectiveness of these Releases, including, without limitation, any and all Claims based upon, arising out of, or related to or by reason of the Parties' Agreements and any of the transactions contemplated thereby, the subject matters of the Actions and the Hong Kong Business.  The
Kington Entities hereby further agree to release any and all Claims based upon any event or matter occurring after the effectiveness of the Releases arising out of, related to, or by reason of the delivery by LoJack Ireland of alternative product(s) for the Hong Kong Business and the Kington Entities’ non-participation in and lack of access to the GTAC database.  At the Closing, the parties
shall deliver executed copies of the releases attached as Exhibit A, which are part and parcel to this Agreement.

	  	  	  	  
	  	  	
7.
	
Standstill.  Each of the Kington Entities agrees for a period of three (3) years commencing on the date hereof, not to, directly or indirectly, unless specifically requested to do so in advance by the Chief Executive Officer or board of directors of LoJack
Corp. or except as expressly agreed to in writing by the parties:  (a) effect or seek, offer or propose publicly to effect, or publicly announce any intention to effect or cause or participate in or in any way assist, facilitate or encourage any other Person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any securities (or beneficial ownership thereof), or rights or options to acquire any securities (or beneficial ownership thereof),
or any

  

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assets, indebtedness or businesses of LoJack Corp. or any of its affiliates, (ii) any tender or exchange offer, consolidation, business combination, acquisition, merger, joint venture or other business combination involving LoJack Corp., any of its affiliates or any of the assets of LoJack Corp. or its affiliates, (iii) any recapitalization, restructuring,
liquidation, dissolution or other extraordinary transaction with respect to LoJack Corp. or any of its affiliates, or (iv) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) to vote any voting securities of LoJack Corp. or any of its affiliates or consents to any action from any holder of any voting securities of LoJack Corp. or any of its affiliates or seek to advise or influence any Person with respect to the voting of
or the granting of any consent with respect to any voting securities of LoJack Corp.; (b) form, join or in any way participate in a “group” (as defined under the Securities Exchange Act of 1934, as amended) in connection with the voting securities of LoJack Corp. or otherwise act in concert with any person in respect of any such securities; (c) otherwise act, alone or in concert with others, to seek representation on or to control or influence the management, board of directors or policies of LoJack
Corp. or to obtain representation on the board of directors of LoJack Corp.; (d) enter into any discussions or arrangements with any third party with respect to any of the foregoing; (e) request that LoJack Corp. or any of its Representatives amend or waive any provision of this paragraph, or make any public announcement with respect to the restrictions of this paragraph, or take any action which would reasonably be expected to require LoJack Corp. make a public announcement regarding the possibility of a business
combination or merger; or (f) advise, assist or encourage, or direct any person to advise, assist or encourage any other persons, in connection with any of the foregoing.  “Person” shall be broadly interpreted to include, without limitation, the media and any individual, corporation, company, partnership, limited liability company, or other entity or group.  As used in this Agreement, the term “affiliate”
shall mean any other Person that directly, or indirectly through one or more intermediates, controls, is controlled by, or is under common control with, such Person.  “Representatives” shall mean, collectively, a party’s directors, officers, affiliates, employees, agents, representatives, accountants, financial, legal and other advisors, or potential debt or equity financing sources.

	  	  	  	  
	  	  	
8.
	
Representations.  The Kington Entities represent as follows as of the date hereof and through the Closing:

 

	 	 	 	 (a)	 There are no third-party outstanding judgment, order, writ, injunction, settlement, decree, litigation, claims, actions, suits, charges, complaints, arbitrations, proceedings or governmental investigations, pending or threatened against the Kington Entities, any of their subsidiaries, respective directors, officers or employees in their respective capacities as
such, arising out of, resulting from and/or in connection in any matter

 

  

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	 	 	 	 	whatsoever with the Kington Entities' (1) establishment and operation of the Mainland China system, (2) sale and installation of any products for the Mainland China business, (3) conduct of the Mainland China Business, and (4) the Parties' Agreements.
	 	 	 	 	 
	 	 	 	 (b)	Other than with respect to the Hong Kong Business, the Kington Entities have had no communications with, and have received no information from, employees of the LoJack Entities other than Richard Riley and Ronald Waters since the commencement of the Arbitration and otherwise have had no access to confidential information of the LoJack Entities outside the scope of discovery
in the Arbitration.

 

	  	  	
9.
	
Governing Law.  This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts without giving effect to any conflicts of law principles of such state that might refer the governance, construction
or interpretation of such agreement to the laws of another jurisdiction.

	  	  	  	  
	  	  	
10.
	
Specific Performance.  The parties acknowledge and agree that they would be damaged irreparably if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any breach of this Agreement could not be adequately
compensated by monetary damages alone.  Accordingly, the parties agree that, in addition to any other right or remedy to which a non-breaching party may be entitled, at law or in equity, he, she, or it will be entitled to enforce any provision of this Agreement by a decree of specific performance and to temporary, preliminary, interim, conservatory, and permanent injunctive relief to prevent breaches or threatened breaches of the provisions of this Agreement, without the necessity of proving actual
damages or the fact that monetary damages may not adequately provide reparation for any injury, without posting any bond or other undertaking, and the party against which such relief is sought will waive the defense in any action for specific performance or other equitable relief that a remedy at law would be adequate.

	  	  	  	  
	  	  	
11.
	
Interpretation.  This Agreement is the product of negotiation by the parties having the assistance of counsel and other advisors of their own choosing.  It is the intention of the parties
that neither party shall be considered the drafter hereof, that this Agreement not be construed more strictly with regard to one party than to any other, and that no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of any authorship of any provisions of this Agreement.

	  	  	  	  
	  	  	
12.
	
Merger; Changes.  This Agreement and the Releases (a form of which is attached as Exhibit A hereto) supersedes any prior understandings and all prior agreements between the parties
with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the Agreement between the parties with respect to its subject matter.  There are

  

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no understandings or agreements, oral or otherwise, in relation thereto, between or among the parties except as expressly set forth in this Agreement and the Releases.  The
terms and conditions of this Agreement cannot be changed or modified in any respect except in a written instrument that is signed by the party against whom the change or modification is to be enforced.

	  	  	  	  
	  	  	
13.
	
Confidentiality.  Neither the Kington Entities nor their attorneys, agents or employees acting on their behalf will, except to the extent required by applicable law or regulation, issue a press release, hold a press conference, make affirmative statements
to the media, or otherwise discuss with or disclose to a third party the negotiation or the terms of this Agreement other than to refer to the public filings of LoJack Corp. with the U.S. Securities Exchange Commission.  All parties hereto confirm and acknowledge that they remain bound by the Stipulated Protective Order entered in the Arbitration and the Norfolk Action and that each of these Stipulated Protective Orders remain in full force and effect and that the obligations thereunder shall survive
the execution and performance of this Release and Settlement Agreement.

	  	  	  	  
	  	  	
14.
	
Non-Disparagement.   The parties (on behalf of themselves and the Releasing and Released Parties as defined in the Releases) hereby mutually agree not to publicly criticize, cast in a negative light, denigrate or disparage each other and the Releasing
and Released Parties.

	  	  	  	  
	  	  	
15.
	
No Admission or Waiver.  Nothing herein is intended, nor shall be construed as, or offered or received into evidence as, an explicit or implicit admission of liability or finding of wrongdoing by any of the parties. The parties agree that this Agreement is
made and entered into to resolve disputed claims and solely for the purpose of avoiding the burden and expense of continued and potential legal proceedings based on pending and any other potential claims among the parties, which are dismissed or released by this Agreement.

	  	  	  	  
	  	  	
16.
	
Costs.  Except as provided in Section 18(f), below, each of the parties shall bear its own costs related to the negotiation and performance of this Agreement and the settlement and other transactions contemplated hereby, including the payment of applicable
taxes and attorneys' fees.

	  	  	  	  
	  	  	
17.
	
Cooperation.  The parties shall cooperate after the Closing to the extent administrative steps need to be performed to give effect to this Agreement and the settlement documented therein.

  

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18.
	
Arbitration.  Any dispute controversy or claim arising out of, relating to or in connection with this Agreement (including any schedule or exhibit hereto) or the breach, termination or validity thereof ("Dispute") shall be finally settled by arbitration in
accordance with the International Arbitration Rules of the American Arbitration Association ("AAA") then in effect (the "Rules"), except as modified herein.

 

	  	  	  	
(a)
	
Venue.  The arbitration shall be held in Boston, Massachusetts.  The arbitration proceedings shall be conducted, and the award shall be rendered, in the English language.

	 	 	 	 	 
	  	  	  	
(b)
	
Tribunal Appointment. There shall be three arbitrators of whom the LoJack Entities and the Kington Entities shall each select one.  The claimant(s) shall name its arbitrator in its notice of arbitration.  The respondent(s)
shall name its arbitrator in its statement of defense.  The two arbitrators so appointed shall select a third arbitrator to serve as presiding arbitrator, such selection to be made within fifteen (15) days of the selection of the second arbitrator.  If any arbitrator is not appointed within the time limits set forth herein, such arbitrator(s) shall be appointed by the AAA in accordance with the Rules and the procedures set forth herein.

	 	 	 	 	 
	  	  	  	
(c)
	
Timetable.  The hearing shall be held, if practicable, no later than three months after the appointment of the third arbitrator.  The award shall be rendered within forty-five days of the close of the hearing. The arbitral tribunal may extend any time period contained herein on the request of any
party or for good cause shown.

	 	 	 	 	 
	  	  	  	
(d)
	
Arbitration Law.  Any arbitration proceedings, decision or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq. and the 1958 New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards.

	 	 	 	 	 
	  	  	  	
(e)
	
Award.  The award shall be in writing and shall state the findings of fact and conclusions of law on which it is based.  The award shall be final and binding upon the Parties and shall be the sole and exclusive remedy between the Parties regarding any claims, counterclaims,
or issues presented to the arbitral tribunal.  The award may be in terms of injunctive relief, specific performance or monetary damages, as the arbitral tribunal determines.  Judgment upon any award may be entered and enforced in any court having jurisdiction thereof.

	 	 	 	 	 
	  	  	  	
(f)
	
Costs.  The prevailing party, as determined by the arbitral tribunal, shall be entitled to recover its costs and reasonable attorneys' fees from the non-prevailing party.

  

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	 	 	 	 (g)	Provisional Measures.  By agreeing to arbitration, the parties do not intend to deprive any court of its jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of arbitration proceedings and the enforcement of any award.  Without prejudice to such provisional
remedies as may be available under the jurisdiction of a national court, the arbitral tribunal shall have full authority to grant provisional remedies or modify or vacate any temporary or preliminary relief issued by a national court, and to award damages for the failure of any party to respect the arbitral tribunal's orders to that effect.

 

	  	  	
19.
	
Authorization, Consent.  The parties acknowledge and agree that in deciding to execute this Agreement each has relied entirely upon their own respective judgment and has entered into the Agreement in the exercise of such judgment in the absence of duress
or coercion.  Each party represents that: (i) such party has full corporate power and authority to execute and deliver this Agreement and consummate the transactions contemplated herein, (ii) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly approved and authorized by all necessary corporate proceedings of such party, and no other corporate proceedings on the part of such party are necessary to approve and authorize the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby, and (iii) neither the execution and delivery by such party of this Agreement nor the consummation by such party of the transactions contemplated hereby will (x) conflict with or result in a breach of any provision of the certificate of incorporation, by-laws, or other governing documents of such party, or (y) (A) violate any order, writ, injunction, decree, judgment, ruling, law, rule or regulation of any court or governmental
authority applicable to such party, or (B) require any consent, approval or authorization of, or notice to, or declaration, filing or registration with, any governmental or regulatory authority.

	  	  	  	  
	  	  	
20.
	
Survival.  All of the representations, covenants and agreements of the parties contained in this Agreement contemplating performance after the Closing shall survive the Closing.

	  	  	  	  
	  	  	
21.
	
Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court jurisdiction or other authority to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions completed hereby is not asffected in any matter materially adverse to any party.  Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.

  

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22.
	
Successors, Assigns and Miscellaneous.  This Agreement is binding upon and shall inure to the benefit of the parties and their respective successors and permitted assigns.  This Agreement may not be assigned by any of the parties hereto without
the prior consent of the other parties hereto.  This Agreement may be executed in one or more counterparts, including facsimile counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same Agreement.

	  	  	  	  
	  	  	
23.
	
Notices.  All notices which any party may be required or desire to give to any other party shall be in writing and shall be given by personal service, registered mail, certified mail (or its equivalent), facsimile or courier to the other party at its respective
address set forth below.

	  	  	  	
(a)
	
if to any Kington Entity:

	 	 	 	 	 
	  	  	  	  	
Sally & Fitch LLP

One Beacon Street

Boston, Massachusetts 02108

Attention:  Jonathan W. Fitch

Fax:  (617) 542-1542

	  	  	  	  	  
	  	  	  	
(b)
	
if to any LoJack Entity:

	 	 	 	 	 
	  	  	  	  	
Law Offices of Robert W. Harrington

One Washington Mall

Boston, Massachusetts 02108

Attention:  Rachel H. Prindle

Fax:  (617) 248-9885

	 	 	 	 	 
	  	  	  	  	
and:

	 	 	 	 	 
	  	  	  	  	
Skadden, Arps, Slate, Meagher & Flom, LLP

Four Times Square

New York, New York 10036

Attention:   Julie Bédard

Fax:   (212) 735-2000

 

	  	  	  	
A party may change its address or addresses set forth above by giving the other party notice of the change in accordance with the provisions of this Section.

  

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IN WITNESS WHEREOF, this Release and Settlement Agreement has been duly signed on behalf of each of the parties hereto as follows:

 

	
LOJACK CORPORATION

 

By:  /s/ Ronald V. Waters

Name: Ronald V. Waters

Title:  President and Chief Executive Officer 

Dated:  September 22, 2009
	
KINGTON HOLDINGS LIMITED

 

By:  /s/ Michael Tang

Name:  Michael Tang

Title:  Director

Dated:   September 22, 2009

 

	
LOJACK EQUIPMENT IRELAND, LIMITED

 

By:  /s/ Richard T. Riley

Name: Richard T. Riley

Title:  Director

Dated:  September 22, 2009

 
	
CHINAPAC LIMITED

 

By:  /s/ Jonathan Philip Lewis-Evans

Name:  Jonathan Philip Lewis-Evans

Title: Director

Dated:  September 22, 2009

 

	
BEIJING TRACKER TECHNOLOGY, LTD.

 

By:  /s/ Alexander John Key

Name: Alexander John Key

Title: Legal Representative

Dated: September 22, 2009
	
KINGTON BEIJING TECHNOLOGY CO. LTD.

 

By:  /s/ Alexander John Key

Name:  Alexander John Key

Title:  Legal Representative

Dated:  September 22, 2009

 

	
THE LOCATION COMPANY LIMITED

 

By:  /s/ Jonathan Philip Lewis-Evans

Name:  Jonathan Philip Lewis-Evans

Title: Director

Dated: September 22, 2009

 
	
THE LOCATION GROUP LTD.

 

By:  /s/ Jonathan Philip Lewis-Evans

Name:  Jonathan Philip Lewis-Evans

Title: Director

Dated: September 22, 2009

	
GLOBAL TEAM SERVICES LTD.

 

By:  /s/ Martin Fairbairn

Name: Martin Fairbairn

Title: Chairman

Dated:  September 22, 2009

 
	
PINPOINT VEHICLE HOLDINGS LTD.

 

By:  /s/ Michael Tang

Name:  Michael Tang

Title: Director

Dated:  September 22, 2009

 

  

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BEIJING LOJACK KI ELECTRONIC TECHNOLOGY LTD.

 

By:  /s/ Michael Tang

Name: Michael Tang

Title: Legal Representative

Dated: September 22, 2009
	
PINPOINT VEHICLE SERVICES LIMITED

 

By:  /s/ Michael Tang

Name:  Michael Tang

Title: Director

Dated:  September 22, 2009

 

	
LOJACK CYPRUS LIMITED

 

By: /s/ Richard T. Riley

Name: Richard T. Riley

Title: Chief Executive Officer

Dated: September 22, 2009
	
LOJACK OPERATING COMPANY, L.P.

 

By: LoJack Corporation

Its: General Partner

 

By:  /s/ Ronald V. Waters

Name: Ronald V. Waters

Title:  President and Chief Executive Officer

Dated: September 22, 2009

 

	
MICHAEL TANG

 

/s/ Michael Tang

Title: Director

Dated: September 22, 2009

 
	
JONATHAN LEWIS-EVANS

 

/s/ Jonathan Philip Lewis-Evans

Title:  Director

Dated: September 22, 2009

	
ALEXANDER KEY

 

/s/ Alexander John Key

Title:  Legal Representative

Dated: September 22, 2009
	
MARTIN FAIRBAIRN

 

/s/ Martin Fairbairn

Title:  Chairman

Dated: September 22, 2009

 

 

  

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Exhibit A- RELEASES

 

These Releases, dated as of September __, 2009, are entered into among LoJack Equipment Ireland, Limited ("LoJack Ireland"), LoJack Corporation ("LoJack Corp."), LoJack Cyprus Limited a.k.a "AnJie China Holdings Limited" ("LoJack
Cyprus") and LoJack Operating Company, L.P. (together, "LoJack Entities") and Kington Holdings Limited ("Kington"), Chinapac Limited ("Chinapac"), Pinpoint Vehicles Services Limited d.b.a. and a.k.a. "LoJack (HK)" ("PPVSL"), Pinpoint Vehicle Holdings Ltd. ("PPVHL"), The Location Group Ltd., The Location Company Limited, Global Team Services Ltd., Beijing LoJack Ki Electronic Technology Ltd. a.k.a.
"Beijing LoJack Ki Company Ltd." ("LoJack Ki"), Beijing Tracker Technology, Ltd. ("Beijing Tracker"), Kington Beijing Technology Co. Ltd. ("Kington Beijing"), Michael Tang, Jonathan Lewis-Evans, Alexander Key and Martin Fairbairn (together, "Kington Entities").

Capitalized terms used but not otherwise defined herein shall have the meanings ascribed hereto in that certain Release and Settlement Agreement, dated as of September 22, 2009 among the parties listed therein.

These Releases shall become effective upon Closing as set forth in the Agreement.

The LoJack Entities, on their own behalf and on behalf of their present, former and future parents, divisions, subsidiaries, affiliates, associates, representatives, predecessors, successors, owners, and assigns, and their and their present, former or future directors, agents, partners, principals,
officers, employees, trustees, insurers, and reinsurers, stockholders, representatives or any of them, and their attorneys and all persons acting by, through, under or in concert with them or any of them, and any party acting on their behalf, whether by operation of law or statute (together, the "LoJack Releasing Entities") hereby release absolutely and forever discharge and covenant not to sue the Kington Entities and their
present, former and future parents, divisions, subsidiaries, affiliates, associates, representatives, predecessors, successors, owners, and assigns, and their present, former or future directors, agents, partners, principals, officers, employees, trustees, insurers, and reinsurers, stockholders, representatives or any of them, and their attorneys and all persons acting by, through, under or in concert with them or any of them, and any party acting on their behalf, whether by operation of law or statute
(the "Kington Released Entities") from any and all claims, charges, demands, liabilities, obligations, damages, actions, claims in equity, rights, attorneys' fees and expenses and causes of action of every kind and nature whatsoever, whether or not known or suspected at this time, whether fixed or contingent, whether anticipated or unanticipated, liquidated or unliquidated (collectively, "Claims"), which the LoJack Releasing Entities have, ever had, owned or held or hereafter can, shall or may have against the
Kington Released Entities based on any event or matters occurring on or before the effectiveness of these Releases, including, without limitation, any and all Claims based upon, arising out of, or related to or by reason of the Parties' Agreements and any of the transactions contemplated thereby, the subject matters of the Actions and any and all aspects of the Hong Kong business through and including the date of Closing.

       The Kington Entities, on their own behalf and on behalf of their present, former and future parents,
divisions, subsidiaries, affiliates, associates, representatives, predecessors,

  

1

  

successors, owners, and assigns, and their and their present, former or future directors, agents, partners, principals, officers, employees, trustees, insurers, and reinsurers, stockholders, representatives or any of them, and their attorneys and all persons acting by, through, under or in concert
with them or any of them, and any party acting on their behalf, whether by operation of law or statute (together, the "Kington Releasing Entities") release absolutely and forever discharge and covenant not to sue the LoJack Entities and their present, former and future parents, divisions, subsidiaries, affiliates, associates, representatives, predecessors, successors, owners, and assigns, and
their present, former or future directors, agents, partners, principals, officers, employees, trustees, insurers, and reinsurers, stockholders, representatives or any of them, and their attorneys and all persons acting by, through, under or in concert with them or any of them, and any party acting on their behalf, whether by operation of law or statute (collectively, the "LoJack Released Entities") from any and all Claims, which the Kington Releasing Entities have, ever had, owned or held or hereafter
can, shall or may have against the LoJack Released Entities based on any event or matter occurring on or before the effectiveness of these Releases, including, without limitation, any and all Claims based upon, arising out of, or related to or by reason of the Parties' Agreements and any of the transactions contemplated thereby, the subject matters of the Actions and any and all aspects of the Hong Kong business through and including the date of Closing,
including, but not limited to, the supply of LoJack and/or LoJack Ireland equipment or infrastructure to the Hong Kong Business and specifically any claims that have arisen or may arise in connection with a certain purchase order No. LJPP0006067 issued to LoJack Ireland dated June 17, 2009.  The Kington Entities hereby further agree to release any and all Claims based upon any event or matter occurring after the effectiveness of the Releases arising out of, related to, or by reason of the delivery by
LoJack Ireland of alternative product(s) for the Hong Kong Business and the Kington Entities’ non-participation in and lack of access to the GTAC database.

 

It is further expressly understood that the foregoing Releases are neither intended to, nor do, waive the right of any party to enforce the terms of the Agreement.

        IN WITNESS WHEREOF, these Releases have been duly signed on behalf of each of the parties hereto as follows:

	
LOJACK CORPORATION

 

By:  ________________________________

Name: 

Title:  

Dated:  
	
KINGTON HOLDINGS LIMITED

 

By:  ______________________

Name:  

Title:  

Dated:   

 

	
LOJACK EQUIPMENT IRELAND, LIMITED

 

By:  ________________________________

Name: 

Title:  

Dated:  

 
	
CHINAPAC LIMITED

 

By:  __________________________

Name:  

Title: 

Dated:  

 

  

2

  

	
BEIJING TRACKER TECHNOLOGY, LTD.

 

By:  _______________________

Name: 

Title: 

Dated: 
	
KINGTON BEIJING TECHNOLOGY CO. LTD.

 

By:  _____________________

Name:  

Title:  

Dated:  

 

	
THE LOCATION COMPANY LIMITED

 

By:  __________________________

Name:  

Title: 

Dated: 

 
	
THE LOCATION GROUP LTD.

 

By:  __________________________

Name:  

Title: 

Dated: 

	
GLOBAL TEAM SERVICES LTD.

 

By:  _______________________

Name: 

Title: 

Dated:  

 
	
PINPOINT VEHICLE HOLDINGS LTD.

 

By:  ____________________

Name:  

Title: 

Dated:  

	
BEIJING LOJACK KI ELECTRONIC TECHNOLOGY LTD.

 

By:  ____________________

Name: 

Title: 

Dated: 

 
	
PINPOINT VEHICLE SERVICES LIMITED

 

By:  _____________________

Name:  

Title: 

Dated:  

	
LOJACK CYPRUS LIMITED

 

By: ______________________

Name: 

Title: 

Dated: Septe

	
LOJACK OPERATING COMPANY, L.P.

 

By:  _________________________________

Name: 

Title:  

Dated: 

 

	
MICHAEL TANG

 

________________________

Title: 

Dated: 

 
	
JONATHAN LEWIS-EVANS

 

________________________

Title:  

Dated: 

 

	
ALEXANDER KEY

 

________________________

Title:  

Dated: 
	
MARTIN FAIRBAIRN

 

_________________________

Title:  

Dated: 

 

 

 

3

 

EXHIBIT B

LOJACK EQUIPMENT

FOR COLLECTION – 9/18/09

	
#
	
Item
	
Invoice X-ref
	
QTY received
	
QTY to be returned
	
Available
	
Unavailable
	
Value of Unavailable Items

	
1
	
Remote Transciever Unit (RTU) w/Uplink Receiver
	
PRCHINA000001
	
2
	
2
	
2
	
0
	
 $                    -

	
2
	
Vehicle Tracking Unit (VTUIII) w/antenna
	
PRCHINA000001
	
2
	
2
	
2
	
0
	
 $                    -

	
3
	
Listening Post Unit (LP0)
	
PRCHINA000001
	
2
	
2
	
2
	
0
	
 $                    -

	
4
	
Listening Post Unit (LP0)
	
PRCHINA000002
	
3
	
3
	
3
	
0
	
 $                    -

	
5
	
Vehicle Tracking Unit (VTU3)
	
PRCHINA000003
	
5
	
5
	
5
	
0
	
 $                    -

	
6
	
Vehicle Location Unit (VLU5N)

Part # 4700-4901-22
	
PRCHINA000004PF
	
600
	
600
	
600
	
0
	
 $                    -

	
7
	
Vehicle Tracking Unit 3 (VTU3)

Part # 4105-0001-10
	
PRCHINA000005
	
10
	
10
	
10
	
0
	
 $                    -

	
8
	
Vehicle Tracking Unit 3 (VTU3) Antenna

Part # 4105 0001 10
	
PRCHINA000005
	
7
	
7
	
7
	
0
	
 $                    -

	
9
	
Listening Post (LP0)

Part # 4201-0001-22
	
PRCHINA000005
	
7
	
7
	
5
	
2
	
 $       1,800.00

	
10
	
Remote Transciever Units (RTU)

Part # 4001-0018-00
	
PRCHINA000005
	
3
	
3
	
3
	
0
	
 $                    -

	
11
	
Remote Transciever Units (RTU) Antenna

Part # FG1623
	
PRCHINA000005
	
3
	
3
	
3
	
0
	
 $                    -

	
12
	
Magnetic Mount Antennas & Cabling for Fixed Vehicle 

Tracking Units 

(Scissor Mount Antennas)

Part # 0100-0056-00
	
PRCHINA000005
	
3
	
3
	
3
	
0
	
 $                    -

	
13
	
Hard Mount Antennas for VTU3 (Fixed VTU3 Antennas)

Part # D165-4NPTMLB & CL4NFBM66F-4
	
PRCHINA000005
	
10
	
10
	
10
	
0
	
 $                    -

	
14
	
Vehicle Utility Transciever (VUT)

Part # 4321 0001-00
	
PRCHINA000005
	
14
	
14
	
14
	
0
	
 $                    -

	
15
	
Portable RTU (Demonstration Equipment)
	
Uninvoiced
	
1
	
1
	
1
	
0
	
 $                    -

	
16
	
Portable VTC (Demonstration Equipment)
	
Uninvoiced
	
1
	
1
	
1
	
0
	
 $                    -

	
17
	
Packet Decoder  (Demonstration Equipment)
	
Uninvoiced
	
1
	
1
	
1
	
0
	
 $                    -

	
18
	
VLU III  (Demonstration Equipment)
	
Uninvoiced
	
3
	
3
	
3
	
0
	
 $                    -

	
19
	
Dell Optiplex Computer  (Demonstration Equipment)
	
Uninvoiced
	
1
	
1
	
1
	
0
	
 $                    -

	
20
	
Vehicle Tracking Unit 3 (VTU3)  (Demonstration 

Equipment)
	
Uninvoiced
	
2
	
2
	
2
	
0
	
 $                    -

	
21
	
Magnetic Mount  (Demonstration Equipment)
	
Uninvoiced
	
1
	
1
	
1
	
0
	
 $                    -

	
22
	
Vehicle Location Unit (VLU5N) (Type Approval)
	
Uninvoiced
	
10
	
10
	
5
	
5
	
 $           640.00

	
23
	
Vehicle Location Unit (VLU5EW2) (Type Approval)
	
Uninvoiced
	
10
	
10
	
9
	
1
	
 $           178.00

	  	  	  	  	  	  	  	  
	  	
Total
	  	  	  	  	  	
 $       2,618.00ex10-2.htm

EXHIBIT 10.2

WAIVER AGREEMENT

THIS WAIVER AGREEMENT (this “Waiver” or this “First Amendment to Credit Agreement”) is made as of the 22nd day
of September, 2009 by and among LOJACK CORPORATION (“LoJack”), the Canadian Borrowers and Foreign Borrowers listed on Schedule 1 to the Credit Agreement referred to below (collectively with LoJack, the “Borrowers”), the U.S. Guarantors and Canadian Guarantors listed on the signature pages hereof (collectively,
the “Guarantors”), the Revolving Credit Lenders, the Term Loan Lenders and the Canadian Lenders listed on the signature pages hereof (each, a Lender, and collectively, the “RequiredLenders”), RBS CITIZENS, NATIONAL ASSOCIATION (successor
by merger to Citizens Bank of Massachusetts), as Administrative Agent and Issuing Bank for itself and each of the other Lenders (the “Agent”), and ROYAL BANK OF CANADA, as the Canadian Lender.  Capitalized terms used herein without definition shall have the respective meaning assigned to such terms in the Credit Agreement

RECITALS

WHEREAS, Borrowers, Guarantors, the Lenders and Agent are party to that certain Multicurrency Revolving Credit and Term Loan Agreement, dated as of July 20, 2007 (as the same may be amended and in effect from time to time, the “Credit Agreement”), pursuant to which the Lenders
have extended credit to Borrowers on the terms set forth therein;

 

WHEREAS, the Borrowers and Guarantors are entering into a settlement agreement (the “Settlement Agreement”) on or about the date hereof to settle the Kington Proceedings as defined on Exhibit A hereto;

 

WHEREAS, the Borrower and Guarantors have requested that the Agent and the Required Lenders waive certain specified defaults or Events of Default that may arise under the Credit Agreement by reason of the Settlement Agreement; and the Agent and the Required Lenders are willing to agree to such a waiver, conditioned on the agreements and covenants
contained in this Waiver Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.  Definitions.  Capitalized terms used herein are defined on Exhibit A hereto or, if not defined thereon, shall have the definitions given in the Credit Agreement.

2.  Waiver.  Subject to and conditioned upon the other terms, conditions and covenants contained herein, the Required Lenders hereby agree to waive any Specified Defaults that now exist or may hereafter arise solely on account of the payment or proposed payment by the Borrowers of the Settlement Amount.  For the avoidance
of doubt, a breach of a financial covenant due to the payment by the Borrowers of the Settlement Amount shall be deemed a Specified Default only if the Borrowers otherwise would have been in compliance with the financial covenant absent the payment or proposed payment of the Settlement Amount.

3.      Conditions Precedent.  The Agent’s and the Lenders’ agreements contained herein are conditioned upon the following conditions precedent and conditions subsequent.  Upon the Required Lenders’ reasonable determination
that a breach of any of the conditions set forth below has occurred, the waivers contained in Section 2 shall automatically terminate (the earliest such event to occur, the “Termination Date”).

  

 

  

(a)  Borrowers shall either (i) enter into a restructured Credit Agreement with certain of the Lenders that is acceptable to all Lenders or (ii) obtain refinancing of the Credit Agreement from third party institutions, in either case on or before December 30, 2009; and provided, however, that for the avoidance of doubt, regardless of any
determination by the Required Lenders, the conditions specified in this clause (a) will not be deemed to be satisfied except upon the agreement of all Lenders;

(b)  Borrowers shall provide and maintain the Cash Collateral described below, which shall be held by the Agent in a blocked account pursuant to this Agreement and the Pledge Agreement;

(c)  Borrowers executing and delivering (i) this Waiver Agreement, and (ii) a Pledge Agreement (the “Pledge Agreement”), and Borrowers delivering the Cash Collateral to the Agent, which the Agent acknowledges having received;

(d)  Borrowers shall pay (i) the Waiver Fee described below, (ii) the Agent’s legal expenses previously incurred for the period from March 1, 2009 through September 17, 2009 (as reflected in invoices from the Agent’s counsel dated May 20, 2009 and September 18, 2009), and (iii) all other reasonable costs and expenses of the
Agent;

(e)  The form of the Settlement Agreement executed by the Borrowers shall not differ from the form previously reviewed by the Agent;

(f)  The cash amount payable pursuant to the Settlement Agreement will not exceed $22,250,000, which shall include (i) a cash settlement payment of not more than $18,250,000, which shall be in full satisfaction of all liabilities or other obligations of the Borrowers and the Guarantors arising out of or related to the disputes relating
to the Kington Proceedings, and (ii) not more than $4,000,000 of associated costs and expenses of the Borrowers and the Guarantors, including legal fees related to the Kington Proceedings;

(g)  The Borrowers shall have paid the full amount required by the Settlement Agreement.

(h)  No Default or Event of Default (other than the Specified Defaults waived herein) shall occur; and

(i)  This Waiver Agreement shall be executed by Lenders constituting the Required Lenders.

4.  Cash Collateral.  Borrowers shall provide to the Lenders cash collateral in an amount equal to the Dollar Equivalent of the Outstanding Amount of the Loans, L/C Obligations and Bankers’ Acceptances, and will provide additional cash collateral from time
to time as necessary to meet the requirements of this section (the foregoing, the “Cash Collateral”).  Within two Business Days’ written notice by the Agent, the Borrowers will deposit additional Cash Collateral from time to time to the extent necessary to cover currency fluctuations between the

  

-2-

  

U.S. Dollar and the Canadian Dollar so that the amount of the Cash Collateral will be sufficient to cover those Loans, L/C Obligations and Bankers’ Acceptances that are denominated in Canadian Dollars.  The Cash Collateral will be wired by the Borrowers to the Agent to be held in a blocked account for the benefit of the Lenders.  The
Termination Date will constitute an “Event of Default” under the Pledge Agreement, and the Agent shall thereupon apply the Cash Collateral to the payment of the Obligations for the benefit of the Lenders without any further action by the Required Lenders or the Borrowers or notice to the Borrowers.  Upon occurrence of the Termination Date, the Commitments and the Credit Agreement shall automatically terminate, except that nothing herein shall terminate
or otherwise impair those expense reimbursement, indemnification or other provisions of the Credit Agreement and the other Loan Documents which by their express terms survive the repayment of the Loans and termination of the Commitments. 

 

5.  Waiver Fee.  As a condition to the waiver contained herein, the Borrowers will pay to the Agent for the account of the consenting Lenders a waiver fee equal to 25 basis points on the amount of the Outstanding Amount of all Loans, L/C Obligations, the face amount
of all Bankers’ Acceptances, and all other Obligations outstanding under the Credit Agreement.

6.  Covenants.  The Borrowers and the Guarantors, jointly and severally, covenant as follows:

(a)  Principal and Interest Payments.  Prior to the Termination Date, the Borrowers will continue to make regularly scheduled payments of principal and interest as and when required by the Credit Agreement.

(b)  No Loans or Advances.  Prior to the Termination Date, the Lenders will not make any further Loans or other advances under the Credit Agreement, issue any new Letters of Credit, or renew existing Letters of Credit, provided, however, that the Lenders will renew
existing Letters of Credit to the extent that the Borrowers continues to maintain sufficient Cash Collateral covering all L/C Obligations, in addition to the Borrowers’ other Obligations.

(c)  Pricing.  Prior to the Termination Date, the Loans, L/C Obligations, Bankers’ Acceptances, and any other Obligations owing under the Credit Agreement will bear interest at a rate equal to the applicable rate or Applicable Margin, as the case may be, for
such Loan, L/C Obligation, Banker’s Acceptance or other Obligation plus two percentage points (2.0%).  By way of clarification, for the fiscal quarter ending June 30, 2009, the Applicable Margin for Eurodollar Rate Loans, CDOR Rate Loans, Libor Loans or Bankers’ Acceptances is Level III, with an Applicable Margin of 0.750%.  Effective from the date hereof, such Applicable Margin will be increased to 2.750%.  For the fiscal quarter ending December 31, 2009, the Applicable
Margin will be as determined pursuant to the Credit Agreement, plus two percentage points (2.0%).

(d)  Costs and Expenses.  All reasonable costs and expenses of the Agent and the Lenders, including the reasonable legal fees of the Agent incurred after September 17, 2009, will be reimbursable by the Borrowers to the Agent as such costs are incurred but in any
event no later than the Termination Date.

(e)  Cure of Certain Defaults.  In the event that the financial statements to be delivered by the Borrowers pursuant to the Credit Agreement reflect or will reflect a Default or Event of Default other than the Specified Defaults waived hereunder, then, upon the
Borrowers’ written request, the Agent agrees to use such amount of the Cash Collateral as is requested by the Borrowers to pay down the outstanding Loans or other Obligations of the Borrowers to the extent requested by the Borrowers in writing.  The

  

-3-

  

Agent and the Required Lenders agree that any such paydown of the Obligations may be reflected on a pro forma basis in the applicable financial statements for purposes of determining whether the Borrowers were in compliance with their financial covenants for such fiscal quarter and, if so compliant on a pro forma basis by reason of such payment,
no Event of Default will be deemed to have occurred in respect of such financial covenant(s).

7.  Amendments to Credit Agreement.  The Credit Agreement is hereby amended as follows:

(a)  Definition of Loan Documents.  The definition of “Loan Documents” is hereby amended to include this Waiver Agreement and the Pledge Agreement.

 

(b)  Restrictions on Borrowings.  Section 9.1 is hereby amended by (i) deleting the period at the end of Section 9.1(i) and replacing it with a semi-colon and the word “and” and (ii) inserting a new clause (j) as follows:

“(j)  indebtedness of the Borrowers incurred in connection with Liens permitted by Section 9.2(h).”

(c)  Restrictions on Liens.  Section 9.2 is hereby amended by (i) deleting the period at the end of Section 9.2(g) and replacing it with a semi-colon and the word “and” and (ii) inserting a new clause (h) as follows:

“(h)  letters of credit from third parties that are not Lenders hereunder, cash collateral securing such letters of credit and similar third-party financing transactions and cash collateral supporting such financing transactions that are entered into by the Borrowers in the ordinary course.”

8.  Conditional Nature of Waivers; Waivers Following Termination Date.  The waivers contained herein are conditional in nature and subject to the terms and conditions set forth herein, and shall terminate and be of no further force or effect upon occurrence of the
Termination Date.  Upon the occurrence of the Termination Date, all Specified Defaults will be reinstated and, upon such occurrence, the Agent and the Lenders shall have all of the rights under and pursuant to the Credit Agreement, the other Loan Documents and under law, including without limitation Article 12 and Section 14.1 of the Credit Agreement, with respect to all Specified Defaults.  Upon the occurrence of the Termination Date, the Agent is authorized, without any further notice to
or act by the Borrowers or the Guarantors, to apply all Cash Collateral to the satisfaction of the Obligations for the benefit of the Lenders.

Nothing herein shall act to waive any Defaults or Events of Default other than the Specified Defaults.

Neither the failure or delay by the Agent or any Lender to exercise any of its rights or remedies, nor the acceptance at any time by the Agent or any Lender of any payments from the Borrowers, nor any provision of this Agreement, shall operate to amend, modify, waive, release or limit the Agent’s
or any Lender’s rights and remedies or the Borrowers’ or Guarantors’ obligations under the Credit Agreement or the other Loan Documents, except that the Lender agrees to forbear from exercising its rights and remedies to the extent and on the terms and conditions specifically provided in this Agreement.

Any extension of the Termination Date, and any waivers, if any, made by the Lenders following the Termination Date, shall require the consent of each Lender, not the Required Lenders, and the Credit Agreement is hereby deemed amended to the extent necessary to reflect this provision.

9.  Representations and Warranties.  Each of the Borrowers and Guarantors hereby represents and warrants to the Agent and the Lenders as follows:

Each Borrower and Guarantor has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder.  This Agreement has been duly authorized, executed and delivered by the Borrowers and the Guarantors and does not contravene any law, rule or regulation applicable to any Borrower or Guarantor
or any of the terms of such party’s charter documents, operating agreement or by-laws or any other indenture, agreement or undertaking to which any Borrower or Guarantor is a party.  The Borrowers’ and Guarantors’  

 

 

-4-

 

 

obligations contained in this Agreement and the Pledge Agreement, taken together with their obligations under the Credit Agreement and all related documents, constitute legal, valid and binding obligations enforceable against the Borrowers and the Guarantors  in accordance with their respective terms.

10.  Release and Indemnification by Borrowers and Guarantors.  Each of the Borrowers and the Guarantors hereby releases, acquits and forever discharges the Agent and each Lender and its subsidiaries, affiliates, officers, directors, agents, employees, servants, attorneys
and representatives (collectively, the "Released Bank Parties") from any and all claims, demands, debts, actions, causes of action, suits, contracts, agreements, obligations, accounts, defenses, rights of offset and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract or in tort, at law or in equity, which any Borrower or Guarantor ever had, now has, or might hereafter have against the Released
Bank Parties, jointly or severally, for or by reason or any matter, cause or thing whatsoever occurring on or prior to the date of this Agreement.  In addition, the Borrowers and the Guarantors agree not to commence, join in, prosecute or participate in any suit or other proceeding in a position which is adverse to any of the Released Bank Parties arising directly or indirectly from any of the foregoing matters.  The Borrower agrees to hold the Lender harmless from and against any and all
liabilities, claims, demands, costs and expenses (including, without limitation, reasonable attorneys' fees and litigation expenses), actions or causes of action, arising out of or relating to any breach of any covenant or agreement or the incorrectness or inaccuracy of any representation and warranty of the Borrower or any document delivered to the Lender by the Borrower or any other person on behalf of the Borrower pursuant to the terms of this Agreement.

11.  Further Assurances.  The Borrowers and the Guarantors agree to do, make, execute and deliver all such additional further acts, things, assurances and instruments as the Agent may reasonably require to carry into effect the provisions and intent of this Agreement.

12.  Miscellaneous.  This Waiver Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts and shall take effect as a sealed instrument under such laws.  Except as expressly amended hereby, the Credit
Agreement and the other Loan Documents are hereby ratified and confirmed and remain in full force and effect.  Except as expressly set forth herein, the Agent and the Lenders expressly reserve all of their rights under the Credit Agreement, the other Loan Documents and under law.

 

 

 

 

 

 

[signature pages follow on next page]

 

 

  

-5-

  

IN WITNESS WHEREOF, each of the undersigned has duly executed this First Amendment to Credit Agreement as of the date first set forth above.

 

	  	
LOJACK CORPORATION

 

By: /s/ Ronald V. Waters

Title: President and CEO

 

	  	  	
LOJACK EXCHANGECO CANADA INC.

 

By: /s/ Richard T. Riley

Title: President

 

	  	  	
RBS CITIZENS, NATIONAL ASSOCIATION 

(successor by merger to Citizens Bank of 

Massachusetts), as Administrative Agent, Issuing Bank 

and a Lender

 

By: /s/ David Bugbee

Title: Senior Vice President

 

	  	  	
 

JPMORGAN CHASE BANK, N.A., as a Lender

 

By: /s/ Peter M. Killea

Title: Vice President

 

	  	  	
 

ROYAL BANK OF CANADA, acting through its New 

York branch, as Revolving Credit Lender

 

By: /s/ Dustin Craven

Title: Attorney-in-Fact

 

[Signatures continued on next page]

  

-6-

  

	  	
SOVEREIGN BANK

 

By: /s/ Greg Batsevitsky

Title: Senior Vice President

 

	  	
 

JPMORGAN CHASE BANK, N.A., Toronto Branch

 

By: /s/ Michael Tam

Title: Senior Vice President

 

	  	
ROYAL BANK OF CANADA, as Term Lender and Canadian Lender

 

By: /s/ Guy Rochette

Title: Authorized Signatory

 

  

-7-

  

CONSENT OF GUARANTORS

LoJack Global LLC, LoJack Operating Company, L.P. and Boomerang Tracking Inc. (collectively, the “Guarantors”) have each guarantied certain indebtedness, obligations and liabilities of the Borrowers pursuant to Guarantees dated as of July 20, 2007 and delivered in connection with the Credit Agreement (collectively, the “Guarantees”).  By
executing this consent, each Guarantor hereby absolutely and unconditionally reaffirms to Agent and the Lenders that its Guaranty remains in full force and effect.  In addition, each Guarantor hereby acknowledges and agrees to the terms and conditions of the foregoing First Amendment and of the Credit Agreement and the other Loan Documents as amended hereby (including, without limitation, the making of any representations and warranties and the performance of any covenants applicable to it herein or
therein).

 

	  	  
	
LOJACK GLOBAL LLC

 

By: /s/ Richard T. Riley

Title: President

 

	
LOJACK OPERATING COMPANY, L.P.

 

By: LoJack Corporation

Its: General Partner

 

By: /s/ Ronald V. Waters

Title: President and Chief Executive Officer

 

	
BOOMERANG TRACKING INC.

 

By: /s/ Richard T. Riley

Title: President

 

  

-8-

  

Definitions

Kington Proceedings.  The proceedings involving Kington Holdings Limited and its affiliates that are referenced in Note 12 (under the caption “China Related Litigation”) to the financial statements included in LoJack’s Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 2009 and any disputes related thereto.

Pledge Agreement.  Defined in Section 3(c).

Settlement Agreement.  Defined in preamble.

Settlement Amount.  A cash amount not to exceed $22,250,000, which shall include a cash payment not to exceed $18,250,000 in settlement payments made on account of the Kington Proceedings, and up to $4,000,000 in legal fees and other costs of the Borrowers associated with
the Kington Proceedings.

Specified Defaults.  The Defaults or Events of Default arising under any financial covenants of the Borrowers contained in the Credit Agreement and any financial statements of the Borrowers relating thereto (including without limitation the fiscal periods ending September 30,
2009 and December 31, 2009).

Termination Date.  Defined in Section 3.

 

 

 

 

 

 

 

 

 

 

 

 

 

-9-

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