LOJACK CORP
GUARANTEE AGREEMENT DTD 09/05/02 - MACKINLEY
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>7
<FILENAME>dex105.txt
<DESCRIPTION>GUARANTEE AGREEMENT DTD 09/05/02 - MACKINLEY
<TEXT>
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                                                                    Exhibit 10.5

                                    GUARANTEE

       GUARANTEE dated as of September 5, 2002 made by Carlos Mackinlay, an
individual residing at Avenida Figueroa Alcorta 3478, ____, Argentina (the
"Guarantor") in favor of LoJack Recovery Systems Business Trust, a Massachusetts
business trust (the "Lender").

                              W I T N E S S E T H :

       WHEREAS, Car Security S.A. (the "Borrower") and the Lender have entered
into a Loan Agreement dated as of the date hereof, superceding a Bridge Loan
Agreement of October 4, 2001 (as the same may be amended, modified,
supplemented, extended or restated from time to time, the "Loan Agreement"),
providing, subject to the terms and conditions thereof, for a loan (the "Loan")
to be made by the Lender to the Borrower;

       WHEREAS, the Guarantor, as an officer and shareholder of the Borrower,
will benefit from the Loan by the Lender pursuant to the Loan Agreement; and

       WHEREAS, it is a condition precedent to the extensions of credit by the
Lender under the Loan Agreement that the Guarantor shall have undertaken the
obligations contemplated by this Guarantee;

       NOW, THEREFORE, in consideration of the premises and to induce the Lender
to make advances to the Borrower thereunder, the Guarantor hereby agrees with
the Lender as follows:

       1. Defined Terms. Unless otherwise defined herein, terms which are
defined in the Loan Agreement and used herein are so used as so defined.

       2. Guarantee. The Guarantor hereby unconditionally and irrevocably
guarantees to the Lender the prompt and complete payment and performance when
due (whether at stated maturity, by acceleration or otherwise) of all present
and future obligations, indebtedness and liabilities, and all renewals and
extensions of all or any part thereof, as principal payor and not merely as
surety, of the Borrower to the Lender arising from, by virtue of, or pursuant to
the Loan Agreement, the Note or any other Loan Document, including any
extensions, modifications, substitutions, amendments and renewals thereof,
whether for principal, interest, fees, premium, expenses, indemnification or
otherwise, and including, without limitation, all such amounts that would be
owed by the Borrower to the Lender under any Loan Document but for the fact that
they are not allowable due to the existence of a bankruptcy insolvency,
reorganization, arrangement, readjustment, composition, liquidation or similar
proceeding with respect to the Borrower (collectively, the "Obligations"). The
Guarantor further agrees to pay any and all expenses (including, without
limitation, all fees and disbursements of counsel to the Lender) which may be
paid or incurred by the Lender in enforcing, or obtaining advice of counsel in
respect of, any of its rights under this Guarantee. This Guarantee shall remain
in full force and effect until the Obligations are paid in full.

       3. Right of Set-off. Regardless of the adequacy of any collateral or
other means of obtaining repayment of the Obligations, any deposits (general or
special, time or demand, provisional or final) and any other indebtedness at any
time held or owing by the Lender to the Guarantor may, at any time and from time
to time after the occurrence of an Event of Default,

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without notice to the Guarantor or compliance with any other conditions
precedent now or hereafter imposed by statute, rule of law, or otherwise (all of
which are hereby expressly waived to the extent permitted by law) be set off,
appropriated, and applied by the Lender against any and all obligations of the
Guarantor to the Lender (irrespective of whether such obligations may be
contingent or unmatured at such time) in such manner as the Lender in its sole
discretion may determine, and the Guarantor hereby grants the Lender a
continuing security interest in such deposits and indebtedness for the payment
and performance of such obligations.

       4. Subrogation and Contribution. The Guarantor irrevocably and
unconditionally waives any and all rights to which the Guarantor may be
entitled, by operation of law or otherwise, to be subrogated, with respect to
any payment made by the Guarantor hereunder, to the rights of the Lender against
the Borrower, or otherwise to be reimbursed, indemnified or exonerated by the
Borrower in respect thereof or to receive any payment, in the nature of
contribution or for any other reason, from any other guarantor of the
Obligations with respect to any payment made by the Guarantor hereunder.

       5. Effect of Bankruptcy Stay. If acceleration of the time for payment or
performance of any of the Obligations is stayed upon the insolvency, bankruptcy
or reorganization of the Borrower or any other Person or otherwise, all such
amounts otherwise subject to acceleration shall nonetheless be payable by the
Guarantor under this Guarantee forthwith upon demand.

       6. Guarantor Representations and Warranties. The Guarantor confirms,
represents and warrants to the Lender that (A) the Guarantor has received true
and complete copies of the Loan Agreement and the other Loan Documents from the
Borrower, has read the contents thereof and reviewed the same with legal counsel
of his choice; (B) no representations or agreements of any kind have been made
to the Guarantor which would limit or qualify in any way the terms of this
Guarantee; (C) this Guarantee is executed at the Borrower's request and not at
the request of the Lender; (D) the Lender has made no representation to the
Guarantor as to the creditworthiness of the Borrower; and (E) the Guarantor has
established adequate means of obtaining from the Borrower on a continuing basis
information regarding the Borrower's financial condition. The Guarantor agrees
to keep adequately informed from such means of any facts, events, or
circumstances which might in any way affect the Guarantor's risks under this
Guarantee, and the Guarantor further agrees that the Lender shall have no
obligation to disclose to the Guarantor any information or documents acquired by
the Lender in the course of its relationship with the Borrower.

       7. Amendments, etc. with respect to the Obligations. The obligations of
the Guarantor under this Guarantee shall remain in full force and effect without
regard to, and shall not be released, altered, exhausted, discharged or in any
way affected by any circumstance or condition (whether or not the Borrower shall
have any knowledge or notice thereof), including without limitation (A) any
amendment or modification of or supplement to the Loan Agreement or any other
Loan Document, or any obligation, duty or agreement of the Borrower or any other
Person thereunder or in respect thereof, (B) any assignment or transfer in whole
or in part of any of the Obligations, (C) any furnishing or acceptance of any
direct or indirect security or guaranty, or any release of or non-perfection or
invalidity of any direct or indirect security or guaranty, for any of the
Obligations, (D) any waiver, consent, extension, renewal, indulgence,
settlement, compromise or other action or inaction under or in respect of the
Loan Agreement or any other

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Loan Document, or any exercise or nonexercise of any right, remedy, power or
privilege under or in respect of any such instrument (whether by operation of
law or otherwise), (E) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding with respect to the
Borrower or any other Person or any of their respective properties or creditors
or any resulting release or discharge of any Obligations, (F) the voluntary or
involuntary sale or other disposition of all or substantially all the assets of
the Borrower or any other Person, (G) the voluntary or involuntary liquidation,
dissolution or termination of the Borrower or any other Person, (H) any
invalidity or unenforceability, in whole or in part, of any term hereof or of
the Loan Agreement or any other Loan Document, or any obligation, duty or
agreement of the Borrower or any other Person thereunder or in respect thereof,
or any provision of any applicable law or regulation purporting to prohibit the
payment or performance by the Borrower or any other Person of any Obligations,
(I) any failure on the part of the Borrower or any other Person for any reason
to perform or comply with any term of the Loan Agreement or any other Loan
Document or any other agreement, or (J) any other act, omission or occurrence
whatsoever, whether similar or dissimilar to the foregoing. The Guarantor
authorizes the Borrower, each other guarantor in respect of Obligations and the
Lender at any time in its discretion, as the case may be, to alter any of the
terms of Obligations.

       8. Guarantor as Principal. If for any reason the Borrower or any other
Person is under no legal obligation to discharge any Obligations, or if any
other moneys included in Obligations have become unrecoverable from the Borrower
or any other Person by operation of law or for any other reason, including,
without limitation, the invalidity or irregularity in whole or in part of any
Obligation or of the Loan Agreement or any other Loan Document, the legal
disability of the Borrower or any other obligor in respect of Obligations, any
discharge of or limitation on the liability of the Borrower or any other person
or any limitation on the method or terms of payment under any Obligation, or of
the Loan Agreement or any other Loan Document, which may now or hereafter be
caused or imposed in any manner whatsoever (whether consensual or arising by
operation of law or otherwise), this Guarantee shall nevertheless remain in full
force and effect and shall be binding upon the Guarantor to the same extent as
if the Guarantor at all times had been the principal obligor on all Obligations.

       9. Waiver of Demand, Notice, Etc. The Guarantor hereby waives, to the
extent not prohibited by applicable law, (A) all presentments, demands for
performance, notice of nonperformance, protests, notices of protests and notices
of dishonor in connection with the Obligations or the Loan Agreement or any
other Loan Document, including but not limited to notice of additional
indebtedness constituting Obligations or the existence, creation or incurring of
any new or additional indebtedness or obligation or of any action or non-action
on the part of the Borrower, the Lender, any endorser or creditor of the
Borrower or any other Person; (B) any notice of any indulgence, extensions or
renewals granted to any obligor with respect to Obligations; (C) any requirement
of diligence or promptness in the enforcement of rights under the Loan Agreement
or any other Loan Document, or any other agreement or instrument directly or
indirectly relating thereto or to the Obligations; (D) any enforcement of any
present or future agreement or instrument relating directly or indirectly
thereto or to the Obligations; (E) notice of any of the matters referred to in
Paragraph 8 above, (F) any defense of any kind which the Guarantor may now have
with respect to his liability under this Guarantee; (G) any right to require the
Lender, as a condition of enforcement of this Guarantee, to proceed against the
Borrower or any other Person or to proceed against or exhaust any security held
by the Lender at

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any time or to pursue any other right or remedy in the Lender's power before
proceeding against the Guarantor; (H) any defense that may arise by reason of
the incapacity, lack of authority, death or disability of any other Person or
Persons or the failure of the Lender to file or enforce a claim against the
estate (in administration, bankruptcy, or any other proceeding) of any other
Person or Persons; (I) any defense based upon an election of remedies by the
Lender; (J) any defense arising by reason of any "one action" or
"anti-deficiency" law or any other law which may prevent the Lender from
bringing any action, including a claim for deficiency, against the Guarantor,
before or after the Lender's commencement of completion of any foreclosure
action, either judicially or by exercise of a power of sale; (K) any defense
based upon any lack of diligence by the Lender in the collection of any
Obligation; (L) any duty on the part of the Lender to disclose to the Guarantor
any facts the Lender may now or hereafter know about the Borrower or any other
obligor in respect of Obligations; (M) any defense arising because of an
election made by the Lender under Section 1111(b)(2) of the Federal Bankruptcy
Code; (N) any defense based on any borrowing or grant of a security interest
under Section 364 of the Federal Bankruptcy Code; (O) any defense based upon or
arising out of any defense which the Borrower or any other Person may have to
the payment or performance of Obligations (including but not limited to failure
of consideration, breach of warranty, fraud, payment, accord and satisfaction,
strict foreclosure, statute of frauds, bankruptcy, infancy, statute of
limitations, lender liability and usury) and (P) any right contemplated by
Articles 480 (second paragraph), 481 and 482 of the Argentine Commercial Code as
well as any rights and powers contemplated by Articles 1990, 1994, 2012, 2015,
2017, 2018, 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2028, 2029, 2043, 2044,
2045, 2046, 2047, 2049 and 2050 of the Argentine Civil Code. Guarantor
acknowledges and agrees that each of the waivers set forth herein on the part of
the Guarantor is made with Guarantor's full knowledge of the significance and
consequences thereof and that under the circumstances the waivers are
reasonable. If any such waiver is determined to be contrary to any applicable
law or public policy, such waiver shall be effective only to the extent
permitted by such law or public policy.

       10. Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any substantial part of its property, or otherwise, all as though
such payments had not been made.

       11. Payments. The Guarantor hereby agrees that the Obligations will be
paid to the Lender without set-off or counterclaim in U.S. Dollars at the office
of the Lender located at Westwood Executive Center, 200 Lowder Brook Road, Suite
1000, Westwood, MA 02090, United States of America, or to such other location as
the Lender shall notify the Guarantor.

       12. Representations and Warranties. The Guarantor represents and warrants
that:

             (A) Enforceability. This Guarantee constitutes a valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and except as

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enforceability may be subject to general principles of equity, whether such
principles are applied in a court of equity or at law.

              (B) No Violation. The execution, delivery and performance of this
Guarantee will not contravene any provision of law, statute, rule or regulation
to which the Guarantor is subject or any judgment, decree, franchise, order or
permit applicable to the Guarantor, or will conflict or will be inconsistent
with or will result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Guarantor pursuant to the terms of any contractual
obligation affecting the Guarantor.

              (C) Litigation. There are no actions, suits or proceedings pending
or threatened against or affecting the Guarantor before any governmental
authority, which in any one case or in the aggregate, if determined adversely to
the interests of the Guarantor, would have a material adverse effect on the
assets or properties of the Guarantor.

       13. Subordination of Claims against Borrower. Without limiting the
provisions of Paragraph 4 hereof, the Guarantor hereby irrevocably agrees that
any and all claims which the Guarantor may now or hereafter have against the
Borrower or any other guarantor of the Obligations, including, without
limitation, the benefit of any setoff or counterclaim or proof against dividend,
composition or payment by the Borrower or such other guarantor, shall be subject
and subordinate to the prior payment in full of all of the Obligations to the
Lender. After the occurrence of a Default, the Guarantor shall not claim from
the Borrower or such other guarantor, or with respect to any of their respective
properties, any sums which may be owing to the Guarantor, or have the benefit of
any setoff or counterclaim or proof against dividend, composition or payment by
the Borrower or such other guarantor, until the Obligations shall have been paid
in full. Should any payment or distribution or security or the benefit of
proceeds thereof be received by the Guarantor upon or with respect to amounts
due to him from the Borrower or any other guarantor of the Obligations after a
Default has occurred and prior to the payment in full of all Obligations, the
Guarantor will forthwith deliver the same to the Lender in precisely the form
received (except for endorsement or assignment where necessary), for application
in or towards repayment of the Obligations and, until so delivered, the same
shall be held in trust as property of the Lender. In the event of the failure of
the Guarantor to make any such endorsement or assignment, the Lender is hereby
irrevocably authorized to make the same on behalf of the Guarantor.

       14. Severability. Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

       15. Paragraph Headings. The paragraph headings used in this Guarantee are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.

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       16. No Waiver, Cumulative Remedies. The Lender shall not by any act
(except by a written instrument pursuant to Paragraph 17 hereof), delay,
indulgence, omission or otherwise, be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Lender of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Lender would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.

       17. Waivers and Amendments; Successors and Assigns. None of the terms or
provisions of this Guarantee may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Guarantor and the
Lender, provided that any provision of this Guarantee may be waived by the
Lender in a letter or agreement executed by the Lender or by telecopy from the
Lender. This Guarantee shall be binding upon the successors and permitted
assigns of the Guarantor and shall inure to the benefit of the Lender and its
successors and assigns. The Guarantor shall not assign its rights or obligations
under this Guarantee without the prior written consent of the Lender or its
successors and assigns.

       18. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; GOVERNING LAW. THE
GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT THE GUARANTOR MAY NOW OR HEREAFTER
HAVE TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING WHICH ARISES OUT OF OR BY
REASON OF THIS GUARANTEE, ANY LOAN DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

       BY THE GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTEE, THE
GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH THE GUARANTOR'S PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN
ANY ACTION, SUIT OR PROCEEDING OF ANY KIND AGAINST THE GUARANTOR WHICH ARISES
OUT OF OR BY REASON OF THIS GUARANTEE, ANY LOAN DOCUMENT, OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ADDITION TO ANY OTHER COURT IN WHICH SUCH ACTION, SUIT
OR PROCEEDING MAY BE BROUGHT, IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED BY ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR PROCEEDING IN WHICH THE
GUARANTOR SHALL HAVE BEEN SERVED WITH PROCESS IN THE MANNER HEREINAFTER
PROVIDED, AND TO THE EXTENT THAT THE GUARANTOR MAY LAWFULLY DO SO, WAIVES AND
AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN SUCH
ACTION, SUIT OR PROCEEDING ANY CLAIMS THAT THE GUARANTOR IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT THE GUARANTOR'S PROPERTY IS

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EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION, SUIT OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS
IMPROPER, AND AGREES THAT PROCESS MAY BE SERVED UPON THE GUARANTOR IN ANY SUCH
ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED BY CHAPTER 223A OF THE GENERAL
LAWS OF MASSACHUSETTS, RULE 4 OF THE MASSACHUSETTS RULES OF CIVIL PROCEDURE OR
RULE 4 OF THE FEDERAL RULES OF CIVIL PROCEDURE.

       TO THE EXTENT THAT THE GUARANTOR MAY BE ENTITLED TO THE BENEFIT OF ANY
PROVISION OF LAW REQUIRING ANY LENDER PARTY IN ANY SUIT, ACTION OR PROCEEDING
BROUGHT IN A COURT OF ARGENTINA OR OTHER JURISDICTION ARISING OUT OF OR IN
CONNECTION WITH THIS GUARANTY OR THE TRANSACTION DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY, TO POST SECURITY FOR LITIGATION COSTS OR
OTHERWISE POST A PERFORMANCE BOND OR GUARANTY ("CAUTIO JUDICATUM SOLVI" OR
"EXCEPCION DE ARRAIGO"), OR TO TAKE ANY SIMILAR ACTION, THE GUARANTOR HEREBY
IRREVOCABLY WAIVES SUCH BENEFIT, IN EACH CASE TO THE FULLEST EXTENT NOW OR
HEREAFTER PERMITTED UNDER THE LAWS OF ARGENTINA OR, AS THE CASE MAY BE, SUCH
OTHER JURISDICTION

       THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.

       19. Notices. All notices under this Guarantee shall be in writing, and
shall be delivered by hand, by a nationally recognized commercial overnight
delivery service, by first class mail or by telecopy, delivered, addressed or
transmitted, if to the Lender, at its address or telecopy number set forth in
the Loan Agreement, and if to the Guarantor, at the Guarantor's address or
telecopy number set out below the Guarantor's signature in this Guarantee. Such
notices shall be effective (A) in the case of hand deliveries, when received,
(B) in the case of an overnight delivery service, on the next Business Day after
being placed in the possession of such delivery service, with delivery charges
prepaid, (C) in the case of mail, three days after deposit in the postal system,
first class postage prepaid and (D) in the case of telecopy notices, when
electronic indication of receipt is received. Either party may change its
address and telecopy number by written notice to the other.

       20. Currency. All payments by the Guarantor hereunder shall be made in
United States Dollars ("Dollars") and payment in such currency shall be of the
essence of this Guaranty. If due to exchange controls in Argentina or
restrictions in the transfer of foreign currency outside of Argentina, the
Guarantor shall be prevented from making any payment due hereunder in Dollars,
it may (i) deliver to the Lender Global External Bonds of the Republic of
Argentina of any issue chosen by the Lender or any other public bond issued by
the Federal Government of Argentina denominated in Dollars and freely exportable
in a quantity sufficient to acquire in New York the amount of Dollars owed
hereunder, exclusive of any taxes, commissions, fees or other costs, or (ii) pay
all amounts due hereunder in Dollars through any other legal mechanism for the

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acquisition of Dollars in any exchange market. Any such payment will only be
considered to be effected upon the receipt by the Lender Parties of the Dollars
due hereunder.

       21. Supercedes Prior Agreement. This Agreement supercedes the provisions
of that certain Interim Guarantee dated October 4, 2001 between the parties
hereto, which prior agreement shall be of no further force or effect. The
undersigned hereby acknowledges that all amounts guaranteed under such Interim
Guarantee shall remain guaranteed pursuant hereto.

       IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Guarantee as of the date first above written.

                                     __________________________________
                                     Carlos Mackinlay

                                     Address:

                                     Av. Figueroa Alcota 3478,
                                     (1425) Buenos Aires
                                     Argentina

                                     Telecopy No.: ____________________

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