FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment to Loan Agreement (this Agreement) is entered into on
October 31, 1995, with an effective date as of September 26, 1995, by and
between NationsBank, N.A., a national banking association (Bank), Comarco Inc.,
a California corporation, (Borrower) and Comarco Wireless Technologies, Inc., a
Delaware corporation, International Business Services, Inc., a District of
Columbia corporation, Decisions and Designs, Inc., a Virginia corporation and
LCTI, Inc., a Maryland Corporation (individually and collectively the
Guarantors).
Recitals
A. The Borrower, the Guarantors and the Bank entered into a Loan Agreement
(the Original Agreement) dated September 26, 1994.
B. The Borrower, the Guarantors and the Bank now wish to further amend the
Original Agreement to extend the maturity date, to modify certain covenants, and
for certain other matters, as set forth in this Agreement.
Agreements
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, intending to be legally bound, hereby agree as
follows:
Section 1. Definitions Used in this Agreement
(a) In this Agreement, the term Existing Agreement means the Original
Agreement.
(b) In this Agreement, the term Loan Agreement means the Existing
Agreement.
(c) All capitalized terms used in this Agreement which are not otherwise
defined in this Agreement shall have the meanings assigned to them in the Loan
Agreement, including those definitions added to the Loan Agreement by this
Agreement.
Sections 2. Representations and Warranties
In order to induce the Bank to enter into this Agreement, the Borrower and
Guarantors make the following representations and warranties and:
(a) Existing Agreement Representations. The representations and warranties
contained in the Existing Agreement remain true and correct in all material
respects, except for representations which by their nature referred to facts at
the time the Existing Agreement was executed and which would normally be
expected to change over time.
(b) Due Authorization, Execution, Etc. This Agreement has been duly
authorized, executed and delivered by the Borrower and Guarantors and
constitutes the valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms.
(c) No Defaults. There exists under the Loan Agreement no Event of Default
and no event, fact or circumstance, which, with notice or the passage of time,
or both, will become an Event of Default.
(d) No Material Adverse Change. There has occurred no material adverse
change in the operations, financial condition, or business prospects of the
Borrower since the delivery to the Bank of the Borrower's most recent quarterly
financial statements.
Section 3. Conditions Precedent
The matters set forth in Section 4 and 5 shall be subject to the satisfaction,
not later than the close of business on October 31, 1995, of the following
conditions precedent:
(a) Corporate Documents. The Borrower shall provide the following corporate
documents to the Bank:
(1) Articles and Bylaws. A certificate of the Borrower's secretary or
assistant secretary dated not more than 2 days before delivery to the effect
that the Borrower's articles of incorporation and bylaws have not been amended
since they were last supplied to the Bank in connection with the execution and
delivery of the Existing Agreement.
(2) Bank's Satisfaction. The documents delivered to the Bank pursuant to
paragraphs (1) and (2) shall be satisfactory in form and substance to the Bank.
(b) Notes. The Borrower shall execute and deliver to the Bank an amended
Guidance Line of Credit Note, amended Master Line of Credit note and all
Acquisition Term notes, collectively.
(c) Opinion of Counsel. The Borrower shall provide to the Bank a favorable
opinion of Borrower's counsel concerning the due authorization, execution,
delivery, validity and binding effect of this Agreement and the other loan
Documents executed and delivered pursuant to this Agreement.
Section 4. Amendments to Loan Agreement
Upon the satisfaction, but not later than the outside date set forth in Section
3, of the conditions precedent set forth in Section 3, the Loan Agreement shall
be amended as follows; if the conditions precedent set forth in Section 3 are
not so satisfied, the following amendments shall not become effective:
(a) Amendment to Article I of Loan Agreement. The following definitions are
added (if they are not already defined) or revised (if they are already defined)
to read as follows:
Note means that certain First Amended and Restated Master Line of
Credit Note dated as of October 31, 1995 with an effective date as of September
26, 1995, that First Amended and Restated Guidance Line of Credit Note dated as
of October 31, 1995 with an effective date as of September 26, 1995 and all
Acquisition Term Notes, collectively, all dated as of October 31, 1995 with an
effective date as of September 26, 1995. The term also shall include any other
promissory notes hereafter executed by Borrower in favor of Bank and any and all
renewals, extension or rearrangements thereof.
(b) Amendment to Article VII of Loan Agreement. The borrower shall at all times
maintain Tangible Net Worth of not less than Nine Million Thousand Dollars
($9,000,000.00). For purposes of this Article VII, Tangible Net Worth shall mean
all capital stock, paid in capital and retained earnings less all treasury
stock, amounts due from officers, directors, stockholders and members of their
immediate families, amounts due from affiliates, investments in non-marketable
securities or affiliated companies, leasehold improvements, goodwill,
non-compete agreements, capitalized organization and development costs,
capitalized expenses, loan costs, patents, trademarks, copy rights, franchises,
licenses, and other intangible assets.
Section 5. Reaffirmation, Confirmation and Miscellaneous
(a) Reaffirmation by Borrower. As modified by the Agreement, the Borrower
reaffirms all of its obligations under the Loan Agreement and the other Loan
Documents, and confirm that they remain in full force and effect and otherwise
unmodified.
(b) Fees and Expenses. Upon execution of this Agreement, the Borrower shall pay
all out-of-pocket expenses incurred by the Bank in connection with this
Agreement and the transactions contemplated hereunder, including the expenses
and reasonable fees of Bank's legal counsel.
(c) Defenses. The Borrower confirms that is has no defenses against the Bank or
any of its obligations under the loan Agreement or the other loan Documents. The
Borrower confirms that it has no claims against the Bank for any reason
whatsoever arising our of the Loan, or the relationship between the parties from
making of the loan and subsequent transactions relating to the loan.
(d) No Waivers. The execution and delivery of this Agreement by the Bank shall
not constitute a waiver by the Bank of any Event of Default under the Loan
Agreement or a waiver of the Bank's right to take action as it deems appropriate
under the loan Agreement or other loan Documents in response to any extant Event
of Default or Default.
(e) Approvals of Guarantors. The approval of the Guarantors is set forth
below.
In witness whereof, the parties have executed this Agreement on the date first
written above.
Attest: Comarco, Inc.
[Corporate Seal]
By: By:
-------------------------------- ---------------------------------
Xxxxxx X. Xxxxx
Chief Financial Officer
Attest: NationsBank, N.A.
By: By:
--------------------------------- ---------------------------------
Xxxxxx X. Xxxxx
Vice President
ACKNOWLEDGMENT AND CONFIRMATION BY GUARANTORS
The Guarantors hereby reaffirm their obligations under their existing joint and
several unconditional guaranty of the payment of the Loan and all other
obligations, and confirm that the Borrower's execution and delivery of this
Agreement in no way impairs or limits their obligations under such existing
guaranty.
[Corporate Seal] COMARCO WIRELESS TECHNOLOGIES, INC.
Attest:
By:
------------------------------------ ---------------------------------
Xxxxxx X. Xxxxx
Chief Financial Officer
[Corporate Seal] INTERNATIONAL BUSINESS SERVICES, INC.
Attest:
By:
------------------------------------ ---------------------------------
Xxxxxx X. Xxxxx
Chief Financial Officer
[Corporate Seal] DECISIONS AND DESIGNS, INC.
Attest:
By:
------------------------------------ ---------------------------------
Xxxxxx X. Xxxxx
Chief Financial Officer
[Corporate Seal] LCTI, INC.
Attest:
By:
------------------------------------ ---------------------------------
Xxxxxx X. Xxxxx
Chief Financial Officer
