FOURTH AMENDED AND RESTATED MASTER LINE OF CREDIT NOTE
THIS FOURTH AMENDED AND RESTATED MASTER LINE OF CREDIT NOTE (this
"Agreement") is entered into as of this 21st day of August 1998, by COMARCO,
INC., a corporation organized under the laws of the State of California (the
"Borrower") in favor of NATIONSBANK, N.A., a national banking association, its
successors and assigns (the "Lender").
RECITALS
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A. The Lender made a secured revolving loan (the "Master Line of
Credit") to the Borrower in the original maximum principal amount of Eight
Million Dollars ($8,000,000), which Master Line of Credit is evidenced by that
certain Master Line of Credit Note (the "Original Master Line of Credit Note")
dated September 26, 1994 from the Borrower to the Lender in the maximum
principal amount of Eight Million Dollars ($8,000,000), as amended and restated
in its entirety pursuant to the provisions of that certain Amended and Restated
Master Line of Credit Note dated October 31, 1995 from the Borrower in favor of
the Lender in the maximum principal amount of Eight Million Dollars ($8,000,000)
(the "First Replacement Master Line of Credit Note"), and as further amended and
restated in its entirety pursuant to the provisions of that certain Second
Amended and Restated Master Line of Credit Note dated August 30, 1996 from the
Borrower in favor of the Lender in the maximum principal amount of Eight Million
Dollars ($8,000,000) (the "Second Replacement Master Line of Credit Note"), and
which Second Replacement Master Line of Credit Note was further amended and
restated in its entirety pursuant to the provisions of that certain Third
Amended and Restated Master Line of Credit Note date August 15, 1997 from the
Borrower in favor of the Lender in the maximum principal amount of Eight Million
Dollars ($8,000,000) (the "Third Replacement Master Line of Credit Note").
B. The Master Line of Credit is governed by the provisions of that
certain Loan Agreement of even date with the Original Master Line of Credit Note
by and among the Borrower, the Guarantors named therein and the Lender (the
"Original Loan Agreement"). The Original Loan Agreement was amended by that
certain (i) First Amendment to Loan Agreement dated September 26, 1995 by and
among the Borrower, the Guarantors named therein and the Lender, (ii) Second
Amendment to Loan Agreement dated August 30, 1996, by and among the Borrower,
the guarantors named therein and the Lender, and (iii) Third Amendment to Loan
Agreement dated August 15, 1997 by and among the Borrower, the guarantors named
therein and the Lender (the Original Loan Agreement as amended from time to time
is hereafter called the "Loan Agreement"). All capitalized terms used herein and
not otherwise defined herein shall have the meanings given to such terms in the
Loan Agreement.
C. The Borrower has requested that the Lender increase the maximum
principal amount of the Master Line of Credit and the Lender has agreed to on
the condition, among others, that the Borrower execute and deliver this
Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Lender and the Borrower covenant and agree as follows:
1. The Recitals. The parties hereto acknowledge and agree that the
above Recitals are true and correct in all respects and that the same are
incorporated herein and made a part hereof by reference.
2. The Master Line of Credit Note. The Third Replacement Master Line of
Credit Note is hereby amended and restated in its entirety as follows:
MASTER LINE OF CREDIT NOTE
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$10,000,000 McLean, Virginia
FOR VALUE RECEIVED, COMARCO, INC., a corporation organized under
the laws of the State of California (the "Borrower")promises to pay to
the order of NATIONSBANK, N.A., a national banking association, its
successors and assigns (the "Lender"), the principal sum of TEN MILLION
DOLLARS ($10,000,000) (the "Principal Sum"), or so much thereof as has
been or may be advanced or readvanced to or for the account of the
Borrower, together with interest thereon at the rate or rates
hereinafter provided, in accordance with the following:
1. Interest. Except as otherwise expressly set forth below,
amounts outstanding hereunder shall bear interest at the Prime Rate or
the Floating LIBOR Rate. For purposes hereof, the "Prime Rate" means
the fluctuating prime rate of interest established and declared by the
Lender from time to time. The Prime Rate does not necessarily represent
the lowest rate of interest charged by the Lender to its borrowers. For
purposes hereof, the "Floating LIBOR Rate" shall mean a fluctuating
rate of interest equal to the one month rate of interest (rounded
upwards, if necessary to the nearest 1/100 of 1%) appearing on Telerate
Page 3750 (or any successor page) as the one month London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) on the second preceding business day as adjusted from
time to time in Lender's sole discretion for then applicable reserve
requirements, deposit insurance assessment rates and other regulatory
costs. If for any reason such rate is not available, the term "LIBOR
Rate" shall mean the fluctuating rate of interest equal to the one
month rate of interest (rounded upwards, if necessary to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the one month
London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) on the second preceding business day, as
adjusted from time to time in Lender's sole discretion for then
applicable reserve requirements, deposit insurance assessment rates and
other regulatory costs; provided, however, if more than one rate is
specified on Reuters Screen LIBO page, the applicable rate shall be the
arithmetic mean of all such rates. "Telerate Page 3750" means the
British Bankers Association Libor Rates (determined as of 11:00 a.m.
London time) that are published by Dow Xxxxx Telerate, Inc.
So long as no event of default or any act, event or condition
which, with notice or the passage of time or both, would constitute an
event of default under any Loan Document has occurred and is
continuing, the Borrower shall have the right to elect that specified
amounts advanced under this Note, bear interest for specified periods
(each being herein referred to as a "LIBOR Rate Funding Period"), at
the LIBOR Rate, plus one and one half percent (1.50%)(the "Adjusted
LIBOR Rate"). Election by the Borrower of a LIBOR Rate interest rate as
herein provided shall be made in a writing delivered to the Lender not
less than three (3) Banking Days prior to the date of on which the
LIBOR Rate is to begin, and shall specify (1) the Banking Day on which
the LIBOR Rate is to be effective and the period for which the LIBOR
Rate shall be applicable (which shall be only 30, 60, 90 or 180 days
and the expiration of which may not be later than the "Maturity Date");
and (2) the principal amount of this Note which shall bear interest at
the Adjusted LIBOR Rate (each being herein referred to as a "LIBOR Rate
Funding Segment"). The Borrower may not revoke any such election
without the Lender's written consent. Upon the expiration of an
applicable LIBOR Rate Funding Period, unless notice of LIBOR Rate
election from the Borrower, the rate of interest applicable to any
LIBOR Rate Funding Segment (after the expiration thereof) shall
automatically convert at the end of the applicable LIBOR Rate Funding
Period, to the Prime Rate.
For purposes hereof, the "LIBOR Rate" shall mean the per annum rate of
interest, as determined by the Lender in its sole discretion, at which
deposits in United States Dollars in an amount approximately equal to
the amount for which the rate is to be fixed and with maturities
comparable to the interest period selected by the Borrower, to be the
averages of rates per annum for 11:00 a.m. (London, time), two (2)
Banking Days prior to the first day of such LIBOR Rate Funding Period
for delivery on the first such day of such LIBOR Rate Funding Period,
in amounts comparable to the applicable LIBOR Rate Funding Segment, as
adjusted for Federal Reserve Board reserve requirements and similar
assessments, if any, imposed upon the Lender.
All interest payable under the terms of this Note shall be
calculated on the basis of a 360-day year and the actual number of days
elapsed.
2. Payments and Maturity. The unpaid Principal Sum, together
with interest thereon at the rate or rates provided above, shall be
payable as follows:
(a) Except as otherwise provided in this Note, this
Note shall be payable in successive monthly installments of accrued and
unpaid interest only, on the last day of each month commencing July 31,
1998, and on the last day of each month thereafter to maturity;
(b) Unless sooner paid, the unpaid Principal Sum,
together with all accrued and unpaid interest thereon shall be due and
payable in full on June 30, 2000.
The fact that the balance hereunder may be reduced to
zero from time to time pursuant to the Loan Agreement will not affect
the continuing validity of this Note or the Loan Agreement, and the
balance may be increased to the Principal Sum after any such reduction
to zero.
3. Default Interest. Upon the occurrence of an Event of
Default (as hereinafter defined), the unpaid Principal Sum shall bear
interest thereafter at a rate two percent (2%) per annum in excess of
the then highest current rate or rates of interest hereunder until such
Event of Default is cured.
4. Late Charges. If the Borrower shall fail to make any
payment under the terms of this Note within five (5) days after the
date such payment is due, the Borrower shall pay to the Lender on
demand a late charge equal to five percent (5%) of such payment.
5. Application and Place of Payments. All payments hereunder
shall be applied first to the payment of any late charges and costs of
collections then due hereunder, second to the payment of accrued and
unpaid interest then due hereunder, and the remainder, if any, shall be
applied to the unpaid Principal Sum. Notwithstanding the foregoing,
accrued and unpaid interest on amounts outstanding hereunder bearing
interest on a LIBOR Rate basis shall be due and payable on the last day
of the applicable LIBOR Rate Funding Period (as herein defined) and if
such LIBOR Rate Funding Period is longer than ninety (90) days, on the
ninetieth (90th) day of each LIBOR Rate Funding Period. All payments on
account of this Note shall be paid in lawful money of the United States
of America in immediately available funds on or before 11:00 a.m.
(Washington, D.C. time) at its principal office in McLean, Virginia or
at such other times and places as the Lender may at any time and from
time to time designate in writing to the Borrower.
6. Prepayment. The Borrower may prepay amounts accruing
interest based on the Prime Rate, in whole or in part, at any time
without notice to the Lender without premium or penalty. No prepayment
of any other amounts outstanding hereunder shall be permitted without
the prior written consent of the Lender.
7. Loan Agreement and Other Loan Documents. This Note is the
"Master Line of Credit Note" described in a Loan Agreement dated as of
September 26, 1994 by and among the Borrower and Comarco Wireless
Technologies, Inc., International Business Services, Inc., Decisions
and Designs, Inc., LCTI, Inc. (the "Original Guarantors") and the
Lender, as amended by (i) that certain First Amendment to Loan
Agreement dated September 26, 1995, by and among the Borrower, the
Original Guarantors and the Lender, (ii) that certain Second Amendment
to Loan Agreement dated August 30, 1996, by and among the Borrower, the
Original Guarantors, Manufacturing Training Technology, Center, Inc.
("MTTCI"), Comarco Staffing, Inc. (formerly known as CoSource
Solutions, Inc.) ("CSI") and the Lender, (iii) that certain Third
Amendment to Loan Agreement dated as of August 15, 1997 by and among
the Borrower, the Original Guarantors, MTTCI, CSI, Comarco Systems,
Inc., Comarco Wireless International, Inc. and the Lender, and (iv)
that certain Fourth Amendment to Loan Agreement of even date herewith
by and among the Borrower, the Original Guarantors, MTTCI, CSI, Comarco
Systems, Inc., Comarco Wireless International, Inc. and the Lender (as
amended, modified, restated, substituted, extended and renewed at any
time and from time to time, the "Loan Agreement"). The indebtedness
evidenced by this Note is included within the meaning of the term
"Obligations" as defined in the Security Agreement. This Note
increases, amends and restates in its entirety that certain Third
Amended and Restated Master Line of Credit Note dated August 15, 1997
in the maximum principal amount of Eight Million Dollars ($8,000,000)
from the Borrower in favor of the Lender. The term "Loan Documents" as
used in this Note shall mean collectively this Note, any Acquisition
Term Note, the Loan Agreement and any other instrument, agreement, or
document previously, simultaneously, or hereafter executed and
delivered by the Borrower, the Guarantors and/or any other person,
singularly or jointly with any other person, evidencing, securing,
guaranteeing, or in connection with the Principal Sum, this Note and/or
the Loan Agreement. All capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in the Loan
Agreement.
8. Events of Default. The occurrence of any one or more of the
following events shall constitute an event of default (individually, an
"Event of Default" and collectively, the "Events of Default") under the
terms of this Note:
(a) The failure of the Borrower to pay to the Lender
within five (5) days of when due any and all amounts payable by the
Borrower to the Lender under the terms of this Note; or
(b) The occurrence of an event of default (as defined
therein) under the terms and conditions of any of the other Loan
Documents, including, but not limited to the Loan Agreement.
9. Remedies. Upon the occurrence of an Event of Default, at
the option of the Lender, all amounts payable by the Borrower to the
Lender under the terms of this Note shall immediately become due and
payable by the Borrower to the Lender without notice to the Borrower,
or any other person, and the Lender shall have all of the rights,
powers, and remedies available under the terms of this Note, any of the
other Loan Documents and all applicable laws. The Borrower, the
Guarantors and all endorsers, guarantors, and other parties who may now
or in the future be primarily or secondarily liable for the payment of
the indebtedness evidenced by this Note hereby severally waive
presentment, protest and demand, notice of protest, notice of demand
and of dishonor and non-payment of this Note and expressly agree that
this Note or any payment hereunder may be extended from time to time
without in any way affecting the liability of the Borrower, and any
guarantors and endorsers.
10. Expenses. The Borrower promises to pay to the Lender on
demand by the Lender all costs and expenses incurred by the Lender in
connection with the collection and enforcement of this Note, including,
without limitation, reasonable attorneys' fees and expenses and all
court costs.
11. Notices. Any notice, request, or demand to or upon the
Borrower or the Lender shall be deemed to have been properly given or
made when delivered in accordance with the Loan Agreement.
12. Miscellaneous. Each right, power, and remedy of the Lender
as provided for in this Note or any of the other Loan Documents, or now
or hereafter existing under any applicable law or otherwise shall be
cumulative and concurrent and shall be in addition to every other
right, power, or remedy provided for in this Note or any of the other
Loan Documents or now or hereafter existing under any applicable law,
and the exercise or beginning of the exercise by the Lender of any one
or more of such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such other
rights, powers, or remedies. No failure or delay by the Lender to
insist upon the strict performance of any term, condition, covenant, or
agreement of this Note or any of the other Loan Documents, or to
exercise any right, power, or remedy consequent upon a breach thereof,
shall constitute a waiver of any such term, condition, covenant, or
agreement or of any such breach, or preclude the Lender from exercising
any such right, power, or remedy at a later time or times. By accepting
payment after the due date of any amount payable under the terms of
this Note, the Lender shall not be deemed to waive the right either to
require prompt payment when due of all other amounts payable under the
terms of this Note or to declare an Event of Default for the failure to
effect such prompt payment of any such other amount. No course of
dealing or conduct shall be effective to amend, modify, waive, release,
or change any provisions of this Note.
13. Partial Invalidity. In the event any provision of this
Note (or any part of any provision) is held by a court of competent
jurisdiction to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any
other provision (or remaining part of the affected provision) of this
Note; but this Note shall be construed as if such invalid, illegal, or
unenforceable provision (or part thereof) had not been contained in
this Note, but only to the extent it is invalid, illegal, or
unenforceable.
14. Captions. The captions herein set forth are for
convenience only and shall not be deemed to define, limit, or describe
the scope or intent of this Note.
15. Applicable Law. The Borrower acknowledges and agrees that
this Note shall be governed by the laws of the Commonwealth of
Virginia, even though for the convenience and at the request of the
Borrower, this Note may be executed elsewhere.
16. Arbitration. Any controversy or claim between or among the
parties hereto including but not limited to those arising out of or
relating to this Agreement or any of the other Loan Documents ,
including any claim based on or arising from any alleged tort, shall be
determined by binding arbitration in accordance with the Federal
Arbitration Act (or if not applicable, the applicable state law), the
rules of practice and procedure for the arbitration of commercial
disputes of Judicial Arbitration and Mediation Services, Inc.
(J.A.M.S.) and the "special rules" set forth below. In the event of any
inconsistency, the special rules shall control. Judgment upon any
arbitration award may be entered in any court having jurisdiction. Any
party to this agreement may bring an action, including a summary or
expedited proceeding, to compel arbitration of any controversy or claim
to which this Agreement applies in any court having jurisdiction over
such action.
(a) Special Rules. The arbitration shall be conducted
in the city of the Borrower's domicile at time of this Agreement's
execution and administered by J.A.M.S. who will appoint an arbitrator;
if J.A.M.S. is unable or legally precluded from administering the
arbitration, then the American Arbitration Association will serve. All
arbitration hearings will be commenced within 90 days of the demand for
arbitration; further, the arbitrator shall only, upon a showing of
cause, be permitted to extend the commencement of such hearing for up
to an additional 60 days.
(b) Reservation of Rights. Nothing in this Agreement
shall be deemed to (i) limit the applicability of any otherwise
applicable statutes of limitation or repose and any waivers contained
in this Note or (ii) be a waiver by the Lender of the protection
afforded to it by 12 U.S.C. Section 91 or any substantially equivalent
state law; or (iii) limit the right of the Lender (a) to exercise self
help remedies such as (but not limited to) setoff, or (b) to foreclose
against any real or personal property collateral, or (c) to obtain from
a court provisional or ancillary remedies such as (but not limited to)
injunctive relief, writ of possession or the appointment of a receiver.
Lender may exercise such self help rights, foreclosure upon such
property, or obtain such provisional or ancillary remedies before,
during or after the pendency of any arbitration proceeding brought
pursuant to this Agreement. Neither the exercise of self help remedies
nor the institution or maintenance of an action for foreclosure or
provisional or ancillary remedies shall constitute a waiver of the
right of any party, including the claimant in any such action, to
arbitrate the merits of the controversy or claim occasioning resort to
such remedies.
3. Governing Law, Etc. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia and shall
be deemed to be an instrument under seal pursuant to said law. The headings used
in this Agreement are for the convenience of the parties and shall not be used
to interpret or construe the provisions hereof.
4. Not A Novation. It is expressly understood and agreed that the
indebtedness evidenced by the Third Replacement Master Line of Credit Note has
not been extinguished or discharged hereby. The Borrower and the Lender agree
that the execution of this Agreement is not intended and shall not cause or
result in a novation with regard to the Third Replacement Master Line of Credit
Note.
WITNESS the signature and seal of the Borrower by its duly authorized
officer as of the day and year first above written.
WITNESS/ATTEST: COMARCO, INC.
______________________________ By:_____________________________(SEAL)
Name:
Title:
