Exhibit 10.28
SIXTH AMENDMENT TO LOAN AGREEMENT
THIS SIXTH AMENDMENT TO LOAN AGREEMENT (this "Agreement") made this 30th
day of June, 2000 by and among (i) COMARCO, INC., a California corporation (the
"Borrower"), (ii) COMARCO WIRELESS TECHNOLOGIES, INC., a Delaware corporation,
(iii) COMARCO WIRELESS INTERNATIONAL, INC. ("CWI"), a Delaware corporation
(individually called a "Guarantor" and collectively, the "Guarantors") and BANK
OF AMERICA, N.A., a national banking association, its successors and assigns
(formerly known as NATIONSBANK, N.A.) (the "Lender" or the "Bank").
RECITALS
A. The Borrower, the Original Guarantors and the Lender have entered into
that certain Loan Agreement dated September 26, 1994 (the "Original Loan
Agreement"), which Original Loan Agreement was amended by that certain First
Amendment to Loan Agreement dated September 26, 1995, by and among the Borrower,
the Original Guarantors and the Lender, and which Original Loan Agreement was
further amended by that certain Second Amendment to Loan Agreement dated August
30, 1996 by and among the Borrower, the Original Guarantors, MTTCI, CSI and the
Lender. Comarco Systems and CWI were added as guarantors to the Original Loan
Agreement pursuant to that certain Third Amendment to Loan Agreement dated as of
August 15, 1997 by and among the Borrower, the Guarantors and the Lender. The
Original Loan Agreement was amended by that certain Fourth Amendment dated
August 21, 1998 (the "Fourth Amendment"), by and among the Borrower, the
Guarantors and the Lender. The Original Loan Agreement was again amended by that
certain Fifth Amendment dated October
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30, 1998 by and among the Borrower, the Guarantors and the Lender. (The Original
Loan Agreement, as thereafter amended from time to time, is hereafter called the
"Loan Agreement").
B. The Borrower and the Guarantors have requested that the Lender extend
the maturity date of the Master Line of Credit for one year (1) and modify
certain provisions of the Loan Agreement and release certain of the Guarantors
from any liability under their guaranties, and the Lender has agreed subject to
the terms of this Agreement.
C. All capitalized terms used herein and not otherwise defined shall have
the meanings given to such terms in the Loan Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Guarantors and
the Lender hereby agree as follows:
1. Recitals. The parties hereto acknowledge and agree that the above
Recitals are true and correct in all respect and that the same are incorporated
herein and made a part hereof by reference.
2. Definitions. The definition of "Master Line of Credit Expiration Date"
in Article I of the Loan Agreement is amended and restated in its entirety as
follows
"Master Line of Credit Commitment Expiration Date" shall mean July 30,
2001.
3. Release of Certain Guarantors. Lender hereby releases INTERNATIONAL
BUSINESS SERVICES, INC., a District of Columbia corporation, DECISIONS AND
DESIGNS, INC, a Virginia corporation, LCTI, INC., a Maryland corporation,
COMARCO SYSTEMS, INC., COMARCO STAFFING, INC., MANUFACTURING TECHNOLOGY TRAINING
CENTER, INC., all California corporations (the "Released Parties") from any and
all obligations, or liabilities of any nature whatsoever, at law or in equity or
by statute, arising
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out of the Guaranties previously delivered by the Released Parties to the Lender
in connection with the Original Loan.
4. Financial Covenants. From and after the effective date hereof,
paragraphs 3 and 5 of Article VII of the Loan Agreement are hereby amended and
restated in their entirety as follows:
3. Maximum Total Liabilities to Tangible Net Worth. The Borrower shall
maintain a ratio of Total Liabilities to Tangible Net Worth of not greater
than 2.0 to 1.0, as measured on the last day of each fiscal quarter
throughout the term of this Agreement. For purposes of this Article VII,
"Total Liabilities" shall mean all liabilities of the Borrower, including,
without limitation, Capitalized Leases and "Tangible Net Worth" shall mean
all capital stock, paid in capital and retained earnings of the Borrower,
less all treasury stock, amounts due from officers, directors, stockholders
of the Borrower, including any such amounts due from members of any of
their immediate families, amounts due from any affiliates of the Borrower,
investments in non-marketable securities or affiliated companies, leasehold
improvements, goodwill, non-compete agreements, capitalized organization
and development expenses, loan costs, patents, trademarks, copyrights,
franchise, licenses, net assets available for sale and other intangible
assets.
5. Fixed Charge Coverage Ratio. The Borrower shall maintain a Fixed
Charge Coverage Ratio of not less than 1.1 to 1.0, calculated and measured
quarterly (computed on a cumulative quarter basis beginning with the
quarter ending 4/30/2000). For purposes of this Article VII, the "Fixed
Charge Coverage Ratio" shall be the quotient of net income after taxes
(excluding all gains on the sale of assets, securities gains, asset
write-ups and other extraordinary gains), plus Depreciation and
Amortization, divided by Current Maturities of Long Term Debt, including
Capitalized Leases, plus Scheduled Principal Payments on Subordinated Debt,
plus Capital Expenditures, plus stock repurchases, less cash received from
options exercised by the Borrower. The above calculation shall be based on
continuing operations only and exclude net income (losses) from
discontinued operations.
4. Conditions Precedent. This Agreement shall become effective on the date
the Lender receives the following documents, each of which shall be satisfactory
in form and substance to the Lender:
(a) The "Fifth Replacement Master Line of Credit Note (as hereinafter
defined);
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(b) Proof that the Borrower has paid all costs and expenses to the
Lender in connection with this Agreement, including but not limited to all
the Lender's attorneys fees; and
(c) Such other information, instruments, opinions, documents,
certificates and reports as the Lender may deem necessary.
5. The Master Line of Credit Note. From and after the date hereto, all
references in the Loan Agreement to the "Master Line of Credit Note" shall mean
that certain Fifth Amended and Restated Master Line of Credit Note of even date
herewith (the "Fifth Replacement Master Line of Credit Note") from the Borrower
in favor of the Lender in the maximum principal amount of Ten Million Dollars
($10,000,000) in the form of Exhibit B-1 attached hereto. The Fifth Replacement
Master Line of Credit Note amends and restates in its entirety that certain
Fourth Amended and Restated Master Line of Credit Note dated August 21, 1998
(the "Fourth Replacement Master Line of Credit Note") from the Borrower in favor
of the Lender in the maximum principal amount of Ten Million Dollars
($10,000,000). 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 Fourth Replacement Master Line of Credit Note. The Fifth
Replacement Master Line of Credit Note shall not operate as a novation of any of
the sums due or owing under the Fourth Master Line of Credit Note or nullify,
discharge, or release any sums due or owing under the Fourth Master Line of
Credit Note or the continuing contractual relationship of the parties hereto in
accordance with the provisions of this Agreement.
6. Replacement Exhibit. Exhibit "B-1" to the Loan Agreement is being
replaced in its entirety with Exhibit "B-1" attached hereto. The Borrower shall
execute and deliver to the Lender on the date hereof the Fifth Replacement
Master Line of Credit Note in substitution for and not satisfaction of, the
Fourth Replacement Master Line of Credit Note, and the Fifth
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Replacement Master Note shall be the "Note" or "Notes" for all purposes of the
Loan Documents.
7. Counterparts. This Agreement may be executed in any number of duplicate
originals or counterparts, each of which duplicate original or counterpart shall
be deemed to be an original and all taken together shall constitute one and the
same instrument.
8. Loan Documents; Governing Law; Etc. This Agreement is one of the Loan
Documents defined in the Loan Agreement and shall be governed and construed in
accordance with the laws of the Commonwealth of Virginia. The headings and
captions in this Agreement are for the convenience of the parties only and are
not a part of this Agreement.
9. Acknowledgments. The Borrower and the Guarantors hereby confirm to the
Lender the enforceability and validity of each of the Loan Documents. In
addition, the Borrower and each of the Guarantors hereby agree to the execution
and delivery of this Agreement and the terms and provisions, covenants or
agreements contained in this Agreement shall not in any manner release, impair,
lessen, modify, waive or otherwise limit the liability and obligations of the
Borrower or any of the Guarantors under the terms of any of the Loan Documents,
except as otherwise specifically set forth in this Agreement. The Borrower and
each Guarantor hereby issue, remake, ratify and confirm the representations,
warranties and covenants contained in the Loan Documents.
10. Modifications. This Agreement may not be supplemented, changed, waived,
discharged, terminated, modified or amended, except by written instrument
executed by the parties.
[SIGNATURES ARE ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered under seal by their duly authorized representative as of the date
and year first written above.
THE BORROWER:
WITNESS/ATTEST COMARCO, INC.
______________________ By: _____________________________(SEAL)
Name:
Title:
THE GUARANTORS:
WITNESS/ATTEST: COMARCO WIRELESS TECHNOLOGIES, INC.
______________________ By: _____________________________(SEAL)
Name:
Title:
WITNESS/ATTEST: COMARCO WIRELESS INTERNATIONAL, INC.
______________________ By: _____________________________(SEAL)
Name:
Title:
THE LENDER:
WITNESS: BANK OF AMERICA, N.A.
______________________ By: _____________________________(SEAL)
Elaine T. Eaton
Senior Vice President
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