Exhibit 10.1
THIRD AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
     THIS THIRD AMENDMENT to Loan and Security Agreement (this “Amendment”) is
entered into this 9th day of February 2011, by and between Silicon Valley Bank
(“Bank”) and Comarco, Inc., a California corporation and Comarco Wireless
Technologies, Inc., a Delaware corporation (jointly and severally, “Borrower”)
whose address is 25541 Commercentre Drive, Lake Forest, CA 92630.
Recitals
     A. Bank and Borrower have entered into that certain Loan and Security
Agreement dated as of February 12, 2009 (as the same may from time to time be
amended, modified, supplemented or restated, the “Loan Agreement”).
     B. Bank has extended credit to Borrower for the purposes permitted in the
Loan Agreement.
     C. Borrower has requested that Bank amend the Loan Agreement, as herein set
forth, and Bank has agreed to the same, but only to the extent, in accordance
with the terms, subject to the conditions and in reliance upon the
representations and warranties set forth herein.
Agreement
     Now, Therefore, in consideration of the foregoing recitals and other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
     1. Definitions. Capitalized terms used but not defined in this Amendment
shall have the meanings given to them in the Loan Agreement.
     2. Amendments to Loan Agreement. The Loan Agreement is amended as follows,
effective on the date hereof (except where a different effective date is
specified below):
          2.1 Modification Regarding Interest Rates. Section 2.3(a) of the Loan
Agreement is hereby amended in its entirety to read as follows:
(a) Interest Rate; Advances. Subject to Section 2.3(b), the principal amount
outstanding under the Revolving Line shall accrue interest at a per annum rate
equal to three and one-quarter percentage points (3.25%) above the Prime Rate,
provided that the interest rate in effect on any day

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shall not be less than 6.5% per annum, which interest shall be payable monthly.
          2.2 Modification Regarding Collateral Monitoring Fee. Section 2.4(b)
of the Loan Agreement is hereby amended in its entirety to read as follows:
(b) Collateral Monitoring Fee. A monthly collateral monitoring fee of $1,000,
payable in arrears on the last day of each month (prorated for any partial month
at the beginning and upon termination of this Agreement); and
          2.3 Modification Regarding Interim Projections. Section 6.2(a)(vi) of
the Loan Agreement is hereby amended in its entirety to read as follows:

  (vi)   within thirty (30) days prior to the end of each fiscal year of
Borrower, (A) annual operating forecasts (including income statements, balance
sheets and cash flow statements, by month) for the upcoming fiscal year of
Borrower, and (B) annual financial projections for the following fiscal year (on
a quarterly basis) as approved by Borrower’s board of directors, together with
any related business forecasts used in the preparation of such annual financial
projections; Borrower shall provide to Bank, upon completion thereof, any
interim updates of with respect to any of the foregoing; and

          2.4 Modification Regarding Audits. The sentence in Section 6.6 of the
Loan Agreement that currently reads as follows:
The initial audit of Borrower’s Collateral and Books will be conducted within
ninety (90) days of the Effective Date, and thereafter, the parties contemplate
that such audits will be performed no more frequently than semi-annually, but
nothing herein restricts Bank’s right to conduct such audits more frequently if
(i) Bank believes that it is advisable to do so in Bank’s good faith business
judgment, or (ii) Bank believes in good faith that a Default or Event of Default
has occurred.
is hereby amended in its entirety to read as follows:
The initial audit of Borrower’s Collateral and Books will be conducted within
ninety (90) days of the Effective Date, and thereafter, the parties contemplate
that such audits will be performed no more frequently than annually; provided,
however, if the principal amount of all outstanding Obligations exceeds
$2,000,000 for thirty (30) consecutive

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days, then such audits will be performed semi-annually; provided, further,
nothing herein restricts Bank’s right to conduct such audits more frequently if
(i) Bank believes that it is advisable to do so in Bank’s good faith business
judgment, or (ii) Bank believes in good faith that a Default or Event of Default
has occurred.
          2.5 Modification Regarding Change in Business, Management, Ownership
or Business Locations. Section 7.2(c) of the Loan Agreement is hereby amended in
its entirety to read as follows:
(c) (i) permit or suffer a Change in Control or (ii) any Key Person ceases to
hold such offices with Borrower and replacements satisfactory to Bank are not
made within 30 days after his, her or their departure from Borrower;
          2.6 Modification Adding the Definition of Key Persons. The definition
of “Key Persons” is hereby added to Section 13.1 of the Loan Agreement and shall
read as follows:
“Key Person” is any of Borrower’s Chief Executive Officer and Chief Financial
Officer who are, as of the Effective Date, Sam Inman and Winston Hickman,
respectively.
          2.7 Modification Regarding Prime Rate. The definition of “Prime Rate”
set forth in Section 13.1 of the Loan Agreement is hereby amended in its
entirety to read as follows:
“Prime Rate” is, on any date, the greater of (i) three and one-quarter percent
(3.25%) or (ii) the highest of the prime rates most recently published in the
Wall Street Journal as the base rate on corporate loans at large U.S. banks.
          2.8 Modification Regarding Revolving Line Maturity Date. The
definition of “Revolving Line Maturity Date” set forth in Section 13.1 of the
Loan Agreement is hereby amended in its entirety to read as follows:
“Revolving Line Maturity Date” is February 9, 2012.
     3. Limitation of Amendments.
          3.1 The amendments set forth in Section 2, above, are effective for
the purposes set forth herein and shall be limited precisely as written and
shall not be deemed to (a) be a consent to any amendment, waiver or modification
of any other term or condition of any Loan Document, or (b) otherwise prejudice
any right or remedy which Bank may now have or may have in the future under or
in connection with any Loan Document.

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          3.2 This Amendment shall be construed in connection with and as part
of the Loan Documents and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents, except as herein
amended, are hereby ratified and confirmed and shall remain in full force and
effect.
     4. Representations and Warranties. To induce Bank to enter into this
Amendment, Borrower hereby represents and warrants to Bank as follows:
          4.1 Immediately after giving effect to this Amendment (a) the
representations and warranties contained in the Loan Documents are true,
accurate and complete in all material respects as of the date hereof (except to
the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (b) no Event of
Default has occurred and is continuing;
          4.2 Borrower has the power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as amended by
this Amendment;
          4.3 The organizational documents of Borrower delivered to Bank on the
Effective Date remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;
          4.4 The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, have been duly authorized;
          4.5 The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, do not and will not contravene (a) any law or regulation
binding on or affecting Borrower, (b) any contractual restriction with a Person
binding on Borrower, (c) any order, judgment or decree of any court or other
governmental or public body or authority, or subdivision thereof, binding on
Borrower, or (d) the organizational documents of Borrower;
          4.6 The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, do not require any order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Borrower, except as already has been obtained or
made; and
          4.7 This Amendment has been duly executed and delivered by Borrower
and is the binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws of general application and equitable principles relating to or affecting
creditors’ rights.

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     5. Counterparts. This Amendment may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
     6. Effectiveness. This Amendment shall be deemed effective upon (a) the due
execution and delivery to Bank of this Amendment by each party hereto,
(b) Borrower’s payment of an amendment fee in an amount equal to $50,000 and
(c) Bank’s receipt of the Consent to Amendment and Reaffirmation of Guaranty
attached hereto, duly executed and delivered by each Guarantor (unless Bank, in
its sole discretion at any time waives in writing the receipt of any such
Consent).
[Signature page follows.]

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     In Witness Whereof, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first written above.

                      BANK       BORROWER    
 
                    Silicon Valley Bank       Comarco, Inc.    
 
                   
 
                   
By:
  /s/ Brett Maver       By:   /s/ Sam Inman III    
 
                   
Name:
  Brett Maver       Name:   Sam Inman III    
 
                   
Title:
  VP & RM       Title:   President & CEO    
 
                   
 
                                BORROWER    
 
                                Comarco Wireless Technologies, Inc.    
 
                   
 
                   
 
          By:   /s/ Winston Hickman    
 
                   
 
          Name:   Winston Hickman    
 
                   
 
          Title:   CFO    
 
                   

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CONSENT TO AMENDMENT
AND REAFFIRMATION OF GUARANTY
     Each of the undersigned acknowledges that his consent to the foregoing
Third Amendment to Loan and Security Agreement dated as of even date herewith
(the “Amendment”) is not required, but the undersigned nevertheless does hereby
consent to the terms and conditions of the Amendment and agrees that the
Guaranty of the undersigned relating to the Obligations of Borrower shall
continue in full force and effect, shall be valid and enforceable and shall not
be impaired or otherwise affected by the execution of the Amendment or any other
document or instrument delivered in connection herewith.
     Each of the undersigned represents and warrants that, after giving effect
to the Amendment, all representations and warranties of the undersigned
contained in the Guaranty are true, accurate and complete as if made the date
hereof.
Dated as of February 9th, 2011

          GUARANTOR   COMARCO, INC.
 
       
 
       
 
  By:   /s/ Sam Inman III
 
       
 
  Name:   Sam Inman III
 
       
 
  Title:   President & CEO
 
       
 
       
 
        GUARANTOR   COMARCO WIRELESS TECHNOLOGIES, INC.
 
       
 
       
 
  By:   /s/ Winston Hickman
 
       
 
  Name:   Winston Hickman
 
       
 
  Title:   CFO
 
       

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