Exhibit 10.1

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER

THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER (“Amendment”) is
made as of August 13, 2009 by and among COBRA ELECTRONICS CORPORATION, a
Delaware corporation (the “Borrower”), THE PRIVATEBANK AND TRUST COMPANY, an
Illinois state chartered bank, as Administrative Agent (“Administrative Agent”)
and the Lenders currently party to the Loan Agreement (as hereinafter defined).

RECITALS

A. The Administrative Agent, the Lenders and the Borrower entered into a Loan
and Security Agreement dated as of February 15, 2008 as amended by First
Amendment to Loan and Security Agreement dated as of October 31, 2008 (as so
amended, the “Loan Agreement”).

B. The parties to the Loan Agreement desire to enter into this Amendment for the
purpose of making certain amendments to the Loan Agreement and waiving
compliance with certain covenants in the Loan Agreement.

AGREEMENT

In consideration of the matters set forth in the recitals and the covenants and
provisions herein set forth, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Definitions. Capitalized terms used but not defined herein are used as
defined in the Loan Agreement.

2. Amendments. Upon satisfaction of the conditions precedent hereinafter set
forth, the Loan Agreement shall be amended as follows:

2.1. The amount of the Revolving Loan Commitment of each Lender (currently set
forth on its signature page to the Loan Agreement) shall be amended as follows:

 

Lender

   Revolving Loan
Commitment

PrivateBank

RBS

   $

$

15,743,488.60

12,256,511.40

2.2. Section 1.1 of the Loan Agreement shall be amended by adding new
definitions of Availability Reserve, Dilution, Second Amendment Effective Date,
Supplementary Fee Letter, Tangible Net Worth and Unmatured Event of Default
thereto which read as follows:

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“Availability Reserve” shall mean $2,500,000 for the period commencing the
Second Amendment Effective Date through and including September 30, 2009 and
$3,000,000 at all times thereafter.

“Dilution” shall mean, with respect to any period, the percentage obtained by
dividing (i) the sum of non-cash credits against Accounts (including, but not
limited to returns, adjustments and rebates) of Borrower for such period, plus
pending or probable, but not yet applied, non-cash credits against Accounts of
Borrower for such period, as determined by the Administrative Agent in its
reasonable credit judgment consistent with industry standards for asset-based
loans by (ii) gross invoiced sales of the Borrower for such period.

“Second Amendment Effective Date” shall mean August 13, 2009.

“Supplementary Fee Letter” shall mean the Supplementary Fee Letter dated
August 13, 2009 between the Borrower and the Administrative Agent, as amended
from time to time.”

“Tangible Net Worth” shall mean, as of any date, shareholders’ equity (including
retained earnings) less prepaid assets and intangible assets of the Borrower and
its Subsidiaries computed on a consolidated basis in accordance with GAAP.

“Unmatured Event of Default” shall mean any event that, if it continues uncured,
will with the lapse of time or giving of notice, or both, constitute an Event of
Default.

2.3. The definition of Applicable Margin contained in Section 1.1 of the Loan
Agreement shall be amended in its entirety and as so amended shall read as
follows:

“Applicable Margin” means, for any day, the rate per annum set forth below
opposite the level (the “Level”) then in effect.

 

Level

  

Total Debt
to EBITDA
Ratio

   Applicable
Margin for
Prime Rate
Loans    Applicable
Margin for
LIBOR Rate
Loans    Letter of Credit Fees             Documentary L/C
Fees    Standby
L/C Fees

I

   Greater than or equal to 2.50:1    2.00%    4.50%    2.15%    3.00%

II

   Greater than or equal to 2.00:1 but less than 2.50:1    1.00%    3.50%   
2.00%    2.75%

III

   Less than 2.00:1    0%    2.50%    1.85%    2.50%

 

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The Applicable Margins with respect to Prime Rate Loans, LIBOR Rate Loans and
the Letter of Credit Fees shall be adjusted, to the extent applicable, on the
tenth (10th) Business Day after the Borrower provides the annual and quarterly
financial statements and other information pursuant to subsection 9(c), as
applicable, and the related Compliance Certificate, with respect to fiscal
quarters of Borrower ending on and after December 31, 2009, based on the Total
Debt to EBITDA Ratio for such Computation Period. Notwithstanding anything
contained in this paragraph to the contrary, (a) if the Borrower fails to
deliver such financial statements and Compliance Certificate in accordance with
the provisions of subsection 9(c), the Applicable Margin shall be based upon
Level I above beginning on the date such financial statements and Compliance
Certificate were required to be delivered until the tenth (10th) Business Day
after such financial statements and Compliance Certificate are actually
delivered, whereupon the Applicable Margin shall be determined by the then
current Level; (b) no reduction to any Applicable Margin shall become effective
at any time when an Event of Default or Unmatured Event of Default has occurred
and is continuing; (c) the initial Applicable Margin on the Second Amendment
Effective Date shall be based on Level I until the date on which the financial
statements and Compliance Certificate are delivered for the Fiscal Quarter
ending December 31, 2009; and (d) the Applicable Margin shall be based upon
Level I above until such time as the Borrower’s Total Debt to EBITDA Ratio
qualifies for a different level for two (2) consecutive quarterly determination
dates.

2.4. The introductory sentences of the definition of Eligible Account contained
in Section 1.1 of the Loan Agreement shall be amended in their entirety to read
as follows:

“Eligible Account” shall mean an Account (or in the case of clause (iii)(C)
below, a claim arising from the sale of an Account) owing to Borrower which is
acceptable to Administrative Agent in its reasonable credit judgment consistent
with industry standards for asset-based loans for lending purposes. Without
limiting Administrative Agent’s exercise of such judgment, Administrative Agent
shall, in general, not consider an Account (or such claim) to be an Eligible
Account unless it meets, and so long as it continues to meet, the following
requirements:”

 

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2.5. Clause (iv) of the definition of Eligible Account contained in Section 1.1
of the Loan Agreement shall be amended by deleting “fifty percent (50%)” and by
substituting “twenty-five percent (25%)” therefor.

2.6. Clause (xiii) of the definition of Eligible Account contained in
Section 1.1 of the Loan Agreement shall be amended by adding the following at
the end thereof:

“and provided further that the Administrative Agent shall have the right, in its
reasonable credit judgment consistent with industry standards for asset-based
loans, to increase any of the percentage concentration limits contemplated under
this clause (xiii) from time to time”

2.7. The introductory sentences of the definition of Eligible Inventory
contained in Section 1.1 of the Loan Agreement shall be amended in their
entirety to read as follows:

“Eligible Inventory” shall mean Inventory of Borrower which is acceptable to
Administrative Agent, in its reasonable credit judgment consistent with industry
standards for asset-based loans, for lending purposes. Without limiting
Administrative Agent’s exercise of such judgment, Administrative Agent shall, in
general, not consider Inventory to be Eligible Inventory unless it meets, and so
long as it continues to meet, the following requirements:”

2.8. Section 2(a) of the Loan Agreement shall be amended in its entirety and as
so amended shall read as follows:

 

  (a) Revolving Loans.

Subject to the terms and conditions of this Agreement and the Other Agreements,
so long as no Event of Default or Unmatured Event of Default is then continuing,
during the Original Term, each Lender, severally and not jointly, agrees to make
in Dollars, Euros or Pounds Sterling, as requested by Borrower its Pro Rata
Share of revolving loans and advances (the “Revolving Loans”) requested by
Borrower up to such Lender’s Revolving Loan Commitment so long as after giving
effect to such Revolving Loans, the sum of the aggregate unpaid principal
balance of the Revolving Loans and the Letter of Credit Obligations does not
exceed a Dollar Equivalent amount of up to the sum of the following sublimits
(the “Revolving Loan Limit”) which shall be determined from time to time based
on the most current borrowing base report furnished to the Administrative Agent
pursuant to Section 9(a) hereof:

 

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(i) Seventy-five percent (75%) of the face amount of Borrower’s Eligible
Account; provided that such advance rate shall be reduced by one (1) percentage
point for each whole percentage point (and rounded up to the nearest .25% in the
case of a partial percentage point) by which Dilution (as determined by the
Administrative Agent in its reasonable discretion based on the results of the
most recent twelve (12) month period for which the Administrative Agent has
conducted a field audit of the Borrower) exceeds fifteen percent (15%); plus

(ii) The lesser of (a) sixty percent (60%) of the lower of cost or market value
of Borrower’s Eligible Inventory or (b) eighty-five percent (85%) of the
appraised orderly liquidation value of Borrower’s Eligible Inventory; plus

(iii) Sixty percent (60%) against the face amount of commercial Letters of
Credit issued or guaranteed by the Issuing Lender or letters of credit permitted
under Section 13(b)(xii) hereof for the purpose of purchasing Eligible
Inventory; provided, that such commercial Letters of Credit are in form and
substance satisfactory to Administrative Agent; minus

(iv) The Availability Reserve and such other reserves as Administrative Agent
elects, in its reasonable credit judgment consistent with industry standards for
asset-based loans, to establish from time to time (including, without
limitation, a rent reserve in an amount equal to three (3) months rent payable
by Borrower for all of its leased inventory locations, a reserve for payments
due under licensing agreements and a reserve with respect to Hedging
Liabilities);

provided, that (x) the sum of the advances with respect to clauses (ii) and
(iii) above shall at no time exceed Fourteen Million and No/100 Dollars
($14,000,000), and (y) the Revolving Loan Limit shall in no event exceed
Twenty-Eight Million and No/100 Dollars ($28,000,000) (the “Maximum Revolving
Loan Limit”) and further provided that the Administrative Agent may, in its
reasonable credit judgment consistent with industry standards for asset-based
loans, from time to time reduce the percentage advance rates specified in (i),
(ii) and (iii) above upon notice to the Borrower and the Lenders.

The aggregate unpaid principal balance of the Revolving Loans (including the
Dollar Equivalent of all Loans made in Euros or Pounds Sterling) shall not at
any time exceed the lesser of the (i) Revolving Loan Limit minus the Letter of
Credit Obligations and (ii) the Maximum Revolving Loan Limit minus the Letter of
Credit Obligations. If at any time the outstanding Revolving Loans (including
the Dollar Equivalent of all Loans made in Euros or Pounds Sterling) exceeds

 

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either the Revolving Loan Limit or the Maximum Revolving Loan Limit, in each
case minus the Letter of Credit Obligations, or any portion of the Revolving
Loans (including the Dollar Equivalent of all Loans made in Euros or Pounds
Sterling) and Letter of Credit Obligations exceeds any applicable sublimit
within the Revolving Loan Limit, Borrower shall immediately, and without the
necessity of demand by Administrative Agent, pay to Administrative Agent such
amount as may be necessary to eliminate such excess and Administrative Agent
shall apply such payment to the Revolving Loans in such order as Administrative
Agent shall determine in its sole discretion; provided that Administrative Agent
may, in its sole discretion, permit such excess (the “Interim Advance”) to
remain outstanding and continue to advance Revolving Loans to Borrower on behalf
of Lenders without the consent of any Lender for a period of up to sixty
(60) calendar days, so long as (i) the amount of the Interim Advances does not
exceed at any time One Million and No/100 Dollars ($1,000,000), (ii) the
aggregate outstanding principal balance of the Revolving Loans (including the
Dollar Equivalent of all Loans made in Euros or Pounds Sterling) does not exceed
the Maximum Loan Limit, and (iii) Administrative Agent has not been notified by
Requisite Lenders (or, if there are only three (3) Lenders, any two (2) of the
Lenders) to cease making such Revolving Loans. If the Interim Advance is not
repaid in full within sixty (60) days of the initial occurrence of the Interim
Advance, no future advances may be made to Borrower without the consent of all
Lenders until the Interim Advance is repaid in full.

Neither Administrative Agent nor any Lender shall be responsible for any failure
by any other Lender to perform its obligations to make Revolving Loans
hereunder, and the failure of any Lender to make its Pro Rata Share of any
Revolving Loan hereunder shall not relieve any other Lender of its obligation,
if any, to make its Pro Rata Share of any Revolving Loans hereunder.

If Borrower makes a request for a Revolving Loan as provided herein,
Administrative Agent, at its option and in its sole discretion, shall do either
of the following:

(i) advance the amount of the proposed Revolving Loan to Borrower
disproportionately (a “Disproportionate Advance”) out of Administrative Agent’s
own funds on behalf of Lenders, which advance shall be on the same day as
Borrower’s request therefor with respect to Prime Rate Loans if Borrower
notifies Administrative Agent of such request by 11:00 a.m., Chicago time on
such day, and request settlement in accordance with Section 18 hereof such that
upon such settlement each Lender’s share of the outstanding Revolving Loans
(including, without limitation, the amount of any Disproportionate Advance)
equals its Pro Rata Share; or

 

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(ii) Notify each Lender by telecopy or other similar form of teletransmission of
the proposed advance on the same day Administrative Agent is notified or deemed
notified by Borrower of Borrower’s request for an advance pursuant to this
Section 2(a). Each Lender shall remit, to the demand deposit account designated
by the Administrative Agent (i) with respect to Prime Rate Loans, at or prior to
3:00 P.M., Chicago time, on the date of notification, if such notification is
made by the Administrative Agent to the Lenders at or prior to 1:00 p.m.,
Chicago time, or 10:00 A.M., Chicago time, on the business day immediately
succeeding the date of such notification, if such notification is made by the
Administrative Agent to the Lenders after 1:00 p.m., Chicago time, and (ii) with
respect to LIBOR Rate Loans, at or prior to 12:00 noon., Chicago time, on the
date such LIBOR Rate Loans are to be advanced, immediately available funds in an
amount equal to such Lender’s Pro Rata Share of such proposed advance.

If and to the extent that a Lender does not settle with Administrative Agent as
required under this Agreement (a “Defaulting Lender”) Borrower and Defaulting
Lender severally agree to repay to Administrative Agent forthwith on demand such
amount required to be paid by such Defaulting Lender to Administrative Agent,
together with interest thereon, for each day from the date such amount is made
available to Borrower until the date such amount is repaid to Administrative
Agent (x) in the case of a Defaulting Lender at the Federal Funds Rate and
(y) in the case of Borrower, at the interest rate applicable at such time for
such Loans; provided, that Borrower’s obligation to repay such advance to
Administrative Agent shall not relieve such Lender of its liability to
Administrative Agent for failure to settle as provided in this Agreement.

Borrower hereby authorizes Administrative Agent, in its sole discretion, to
charge any of Borrower’s accounts or advance Revolving Loans to make any
payments of principal, interest, fees, costs or expenses required to be made
under this Agreement or the Other Agreements; provided that the Administrative
Agent agrees to give the Borrower advance notice (which may be telephonic or by
electronic transmission) in the case of any such charge or Revolving Loan made
in connection with payment of audit, legal or appraisal charges or any other
payments to third parties.

 

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A request for a Revolving Loan shall be made or shall be deemed to be made, each
in the following manner: Borrower shall give Administrative Agent same day
notice, no later than 12:00 noon (Chicago time) for such day, of its request for
a Revolving Loan as a Prime Rate Loan, and at least three (3) Business Days
prior notice of its request for a Revolving Loan as a LIBOR Rate Loan, in which
notice Borrower shall specify the amount of the proposed borrowing and the
proposed borrowing date; provided, however, that no such request may be made at
a time when there exists an Event of Default or an event which, with the passage
of time or giving of notice, will become an Event of Default. In the event that
Borrower maintains a controlled disbursement account at Administrative Agent,
each check presented for payment against such controlled disbursement account
and any other charge or request for payment against such controlled disbursement
account shall constitute a request for a Revolving Loan as a Prime Rate Loan. As
an accommodation to Borrower, Administrative Agent may permit telephone requests
for Revolving Loans and electronic transmittal of instructions, authorizations,
agreements or reports to Administrative Agent by Borrower. Unless Borrower
specifically directs Administrative Agent in writing not to accept or act upon
telephonic or electronic communications from Borrower, Administrative Agent
shall have no liability to Borrower for any loss or damage suffered by Borrower
as a result of Administrative Agent’s honoring of any requests, execution of any
instructions, authorizations or agreements or reliance on any reports
communicated to it telephonically or electronically and purporting to have been
sent to Administrative Agent by Borrower and Administrative Agent shall have no
duty to verify the origin of any such communication or the authority of the
Person sending it, other than to verify that the Person purporting to make such
request is a Person or officer identified by Borrower to Administrative Agent as
having the authority to make such request.

Borrower hereby irrevocably authorizes Administrative Agent to disburse the
proceeds of each Revolving Loan requested by Borrower, or deemed to be requested
by Borrower, as follows: the proceeds of each Revolving Loan requested under
Section 2(a) shall be disbursed by Administrative Agent in lawful money of the
United States of America in immediately available funds, in the case of the
initial borrowing, in accordance with the terms of the written disbursement
letter from Borrower, and in the case of each subsequent borrowing, by wire
transfer or Automated Clearing House (ACH) transfer to such bank account as may
be agreed upon by Borrower and Administrative Agent from time to time, or
elsewhere if pursuant to a written direction from Borrower.

 

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2.9. Section 3(a) of the Loan Agreement shall be amended by deleting “Twelve
Million Five Hundred Thousand and no/100 ($12,500,000)” appearing therein and by
substituting “Six Million Five Hundred Thousand and no/100 Dollars ($6,500,000)”
therefor.

2.10. Section 4(a)(i) of the Loan Agreement shall be amended in its entirety and
as so amended shall read as follows:

“(i) The sum of the Applicable Margin then in effect with respect to Prime Rate
Loans per annum plus the Prime Rate in effect from time to time, payable on the
last day of each calendar quarter through and including June 30, 2009 and
thereafter, commencing August 31, 2009, such interest shall be payable on the
last day of each calendar month, in each case in arrears. Said rate of interest
shall increase or decrease by an amount equal to each increase or decrease in
the Prime Rate effective on the effective date of each such change in the Prime
Rate.”

2.11. Sections 4(c)(ii) and 4(c)(iii) of the Loan Agreement shall be amended in
their entirety and as so amended shall read as follows:

“(ii) Unused Line Fee: Borrower shall pay to Administrative Agent, for the
benefit of Lenders, an unused line fee equal to one-fourth of one percent (.25%)
for the period through and including August 12, 2009 and one-half of one percent
(.50%) at all times thereafter of the difference between the Maximum Revolving
Loan Limit and the average daily balance of the Revolving Loans plus the Letter
of Credit Obligations for each calendar quarter through and including June 30,
2009 and thereafter for each calendar month, which fee shall be fully earned by
Lenders and payable quarterly in arrears on the last day of each calendar
quarter through June 30, 2009 and thereafter payable monthly in arrears on the
last day of each calendar month (commencing August 31, 2009). Said fee shall be
calculated on the basis of a 360 day year.

(iii) Agency Fees: Borrower shall pay to the Administrative Agent for its own
account the fees described in the Fee Letter and the Supplementary Fee Letter.”

2.12. Sections 8 and 9 of the Loan Agreement shall be amended in their entirety
and as so amended shall read as follows:

 

  “8. COLLECTIONS.

(a) Borrower shall direct all of its Account Debtors to make all payments on the
Accounts directly to a post office box (the “Lock Box”) designated by, and under
the exclusive control of, Administrative Agent, at a financial institution

 

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acceptable to Administrative Agent. Borrower shall establish an account (the
“Lock Box Account”) in Administrative Agent’s name with a financial institution
acceptable to Administrative Agent, into which all payments received in the Lock
Box shall be deposited, and into which Borrower will immediately deposit all
payments received by Borrower on Accounts in the identical form in which such
payments were received, whether by cash or check. If Borrower, any Affiliate or
Subsidiary, any shareholder, officer, director, employee or agent of Borrower or
any Affiliate or Subsidiary, or any other Person acting for or in concert with
Borrower shall receive any monies, checks, notes, drafts or other payments
relating to or as Proceeds of Accounts or other Collateral, Borrower and each
such Person shall receive all such items in trust for, and as the sole and
exclusive property of, Administrative Agent and, immediately upon receipt
thereof, shall remit the same (or cause the same to be remitted) in kind to the
Lock Box Account. The financial institution with which the Lock Box Account is
established shall acknowledge and agree, in a manner satisfactory to
Administrative Agent, that the amounts on deposit in such Lock Box and Lock Box
Account are the sole and exclusive property of Administrative Agent, that such
financial institution will follow the instructions of Administrative Agent with
respect to disposition of funds in the Lock Box and Lock Box Account without
further consent from Borrower, that such financial institution has no right to
setoff against the Lock Box or Lock Box Account or against any other account
maintained by such financial institution into which the contents of the Lock Box
or Lock Box Account are transferred, and that such financial institution shall
wire, or otherwise transfer in immediately available funds to Administrative
Agent in a manner satisfactory to Administrative Agent, funds deposited in the
Lock Box Account on a daily basis as such funds are collected. Borrower agrees
that all payments made to such Lock Box Account or otherwise received by
Administrative Agent, whether in respect of the Accounts or as Proceeds of other
Collateral or otherwise, will be applied on account of the Liabilities in
accordance with the terms of this Agreement; provided prior to the occurrence of
any Event of Default or Unmatured Event of Default, such lockbox collections
shall be first applied to reduce the Revolving Loans and any interest or fees
then due and owing hereunder. Borrower agrees to pay all fees, costs and
expenses in connection with opening and maintaining the Lock Box and Lock Box
Account. All of such fees, costs and expenses if not paid by Borrower, may be
paid by Administrative Agent and in such event all amounts paid by
Administrative Agent shall constitute Liabilities hereunder, shall be payable to
Administrative Agent by Borrower upon demand, and, until paid, shall bear
interest at the highest rate then applicable to

 

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Loans hereunder. All checks, drafts, instruments and other items of payment or
Proceeds of Collateral shall be endorsed by Borrower to Administrative Agent,
and, if that endorsement of any such item shall not be made for any reason,
Administrative Agent is hereby irrevocably authorized to endorse the same on
Borrower’s behalf. For the purpose of this section, Borrower irrevocably hereby
makes, constitutes and appoints Administrative Agent (and all Persons designated
by Administrative Agent for that purpose) as Borrower’s true and lawful attorney
and agent-in-fact (i) to endorse Borrower’s name upon said items of payment
and/or Proceeds of Collateral and upon any Chattel Paper, Document, Instrument,
invoice or similar document or agreement relating to any Account of Borrower or
Goods pertaining thereto; (ii) to take control in any manner of any item of
payment or Proceeds thereof and (iii) to have access to any lock box or postal
box into which any of Borrower’s mail is deposited, and open and process all
mail addressed to Borrower and deposited therein.

(b) Administrative Agent may, at any time and from time to time, whether before
or after notification to any Account Debtor and whether before or after the
maturity of any of the Liabilities, (i) enforce collection of any of Borrower’s
Accounts or other amounts owed to Borrower by suit or otherwise; (ii) exercise
all of Borrower’s rights and remedies with respect to proceedings brought to
collect any Accounts or other amounts owed to Borrower; (iii) surrender, release
or exchange all or any part of any Accounts or other amounts owed to Borrower,
or compromise or extend or renew for any period (whether or not longer than the
original period) any indebtedness thereunder; (iv) sell or assign any Account of
Borrower or other amount owed to Borrower upon such terms, for such amount and
at such time or times as Administrative Agent deems advisable; (v) prepare, file
and sign Borrower’s name on any proof of claim in bankruptcy or other similar
document against any Account Debtor or other Person obligated to Borrower; and
(vi) do all other acts and things which are necessary, in Administrative Agent’s
sole discretion, to fulfill Borrower’s obligations under this Agreement and the
Other Agreements and to allow Administrative Agent to collect the Accounts or
other amounts owed to Borrower. In addition to any other provision hereof,
Administrative Agent may at any time, after the occurrence of an Event of
Default, at Borrower’s expense, notify any parties obligated on any of the
Accounts to make payment directly to Administrative Agent of any amounts due or
to become due thereunder.

(c) Administrative Agent shall, after receipt by Administrative Agent at its
office in Chicago, Illinois of (i) checks and (ii) cash or other immediately
available funds from collections of items of payment and Proceeds of any
Collateral, apply

 

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the whole or any part of such collections or Proceeds, subject to actual
collection, against the Liabilities in such order as Administrative Agent shall
determine in its sole discretion; provided that prior to the occurrence of an
Event of Default or Unmatured Event of Default, such amounts shall be applied to
payment of the Revolving Loans and any interest or fees then due and owing
hereunder.

(d) On a monthly basis, Administrative Agent shall deliver to Borrower an
account statement showing all Loans, charges and payments, which shall be deemed
final, binding and conclusive upon Borrower unless Borrower notifies
Administrative Agent in writing, specifying any error therein, within sixty
(60) days of the date such account statement is sent to Borrower and any such
notice shall only constitute an objection to the items specifically identified.

 

  9. COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES.

(a) Borrowing Base Reports.

Borrower shall deliver an executed loan report and certificate in Administrative
Agent’s then current form at least once each week and at each month end (or more
frequently as may be requested by Administrative Agent), which shall be
accompanied by supporting documentation (satisfactory to the Administrative
Agent) verifying the amounts reported for sales, credits and collections shown
on the borrowing base report for the relevant period. Each such report shall
reflect the activity of Borrower with respect to Accounts for the immediately
preceding week, and shall be in a form and with such specificity as is
satisfactory to Administrative Agent and shall contain such additional
information concerning Accounts and Inventory as may be requested by
Administrative Agent including, without limitation, but only if specifically
requested by Administrative Agent, copies of all invoices prepared in connection
with such Accounts.

(b) Monthly Reports.

Borrower shall deliver to Administrative Agent, in addition to any other
reports, as soon as practicable and in any event: (i) within fifteen (15) days
after the end of each month, (A) a detailed trial balance of Borrower’s Accounts
aged per invoice date, in form and substance reasonably satisfactory to
Administrative Agent including, without limitation, the names and addresses of
all Account Debtors of Borrower, and (B) a summary and detail of

 

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accounts payable (such Accounts and accounts payable divided into such time
intervals as Administrative Agent may require in its sole discretion), including
a listing of any held checks; and (ii) within fifteen (15) days after the end of
each month, the general ledger inventory account balance, a perpetual inventory
report and Administrative Agent’s standard form of Inventory report then in
effect or the form most recently requested from Borrower by Administrative
Agent, for Borrower by each category of Inventory, together with a description
of the monthly change in each category of Inventory.

(c) Compliance Certificate.

As soon as practicable and in any event within forty-five (45) days after the
end of each fiscal quarter of the Borrower, a compliance certificate in the form
of Exhibit B (a “Compliance Certificate”), which Compliance Certificate shall
include a calculation of all financial covenants contained in this Agreement,
including a description of any deviation therefrom.

(d) Financial Statements.

Borrower shall deliver to Administrative Agent and each Lender the following
financial information, all of which shall be prepared on a consolidated and
consolidating basis in accordance with generally accepted accounting principles
consistently applied: (i) no later than forty-five (45) days after each calendar
month, copies of internally prepared financial statements, including, without
limitation, balance sheets and statements of income, retained earnings and cash
flow of Borrower, certified by the Chief Financial Officer or Vice
President-Finance of Borrower and (ii) no later than ninety (90) days after the
end of each of Borrower’s Fiscal Years, (x) audited financial statements for
such Fiscal Year with an unqualified opinion by independent certified public
accountants selected by Borrower and reasonably satisfactory to Administrative
Agent, which financial statements shall be accompanied by copies of any
management letters sent to the Borrower by such accountants and (y) copies of
Borrower’s Form 10-K report filed with the Securities and Exchange Commission.

(d) Projections.

As soon as practicable and in any event prior to the beginning of each Fiscal
Year, Borrower shall deliver to Administrative Agent and each Lender projected
balance sheets, statements of income and cash flow for Borrower, for each of the
twelve (12) months during such Fiscal Year, which shall include the assumptions
used therein,

 

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together with appropriate supporting details as reasonably requested by
Administrative Agent. The Borrower shall update such projections quarterly
throughout each Fiscal Year, such updated projections to be delivered to the
Administrative Agent no later than 15 days prior to the beginning of each fiscal
quarter. The Borrower agrees to deliver updated projections for the balance of
2009 to the Administrative Agent and each Lender in form reasonably acceptable
to them within ten (10) days of the Second Amendment Effective Date.

As soon as practicable and in any event within fifteen (15) days prior to the
beginning of each calendar quarter, projected cash flow and projected usage and
availability of the Revolving Loan Commitments on a weekly basis for the
Borrower for such quarter, together with appropriate supporting details as
reasonably requested by the Administrative Agent.

(e) Explanation of Budgets and Projections.

In conjunction with the delivery of the projections or budgets referred to in
subsection 9(d) above, Borrower shall deliver a letter signed by the President
or a Vice President of Borrower and by the Treasurer or Chief Financial Officer
of Borrower, describing, comparing and analyzing, in detail, all changes and
developments between the anticipated financial results included in such
projections or budgets and the historical financial statements of Borrower.

(f) Public Reporting.

Promptly upon the filing thereof, Borrower shall deliver to Administrative Agent
and each Lender copies of all registration statements and annual, quarterly,
monthly or other regular reports which Borrower or any of its Subsidiaries files
with the Securities and Exchange Commission, as well as promptly providing to
Administrative Agent and each Lender copies of any reports and proxy statements
delivered to its shareholders.

(g) Other Information.

Promptly following request therefor by Administrative Agent or any Lender,
Borrower shall deliver to Administrative Agent and each Lender such other
business or financial data, reports, appraisals and projections as
Administrative Agent or such Lender may reasonably request.

2.13. The last sentence of Section 12(d) of the Loan Agreement shall be deleted
and replaced with the following:

 

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“Without limiting the foregoing, Borrower agrees that the Administrative Agent,
through its officers, employees, agents and independently engaged appraisers or
other Persons shall conduct field audits of the Collateral not less than two
(2) times in each year, including appraisals of the Borrower’s and its
Subsidiaries Inventory, the first such appraisal to be completed no later than
September 15, 2009 and the Borrower shall fully cooperate in connection with
such field audits. The Borrower shall pay to the Administrative Agent all
customary fees and all costs and out-of-pocket expenses incurred by the
Administrative Agent in the exercise of its rights hereunder, and all of such
fees, costs and expenses shall constitute Liabilities hereunder, shall be
payable on demand and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder.”

2.14. Section 14 of the Loan Agreement shall be amended in its entirety and as
so amended shall read as follows:

 

  “14. FINANCIAL COVENANTS.

Borrower shall maintain and keep in full force and effect each of the financial
covenants set forth below:

(a) Minimum EBITDA.

Borrower shall not permit the EBITDA as of the last day of any fiscal quarter
during the periods specified below to be less than the amount set forth below
for the period specified below:

 

Period

   Minimum
EBITDA

July 1, 2009 through September 30, 2009

   $ 1,350,000

July 1, 2009 through December 31, 2009

   $ 3,375,000

July 1, 2009 through March 31, 2010

   $ 4,025,000

July 1, 2009 through June 30, 2010

   $ 4,900,000

Each Computation Period ending on and after September 30, 2010

   $ 5,000,000

(b) Fixed Charge Coverage Ratio.

Borrower shall not permit the Fixed Charge Coverage Ratio as of the last day of
any period set forth below to be less than the applicable ratio set forth below
for such period:

 

Period

   Fixed Charge
Coverage Ratio

July 1, 2009 through September 30, 2009

   1.00:1.00

July 1, 2009 through December 31, 2009

   1.10:1.00

July 1, 2009 through March 31, 2010

   1.00:1.00

July 1, 2009 through June 30, 2010

   1.00:1.00

Each Computation Period ending on and after September 30, 2010

   1.10:1.00

 

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(c) Tangible Net Worth. Borrower will not permit Tangible Net Worth to be less
than Minimum Required Amount. For purposes hereof, “Minimum Required Amount”
shall mean (i) commencing June 30, 2009 an amount equal to $13,419,794 (subject
to adjustment in the event such amount does not equal 90% of Borrower’s actual
Tangible Net Worth as of June 30, 2009 as reported on its final financial
statements for such date) and (ii) thereafter from the last day of each Fiscal
Quarter of Borrower through the day prior to the last day of each immediately
succeeding Fiscal Quarter of Borrower, the Minimum Tangible Net Worth required
pursuant hereto during the immediately preceding period plus fifty percent
(50%) of Borrower’s consolidated net income for such Fiscal Quarter (but without
reduction for any net loss) and excluding any gain or loss on cash surrender
value (CSV) life insurance which is an amount calculated from the Borrower’s
Consolidated Statement of Cash Flows and Notes to Consolidated Financial
Statements, respectively, in Borrower’s annual Form 10-K and quarterly Form
10-Qs filed pursuant to section 13 or 15(d) of the Securities Exchange Act of
1934.

2.15. Section 29 of the Loan Agreement shall be amended by adding the following
immediately preceding the period at the end thereof:

“and the Borrower further consents to the disclosure of information relating to
the Borrower to any third party engaged by the Administrative Agent or any
Lender or any of its Affiliates to perform services on its behalf in connection
with any Bank Products made available to the Borrower or in connection with
processing or evaluating reports furnished by the Borrower hereunder with
respect to the Collateral”

3. Waiver. The Borrower has advised the Administrative Agent that the Borrower
is in violation of the provisions of Sections 14(a) and 14(b) of the Loan
Agreement as of June 30, 2009 (the “Violations”). Subject to the satisfaction of
the conditions precedent set forth in Section 6 below, the Requisite Lenders
hereby acknowledge the Violations and waive any Event of Default or Unmatured
Event of Default that would otherwise be caused by the Violations. The waiver
under this Section 3 is limited as specifically written herein and shall be
solely a waiver of the above described Violations and it shall not constitute a
waiver of any other terms or conditions of the Loan Agreement.

 

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4. Affirmation. Except as expressly amended hereby, the Loan Agreement and the
Other Agreements are and shall continue in full force and effect and the
Borrower hereby fully ratifies and affirms the Loan Agreement and each Other
Agreement to which it is a party. Reference in any of this Amendment, the Loan
Agreement or any Other Agreement to the Loan Agreement shall be a reference to
the Loan Agreement as amended hereby and as further amended, modified, restated,
supplemented or extended from time to time.

5. Representations and Warranties. To induce the Administrative Agent and
Lenders to execute this Amendment, the Borrower hereby represents and warrants
to the Lenders as follows:

5.1. The Borrower is duly authorized to execute and deliver this Amendment and
is duly authorized to perform its obligations hereunder.

5.2. The execution, delivery and performance by the Borrower of this Amendment
do not and will not (i) require any consent or approval of any Person (other
than any consent or approval which has been obtained and is in full force and
effect), (ii) conflict with (A) any provision of law, (B) the charter, by-laws
or other organizational documents of the Borrower or (C) any agreement,
indenture, instrument or other document, or any judgment, order or decree, which
is binding upon the Borrower or any of its properties or (iii) require, or
result in, the creation or imposition of any Lien on any asset of the Borrower
other than Liens in favor of the Administrative Agent.

5.3. This Amendment is the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms, subject to
bankruptcy, insolvency and similar laws affecting enforceability of creditors’
rights generally and to general principles of equity.

5.4. The representations and warranties in the Loan Agreement and Other
Agreements (including but not limited to Section 11 of the Loan Agreement) are
true and correct with the same effect as though made on and as of the date of
this Amendment (except to the extent stated to relate to a specific earlier
date, in which case such representations and warranties were true and correct as
of such earlier date).

5.5. Except for the Violations waived pursuant to Section 3 of this Amendment,
no Unmatured Event of Default or Event of Default has occurred and is
continuing.

6. Conditions to Amendment. This Amendment shall become effective upon the
satisfaction in full of all of the following conditions precedent, each of which
shall be satisfactory to the Administrative Agent and the Requisite Lenders:

6.1. Amendment. The Borrower and the Requisite Lenders shall have executed and
delivered to the Administrative Agent this Amendment.

6.2. Amendment Fee. The Administrative Agent shall have received $159,150.00 as
and for a nonrefundable amendment fee for the pro rata account of the Lenders
executing this Amendment.

 

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6.3. Fees and Expenses. The Borrower shall have paid all of the Administrative
Agent’s and RBS’ legal fees and expenses in connection with this Amendment to
the extent invoiced.

6.4. Other. Such other documents as the Administrative Agent or Lender shall
reasonably request.

7. Costs and Expenses. The Borrower shall pay or reimburse the Administrative
Agent and RBS within five Business Days after demand for all reasonable costs
and expenses (including reasonable attorneys fees) incurred by them in
connection with the preparation, delivery, administration, and execution of this
Amendment and the documentation and transactions contemplated hereby, and in
connection with any review of the Collateral and Other Agreements considered
necessary by them in connection with this Amendment (capped in the case of
attorney’s fees for RBS at $5,000).

8. Counterparts. This Amendment may be executed in two or more counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute one instrument. Delivery of an executed counterpart of this
Amendment by facsimile or electronic transmission shall be effective as delivery
of an original counterpart.

9. Headings. The headings and captions of this Amendment are for the purposes of
reference only and shall not affect the construction of, or be taken into
consideration in interpreting, this Amendment.

10. APPLICABLE LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO ILLINOIS
CHOICE OF LAW DOCTRINE.

The parties hereto have caused this Amendment to be executed by their duly
authorized officers, all as of the day and year first above written.

Signature Pages Follow

 

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COBRA ELECTRONICS CORPORATION By:   /s/ Michael Smith Name:     Michael Smith
Title:   Senior Vice President and Chief Financial Officer THE PRIVATEBANK AND
TRUST COMPANY, individually as a Lender and as Administrative Agent By:   /s/
Mitchell B. Rasky Name:     Mitchell B. Rasky Title:   Managing Director RBS
CITIZENS, N.A., as a Lender By:   /s/ Paul M. Mongeau Name:     Paul M. Mongeau
Title:   Senior Vice President

 

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