THIRD AMENDMENT TO LOAN AGREEMENT
                        ---------------------------------

     THIS THIRD  AMENDMENT TO LOAN AGREEMENT (this  "Agreement")  made this 15th
day of August,  1997 by and among (i) COMARCO,  INC.,  a California  corporation
(the  "Borrower"),   (ii)  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  (collectively,  the "Original  Guarantors"  and each an
"Original  Guarantor"),  (iii) COMARCO  SYSTEMS,  INC.  ("Comarco  Systems"),  a
California  corporation,  COMARCO  STAFFING,  INC.  (formerly  known as CoSource
Solutions,  Inc.)  ("CSI"),  a California  corporation,  MANUFACTURING  TRAINING
TECHNOLOGY CENTER, INC. ("MTTCI"), a California corporation and COMARCO WIRELESS
INTERNATIONAL, INC. ("CWI"), a Delaware corporation (Comarco Systems, CSI, MTTCI
and CWI,  together with the Original  Guarantors,  being  individually  called a
"Guarantor"  and  collectively,  the  "Guarantors")  and  NATIONSBANK,  N.A.,  a
national banking association, its successors and assigns (the "Lender").

                                    RECITALS
                                    --------
         A. The Borrower,  the Original  Guarantors  and the Lender have entered
into that certain Loan  Agreement  dated  September 26, 1994, as amended by that
certain First Amendment to Loan Agreement dated September 26, 1995, by and among
the Borrower, the Original Guarantors and the Lender, as 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 (as thereafter
amended from time to time, is hereafter called the "Loan Agreement").
         B.  The  parties  hereto  desire  to add  Comarco  Systems  and  CWI as
guarantors to the Loan  Agreement,  to extend the maturity date of the Loans and
to modify certain covenants, all as more fully set forth in 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. 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 Third Amended and Restated  Master Line of Credit Note of even date
herewith  (the "Third  Replacement  Master Line of Credit  Note") in the form of
Exhibit B-1 attached hereto.  The Third  Replacement  Master Line of Credit Note
amends and restates in its entirety  that  certain  Amended and Restated  Master
Line of Credit Note dated August 30,  1996 (the "Second  Replacement Master Line
of  Credit  Note")  from the  Borrower  in favor of the  Lender  in the  maximum
principal  amount of  $8,000,000.  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 Second  Replacement  Master Line of Credit Note. The
Third Replacement  Master Line of Credit Note shall not operate as a novation of
any of the sums due or owing  under the  Second  Master  Line of Credit  Note or
nullify,  discharge,  or release any sums due or owing  under the Second  Master
Line of Credit Note or the continuing  contractual  relationship  of the parties
hereto in accordance with the provisions of this Agreement.
         3. The Guidance  Line of Credit  Note.  From and after the date hereto,
all references in the Loan Agreement to the "Guidance Line of Credit Note" shall
mean that certain  Third  Amended and Restated  Guidance  Line of Credit Note of
even date herewith (the "Third Replacement Guidance Line of Credit Note") in the
form of Exhibit C attached hereto. The Third Replacement Guidance Line of Credit
Note  amends and  restates  in its  entirety  that  certain  Second  Amended and
Restated  Guidance  Line of Credit  Note  dated  August  30,  1996 (the  "Second
Replacement  Guidance  Line of Credit  Note") from the  Borrower in favor of the
Lender in the maximum  principal  amount of  $5,000,000.  The  Borrower  and the
Lender agree that the execution of this  Agreement is not intended and shall not
cause or result in an novation  with regard to the Second  Replacement  Guidance
Line of Credit Note.  The Third  Replacement  Guidance Line of Credit Note shall
not  operate  as a  novation  of any of the sums due or owing  under the  Second
Guidance Line of Credit Note or nullify,  discharge,  or release any sums due or
owing  under the  Guidance  Line of Credit  Note or the  continuing  contractual
relationship  of the parties  hereto in accordance  with the  provisions of this
Agreement.
         4.  Assumption of  Obligations.  Comarco  Systems and CWI,  jointly and
severally, covenant, promise and agree to perform each and all of the covenants,
agreements and obligations in the Loan Documents to be performed by the Original
Guarantors, at the times, in the manner and in all respects as provided therein,
and to be  bound  by each  and  all of the  terms  and  provisions  of the  Loan
Agreement as though the Loan Agreement had originally been jointly and severally
made by the  Borrower,  the Original  Guarantors,  Comarco  Systems and CWI. The
Borrower  and  each of the  Original  Guarantors  shall  remain  liable  for the
performance of each and all of the covenants,  agreements and obligations in the
Loan Documents to be performed by the Borrower and the Original  Guarantors,  as
the case may be. All references in the Loan Agreement to the  "Guarantor" or the
"Guarantors" shall hereafter be deemed to include Comarco Systems and CWI.
         5. 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 Third  Replacement  Master  Line of Credit Note in the
form of Exhibit  B-1  attached  hereto  and  incorporated  herein by  reference,
payable  to the  order  of  the  Lender  in  the  maximum  principal  amount  of
$8,000,000;
                  (b) The Third Replacement  Guidance Line of Credit Note in the
form of Exhibit C attached hereto and incorporated herein by reference,  payable
to the order of the Lender in the maximum principal amount of $5,000,000;
                  (c) A Continuing  and  Unconditional  in the form of Exhibit D
attached hereto and  incorporated  herein by reference,  issued and delivered by
Comarco Systems and CWI in favor of the Lender;
                  (d) A  Security  Agreement  in the form of  Exhibit E attached
hereto and  incorporated  herein by reference,  from Comarco  Systems and CWI in
favor of the Lender;
                  (e) A  Covenant  Not to  Encumber  in the  form of  Exhibit  F
attached hereto and  incorporated  herein by reference,  issued and delivered by
Comarco Systems and CWI in favor of the Lender;
                  (f) The Lender shall have received a  certificate  dated as of
the Closing Date by the Secretary or Assistant  Secretary of Comarco Systems and
CWI covering:
                       (i) true and  complete  copies of  Comarco  Systems'  and
CWI's  corporate charter,  bylaws, and all amendments  thereto;
                      (ii) true and complete copies of the resolutions of 
Comarco  Systems' and CWI's Boards of Directors  authorizing (i) the execution,
delivery and performance of the Loan Documents, and (ii) the guaranty of the
Loans; and 
                     (iii) the incumbency, authority and signatures of the
officers of Comarco Systems and CWI  authorized to sign this Agreement and the
other Loan Documents to which Comarco Systems and CWI is a party.

                  (g) 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
                  (h) Such other information,  instruments, opinions, documents,
certificates and reports as the Lender may deem necessary.
         6. Replacement Exhibits.  Exhibits "B-1", and "C" to the Loan Agreement
are being  replaced  in their  entirety  with  Exhibits  "B-1" and "C"  attached
hereto.  The Borrower shall execute and deliver to the Lender on the date hereof
the  Third  Replacement  Master  Line of Credit  Note and the Third  Replacement
Guidance Line of Credit Note in substitution  for and not  satisfaction  of, the
Second  Replacement  Master  Line of  Credit  Note  and the  Second  Replacement
Guidance  Line of Credit  Note,  and the Third  Replacement  Master Note and the
Third  Replacement  Guidance  Line of Credit  Note shall be the  "Notes" for all
purposes of the Loan  Documents.  The notes being  substituted  pursuant to this
Agreement shall be marked "Replaced" and returned to the Borrower promptly after
the execution and delivery of the Third  Replacement  Master Line of Credit Note
and the Third Replacement Guidance Line of Credit Note to the Lender.
         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.


<PAGE>


         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 OR ATTEST:          COMARCO, INC.


__________________________ By:_________________________________________(SEAL)
                              Name:
                              Title:

                            THE GUARANTORS:

WITNESS OR ATTEST:          COMARCO WIRELESS TECHNOLOGIES, INC., a corporation
                            organized under the laws of the State of Delaware


__________________________ By:_________________________________________(SEAL)
                              Name:
                              Title:

WITNESS OR ATTEST:          INTERNATIONAL BUSINESS SERVICES, INC., a corporation
                            organized under the laws of the District of Columbia


__________________________ By:_________________________________________(SEAL)
                              Name:
                              Title:

WITNESS OR ATTEST:          DECISIONS AND DESIGNS, INC., a corporation organized
                            under the laws of the Commonwealth of Virginia


__________________________ By:_________________________________________(SEAL)
                              Name:
                              Title:


WITNESS OR ATTEST:          LCTI, INC., a corporation organized under the laws
                            of the State of Maryland


__________________________ By:_________________________________________(SEAL)
                              Name:
                              Title:

WITNESS OR ATTEST:          MANUFACTURING TRAINING TECHNOLOGY CENTER, INC.,  a
                            corporation organized under the laws of the State of
                            California


__________________________ By:_________________________________________(SEAL)
                              Name:
                              Title:

<PAGE>

WITNESS OR ATTEST:          COMARCO SYSTEMS, INC., a corporation organized under
                            the laws of the State of California


__________________________ By:_________________________________________(SEAL)
                              Name:
                              Title:

WITNESS OR ATTEST:          COMARCO STAFFING, INC., a corporation organized 
                            under the laws of the State of California


__________________________ By:_________________________________________(SEAL)
                              Name:
                              Title:

WITNESS OR ATTEST:          COMARCO WIRELESS INTERNATIONAL, INC., a  corporation
                            organized under the laws of the State of Delaware


__________________________ By:_________________________________________(SEAL)
                              Name:
                              Title:


                            THE LENDER:
                            ----------

WITNESS:                    NATIONSBANK, N.A.

________________________   By:_________________________________________(SEAL)
                              Elaine T. Eaton
                              Vice President