Exhibit 10.38

 

AMENDMENT NO. 4 TO LOAN AGREEMENT

 

This AMENDMENT NO. 4 TO LOAN AGREEMENT (this “Amendment”) is made and entered
into as of September 15, 2003 by and among Powerwave Technologies, Inc., a
Delaware corporation (the “Borrower”), COMERICA BANK-CALIFORNIA, a California
banking corporation, as agent for the Lenders (the “Agent”), and the various
financial institutions that are (or may from time to time hereafter become)
parties to the Loan Agreement identified below as lenders (each a “Lender” and
collectively the “Lenders”).

 

R E C I T A L S:

 

A. Borrower, Agent and the Lenders have entered into that certain Loan Agreement
dated as of May 26, 2000, as amended, pursuant to which Lenders agreed to
provide certain credit facilities to Borrower (the “Loan Agreement”; capitalized
terms used herein without definition shall have the meanings ascribed to them in
the Loan Agreement).

 

B. While the Loan Agreement matured and terminated on May 31, 2003, it is the
desire of Borrower, Agent and the Lenders to reinstate the Loan Agreement as of
the date hereof, and to make certain changes to the Loan Agreement and the
Revolving Note as set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

1. AMENDMENTS.

 

1.1 Maturity Date. The maturity date as set forth in Section 2.1 of the Loan
Agreement and in the Revolving Note, is amended to be “May 31, 2004”, and such
date shall henceforth be deemed to be the “Revolving Maturity Date”.

 

1.2 Restrictions on Indebtedness. Section 7.7 of the Loan Agreement is amended
and restated to read in full as follows:

 

7.7 Restrictions on Indebtedness. Borrower will not incur, create, assume or
suffer to exist any Indebtedness, other than the following:

 

(a) Indebtedness incurred pursuant to this Agreement and the other Loan
Documents;

 

(b) Accounts payable and other accrued liabilities arising in the ordinary
course of business;

 

(c) Indebtedness in addition to the Obligations in an aggregate principal amount
not to exceed $10,000,000 in at any one time outstanding;

 

(d) in addition to the foregoing, Indebtedness secured by Liens permitted under
Section 7.8;

 

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(e) Indebtedness represented by Borrower’s $130,000,000 1.25% Convertible
Subordinated Notes Due 2008 , issued pursuant to that certain Indenture dated as
of July 18, 2003 with Deutsche Bank Trust Company Americas, as Trustee, provided
that the Obligations constitute “Designated Senior Indebtedness” under such
Indenture; and

 

(f) Indebtedness consisting of Guarantee obligations permitted under Section
7.14(a).

 

1.3 Financial Covenants. Section 7.16 of the Loan Agreement is amended and
restated to read in full as follows:

 

7.16 Financial Covenants. All financial covenants are determined for Borrower
and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

(a) Leverage Ratio. Borrower will maintain a Leverage Ratio of not more than
0.75:1.0 at the end of each fiscal quarter:

 

(b) Minimum Tangible Net Worth. Borrower will maintain, as at the last day of
each fiscal quarter, a Tangible Net Worth in accordance with GAAP of not less
than $285,000,000 plus, commencing June 29, 2003 and each fiscal quarter end
thereafter, (i) 75% of Borrower’s positive consolidated Net Income (Loss) and
(ii) 100% of the proceeds of issuances and sales of (x) subordinated
Indebtedness that is included in Tangible Net Worth and (y) equity securities of
Borrower and its Subsidiaries (in each case net of associated fees and
expenses), less stock repurchases, in each case determined on a cumulative basis
following March 31, 2003.

 

(c) [RESERVED]

 

(d) Quick Ratio. Borrower shall have a ratio of Consolidated Current Assets to
Consolidated Current Liabilities of not less than 2.0 : 1.0 as at the end of
each fiscal quarter.

 

2. EFFECTIVENESS AND EFFECT. This Amendment shall be effective upon the
execution and delivery hereof by all of the parties hereto, whereupon the Loan
Agreement, as heretofore amended and as amended hereby, shall be reinstated and
shall be in full force and effect. This Amendment is limited to the express
terms hereof. Except as specifically provided herein, all provisions of the Loan
Agreement, the Revolving Note and the other Loan Documents remain in full force
and effect without modification or waiver, and the same are hereby ratified by
the parties in all respects.

 

3. DESIGNATED SENIOR INDEBTEDNESS. Borrower hereby affirms and agrees that the
Obligations shall constitute “Designated Senior Indebtedness” as defined in, and
for all purposes under, that certain Indenture dated as of July 18, 2003 between
Borrower and Deutsche Bank Trust Company Americas, as Trustee, and that a copy
of this Amendment may be furnished to the Trustee as evidence thereof.

 

4. GENERAL PROVISIONS. This Amendment shall be deemed for all purposes to be a
Loan Document and shall be subject to the General Provisions set forth in
Section 9 of the Loan Agreement.

 

[remainder of page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 to
Loan Agreement as of the date first set forth above.

 

Borrower:

 

POWERWAVE TECHNOLOGIES, INC.

   

By:

 

/s/ Kevin T. Michaels

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Print Name:

 

Kevin T. Michaels

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Agent:

 

COMERICA BANK-CALIFORNIA

   

By:

 

/s/ Bonnie Kehe

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Print Name:

 

Bonnie Kehe

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Lenders:

 

COMERICA BANK-CALIFORNIA

   

By:

 

/s/ Bonnie Kehe

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Print Name:

 

Bonnie Kehe

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