Exhibit 4.1.3
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of August 16, 2004, among CRICKET
COMMUNICATIONS, INC., a Delaware corporation (the "Issuer"), LEAP WIRELESS
INTERNATIONAL, INC., a Delaware corporation (the "Parent"), each subsidiary of
the Parent listed on Schedule I hereto (each such subsidiary individually a
"Subsidiary Pledgor" and, collectively, the "Subsidiary Pledgors", and together
with the Parent, each individually a "Guarantor" and, collectively, the
"Guarantors"; and the Guarantors and the Issuer are referred to collectively
herein as the "Pledgors") and Xxxxx Fargo Bank, National Association, a national
banking association (the "Trustee"), as trustee under the Indenture referred to
below and as collateral agent (in such capacity as collateral agent, the
"Collateral Agent") for the Secured Parties (as defined in the Security
Agreement). Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Indenture (as defined below).
WITNESSETH:
WHEREAS, pursuant to the terms, conditions and provisions of the Indenture
dated as of the date hereof (as amended, restated, supplemented or otherwise
modified from time to time, the "Indenture"), among the Issuer, the Guarantors
and the Trustee, the Issuer is initially issuing $350,000,000 aggregate
principal amount of 13% Senior Secured Pay-in-Kind Notes due 2010 and may issue,
from time to time, additional notes in accordance with the provisions of the
Indenture (collectively, the "Notes") which will be guaranteed on a senior
secured basis by each of the Guarantors;
WHEREAS, each Pledgor is executing and delivering this Agreement pursuant
to the terms of the Indenture to evidence the security interests in the
Collateral (as defined herein); and
WHEREAS, each Pledgor has duly authorized the execution, delivery and
performance of this Agreement.
NOW, THEREFORE, for and in consideration of the premises, and of the
mutual covenants herein contained, each Pledgor and the Collateral Agent, on
behalf of itself and each Secured Party (as defined in the Security Agreement)
(and each of their respective successors or assigns), hereby agree as follows:
SECTION 1. Pledge. As security for the payment and performance, as the
case may be, in full of all obligations of the Issuer and the Guarantors under
the Indenture, the Notes and the other Indenture Documents, including
obligations to the Trustee and the Collateral Agent, whether for payment of
principal of or interest on the Notes and all other monetary obligations of the
Issuer and the Guarantors under the Indenture, the Notes and the other Indenture
Documents, whether for fees, expenses, indemnification or otherwise (referred to
collectively as the "Obligations"), each Pledgor hereby pledges and grants to
the Collateral Agent, its successors and assigns, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a first-priority security interest (subject to Permitted Liens)
in all of such Pledgor's right, title and interest in, to and under (a) the
shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person (collectively, the "Equity Interests") owned
by it which are listed on Schedule II hereto and any Equity Interests obtained
in the future by such Pledgor and the certificates representing all such Equity
Interests (the "Pledged Interests"); provided that the Pledged Interests shall
not include, to the extent that applicable law requires that a Subsidiary of
such Pledgor issue directors' qualifying shares, such qualifying shares; (b)(i)
the debt securities owned by it which are listed opposite the name of such
Pledgor on Schedule II hereto, (ii) any debt securities in the future issued to
or acquired by such Pledgor and (iii) the promissory notes and any other
instruments evidencing such debt securities or any other indebtedness for
borrowed money in a face amount in excess of $25,000 (the "Pledged Debt
Securities"); (c) all other property that has been or may be delivered to and
held by the Collateral Agent pursuant to the terms hereof; (d) subject to
Section 5, all payments of principal or interest, dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed, in respect of, in exchange for or upon the conversion of the
securities referred to in clauses (a) and (b) above; (e) subject to Section 5,
all rights and privileges of such Pledgor with respect to the securities and
other property referred to in clauses (a), (b), (c) and (d) above; and (f) all
proceeds of any of the foregoing (the items referred to in clauses (a) through
(f) above being collectively referred to as the "Collateral"). Upon delivery to
the Collateral Agent, (x) any Pledged Interests, any Pledged Debt Securities or
any stock certificates, notes or other securities now or hereafter included in
the Collateral (the "Pledged Securities") have been or shall be accompanied by
stock powers duly executed in blank or other instruments of transfer
satisfactory to the Collateral Agent and by such other instruments and documents
as the Collateral Agent may reasonably request and (y) all other property
comprising part of the Collateral shall be accompanied by proper instruments of
assignment duly executed by the applicable Pledgor and such other instruments or
documents as the Collateral Agent may reasonably request. Each delivery of
Pledged Securities shall be accompanied by a schedule describing the securities
theretofore and then being pledged hereunder, which schedule shall be attached
hereto as Schedule II and made a part hereof. Each schedule so delivered shall
supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral. (a) Each Pledgor agrees promptly to
deliver or cause to be delivered to the Collateral Agent any and all Pledged
Securities, and any and all certificates or other instruments or documents
representing the Collateral.
(b) Each Pledgor will cause any Indebtedness for borrowed money owed to
the Pledgor by any Person in a face amount in excess of $25,000 to be evidenced
by a duly executed promissory note that is pledged to the Collateral Agent and
delivered to the Collateral Agent for the benefit of the Secured Parties
pursuant to the terms hereof.
SECTION 3. Representations, Warranties and Covenants. Each Pledgor hereby
represents, warrants and covenants, as to itself and the Collateral pledged by
it hereunder, but subject to Section 14 and to any Permitted Liens, to and with
the Collateral Agent that:
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(a) the Pledged Interests represent that percentage as set forth on
Schedule II of the issued and outstanding shares of each class of the Equity
Interests of the issuer thereof with respect thereto, and the Pledged Interests
listed on Schedule II constitute all Equity Interests owned by each Pledgor as
of the date hereof;
(b) the Pledged Debt Securities listed on Schedule II constitute all
debt securities, promissory notes (with a face amount in excess of $25,000) and
other instruments evidencing indebtedness for borrowed money owned by each
Pledgor as of the date hereof;
(c) except for the security interest granted hereunder, such Pledgor (i)
is and will at all times continue to be the direct owner, beneficially and of
record, of the Pledged Securities indicated on Schedule II, (ii) holds the same
free and clear of all Liens other than Permitted Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist
any security interest in or other Lien on, the Collateral, other than pursuant
hereto, and (iv) subject to Section 5, will cause any and all Collateral,
whether for value paid by such Pledgor or otherwise, to be forthwith deposited
with the Collateral Agent and pledged or assigned hereunder;
(d) such Pledgor (i) has the power and authority to pledge the
Collateral in the manner hereby done or contemplated and (ii) will defend its
title or interest thereto or therein against any and all Liens other than
Permitted Liens, however arising, of all Persons whomsoever;
(e) no consent of any other Person (including stockholders or creditors
of any Pledgor) and no consent or approval of any Governmental Authority or any
securities exchange was or is necessary to the validity of the pledge effected
hereby;
(f) by virtue of the execution and delivery by the Pledgors of this
Agreement, upon delivery to the Collateral Agent of the Pledged Securities,
certificates or other documents representing or evidencing the Collateral in
accordance with this Agreement, and, in the case of Pledged Securities not
constituting certificated securities or instruments, the filing of UCC financing
statements in the appropriate filing office, the Collateral Agent will have a
valid and perfected first-priority lien upon and security interest in such
Pledged Securities as security for the payment and performance of the
Obligations;
(g) the pledge effected hereby is effective to vest in the Collateral
Agent, on behalf of the Secured Parties, the rights of the Collateral Agent in
the Collateral as set forth herein;
(h) all of the Pledged Interests have been duly authorized and validly
issued and are fully paid and nonassessable; and
(i) all Collateral consisting of Pledged Securities, certificates or
other documents representing or evidencing the Collateral has been delivered to
the Collateral Agent in accordance with Section 2.
SECTION 4. Registration in Nominee Name; Denominations. Subject to Section
25, the Collateral Agent, on behalf of the Secured Parties, shall have the right
(in its sole and absolute discretion) to hold the Pledged Securities in its own
name as pledgee, the name of its nominee
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(as pledgee or as sub-agent) or the name of the Pledgors, endorsed or assigned
in blank or in favor of the Collateral Agent. Each Pledgor will promptly give to
the Collateral Agent copies of any notices or other communications received by
it with respect to Pledged Securities registered in the name of such Pledgor.
The Collateral Agent shall at all times have the right to exchange the
certificates representing Pledged Securities for certificates of smaller or
larger denominations for any purpose consistent with this Agreement, if and to
the extent that the Pledgors have the right to effect, or cause to be effected,
any such exchange.
SECTION 5. Voting Rights; Dividends and Interest, etc.
(a) Unless and until an Event of Default shall have occurred and be
continuing:
(i) Each Pledgor shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms
of this Agreement, the Indenture and the other Indenture Documents;
provided, however, that such Pledgor shall not exercise any such right if
the result thereof could materially and adversely affect the rights
inuring to a holder of the Pledged Securities or the rights and remedies
of any of the Secured Parties under this Agreement or the Indenture or any
other Indenture Document or the ability of the Secured Parties to exercise
the same.
(ii) The Collateral Agent shall execute and deliver to each
Pledgor, or cause to be executed and delivered to each Pledgor, all such
proxies, powers of attorney and other instruments as such Pledgor may
reasonably request for the purpose of enabling such Pledgor to exercise
the voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above and to receive the cash dividends it is
entitled to receive pursuant to subparagraph (iii) below.
(iii) Each Pledgor shall be entitled to receive and retain any and
all cash dividends, interest and principal paid on the Pledged Securities
to the extent and only to the extent that such cash dividends, interest
and principal are permitted by, and otherwise paid in accordance with, the
terms and conditions of the Indenture, the other Indenture Documents and
applicable laws. All noncash dividends, interest and principal, and all
dividends, interest and principal paid or payable in cash or otherwise in
connection with a partial or total liquidation or dissolution, return of
capital, capital surplus or paid-in surplus, and all other distributions
(other than distributions referred to in the preceding sentence) made on
or in respect of the Pledged Securities, whether paid or payable in cash
or otherwise, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of the issuer of any
Pledged Securities or received in exchange for Pledged Securities or any
part thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the
Collateral, and, if received by any Pledgor, shall not be commingled by
such Pledgor with any of its other funds or property but shall be held
separate and apart therefrom, shall be held in trust for the benefit of
the Collateral Agent and shall be forthwith delivered to the Collateral
Agent for the benefit of the Secured Parties in the same form as so
received (with any necessary endorsement).
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(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to dividends, interest or principal that such
Pledgor is authorized to receive pursuant to paragraph (a)(iii) above shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall (subject to the provisions of this paragraph (b)) have the
sole and exclusive right and authority to receive and retain such dividends,
interest or principal. All dividends, interest or principal received by the
Pledgor contrary to the provisions of this Section 5 shall be held in trust for
the benefit of the Collateral Agent, shall be segregated from other property or
funds of such Pledgor and shall be forthwith delivered to the Collateral Agent
upon demand in the same form as so received (with any necessary endorsement).
Any and all money and other property paid over to or received by the Collateral
Agent pursuant to the provisions of this paragraph (b) shall be retained by the
Collateral Agent in an account to be established by the Collateral Agent upon
receipt of such money or other property and shall be applied in accordance with
the provisions of Section 7. After all Events of Default have been cured or
waived, the Collateral Agent shall promptly repay to each Pledgor all cash
dividends, interest or principal (without interest), that such Pledgor would
otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii)
above and which remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default, and subject to the requirements for prior FCC approval specified in
Section 25, all rights of any Pledgor to exercise the voting and consensual
rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of
this Section 5, and the obligations of the Collateral Agent under paragraph
(a)(ii) of this Section 5, shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to exercise such voting and consensual rights and powers,
provided that, unless the Collateral Agent shall have received written
objections from Holders of at least 25% in principal amount of the Notes, the
Collateral Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Pledgors to exercise such
rights. After all Events of Default have been cured or waived, each Pledgor will
have the right to exercise the voting and consensual rights and powers that it
would otherwise be entitled to exercise pursuant to the terms of paragraph
(a)(i) above.
SECTION 6. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, and subject to applicable regulatory and
legal requirements, including the requirements for prior FCC approval specified
in Section 25, the Collateral Agent shall have the right to sell the Collateral,
or any part thereof, at public or private sale or at any broker's board or on
any securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Pledgor, and, to the extent permitted by
applicable law, the Pledgors hereby waive all rights of redemption, stay,
valuation and appraisal any Pledgor now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted.
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The Collateral Agent shall give a Pledgor 10 days' prior written notice
(which each Pledgor agrees is reasonable notice within the meaning of Section
9-611 of the Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions) of the Collateral Agent's intention to
make any sale of such Pledgor's Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice of such sale. At any such sale, the Collateral, or portion thereof, to be
sold may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may (in its sole and absolute discretion) determine. The
Collateral Agent shall not be obligated to make any sale of any Collateral if it
shall determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Collateral Agent until the sale price is paid in full by the
purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any public (or, to the extent permitted by
applicable law, private) sale made pursuant to this Section 6, any Secured Party
may bid for or purchase, free from any right of redemption, stay or appraisal on
the part of any Pledgor (all said rights being also hereby waived and released),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any Obligation then due and payable to it from such
Pledgor as a credit against the purchase price, and it may, upon compliance with
the terms of sale, hold, retain and dispose of such property without further
accountability to such Pledgor therefor. For purposes hereof, (a) a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof, (b) the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and (c) such Pledgor shall not be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose upon and to sell the Collateral or any portion thereof pursuant to
a judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
SECTION 7. Application of Proceeds of Sale. The Collateral Agent shall
apply the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Trustee or the Collateral Agent (in its capacity as such hereunder or
under any other Indenture Document) in connection with such collection or
sale or otherwise in connection with this Agreement or any of the
Obligations, including all court costs and the reasonable fees
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and expenses of its agents and legal counsel, the repayment of all
advances made by the Trustee or the Collateral Agent hereunder or under
any other Indenture Document on behalf of any Pledgor and any other costs
or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Indenture Document and any other
amounts due to the Trustee or the Collateral Agent under Section 7.07 of
the Indenture;
SECOND, to the payment in full of the Obligations owed to the
Holders (the amounts so applied to be distributed among the Holders pro
rata in accordance with the amounts of the Obligations owed to Holders on
the date of any such distribution); and
THIRD, to the Pledgors, their successors or assigns, or as a court
of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. The Collateral Agent may fix a record date and payment date for any
payment to Holders pursuant to this Section 7. At least 15 days before such
record date, the Collateral Agent shall mail to each Holder and the Issuer a
notice that states the record date, the payment and amount to be paid. Upon any
sale of the Collateral by the Collateral Agent (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of the
purchase money by the Collateral Agent or of the officer making the sale shall
be a sufficient discharge to the purchaser or purchasers of the Collateral so
sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 8. Reimbursement of Collateral Agent.
(a) Each Pledgor agrees to pay upon demand to the Collateral Agent the
amount of any and all reasonable expenses, including the reasonable fees, other
charges and disbursements of its counsel and of any experts or agents, that the
Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent hereunder or (iv) the
failure by such Pledgor to perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Indenture Documents, each Pledgor agrees to indemnify the Collateral
Agent, the Trustee, the Holders and each Affiliate of the foregoing Persons
(each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, other charges and
disbursements (provided, that the Pledgors shall not be obligated to pay for
more than one primary counsel and one local counsel for all Indemnitees
collectively unless there is, under applicable standards of professional
conduct, a conflict on any significant issue between the positions of any two or
more Indemnitees), incurred by or asserted against any Indemnitee arising out
of, in any way connected with, or as a result of (i) the execution or delivery
of this Agreement or any other Indenture Document or any agreement or instrument
contemplated hereby or thereby, the
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performance by the parties hereto of their respective obligations thereunder or
the consummation of the other transactions contemplated thereby or (ii) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee.
(c) Any amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 8 shall remain operative and in full force and effect regardless
of the termination of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Indenture Document or any investigation made by or on behalf of the Collateral
Agent or any other Secured Party. All amounts due under this Section 8 shall be
payable on written demand therefor and shall bear interest at the rate specified
in the Notes.
SECTION 9. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor
hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Pledgor, to ask for, demand,
xxx for, collect, receive and give acquittance for any and all moneys due or to
become due under and by virtue of any Collateral, to endorse checks, drafts,
orders and other instruments for the payment of money payable to the Pledgor
representing any interest or dividend or other distribution payable in respect
of the Collateral or any part thereof or on account thereof and to give full
discharge for the same, to settle, compromise, prosecute or defend any action,
claim or proceeding with respect thereto, to sell, assign, endorse, pledge,
transfer and to make any agreement respecting, or otherwise deal with, the same,
and to prepare and file applications seeking the FCC's consent to transfer
control of, or assign, FCC licenses, permits, and authorizations; provided,
however, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by the Collateral Agent, or
to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
SECTION 10. Waivers; Amendment. (a) No failure or delay of the Collateral
Agent in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of
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any other right or power. The rights and remedies of the Collateral Agent
hereunder and of the Collateral Agent and the other Secured Parties under the
other Indenture Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provisions of this
Agreement or consent to any departure by any Pledgor therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on any Pledgor in any
case shall entitle such Pledgor to any other or further notice or demand in
similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except in accordance with the Indenture pursuant to a
written agreement entered into between the Collateral Agent and the Pledgor or
Pledgors with respect to which such waiver, amendment or modification is to
apply.
SECTION 11. Securities Act, etc. In view of the position of the Pledgors
in relation to the Pledged Securities, or because of other current or future
circumstances, a question may arise under the Securities Act of 1933, as now or
hereafter in effect, or any similar statute hereafter enacted analogous in
purpose or effect (such Act and any such similar statute as from time to time in
effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Securities permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Securities, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Securities could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Securities under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Pledgor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Securities, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Securities for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion, (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale, in either case in accordance with a valid exemption from
registration under the Federal Securities Laws. Each Pledgor acknowledges and
agrees that any such sale might result in prices and other terms less favorable
to the seller than if such sale were a public sale without such restrictions. In
the event of any such sale, the Collateral Agent shall incur no responsibility
or liability for selling all or any part of the Pledged Securities at a price
that the Collateral Agent, in its sole and absolute discretion, may in good
xxxxx xxxx reasonable under the circumstances, notwithstanding the possibility
that a substantially higher price might have been realized if the sale were
deferred until after registration as aforesaid or if more than a single
purchaser were approached. The provisions of this Section 11 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Collateral Agent sells any Pledged Securities.
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SECTION 12. Registration, etc. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default, if for any reason
the Collateral Agent desires to sell any of the Pledged Securities at a public
sale, it will, at any time and from time to time, upon the written request of
the Collateral Agent, use its commercially reasonable efforts to take or to
cause the issuer of such Pledged Securities to take such action and prepare,
distribute and/or file such documents, as are required or advisable in the
reasonable opinion of counsel for the Collateral Agent to permit the public sale
of such Pledged Securities. Each Pledgor further agrees to indemnify, defend and
hold harmless the Collateral Agent, each other Secured Party, any underwriter
and their respective officers, directors, affiliates and controlling Persons
from and against all loss, liability, expenses, reasonable costs of counsel
(including, without limitation, reasonable fees and expenses to the Collateral
Agent of legal counsel), and claims (including the costs of investigation) that
they may incur insofar as such loss, liability, expense or claim arises out of
or is based upon any alleged untrue statement of a material fact contained in
any prospectus (or any amendment or supplement thereto) or in any notification
or offering circular, or arises out of or is based upon any alleged omission to
state a material fact required to be stated therein or necessary to make the
statements in any thereof not misleading, except insofar as the same may have
been caused by any untrue statement or omission based upon information furnished
in writing to such Pledgor or the issuer of such Pledged Securities by the
Collateral Agent or any other Secured Party expressly for use therein. Each
Pledgor further agrees, upon such written request referred to above, to use its
commercially reasonable efforts to qualify, file or register, or cause the
issuer of such Pledged Securities to qualify, file or register, any of the
Pledged Securities under the Blue Sky or other securities laws of such states as
may be requested by the Collateral Agent and keep effective, or cause to be kept
effective, all such qualifications, filings or registrations. Each Pledgor will
bear all costs and expenses of carrying out its obligations under this Section
12. Each Pledgor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 12 and that such
failure would not be adequately compensable in damages, and therefore agrees
that its agreements contained in this Section 12 may be specifically enforced.
SECTION 13. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the grant of a security interest in the Collateral and all
obligations of each Pledgor hereunder, shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Indenture, any
other Indenture Document, any agreement with respect to any of the Obligations
or any other agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Indenture, any other Indenture Document or any other
agreement or instrument relating to any of the foregoing, (c) any exchange,
release or nonperfection of any other collateral, or any release or amendment or
waiver of or consent to or departure from any guaranty, for all or any of the
Obligations or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Pledgor in respect of the
Obligations or in respect of this Agreement (other than the indefeasible payment
in full of all the Obligations).
SECTION 14. Termination or Release.
(a) This Agreement and the security interests granted hereby shall
terminate at the time provided in Section 10.08 of the Indenture.
10
(b) Upon any sale or other transfer by any Pledgor of any Collateral
that is permitted under the Indenture to any Person that is not a Pledgor, or,
if any of the Collateral shall otherwise become subject to the release
provisions set forth in Section 10.03 of the Indenture, such Collateral shall be
automatically released from the Security Interest to the extent provided in
Section 10.03 of the Indenture.
(c) In connection with any termination or release pursuant to paragraph
(a) or (b) or Section 17, the Collateral Agent shall return the Collateral to
the Pledgor and shall execute and deliver to any Pledgor, at such Pledgor's
expense, all documents that such Pledgor shall reasonably request to evidence
such termination or release. Any execution and delivery of documents pursuant to
this Section 14 shall be without recourse to or warranty by the Collateral
Agent.
SECTION 15. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 12.02 of the Indenture. All
communications and notices hereunder to any Guarantor shall be given to it at
the address or telecopy number set forth on Schedule I, with a copy to the
Issuer.
SECTION 16. Further Assurances. Each Pledgor agrees to do such further
acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Collateral Agent may at any time
reasonably request in connection with the administration and enforcement of this
Agreement or with respect to the Collateral or any part thereof or in order to
better assure and confirm unto the Collateral Agent its rights and remedies
hereunder.
SECTION 17. Binding Effect; Several Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Pledgor that are contained in
this Agreement shall bind and inure to the benefit of its successors and
assigns. This Agreement shall become effective as to any Pledgor when a
counterpart hereof executed on behalf of such Pledgor shall have been delivered
to the Collateral Agent and a counterpart hereof shall have been executed on
behalf of the Collateral Agent, and thereafter shall be binding upon such
Pledgor and the Collateral Agent and their respective successors and assigns,
and shall inure to the benefit of such Pledgor, the Collateral Agent and the
other Secured Parties, and their respective successors and assigns, except that
no Pledgor shall have the right to assign its rights hereunder or any interest
herein or in the Collateral (and any such attempted assignment shall be void),
except as expressly permitted by this Agreement or the other Indenture
Documents. In the event that a Pledgor ceases to be a Subsidiary of the Parent
or is designated an Unrestricted Subsidiary in accordance with the provisions of
the Indenture Documents, such Pledgor shall be released from its obligations
under this Agreement, and the Equity Interests issued by such Pledgor shall
cease to be Pledged Interests, without further action. This Agreement shall be
construed as a separate agreement with respect to each Pledgor and may be
amended, modified, supplemented, waived or released with respect to any Pledgor
without the approval of any other Pledgor and without affecting the obligations
of any other Pledgor hereunder.
11
SECTION 18. Survival of Agreement; Severability. (a) All covenants,
agreements, representations and warranties made by each Pledgor herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Indenture Document shall be
considered to have been relied upon by the Collateral Agent and the other
Secured Parties and shall survive the issuance of the Notes and any resale of
the Notes by any Holder, regardless of any investigation made by the Secured
Parties or on their behalf, and shall continue in full force and effect as long
as any Obligation remains unpaid.
(b) In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute a single instrument, and shall become effective
as provided in Section 17. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 21. Rules of Interpretation. The rules of interpretation specified
in Section 1.03 of the Security Agreement shall be applicable to this Agreement.
Section headings used herein are for convenience of reference only, are not part
of this Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting this Agreement.
SECTION 22. Jurisdiction; Consent to Service of Process. (a) Each Pledgor
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York state court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Indenture Documents, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that, to the extent permitted by applicable law, all
claims in respect of any such action or proceeding may be heard and determined
in such New York state or, to the extent permitted by law, in such federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Indenture Documents against any Pledgor
or its properties in the courts of any jurisdiction.
12
(b) Each Pledgor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Indenture Documents in
any New York state or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 15. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INDENTURE DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER INDENTURE DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 23.
SECTION 24. Additional Pledgors. If, pursuant to Sections 4.11 and 11.07
of the Indenture, the Parent is required to cause any Subsidiary of the Parent
that is not a Subsidiary Pledgor to become a Subsidiary Pledgor, upon execution
and delivery by the Collateral Agent and such Subsidiary of an instrument in the
form of Annex 1, such Subsidiary shall become a Subsidiary Pledgor hereunder
with the same force and effect as if originally named as a Subsidiary Pledgor
herein. The execution and delivery of such instrument shall not require the
consent of any Pledgor hereunder. The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Subsidiary Pledgor as a party to this Agreement.
SECTION 25. Compliance with FCC Laws. Notwithstanding anything in this
Agreement to the contrary, no action shall be taken by the Collateral Agent or
the Secured Parties with respect to the foreclosure on, sale, transfer or
disposition of, or control of, the Collateral, that would constitute or result
in any assignment or transfer of control, whether de jure or de facto, of any
FCC license, permit, or authorization, if such assignment or transfer of control
would require under then existing law (including the Communications Act of 1934,
as amended, and the published rules, regulations and orders of the FCC) the
prior approval of the FCC, without first obtaining such approval of the FCC.
13
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
CRICKET COMMUNICATIONS, INC.,
By /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President & Chief Financial
Officer
LEAP WIRELESS INTERNATIONAL, INC.,
By /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President & Chief
Financial Officer
EACH OF THE OTHER SUBSIDIARIES LISTED ON SCHEDULE I
HERETO,
By /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President & Chief
Financial Officer for each of the
subsidiaries listed on Schedule I hereto
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Collateral
Agent,
By /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
[SIGNATURE PAGE TO PLEDGE AGREEMENT]
14
Schedule I to the
Pledge Agreement
Schedule II to the
Pledge Agreement
CAPITAL STOCK OR OTHER EQUITY INTERESTS
Number and Class of
Shares or Other
Issuer Number of Certificate Registered Owner Equity Interests
---------------------- --------------------- -------------------- ---------------------
DEBT SECURITIES
Issuer Principal Amount Date of Note
---------------------- -------------------------- ----------------------
Annex 1 to the
Pledge Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the PLEDGE AGREEMENT dated as of
__________, 2004, among CRICKET COMMUNICATIONS, INC., a Delaware corporation
(the "Issuer"), LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation (the
"Parent"), each subsidiary of the Parent listed on Schedule I hereto (each such
subsidiary individually a "Subsidiary Pledgor" and, collectively, the
"Subsidiary Pledgors", and together with the Parent, each individually a
"Guarantor" and, collectively, the "Guarantors"; and the Guarantors and the
Issuer are referred to collectively herein as the "Pledgors") and XXXXX FARGO
BANK, NATIONAL ASSOCIATION, a national banking association (the "Trustee"), as
trustee under the Indenture referred to below and as collateral agent (in such
capacity as collateral agent, the "Collateral Agent") for the Secured Parties
(as defined in the Security Agreement).
A. Reference is made to the Indenture dated as of __________, 2003 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
among the Issuer, the Guarantors and the Trustee.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Pledge Agreement and the
Indenture.
C. The Pledgors have entered into the Pledge Agreement in accordance
with the terms of the Indenture. Pursuant to Section 4.11 of the Indenture, the
Parent is required to cause certain of its Subsidiaries to enter into the Pledge
Agreement as a Subsidiary Pledgor. Section 24 of the Pledge Agreement provides
that such Subsidiaries may become Subsidiary Pledgors under the Pledge Agreement
by execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Pledgor") is executing this Supplement in
accordance with the requirements of the Indenture to become a Subsidiary Pledgor
under the Pledge.
Accordingly, the Collateral Agent and the New Pledgor agree as follows:
SECTION 1. In accordance with Section 24 of the Pledge Agreement, the New
Pledgor by its signature below becomes a Pledgor under the Pledge Agreement with
the same force and effect as if originally named therein as a Pledgor and the
New Pledgor hereby agrees (a) to all the terms and provisions of the Pledge
Agreement applicable to it as a Pledgor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Pledgor
thereunder are true and correct on and as of the date hereof except to the
extent a representation and warranty expressly relates solely to a specific date
in which case such representation and warranty shall be true and correct on such
date. In furtherance of the foregoing, the New Pledgor, as security for the
payment and performance in full of the Obligations (as defined in the Pledge
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, their successors and
assigns, a security interest in and lien on all of the New Pledgor's right,
title and interest in and to the Collateral (as defined in the Pledge Agreement)
of the New Pledgor. Each reference to a "Subsidiary Pledgor" or a "Pledgor" in
the Pledge Agreement shall be deemed to include the New Pledgor. The Pledge
Agreement is hereby incorporated herein by reference.
SECTION 2. The New Pledgor represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts, each of which
shall constitute an original, but all of which when taken together shall
constitute a single instrument. This Supplement shall become effective when the
Collateral Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Pledgor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Pledgor hereby represents and warrants that set forth
on Schedule I attached hereto is a true and correct schedule of all its Pledged
Securities.
SECTION 5. Except as expressly supplemented hereby, the Pledge Agreement
shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 15 of the Pledge Agreement. All communications
and notices hereunder to the New Pledgor shall be given to it at the address set
forth under its signature hereto, below, with a copy to the Issuer.
SECTION 9. The New Pledgor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent have duly
executed this Supplement to the Pledge Agreement as of the day and year first
above written.
[NAME OF NEW PLEDGOR],
By ________________________________
Name:
Title:
Address:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, as Collateral Agent,
By ________________________________
Name:
Title:
Schedule I to
Supplement No. [ ]
to the Pledge Agreement
Pledged Securities of the New Pledgor
CAPITAL STOCK OR OTHER EQUITY INTERESTS
Number and Class of
Shares or Other
Issuer Number of Certificate Registered Owner Equity Interests
---------------------- --------------------- -------------------- ---------------------
DEBT SECURITIES
Issuer Principal Amount Date of Note
---------------------- -------------------------- ----------------------
