EXHIBIT 4.1.2
THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY.
THE COLLATERAL COVERED BY THIS INSTRUMENT INCLUDES FIXTURES.
SECURITY AGREEMENT
SECURITY 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" and, collectively, the "Subsidiaries", 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
"Grantors") 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 herein).
W I T N E S S E T H:
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 Grantor is executing and delivering this Agreement pursuant
to the terms of the Indenture to evidence the security interests contemplated
thereby; and
WHEREAS, each Grantor 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 Grantor and the Collateral Agent, on
behalf of itself and each Secured Party (and each of their respective successors
or assigns), hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definition of Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall have
the meanings set forth in the Indenture.
SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Account Debtor" shall mean any Person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.
"Accounts" shall mean all "accounts" (as defined in the Uniform Commercial
Code) of any Grantor and shall include any and all right, title and interest of
any Grantor to payment for goods and services sold or leased, including any such
right evidenced by chattel paper, whether due or to become due, whether or not
it has been earned by performance, and whether now or hereafter acquired or
arising in the future, including accounts receivable from Affiliates of the
Grantors.
"Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents, (c)
Equipment, (d) General Intangibles, (e) Inventory, (f) cash, cash accounts and
Deposit Accounts, (g) Investment Property, (h) Wireless Licenses (subject to
Sections 2.01(b) and 7.16 hereof) and (i) Proceeds.
"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an option on
a commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"Commodity Customer" shall mean a Person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a Person who is registered as a
futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Copyright License" shall mean any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following: (a) all copyright rights in
any work subject to the copyright laws of the United States or any other
country, whether as author, assignee, transferee or otherwise, and (b) all
registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, including those listed on Schedule II.
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"Deposit Account" shall have the meaning specified for the term "deposit
account" in Section 9-102(a)(29) of the UCC.
"Documents" shall mean all instruments, files, records, ledger sheets and
documents covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the Uniform Commercial Code, such Person is the
Entitlement Holder.
"Equipment" shall mean "equipment" (as defined in the UCC) of any Grantor
and shall include all equipment, furniture and furnishings, and all tangible
personal property similar to any of the foregoing, including tools, parts and
supplies of every kind and description, and all improvements, accessions or
appurtenances thereto, that are now or hereafter owned by any Grantor. The term
Equipment shall include Fixtures.
"FCC Laws" shall mean the U.S. Communications Act of 1934, as amended,
and any similar or successor federal statute, and the published rules,
regulations and orders of the FCC, all as the same may be in effect from time to
time.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a Person
or a share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a Person's claim to it is
evidenced, including a certificated or uncertificated Security, a certificate
representing a Security or a Security Entitlement.
"Fixtures" shall mean all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
"General Intangibles" shall mean all "general intangibles" (as defined in
the UCC) of any Grantor and shall include choses in action and causes of action
and all other assignable intangible personal property of any Grantor of every
kind and nature (other than Accounts Receivable) now owned or hereafter acquired
by any Grantor, including corporate or other business records, indemnification
claims, contract rights (including rights under leases, whether entered into as
lessor or lessee, Hedging Agreements and other agreements), Intellectual
Property, goodwill, registrations, franchises, tax refund claims and any letter
of credit, guarantee, claim, security interest or other security held by or
granted to any Grantor to secure payment by an Account Debtor of any of the
Accounts Receivable.
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"Hedging Agreement" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Intellectual Property" shall mean all intellectual and similar property
of any Grantor of every kind and nature now owned or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"Inventory" shall mean "inventory" (as defined in the UCC) of any Grantor
and shall include all goods of any Grantor, whether now owned or hereafter
acquired, held for sale or lease, or furnished or to be furnished by any Grantor
under contracts of service, or consumed in any Grantor's business, including raw
materials, intermediates, work in process, packaging materials, finished goods,
semi-finished inventory, scrap inventory, manufacturing supplies and spare
parts, and all such goods that have been returned to or repossessed by or on
behalf of any Grantor.
"Investment Property" shall mean all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of any Grantor, whether now owned or hereafter acquired
by any Grantor.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense (except for Wireless Licenses) to which
any Grantor is a party, including those listed on Schedule III (other than those
license agreements in existence on the date hereof and listed on Schedule III
and those license agreements entered into after the date hereof, which by their
terms prohibit assignment or a grant of a security interest by such Grantor as
licensee thereunder).
"Obligations" shall mean 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.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean all of the following now owned or hereafter acquired
by any Grantor: (a) all letters patent of the United States or any other
country, all registrations and recordings thereof, and all applications for
letters patent of the United States or any other
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country, including registrations, recordings and pending applications in the
United States Patent and Trademark Office or any similar offices in any other
country, including those listed on Schedule IV, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof,
and the inventions disclosed or claimed therein, including the right to make,
use and/or sell the inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate substantially in the
form of Annex 1 hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by an Officer of the Issuer.
"Proceeds" shall mean "proceeds" (as defined in the UCC) of any Grantor
and shall include any consideration received from the sale, exchange, license,
lease or other disposition of any asset or property that constitutes Collateral,
any value received as a consequence of the possession of any Collateral and any
payment received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property which constitutes Collateral, and shall include,
(a) any claim of any Grantor against any third party for (and the right to xxx
and recover for and the rights to damages or profits due or accrued arising out
of or in connection with) (i) past, present or future infringement of any Patent
now or hereafter owned by any Grantor, or licensed under a Patent License, (ii)
past, present or future infringement or dilution of any Trademark now or
hereafter owned by any Grantor or licensed under a Trademark License or injury
to the goodwill associated with or symbolized by any Trademark now or hereafter
owned by any Grantor, (iii) past, present or future breach of any License and
(iv) past, present or future infringement of any Copyright now or hereafter
owned by any Grantor or licensed under a Copyright License and (b) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral.
"Secured Parties" shall mean the Trustee, the Collateral Agent, each
Holder and the successors and assigns of each of the foregoing.
"Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c)(i) are, or are of a type, dealt
with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
"Securities Account" shall mean an account to which a Financial Asset is
or may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Entitlements" shall mean the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
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"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Security Intermediary" shall mean (a) a clearing corporation or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Trademark License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following: (a) all trademarks, service
marks, trade names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule V, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code as in
effect in the State of New York from time to time.
"Wireless Licenses" shall mean all licenses, permits, and authorizations
issued by the FCC to any Grantor.
SECTION 1.03. Rules of Interpretation. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Annexes and Schedules shall be
construed to refer to Articles and Sections of, and Annexes and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
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ARTICLE II
SECURITY INTEREST
SECTION 2.01. Security Interest.
(a) As security for the payment or performance, as the case may be, in
full of the Obligations, each Grantor hereby bargains, sells, conveys, assigns,
sets over, mortgages, pledges, hypothecates and transfers to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, and hereby grants to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, a security interest in all of
such Grantor's right, title and interest in, to and under the Collateral (the
"Security Interest"). Without limiting the foregoing, the Collateral Agent is
hereby authorized to file one or more financing statements (including fixture
filings), continuation statements, filings with the United States Patent and
Trademark Office or United States Copyright Office (or any successor office or
any similar office in any other country) or other documents for the purpose of
perfecting, confirming, continuing, enforcing or protecting the Security
Interest granted by each Grantor, without the signature of any Grantors, and
naming any Grantor or the Grantors as debtors and the Collateral Agent as
secured party, which financing statements may describe the Collateral as "all
assets" or "all personal property."
(b) Notwithstanding the foregoing provisions of this Section 2.01, the
foregoing grant of a security interest shall not extend to, and the term
"Collateral" shall not include, Wireless Licenses to the extent (but only to the
extent) it is unlawful to grant a security interest therein (but solely to the
extent that any such restriction shall be enforceable under applicable law);
provided, however, that the foregoing grant of a security interest shall extend
to, and the Collateral shall include, each of the following: (i) the right to
receive all proceeds derived or arising from or in connection with the sale,
assignment, transfer or transfer of control over such Wireless Licenses; (B) any
and all proceeds of any Wireless Licenses that are otherwise excluded, and (C)
upon obtaining the consent of the FCC with respect to any such otherwise
excluded Wireless Licenses, such Wireless Licenses as well as any and all
proceeds thereof that might theretofore have been excluded from such grant of a
security interest and from the Collateral.
SECTION 2.02. No Assumption of Liability. The Security Interest is granted
as security only and shall not subject the Collateral Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Collateral.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantors jointly and severally represent and warrant to the Collateral
Agent and the Secured Parties that:
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SECTION 3.01. Title and Authority. Each Grantor has good and valid rights
in and title to the Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval which has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete in all material respects as of the date hereof (or, with
regard to any updated Perfection Certificate, as of the date thereof). Fully
executed Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Collateral have been filed by or
on behalf of each Grantor, with copies provided to the Collateral Agent, or have
been delivered to the Collateral Agent for filing, in each governmental,
municipal or other office specified in Schedule 6 to the Perfection Certificate,
which are all the filings, recordings and registrations (other than filings
required to be made in the United States Patent and Trademark Office and the
United States Copyright Office in order to perfect the Security Interest in
Collateral consisting of United States Patents, Trademarks and Copyrights) that
are necessary to publish notice of and protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral in
which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements or amendments.
(b) Each Grantor shall ensure that fully executed security agreements in
the form hereof (or short-form supplements to this Agreement in form and
substance satisfactory to the Collateral Agent) and containing a description of
all Collateral consisting of Intellectual Property shall have been received and
recorded within ten (10) Business Days after the execution of this Agreement
with respect to United States Patents and United States registered Trademarks
(and Trademarks for which United States registration applications are pending)
and within ten (10) Business Days after the execution of this Agreement with
respect to United States registered Copyrights have been delivered to the
Collateral Agent for recording by the United States Patent and Trademark Office
and the United States Copyright Office pursuant to 35 U.S.C. Section 261, 15
U.S.C. Section 1060 or 17 U.S.C. Section 205 and the regulations thereunder, as
applicable, and otherwise as may be required pursuant to the laws of any other
necessary jurisdiction in the United States (or any political subdivision
thereof) and its territories and possessions, to protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the ratable benefit of the Secured Parties) in respect of
all Collateral consisting of Patents, Trademarks and Copyrights in which a
security interest may be perfected by filing, recording or registration in the
United States (or any political subdivision thereof) and its territories and
possessions, or in any other necessary jurisdiction, and no further or
subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction (other than such actions as
are necessary to perfect the Security Interest with respect
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to any Collateral consisting of Patents, Trademarks and Copyrights (or
registration or application for registration thereof) acquired or developed
after the date hereof).
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to the
filings described in Section 3.02 above, a perfected security interest in all
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the UCC or other analogous applicable law in such jurisdictions and (c) a
security interest that shall be perfected in all Collateral in which a security
interest may be perfected upon the receipt and recording of this Agreement with
the United States Patent and Trademark Office and the United States Copyright
Office, as applicable, within the three month period (commencing as of the date
hereof) pursuant to 35 U.S.C. Section 261 or 15 U.S.C. Section 1060 or the one
month period (commencing as of the date hereof) pursuant to 17 U.S.C. Section
205 and otherwise as may be required pursuant to the laws of any other necessary
jurisdiction in the United States (or any political subdivision thereof) and its
territories and possessions. The Security Interest is and shall be prior to any
other Lien on any of the Collateral, other than Permitted Liens.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for any Permitted Liens. The Grantor
has not filed or consented to the filing of (a) any financing statement or
analogous document under the UCC or any other applicable laws covering any
Collateral, (b) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Collateral with the
United States Patent and Trademark Office or the United States Copyright Office
or (c) any assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for any Permitted Liens.
ARTICLE IV
COVENANTS
SECTION 4.01. Records. Each Grantor agrees to maintain, at its own cost
and expense, such complete and accurate records with respect to the Collateral
owned by it as is consistent with its current practices, but in any event in
accordance with reasonably prudent and standard practices used in industries
that are the same as or similar to those in which the Grantor is engaged, and,
at such time or times as the Collateral Agent may reasonably request, promptly
to prepare and deliver to the Collateral Agent an updated Perfection
Certificate, noting all material changes, if any, since the date of the most
recent Perfection Certificate.
SECTION 4.02. Protection of Security. Each Grantor shall, at its own cost
and expense, take any and all actions necessary to defend title to the
Collateral against all Persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien
other than Permitted Liens.
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SECTION 4.03. Further Assurances. Each Grantor agrees, at its own expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent may
from time to time request to better assure, preserve, protect and perfect the
Security Interest and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the Security Interest and the filing
of any financing statements (including fixture filings) or other documents in
connection herewith or therewith. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any promissory note
or other instrument payable to a Grantor, such note or instrument shall be
immediately pledged and delivered to the Collateral Agent to be held as
Collateral pursuant to this Agreement, duly endorsed in a manner satisfactory to
the Collateral Agent.
SECTION 4.04. Inspection and Verification. The Collateral Agent and such
Persons as the Collateral Agent may reasonably designate shall have the right to
inspect the Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Collateral is
located, at reasonable times and intervals during normal business hours upon
reasonable advance notice to the respective Grantor and to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of the Collateral, subject to a customary confidentiality agreement
between the Grantor and the Collateral Agent.
SECTION 4.05. Taxes; Encumbrances. At its option, the Collateral Agent may
discharge past due taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the Collateral and not
permitted under the Indenture, and may pay for the maintenance and preservation
of the Collateral, in each case to the extent any Grantor fails to do so as
required by the Indenture or this Agreement, and each Grantor jointly and
severally agrees to reimburse the Collateral Agent on demand for any payment
made or any expense incurred by the Collateral Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 4.05 shall be
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Indenture Documents.
SECTION 4.06. Assignment of Security Interest. If at any time any Grantor
shall take a security interest in any property of an Account Debtor or any other
Person to secure payment and performance of an Account, such Grantor shall
promptly assign such security interest to the Collateral Agent to the extent
permitted by any contracts or arrangements to which such property is subject.
Such assignment need not be filed of public record unless necessary to continue
the perfected status of the security interest against creditors of and
transferees from the Account Debtor or other Person granting the security
interest.
SECTION 4.07. Continuing Obligations of the Grantors. As between each
Grantor, on the one hand, and the Collateral Agent and the Secured Parties, on
the other hand, each Grantor shall remain liable to observe and perform all the
conditions and obligations to be observed and performed by it under each
contract, agreement or instrument relating to the Collateral, all in
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accordance with the terms and conditions thereof, and each Grantor jointly and
severally agrees to indemnify and hold harmless the Collateral Agent and the
Secured Parties from and against any and all liability for such performance.
SECTION 4.08. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except as
permitted by the Indenture. None of the Grantors shall make or permit to be made
any transfer of the Collateral and each Grantor shall remain at all times in
possession of the Collateral owned by it, except that (a) Inventory may be
stored, handled and sold in the ordinary course of business and (b) unless and
until the Collateral Agent shall notify the Grantors that an Event of Default
shall have occurred and be continuing and that during the continuance thereof
the Grantors shall not sell, convey, lease, assign, transfer or otherwise
dispose of any Collateral (which notice may be given by telephone if promptly
confirmed in writing), the Grantors may use and dispose of the Collateral in any
lawful manner not inconsistent with the provisions of this Agreement, the
Indenture or any other Indenture Document.
SECTION 4.09. Insurance. Each Grantor irrevocably makes, constitutes and
appoints the Collateral Agent (and all officers, employees or agents designated
by the Collateral Agent) as such Grantor's true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Collateral under
policies of insurance, endorsing the name of such Grantor on any check, draft,
instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
In the event that any Grantor at any time or times shall fail to obtain or
maintain any of the policies of insurance required under the Indenture or to pay
any premium in whole or part relating thereto, the Collateral Agent may, without
waiving or releasing any obligation or liability of the Grantors hereunder or
any Event of Default, in its sole discretion, obtain and maintain such policies
of insurance and pay such premium and take any other actions with respect
thereto as the Collateral Agent deems advisable. All sums disbursed by the
Collateral Agent in connection with this Section 4.10, including reasonable
attorneys' fees, court costs, expenses and other charges relating thereto, shall
be payable, upon demand, by the Grantors to the Collateral Agent and shall be
additional Obligations secured hereby.
SECTION 4.10. Legend. If any Accounts Receivable of any Grantor are
evidenced by chattel paper, such Grantor shall legend, in form and manner
satisfactory to the Collateral Agent, such Accounts Receivable and its books,
records and documents evidencing or pertaining thereto with an appropriate
reference to the fact that such Accounts Receivable have been assigned to the
Collateral Agent for the benefit of the Secured Parties and that the Collateral
Agent has a security interest therein.
SECTION 4.11. Covenants Regarding Patent, Trademark and Copyright
Collateral.
(a) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in
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any other country or any political subdivision thereof, unless it promptly
informs the Collateral Agent, and, upon request of the Collateral Agent,
executes and delivers any and all agreements, instruments, documents and papers
as the Collateral Agent may request to evidence and perfect the Collateral
Agent's security interest in such Patent, Trademark or Copyright, and each
Grantor hereby appoints the Collateral Agent as its attorney-in-fact to execute
and file such writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an interest,
is irrevocable.
(b) Upon and during the continuance of an Event of Default, each Grantor
shall use its commercially reasonable efforts to obtain all requisite consents
or approvals from the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all of such Grantor's right, title
and interest thereunder to the Collateral Agent or its designee for the benefit
of the Secured Parties.
SECTION 4.12. Covenants Regarding Wireless Licenses. Upon and during the
continuance of an Event of Default:
(a) Each Grantor shall maintain and keep, or cause to be maintained and
kept, in full force and effect, and shall apply in a timely manner for renewal
of, all Wireless Licenses material to the conduct of Company's business; and
(b) Each Grantor shall notify the Collateral Agent immediately if it knows
or has reason to know of any fact or circumstance that could reasonably be
expected to result in the revocation, suspension, termination, non-renewal, or
materially adverse modification of any Wireless License that is material to the
conduct of the Company's business.
SECTION 4.13. Location of Inventory and Equipment. Upon and during the
continuance of an Event of Default, each Grantor shall promptly provide the
Collateral Agent a list, and shall update such list promptly upon request by the
Collateral Agent, of (a) all the locations where such Grantor maintains any
Inventory, Equipment and other Collateral not identified in the Perfection
Certificate, including on such list the Inventory, Equipment or other Collateral
at each such location, and (b) the names and addresses of all Persons other than
such Grantor that have possession of any of the Collateral of such Grantor,
including on such list the Collateral in the possession of each such Person.
SECTION 4.14. Control Agreements for Deposit Accounts. Unless such Deposit
Account is subject to a Permitted Lien, neither the Company nor any Guarantor
will maintain any Deposit Account with funds deposited in such account in excess
of $25,000, unless such Deposit Account (a) is maintained at a bank or trust
company in the United States, and (b) is subject to a control agreement, in form
and substance satisfactory to the Collateral Agent, among the Company or
Guarantor, the Collateral Agent and the depository bank at which such Deposit
Account is maintained, pursuant to which, (i) the Collateral Agent's Security
Interest in and to such Deposit Account shall be perfected, and (ii) the
depository bank subordinates its security interest in such Deposit Account to
that of the Collateral Agent, as contemplated by Section 9-339 of the UCC.
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SECTION 4.15. Covenants Concerning Grantors' Legal Status. Each Grantor
covenants with the Collateral Agent as follows: (a) without providing at least
15 days prior written notice to the Collateral Agent, each Grantor will not
change its name, its place of business or, if more than one, chief executive
office, or its mailing address or organizational identification number if it has
one, (b) if any Grantor does not have an organizational identification number
and later obtains one, such Grantor will forthwith notify the Collateral Agent
of such organizational identification number, and (c) without providing at least
15 days prior written notice to the Collateral Agent, each Grantor will not
change its type of organization, jurisdiction of organization or other legal
structure.
ARTICLE V
POWER OF ATTORNEY
Each Grantor irrevocably makes, constitutes and appoints the Collateral
Agent (and all officers, employees or agents designated by the Collateral Agent)
as such Grantor's true and lawful agent and attorney-in-fact, and in such
capacity the Collateral Agent shall have the right, with power of substitution
for each Grantor and in each Grantor's name or otherwise, for the use and
benefit of the Collateral Agent and the Secured Parties, upon the occurrence and
during the continuance of an Event of Default (a) to receive, endorse, assign
and/or deliver any and all notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Collateral or any part thereof; (b)
to demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of any Grantor on
any invoice or xxxx of lading relating to any of the Collateral; (d) to send
verifications of Accounts Receivable to any Account Debtor; (e) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Collateral
Agent; (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral; and (i) to
prepare and file applications seeking the FCC's consent to transfer control of,
or assign, Wireless Licenses, and to do all other acts and things necessary to
carry out the purposes of this Agreement, as fully and completely as though the
Collateral Agent were the absolute owner of the Collateral for all purposes;
provided, however, that nothing herein contained shall be construed as requiring
or obligating the Collateral Agent or any Secured Party to make any commitment
or to make any inquiry as to the nature or sufficiency of any payment received
by the Collateral Agent or any Secured Party, 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, and no action taken or omitted to be taken by the Collateral Agent or
any Secured Party with respect to the Collateral or any part thereof shall give
rise to any defense, counterclaim or offset in favor of any Grantor or to any
claim or action against the Collateral Agent or any Secured Party. It is
understood and agreed that the appointment of the Collateral Agent as the agent
and attorney-in-fact of the Grantors for the purposes set forth above is coupled
with an interest and is irrevocable. The provisions of this Section shall in no
event relieve any Grantor of any of its obligations hereunder or under any
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other Indenture Document with respect to the Collateral or any part thereof or
impose any obligation on the Collateral Agent or any Secured Party to proceed in
any particular manner with respect to the Collateral or any part thereof, or in
any way limit the exercise by the Collateral Agent or any Secured Party of any
other or further right which it may have on the date of this Agreement or
hereafter, whether hereunder, under any other Indenture Document, by law or
otherwise.
ARTICLE VI
REMEDIES
SECTION 6.01. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right, subject to the requirements for prior FCC
approval specified in Section 7.16, to take any of or all the following actions
at the same or different times: (a) with respect to any Collateral consisting of
Intellectual Property, on demand, to cause the Security Interest to become an
assignment, transfer and conveyance of any of or all such Collateral by the
applicable Grantors to the Collateral Agent (except to the extent assignment,
transfer or conveyance thereof would result in a loss of said Intellectual
Property), or to license or sublicense, whether general, special or otherwise,
and whether on an exclusive or non-exclusive basis, any such Collateral
throughout the world on such terms and conditions and in such manner as the
Collateral Agent shall determine (other than in violation of any then-existing
licensing arrangements to the extent that waivers cannot be obtained), and (b)
with or without legal process and with or without prior notice or demand for
performance, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purpose of taking possession of or removing the Collateral and, generally, to
exercise any and all rights afforded to a secured party under the UCC or other
applicable law. Without limiting the generality of the foregoing, each Grantor
agrees that the Collateral Agent shall have the right, subject to the mandatory
requirements of applicable law, to sell or otherwise dispose of all or any part
of the Collateral, 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 Grantor, and each Grantor hereby waives
(to the extent permitted by law) all rights of redemption, stay and appraisal
which such Grantor now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted.
The Collateral Agent shall give the Grantors 10 days' written notice
(which each Grantor 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 Collateral. Such notice, in the case of a public
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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 (if any) 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 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 law, private) sale made pursuant to this Section, any Secured Party may bid
for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
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 such Secured
Party from any Grantor as a credit against the purchase price, and such Secured
Party may, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to any Grantor therefor. For
purposes hereof a written agreement to purchase the Collateral or any portion
thereof shall be treated as a sale thereof; the Collateral Agent shall be free
to carry out such sale pursuant to such agreement and no Grantor shall 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 6.02. Application of Proceeds. 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 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 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 Grantor 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
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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 such
Holders on the date of any such distribution); and
THIRD, to the Grantors, 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 6.02. 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
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 6.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sub-license
any of the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
may be exercised, at the option of the Collateral Agent, only upon the
occurrence and during the continuation of an Event of Default; provided that any
license, sub-license or other transaction entered into by the Collateral Agent
in accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) 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 its address or telecopy
number set forth on Schedule I, with a copy to the Issuer.
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SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
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,
(c) any exchange, release or non-perfection of any Lien on other collateral, or
any release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
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 such Holder or
on its behalf, and shall continue in full force and effect until this Agreement
shall terminate.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor 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 Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein (and any
such assignment or transfer shall be void) except as expressly permitted by this
Agreement or the other Indenture Documents. This Agreement shall be construed as
a separate agreement with respect to each Grantor and may be amended, modified,
supplemented, waived or released with respect to any Grantor without the
approval of any other Grantor and without affecting the obligations of any other
Grantor hereunder.
SECTION 7.05. Successors and Assigns. 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 Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification.
(a) Each Grantor jointly and severally agrees to pay upon demand to the
Collateral Agent the amount of any and all reasonable expenses, including the
reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which 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)
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the exercise, enforcement or protection of any of the rights of the Collateral
Agent hereunder or (iv) the failure of any Grantor to perform or observe any of
the provisions hereof applicable to it.
(b) Without limitation of its indemnification obligations under the other
Indenture Documents, each Grantor jointly and severally 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
of them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable fees, disbursements and other charges of
counsel (provided, that the Grantors shall not be obligated to pay for more than
one primary counsel and one local counsel for the 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 of them arising out of, in any way connected
with, or as a result of, the execution, delivery or performance of this
Agreement or any claim, litigation, investigation or proceeding relating hereto
or to the Collateral, 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 such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Indenture Document,
the consummation of the transactions contemplated hereby, the repayment of any
of the Notes, 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 Holder. All amounts due under this
Section 7.06 shall be payable on written demand therefor.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. 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 any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent, the Trustee and the Holders 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 any other Indenture Document or consent to any departure by any
Grantor 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 to or demand on any Grantor in any case shall entitle such Grantor or any
other Grantor to any other or further notice or demand in similar or other
circumstances.
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(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except in accordance with the Indenture pursuant to an agreement or
agreements in writing entered into by the Collateral Agent and the Grantor or
Grantors with respect to which such waiver, amendment or modification is to
apply.
SECTION 7.09. 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 OF THE 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 7.09.
SECTION 7.10. Severability. 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 7.11. 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 but one contract (subject to Section 7.04), and
shall become effective as provided in Section 7.04. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used herein are for
the purpose 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 7.13. Jurisdiction; Consent to Service of Process. (a) Each
Grantor 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 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
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manner provided by law. Nothing in this Agreement shall affect any right that
the Collateral Agent, the Trustee or any Holder may otherwise have to bring any
action or proceeding relating to this Agreement or the other Indenture Documents
against any Grantor or its properties in the courts of any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which 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 7.01. 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 7.14. Termination. (a) This Agreement and the Security Interest
shall terminate at the time provided in Section 10.08 of the Indenture at which
time the Collateral Agent shall execute and deliver to the Grantors, at the
Grantors' expense, all Uniform Commercial Code termination statements and
similar documents, including, without limitation, authorization for the Grantors
to file Uniform Commercial Code termination statements, which the Grantors shall
reasonably request to evidence such termination. Any execution and delivery of
termination statements or documents pursuant to this Section 7.14 shall be
without recourse to or warranty by the Collateral Agent. A Grantor shall
automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Grantor and in the equity interests issued by
such Grantor shall be automatically released, in the event that such Grantor
ceases to be a Guarantor or is designated an Unrestricted Subsidiary in
accordance with the provisions of the Indenture, without further action. At such
time, the Collateral Agent shall execute and deliver to any Grantor, at such
Grantor's expense, all documents that such Grantor shall reasonably request to
evidence such release.
(b) Without limiting the foregoing, if any of the Collateral shall 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. The Collateral Agent
shall execute and deliver to the Grantors, at the Grantors' expense, all Uniform
Commercial Code termination statements and similar documents which the Grantor
shall reasonably request to evidence the termination of the Security Interest in
such Collateral.
SECTION 7.15. Additional Grantors. 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 Grantor to enter in to this Agreement as a Grantor, upon execution
and delivery by the Collateral Agent and such Subsidiary of an instrument in the
form of Annex 2 hereto, such Subsidiary shall become a Grantor hereunder with
the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any such instrument shall not require the consent of
any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Grantor as a party to this Agreement.
-20-
SECTION 7.16. 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
Wireless License, if such assignment or transfer of control would require under
then existing law (including FCC Laws) the prior approval of the FCC, without
first obtaining such approval of the FCC.
[SIGNATURE PAGE FOLLOWS]
-21-
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 GUARANTORS
LISTED ON SCHEDULE I HERETO,
By /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: as 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 SECURITY AGREEMENT]
-22-
Schedule I to the
Security Agreement
GUARANTORS
Guarantors Address
---------- -------
List List
Schedule II to the
Security Agreement
COPYRIGHTS
Schedule III to the
Security Agreement
LICENSES
Schedule IV to the
Security Agreement
PATENTS
Schedule V to the
Security Agreement
TRADEMARKS
THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY.
THE COLLATERAL COVERED BY THIS INSTRUMENT INCLUDES FIXTURES.
Annex 1 to the
Security Agreement
[FORM OF]
PERFECTION CERTIFICATE
Reference is made to (a) the Indenture dated as of ___________, 2004 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
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" and, collectively, the "Subsidiaries", 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 "Grantors") and Xxxxx Fargo Bank Minnesota, National Association,
a national banking association (the "Trustee"), as trustee under the Indenture,
and (b) the Security Agreement dated as of ____________, 2004, among the Issuer,
the Guarantors and the Trustee, as collateral agent (in such capacity as
collateral agent, the "Collateral Agent"). Capitalized terms used but not
defined herein have the meanings assigned to them in the Indenture or the
Security Agreement, as applicable.
The undersigned, an Officer of the Issuer, hereby certifies to the
Collateral Agent and each other Secured Party as follows:
1. Names.
(a) The exact legal name of each Grantor, as such name appears in its respective
certificate of formation, is as follows:
(b) Set forth below is each other legal name each Grantor has had in the past
five years, together with the date of the relevant change:
(c) Except as set forth in Schedule 1 hereto, no Grantor has changed its
identity or corporate structure in any way since [insert date of bankruptcy
reorganization]. Changes in identity or corporate structure would include
mergers, consolidations and acquisitions, as well as any change in the form,
nature or jurisdiction of corporate organization. If any such change has
occurred, include in Schedule 1 the information required by Sections 1 and 2 of
this certificate as to each acquiree or constituent party to a merger or
consolidation.
(d) The following is a list of all other names (including trade names or similar
appellations) used by each Grantor or any of its divisions or other business
units in connection with the conduct of its business or the ownership of its
properties at any time during the past five years:
(e) Set forth below is the organizational identification number, if any, issued
by the jurisdiction of formation of each Grantor that is a registered
organization:
Organizational Identification
Grantor Number
------- ------
(f) Set forth below is the Federal Taxpayer Identification Number of each
Grantor:
Federal Identification
Grantor Number
------- ------
2. Current Locations. (a) The chief executive office of each Grantor is located
at the address set forth opposite its name below:
Grantor Mailing Address County State
------- --------------- ------ -----
(b) Set forth below opposite the name of each Grantor are all locations where
such Grantor maintains any books or records relating to any Accounts Receivable
or General Intangibles (with each location at which Chattel Paper, if any, is
kept being indicated by an "*"):
Grantor Mailing Address County State
------- --------------- ------ -----
(c) The jurisdiction of formation of each Grantor that is a registered
organization is set forth opposite its name below:
Grantor Jurisdiction
------- ------------
3. Unusual Transactions. Since [INSERT DATE OF BANKRUPTCY REORGANIZATION], all
Accounts have been originated by the Grantors and all Inventory has been
acquired by the Grantors in the ordinary course of business. [THIS STATEMENT MAY
BE OMITTED FROM PERFECTION CERTIFICATE DELIVERED AS OF THE DATE OF THE SECURITY
AGREEMENT]
4. File Search Reports. File search reports have been obtained from each Uniform
Commercial Code filing office identified with respect to such Grantor in Section
2 hereof, and such search reports reflect no liens against any of the Collateral
other than those permitted under the Indenture.
5. UCC Filings. UCC financing statements in substantially the form of Schedule 5
hereto have been prepared for filing in the proper Uniform Commercial Code
filing office in the jurisdiction in which each Grantor is located and, to the
extent any of the Collateral is comprised
of fixtures in the proper local jurisdiction, as set forth with respect to such
Grantor in Section 2 hereof.
6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
forth, with respect to the filings described in Section 5 above, each filing and
the filing office in which such filing is to be made.
7. Stock Ownership and other Equity Interests. Attached hereto as Schedule 7 is
a true and correct list of all the issued and outstanding stock, partnership
interests, limited liability company membership interests or other equity
interests owned by the Parent and each Subsidiary of the Parent (including the
Issuer). Also set forth on Schedule 7 is each equity investment of the Parent or
any Subsidiary of the Parent (including the Issuer) that represents 50% or less
of the equity of the entity in which such investment was made.
8. Debt Instruments. Attached hereto as Schedule 8 is a true and correct list of
all instruments, including any promissory notes, and other evidence of
indebtedness held by the Parent and each Subsidiary of the Parent (including the
Issuer), including all intercompany notes between the Parent and each Subsidiary
of the Parent (including the Issuer) and each Subsidiary of the Parent
(including the Issuer) and each other such Subsidiary (including the Issuer).
9. Advances. Attached hereto as Schedule 9 is (a) a true and correct list of all
advances made by the Parent to any Subsidiary of the Parent (including the
Issuer) or made by any Subsidiary of the Parent (including the Issuer) to the
Parent or to any other Subsidiary of the Parent (including the Issuer) (other
than those identified on Schedule 8), which advances will be on and after the
date hereof evidenced by one or more intercompany notes pledged to the
Collateral Agent under the Pledge Agreement and (b) a true and correct list of
all unpaid intercompany transfers of goods sold and delivered by or to the
Parent or any Subsidiary of the Parent (including the Issuer).
10. Mortgage Filings. Attached hereto as Schedule 10 is a schedule setting
forth, with respect to each Mortgaged Property, (a) the exact name of the Person
that owns such property as such name appears in its certificate of incorporation
or other organizational document, (b) if different from the name identified
pursuant to clause (a), the exact name of the current record owner of such
property reflected in the records of the filing office for such property
identified pursuant to the following clause and (c) the filing office in which a
Mortgage with respect to such property must be filed or recorded in order for
the Collateral Agent to obtain a perfected security interest therein.
11. Intellectual Property. Attached hereto as Schedule 11(A) is a schedule
setting forth all of each Grantor's Patents and registered Trademarks and Patent
and Trademark applications, including the name of the registered owner or
applicant, as applicable, and the registration or application number, as
applicable, of each Patent and registered Trademark or Patent or Trademark
application owned by any Grantor, in proper form for filing with the United
States Patent and Trademark Office, and a schedule setting forth all of each
Grantor's material Patent Licenses and material Trademark Licenses. Attached
hereto as Schedule 11(B) is a schedule setting forth all of each Grantor's
registered Copyrights, including the name of the registered owner and the
registration number of each Copyright owned by any Grantor, in proper form for
filing with the United States Copyright Office, and a schedule setting forth all
of each Grantor's material Copyright Licenses that grant rights with respect to
registered Copyrights.
12. Wireless Licenses. Attached hereto as Schedule 12 is a schedule setting
forth all of each Grantor's Wireless Licenses, including the name of the
registered license holder and the license number or other identifying
information, of each Wireless License held or utilized by any Grantor.
IN WITNESS WHEREOF, the undersigned have duly executed this certificate on
this ____th day of ________, 200__.
CRICKET COMMUNICATIONS, INC.,
By:
-----------------------------------
Name:
Title:
THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY.
THE COLLATERAL COVERED BY THIS INSTRUMENT INCLUDES FIXTURES.
Annex 2 to the
Security Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the Security 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 thereto (each such
subsidiary individually a "Subsidiary" and, collectively, the "Subsidiaries",
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 "Grantors") and Xxxxx Fargo Bank Minnesota, 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 therein).
A. Reference is made to the Indenture dated as of _________, 2004 (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 Security Agreement and the
Indenture.
C. The Grantors have entered into the Security 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 that are not Grantors to
enter into this Agreement as Grantors. Section 7.15 of the Security Agreement
provides that such Subsidiaries may become Grantors under the Security Agreement
by execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Grantor") is executing this Supplement in
accordance with the requirements of the Indenture to become a Grantor under the
Security Agreement.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 7.15 of the Security Agreement, the
New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor 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 Grantor, as security for the
payment and performance in full of the Obligations (as defined in the Security
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 Grantor's right,
title and interest in and to the Collateral of the New Grantor. Each reference
to a "Grantor" in the Security Agreement shall be deemed to include the New
Grantor. The Security Agreement is hereby incorporated herein by reference.
-1-
SECTION 2. The New Grantor 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 (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. 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 Grantor 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 Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth under
its signature hereto, is the true and correct location of the chief executive
office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security 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, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement 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 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 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below, with a copy to the Issuer.
SECTION 9. The New Grantor 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.
-2-
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
[NAME OF NEW GRANTOR],
By:
-----------------------------------
Name:
Title:
Address:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Collateral
Agent,
By:
-----------------------------------
Name:
Title:
-3-
THIS INSTRUMENT GRANTS A SECURITY INTEREST BY A UTILITY.
THE COLLATERAL COVERED BY THIS INSTRUMENT INCLUDES FIXTURES.
Schedule I
to Supplement No. [ ]
to the Security Agreement
LOCATION OF COLLATERAL
Description Location
----------- --------
