PARENT GUARANTY Dated as of August 8, 2006 From LEAP WIRELESS INTERNATIONAL, INC. as Guarantor in favor of THE ADMINISTRATIVE AGENT AND THE LENDERS REFERRED TO IN THE CREDIT AGREEMENT REFERRED TO HEREIN
Exhibit 10.2
EXECUTION COPY
PARENT GUARANTY
Dated as of August 8, 2006
From
LEAP WIRELESS INTERNATIONAL, INC.
as Guarantor
in favor of
THE ADMINISTRATIVE AGENT AND THE LENDERS REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
TABLE OF CONTENTS
| Section | Page | |||
Section 1. Guaranty |
1 | |||
Section 2. Guaranty Absolute |
2 | |||
Section 3. Waivers and Acknowledgments |
3 | |||
Section 4. Subrogation |
4 | |||
Section 5. Payments Free and Clear of Taxes, Etc. |
4 | |||
Section 6. Representations and Warranties |
4 | |||
Section 7. Covenants |
5 | |||
Section 8. Amendments, Etc. |
5 | |||
Section 9. Notices, Etc. |
5 | |||
Section 10. No Waiver; Remedies |
5 | |||
Section 11. Right of Set-off |
5 | |||
Section 12. Indemnification |
6 | |||
Section 13. Subordination |
6 | |||
Section 14. Continuing Guaranty; Assignments under the Credit Agreement |
7 | |||
Section 15. Execution in Counterparts |
7 | |||
Section 16. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. |
8 | |||
PARENT GUARANTY
PARENT GUARANTY dated as of August 8, 2006 made by Leap Wireless International, Inc., a
Delaware corporation (the “Guarantor”), in favor of the Lenders (as defined in the Credit Agreement
referred to below) and the Administrative Agent (as defined in the Credit Agreement referred to
below) (as amended or otherwise modified from time to time, the “Guaranty”).
PRELIMINARY STATEMENT. Cricket Communications, Inc., a Delaware corporation (the “Borrower”),
and a wholly owned subsidiary of the Guarantor, is party to that certain bridge credit agreement
dated as of August 8, 2006 (as amended or otherwise modified from time to time, the “Credit
Agreement”; the capitalized terms defined therein and not otherwise defined herein being used
herein as therein defined) among the Borrower, the Guarantor, certain Lenders from time to time
party thereto (the “Lenders”) and Citicorp North America, Inc., as administrative agent (in such
capacity, the “Administrative Agent”). The Guarantor may receive, directly or indirectly, a
portion of the proceeds of the Loans under the Credit Agreement and will in any event derive
substantial direct and indirect benefits from the transactions contemplated by the Credit
Agreement. It is a condition precedent to the effectiveness of the Credit Agreement and the making
of the Loans that the Guarantor shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to induce the Lenders to enter
into and make Loans under the Credit Agreement, the Guarantor hereby agrees as follows:
Section 1. Guaranty. (a) The Guarantor hereby absolutely, unconditionally and
irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any date
of a required prepayment or by acceleration, demand or otherwise, of all Obligations of each other
Loan Party now or hereafter existing under or in respect of the Loan Documents (including, without
limitation, any extensions, modifications, substitutions, amendments or renewals of any or all of
the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether for
principal, interest, premiums, fees, indemnities, contract causes of action, costs, expenses or
otherwise (such Obligations being the “Guaranteed Obligations”), and agrees to pay any and all
expenses (including, without limitation, fees and expenses of counsel) incurred by the
Administrative Agent or any other Lender in enforcing any rights under this Guaranty or any other
Loan Document. Without limiting the generality of the foregoing, the Guarantor’s liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by any
other Loan Party to the Administrative Agent or any Lender under or in respect of the Loan
Documents but for the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such other Loan Party.
(b) The Guarantor hereby unconditionally and irrevocably agrees that in the event any payment
shall be required to be made to the Administrative Agent or any Lender under this Guaranty or the
Subsidiary Guaranty or any other guaranty, the Guarantor will contribute, to the
maximum extent permitted by law, such amounts to each other guarantor so as to maximize the
aggregate amount paid to the Lenders under or in respect of the Loan Documents.
Section 2. Guaranty Absolute. The Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Administrative Agent or any Lender with respect thereto. The
Obligations of the Guarantor under or in respect of this Guaranty are independent of the Guaranteed
Obligations or any other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted against the Guarantor to
enforce this Guaranty, irrespective of whether any action is brought against the Borrower or any
other Loan Party or whether the Borrower or any other Loan Party is joined in any such action or
actions. The liability of the Guarantor under this Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and the Guarantor hereby irrevocably waives any defenses it may now
have or hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations or any other Obligations of any other Loan Party under
or in respect of the Loan Documents, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to any Loan Party
or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any collateral, or any taking,
release or amendment or waiver of, or consent to departure from, any other guaranty, for all
or any of the Guaranteed Obligations;
(d) any manner of application of any collateral, or proceeds thereof, or any other
guaranty, to all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Guaranteed Obligations or any other
Obligations of any Loan Party under the Loan Documents or any other assets of any Loan Party
or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate structure or existence of
any Loan Party or any of its Subsidiaries;
(f) any failure of any Lender to disclose to any Loan Party any information relating to
the business, condition (financial or otherwise), operations, performance, properties or
prospects of any other Loan Party now or hereafter known to such Lender (the Guarantor
waiving any duty on the part of such Lender to disclose such information);
(g) the failure of any other Person to execute or deliver any other guaranty or
agreement or the release or reduction of liability of any other guarantor or surety with
respect to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by any Lender that
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might otherwise
constitute a defense available to, or a discharge of, any Loan Party or any other guarantor
or surety (other than indefeasible payment in full of the Guaranteed Obligations).
This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any
Lender, the Administrative Agent or any other Person upon the insolvency, bankruptcy or
reorganization of the Borrower or any other Loan Party or otherwise, all as though such payment had
not been made.
Section 3. Waivers and Acknowledgments. (a) The Guarantor hereby unconditionally
and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or dishonor and any other
notice with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that
the Administrative Agent or any Lender protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party or any other Person
or any collateral.
(b) The Guarantor hereby unconditionally and irrevocably waives any right to revoke this
Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future.
(c) The Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by
reason of any claim or defense based upon an election of remedies by the Administrative Agent or
any Lender that in any manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification rights of the Guarantor or
other rights of the Guarantor to proceed against any of the other Loan Parties, any other guarantor
or any other Person or any collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the Obligations of the Guarantor hereunder.
(d) The Guarantor acknowledges that the Administrative Agent (or an agent thereof) may,
without notice to or demand upon the Guarantor and without affecting the liability of the Guarantor
under this Guaranty, foreclose under any mortgage by nonjudicial sale, and the Guarantor hereby
waives any defense to the recovery by the Administrative Agent (or an agent thereof) and the other
Lenders against the Guarantor of any deficiency after such nonjudicial sale and any defense or
benefits that may be afforded by applicable law.
(e) The Guarantor hereby unconditionally and irrevocably waives any duty on the part of the
Administrative Agent or any Lender to disclose to the Guarantor any matter, fact or
thing relating to the business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Loan Party or any of its Subsidiaries now or hereafter known
by the Administrative Agent or such Lender.
(f) The Guarantor acknowledges that it will receive substantial direct and indirect benefits
from the financing arrangements contemplated by the Loan Documents and that the
3
waivers set forth
in Section 2 and this Section 3 are knowingly made in contemplation of such benefits.
Section 4. Subrogation. The Guarantor hereby unconditionally and irrevocably agrees
not to exercise any rights that it may now have or hereafter acquire against the Borrower, any
other Loan Party or any other insider guarantor that arise from the existence, payment, performance
or enforcement of the Guarantor’s Obligations under or in respect of this Guaranty or any other
Loan Document, including, without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or remedy of any Lender
against the Borrower, any other Loan Party or any other insider guarantor or any collateral,
whether or not such claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the Borrower, any other Loan
Party or any other insider guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim, remedy or right, in
each case unless and until all of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall have been paid in full in cash and the Commitments shall have expired or been
terminated. If (i) the Guarantor shall make payment to any Lender of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other amounts payable under
this Guaranty shall have been paid in full in cash, (iii) the Final Maturity Date shall have
occurred and (iv) all Commitments shall have expired or been terminated, the Lenders will, at the
Guarantor’s request and expense, execute and deliver to the Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantor of an interest in the Guaranteed Obligations resulting from such
payment made by the Guarantor pursuant to this Guaranty.
Section 5. Payments Free and Clear of Taxes, Etc. Any and all payments made by the
Guarantor under or in respect of this Guaranty or any other Loan Document shall be made free and
clear of and without deduction for any and all present or future Indemnified Taxes or Other Taxes
on the same terms and to the same extent that payments by the Borrower are required to be made free
and clear of Indemnified Taxes or Other Taxes pursuant to the terms of the Credit Agreement.
Section 6. Representations and Warranties. The Guarantor hereby represents and
warrants as follows:
(a) There are no conditions precedent to the effectiveness of this Guaranty that have
not been satisfied or waived.
(b) The Guarantor has, independently and without reliance upon the Administrative Agent
or any Lender and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Guaranty and each other Loan
Document to which it is or is to be a party, and the Guarantor has established adequate
means of obtaining from each other Loan Party on a continuing basis information pertaining
to, and is now and on a continuing basis will be completely familiar with, the business,
condition (financial or otherwise), operations, performance, properties and prospects of
such other Loan Party.
4
Section 7. Covenants. The Guarantor covenants and agrees that, so long as any part
of the Guaranteed Obligations shall remain unpaid or any Lender shall have any Commitment, the
Guarantor will perform and observe, and cause the Borrower and each of its Subsidiaries to perform
and observe, all of the terms, covenants and agreements set forth in the Loan Documents on its or
their part to be performed or observed or that the Borrower has agreed to cause its Subsidiaries to
perform or observe.
Section 8. Amendments, Etc. No amendment, modification or waiver of any provision
of this Guaranty and no consent to any departure by the Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed by the Administrative Agent and the
Required Lenders and, in the case of any amendment or modification, the Guarantor, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no amendment, modification, waiver or consent shall, unless in
writing and signed by all of the Lenders (other than any Lender that is, at such time, a Defaulting
Lender), (a) reduce or limit the obligations of the Guarantor hereunder, release the Guarantor
hereunder or otherwise limit the Guarantor’s liability with respect to the Obligations owing to the
Administrative Agent or the Lenders under or in respect of the Loan Documents, (b) postpone any
date fixed for payment hereunder or (c) change the number of Lenders or the percentage of (y) the
Commitments or (z) the aggregate unpaid principal amount of the Loans that, in each case, shall be
required for the Lenders or any of them to take any action hereunder.
Section 9. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopy or telex communication) and mailed,
telegraphed, telecopied, telexed or delivered to it, if to the Guarantor, addressed to it in care
of the Borrower at the Borrower’s address specified in Schedule 10.02 of the Credit Agreement, if
to the Administrative Agent, at its address specified in Schedule 10.02 of the Credit Agreement, if
to any other Lender, at its address specified in its Administrative Questionnaire, or, as to any
party, at such other address as shall be designated by such party in a written notice to each other
party. All such notices and other communications shall, when mailed, telegraphed, telecopied or
telexed, be effective when deposited in the mails, delivered to the telegraph company, transmitted
by telecopier or confirmed by telex answerback, respectively. Delivery by telecopier of an
executed
counterpart of a signature page to any amendment or waiver of any provision of this Guaranty
shall be effective as delivery of an original executed counterpart thereof.
Section 10. No Waiver; Remedies. No failure on the part of the Administrative Agent
or any Lender to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon both (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the granting of the
consent specified by Section 8.02 of the Credit Agreement to authorize the Administrative Agent to
take the actions described therein, the Administrative Agent, each Lender and each of their
respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent
5
permitted by law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing by the
Administrative Agent, such Lender or such Affiliate to or for the credit or the account of the
Guarantor against any and all of the Obligations of the Guarantor now or hereafter existing under
the Loan Documents, irrespective of whether the Administrative Agent or such Lender shall have made
any demand under this Guaranty or any other Loan Document and although such Obligations may be
unmatured. The Administrative Agent and each Lender agrees promptly to notify the Guarantor after
any such set-off and application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Administrative Agent and
each Lender and their respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that the Administrative Agent,
such Lender and their respective Affiliates may have.
Section 12. Indemnification. (a) Without limitation on any other Obligations of
the Guarantor or remedies of the Administrative Agent or the Lenders under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and save and hold
harmless the Administrative Agent and each Lender and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and
against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party in connection with or as a result of any failure
of any Guaranteed Obligations to be the legal, valid and binding obligations of any Loan Party
enforceable against such Loan Party in accordance with their terms.
(b) The Guarantor hereby also agrees that none of the Indemnified Parties shall have any
liability (whether direct or indirect, in contract, tort or otherwise) to the Guarantor or any of
its Affiliates or any of their respective officers, directors, employees, agents and advisors,
and the Guarantor hereby agrees not to assert any claim against any Indemnified Party on any
theory of liability, for special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Loans, the
Loan Documents or any of the transactions contemplated by the Loan Documents.
(c) Without prejudice to the survival of any of the other agreements of the Guarantor under
this Guaranty or any of the other Loan Documents, the agreements and obligations of the Guarantor
contained in Section 1(a) (with respect to enforcement expenses), the last sentence of Section 2,
Section 5 and this Section 12 shall survive the payment in full of the Guaranteed Obligations and
all of the other amounts payable under this Guaranty.
Section 13. Subordination. The Guarantor hereby subordinates any and all debts,
liabilities and other Obligations owed to the Guarantor by each other Loan Party (the “Subordinated
Obligations”) to the Guaranteed Obligations to the extent and in the manner hereinafter set forth
in this Section 13:
(a) Prohibited Payments, Etc. Except during the continuance of an Event of
Default (including the commencement and continuation of any proceeding under any Bankruptcy
Law relating to any other Loan Party), the Guarantor may receive payments from any other
Loan Party on account of the Subordinated Obligations. After the
6
occurrence and during the
continuance of any Event of Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party), however, unless the
Administrative Agent otherwise agrees and except with respect to transactions between and
among Loan Parties that are not by the terms of the Credit Agreement prohibited from being
consummated after the occurrence of an Event of Default, the Guarantor shall not demand,
accept or take any action to collect any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any proceeding under any
Bankruptcy Law relating to any other Loan Party, the Guarantor agrees that the Lenders shall
be entitled to receive payment in full in cash of all Guaranteed Obligations (including all
interest and expenses accruing after the commencement of a proceeding under any Bankruptcy
Law, whether or not constituting an allowed claim in such proceeding (“Post Petition
Interest”)) before the Guarantor receives payment of any Subordinated Obligations.
(c) Administrative Agent Authorization. After the occurrence and during the
continuance of any Event of Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party), the Administrative
Agent is authorized and empowered (but without any obligation to so do), in its discretion,
(i) in the name of the Guarantor, to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and to apply any amounts received thereon to the Guaranteed
Obligations (including any and all Post Petition Interest), and (ii) to require the
Guarantor (A) to collect and enforce, and to submit claims in respect of, Subordinated
Obligations and (B) to pay any amounts received on such obligations to the
Administrative Agent for application to the Guaranteed Obligations (including any and
all Post Petition Interest).
Section 14. Continuing Guaranty; Assignments under the Credit Agreement. This
Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the latest of
(i) the payment in full in cash of the Guaranteed Obligations and all other amounts payable under
this Guaranty, (ii) the Final Maturity Date and (iii) the date of expiration or termination of all
Commitments, (b) be binding upon the Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Administrative Agent, the Lenders and their successors,
transferees and assigns. Without limiting the generality of clause (c) of the immediately
preceding sentence, any Lender may assign or otherwise transfer all or any portion of its rights
and obligations under the Credit Agreement (including, without limitation, all or any portion of
its Commitments, the Loans owing to it and the Note or Notes held by it) subject to compliance with
Section 10.06 of the Credit Agreement, and each such permitted assignee or transferee shall
thereupon become vested with all the benefits in respect thereof granted to such Lender herein or
otherwise, in each case as and to the extent provided in Section 10.06 of the Credit Agreement.
The Guarantor shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lenders.
Section 15. Execution in Counterparts. This Guaranty and each amendment, waiver and
consent with respect hereto may be executed in any number of counterparts and by different parties
thereto in separate counterparts, each of which when so executed shall be
7
deemed to be an original
and all of which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Guaranty by telecopier shall be effective as
delivery of an original executed counterpart of this Guaranty.
Section 16. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. (a) This
Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York.
(b) The Guarantor 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 Guaranty or any of the other Loan Documents to which
it is or is to be a party, or for recognition or enforcement of any judgment, and the Guarantor
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to the extent permitted
by law, in such federal court. The Guarantor 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 Guaranty or any other Loan Document shall
affect any right that any party may otherwise have to bring any action or proceeding relating to
this Guaranty or any other Loan Document in the courts of any jurisdiction.
(c) The Guarantor 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 Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal court. The Guarantor
hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such suit, action or proceeding in any such court.
(d) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, THE LOANS OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY
LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
8
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered
by its officer thereunto duly authorized as of the date first above written.
| LEAP WIRELESS INTERNATIONAL, INC. | ||||||
| By: | /s/ Xxxx X. Xxxxxx | |||||
| Name: Xxxx X. Xxxxxx | ||||||
| Title: Acting Chief Financial Officer | ||||||
