PARENT PLEDGE AGREEMENT dated as of September 17, 1999, among LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation (the "Parent") and STATE STREET BANK AND TRUST COMPANY, as collateral agent (in such capacity, the "Collateral Agent") for the Secured Parties.
Reference is made to the Collateral Agency and Intercreditor Agreement dated as of September 17, 1999 (as amended, supplemented or otherwise modified from time to time, the "Collateral Agency and Intercreditor Agreement") among Cricket Wireless Communications, Inc., a Delaware corporation (the "Borrower"), the Representatives and Unrepresented Holders referred to therein and the Collateral Agent. Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Collateral Agency and Intercreditor Agreement. The Parent acknowledges receipt of a true and correct copy of the Collateral Agency and Intercreditor Agreement and agrees to the terms thereof.
The Lenders have agreed to make Loans to the Borrower pursuant to, and upon the terms and subject to the conditions specified in, the Credit Agreement. The Borrower is a subsidiary of the Parent. The obligations of the Lenders to make Loans are conditioned upon, among other things, the execution and delivery by the Parent of a Pledge Agreement in the form hereof. The Borrower may from time to time incur Permitted Additional Obligations that are required to be secured pursuant to the terms hereof.
Accordingly, the Parent and the Collateral Agent, on behalf of itself and each Secured Party (and each of their respective successors or assigns), hereby agree as follows:
SECTION 1. Pledge. As security for the payment and performance, as the case may be, in full of the Obligations, the Parent hereby transfers, grants, bargains, sells, conveys, hypothecates, pledges, sets over and delivers unto the Collateral Agent, its successors and assigns, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest in all of the Parent's right, title and interest in, to and under (a), the shares of capital stock, membership interests or other, equity interests of the Borrower or any Subsidiary Loan Party owned by it and listed on Schedule I hereto and any shares of the Borrower or any Subsidiary Loan Party obtained in the future by the Parent and the certificates representing all such shares,
membership interests or other equity interests (collectively, the "Pledged Stock"); provided that the pledged interests shall not include to the extent that applicable law requires that the Borrower or any Subsidiary Loan Party issue directors' qualifying shares, such qualifying shares; (b)(i) all debt securities issued by the Borrower or any Subsidiary Loan Party owned by it, all of which are listed on Schedule I hereto, (ii) any debt securities in the future issued to the Parent by the Borrower or any Subsidiary Loan Party and (iii) the promissory notes and any other instruments evidencing such debt securities (the "Pledged Debt Securities"); (c) all other property that may be delivered to and held by the Collateral Agent pursuant to the terms hereof; (d) subject to Section 5, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed, in respect of, in exchange for or upon the conversion of the securities referred to in clauses (a) and (b) above; (e) subject to Section 5, all rights and privileges of the Parent with respect to the securities and other property referred to in clauses (a), (b), (c) and (d) above; and (f) all proceeds of any of the foregoing (the items referred to in clauses (a) through (f) above being collectively referred to as the "Collateral"). Upon delivery to the Collateral Agent, (a) any stock certificates, notes or other securities now or hereafter included in the Collateral (the "Pledged Securities") shall be accompanied by stock powers duly executed in blank or other instruments of transfer satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request in order to give effect to the pledge granted hereby and (b) all other property comprising part of the Collateral shall be accompanied by proper instruments of assignment duly executed by the Parent and such other instruments or documents as the Collateral Agent may reasonably request in order to give effect to the pledge granted hereby. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities theretofore and then being pledged hereunder, which schedule shall be attached hereto as Schedule I and made a part hereof. Each schedule so delivered shall supersede any prior schedules so delivered.
TO HAVE AND TO HOLD the Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent,
its successors and assigns, for the ratable benefit of the Secured Parties, forever; subject, however, to the terms, covenants and conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral. (a) The Parent agrees promptly to deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities and any and all certificates or other instruments or documents representing the Collateral.
(b) The Parent will cause any Indebtedness for borrowed money owed to the Parent by the Borrower or any Subsidiary Loan Party to be evidenced by a duly executed promissory note, bond, debenture or similar instrument that is pledged and delivered to the Collateral Agent pursuant to the terms thereof.
SECTION 3. Representations, Warranties and Covenants. The Parent hereby represents, warrants and covenants, as to itself and the Collateral pledged by it hereunder, to and with the Collateral Agent that as of the Effective Date:
(a) the Pledged Stock represents that percentage as set forth on Schedule I of the issued and outstanding shares of each class of the capital stock of the issuer with respect thereto;
(b) except for the security interest granted hereunder, the Parent (i) is and will at all times continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule I, (ii) holds the same free and clear of all Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Collateral, other than pursuant hereto, and (iv) subject to Section 5, will cause any and all Collateral, whether for value paid by the Parent or otherwise, to be forthwith deposited with the Collateral Agent and pledged or assigned hereunder;
(c) the Parent (i) has the power and authority to pledge the Collateral in the manner hereby done or contemplated and (ii) will defend its title or interest thereto or therein against any and all Liens (other than the Lien created by this Agreement), however arising, of all Persons whomsoever;
(d) except for such consents and approvals as have been obtained and are in full force and effect, no consent of any other Person (including stockholders or creditors of the Parent) and no consent or approval of any Governmental Authority or any securities exchange was or is necessary to the validity of the pledge effected hereby;
(e) by virtue of the execution and delivery by the Parent of this Agreement, when the Pledged Securities, certificates or other documents representing or evidencing the Collateral are delivered to, and continue to be in the possession of, the Collateral Agent in accordance with this Agreement, the Collateral Agent will have a valid and perfected first lien upon and security interest in such Pledged Securities as security for the payment and performance of the Obligations;
(f) the pledge effected hereby is effective to vest in the Collateral Agent, on behalf of the Secured Parties, the rights of the Collateral Agent in the Collateral as set forth herein;
(g) all of the Pledged Stock has been duly authorized and validly issued and is fully paid and nonassessable;
(h) all information set forth herein relating to the Pledged Stock is accurate and complete in all material respects as of the date hereof; and
(i) the pledge of the Pledged Stock pursuant to this Agreement does not violate Regulation U or X of the Federal Reserve Board or any successor thereto as of the date hereof.
SECTION 4. Registration in Nominee Name; Denominations. The Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the Parent, endorsed or assigned in blank or in favor of the Collateral Agent. The Parent will promptly give to the Collateral Agent copies of any material notices or other communications received by it with respect to Pledged Securities registered in the name of the Parent. The Collateral Agent shall at all times have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless and until a Notice of Enforcement is in effect:
(i) The Parent shall be entitled to exercise any and all voting
and/or other consensual rights and powers inuring to an owner of Pledged
Securities or any part thereof for any purpose consistent with the terms
of this Agreement, the other Support Documents and the Secured
Instruments; provided, however, that the Parent will not be entitled to
exercise any such right if the result thereof could materially and
adversely affect the rights inuring to a holder of the Pledged
Securities or the rights and remedies of any of the Secured Parties
under this Agreement or any other Support Document or Secured Instrument
or the ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall execute and deliver to the
Parent, or cause to be executed and delivered to the Parent, all such
proxies, powers of attorney and other instruments as the Parent may
reasonably request for the purpose of enabling the Parent to exercise
the voting and/or consensual rights and powers it is entitled to
exercise pursuant to subparagraph (i) above and to receive the cash
dividends it is entitled to receive pursuant to subparagraph (iii)
(iii) The Parent shall be entitled to receive and retain any and
all cash dividends, interest and principal paid on the Pledged
Securities to the extent and only to the extent that such cash
dividends, interest and principal are permitted by, and otherwise paid
in accordance with, the terms and conditions of the Support Documents,
the Secured Instruments and applicable laws. While a Notice of
Enforcement is in effect, all noncash dividends, interest and principal,
and all dividends, interest and principal paid or payable in cash or
otherwise in connection with a partial or total liquidation or
dissolution, return of capital, capital surplus or paid-in surplus, and
other distributions (other than distributions referred to in the
preceding sentence) made on or in respect of the Pledged Securities,
whether paid or payable in cash or otherwise, whether resulting from a
subdivision, combination or reclassification of the outstanding capital
stock of the issuer of any Pledged Securities or received in exchange
for Pledged Securities or any part thereof, or in redemption thereof, or
as a result of any merger, consolidation, acquisition or other exchange
of assets to which such issuer may be a party or otherwise, shall be and
become part of the Collateral, and, if received by the Parent, shall not
be commingled by the Parent with any of its other funds or property but
shall be held separate and apart therefrom, shall be held in trust for
the benefit of the Collateral Agent and shall be forthwith delivered to
the Collateral Agent in the same form as so received (with any necessary
(b) While a Notice of Enforcement is in effect, all rights of the Parent to dividends, interest or principal that the Parent is authorized to receive pursuant to paragraph (a)(iii) above shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest or principal. All dividends, interest or principal received by the Parent contrary to the provisions of this Section 5 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of the Parent and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in the Enforcement Collateral Account upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 7. After a Notice of Enforcement has been rescinded in accordance with the terms of the Collateral Agency and Intercreditor Agreement, the Collateral Agent shall, within five Business Days after all such Notices of Enforcement have been rescinded, repay to the Parent all cash dividends, interest or principal (without interest), that the Parent would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) above and which remain in the Enforcement Collateral Account.
(c) While a Notice of Enforcement is in effect, all rights of the Parent to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 5, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 5, shall c