Financial Statements

EX-10.1 2 a42663exv10w1.htm EXHIBIT 10.1 exv10w1

EXHIBIT 10.1
EXECUTION COPY

AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT

AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 18, 2008 (this “Amendment”) among CRICKET COMMUNICATIONS, INC., a Delaware corporation (the “Borrower”), LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation (“Holdings”), the banks, financial institutions and other institutional lenders parties to the Credit Agreement referred to below (collectively, the “Lenders”) and Bank of America, N.A., as administrative agent (the “Administrative Agent”) for the Lenders.

PRELIMINARY STATEMENTS:

1. Holdings, the Borrower, the Lenders and the Administrative Agent have entered into an Amended and Restated Credit Agreement dated as of June 16, 2006 (as amended by Amendment No. 1 thereto dated as of March 15, 2007 and Amendment No. 2 thereto dated as of November 20, 2007, the “Credit Agreement”). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement.

2. The Borrower has requested that the Lenders amend the Credit Agreement (w) to resize and amend certain baskets and exclusions to reflect the growth in the Loan Parties’ business and their ongoing business expansion activities, (x) to permit the Borrower and Holdings to incur additional Permitted Unsecured Debt, (y) to permit Holdings to issue Qualified Preferred Stock and (z) to make certain other amendments to the Credit Agreement as set forth below.

3. The Lenders have agreed, subject to the terms and conditions hereinafter set forth, to amend the Credit Agreement as set forth below.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the sufficiency and receipt of all of which is hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. Amendments to Credit Agreement. Upon, and subject to, the satisfaction of the conditions precedent set forth in Section 2 below, the Credit Agreement is hereby amended as follows:

(a) Section 1.01 of the Credit Agreement is amended by amending and restating in full clause (a) of the definition of “Applicable Rate” to read as follows:

“(a) in respect of the Term B1 Facility, (i) 3.50% per annum for Eurodollar Rate Loans, and (ii) 2.50% per annum for Base Rate Loans, in each case as the same may be increased pursuant to Section 2.13(g), and”

(b) Section 1.01 of the Credit Agreement is further amended by amending and restating in full the table in clause (b) of the definition of “Applicable Rate” to read as follows:


Applicable Rate
	Consolidated Senior	Eurodollar Rate +
Pricing Level	Secured Leverage Ratio	Letters of Credit	Base Rate
1	<2.50:1	3.25%	2.25%
2	³2.50:1 but <3.00:1	3.50%	2.50%
3	³3.00:1 but <3.50:1	3.75%	2.75%
4	³3.50:1	4.00%	3.00%

(i) clause (e) of the definition of “Change of Control” is amended by substituting for the phrase “or Permitted Bridge Debt” where it occurs therein the phrase “, Permitted Bridge Debt or Qualified Preferred Stock”;

(ii) clause (a) of the definition of “Consolidated EBITDA” is amended by (w) substituting a comma for the word “and” where it appears at the end of clause (viii) thereof, (x) substituting for the date: “May 31, 2010” the date: “ December 31, 2011” where it appears in clause (ix) thereof, (y) substituting for the amount: “$75,000,000” the amount: “$100,000,000” where it appears in clause (ix) thereof and (z) inserting after the end of clause (ix) thereof the phrase: “and (x) for purposes of calculating the Consolidated Fixed Charge Coverage Ratio only, for any Measurement Period ending on or prior to December 31, 2009, of not more than $125,000,000 of additional operating losses (determined in accordance with GAAP) incurred during such Measurement Period in markets that at the time of such loss either were not yet in commercial operation or had been in commercial operation for one year or less (but only to the extent of losses incurred prior to or within one year after commercial launch of the relevant market)”;

(iii) clause (a)(ii) of the definition of “Consolidated Fixed Charge Coverage Ratio” is amended by (x) substituting a comma for the word “and” where it appears at the end of sub-clause (A) thereof and (y) inserting after the end of sub-clause (B) thereof the phrase: “to the extent such Capital Expenditures are incurred during the applicable Measurement Period and (C) for any Measurement Period ending on or prior to December 31, 2009, Capital Expenditures in an aggregate amount not to exceed $125,000,000 made directly and only in connection with the expansion of network coverage, capability and capacity in operating markets in existence as of December 31, 2007”;

(iv) the definition of “Contractual Obligation” is amended by inserting the phrase: “(whether contained in the certificate of designations, articles of incorporation or otherwise)” immediately after the phrase: “any provision of any security issued by such Person”.

(v) the definition of “LIBO Rate” is amended by inserting the phrase: “, the greater of (x) 3.00% per annum and (y) a rate per annum determined as follows:”

immediately after the phrase: “means, for such Interest Period” where it appears in the definition of “Eurodollar Rate”;

(vi) paragraph (g) of the definition of “Indebtedness” is amended and restated in full as follows:

“(g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment, in each case prior to the date that is 180 days after the Maturity Date in respect of, or prior to any other payment required by, the Term B1 Facility (except as contemplated by the definition of Qualified Preferred Stock), in respect of (i) any Equity Interest in such Person or any other Person or (ii) any warrant, right or option to acquire such Equity Interest, excluding in each case any such obligations to the extent that such obligations by their terms permit satisfaction in full in common Equity Interests or Qualified Preferred Stock (or any combination thereof) of Holdings (including Permitted Equity Forwards), valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid cash dividends, and, for purposes of the definition of “Permitted Unsecured Debt” or “Permitted Bridge Debt,” if applicable, with a deemed maturity date, in the case of a redeemable preferred interest, of the specified mandatory redemption date for such redeemable preferred interest; and”

(vii) the definition of “Qualified Preferred Stock” is amended and restated in its entirety to read as follows:

“Qualified Preferred Stock” means preferred stock (including convertible preferred stock) of Holdings that (a) has no mandatory redemption feature exercisable on a date earlier than 180 days after the Maturity Date in respect of, or prior to any other payment required by, the Term B1 Facility (other than mandatory redemption provisions with respect to a change of control on terms no more restrictive than customary terms for preferred stock (including, if such preferred stock is convertible, convertible preferred stock)), (b) has no requirements for the payment in cash of dividends or other distributions on a date earlier than 180 days after the Maturity Date in respect of, or prior to any other payment required by, the Term B1 Facility and (c) contains covenants, if any, no more restrictive, taken as a whole and in all material respects, than those customarily found in a preferred stock (including, if such preferred stock is convertible, convertible preferred stock) offering.”

(viii) the definition of “Repricing Transaction” is amended by inserting the phrase: “, or repricing of,” after the phrase: “new or additional” where such phrase appears in the second and third lines thereof.

(d) Section 2.08(b)(iii) is amended and restated in full as follows:

“(iii) If prior to June 18, 2010, the Borrower (A) makes any prepayment of any Term B1 Loans (x) pursuant to Section 2.04(a), (b)(i), (b)(ii), (b)(iii) or (b)(v) or (y) in

connection with any Repricing Transaction or (B) makes any repayment of any Term B1 Loans upon any acceleration pursuant to Section 8.02, then the Borrower shall pay to the Administrative Agent, for the ratable account of the Term B1 Lenders, a prepayment or repayment, as applicable, premium in an amount equal to (A) 2.00% of the principal amount prepaid or repaid, as applicable, if such prepayment or repayment occurs prior to June 18, 2009, or (B) 1.00% of the principal amount prepaid or repaid, as applicable, if such prepayment or repayment occurs on or after June 18, 2009 but prior to June 18, 2010.”

(e) Section 2.13(a) is amended by inserting the phrase: “by an amount (for all such requests) not exceeding $400,000,000” immediately after the phrase: “request an increase in the Term B1 or Revolving Credit Commitments”.

(f) Section 2.13(d) is amended by (i) inserting after the phrase: “Term B1 Commitments shall amortize” where it appears in the eighth line thereof the phrase: “not less than” and (ii) substituting for the phrase: “Maturity Date” where it appears in the ninth line thereof the phrase: “maturity date of such Incremental Facility”.

(g) Section 2.13(g) is amended and restated in full as follows:

“(g) Pricing Parity. In the event that any Loans made under any Incremental Facility have, at the Increase Effective Date, an effective interest rate margin or weighted average yield (to be determined by the Administrative Agent consistent with generally accepted financial practice, after giving effect to, among other factors, call protection, margins, interest rate floors, upfront or similar fees or original issue discount shared with all lenders or holders thereof, but excluding the effect of any arrangement, structuring, syndication or other fees payable in connection therewith that are not shared with all lenders or holders thereof (based on an assumed three-year average life to maturity or, if lesser, the remaining life to maturity of the Term B1 Loans or the Revolving Credit Loans, as applicable)) that is higher than the Applicable Rate for (i) if such Incremental Facility consists of Term B1 Commitments, the Term B1 Loans or (ii) if such Incremental Facility consists of Revolving Credit Commitments, the Revolving Credit Loans, then the Applicable Rate in respect of Loans under the Term B1 Facility or the Revolving Credit Facility, as applicable, immediately prior to the Increase Effective Date for the applicable Incremental Facility shall be automatically increased to a rate equal to the greater of the effective interest rate margin or weighted average yield, as applicable, in respect of such Incremental Facility.”

(h) Section 7.01(i) is amended by substituting for the amount: “$150,000,000” the amount: “$250,000,000”.

(i) Section 7.01(p) is amended by substituting for the amount: “$15,000,000” the amount: “$30,000,000”.

(j) Section 7.02(a)(i)(C) is amended by substituting for the amount: “$1,200,000,000” the phrase: “$1,650,000,000 plus the sum of all cash proceeds of capital

contributions to and issuances or sales of common Equity Interests (excluding convertible debt securities) received after June 18, 2008 up to a maximum of $200,000,000 in the aggregate”.

(k) Section 7.02(a)(ii)(D) is amended by substituting for the amount: “$150,000,000” the amount: “$250,000,000”.

(l) Section 7.02(a)(ii)(I) is amended by substituting for the amount: “$15,000,000” the amount: “$30,000,000”.

(m) Section 7.06(a) is amended by inserting the phrase: “, or the incurrence of any obligation (contingent or otherwise) to declare or make,” immediately after the phrase: “the declaration or making of” where it appears in the tenth line thereof.

(n) Section 7.06(b) is amended by substituting for the phrase: “other than common equity of Holdings” where it appears in the fifth line thereof the phrase “other than common Equity Interests of Holdings”.

(o) Section 8.01(e)(i)(B) is amended by inserting the phrase “(including breach of a representation or warranty contained in an agreement, or failure to observe or perform any term of any stock or security)” immediately after the phrase: “fails to observe or perform any other agreement”.

SECTION 2. Conditions of Effectiveness. This Amendment and the amendments to the Credit Agreement set forth herein shall become effective on the date (the “Third Amendment Effective Date”) on which the Administrative Agent (or, in the case of clause (c)(i)(x) below, GSCP) shall have received the following:

(a) counterparts of this Amendment executed by the Borrower, Holdings, and the Required Lenders or, as to any of the Lenders, advice satisfactory to the Administrative Agent that such Lender has executed this Amendment;

(b) (i) the consent attached hereto executed by each Subsidiary Guarantor and (ii) evidence reasonably satisfactory to the Administrative Agent that each Loan Party has taken all corporate action necessary to authorize the execution and delivery of this Amendment; and

(c) (i) such fees, if any, as have been separately agreed in writing between (x) GSCP and the Borrower and (y) the Administrative Agent and the Borrower, (ii) the reasonable accrued fees and expenses of counsel to the Administrative Agent and (iii) for the account of each Lender that executes and delivers a counterpart of this Amendment on or before 5:00 P.M. (New York City time) on June 18, 2008, a fee equal to 50 bps on the aggregate principal amount of such Lender’s Commitments and Loans under the Credit Agreement.

The effectiveness of this Amendment is conditioned upon the accuracy of the factual matters described herein. This Amendment is subject to the provisions of Section 10.01 of the Credit Agreement.

SECTION 3. Representations and Warranties. Each of Holdings and the Borrower represents and warrants as follows:

(a) The representations and warranties of the Borrower and each other Loan Party contained in each of Loan Documents, or which are contained in any document furnished at any time under or in connection herewith or therewith, are true and correct in all material respects on and as of the Third Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date; and

(b) No Default exists as of, or would result from the occurrence of, the Third Amendment Effective Date.

SECTION 4. Reference to and Effect on the Credit Agreement and the Loan Documents.

(a) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the Notes and each of the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment.

(b) The Credit Agreement, the Notes and each of the other Loan Documents, as specifically amended by this Amendment (and as contemplated to be amended, modified, supplemented, restated, substituted or replaced by this Amendment) are and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Collateral Documents and all of the Collateral described therein do and shall continue to secure the payment of all Obligations of the Loan Parties under the Loan Documents, in each case, as amended by this Amendment.

(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. On and after the effectiveness of this Amendment, this Amendment shall for all purposes constitute a Loan Document.

SECTION 5. Costs and Expenses. The Borrower agrees that all costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Amendment and the other instruments and documents to be delivered hereunder or in connection herewith (including, without limitation, the reasonable fees and expenses of counsel for the Administrative Agent), are costs and expenses that the Borrower is required to pay or reimburse pursuant to Section 10.04 of the Credit Agreement.

SECTION 6. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall

constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 7. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.


CRICKET COMMUNICATIONS, INC.
By	/s/ S. DOUGLAS HUTCHESON
	Name:	S. Douglas Hutcheson
	Title:	CEO

LEAP WIRELESS INTERNATIONAL, INC.
By	/s/ S. DOUGLAS HUTCHESON
	Name:	S. Douglas Hutcheson
	Title:	CEO

BANK OF AMERICA, N.A., as Administrative Agent, as Lender
By	/s/ TODD SHIPLEY
	Name:	Todd Shipley
	Title:	Senior Vice President