Cricket Wireless 2010 Annual Report Download - page 84

be convertible into 10.7290 shares of Leap common stock per $1,000 principal amount of the notes (referred to as
the “base conversion rate”), subject to adjustment upon the occurrence of certain events. If, at the time of
conversion, the applicable stock price of Leap’s common stock exceeds approximately $93.21 per share, the
conversion rate will be determined pursuant to a formula based on the base conversion rate and an incremental share
factor of 8.3150 shares per $1,000 principal amount of the notes, subject to adjustment.
Leap may be required to repurchase all outstanding notes in cash at a repurchase price of 100% of the principal
amount of the notes, plus accrued and unpaid interest, if any, thereon to the repurchase date if (1) any person
acquires beneficial ownership, directly or indirectly, of shares of Leap’s capital stock that would entitle the person to
exercise 50% or more of the total voting power of all of Leap’s capital stock entitled to vote in the election of
directors, (2) Leap (i) merges or consolidates with or into any other person, another person merges with or into Leap,
or Leap conveys, sells, transfers or leases all or substantially all of its assets to another person or (ii) engages in any
recapitalization, reclassification or other transaction in which all or substantially all of Leap common stock is
exchanged for or converted into cash, securities or other property, in each case subject to limitations and excluding
in the case of (1) and (2) any merger or consolidation where at least 90% of the consideration consists of shares of
common stock traded on NYSE, ASE or NASDAQ, (3) a majority of the members of Leap’s board of directors
ceases to consist of individuals who were directors on the date of original issuance of the notes or whose election or
nomination for election was previously approved by the board of directors, (4) Leap is liquidated or dissolved or
holders of common stock approve any plan or proposal for its liquidation or dissolution or (5) shares of Leap
common stock are not listed for trading on any of the New York Stock Exchange, the NASDAQ Global Market or
the NASDAQ Global Select Market (or any of their respective successors). Leap may not redeem the notes at its
option.
Unsecured Senior Notes Due 2015
In June 2008, Cricket issued $300 million of 10.0% unsecured senior notes due 2015 in a private placement to
institutional buyers. The notes bear interest at the rate of 10.0% per year, payable semi-annually in cash in arrears,
which interest payments commenced in January 2009. The notes are guaranteed on an unsecured senior basis by
Leap and each of its existing and future domestic subsidiaries (other than Cricket, which is the issuer of the notes)
that guarantees indebtedness for borrowed money of Leap, Cricket or any subsidiary guarantor. The notes and the
guarantees are Leap’s, Cricket’s and the guarantors’ general senior unsecured obligations and rank equally in right
of payment with all of Leap’s, Cricket’s and the guarantors’ existing and future unsubordinated unsecured
indebtedness. The notes and the guarantees are effectively junior to Leap’s, Cricket’s and the guarantors’
existing and future secured obligations, including those under the senior secured notes described below, to the
extent of the value of the assets securing such obligations, as well as to existing and future liabilities of Leap’s and
Cricket’s subsidiaries that are not guarantors (including Denali, LCW Wireless and STX Wireless) and Savary
Island and their respective subsidiaries. In addition, the notes and the guarantees are senior in right of payment to
any of Leap’s, Cricket’s and the guarantors’ future subordinated indebtedness.
Prior to July 15, 2011, Cricket may redeem up to 35% of the aggregate principal amount of the notes at a
redemption price of 110.0% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the
redemption date, from the net cash proceeds of specified equity offerings. Prior to July 15, 2012, Cricket may
redeem the notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the
applicable premium and any accrued and unpaid interest, if any, thereon to the redemption date. The applicable
premium is calculated as the greater of (i) 1.0% of the principal amount of such notes and (ii) the excess of (a) the
present value at such date of redemption of (1) the redemption price of such notes at July 15, 2012 plus (2) all
remaining required interest payments due on such notes through July 15, 2012 (excluding accrued but unpaid
interest to the date of redemption), computed using a discount rate equal to the Treasury Rate plus 50 basis points,
over (b) the principal amount of such notes. The notes may be redeemed, in whole or in part, at any time on or after
July 15, 2012, at a redemption price of 105.0% and 102.5% of the principal amount thereof if redeemed during the
twelve months beginning on July 15, 2012 and 2013, respectively, or at 100% of the principal amount if redeemed
during the twelve months beginning on July 15, 2014 or thereafter, plus accrued and unpaid interest, if any, thereon
to the redemption date.
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