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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10- K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004 OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to Commission file number 0- 29752 .

LEAP WIRELESS INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization) 10307 Pacific Center Court, San Diego, CA (Address of Principal Executive Offices) (858) 882- 6000
(Registrant's Telephone Number, Including Area Code)

33- 0811062 (I.R.S. Employer Identification No.) 92121 (Zip Code)

Securities registered pursuant to Section 12(b) of the Act: None. Securities registered pursuant to Section 12(g) of the Act: Common Stock, $.0001 par value
(Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES  NO t Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S- K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10- K or any amendment to this Form 10- K.  Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b- 2). YES t NO  As of June 30, 2004, the aggregate market value of the registrant's voting and nonvoting common stock held by non- affiliates of the registrant was approximately $737,000, based on the closing price of Leap's common stock on the OTC Bulletin Board on June 30, 2004, of $.02 per share. Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes  No t The number of shares of registrant's common stock outstanding on May 11, 2005 was 60,000,000.

Table of Contents EXPLANATORY NOTE This annual report on Form 10- K for the year ended December 31, 2004 includes consolidated financial statements of Leap Wireless International, Inc. (the Predecessor Company) for the seven months ended July 31, 2004 and consolidated financial statements of Leap Wireless International, Inc. (the Successor Company) for the five months ended December 31, 2004. The audited consolidated financial statements of the Predecessor Company incorporate restatement adjustments relating to the previously issued unaudited interim consolidated financial information for the one month and seven months ended July 31, 2004. The previously issued unaudited interim consolidated financial information of the Predecessor Company has been restated to properly present various liabilities, including asset retirement obligations and deferred rent, upon the adoption of fresh start reporting as of July 31, 2004. See Note 2 to our consolidated financial statements included as part of this annual report for additional information. Note 16 to the consolidated financial statements includes restated unaudited quarterly financial data relating to the one month interim period ended July 31, 2004 of the Predecessor Company and the two month interim period ended September 30, 2004 of the Successor Company. LEAP WIRELESS INTERNATIONAL, INC. ANNUAL REPORT ON FORM 10- K For the Year Ended December 31, 2004 TABLE OF CONTENTS
Page

Item 1. Item 2. Item 3. Item 4. Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Item 10. Item 11. Item 12. Item 13. Item 14. Item 15. EXHIBIT 4.1 EXHIBIT 10.5.1 EXHIBIT 10.7 EXHIBIT 10.11 EXHIBIT 10.11.1 EXHIBIT 10.12.4 EXHIBIT 10.13 EXHIBIT 10.15 EXHIBIT 10.16.1 EXHIBIT 10.16.2 EXHIBIT 10.16.3 EXHIBIT 10.16.4 EXHIBIT 21.1 EXHIBIT 31.1 EXHIBIT 31.2 EXHIBIT 32.1 EXHIBIT 32.2

PART I Business Properties Legal Proceedings Submission of Matters to a Vote of Security Holders PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PART III Directors and Executive Officers of the Registrant Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions Principal Accounting Fees and Services PART IV Exhibits and Financial Statement Schedules

1 23 24 25

26 28 30 47 48 87 87 90 90 93 102 104 105 107

Table of Contents PART I As used in this report, the terms "we," "our," "ours" and "us" refer to Leap Wireless International, Inc., a Delaware corporation, and its subsidiaries, unless the context suggests otherwise. Unless otherwise specified, information relating to population and potential customers, or POPs, is based on 2005 population estimates provided by Claritas Inc. Forward- Looking Statements; Cautionary Statement Except for the historical information contained herein, this report contains "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management's current forecast of certain aspects of Leap's future. You can identify most forward- looking statements by forward- looking words such as "believe," "think," "may," "could," "will," "estimate," "continue," "anticipate," "intend," "seek," "plan," "expect," "should," "would" and similar expressions in this report. Such statements are based on currently available operating, financial and competitive information and are subject to various risks, uncertainties and assumptions that could cause actual results to differ materially from those anticipated or implied in our forward- looking statements. Such risks, uncertainties and assumptions include, among other things: our ability to attract and retain customers in an extremely competitive marketplace; our ability to attract, motivate and retain an experienced workforce; changes in economic conditions that could adversely affect the market for wireless services; the impact of competitors' initiatives; our ability to successfully execute service expansion plans; failure of network systems to perform according to expectations; our ability to comply with the covenants in our senior secured credit facilities; failure of the Federal Communications Commission, or the FCC, to approve the transfers (a) to a third party of the wireless licenses covered by the asset purchase agreement between Cricket Communications, Inc., the third party and the other parties to such agreement, and (b) to Alaska Native Broadband 1 License, LLC of the wireless licenses for which it was the winning bidder in the FCC's Auction #58; global political unrest, including the threat or occurrence of war or acts of terrorism; and other factors detailed in the section entitled "Risk Factors" included in Item 1 below. All forward- looking statements in this report should be considered in the context of these risk factors. We undertake no obligation to update or revise any forward- looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, the forward- looking events and circumstances discussed in this report may not occur and actual results could differ materially from those anticipated or implied in the forward- looking statements. Accordingly, users of this report are cautioned not to place undue reliance on the forward- looking statements. Item 1. Business Leap Wireless International, Inc., or Leap, together with its wholly- owned subsidiaries, is a wireless communications carrier that offers digital wireless service in the United States. Leap operates through its subsidiaries; Leap has no independent operations or sources of operating revenue other than through dividends and distributions, if any, from its operating subsidiaries. Cricket Communications, Inc. and its subsidiaries that operate Cricket's wireless communications business are collectively referred to in this report as Cricket or the Cricket Companies. Leap and the Cricket Companies are collectively referred to in this report as the Company. 1

Table of Contents Leap was formed in 1998 by Qualcomm Incorporated, or Qualcomm. Qualcomm distributed the common stock of Leap in a "spin- off" distribution to Qualcomm's stockholders in September 1998. Under a license from Leap, the Cricket service was first introduced in Chattanooga, Tennessee in March 1999 by Chase Telecommunications, Inc., a company that Leap acquired in March 2000. On April 13, 2003, or the Petition Date, Leap, Cricket and substantially all of their subsidiaries filed voluntary petitions for relief under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of California, or the Bankruptcy Court. Our Fifth Amended Joint Plan of Reorganization, or Plan of Reorganization, was confirmed by the Bankruptcy Court on October 22, 2003. The effectiveness of our Plan of Reorganization was conditioned upon, among other things, the receipt of required regulatory approvals from the FCC for the transfer of wireless licenses associated with the change of control that occurred upon our emergence from bankruptcy. We received the requisite FCC approvals on August 5, 2004 and, on August 16, 2004, or the Effective Date, Leap, Cricket and each of their subsidiaries that filed for Chapter 11 relief emerged from bankruptcy. For a description of our bankruptcy proceedings, see "- Chapter 11 Proceedings Under the Bankruptcy Code" below. Cricket Business Overview Cricket Service The Cricket Companies offer wireless service in the United States under the brand "Cricket." On December 31, 2004, Cricket had approximately 1,570,000 customers located in 39 markets throughout the United States. These markets are located in 47 basic trading areas, or BTAs, covering a total population of approximately 26.7 million potential customers. At December 31, 2004, we owned wireless licenses covering approximately 53.0 million potential customers in 31 states. In February 2005, our subsidiary Cricket Licensee (Reauction), Inc. was named the winning bidder in the FCC's Auction #58 for four wireless licenses covering approximately 11.1 million potential customers with an aggregate purchase price of $166.9 million. The transfers of wireless licenses to Cricket Licensee (Reauction), Inc. were subject to FCC approval. The FCC approved these transfers on May 13, 2005. In addition, in November 2004 we acquired a 75% non- controlling membership interest in, and we are a secured lender to, Alaska Native Broadband 1, LLC (referred to as ANB 1), whose wholly- owned subsidiary Alaska Native Broadband 1 License, LLC (referred to as ANB 1 License) was named the winning bidder in Auction #58 for nine wireless licenses covering approximately 10.1 million potential customers with an aggregate purchase price of $68.2 million. The transfers of wireless licenses to ANB 1 License are subject to FCC approval. Although we expect that such approvals will be issued in the normal course, we cannot assure you that the FCC will grant such approvals. In March 2005, subsidiaries of Leap signed an agreement to sell 23 wireless licenses and the operating assets in our Michigan markets for $102.5 million. We have not launched commercial operations in most of the markets covered by the licenses to be sold. Completion of the transaction is subject to FCC approval and other customary closing conditions. Although we expect to receive such approval and satisfy such conditions in the normal course, we cannot assure you that the FCC will grant such approval or that the other conditions will be satisfied. Including the licenses we acquired in Auction #58, we would own wireless licenses covering approximately 60.2 million potential customers if this sale is completed and after we close our acquisition of the Fresno, California license which we have previously agreed to purchase. Our service allows customers to make and receive virtually unlimited calls within a local calling area and receive virtually unlimited calls from any area for a flat monthly rate. Cricket customers may sign up for additional feature packages and may also make long distance calls on a perminute basis or as part of packaged offerings. In addition to our basic Cricket service, we also offer a plan that bundles domestic long distance at a higher price. Additionally, we offer a premium plan, which includes virtually unlimited local and domestic long distance service, and virtually unlimited use of multiple calling features and messaging services for a flat rate. We also offer a plan that provides discounts on additional lines of service that are added to an existing qualified account. 2

Table of Contents Our business model is different from most other wireless cellular and PCS business models. Most other wireless cellular and PCS service providers offer consumers a complex array of rate plans that typically include additional charges for minutes above a set maximum. This approach may result in monthly service charges that are higher than their customers expect. We have designed the Cricket service to appeal to consumers who value virtually unlimited mobile calling with a predictable monthly bill, and who make the majority of their calls from within their local areas. We intend, however, to introduce an away- from- home calling option (roaming) in the first half of 2005 for our customers who occasionally travel away from their home calling area. Commencing in the second quarter of 2004, we began upgrading our networks to permit us to offer our customers a number of additional features to enhance the Cricket service. These enhancements, which are now available in most of our markets, include games and applications that utilize the BREW (a registered trademark of Qualcomm) handset application software platform, improved data services, and customized ringtones. Early in 2005, we expanded our available international long distance destinations to many additional countries and enhanced our product portfolio by adding instant messaging and multimedia (picture) messaging. In addition, in March 2005, we launched our first per- minute prepaid service, "Jumptm by Cricket," to bring Cricket's value proposition to customers who prefer active control over their wireless usage. Our Jump service allows customers to place local as well as domestic and international long distance calls to more than 70 countries at per- minute costs that are among the lowest in the industry. Unlike most other prepaid wireless offerings, Cricket's Jump service prepaid customers can also receive free unlimited inbound calls as long as there is a balance in their prepaid account. Jump service prepaid customers also receive voicemail, caller ID, call waiting, and three- way calling at no additional charge. Cricket Business Strategy Simple, Understandable Service. Our innovative Cricket service is designed to attract new customers by removing the price and complexity barriers that we believe have prevented many potential customers from using wireless service. We believe many potential customers view wireless service as expensive, feel that they cannot control the cost of service, or find existing service offerings too confusing. As a result, our service plans are designed to attract customers by offering simple, predictable and affordable wireless services that are a competitive alternative to traditional wireless and landline services. In addition, Cricket does not require credit checks or term commitments with early termination fees for customers subscribing to its service. Appealing Value Proposition. Our offerings combine high quality service in simple packages at highly competitive prices that provide a "high value/low price" proposition for customers. We continually focus on enhancing our Cricket service with new offerings to meet the needs of our growing customer base. Control and Minimize Costs. To become one of the lowest cost providers in the industry, we minimize our capital costs by engineering highquality, efficient networks that cover only the urban and suburban areas of our markets where most of our potential customers live, work and play, while avoiding rural areas and corridors between markets. This strategy allows us to realize higher utilization rates on our networks for more efficient use of network capital and also reduces our network operating costs. In addition, this strategy allows us to more efficiently purchase wireless licenses for new markets because it allows us to acquire only those wireless licenses that we deem to be appropriately priced and to avoid acquiring wireless licenses simply to provide continuous geographic coverage across broad areas. We also reduce our general operating costs through streamlined billing procedures and the control of customer care expenses. In addition, we are focused on streamlining marketing and distribution operations and maintaining lower customer acquisition costs. These strategies allow us to be a low- cost provider of wireless services in each of our markets. Leverage CDMA Technology. We have deployed numerous state- of- the- art CDMA networks that deliver high capacity and outstanding quality and that can be easily upgraded to support enhanced capacity. We believe this enables us to operate superior networks that support planned customer growth and high usage. In addition, we believe our CDMA networks provide a better platform than competing technologies to expand into other wireless services based on advances in digital technology in the future. 3

Table of Contents Strategic Expansion. We intend to seek additional opportunities for market expansion, with our selection of potential new markets based upon our evaluation of criteria such as: (1) does the market enhance an existing Cricket market cluster; (2) does the market satisfy internally developed criteria that indicate attractive penetration potential; and (3) does the market contain sufficient population density for Cricket to offer services on a cost competitive basis. The Fresno, California license which we have agreed to purchase and the licenses we acquired in Auction #58 reflect this expansion strategy. Cricket Business Operations Market Opportunity. Wireless penetration was approximately 62% in the U.S. as of December 31, 2004. The majority of existing wireless customers in the U.S. subscribe to post- pay services that require credit approval and a contractual commitment from the subscriber for a period of one year or greater. Those customers typically use 700 minutes per month on plans that have price penalties for minutes used in excess of the amount allocated as their monthly limit. Cricket service does not require a credit check or long- term service commitment, and Cricket's customers use an average of 1,500 minutes per month on plans that do not have monthly usage limits for calls within a customer's home calling area. Cricket believes, and industry analysis indicates, that consumers who are not likely to meet credit approval or enter into long- term contractual commitments represent a large portion of the remaining growth potential in the U.S. wireless market. The highest rate of growth in the U.S. wireless market in 2004 occurred in the prepaid segment, where customers do not submit to credit checks or sign long- term commitments. Cricket believes that its strategy of not requiring credit approvals or long- term commitments, along with the value pricing associated with its unlimited plans, positions Cricket well for continued growth. Sales and Distribution. Cricket's approach is to continue increasing existing market penetration while minimizing expenses associated with sales, distribution and marketing by focusing on improving the sales process for customers and by offering easy to understand service plans and attractive handset pricing and promotions. Cricket's service and its wireless handsets are sold through three main channels: Cricket's own retail locations and kiosks (the direct channel); Cricket authorized dealers and distributors, including local market authorized dealers, national retail chains and distributors (the indirect channel); and Cricket's own website and Internet dealers (the web channel). Cricket's direct channel sells approximately 35% of the new Cricket handsets sold, while Cricket's indirect channel and web channel generate the other 65% of sales. For Cricket, the costs of sales by the indirect and web channels are largely variable costs, while the operation of our direct channel locations involves substantial fixed costs. Cricket's service plans are designed so that a potential customer can make a purchase decision with little or no sales assistance. Customers can read about the Cricket service at the point of sale and learn virtually all they need to know about the service without consulting a complicated plan summary or a specialized salesperson. We believe our sales costs are lower than traditional wireless providers in part because of this streamlined sales approach. We combine mass and local marketing strategies and tactics to build brand awareness of the Cricket service within the communities we serve. In order to reach our target segments, we advertise primarily on radio stations and, to a lesser extent, in local publications and television commercials. We also maintain a Cricket website (www.mycricket.com) for informational, e- commerce, and customer service purposes. Some third- party Internet retailers sell the Cricket service over the Internet and, together with one such retailer, we have also developed and launched Internet sales on our Cricket website. As a result of these marketing strategies and our unlimited calling value proposition, we believe our expenditures on advertising are generally at much lower levels than those of traditional wireless carriers. Our customer acquisition cost, or CPGA, is one of the lowest in the industry. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Performance Measures," contained in this report. Network and Operations. Cricket's service is based on providing customers with levels of usage equivalent to landline service at prices substantially lower than most of our wireless competitors for similar usage. We believe our success depends on operating our CDMA networks to provide high, concentrated 4

Table of Contents capacity with good in- building coverage rather than the broad, geographically dispersed coverage provided by traditional wireless carriers. The appeal of our service in any given market is not dependent on the Cricket service having ubiquitous coverage in the rest of the country or in regions surrounding our markets. Many of our Cricket networks are in local population centers of self- contained communities where we believe roaming is not an important component of wireless service for our existing target customers. We believe that we can deploy our capital more efficiently by tailoring our networks only to our target population centers and by omitting underutilized cell sites that connect those population centers. We engage an independent third party to test the network call quality offered by Cricket and its competitors. According to the most current results, Cricket regularly ranks first or second in network quality within its core market footprints. Capital Requirements and Projected Investments. A Leap subsidiary was the winning bidder in FCC's Auction #58 for four wireless licenses covering approximately 11.1 million potential customers. We currently plan to build- out and launch commercial operations in these markets, and we expect to seek additional capital to increase our liquidity and help assure we have sufficient funds for the build- out and initial operation of these markets. For a more detailed description of our capital requirements and liquidity, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" contained in this report. Chapter 11 Proceedings Under the Bankruptcy Code Plan of Reorganization On April 13, 2003, Leap, Cricket and substantially all of their subsidiaries filed voluntary petitions for relief under Chapter 11 in the United States Bankruptcy Court for the Southern District of California (jointly administered as Case Nos. 03- 03470- A11 to 03- 03535- A11). While reorganizing under Chapter 11, each of the debtors continued to manage its properties and operate its business as a "debtor- in- possession" under the jurisdiction of the Bankruptcy Court and in accordance with Sections 1107(a) and 1108 of Chapter 11. Our Plan of Reorganization was confirmed by the Bankruptcy Court on October 22, 2003. On August 5, 2004, we received the regulatory approvals from the FCC required for our emergence from bankruptcy. Leap and Cricket satisfied the remaining conditions to the Plan of Reorganization and the Plan of Reorganization became effective on August 16, 2004 (referred to as the Effective Date). Our Plan of Reorganization implemented a comprehensive financial reorganization that significantly reduced our outstanding indebtedness. On the Effective Date of the Plan of Reorganization, our long- term debt was reduced from a book value of more than $2.4 billion to debt with an estimated fair value of approximately $412.8 million, consisting of Cricket 13% senior secured pay- in- kind notes due 2011 with a face value of $350 million and an estimated fair value of $372.8 million, issued on the Effective Date, and approximately $40 million in principal amount of remaining indebtedness to the FCC (net of the repayment of $45 million of principal and accrued interest to the FCC on the Effective Date). We entered into new syndicated senior secured credit facilities in January 2005, and we used a portion of the proceeds from the $500 million term loan included as a part of such facilities to redeem Cricket's 13% senior secured pay- in- kind notes, to repay our remaining approximately $41 million of outstanding indebtedness and accrued interest to the FCC and to pay transaction fees and expenses of $6.4 million. The balance of the proceeds of approximately $60 million will be used for general corporate purposes. For a description of the terms of the revolving credit facility and term loan under the Credit Agreement, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - New Credit Agreement." The following is a summary of the material actions that occurred as of the Effective Date of the Plan of Reorganization: A new board of directors of Leap was appointed. All of the outstanding shares of Leap common stock, warrants and options were cancelled. The holders of Leap common stock, warrants and options did not receive any distributions under the Plan of Reorganization. 5

Table of Contents Leap issued 60 million shares of new Leap common stock for distribution to two classes of our creditors, as described below. Leap also issued warrants to purchase 600,000 shares of new Leap common stock pursuant to a settlement agreement. The holders of Cricket's senior secured vendor debt claims received, on a pro rata basis, 96.5% of the issued and outstanding shares of new Leap common stock, or an aggregate of 57.9 million shares, as well as new Cricket 13% senior secured pay- in- kind notes due 2011. The notes were guaranteed by Leap and its direct and indirect domestic subsidiaries and secured by all of their personal property and owned real property. Cricket redeemed these notes in January 2005. The Leap Creditor Trust, which was formed for the benefit of Leap's general unsecured creditors as contemplated by the Plan of Reorganization, received 3.5% of the issued and outstanding shares of new Leap common stock, or 2.1 million shares, for distribution to holders of allowed Leap general unsecured claims on a pro rata basis. Leap also transferred other assets as specified in the Plan of Reorganization, which were to be liquidated by the Leap Creditor Trust, with the cash proceeds from such liquidation to be distributed to the holders of allowed Leap general unsecured claims. These other assets included a $35 million note receivable from Endesa, S.A., currently in litigation in Chile, nine wireless licenses with a net book value of approximately $1.1 million at August 16, 2004, Leap's equity interest in IAT Communications, Inc., which had no carrying value at August 16, 2004, certain causes of action, and approximately $2.3 million of cash. Prior to August 16, 2004, Leap had transferred $68.8 million of funds to the Leap Creditor Trust to be distributed to holders of allowed Leap general unsecured claims. Certain executory contracts and unexpired leases were assumed by the reorganized debtors, with reorganized Cricket responsible for paying the cure amounts associated with such contracts and leases. The holders of general unsecured claims against Cricket and Leap's other direct and indirect subsidiaries received no distributions under the Plan of Reorganization. All of the debtors' pre- petition indebtedness, other than indebtedness owed to the FCC, was cancelled in full, including approximately $1.6 billion net book value of debt outstanding under Cricket's senior secured vendor credit facilities and approximately $738.2 million net book value of debt outstanding under Leap's 12.5% senior notes, or Senior Notes, 14.5% senior discount notes, or Senior Discount Notes, note payable to GLH, Inc. and Qualcomm term loan. We paid the FCC approximately $36.7 million of unpaid principal and approximately $8.3 million of accrued interest in connection with the reinstatement of our FCC debt, and approximately $278,000 of unjust enrichment penalties. We agreed to repay the approximately $40 million remaining outstanding principal amount of FCC debt, plus accrued interest, in installments scheduled for April and July 2005. This remaining FCC debt was repaid in January 2005. Leap entered into a Registration Rights Agreement with Highland Capital Management, L.P. (a beneficial stockholder of Leap and an affiliate of James D. Dondero, a director of Leap), and MHR Institutional Partners II LP and MHR Institutional Partners IIA LP (beneficial stockholders of Leap and affiliates of Dr. Mark H. Rachesky, a director of Leap) pursuant to which Leap granted demand registration rights to such entities and agreed to prepare and file a resale shelf registration statement relating to the shares of new Leap common stock received by such entities under the Plan of Reorganization. Also, on the Effective Date of the Plan of Reorganization, Leap, Cricket and their subsidiaries implemented certain restructuring transactions intended to streamline their corporate structure. As a result, Leap owns 100% of the issued and outstanding shares of reorganized Cricket and certain other reorganized subsidiaries, and Cricket owns 100% of the issued and outstanding shares of each of the reorganized wireless license holding companies and the reorganized property holding companies. Any cash held in reserve by Leap immediately prior to the Effective Date of the Plan of Reorganization that remains following satisfaction of all allowed administrative claims and allowed priority claims against 6

Table of Contents Leap will be distributed to the Leap Creditor Trust. At December 31, 2004, approximately $9.6 million remained in reserve by Leap and was included in restricted cash. On the same date, Cricket had restricted cash and cash equivalents of $20.8 million that included funds set aside or pledged to satisfy payments and administrative and priority claims against the Cricket Companies following their emergence from bankruptcy, and cash restricted for other purposes. Wireless Licenses The following table shows the wireless licenses that we owned at December 31, 2004, including licenses we have agreed to sell to a third party. The wireless licenses set forth in the table cover approximately 53.0 million potential customers.
Market Population Total MHz Channel Block

Anchorage, AK Birmingham, AL(2) Tuscaloosa, AL(2) Blytheville, AR Fayetteville, AR(1)(2) Fort Smith, AR(1)(2) Hot Springs, AR(1) Jonesboro, AR(1) Little Rock, AR(1)(2) Pine Buff, AR(1) Russellville, AR(2) Nogales, AZ Phoenix, AZ(1) Tucson, AZ(1) Merced, CA(1) Modesto, CA(1) Visalia, CA(1) Denver/Boulder, CO(1) Ft. Collins, CO(1) Greeley, CO(1) Pueblo, CO(1) Lakeland, FL Albany, GA Columbus, GA(1) Macon, GA(1) Boise, ID(1) Lewiston, ID Peoria, IL Evansville, IN Ft. Wayne, IN Coffeyville, KS Wichita, KS(1) Owensboro, KY Adrian, MI(2) Battle Creek, MI(1)(2) Flint, MI(1)(2) Grand Rapids, MI(2) Jackson, MI(1)(2) Kalamazoo, MI(1)(2) Lansing, MI Mount Pleasant, MI(2) Muskegon, MI(2) Saginaw- Bay City, MI Traverse City, MI(2) Duluth, MN Jackson, MS(2) Vicksburg, MS(2) Charlotte/Gastonia, NC(1) Greensboro/Winston- Salem/High Point, NC(1) Hickory, NC Fargo, ND Grand Forks, ND Lincoln, NE(1) Omaha, NE(1) Albuquerque, NM(1) Gallup, NM Roswell, NM Santa Fe, NM(1) Reno, NV(1) Buffalo, NY(1)(3) Plattsburgh, NY(2) Syracuse, NY(1) Utica, NY Watertown, NY(2) Dayton/Springfield, OH(1)

490,179 1,351,186 257,010 68,363 370,274 338,239 143,487 185,781 992,571 150,064 101,576 41,578 3,976,491 930,985 254,495 567,167 535,660 2,917,977 273,168 226,084 324,364 521,582 361,612 366,475 685,916 658,846 123,131 456,972 524,333 733,097 58,997 675,514 166,507 101,407 244,365 519,000 1,134,931 210,889 385,037 524,057 140,410 231,233 640,197 262,867 413,433 693,772 60,944 2,276,558 1,519,582 355,284 317,884 195,544 363,161 1,024,692 890,052 141,038 79,523 233,370 649,556 1,195,970 121,413 785,746 296,949 290,418 1,214,649

30 15 15 15 30 30 15 10 20 20 15 20 10 15 15 15 15 10 10 10 20 10 15 15 30 30 15 15 10 10 15 15 10 25 25 10 25 25 10 10 10 25 10 10 10 10 10 10 10 10 15 15 15 10 15 15 15 15 10 10 10 15 10 15 10

C C C C C C C C C C C C C C C C C F F F C F C C C C C C F E C C F C,D C,D D C,D C,D D D D C,D D D E E E F F F C C C F C C C C C E C C F C F

Marion, OH Sandusky, OH(1) Steubenville, OH Toledo, OH(1) Tulsa, OK(1) Eugene, OR(1) Salem/Corvallis, OR(1) Johnstown, PA Pittsburgh/Butler/Uniontown/Washington/Latrobe, PA(1) Chattanooga, TN(1) Clarksville, TN(1) Knoxville, TN(1) Memphis, TN(1) Nashville/Murfreesboro, TN(1) Eagle Pass, TX Lufkin, TX Provo, UT(1) Salt Lake City/Ogden, UT(1) Spokane, WA(1) Appleton- Oshkosh, WI Eau Claire, WI(2) La Crosse, WI, Winona, MN Stevens Point, Marshfield, Wisconsin Rapids, WI Total

100,055 138,820 127,682 788,491 991,073 334,079 555,514 227,336 2,453,075 585,065 270,836 1,173,529 1,607,311 1,868,575 123,835 167,104 424,646 1,731,411 777,420 473,062 203,153 324,597 218,272 53,008,553

10 15 10 15 15 10 20 10 10 15 15 15 15 15 15 10 15 15 15 10 10 10 20

C C C C C C C C E C C C C C C C C C C E E D D,E

(1) Designates markets where we offer Cricket service. (2) Designates markets with respect to which we have agreed to sell the related wireless license (or a portion of the related wireless license) to a third party. Details are shown in the table below. (3) Designates a wireless license which we have agreed to exchange for a wireless license covering the same market area with the same amount of MHz, but in a different frequency block.

Table of Contents Cricket has agreed to purchase a wireless license for Fresno, California covering approximately 1.0 million potential customers. We have begun to invest significant resources in building out the Fresno market. Our application to the FCC for consent to acquire this license, although initially opposed by a third party, was granted on May 13, 2005. The FCC's order approving the transfer may be challenged during the 40- day period following the date of such approval. The following table shows wireless licenses covering approximately 8.0 million potential customers that we have agreed to sell to a third party. The transfers of these licenses are subject to FCC approval and other closing conditions, including obtaining third party consents and finalizing and signing a transition services agreement. Although we expect to obtain such approval and satisfy such conditions, we cannot assure you that the FCC will grant such approval or that the other conditions will be satisfied.
Market Population Total MHz Channel Block

Birmingham, AL Tuscaloosa, AL Fayetteville, AR Fort Smith, AR Little Rock, AR Russellville, AR Adrian, MI Battle Creek, MI(1) Flint, MI(1) Grand Rapids, MI Jackson, MI(1) Kalamazoo, MI(1) Mount Pleasant, MI Muskegon, MI Traverse City, MI Jackson, MS Vicksburg, MS Plattsburgh, NY Watertown, NY Eau Claire, WI Total

1,351,186 257,010 370,274 338,239 992,571 101,576 101,407 244,365 519,000 1,134,931 210,889 385,037 140,410 231,233 262,867 693,772 60,944 121,413 290,418 203,153 8,010,695

15 15 10 10 5 15 25 25 10 15 25 10 10 15 10 10 10 10 15 10

C C C C C C C,D C,D D C C,D D D C D E E C C E

(1) Designates wireless licenses or portions of wireless licenses used in commercial operations that we have agreed to sell along with associated network assets and subscribers. Upon completion of the sale, Cricket will no longer offer service in these designated markets.

The following table shows wireless licenses covering approximately 11.1 million potential customers for which our subsidiary Cricket Licensee (Reauction), Inc. was named the winning bidder in Auction #58 in February 2005 with an aggregate purchase price of $166.9 million. The grants of these licenses were subject to FCC approval. The FCC approved the grants of these licenses on May 13, 2005.
Market Population Total MHz Channel Block

San Diego, CA Kansas City, MO Houston, TX Temple, TX Total

3,010,095 2,161,000 5,579,503 377,712 11,128,310

10 10 10 10

C C C C

Arrangements with Alaska Native Broadband In November 2004 we acquired a 75% non- controlling membership interest in, and we are a secured lender to, ANB 1, whose wholly- owned subsidiary ANB 1 License participated in Auction #58. Alaska Native Broadband, LLC, or ANB, owns a 25% controlling membership interest in ANB 1 and is the sole manager of ANB 1. We have determined that our investment in ANB 1 is required to be consolidated under FASB Interpretation, or FIN, No. 46- R, "Consolidation of Variable Interest Entities." The following table shows wireless licenses covering approximately 10.1 million potential customers for which ANB 1 License was named the winning bidder in Auction #58 in February 2005 with an aggregate purchase price of $68.2 million. The transfers of these licenses are subject to FCC approval, including a determination by the FCC that ANB 1 License is qualified as a small business or very small business, as defined by FCC regulations, entitled to hold licenses designated by the FCC as "Entrepreneurs' Block" licenses. Although we expect ANB 1 8

Table of Contents License will receive such approval in the normal course, we cannot assure you that such approval will be granted.
Market Population Total MHz Channel Block

Colorado Springs, CO. Lexington, KY Louisville, KY Las Cruces, NM Cincinnati, OH Austin, TX Bryan, TX El Paso, TX San Antonio, TX Total

583,582 964,000 1,543,214 256,591 2,241,105 1,539,235 196,292 785,293 2,013,655 10,122,967

10 10 10 10 10 10 10 10 10

C C C C C C C C C

In March 2005, ANB and Cricket increased their aggregate equity capital contributions to ANB 1 to $1.0 million and $3.0 million, respectively. In turn, ANB 1 contributed these funds to its subsidiary, ANB 1 License. Also in March 2005, Cricket made loans under its senior secured credit facility with ANB 1 License in the aggregate principal amount of $56.2 million. ANB 1 License paid these borrowed funds, together with the $4.0 million of equity contributions, to the FCC to increase its total FCC payments to $68.2 million, the aggregate purchase price for the nine licenses. Cricket previously loaned ANB 1 License $8.0 million to fund ANB 1 License's auction eligibility deposit with the FCC. Under the senior secured credit facility, Cricket has committed to loan ANB 1 License up to $4.5 million in additional funds to finance its initial working capital requirements. Cricket's principal agreements with the ANB entities are summarized below. Limited Liability Company Agreement. In December 2004, Cricket and ANB entered into an amended and restated limited liability company agreement, referred to in this report as the ANB 1 LLC Agreement, which governs the parties' rights and interests with respect to their investments in ANB 1. Under the ANB 1 LLC Agreement, ANB and Cricket agreed to make aggregate equity investments in ANB 1 of up to $1.0 million and $3.0 million, respectively, which investments were completed in March 2005. Under the ANB 1 LLC Agreement, ANB, as the sole manager of the company, has the exclusive right and power to manage, operate and control ANB 1 and its business and affairs, subject to certain protective provisions for the benefit of Cricket, including among others, Cricket's consent to the sale of any of ANB 1 License's wireless licenses or a sale of equity interests in ANB 1. Subject to FCC approval, Cricket has the right to remove ANB as the manager of ANB 1 in the event of ANB's fraud, gross negligence or willful misconduct, ANB's insolvency or bankruptcy, ANB's failure to qualify as an "entrepreneur" and a "very small business" under FCC rules, or other limited circumstances. Under the ANB 1 LLC Agreement, if ANB 1 or ANB 1 License proposes to transfer any wireless licenses or other material assets to a third party, Cricket has a right of first refusal to purchase such licenses or assets on the same terms as those negotiated with the third party. During the first seven years following the initial grant of wireless licenses to ANB 1 License, members of ANB 1 generally may not transfer their membership interests without Cricket's prior consent. Following such period, if a member desires to transfer its interests in ANB 1 to a third party, Cricket has a right of first refusal to purchase such interests on the same terms as those negotiated with the third party, or in lieu of exercising this right, Cricket has a tagalong right to participate in the sale. Under the ANB 1 LLC Agreement, once ANB 1 License satisfies the FCC's initial five- year build- out milestone requirements with respect to its wireless licenses, ANB has a 30- day option to sell its entire membership interests in ANB 1 to Cricket for a purchase price of $2.0 million, payable in cash. If exercised, the consummation of the sale will be subject to FCC approval. If Cricket breaches its obligation to pay the purchase price, several of Cricket's protective provisions cease to apply, and ANB receives a $2.0 million liquidation preference, payable prior to Cricket's equity and debt investments in ANB 1 and ANB 1 License. If ANB fails to qualify as an "entrepreneur" and a "very small business" under FCC rules (other than due to a change in FCC rules), and as a result of such failure ANB 1 License ceases to retain the benefits it received in Auction #58, ANB is liable to Cricket only to the extent of ANB's $1.0 million equity capital contribution to ANB 1. 9

Table of Contents Senior Secured Credit Agreement. ANB 1 License, ANB 1, and Cricket are parties to a senior secured credit agreement, referred to in this report as the Cricket Credit Agreement, pursuant to which Cricket has agreed to loan ANB 1 License up to $89.0 million plus capitalized interest. The facility consists of an $84.5 million sub- facility to finance the purchase of wireless licenses in Auction #58 and a $4.5 million sub- facility to finance ANB 1 License's initial working capital requirements. At April 30, 2005, ANB 1 License had outstanding borrowings of $64.2 million principal amount under the acquisition sub- facility and no borrowings outstanding under the working capital sub- facility. ANB 1 License will need to obtain additional capital from Cricket or another third party to build out and launch its networks. Borrowings under the Cricket Credit Agreement are guaranteed by ANB 1 and are secured by a first priority security interest in all of the assets of ANB 1 and ANB 1 License, including a pledge of ANB 1's membership interests in ANB 1 License. ANB also has entered into a negative pledge agreement with respect to its entire membership interests in ANB 1, agreeing to keep such membership interests free and clear of all liens and encumbrances. Under the Cricket Credit Agreement, borrowings accrue interest at a rate of 12% per annum, with all accrued interest added to the outstanding principal balance of loans until the amortization commencement date. The amortization commencement date under the facility occurs 30 days after the date that ANB 1 License satisfies the FCC's initial five- year build- out milestone requirements with respect to its wireless licenses, subject to extension until the closing of the sale if ANB has then exercised its right to sell its entire membership interests in ANB 1 to Cricket. Loans under the Cricket Credit Agreement must be repaid in 16 quarterly installments of principal plus accrued interest, commencing at the end of the first quarter following the amortization commencement date. Loans may be prepaid at any time without premium or penalty. Loans must be prepaid with the proceeds of any refunds received by ANB 1 License from the FCC. Cricket's commitment under the working capital sub- facility expires on the earliest to occur of: (1) the amortization commencement date; (2) the termination by Cricket of the management services agreement between Cricket and ANB 1 License due to a breach by ANB 1 License; or (3) the termination by ANB 1 License of the management services agreement for convenience. If ANB 1 License terminates the management services agreement for convenience, all borrowings, accrued interest and other amounts owing under the Cricket Credit Agreement become due and payable following expiration of the applicable one- year notice period for termination. Management Agreement. Cricket and ANB 1 License are parties to a management services agreement, pursuant to which Cricket will provide management services to ANB 1 License in exchange for a monthly management fee based on Cricket's costs of providing such services plus a markup for administrative overhead. Under the management services agreement, ANB 1 License retains full control and authority over its business strategy, finances, wireless licenses, network equipment, facilities and operations, including its product offerings, terms of service and pricing. The initial term of the management services agreement is eight years. The management services agreement may be terminated by ANB 1 License or Cricket if the other party materially breaches its obligations under the agreement. The management services agreement also may be terminated by ANB 1 License if Cricket fails to pay the purchase price for ANB's membership interests under the ANB 1 LLC Agreement or by ANB 1 License for convenience with one year's prior written notice to Cricket. Competition Generally, the telecommunications industry is very competitive. We believe that our primary competition in the U.S. wireless market is with national and regional wireless service providers including Alltel, Cingular, Nextel and Nextel Partners, Sprint (and Sprint affiliates), T- Mobile, U.S. Cellular and Verizon Wireless. We also face competition from resellers, such as Virgin Mobile, Qwest Wireless and others, which provide wireless services to customers but do not hold FCC licenses or own facilities. Instead, resellers buy wireless telephone capacity from a licensed carrier and resell services through their own distribution network to the public. In addition, wireless providers increasingly are competing in the provision of both voice and non- voice services. Non- voice services, including data transmission, text messaging, e- mail and Internet access, are also now available from personal communications service providers and enhanced specialized mobile radio carriers such 10

Table of Contents as Nextel. In many cases, non- voice services are offered in conjunction with or as adjuncts to voice services. There has also been an increasing trend towards consolidation of wireless service providers through joint ventures, reorganizations and acquisitions. Over time, we expect these types of consolidations to lead to the creation of larger competitors with considerable spectrum resources, extensive network coverage and vast financial resources and we may be unable to compete successfully with these larger companies. Competition for subscribers among wireless communications providers is based principally upon the services and features offered, the technical quality of their wireless systems, customer service, system coverage, capacity and price. Competition has caused, and we anticipate that competition will continue to cause, market prices for two- way wireless products and services to decline. In addition, some competitors have announced unlimited service plans at rates similar to Cricket's service plan rates in markets in which we have launched service. Our ability to compete successfully will depend, in part, on our ability to distinguish our Cricket service from competitors through marketing and through our ability to anticipate and respond to other competitive factors affecting the industry, including new services that may be introduced, changes in consumer preferences, demographic trends, economic conditions and competitors' discount pricing and bundling strategies, all of which could adversely affect our operating margins, market penetration and customer retention. Because many of the wireless operators in our markets have substantially greater financial resources than we do, they may be able to offer prospective customers discounts or equipment subsidies that are substantially greater than those that could be offered by us. In addition, to the extent that products or services that we offer, such as roaming capability, may depend upon negotiations with such wireless operators, discriminatory behavior by such operators or their refusal to negotiate with us could adversely affect our business. While we believe that our cost structure, combined with the differentiated value proposition that our Cricket service represents in the wireless marketplace, provides us with the means to react effectively to price competition, we cannot predict the effect that the market forces or the conduct of other operators in the industry will have on our business. The FCC is pursuing policies designed to increase the number of wireless licenses available in each of our markets. For example, the FCC has adopted rules that allow the partitioning, disaggregation or leasing of PCS and other wireless licenses, and continues to allocate and auction additional spectrum that can be used for wireless services. Continuing technological advances in the communications field make it difficult to predict the nature and extent of additional future competition. Also, in February 2005, the FCC completed Auction #58, in which additional PCS spectrum was auctioned in numerous markets, including many markets where we currently provide service. As wireless service is becoming a viable alternative to traditional landline phone service, we are also increasingly competing directly with traditional landline telephone companies for customers. Competition is also increasing from local and long distance wireline carriers who have begun to aggressively advertise in the face of increasing competition from wireless carriers, cable operators and other competitors. We may also compete in the future with companies that offer new technologies, such as Voice over Internet Protocol or VoIP, and that market other services, including cable television access, landline telephone service and Internet access, that we do not currently intend to market. Some of our competitors offer these other services together with their wireless communications service, which may make their services more attractive to customers. Government Regulation The licensing, construction, modification, operation, sale, ownership and interconnection arrangements of wireless communications networks are regulated to varying degrees by the FCC, Congress, state regulatory agencies, the courts and other governmental bodies. Decisions by these bodies could have a significant impact on the competitive market structure among wireless providers and on the relationships between wireless providers and other carriers. These mandates may impose significant financial obligations on us and other wireless providers. We are unable to predict the scope, pace or financial impact of legal or policy changes that could be adopted in these proceedings. Licensing of PCS Systems. A broadband PCS system operates under a license granted by the FCC for a particular market on one of six frequency blocks allocated for broadband PCS. Broadband PCS systems 11

Table of Contents generally are used for two- way voice applications. Narrowband PCS systems, in contrast, generally are used for non- voice applications such as paging and data service and are separately licensed. The FCC has segmented the U.S. PCS markets into 51 large regions called major trading areas, which are comprised of 493 smaller regions called basic trading areas, or BTAs. The FCC awards two broadband PCS licenses for each major trading area and four licenses for each BTA. Thus, generally, six licensees are authorized to compete in each area. The two major trading area licenses authorize the use of 30 MHz of spectrum. One of the basic trading area licenses is for 30 MHz of spectrum, and the other three are for 10 MHz each. The FCC permits licensees to split their licenses and assign a portion to a third party on either a geographic or frequency basis or both. Over time, the FCC has also further split licenses in connection with re- auctions of PCS spectrum, creating additional 15 MHz and 10 MHz licenses. The FCC's spectrum allocation for PCS includes two licenses, a 30 MHz C- Block license and a 10 MHz F- Block license, that are designated as "Entrepreneurs' Blocks." The FCC generally requires holders of these licenses to meet certain threshold financial size qualifications. In addition, the FCC has determined that designated entities who qualify as small businesses or very small businesses, as defined by a complex set of FCC rules, can receive additional benefits, such as bidding credits in C- Block or F- Block spectrum auctions or re- auctions, and in some cases, an installment loan from the federal government for a significant portion of the dollar amount of the winning bids in the FCC's initial auctions of C- Block and F- Block licenses. The FCC's rules also allow for publicly traded corporations with widely dispersed voting power, as defined by the FCC, to hold C- Block and F- Block licenses and to qualify as small or very small businesses. A failure by an entity to maintain its qualifications to own C- Block and FBlock licenses could cause a number of adverse consequences, including the ineligibility to hold licenses for which the FCC's minimum coverage requirements have not been met, the triggering of FCC unjust enrichment rules and the acceleration of installment payments owed to the U.S. Treasury. In July 1999, the FCC determined that we were entitled to acquire C- Block and F- Block licenses as a publicly traded corporation with widely dispersed voting power and a very small business under FCC rules. In July 2000, the FCC affirmed its July 1999 order. Subsequently, the FCC approved the transfer to us of a number of other PCS licenses, the majority of them C- Block and F- Block licenses. Because our emergence from bankruptcy involved a change in control of the Company, we were required to seek FCC consent to the change in control of our FCC spectrum licenses. In connection with its review of our application seeking such consent, the FCC determined that as a result of our restructuring in bankruptcy: we were no longer qualified as an "Entrepreneur" to hold several of our C- and F- Block licenses, we would owe approximately $2- $4 million in unjust enrichment penalties, and $76.7 million of indebtedness to the FCC would become immediately due and payable. We were able to successfully negotiate a settlement of these consequences with the FCC and the Department of Justice which provided for an immediate payment of $45 million to the FCC with the balance of monies payable in April and July 2005. The settlement further required us to use reasonable efforts to complete a refinancing on or prior to January 31, 2005 which generated sufficient proceeds to repay the senior secured pay- in- kind notes that we issued upon our emergence from bankruptcy and our remaining indebtedness to the FCC. On August 5, 2004, the FCC approved the transfer of our licenses and we subsequently emerged from the bankruptcy process. On January 10, 2005, we paid the FCC the remaining principal and accrued interest balance of approximately $41 million as called for by our settlement agreement. Our PCS licenses are in good standing with the FCC. All PCS licenses have a 10- year term, at the end of which they must be renewed. The FCC's rules provide a formal presumption that a PCS license will be renewed, called a "renewal expectancy," if the PCS licensee (1) has provided substantial service during its past license term, and (2) has substantially complied with applicable FCC rules and policies and the Communications Act. The FCC defines substantial service as service which is sound, favorable and substantially above a level of mediocre service that might only minimally warrant renewal. If a licensee does not receive a renewal expectancy, then the FCC will accept competing applications for the license renewal period and, subject to a comparative hearing, may award the license to another party. Under existing law, no more than 20% of an FCC licensee's capital stock may be owned, directly or indirectly, or voted by non- U.S. citizens or their representatives, by a foreign government or its representatives 12

Table of Contents or by a foreign corporation. If an FCC licensee is controlled by another entity (as is the case with Leap's ownership and control of subsidiaries that hold FCC licenses), up to 25% of that entity's capital stock may be owned or voted by non- U.S. citizens or their representatives, by a foreign government or its representatives or by a foreign corporation. Foreign ownership above the 25% holding company level may be allowed if the FCC finds such higher levels consistent with the public interest. The FCC has ruled that higher levels of foreign ownership, even up to 100%, are presumptively consistent with the public interest with respect to investors from certain nations. If our foreign ownership were to exceed the permitted level, the FCC could revoke our wireless licenses, although we could seek a declaratory ruling from the FCC allowing the foreign ownership or could take other actions to reduce our foreign ownership percentage in order to avoid the loss of our licenses. We have no knowledge of any present foreign ownership in violation of these restrictions. Since 1996, PCS licensees have been required to coordinate frequency usage with existing fixed microwave licensees in the 1850 to 1990 MHz band. In an effort to balance the competing interests of existing microwave users and newly authorized PCS licensees, the FCC has adopted a transition plan to relocate such microwave operators to other spectrum blocks and a cost sharing plan so that if the relocation of an incumbent benefits more than one PCS licensee, those licensees will share the cost of the relocation. The transition and cost sharing plans expired on April 4, 2005. Subsequent to that date, remaining microwave incumbents in the PCS spectrum are responsible for avoiding interference with a PCS licensee's network. Absent an agreement with affected broadband PCS entities or an extension, incumbent microwave licensees will be required to return their operating authorizations to the FCC following six months written notice from a PCS entity that such entity intends to turn on a PCS system within the interference range of the incumbent microwave licensee. To secure a sufficient amount of unencumbered spectrum to operate our PCS systems efficiently and with adequate population coverage within an appropriate time period, we have previously needed to relocate one or more of these incumbent fixed microwave licensees and have also been required (and may continue to be required) to participate in the cost sharing related to microwave licenses that have been voluntarily relocated by other PCS licensees or the existing microwave operators. PCS Construction Requirements. All PCS licensees must satisfy minimum geographic coverage requirements within five and/or ten years after the license grant date. These initial requirements are met for most 10 MHz licenses when adequate service is offered to at least one- quarter of the population of the licensed area within five years, and for 30 MHz licenses when adequate service is offered to at least one- third of the population within five years and two- thirds of the population within ten years after the license grant date. In general, a failure to comply with FCC coverage requirements could cause the revocation of the relevant wireless license or the imposition of fines and/or other sanctions. Transfer and Assignment of PCS Licenses. The Communications Act and FCC rules require the FCC's prior approval of the assignment or transfer of control of a license for a PCS system, with limited exceptions. The FCC may prohibit or impose conditions on assignments and transfers of control of licenses. Non- controlling interests in an entity that holds an FCC license generally may be bought or sold without FCC approval. Although we cannot assure you that the FCC will approve or act in a timely fashion upon any pending or future requests for approval of assignment or transfer of control applications that we file, in general we believe the FCC will approve or grant such requests or applications in due course. Because an FCC license is necessary to lawfully provide PCS service, if the FCC were to disapprove any such filing, our business plans would be adversely affected. Pursuant to an order released in December 2001, as of January 1, 2003, the FCC no longer limits the amount of PCS and other commercial mobile radio spectrum that an entity may hold in a particular geographic market. The FCC now engages in a case- by- case review of transactions that involve the consolidation of spectrum licenses. A C- Block or F- Block license may be transferred to non- designated entities once the licensee has met its five- year coverage requirement. Such transfers will remain subject to certain costs and reimbursements to the government of any bidding credits or outstanding principal and interest payments owed to the FCC. General FCC Obligations. The FCC has a number of other complex requirements and proceedings that affect our operations and that could increase our cost or diminish our revenues. For example, the FCC requires 13

Table of Contents wireless carriers to make available emergency 911 services, including enhanced emergency 911 services that provide the caller's telephone number and detailed location information to emergency responders, as well as a requirement that emergency 911 services be made available to users with speech or hearing disabilities. Our obligations to implement these services occur on a market- by- market basis as emergency service providers request the implementation of enhanced emergency 911 services in their locales. Absent a waiver, a failure to comply with these requirements could subject us to significant penalties. FCC rules also require that local exchange carriers and most commercial mobile radio service providers, including PCS providers like Leap, allow customers to change service providers without changing telephone numbers. For wireless service providers, this mandate is referred to as wireless local number portability, or WLNP. The FCC also has adopted rules governing the porting of wireline telephone numbers to wireless carriers. The FCC has the authority to order interconnection between commercial mobile radio service operators and incumbent local exchange carriers, and FCC rules provide that all local exchange carriers must enter into compensation arrangements with commercial mobile radio service carriers for the exchange of local traffic, whereby each carrier compensates the other for terminating local traffic originating on the other carrier's network. As a commercial mobile radio services provider, we are required to pay compensation to a wireline local exchange carrier that transports and terminates a local call that originated on our network. Similarly, we are entitled to receive compensation when we transport and terminate a local call that originated on a wireline local exchange network. We negotiate interconnection arrangements for our network with major incumbent local exchange carriers and other independent telephone companies. If an agreement cannot be reached, under certain circumstances, parties to interconnection negotiations can submit outstanding disputes to state authorities for arbitration. Negotiated interconnection agreements are subject to state approval. The FCC's interconnection rules and rulings, as well as state arbitration proceedings, will directly impact the nature and costs of facilities necessary for the interconnection of our network with other telecommunications networks. They will also determine the amount of revenue we receive for terminating calls originating on the networks of local exchange carriers and other telecommunications carriers. The FCC is currently considering changes to the local exchange- commercial mobile radio service interconnection and other intercarrier compensation arrangements, and the outcome of such proceedings may affect the manner in which we are charged or compensated for the exchange of traffic. We also are subject or potentially subject to universal service obligations; number pooling rules; rules governing billing and subscriber privacy; rules governing wireless resale and roaming obligations; rules that require wireless service providers to configure their networks to facilitate electronic surveillance by law enforcement officials; rate averaging and integration requirements; rules governing spam, telemarketing and truth- inbilling and rules requiring us to offer equipment and services that are accessible to and usable by persons with disabilities, among others. Some of these requirements pose technical and operational challenges to which we, and the industry as a whole, have not yet developed clear solutions. These requirements are all the subject of pending FCC or judicial proceedings, and we are unable to predict how they may affect our business, financial condition or results of operations. State, Local and Other Regulation. Congress has given the FCC the authority to preempt states from regulating rates or entry into commercial mobile radio service, including PCS. The FCC, to date, has denied all state petitions to regulate the rates charged by commercial mobile radio service providers. State and local governments are permitted to manage public rights of way and can require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for the use of such rights of way by telecommunications carriers, including PCS providers, so long as the compensation required is publicly disclosed by the state or local government. States may also impose competitively neutral requirements that are necessary for universal service, to protect the public safety and welfare, to ensure continued service quality and to safeguard the rights of consumers. While a state may not impose requirements that effectively function as barriers to entry or create a competitive disadvantage, the scope of state authority to maintain existing requirements or to adopt new requirements is unclear. State legislators, public utility commissions and other state agencies are becoming increasingly active in efforts to regulate wireless carriers and the service they provide, including efforts to conserve numbering resources and efforts 14

Table of Contents aimed at regulating service quality, advertising, warranties and returns, rebates, and other consumer protection measures. The location and construction of our PCS antennas and base stations and the towers we lease on which such antennas are located are subject to FCC and Federal Aviation Administration regulations; federal, state and local environmental and historic preservation regulations; and state and local zoning, land use or other requirements. We cannot assure you that any state or local regulatory requirements currently applicable to our systems will not be changed in the future or that regulatory requirements will not be adopted in those states and localities that currently have none. Such changes could impose new obligations on us that could adversely affect our operating results. Privacy. We are obligated to comply with a variety of federal and state privacy and consumer protection requirements. The Communications Act and FCC rules, for example, impose various rules on us intended to protect against the disclosure of customer proprietary network information. Other FCC and Federal Trade Commission rules also regulate the disclosure and sharing of subscriber information. We have developed and comply with a policy designed to protect the privacy of our customers and their personal information. State legislatures and regulators are considering imposing additional requirements on companies to further protect the privacy of wireless customers. Our need to comply with these rules, and to address complaints by subscribers invoking them, could adversely affect our operating results. Availability of Public Reports As soon as is reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission, or SEC, our annual reports on Form 10- K, quarterly reports on Form 10- Q, current reports on Form 8- K, and any amendments to those reports, are available free of charge at www.leapwireless.com. This website is not part of this filing. They are also available free of charge on the SEC's website at www.sec.gov. In addition, any materials filed with the SEC may be read and copied by the public at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1- 800- SEC- 0330. Financial Information Concerning Segments and Geographical Information Financial information concerning the Company's operating segment and the geographic area in which it operates is set forth in Note 14 to the consolidated financial statements included in Item 8 of this report. Employees As of December 31, 2004, Cricket employed approximately 1,400 full time employees, and Leap had no employees. Seasonality The Company's customer activity is influenced by seasonal effects related to traditional retail selling periods and other factors that arise from Cricket's target customer base. As a result, new sales activity is generally highest in the first and fourth quarters, and customer turnover, or churn, has tended to be higher in the second and third quarters. However, our business is sensitive to promotional activity and competitive actions, both of which have the ability to reduce or outweigh certain seasonal effects. Inflation We believe that inflation has not had a material effect on our results of operations. 15

Table of Contents RISK FACTORS Risks Related to Our Business and Industry We Have Experienced Net Losses Since Inception And We May Not Be Profitable In The Future We experienced losses of $8.6 million and $49.3 million (excluding reorganization items, net) for the five months ended December 31, 2004 and the seven months ended July 31, 2004, respectively. In addition, we experienced net losses of $597.4 million for the year ended December 31, 2003, $664.8 million for the year ended December 31, 2002, $483.3 million for the year ended December 31, 2001, $0.2 million for the year ended December 31, 2000, $75.8 million for the transition period from September 1, 1999 to December 31, 1999, and $164.6 million for the fiscal year ended August 31, 1999. We may not generate profits in the future on a consistent basis or at all. If we fail to achieve consistent profitability, that failure could have a negative effect on our financial condition and on the value of the common stock of Leap. We Face Increasing Competition Which Could Have A Material Adverse Effect On Demand For The Cricket Service In general, the telecommunications industry is very competitive. Some competitors have announced rate plans substantially similar to the Cricket service plan (and have also introduced products that consumers perceive to be similar to Cricket's service plan) in markets in which we offer wireless service. In addition, the competitive pressures of the wireless telecommunications market have caused other carriers to offer service plans with large bundles of minutes of use at low prices which are competing with the predictable and virtually unlimited Cricket calling plans. Some competitors also offer prepaid wireless plans that are being advertised heavily to demographic segments that are strongly represented in Cricket's customer base. These competitive offerings could adversely affect our ability to maintain our pricing and market penetration. Our competitors may attract more customers because of their stronger market presence and geographic reach. Potential customers may perceive the Cricket service to be less appealing than other wireless plans, which offer more features and options, including the ability to roam outside of the home service area. We compete as a mobile alternative to landline service providers in the telecommunications industry. Wireline carriers have begun to advertise aggressively in the face of increasing competition from wireless carriers, cable operators and other competitors. Wireline carriers are also offering unlimited national calling plans and bundled offerings that include wireless and data services. We may not be successful in our efforts to persuade potential customers to adopt our wireless service in addition to, or in replacement of, their current landline service. Many competitors have substantially greater financial and other resources than we have, and we may not be able to compete successfully. Because of their size and bargaining power, our larger competitors may be able to purchase equipment, supplies and services at lower prices than we can. As consolidation in the industry creates even larger competitors, any purchasing advantages our competitors have may increase. We May Not Be Successful In Increasing Our Customer Base Which Would Force Us To Change Our Business Plans And Financial Outlook And Would Likely Negatively Affect The Price Of Our Stock Our growth on a quarter by quarter basis has varied substantially in the recent past. In the first quarter of 2003, we gained approximately 1,000 net customers but we lost approximately 54,000 net customers in the second quarter of 2003. Net customers increased by approximately 18,000 in the third quarter of 2003, but decreased by approximately 4,000 during the fourth quarter of 2003. During the first and second quarters of 2004, we experienced a net increase of approximately 65,700 customers and 9,000 customers, respectively, but lost approximately 8,000 net customers in the third quarter of 2004. During the fourth quarter of 2004, we gained approximately 30,000 net customers. We believe that this uneven growth over the last several quarters generally reflects seasonal trends in customer activity, promotional activity, the competition in the wireless telecommunications market, our attenuated spending on capital investments and advertising while we were in bankruptcy, and varying national economic conditions. Our current business plans assume that we will increase our customer base over time, providing us with increased economies of scale. If we are unable to 16

Table of Contents attract and retain a growing customer base, we would be forced to change our current business plans and financial outlook and there would likely be a material negative affect on the price of our common stock. We Have Identified Material Weaknesses In Our Internal Control Over Financial Reporting, And Our Business And Stock Price May Be Adversely Affected If We Do Not Remediate These Material Weaknesses, Or If We Have Other Material Weaknesses Or Significant Deficiencies In Our Internal Control Over Financial Reporting Following publication of a letter regarding accounting for leases issued by the Office of the Chief Accountant of the U.S. Securities and Exchange Commission on February 7, 2005, we reviewed our accounting for leases, including our site retirement and remediation obligations. As a result of this review, and in connection with preparing for our annual audit, we identified accounting errors in our unaudited interim financial statements included in the Company's Quarterly Report on Form 10- Q for the three months ended September 30, 2004. As more fully described in Note 2 to our consolidated financial statements included in this report, our management and Audit Committee concluded that the Company's unaudited interim financial statements for the one and seven month periods ended July 31, 2004 and the two month period ended September 30, 2004 should be restated to correct these accounting errors. According to the PCAOB's Auditing Standard No. 2, "An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements," restatement of financial statements in prior filings with the SEC is a strong indicator of the existence of a material weakness in internal control over financial reporting. A "material weakness" is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. In connection with their evaluation of our disclosure controls and procedures, our CEO and CFO concluded that certain material weaknesses in our internal control over financial reporting existed as of December 31, 2004 with respect to turnover and staffing levels in our accounting and financial reporting departments (arising in part in connection with the Company's now completed bankruptcy proceedings), the application of leaserelated accounting principles, fresh- start reporting oversight, and account reconciliation procedures. As a result of these material weaknesses, our CEO and CFO concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of the end of the period covered by this report. For a description of these material weaknesses and the steps we are undertaking to remediate these material weaknesses, see "Item 9A. Controls and Procedures" contained in this report. The existence of one or more material weaknesses or significant deficiencies could result in errors in our financial statements, and substantial costs and resources may be required to rectify any internal control deficiencies. If we cannot produce reliable financial reports, investors could lose confidence in our reported financial information, the market price of our stock could decline significantly, we may be unable to obtain additional financing to operate and expand our business, and our business and financial condition could be harmed. If Our Internal Control Over Financial Reporting Does Not Comply With The Requirements Of The Sarbanes- Oxley Act Of 2002, Our Business And Stock Price May Be Adversely Affected Section 404 of the Sarbanes- Oxley Act of 2002 requires companies to do a comprehensive evaluation of their internal control over financial reporting. To comply with this statute, we will be required to document and test our internal control over financial reporting; our management will be required to assess and issue a report concerning our internal control over financial reporting; and our independent auditors will be required to attest to and report on management's assessment. Reporting on our compliance with Section 404 of the Sarbanes- Oxley Act will first be required in connection with the filing of our Annual Report on Form 10- K for the fiscal year ending December 31, 2005. We have been conducting a rigorous review of our internal control over financial reporting in order to become compliant with the requirements of Section 404. However, the standards that must be met for management to assess our internal control over financial reporting are new and require significant documentation and testing. Our assessment may identify the need for remediation of our internal control over financial reporting. We recently concluded that certain material weaknesses existed in our internal control over financial reporting. See "Item 9A. Controls and Procedures." If management cannot 17

Table of Contents favorably assess the effectiveness of our internal control over financial reporting as of December 31, 2005, or if our auditors cannot timely attest to management's assessment or if they identify significant deficiencies or material weaknesses in our internal control over financial reporting as of December 31, 2005, investors could lose confidence in our reported financial information, the market price of our stock could decline significantly, we may be unable to obtain additional financing to operate and expand our business, and our business and financial condition could be harmed. If We Experience High Rates Of Customer Turnover or Credit Card, Subscription or Dealer Fraud, Our Ability To Become Profitable Will Decrease Customer turnover, frequently referred to as "churn," is an important business metric in the telecommunications industry because it can have significant financial effects. Because we do not require customers to sign long- term commitments or pass a credit check, our service is available to a broader customer base than many other wireless providers and, as a result, some of our customers may be more likely to terminate service for inability to pay than the average industry customer. In addition, our rate of customer turnover may be affected by other factors, including the size of our calling areas, inability to make calls while outside of the home service calling area, handset issues, customer care concerns, number portability and other competitive factors. Our strategies to address customer turnover may not be successful. A high rate of customer turnover would reduce revenues and increase the total marketing expenditures required to attract the minimum number of replacement customers required to sustain our business plan, which, in turn, could have a material adverse effect on our business, financial condition and results of operations. Our operating costs can also increase substantially as a result of customer credit card and subscription fraud and dealer fraud. We have implemented a number of strategies and processes to detect and prevent efforts to defraud us, and we believe that our efforts have substantially reduced the types of fraud we have identified. However, if our strategies are not successful in detecting and controlling fraud in the future, it would have a material adverse impact on our financial condition and results of operations. Our Primary Business Strategy May Not Succeed In The Long Term A major element of our business strategy is to offer consumers a service that allows them to make virtually unlimited calls within their Cricket service area and receive unlimited calls from any area for a flat monthly rate without entering into a long- term service commitment or passing a credit check. This strategy may not prove to be successful in the long term. From time to time, we also evaluate our service offerings and the demands of our target customers and may modify, change or adjust our service offerings or offer new services. We cannot assure you that these service offerings will be successful or prove to be profitable. Our Indebtedness Could Adversely Affect Our Financial Health, And If We Fail To Maintain Compliance With The Covenants Under Our Senior Secured Credit Facilities, Any Such Failure Could Materially Adversely Affect Our Liquidity And Financial Condition As of April 30, 2005, we had approximately $500 million of outstanding indebtedness and, to the extent we raise additional capital in the future, we expect to obtain much of such capital through debt financing. This existing indebtedness bears interest at a variable rate, but we have entered into interest rate hedging agreements with respect to $250 million of our debt which mitigates the interest rate risk. Our present and future debt financing could have important consequences. For example, it could: Increase our vulnerability to general adverse economic and industry conditions; Require us to dedicate a substantial portion of our cash flows from operations to payments on our indebtedness, thereby reducing the availability of our cash flows to fund working capital, capital expenditures, acquisitions and other general corporate purposes; Limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and 18

Table of Contents Reduce the value of stockholders' investments in Leap because debt holders have priority regarding our assets in the event of a bankruptcy or liquidation. In addition, the Credit Agreement governing our senior secured credit facilities contains restrictive covenants that limit our ability to engage in activities that may be in our long- term best interest. The Credit Agreement also contains various affirmative and negative covenants, including covenants that require us to maintain compliance with certain financial leverage and coverage ratios. Our failure to comply with any of these covenants could result in an event of default that, if not cured or waived, could result in the acceleration of all of our debt. Any such acceleration would have a material adverse affect on our liquidity and financial condition and on the value of the common stock of Leap. Our failure to timely file this Annual Report on Form 10- K constituted a default under the Credit Agreement. Although we were able to obtain a limited waiver of this default, we cannot assure you that we will be able to obtain a waiver in the future should a default occur. We Expect To Be Able To Incur Substantially More Debt; This Could Increase The Risks Associated With Our Leverage The covenants in our Credit Agreement allow us to incur substantial additional indebtedness in the future. If we incur additional indebtedness, the risks associated with our leverage could increase substantially. The Wireless Industry Is Experiencing Rapid Technological Change, And We May Lose Customers If We Fail To Keep Up With These Changes The wireless communications industry is experiencing significant technological change, as evidenced by the ongoing improvements in the capacity and quality of digital technology, the development and commercial acceptance of wireless data services, shorter development cycles for new products and enhancements and changes in end- user requirements and preferences. The cost of implementing future technological innovations may be prohibitive to us, and we may lose customers if we fail to keep up with these changes. The Loss Of Key Personnel And Difficulty Attracting And Retaining Qualified Personnel Could Harm Our Business We believe our success depends heavily on the contributions of our employees and on maintaining our experienced workforce. We do not, however, generally provide employment contracts to our employees and the uncertainties associated with our bankruptcy and our emergence from bankruptcy have caused many employees to consider or pursue alternative employment. Since we announced reorganization discussions and filed for Chapter 11, we have experienced higher than normal employee turnover, including turnover of individuals at the chief executive officer, president and chief operating officer, senior vice president, vice president and other management levels. The loss of key individuals, and particularly the cumulative effect of such losses, may have a material adverse impact on our ability to effectively manage and operate our business. Risks Associated With Wireless Handsets Could Pose Product Liability, Health And Safety Risks That Could Adversely Affect Our Business We do not manufacture handsets or other equipment sold by us and generally rely on our suppliers to provide us with safe equipment. Our suppliers are required by applicable law to manufacture their handsets to meet certain governmentally imposed safety criteria. However, even if the handsets we sell meet the regulatory safety criteria, we could be held liable with the equipment manufacturers and suppliers for products we sell if they are later found to have design or manufacturing defects. We generally have indemnification agreements with the manufacturers who supply us with handsets to protect us from direct losses associated with product liability, but we cannot guarantee that we will be fully protected against all losses associated with a product that is found to be defective. Media reports have suggested that the use of wireless handsets may be linked to various health concerns, including cancer, and may interfere with various electronic medical devices, including hearing aids and pacemakers. Certain class action lawsuits have been filed in the industry claiming damages for alleged health 19

Table of Contents problems arising from the use of wireless handsets. In addition, interest groups have requested that the FCC investigate claims that wireless technologies pose health concerns and cause interference with airbags, hearing aids and other medical devices. The media has also reported incidents of handset battery malfunction, including reports of batteries that have overheated. Malfunctions have caused at least one major handset manufacturer to recall certain batteries used in its handsets, including batteries in a handset sold by Cricket and other wireless providers. Concerns over radio frequency emissions and defective products may discourage the use of wireless handsets, which could decrease demand for our services. In addition, if one or more Cricket customers were harmed by a defective product provided to us by the manufacturer and subsequently sold in connection with our services, our ability to add and maintain customers for Cricket service could be materially adversely affected by negative public reactions. There also are some safety risks associated with the use of wireless handsets while driving. Concerns over these safety risks and the effect of any legislation that has been and may be adopted in response to these risks could limit our ability to sell our wireless service. We Rely Heavily On Third Parties To Provide Specialized Services; A Failure By Such Parties To Provide The Agreed Services Could Materially Adversely Affect Our Business, Results Of Operations And Financial Condition We depend heavily on suppliers and contractors with specialized expertise in order for us to efficiently operate our business. In the past, our suppliers, contractors and third- party retailers have not always performed at the levels we expect or at the levels required by their contracts. If key suppliers, contractors or third- party retailers fail to comply with their contracts, fail to meet our performance expectations or refuse to supply us in the future, our business could be severely disrupted. Generally, there are multiple sources for the types of products we purchase. However, some suppliers, including software suppliers, are the exclusive sources of their specific products. Because of the costs and time lags that can be associated with transitioning from one supplier to another, our business could be substantially disrupted if we were required to replace the products or services of one or more major, specialized suppliers with products or services from another source, especially if the replacement became necessary on short notice. Any such disruption could have a material adverse affect on our business, results of operations and financial condition. We May Be Subject To Claims Of Infringement Regarding Telecommunications Technologies That Are Protected By Patents And Other Intellectual Property Rights Telecommunications technologies are protected by a wide array of patents and other intellectual property rights. As a result, third parties may assert infringement claims against us from time to time based on our general business operations or the specific operation of our wireless networks. We generally have indemnification agreements with the manufacturers and suppliers who provide us with the equipment and technology that we use in our business to protect us against possible infringement claims, but we cannot guarantee that we will be fully protected against all losses associated with an infringement claim. Whether or not an infringement claim was valid or successful, it could adversely affect our business by diverting management attention, involving us in costly and time- consuming litigation, requiring us to enter into royalty or licensing agreements (which may not be available on acceptable terms, or at all), or requiring us to redesign our business operations or systems to avoid claims of infringement. A third party with a large patent portfolio has contacted us and suggested that we need to obtain a license under a number of its patents in connection with our current business operations. We understand that the third party has initiated similar discussions with other telecommunications carriers. We have begun to evaluate the third party's position but have not yet reached a conclusion as to the validity of its position. If we cannot reach a mutually agreeable resolution with the third party, we may be forced to enter into a licensing or royalty agreement with the third party. We do not currently expect that such an agreement would materially adversely affect our business, but we cannot provide assurance to our investors about the effect of any such license. 20

Table of Contents Regulation By Government Agencies May Increase Our Costs Of Providing Service Or Require Us To Change Our Services Our operations are subject to varying degrees of regulation by the FCC, the Federal Trade Commission, the Federal Aviation Administration, the Environmental Protection Agency, the Occupational Safety and Health Administration and state and local regulatory agencies and legislative bodies. Adverse decisions or regulations of these regulatory bodies could negatively impact our operations and costs of doing business. State regulatory agencies are increasingly focused on the quality of service and support that wireless carriers provide to their customers and several agencies have proposed or enacted new and potentially burdensome regulations in this area. Governmental regulations and orders can significantly increase our costs and affect our competitive position compared to other telecommunications providers. We are unable to predict the scope, pace or financial impact of regulations and other policy changes that could be adopted by the various governmental entities that oversee portions of our business. If Call Volume Under Our Cricket Flat Price Plans Exceeds Our Expectations, Our Costs Of Providing Service Could Increase, Which Could Have A Material Adverse Effect On Our Competitive Position Cricket customers currently use their handsets approximately 1,500 minutes per month, and some markets are experiencing substantially higher call volumes. We own less spectrum in many of our markets than our competitors, but we design our networks to accommodate our expected high call volume, and we consistently assess and implement technological improvements to increase the efficiency of our wireless spectrum. However, if future wireless use by Cricket customers exceeds the capacity of our networks, service quality may suffer. We may be forced to raise the price of Cricket service to reduce volume or otherwise limit the number of new customers, or incur substantial capital expenditures to improve network capacity. We offer service plans that bundle certain features, long distance and virtually unlimited local service for a fixed monthly fee to more effectively compete with other telecommunications providers. If customers exceed expected usage, we could face capacity problems and our costs of providing the services could increase. Further, long distance rates and the charges for interconnecting telephone call traffic between carriers can be affected by governmental regulatory actions (and in some cases are subject to regulatory control) and, as a result, could increase with limited warning. If we are unable to cost- effectively provide our products and services to customers, our competitive position and business prospects could be materially adversely affected. Future Declines In The Fair Value Of Our Wireless Licenses Could Result In Future Impairment Charges During the three months ended June 30, 2003, we recorded an impairment charge of $171.1 million to reduce the carrying value of our wireless licenses to their estimated fair value. However, as a result of our adoption of fresh- start reporting under American Institute of Certified Public Accountants' Statement of Position 90- 7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code," or SOP 90- 7, we increased the carrying value of our wireless licenses to $652.6 million at July 31, 2004, the fair value estimated by management based in part on information provided by an independent valuation consultant. The fair values of our wireless licenses are based primarily on available market prices, including successful bid prices in FCC auctions and selling prices observed in wireless license transactions. The market values of wireless licenses have varied dramatically over the last several years, and may vary significantly in the future. In particular, valuation swings could occur if: consolidation in the wireless industry allowed or required carriers to sell significant portions of their wireless spectrum holdings; a sudden large sale of spectrum by one or more wireless providers occurs; or market prices decline as a result of the bidding activity in recently concluded or upcoming FCC auctions. 21

Table of Contents In addition, the price of wireless licenses could decline as a result of the FCC's pursuit of policies designed to increase the number of wireless licenses available in each of our markets. If the market value of wireless licenses were to decline significantly in the future, the value of our wireless licenses could be subject to non- cash impairment charges in the future. A significant impairment loss could have a material adverse effect on our operating income and on the carrying value of our wireless licenses on our balance sheet. Declines In Our Operating Performance Could Ultimately Result In An Impairment Of Our Indefinite- Lived Assets, Including Goodwill, Or Our Long- Lived Assets, Including Property and Equipment We assess potential impairments to our long- lived assets, including property and equipment and certain intangible assets, when there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable. We assess potential impairments to indefinite- lived intangible assets, including goodwill and wireless licenses, annually and when there is evidence that events or changes in circumstances indicate that an impairment condition may exist. If we do not achieve our planned operating results, this may ultimately result in a non- cash impairment charge related to our long- lived and/or our indefinite- lived assets. A significant impairment loss could have a material adverse effect on our operating results and on the carrying value of our goodwill or other indefinite- lived assets and/or our long- lived assets on our balance sheet. Because Our Consolidated Financial Statements Reflect Fresh- Start Reporting Adjustments Made Upon Our Emergence From Bankruptcy, Financial Information In Our Current And Future Financial Statements Will Not Be Comparable To Our Financial Information From Prior Periods As a result of adopting fresh- start reporting on July 31, 2004, the carrying values of our wireless licenses and our long- lived assets and the related depreciation and amortization expense, among other things, changed considerably from that reflected in our historical consolidated financial statements. Thus, our current and future balance sheets and results of operations will not be comparable in many respects to our balance sheets and consolidated statements of operations data for periods prior to our adoption of fresh- start reporting. You are not able to compare information reflecting our post- emergence balance sheet data, results of operations and changes in financial condition to information for periods prior to our emergence from bankruptcy, without making adjustments for fresh- start reporting. Risks Related to Our Common Stock Our Shares Are Not Listed With the NASDAQ National Market Or A National Securities Exchange And May Have Limited Trading On the Effective Date of our Plan of Reorganization, Leap issued 60 million shares of common stock for distribution to two classes of our creditors. Leap's outstanding shares of common stock are not currently listed on the NASDAQ National Market or any national securities exchange and Leap cannot guarantee that an application to list its shares will be granted. Leap's common shares are quoted for trading by market makers on the OTC Bulletin Board, but the shares may be less liquid in that market than they would be on the NASDAQ National Market or a national securities exchange. Our ability to access equity capital markets may be restricted in the future if the trading market for Leap's common stock lacks sufficient liquidity. Our Stock Price May Be Volatile The trading prices of the securities of telecommunications companies have been highly volatile. Accordingly, the trading price of our common stock is likely to be subject to wide fluctuations. Factors affecting the trading price of our common stock may include, among other things: variations in our operating results; announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors; recruitment or departure of key personnel; 22

Table of Contents changes in the estimates of our operating results or changes in recommendations by any securities analysts that elect to follow our common stock; and market conditions in our industry and the economy as a whole. Our Directors and Affiliated Entities Have Substantial Influence Over Our Affairs Our directors and entities affiliated with them beneficially own in the aggregate approximately 28.7% of our common stock. These stockholders have the ability to exert substantial influence over all matters requiring approval by our stockholders. These stockholders will be able to influence the election and removal of directors and any merger, consolidation or sale of all or substantially all of our assets and other matters. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control or impeding a merger or consolidation, takeover or other business combination. Provisions In Our Amended And Restated Certificate Of Incorporation And Bylaws Or Delaware Law Might Discourage, Delay Or Prevent A Change In Control Of Our Company Or Changes In Our Management And Therefore Depress The Trading Price Of Our Common Stock. Our amended and restated certificate of incorporation and bylaws contain provisions that could depress the trading price of our common stock by acting to discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of Leap may deem advantageous. These provisions: require super- majority voting to amend some provisions in our amended and restated certificate of incorporation and bylaws; authorize the issuance of "blank check" preferred stock that our board of directors could issue to increase the number of outstanding shares to discourage a takeover attempt; prohibit stockholder action by written consent, and require that all stockholder actions be taken at a meeting of our stockholders; provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and establish advance notice requirements for nominations for elections to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings. Additionally, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any "interested" stockholder for a period of three years following the date on which the stockholder became an "interested" stockholder and which may discourage, delay or prevent a change in control of our company. Item 2. Properties Leap currently leases space, totaling approximately 99,100 square feet, in two office buildings in San Diego, California for our headquarters. We use these buildings for sales, marketing, product development, engineering and administrative purposes. As of April 30, 2005, Cricket had leased regional offices in Denver, Colorado and Nashville, Tennessee. These offices consist of approximately 15,600 square feet and 17,900 square feet, respectively. Cricket has 22 additional office leases in its individual markets that range from 2,500 square feet to 13,618 square feet. Cricket also leases approximately 90 retail locations in its markets, including stores ranging in size from 1,050 square feet to 4,600 square feet, as well as kiosks and retail spaces within another store. In addition, we currently lease approximately 2,600 cell site locations, 26 switch locations and three warehouse facilities that range in size from approximately 3,000 square feet to approximately 20,000 square feet. We do not own any real property. As we continue to develop existing Cricket markets, and as we build- out additional markets, we will lease additional or substitute office facilities, retail stores, cell sites and switch and warehouse facilities. 23

Table of Contents Item 3. Legal Proceedings Bankruptcy Proceedings On the Petition Date, Leap, Cricket and substantially all of their subsidiaries filed voluntary petitions for relief under Chapter 11 in the United States Bankruptcy Court for the Southern District of California. On October 22, 2003, the Bankruptcy Court entered an order confirming the Plan of Reorganization. The effectiveness of the Plan of Reorganization was conditioned upon, among other things, the receipt of required regulatory approvals from the FCC for the transfer of wireless licenses associated with the change of control that occurred upon Leap's emergence from bankruptcy. Leap received the requisite approvals from the FCC on August 5, 2004. On August 16, 2004, Leap and Cricket satisfied the remaining conditions to the Plan of Reorganization, the Plan of Reorganization became effective, and the Company emerged from Chapter 11 bankruptcy. The Leap Creditor Trust is defending unsecured claims asserted against Leap in bankruptcy, and the Leap Creditor Trust will pay settlements or judgments, if any, from Leap Creditor Trust funds. In connection with the Chapter 11 proceedings, the Bankruptcy Court established deadlines by which the holders of pre- emergence claims against us were required to file proofs of claim. The final deadline for such claims, relating to claims that arose during the course of the bankruptcy, was October 15, 2004, 60 days after the Effective Date of the Plan of Reorganization. Parties who were required to, but who failed to, file proofs of claim before the applicable deadlines are barred from asserting such claims against us in the future. Generally, our obligations have been discharged with respect to general unsecured claims for pre- petition obligations, although the holders of allowed general unsecured pre- petition claims against Leap have (and holders of pending general unsecured claims against Leap may have) a pro rata beneficial interest in the assets of the Leap Creditor Trust. We reviewed the remaining claims filed against us (consisting primarily of claims for pre- petition taxes and for obligations incurred by us during the course of the Chapter 11 proceedings) and filed further objections by the Bankruptcy Court deadline of January 17, 2005. We do not believe that the resolution of the outstanding claims filed against us in bankruptcy will have a material adverse impact on the Company's consolidated financial statements. Foreign governmental authorities have asserted or are likely to assert tax claims of approximately $6.3 million, including interest, against Leap with respect to periods prior to the bankruptcy, although the Company believes that the true value of these asserted or potential claims is lower. Leap likely did not mail notice of its bankruptcy filings or the proceedings in the Bankruptcy Court to these governmental authorities. We are exploring methods to bring the claims of these foreign authorities within the bankruptcy claims resolution process. If the claims are resolved through the Bankruptcy Court, we expect any payment on the claims will be paid from restricted cash previously reserved to satisfy allowed administrative claims and allowed priority claims against Leap. In any event, we do not believe that the resolution of these issues will have a material adverse effect on our consolidated financial statements. Securities Litigation On December 31, 2002, several members of American Wireless Group, LLC, referred to in this report as AWG, filed a lawsuit against various officers and directors of Leap in the Circuit Court of the First Judicial District of Hinds County, Mississippi, referred to herein as the Whittington Lawsuit. Leap purchased certain FCC wireless licenses from AWG and paid for those licenses with shares of Leap stock. The complaint alleges that Leap failed to disclose to AWG material facts regarding a dispute between Leap and a third party relating to that party's claim that it was entitled to an increase in the purchase price for certain wireless licenses it sold to Leap. In their complaint, plaintiffs seek rescission and/or damages according to proof at trial of not less than the aggregate amount paid for the Leap stock (alleged in the complaint to have a value of approximately $57.8 million in June 2001 at the closing of the license sale transaction), plus interest, punitive or exemplary damages in the amount of not less than three times compensatory damages, and costs and expenses. Leap is not a defendant in the Whittington Lawsuit. Plaintiffs contend that the named defendants are the controlling group that was responsible for Leap's alleged failure to disclose the material facts regarding the third party dispute and the risk that the shares held by the plaintiffs might be diluted if the third party was successful in an arbitration proceeding. Defendants filed a motion to compel arbitration, or in the alternative, to dismiss the 24

Table of Contents Whittington Lawsuit, noting that plaintiffs as members of AWG agreed to arbitrate disputes pursuant to the license purchase agreement, that they failed to plead facts that show that they are entitled to relief, that Leap made adequate disclosure of the relevant facts regarding the third party dispute, and that any failure to disclose such information did not cause any damage to the plaintiffs. In a related action to the action described above, on June 6, 2003, AWG filed a lawsuit in the Circuit Court of the First Judicial District of Hinds County, Mississippi, referred to herein as the AWG Lawsuit, against the same individual defendants named in the Whittington Lawsuit. The complaint generally sets forth the same claims made by the plaintiffs in the Whittington Lawsuit. Leap is not a defendant in the AWG Lawsuit. In its complaint, plaintiff seeks rescission and/or damages according to proof at trial of not less than the aggregate amount paid for the Leap stock (alleged in the complaint to have a value of approximately $57.8 million in June 2001 at the closing of the license sale transaction), plus interest, punitive or exemplary damages in the amount of not less than three times compensatory damages, and costs and expenses. Defendants filed a motion to compel arbitration or, in the alternative, to dismiss the AWG Lawsuit, making arguments similar to those made in their motion to dismiss the Whittington Lawsuit. Although Leap is not a defendant in either the Whittington or AWG Lawsuits, several of the defendants have indemnification agreements with the Company. Leap's D&O insurers have not filed a reservation of rights letter and have been paying defense costs. Management believes that the liability, if any, from the AWG and Whittington Lawsuits and the related indemnity claims of the defendants against Leap is not probable and estimable; therefore, no accrual has been made in our consolidated financial statements as of December 31, 2004 related to these contingencies. On December 5, 2003, nine securities class action lawsuits were filed against Leap, and certain of its officers and directors, in the United States District Court for the Southern District of California on behalf of all persons who purchased or otherwise acquired Leap's common stock from February 11, 2002 through July 24, 2002. Those lawsuits were all virtually identical to one another. The plaintiffs alleged that the defendants were responsible for the dissemination of a series of material misrepresentations to the market during the class period, thereby artificially inflating the price of Leap's common stock. The complaint sought an unspecified amount of damages, plus costs and expenses related to bringing the actions. No class was certified in the lawsuit. The defendants filed a motion to dismiss the amended complaint, stating that the amended complaint failed to plead any facts which show that any representations were made by Leap or any other defendants or that any of the alleged misrepresentations caused a change in the value of Leap's shares. On August 26, 2004, the court granted the defendants' motion to dismiss, but granted the plaintiffs leave to amend their complaint. The plaintiffs did not file an amended complaint and a court order voluntarily dismissing the action with prejudice was issued on January 7, 2005. Leap is often involved in various claims arising in the course of business, seeking monetary damages and other relief. The amount of the liability, if any, from such claims cannot be determined with certainty. However, in the opinion of Leap's management, the ultimate liability for such claims will not have a material adverse effect on Leap's consolidated financial statements. Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of Leap's stockholders, through the solicitation of proxies or otherwise, during the year ended December 31, 2004. 25

Table of Contents PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters Our common stock traded on the OTC Bulletin Board until August 16, 2004 under the symbol "LWINQ." When we emerged from our Chapter 11 proceedings on August 16, 2004, all of our formerly outstanding common stock was cancelled in accordance with our Plan of Reorganization and our former common stockholders ceased to have any ownership interest in us. The new shares of our common stock issued under our Plan of Reorganization now trade on the OTC Bulletin Board under the symbol "LEAP." Prior to December 11, 2002, our common stock was listed on the NASDAQ under the symbol "LWIN." Because the value of one share of our new common stock bears no relation to the value of one share of our old common stock, the trading prices of our new common stock are set forth separately from the trading prices of our old common stock. The following table sets forth the high and low sales prices per share of our common stock for the quarterly periods indicated, which correspond to our quarterly fiscal periods for financial reporting purposes. Prices for our old common stock are prices on the OTC Bulletin Board through August 15, 2004. Prices for our new common stock are prices on the OTC Bulletin Board from August 16, 2004 through December 31, 2004. Overthe- counter market quotations reflect inter- dealer prices, without retail mark- up, mark- down or commission and may not necessarily represent actual transactions.
High($) Low($)

Old Common Stock Calendar Year - 2003 First Quarter Second Quarter Third Quarter Fourth Quarter Calendar Year - 2004 First Quarter Second Quarter Third Quarter through August 15, 2004 New Common Stock Third Quarter beginning August 16, 2004 Fourth Quarter 27.80 28.10 19.75 19.00 0.06 0.04 0.02 0.03 0.01 0.01 0.21 0.21 0.07 0.09 0.11 0.05 0.02 0.01

On May 11, 2005, the last reported sale price of Leap's common stock on the OTC Bulletin Board was $24.05 per share. As of May 11, 2005, there were 60,000,000 shares of common stock outstanding held by approximately 35 holders of record. Dividends Leap has never paid or declared any cash dividends on its common stock and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. The terms of our senior secured credit facilities entered into in January 2005 restrict our ability to declare or pay dividends. We intend to retain future earnings, if any, to fund our growth. Any future payment of dividends to our stockholders will depend on decisions that will be made by our board of directors and will depend on then existing conditions, including our financial condition, contractual restrictions, capital requirements and business prospects. 26

Table of Contents Securities Authorized For Issuance Under Equity Compensation Plans The following table provides information as of December 31, 2004 with respect to compensation plans (including individual compensation arrangements) under which Leap's common stock is authorized for issuance.
Number of securities to be issued upon exercise of outstanding options(1) Weighted- average exercise price of outstanding options Number of securities remaining available for future issuance under equity compensation plans(1)

Plan Category

Equity compensation plans approved by security holders Equity compensation plans not approved by security holders(2) Total

- $

- $ - $

4,800,000 4,800,000

(1)

All of the Leap common stock, warrants and options outstanding immediately prior to the effectiveness of our Plan of Reorganization were cancelled as of August 16, 2004 pursuant to our Plan of Reorganization. Following our emergence from bankruptcy, in accordance with Section 5.07 of our Plan of Reorganization, the compensation committee of our board of directors, acting pursuant to a delegation of authority from the board of directors, approved the Leap Wireless International, Inc. 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan effective December 30, 2004. The 2004 Plan authorizes discretionary grants to our employees, consultants and independent directors, and to the employees and consultants of our subsidiaries, of stock options, restricted stock and deferred stock units. The aggregate number of shares of common stock subject to awards under the 2004 Plan will be no more than 4,800,000. For a description of the terms of the 2004 Plan, see "Item 11. Executive Compensation - Employee Benefit Plans" contained in this report. Reflects shares authorized for issuance under Leap's 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan adopted by the compensation committee of our board of directors on December 30, 2004 as contemplated by the Company's confirmed Plan of Reorganization. 27

(2)

Table of Contents Item 6. Selected Financial Data SELECTED CONSOLIDATED FINANCIAL DATA (In thousands, except per share data) The following selected financial data are derived from our consolidated financial statements and have been restated for the seven months ended July 31, 2004 to reflect adjustments that are further discussed in Note 2 to the consolidated financial statements included in Item 8 of this report. These tables should be read in conjunction with "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Item 8. Financial Statements and Supplementary Data." References in these tables to "Predecessor Company" refer to the Company on or prior to July 31, 2004. References to "Successor Company" refer to the Company after July 31, 2004, after giving effect to the implementation of freshstart reporting. The financial statements of the Successor Company are not comparable in many respects to the financial statements of the Predecessor Company because of the effects of the consummation of the Plan of Reorganization as well as the adjustments for fresh- start reporting. For a description of fresh- start reporting, see Note 3 to the consolidated financial statements included in Item 8 of this report.
Successor Company Five Months Ended December 31, 2004 Seven Months Ended July 31, 2004 (As Restated) Predecessor Company

Year Ended December 31, 2003 2002 2001 2000(4)

Statement of Operations Data(1): Revenues: Service revenues Equipment revenues

285,647 $ 58,713

398,451 $ 83,196

643,566 $ 107,730

567,694 $ 215,917 $ 50,781 39,247

40,599 9,718

Total revenues Operating expenses: Cost of service (exclusive of items shown separately below) Cost of equipment Selling and marketing General and administrative Depreciation and amortization Impairment of indefinite- lived intangible assets Impairment of long- lived assets and related charges Total operating expenses Gains on sale of wireless licenses Operating income (loss) Equity in net loss of and writedown of investments in and loans receivable from unconsolidated wireless operating companies Interest income Interest expense Foreign currency transaction gains (losses), net Gain on sale of wholly owned subsidiaries

344,360

481,647

751,296

618,475

255,164

50,317

(79,148) (82,402) (39,938) (57,110) (75,324)

(113,988) (97,160) (51,997) (81,514) (177,494)

(199,987) (172,235) (86,223) (162,378) (300,243)

(181,404) (252,344) (122,092) (185,915) (287,942)

(94,510) (202,355) (115,222) (152,051) (119,177)

(20,821) (54,883) (31,709) (85,640) (24,563)

(171,140)

(26,919)

(626)

(24,054)

(16,323)

(333,922) -

(522,779) 532

(1,116,260) (1,072,939) 4,589 364

(683,315) 143,633

(217,616) -

10,438

(40,600)

(360,375)

(454,100)

(284,518)

(167,299)

1,812 (16,594) -

(4,195) -

779 (83,371) -

6,345 (229,740) -

(54,000) 26,424 (178,067) (1,257) -

(78,624) 48,477 (112,358) 13,966 313,432

Gain on issuance of stock by unconsolidated wireless operating company Gain on sale of unconsolidated wireless operating company Other income (expense), net Income (loss) before reorganization items and income taxes Reorganization items, net Income (loss) before income taxes Income taxes Net income (loss) $ Basic and diluted net loss per common share(2) Shares used in per share calculations(2): Basic and Diluted

(117)

(293)

(176)

39,518 (3,001)

8,443

32,602 (2,824)

(4,461) -

(45,088) 962,444

(443,143) (146,242)

(640,978) -

(482,975) -

47,372 -

(4,461) (4,168)

917,356 (4,166)

(589,385) (8,052)

(640,978) (23,821)

(482,975) (322)

47,372 (47,540)

(8,629) $

913,190 $

(597,437) $ (664,799) $ (483,297) $

(168)

(0.14) $

15.58 $

(10.19) $

(14.91) $

(14.27) $

(0.01)

60,000

58,623

58,604

44,591

33,861

25,398

28

Table of Contents
As of December 31, Successor Company 2004 2003

Predecessor Company 2002 2001 2000

Balance Sheet Data(1): Cash and cash equivalents $ Working capital (deficit)(3) Restricted cash, cash equivalents and short- term investments Total assets Long- term debt(3) Total stockholders' equity (deficit) (1)

141,141 $

84,070 $

100,860 $

242,979 $

338,878

142,404

(2,254,809)

(2,144,420)

189,507

602,373

31,427 2,090,482 371,355

55,954 1,756,843 -

25,922 2,163,702 -

40,755 2,450,895 1,676,845

65,471 1,647,407 897,878

1,469,850

(893,356)

(296,786)

358,440

583,258

For the first six months of the year ended December 31, 2000, the financial results of Smartcom are included in the selected consolidated financial data as a result of our acquisition of the remaining 50% interest in Smartcom that we did not already own on April 19, 1999. We subsequently divested our entire interest in Smartcom on June 2, 2000. Refer to Notes 2 and 5 to the consolidated financial statements included in Item 8 of this report for an explanation of the calculation of basic and diluted net loss per common share. We have presented the principal and interest balances related to our outstanding debt obligations as current liabilities in the consolidated balance sheets as of December 31, 2003 and 2002, as a result of the then existing defaults under the underlying agreements. We have reclassified a $4.7 million loss on early extinguishment of debt from extraordinary items to other income (expense) as a result of our adoption of Statement of Financial Accounting Standards (SFAS) No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections." 29

(2) (3) (4)

Table of Contents Management's Discussion and Analysis of Financial Condition and Results of Operations MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is based upon our consolidated financial statements as of the dates and for the periods presented in this report. This discussion and analysis should be read in conjunction with our consolidated financial statements and related notes included in Item 8 of this report. Overview Restatement of Previously Reported Unaudited Interim Consolidated Financial Information. The accompanying Management's Discussion and Analysis of Financial Condition and Results of Operations gives effect to certain restatement adjustments made to the previously unaudited interim financial information of the Predecessor Company for the one and seven month periods ended July 31, 2004 and the Successor Company for the two months ended September 30, 2004. See Note 2 to the consolidated financial statements in Item 8 of this report for additional information. Our Business. We conduct our business primarily through the Cricket Companies. Cricket provides mobile wireless services targeted to meet the needs of customers who are under- served by traditional communications companies. Our Cricket service is a simple and affordable wireless alternative to traditional landline service. Cricket service offers customers virtually unlimited anytime minutes within the Cricket calling area over a high- quality, all- digital CDMA network. Our revenues come from the sale of wireless services, handsets and accessories to customers. Our liquidity and capital resources come primarily from the operations and assets of Cricket, from borrowings under our revolving credit facility and from offerings of debt and/or equity in the capital markets from time to time. Cricket operates in 39 markets in 20 states stretching from New York to California. At December 31, 2004, we had approximately 1,570,000 customers. Factors we consider when expanding our Cricket service into new markets include whether the new market will complement an existing Cricket market cluster, whether we believe we can obtain sufficient customer penetration in the market and whether the market is sufficiently densely populated for us to offer services on a cost competitive basis. For a more detailed description of our business, see "Item 1. Business" above. Voluntary Reorganization Under Chapter 11. On April 13, 2003, Leap, Cricket and substantially all of their subsidiaries filed voluntary petitions for relief under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of California. On August 16, 2004, Leap and Cricket satisfied the final conditions to our Plan of Reorganization and it became effective. On that date, a new Board of Directors of Leap was appointed, our previously existing stock, options and warrants were cancelled, and we issued 60 million shares of new Leap common stock for distribution to two classes of creditors. For a more detailed description of our bankruptcy proceedings, see "Item 1. Business - Chapter 11 Proceedings Under the Bankruptcy Code" and Note 1 to the consolidated financial statements included in Item 8 of this report. Our Plan of Reorganization implemented a comprehensive financial reorganization that significantly reduced our outstanding indebtedness. When the Plan of Reorganization became effective on August 16, 2004, we issued new Cricket 13% senior secured pay- in- kind notes due 2011 with a face value of $350 million and an estimated fair value of $372.8 million and had approximately $40 million of remaining indebtedness to the FCC. On January 10, 2005, we entered into new senior secured credit facilities and used a portion of the proceeds from the $500 million term loan included as a part of such facilities to redeem Cricket's 13% senior secured pay- in- kind notes and to repay the remaining indebtedness to the FCC. The new facilities consist of a six- year $500 million term loan and a five- year, $110 million revolving credit facility. See "Liquidity and Capital Resources" below. Fresh- Start Reporting. In connection with our emergence from Chapter 11, we adopted the fresh- start reporting provisions of SOP 90- 7. Under SOP 90- 7, we were required to apply fresh- start reporting because 30 Item 7.

Table of Contents (i) the reorganization value of our assets immediately before the date of confirmation was less than the sum of all the allowed claims and post petition liabilities, and (ii) holders of Leap common shares immediately before the bankruptcy court confirmed our Plan of Reorganization received less than fifty percent of the common stock issued by Leap on the date it emerged from bankruptcy. All material conditions to the effectiveness of the Plan of Reorganization were satisfied on August 5, 2004. In light of the proximity of August 5, 2004 to the month ended July 31, 2004 and the immateriality of the results of operations for the period from August 1, 2004 through August 5, 2004, we recorded the effects of the consummation of the Plan of Reorganization as well as adjustments for fresh- start reporting in our consolidated financial statements as of July 31, 2004. Under SOP 90- 7, reorganization value represents the fair value of the entity before considering liabilities and approximates the amount a willing buyer would pay for the assets of the entity immediately after the reorganization. Consistent with fresh- start reporting, the enterprise value (i.e. debt plus equity) may be used to calculate our reorganization value. We engaged a third party valuation consultant to assist management in estimating our enterprise value as of July 31, 2004. The valuation consultant and two other valuation firms engaged by us also provided management with information that management utilized in determining the fair market value of our network assets and wireless licenses, and the fair value of our trademarks and customer relationships. Management used these values in connection with the allocation process described below. In implementing fresh- start reporting, we allocated our reorganization value to our assets in conformity with procedures specified by SFAS No. 141, "Business Combinations," and stated our liabilities, other than deferred taxes, at the present value of amounts expected to be paid. The amount remaining after allocation of the reorganization value to our identified tangible and intangible assets is reflected as goodwill, which is subject to periodic evaluation for impairment. In addition, under fresh- start reporting, our accumulated deficit was eliminated and new equity was issued according to the Plan of Reorganization. This overview is intended to be only a summary of significant matters concerning our results of operations and financial condition. It should be read in conjunction with the management discussion below and all of the business and financial information contained in this report, including the consolidated financial statements in Item 8. Results of Operations As a result of our emergence from Chapter 11 bankruptcy and the application of fresh- start reporting, we are deemed to be a new entity for financial reporting purposes. In this report, the Company is referred to as the "Predecessor Company" for periods on or prior to July 31, 2004, and is referred to as the "Successor Company" for periods after July 31, 2004. The financial statements of the Successor Company are not comparable in many respects to the financial statements of the Predecessor Company because of the effects of the consummation of the Plan of Reorganization as well as the adjustments for fresh- start accounting. However, for purposes of this discussion, the Predecessor Company's results for the period from January 1, 2004 through July 31, 2004 have been combined with the Successor Company's results for the period from August 1, 2004 through December 31, 2004. These combined results are compared to the Predecessor Company's results for the year ended December 31, 2003. For a more detailed description of fresh- start reporting, see Note 3 to the consolidated financial statements included in Item 8 of this report. 31

Table of Contents Financial Performance The following table presents the consolidated statement of operations data for the periods indicated (in thousands). The financial data for the year ended December 31, 2004 presented below represents the combination of the Predecessor and Successor Companies' results for that period.
Year Ended December 31, 2004 2003 2002

Revenues: Service revenues Equipment revenues Total revenues Operating expenses: Cost of service (exclusive of items shown separately below) Cost of equipment Selling and marketing General and administrative Depreciation and amortization Impairment of indefinite- lived intangible assets Impairment of long- lived assets and related charges Total operating expenses Gains on sale of wireless licenses Operating loss Interest income Interest expense Gain on sale of unconsolidated wireless operating company Other income (expense), net Loss before reorganization items and income taxes Reorganization items, net Income (loss) before income taxes Income taxes Net income (loss) $ $ 684,098 $ 141,909 643,566 $ 107,730 567,694 50,781

826,007

751,296

618,475

(193,136) (179,562) (91,935) (138,624) (252,818) (626)

(199,987) (172,235) (86,223) (162,378) (300,243) (171,140) (24,054)

(181,404) (252,344) (122,092) (185,915) (287,942) (26,919) (16,323)

(856,701) 532 (30,162) 1,812 (20,789) (410) (49,549) 962,444 912,895 (8,334) 904,561 $

(1,116,260) 4,589 (360,375) 779 (83,371) (176) (443,143) (146,242) (589,385) (8,052) (597,437) $

(1,072,939) 364 (454,100) 6,345 (229,740) 39,518 (3,001) (640,978) (640,978) (23,821) (664,799)

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 At December 31, 2004, we had approximately 1,570,000 customers compared to approximately 1,473,000 customers at December 31, 2003. Gross customer additions for the years ended December 31, 2004 and 2003 were 808,000 and 735,000, respectively, and net customer additions (losses) during these periods were approximately 97,000 and (39,000), respectively. At December 31, 2004, the total potential customer base covered under our 39 operating markets was approximately 26.7 million. During the year ended December 31, 2004, service revenues increased $40.5 million, or 6%, compared to the year ended December 31, 2003. The increase in service revenues was due to a combination of the increase in net customers and an increase in average revenue per customer. Our basic Cricket service offers customers virtually unlimited calls within their Cricket service area at a flat price and in November 2003 we added two other higher priced plans which include different levels of bundled features. In March 2004, we introduced a plan that provides virtually unlimited local and long distance calling for a flat rate and also introduced a plan that provides discounts on additional lines added to an existing qualified account. Since their introduction, the 32

Table of Contents higher priced service plans have represented a significant portion of our gross customer additions and have increased our average service revenue per subscriber. The increase in service revenues resulting from the higher priced service offerings for the year ended December 31, 2004, as compared to the year ended December 31, 2003, was partially offset by the impacts of increased promotional activity in 2004 and by the elimination of activation fees as an element of service revenue. Activation fees were included in service revenues for the first two quarters of fiscal 2003, until our adoption of Emerging Issues Task Force ("EITF") Issue No. 00- 21, "Accounting for Revenue Arrangements with Multiple Deliverables" in July 2003, at which time they began to be included in equipment revenues. During the year ended December 31, 2004, equipment revenues increased $34.2 million, or 32%, compared to the year ended December 31, 2003. Approximately $24.9 million of the increase in equipment revenues resulted from higher average net revenue per handset sold, of which higher prices contributed $15.9 million of the $24.9 million increase, and higher handset sales volumes contributed the remaining $9.0 million of the $24.9 million increase. The primary driver of the increase in revenue per handset sold was the implementation of a policy to increase handset prices commencing in the fourth quarter of 2003, offset in part by increases in promotional activity and in dealer compensation costs in 2004. Additionally, activation fees included in equipment revenue increased by $9.3 million for the year ended December 31, 2004 compared to the year ended December 31, 2003 due to the inclusion of activation fees in equipment revenue for all of 2004 versus only the last two quarters in 2003 as a result of our adoption of EITF Issue No. 00- 21 in July 2003. In 2005, we expect that the change in equipment revenues will generally reflect changes in the volume of handsets sold, subject to potential decreases in average selling prices caused by future promotions or in response to pricing actions from competitors. For the year ended December 31, 2004, cost of service decreased $6.9 million, or 3%, compared to the year ended December 31, 2003, even though service revenues increased by 6%. The decrease in cost of service resulted from a net decrease of $5.8 million in network related costs, generally resulting from the renegotiation of several supply agreements during the course of our bankruptcy, a net decrease of $2.3 million in cell site costs as a result of our rejection of surplus cell site leases in the bankruptcy proceedings, and a $3.3 million reduction in property tax related to the decreased value of fixed assets as a result of the bankruptcy. These decreases were offset in part by increases of $2.1 million in employee- related costs and $6.1 million in software maintenance expenses in the current year. We generally expect that cost of service in 2005 will increase with growth in customers, usage, and the introduction and customer adoption of new products. For the year ended December 31, 2004, cost of equipment increased $7.3 million, or 4%, compared to the year ended December 31, 2003. Equipment costs increased by $22.5 million due primarily to increased handset sales volume and an increase in the average cost per handset as our sales mix shifted from moderately priced to higher end handsets. This increase in equipment cost was offset by cost- reduction initiatives in reverse logistics and other equipment- related activities of approximately $15.1 million. Although equipment revenue growth significantly outpaced equipment cost increases in 2004 due to the reasons discussed above, we generally expect changes in equipment revenue in 2005 to more closely track changes in equipment cost. For the year ended December 31, 2004, selling and marketing expenses increased $5.7 million, or 7%, compared to the year ended December 31, 2003. The increase in selling and marketing expenses was primarily due to increases of $6.0 million in employee and facility related costs. During the latter half of 2003 and throughout 2004, we invested in additional staffing and resources to improve the customer sales and service experience in our retail locations. For the year ended December 31, 2004, general and administrative expenses decreased $23.8 million, or 15%, compared to the year ended December 31, 2003. The decrease in general and administrative expenses was primarily due to a decrease of $4.7 million in insurance costs and a reduction of $15.2 million in call center and billing costs resulting from improved operating efficiencies and cost reductions negotiated during the course of our bankruptcy, partially offset by a $2.9 million increase in employee- related expenses. In addition, for the year ended December 31, 2004, there was a decrease of $9.2 million in legal costs compared to the corresponding period in the prior year, primarily reflecting the classification of costs directly related to our bankruptcy filings and incurred after the Petition Date as reorganization expenses. 33

Table of Contents During the year ended December 31, 2004, depreciation and amortization expenses decreased $47.4 million, or 16%, compared to the year ended December 31, 2003. The decrease in depreciation expense was primarily due to the revision of the estimated useful lives of network equipment and the reduction in the carrying value of property and equipment as a result of fresh- start accounting at July 31, 2004. In addition, depreciation and amortization expense for the year ended December 31, 2004 included amortization expense of $14.5 million related to identifiable intangible assets recorded upon the adoption of fresh- start accounting. During the year ended December 31, 2004, interest expense decreased $62.6 million, or 75%, compared to the year ended December 31, 2003. The decrease in interest expense resulted from the application of SOP 90- 7 which required that, commencing on the Petition Date, we cease to accrue interest and amortize debt discounts and debt issuance costs on pre- petition liabilities that were subject to compromise. As a result, we ceased to accrue interest and to amortize our debt discounts and debt issuance costs for our senior notes, senior discount notes, senior secured vendor credit facilities, note payable to GLH, and Qualcomm term loan. Upon our emergence from bankruptcy, we began accruing interest on the newly issued 13% senior secured pay- in- kind notes. The 13% notes were refinanced in January 2005 and replaced with a $500 million term loan that accrues interest at a variable rate. During the year ended December 31, 2004, reorganization items consisted primarily of $5.0 million of professional fees for legal, financial advisory and valuation services and related expenses directly associated with our Chapter 11 filings and reorganization process, partially offset by $2.1 million of income from the settlement of certain pre- petition liabilities, and $1.4 million of interest income earned while we were in bankruptcy, with the balance of $963.9 million attributable to net gain on the discharge of liabilities, the cancellation of equity upon our emergence from bankruptcy and the application of fresh- start accounting. During the year ended December 31, 2004, income tax expense increased by $0.3 million, or 4%, compared to the year ended December 31, 2003. The increase in income tax expense resulted primarily from increased deferred tax liabilities resulting from higher amortization of wireless licenses for income tax purposes for the year ended December 31, 2004 compared to the prior year. The Successor Company can utilize available Predecessor Company net operating losses to reduce its taxable income. However, utilization of Predecessor Company NOLs generally offsets goodwill rather than reducing book tax expense. Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 At December 31, 2003, we had approximately 1,473,000 customers compared to approximately 1,512,000 at December 31, 2002. During the year ended December 31, 2003, gross customer additions were approximately 735,000 and net customers declined by approximately 39,000, which included a decline of approximately 2,800 customers as a result of our discontinuation of service in Hickory, North Carolina as of September 30, 2003. At December 31, 2003, the total potential customer base covered under our 39 operating markets was approximately 25.9 million. At March 31, 2003, Cricket had 1,513,000 customers, a net addition of 1,000 customers from December 31, 2002. During the three months ended June 30, 2003, the quarter in which Leap, Cricket and substantially all of their subsidiaries filed voluntary petitions for relief under Chapter 11, we experienced a net decline of approximately 54,000 in the number of Cricket customers. Previously, we had not experienced a decline in total customers from one quarter to another. We believe that this decline was due in part to the uncertainty caused by our announcement of filing for bankruptcy protection and our anticipated reorganization. The effect of these events was compounded by a significant reduction in our advertising campaigns during the first and second quarters of 2003. Although promotional activity resulted in a net increase in our customers of approximately 18,000 during the three months ended September 30, 2003, we experienced a net decrease of approximately 4,000 customers during the final three months of the year. During the year ended December 31, 2003, we performed an analysis of the operating performance of our third- party dealers and distributors, and we continued to analyze their performance as we worked to improve our handset distribution strategies. As a result of our analysis, we discontinued our relationship with a substantial number of dealers and distributors who represented a small portion of our equipment sales and who were not performing to our standards. In addition, we revised our incentive structure with our third- party 34

Table of Contents dealers and distributors to benefit high performing dealers and distributors. In connection with these changes, we increased incentives for sales of higher- priced monthly service plans and increased incentives for sales that utilize our cost saving strategies such as Web activation and automatic bill payments via a customer's credit card. In addition, we focused our rebate program on customers who remained on service for several months. During the year ended December 31, 2003, service revenues increased $75.9 million, or 13%, compared to the year ended December 31, 2002. The increase in service revenues was primarily due to an increase in our average service revenue per customer resulting from the launch of a new higher- priced, bundled plan during the third quarter of 2002, combined with an increase in average subscribers to 1,479,000 for the year ended December 31, 2003 from 1,414,000 average subscribers for the year ended December 31, 2002 and, to a lesser extent, approximately $6.2 million of activation fees which we commenced charging during the fourth quarter of 2002 and which were included in service revenues until our adoption of EITF Issue No. 00- 21 in July 2003. The effect of these factors was partially offset by a change in our handset sales practices which eliminated any allocation of the handset price to service revenues. This change is discussed in greater detail below. During the year ended December 31, 2003, equipment revenues increased $57.0 million, or 112%, compared to the year ended December 31, 2002. The largest portion of this increase, $39.1 million, occurred because we stopped including the first month of service in the handset purchase price in the fourth quarter of 2002. As a result, we no longer allocate any portion of the handset price to service revenues. Equipment revenues for the year ended December 31, 2003 also increased approximately $9.8 million because we changed our practice of offering instant or in- store handset rebates to customers and instead began offering mail- in rebates to new customers that were only redeemable if the customer continued on Cricket service for three months. (Mail- in rebates have a lower redemption rate than instant rebates.) Equipment revenues also increased approximately $9.6 million because we began immediately recognizing activation fees as equipment revenues after our adoption of EITF Issue No. 00- 21 on July 1, 2003. In addition, equipment revenues rose because we increased the selling prices of our handsets so that the selling price for the majority of our handsets was at or near the cost of the handset. However, sales incentives offered to customers and volume- based sales incentives offered to our third- party dealers and distributors are included as reductions to equipment revenue, and fulfillment costs and warranty repair costs are included in cost of equipment, which together result in a negative gross margin on the sale of handsets. These increases in equipment revenue were partially offset by a decrease in the number of handsets sold to new customers or sold as replacement handsets for existing customers of 636,000, or 35%, for the year ended December 31, 2003, compared to the prior year. During the year ended December 31, 2003, cost of service increased $18.6 million, or 10%, compared to the year ended December 31, 2002. The increase in cost of service was primarily attributable to an increase of approximately $10.4 million in our long distance costs as a result of the increased long distance usage resulting from the introduction of service plans that include large bundles of available long distance minutes each month. Cost of service also rose as a result of an increase in the number of average subscribers, an increase in software maintenance expenses of approximately $8.5 million and an increase in engineering and other operational costs of approximately $7.1 million, partially offset by a decrease in payroll related costs of approximately $9.2 million. In conjunction with the bankruptcy proceedings, we renegotiated several of our executory contracts with our vendors. During the year ended December 31, 2003, cost of equipment decreased $80.1 million, or 32%, compared to the year ended December 31, 2002. The decrease in cost of equipment was due to a 35% decrease in the number of handsets sold (partially as a result of our efforts commencing in 2002 to reduce fraudulent sales) and, to a lesser extent, a decrease in amounts paid for handsets. During the year ended December 31, 2003, $57.2 million of our total losses on equipment revenues of $64.5 million were directly related to acquiring new customers. Equipment revenues increased sharply in 2003 while at the same time cost of equipment declined, in each case for the reasons described above. We do not believe that this change represented a trend in the relationship between equipment revenues and cost of equipment. For the year ended December 31, 2003, selling and marketing expenses decreased $35.9 million, or 29%, compared to the year ended December 31, 2002. The decrease in selling and marketing expenses was primarily 35

Table of Contents due to a decrease in advertising and related costs of approximately $27.6 million resulting from management's increased focus on the effective use of advertising and from cash conservation during the course of our bankruptcy proceedings, a decrease of $4.6 million in co- operative advertising reimbursements to our third- party dealers and distributors and a decrease of approximately $2.1 million in payroll and related costs. For the year ended December 31, 2003, general and administrative expenses decreased $23.5 million, or 13%, compared to the year ended December 31, 2002. The decrease in general and administrative expenses was primarily due to a reduction of approximately $5.2 million in payroll and related costs, a decrease of approximately $5.0 million in call center costs, a decrease of approximately $5.8 million in legal costs (excluding legal costs directly associated with our reorganization proceedings after the Petition Date), and a decrease of approximately $3.2 million in excise taxes, partially offset by an increase of approximately $3.2 million in insurance costs. For the year ended December 31, 2003, depreciation and amortization increased $12.3 million, or 4%, compared to the year ended December 31, 2002. The increase in depreciation and amortization resulted from a larger base of network, computer and other equipment in service. During the year ended December 31, 2003, we recorded an impairment charge of $171.1 million to reduce the carrying value of our wireless licenses to their estimated fair value. Management estimated the fair value of our wireless licenses based on the information available to it, including a valuation report prepared by a third- party consultant in connection with the confirmation hearing for our Plan of Reorganization. During the year ended December 31, 2002, we also recorded an impairment charge of $26.9 million to our then remaining goodwill balance. The goodwill related to our June 2000 acquisition of the remaining interest in Cricket Communications Holdings that we did not already own. During the year ended December 31, 2003, we recorded charges of $20.7 million in connection with the disposal of certain network assets and the write- off of capitalized costs associated with cell sites that we no longer expected to use in the business. In addition, we recognized $3.4 million in expense for accrued costs related to certain leases that we ceased using before the contractual termination date. For the year ended December 31, 2003, interest income decreased $5.6 million, or 88%, compared to the year ended December 31, 2002. The decrease in interest income resulted from the application of SOP 90- 7 which requires that we classify interest earned during the bankruptcy proceedings as a reorganization item. For the year ended December 31, 2003, interest expense decreased $146.4 million, or 64%, compared to the year ended December 31, 2002. The decrease in interest expense resulted from the application of SOP 90- 7 which requires that, commencing on the Petition Date, we cease accruing interest and amortizing debt discounts and debt issuance costs on pre- petition liabilities that are subject to compromise. As a result, we ceased to accrue interest and to amortize our debt discounts and debt issuance costs for our senior notes, senior discount notes, senior secured vendor credit facilities, the note payable to GLH, Inc., and the Qualcomm term loan. Reorganization items for the year ended December 31, 2003 consisted of $174.1 million related to the write- off of debt discounts and capitalized debt issuance costs associated with our long- term debt subject to compromise in accordance with SOP 90- 7 and $12.1 million of professional fees for legal, financial advisory and valuation services and related expenses directly associated with our Chapter 11 filings and reorganization process, offset by $34.8 million of debt forgiveness income from the settlement of certain pre- petition liabilities, $2.3 million of income from the reversal of certain pre- petition liabilities related to contracts rejected in bankruptcy, and $2.9 million of interest income earned while we were in bankruptcy. For the year ended December 31, 2003, income tax expense decreased $15.8 million compared to the year ended December 31, 2002. The decrease in income tax expense was related primarily to a one- time income tax expense of $15.9 million recorded during the three months ended March 31, 2002 to increase the valuation allowance on our deferred tax assets in connection with ceasing amortization of wireless licenses pursuant to our adoption of SFAS No. 142, "Goodwill and Other Intangible Assets." 36

Table of Contents Performance Measures In managing our business and assessing our financial performance, management supplements the information provided by financial statement measures with several customer focused performance metrics that are widely used in the telecommunications industry. These metrics include average revenue per user per month (ARPU), which measures service revenue per customer; cost per gross customer addition (CPGA), which measures the average cost of acquiring a new customer; cash costs per user per month (CCU), which measures the non- selling cash cost of operating our business on a per customer basis; and churn, which measures turnover in our customer base. CPGA and CCU are non- GAAP financial measures. A nonGAAP financial measure, within the meaning of Item 10 of Regulation S- K promulgated by the Securities and Exchange Commission, is a numerical measure of a company's financial performance or cash flows that (a) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the consolidated balance sheet, consolidated statement of operations or consolidated statement of cash flows; or (b) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. See "Reconciliation of Non- GAAP Financial Measures" below for a reconciliation of CPGA and CCU to the most directly comparable GAAP financial measures. ARPU is an industry metric that measures service revenue divided by the weighted average number of customers, divided by the number of months during the period being measured. Management uses ARPU to identify average revenue per customer, to track changes in average customer revenues over time, to help evaluate how changes in our business, including changes in our service offerings and fees, affect average revenue per customer, and to forecast future service revenue. In addition, ARPU provides management with a useful measure to compare our subscriber revenue to that of other wireless communications providers. We believe investors use ARPU primarily as a tool to track changes in our average revenue per customer and to compare our per customer service revenues to those of other wireless communications providers. CPGA is an industry metric that represents selling and marketing costs and the gain or loss on sale of handsets (generally defined as cost of equipment less equipment revenue), excluding costs unrelated to initial customer acquisition, divided by the total number of gross new customer additions during the period being measured. Costs unrelated to initial customer acquisition include the revenues and costs associated with the sale of handsets to existing customers as well as costs associated with handset replacements and repairs (other than warranty costs which are the responsibility of the handset manufacturers). We deduct customers who do not pay their first monthly bill from our gross customer additions, which tends to increase CPGA because we incur the costs associated with this customer without receiving the benefit of a gross customer addition. Management uses CPGA to measure the efficiency of our customer acquisition efforts, to track changes in our average cost of acquiring new subscribers over time, and to help evaluate how changes in our sales and distribution strategies affect the cost- efficiency of our customer acquisition efforts. In addition, CPGA provides management with a useful measure to compare our per customer acquisition costs with those of other wireless communications providers. We believe investors use CPGA primarily as a tool to track changes in our average cost of acquiring new customers and to compare our per customer acquisition costs to those of other wireless communications providers. CCU is an industry metric that measures cost of service, general and administrative costs, gain or loss on sale of handsets to existing customers and costs associated with handset replacements and repairs (other than warranty costs which are the responsibility of the handset manufacturers), divided by the weighted average number of customers, divided by the number of months during the period being measured. CCU does not include any depreciation and amortization expense. Management uses CCU as a tool to evaluate the non- selling cash expenses associated with ongoing business operations on a per customer basis, to track changes in these non- selling cash costs over time, and to help evaluate how changes in our business operations affect non- selling cash costs per customer. In addition, CCU provides management with a useful measure to compare our nonselling cash costs per customer with those of other wireless communications providers. We believe investors use CCU primarily as a tool to track changes in our non- selling cash costs over time and to compare our non- selling cash costs to those of other wireless communications providers. 37

Table of Contents Churn, an industry metric that measures customer turnover, is calculated as the net number of customers that disconnect from our service divided by the weighted average number of customers divided by the number of months during the period being measured. As noted above, customers who do not pay their first monthly bill are deducted from our gross customer additions; as a result, these customers are not included in churn. Management uses churn to measure our retention of customers, to measure changes in customer retention over time, and to help evaluate how changes in our business affect customer retention. In addition, churn provides management with a useful measure to compare our customer turnover activity to that of other wireless communications providers. We believe investors use churn primarily as a tool to track changes in our customer retention over time and to compare our customer retention to that of other wireless communications providers. The following table shows metric information for 2004:
Three Months Ended March 31, 2004 June 30, 2004 September 30, 2004 (As Restated) December 31, 2004 Year Ended December 31, 2004

ARPU CPGA CCU Churn

$ $ $

37.45 $ 124 $ 20.08 $ 3.1%

37.28 $ 141 $ 18.47 $ 3.7%

36.97 $ 141 $ 18.38 $ 4.5%

37.29 $ 159 $ 18.74 $ 4.1%

37.28 142 18.91 3.9%

Summary of Quarterly Results of Operations The following table presents the Predecessor and Successor Companies' combined condensed consolidated quarterly statement of operations data for 2004 (unaudited) (in thousands). It has been derived from our consolidated financial statements which have been restated for the interim periods for the one month ended July 31, 2004 and the two months ended September 30, 2004 to reflect adjustments that are further discussed in Note 2 to the consolidated financial statements included in Item 8 of this report. For purposes of 38

Table of Contents this discussion, the financial data for the three months ended September 30, 2004 presented below represents the combination of the Predecessor and Successor Companies' results for that period.
Three Months Ended March 31, 2004 June 30, 2004 September 30, 2004 (As Restated) December 31, 2004

Revenues: Service revenues Equipment revenues Total revenues Operating expenses: Cost of service (exclusive of items shown separately below) Cost of equipment Selling and marketing General and administrative Depreciation and amortization Impairment of long- lived assets and related charges Total operating expenses Gains on sale of wireless licenses Operating income (loss) Interest income Interest expense Other income (expense), net Loss before reorganization items and income taxes Reorganization items, net Income (loss) before income taxes Income taxes Net income (loss) $ 169,051 $ 37,771 172,025 $ 33,676 170,386 $ 36,521 172,636 33,941

206,822

205,701

206,907

206,577

(48,000) (43,755) (23,253) (38,610) (75,461) -

(47,827) (40,635) (21,939) (33,922) (76,026) (360)

(51,034) (44,153) (23,574) (30,689) (55,554) (266)

(46,275) (51,019) (23,169) (35,403) (45,777) -

(229,079) (22,257) (1,823) 19

(220,709) (15,008) (1,908) (615)

(205,270) 532 2,169 608 (6,009) 458

(201,643) 4,934 1,204 (11,049) (272)

(24,061) (2,025) (26,086) (1,944)

(17,531) 1,313 (16,218) (1,927)

(2,774) 963,156 960,382 (2,999)

(5,183) (5,183) (1,464)

(28,030) $

(18,145) $

957,383 $

(6,647)

Reconciliation of Non- GAAP Financial Measures We utilize certain financial measures, as described above, that are calculated based on industry conventions and are not calculated based on GAAP. Certain of these financial measures are considered "non- GAAP" financial measures within the meaning of Item 10 of Regulation S- K promulgated by the SEC. CPGA - The following table reconciles total costs used in the calculation of CPGA to selling and marketing expense, which we consider to be the most directly comparable GAAP financial measure to CPGA. The financial data for the three months ended September 30, 2004 and for the year ended December 31, 2004 39

Table of Contents presented below represents the combination of the Predecessor and Successor Companies' results for those periods (in thousands, except gross customer additions and CPGA):
Three Months Ended March 31, 2004 June 30, 2004 September 30, 2004 (As Restated) December 31, 2004 Year Ended December 31, 2004

Selling and marketing expense $ Plus cost of equipment Less equipment revenue Less net loss on equipment transactions unrelated to initial customer acquisition Total costs used in the calculation of CPGA $ Gross customer additions CPGA $

23,253 $ 43,755 (37,771)

21,939 $ 40,635 (33,676)

23,574 $ 44,153 (36,521)

23,169 $ 51,019 (33,941)

91,935 179,562 (141,909)

(3,667)

(3,453)

(2,971)

(5,090)

(15,181)

25,570 $ 206,941 124 $

25,445 $ 180,128 141 $

28,235 $ 200,315 141 $

35,157 $ 220,484 159 $

114,407 807,868 142

CCU - The following table reconciles total costs used in the calculation of CCU to cost of service, which we consider to be the most directly comparable GAAP financial measure to CCU. The financial data for the three months ended September 30, 2004 and for the year ended December 31, 2004 presented below represents the combination of the Predecessor and Successor Companies' results for those periods (in thousands, except weighted- average number of customers and CCU):
Three Months Ended March 31, 2004 June 30, 2004 September 30, 2004 (As Restated) December 31, 2004 Year Ended December 31, 2004

Cost of service $ Plus general and administrative expense Plus net loss on equipment transactions unrelated to initial customer acquisition Total costs used in the calculation of CCU $ Weighted- average number of customers CCU $

48,000 $ 38,610

47,827 $ 33,922

51,034 $ 30,689

46,275 $ 35,403

193,136 138,624

3,667

3,453

2,971

5,090

15,181

90,277 $ 1,498,449 20.08 $

85,202 $ 1,537,957 18.47 $

84,694 $ 1,536,314 18.38 $

86,768 $ 1,543,362 18.74 $

346,941 1,529,020 18.91

Liquidity and Capital Resources Our principal sources of liquidity are our existing cash, cash equivalents and short- term investments, cash generated from operations, and cash available from borrowings under our revolving credit facility. From time to time, we may also generate additional liquidity through the sale of assets that are not required for the on- going operation of our business. We may also generate liquidity from offerings of debt and/or equity in the capital markets. At December 31, 2004, we had a total of $254.2 million in unrestricted cash, cash equivalents and short- term investments. As of December 31, 2004, we also had restricted cash, cash equivalents and short- term investments of $31.4 million that included funds set aside or pledged to satisfy remaining administrative claims and priority claims against Leap and the Cricket Companies, and cash restricted for other purposes. We believe that our existing cash and investments, anticipated cash flows from operations, and available credit facilities will be sufficient to meet our operating and capital requirements through at least the next 12 months. 40

Table of Contents Operating Activities Cash provided by operating activities was $190.4 million during the year ended December 31, 2004 compared to cash provided by operating activities of $44.4 million during the year ended December 31, 2003. The increase was primarily attributable to a decrease in the net loss, offset by adjustments for non- cash items including depreciation, amortization and non- cash interest expense of $92.0 million, a $55.6 million reduction in changes in working capital compared to the corresponding period of the prior year and a decrease of $109.6 million in cash used for reorganization activities. Cash used for reorganization items consisted primarily of a cash payment to the Leap Creditor Trust in accordance with the Plan of Reorganization of $1.0 million and payments of $8.0 million for professional fees for legal, financial advisory and valuation services directly associated with our Chapter 11 filings and reorganization process, offset by $2.0 million of cash received from vendor settlements (net of cure payments) made in connection with assumed and settled executory contracts and leases, and $1.5 million of interest income earned while the Company was in bankruptcy. Investing Activities Cash used in investing activities was $96.6 million during the year ended December 31, 2004 and consisted primarily of the sale and maturity of investments of $90.8 million, a net decrease in restricted investments of $22.3 million and net proceeds from the sale of wireless licenses of $2.0 million, offset by the purchase of investments of $134.5 million and the purchase of property and equipment of $77.2 million. Financing Activities Cash used in financing activities during the year ended December 31, 2004 was $36.7 million which consisted of the partial repayment of the FCC debt upon our emergence from bankruptcy. Credit Facilities In connection with the Plan of Reorganization, all of our pre- petition indebtedness, other than indebtedness owed to the FCC, was cancelled in full. This discharged indebtedness included approximately $1.6 billion net book value of debt outstanding under Cricket's senior secured vendor credit facilities and approximately $738.2 million net book value of debt outstanding under Leap's senior notes, senior discount notes, note payable to GLH, Inc. and Qualcomm term loan. On January 10, 2005, Cricket entered into a new senior secured credit agreement referred to as the Credit Agreement, with a syndicate of lenders and Bank of America, N.A. (as administrative agent and letter of credit issuer). The new facilities under the Credit Agreement consist of a six- year $500 million term loan, which was fully drawn at closing, and a five- year $110 million revolving credit facility, which was undrawn at closing. At April 30, 2005, there were no borrowings outstanding under the revolving credit facility. In January 2005, we used a portion of the proceeds from the $500 million term loan to redeem Cricket's 13% senior secured pay- in- kind notes for $372.8 million (including call premium) plus accrued interest of $20.1 million, to repay approximately $41 million in principal amount of debt and accrued interest owed to the FCC, and to pay transaction fees and expenses of $6.4 million. The balance of the proceeds of approximately $60 million will be used for general corporate purposes. For a description of the terms of the revolving credit facility and term loan under the Credit Agreement, see "- New Credit Agreement" below. Capital Expenditures and Other Asset Acquisitions and Dispositions During the year ended December 31, 2004, we incurred approximately $77.2 million in capital expenditures. We currently expect to incur between $175 million and $230 million in capital expenditures for the year ending December 31, 2005, primarily for maintenance and improvement of our existing wireless networks, for the build- out and launch of the Fresno, California market and the related expansion and network change- out of the Company's existing Visalia and Modesto/ Merced markets, and costs associated with the initial development of markets covered by licenses acquired or to be acquired as a result of Auction #58 (including costs to be incurred by ANB 1 in connection with the initial development of licenses ANB 1 41

Table of Contents expects to acquire as a result of its participation in Auction #58, because our investment in ANB 1 is required to be consolidated under FIN No. 46R). We expect to finance these $175 to $230 million of capital expenditures with our existing cash, cash equivalents and short- term investments, cash obtained from borrowings under our revolving credit facility and cash generated from operations and other transactions. Cricket has agreed to purchase a wireless license to provide service in Fresno, California for approximately $27.1 million (of which $1.8 million was paid as a deposit as of December 31, 2004), plus the reimbursement of certain construction expenses not to exceed $500,000. We have begun to invest significant resources in building out this market. Our application to the FCC for consent to acquire this license, although initially opposed by a third party involved in the bankruptcy of the seller, was granted on May 13, 2005. We currently expect that the capital expenditures for the build- out and launch of the Fresno market, as well as for the related expansion of the Visalia and Modesto/ Merced markets, will be between $20- $25 million (excluding the cost of purchasing the license). Additional cash requirements for the launch are expected to be less than $8 million. We expect to finance these costs in 2005 with our existing cash, cash equivalents and short- term investments, cash obtained from borrowings under our revolving credit facility and cash generated from operations and other transactions. In February 2005, our wholly- owned subsidiary, Cricket Licensee (Reauction), Inc., was named the winning bidder in the FCC's Auction #58 for four wireless licenses covering approximately 11.1 million potential customers. In March 2005, we paid $151.9 million to the FCC, increasing the total amount paid to the FCC for Auction #58 to $166.9 million, the aggregate purchase price for the four licenses. The FCC approved the grants of these licenses on May 13, 2005. In addition, in November 2004 we acquired a 75% non- controlling membership interest in Alaska Native Broadband 1 LLC, or ANB 1, whose wholly- owned subsidiary Alaska Native Broadband 1 License LLC, or ANB 1 License, was named the winning bidder in Auction #58 for nine wireless licenses covering approximately 10.1 million potential customers. In March 2005, we made a $3.0 million equity contribution to ANB 1, which in turn contributed such amounts to ANB 1 License. Also in March 2005, we made loans under our senior secured credit facility with ANB 1 License in the aggregate amount of $56.2 million. ANB 1 License paid such monies to the FCC, together with a $1.0 million equity contribution from its controlling member, Alaska Native Broadband, LLC, to increase its total amounts paid to the FCC to $68.2 million, the aggregate purchase price for its nine licenses. Under our senior secured credit facility with ANB 1 License, we have committed to loan ANB 1 License up to $4.5 million in additional funds to finance its initial build- out costs and working capital requirements. ANB 1 License will need to obtain additional capital from Cricket or another third party to build out and launch its networks. For a description of the terms of the ANB 1 limited liability company agreement and our senior secured credit facility with ANB 1 License, see "Item 1. Business - Arrangements with Alaska Native Broadband." We currently expect to build out and launch commercial operations in the markets covered by the licenses we expect to acquire as a result of Auction #58. We are currently developing plans for such build- outs. We expect that we will seek additional capital to increase our liquidity and help assure we have sufficient funds for the build- out and initial operation of the new markets. In March 2005, subsidiaries of Leap signed an agreement to sell 23 wireless licenses and our operating assets in our Michigan markets for $102.5 million. Completion of the transaction is subject to FCC approval and other customary closing conditions, including obtaining third party consents and finalizing a transition services agreement. Although we expect to receive such approval and satisfy such conditions, we cannot assure you that the FCC will grant such approval or that the other conditions will be satisfied. In March 2005, we also announced an agreement for the sale of approximately 140 cell towers and cell tower related assets for approximately $18 million. Under the agreement, we will lease back space at the tower sites for our networks. The closing of the sale is subject to the purchaser's completion of due diligence and other conditions customary for a sale of this type. 42

Table of Contents Certain Contractual Obligations, Commitments and Contingencies The table below summarizes information as of December 31, 2004 regarding certain future minimum contractual obligations for Leap and the Cricket Companies for the next five years and thereafter (in thousands):
Year Ended December 31, Total 2005 2006 2007 2008 2009 Thereafter

Long- term debt(1) $ Fresno license purchase Origination fees for ANB 1 investment Operating leases Total $

389,979 $ 25,800

39,979 $ 25,800

- $ -

- $ -

- $ -

- $ -

350,000 -

5,500 180,078 601,357 $

5,500 54,745 126,024 $

33,941 33,941 $

18,457 18,457 $

15,950 15,950 $

13,122 13,122 $

43,863 393,863

(1)

Amounts shown for Cricket's senior secured pay- in- kind notes and U.S. government financing include principal only. As noted elsewhere in this report, this debt was repaid in January 2005. Subsequent to December 31, 2004, we incurred the following additional contractual obligations which are not included in the table above: Future minimum contractual obligations for the $500 million term loan under the new credit facilities executed on January 10, 2005, consisting of principal payments of $5.0 million for each year 2005 through 2009 and $475.0 million in 2010.

Contractual obligations to purchase wireless licenses for which we were the winning bidder in Auction #58 for an aggregate purchase price of approximately $166.9 million; we increased our payment to the FCC to $166.9 million, the full amount of the purchase price, in March 2005. The table above also does not include the following contractual obligations relating to ANB 1, a company which we consolidate under FIN No. 46- R: (1) Cricket's obligation to contribute to ANB 1 $3.0 million in equity capital, which contribution was made in March 2005; (2) Cricket's obligation to loan up to $84.5 million to ANB 1 License to finance its purchase of wireless licenses in Auction #58, under which $56.2 million was loaned to ANB 1 License in March 2005 in full satisfaction of such contractual obligations; (3) Cricket's obligation to loan to ANB 1 License up to $4.5 million to finance its initial build- out costs and working capital requirements, which commitment remained undrawn at April 30, 2005; and (4) Cricket's obligation to pay $2.0 million to ANB if ANB exercises its right to sell its membership interests in ANB 1 to Cricket following the initial build- out of ANB 1 License's wireless licenses. Off- Balance Sheet Arrangements We had no material off- balance sheet arrangements at December 31, 2004. New Credit Agreement On January 10, 2005, we entered into a new senior secured Credit Agreement with a syndicate of lenders and Bank of America, N.A. (as administrative agent and letter of credit issuer). The facilities under the new Credit Agreement consist of a six- year $500 million term loan, which was fully drawn at closing, and a five- year $110 million revolving credit facility, which was undrawn at closing. Under the Credit Agreement, the term loan bears interest at LIBOR plus 2.5 percent, with interest periods of one, two, three or six months, or bank base rate plus 1.5 percent, as selected by Cricket. Outstanding borrowings under the term loan must be repaid in 20 quarterly payments of $1.25 million each, commencing March 31, 2005, followed by four quarterly payments of $118.75 million each, commencing March 31, 2010. The commitment of the lenders under the $110 million revolving credit facility may be reduced in the event mandatory prepayments are required under the Credit Agreement and by one- twelfth of the original aggregate 43

Table of Contents revolving credit commitment on January 1, 2008 and by one- sixth of the original aggregate revolving credit commitment on January 1, 2009 (each such fractional reduction to be net of all prior reductions) based on certain leverage ratios and other tests. The commitment fee on the revolving credit facility is payable quarterly at a rate of 1.0 percent per annum when the utilization of the facility (as specified in the Credit Agreement) is less than 50 percent and at 0.75 percent per annum when the utilization exceeds 50 percent. Borrowings under the revolving credit facility will accrue interest at LIBOR plus 2.5 percent, with interest periods of one, two, three or six months, or bank base rate plus 1.5 percent, as selected by Cricket, with the rate subject to adjustment based on our leverage ratio. The new credit facilities are guaranteed by Leap and all of its direct and indirect domestic subsidiaries (other than ANB 1 and its subsidiary) and are secured by all present and future personal property and owned real property of Leap, Cricket and all of their direct and indirect domestic subsidiaries. Proceeds from the term loan borrowing were used by us to redeem Cricket's $350 million 13% senior secured pay- in- kind notes, to pay approximately $43 million of call premium and accrued interest on such notes, to repay approximately $41 million in principal amount of debt and accrued interest owed to the FCC, and to pay transaction fees and expenses. The remaining proceeds from the term loan borrowing of approximately $60 million will be used for general corporate purposes. Under the Credit Agreement, we are subject to certain limitations, including limitations on our ability: (1) to incur additional debt or sell assets, with restrictions on the use of proceeds; (2) to make certain investments and acquisitions; (3) to grant liens; and (4) to pay dividends and make certain other restricted payments. In addition, we will be required to pay down the facilities under certain circumstances if we issue debt or equity, sell assets or property, receive certain extraordinary receipts or generate excess cash flow (as defined in the Credit Agreement). We are also required to maintain compliance with financial covenants which include a minimum interest coverage ratio, a maximum total leverage ratio, a maximum senior secured leverage ratio and a minimum fixed charge coverage ratio. Affiliates of Highland Capital Management, L.P. (a beneficial shareholder of Leap and an affiliate of James D. Dondero, a director of Leap) participated in the syndication of our new Credit Agreement in the following amounts: $100 million of the $500 million term loan and $30 million of the $110 million revolving credit facility. On April 15, 2005, we obtained a waiver of certain defaults and potential defaults under the Credit Agreement. We had not completed the preparation of our audited financial statements for the year ended December 31, 2004 by March 31, 2005 and, as a result, we were not able to deliver such financial statements to the administrative agent under the Credit Agreement by such date. The failure to deliver such financial statements by March 31, 2005 was a default under the Credit Agreement. Accordingly, we have requested and received from the required lenders under the Credit Agreement a waiver of our obligations to provide such audited financial statements to the administrative agent until May 16, 2005. The waiver also extended our obligation to provide our unaudited financial statements for the quarter ended March 31, 2005 to the administrative agent until June 15, 2005, and waived any default that may occur under the Credit Agreement if we amend our financial statements for the fiscal quarter ended September 30, 2004 or for any earlier period, provided that (i) such amendment does not reduce EBITDA, as defined in the Credit Agreement, to less than $217 million for the four quarters ended September 30, 2004 and (ii) neither "Indebtedness," as defined in the Credit Agreement, nor total liabilities, each as reflected in any such amended financial statements, may be more than $10 million greater than the amounts previously reported by us in the original financial statements for the corresponding period. We expect that we will meet all of the requirements of the waiver in a timely manner. Critical Accounting Policies and Estimates Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements which have been prepared in accordance with GAAP. These principles require us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. On an 44

Table of Contents ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition and the valuation of long- lived and intangible assets. We base our estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results may differ from our estimates. We believe that the following significant accounting policies and estimates involve a higher degree of judgment and complexity than others. Revenues and Cost Recognition Cricket's business revenues arise from the sale of wireless services, handsets and accessories. Wireless services are generally provided on a month- to- month basis. Amounts received in advance for wireless services from customers who pay in advance are initially recorded as deferred revenues and are recognized as service revenue as services are rendered. Because we do not require any of our customers to sign long- term service commitments or submit to a credit check, some of our customers may be more likely to terminate service for inability to pay than the customers of other wireless providers. Accordingly, service revenues for customers who pay in arrears are recognized only after the service has been rendered and payment has been received. We also charge customers for service plan changes, activation fees and other service fees. Revenues from service plan change fees are deferred and recorded to revenue over the estimated customer relationship period, and other service fees are recognized when received. Upon our adoption of EITF Issue No. 00- 21, "Accounting for Revenue Arrangements with Multiple Deliverables," on July 1, 2003, we began allocating activation fees to the other elements of the multiple element arrangement on a relative fair value basis. Because the fair values of our handsets are higher than the total consideration received for the handsets and activation fees combined, we allocate the activation fees entirely to equipment revenues and recognize the activation fees when received. Direct costs associated with customer activations are expensed as incurred. Cost of service generally includes direct costs and related overhead, excluding depreciation and amortization, of operating our networks. Equipment revenues arise from the sale of handsets and accessories. Revenues and related costs from the sale of handsets are recognized when service is activated by customers. Revenues and related costs from the sale of accessories are recognized at the point of sale. The costs of handsets and accessories sold are recorded in cost of equipment. Amounts due from third- party dealers and distributors for handsets are recorded as deferred revenue upon shipment of the handsets by us to such dealers and distributors and are recognized as equipment revenues when service is activated by customers. Handsets sold by third- party dealers and distributors are recorded as inventory until they are sold to and activated by customers. Sales incentives offered without charge to customers and volume- based incentives paid to our third- party dealers and distributors are recognized as a reduction of revenue and as a liability when the related service or equipment revenue is recognized. Customers have limited rights to return handsets and accessories based on time and/or usage. We record an estimate for returns of handsets and accessories at the time of recognizing revenue. Returns of handsets and accessories have historically been insignificant. Wireless Licenses Wireless licenses are initially recorded at cost (i.e., the purchase price paid for the wireless licenses at the time of acquisition, together with other capitalized costs including legal costs and microwave relocation costs). We have determined that our wireless licenses meet the definition of indefinite- lived intangible assets under SFAS No. 142 because we expect to continue to provide wireless service using the relevant licenses for the foreseeable future and the wireless licenses may be renewed every ten years for a nominal fee, provided that we continue to meet the service and geographic coverage provisions required by the FCC. Therefore, upon the adoption of SFAS No. 142 on January 1, 2002, we ceased amortizing our wireless license costs. Goodwill and Other Intangible Assets Goodwill represents the excess of reorganization value over the fair value of identified tangible and intangible net assets recorded in connection with fresh- start accounting. Other intangible assets were recorded 45

Table of Contents upon adoption of fresh- start accounting and consist of trademarks, which are being amortized on a straight- line basis over their estimated useful lives of fourteen years, and customer relationships, which are being amortized on a straight- line basis over their estimated useful lives of four years. Impairment of Indefinite- Lived Intangible Assets In accordance with SFAS No. 142, we assess potential impairments to our indefinite- lived intangible assets, including goodwill and wireless licenses, annually and when there is evidence that events or changes in circumstances indicate that an impairment condition may exist. We have chosen to conduct our annual test for impairment during the third quarter of each year. An impairment loss is recognized when the fair value of the asset is less than its carrying value, and would be measured as the amount by which the asset's carrying value exceeds its fair value. Any required impairment loss would be recorded as a reduction in the carrying value of the related asset and charged to results of operations. Estimates of fair value of our wireless licenses are based primarily on available market prices, including successful bid prices in FCC auctions and selling prices observed in wireless license transactions. We previously adopted EITF Issue No. 02- 07, "Unit of Accounting for Testing Impairment of Indefinite- Lived Intangible Assets." EITF Issue No. 02- 07 requires that separately recorded indefinite- lived intangible assets be combined into a single unit of accounting for purposes of testing impairment if they are operated as a single asset and, as such, are essentially inseparable from one another. Management concluded that our wireless licenses in our operating markets should be combined into a single unit of accounting because these wireless licenses as a group represent the highest and best use of the assets, and that the value of the wireless licenses would not be significantly impacted by a sale of one or a portion of the wireless licenses, among other factors. Impairment of Long- Lived Assets In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long- Lived Assets," we assess potential impairments to our long- lived assets, including property and equipment and certain intangible assets, when there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss may be required to be recognized when the undiscounted cash flows expected to be generated by a long- lived asset (or group of such assets) is less than its carrying value. Any required impairment loss would be measured as the amount by which the asset's carrying value exceeds its fair value and would be recorded as a reduction in the carrying value of the related asset and charged to results of operations. Income Taxes The Company calculates income tax expense for each jurisdiction in which it operates. This process involves calculating the actual current tax liability together with deferred income taxes associated with temporary differences resulting from differing treatments of items for tax and accounting purposes. The Company must then assess the likelihood that its deferred tax assets will be recovered from future taxable income. To the extent that the Company believes that recovery is not likely, it must establish a valuation allowance. Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. The Company has recorded a full valuation allowance on its net deferred tax asset balances for all periods presented because of its history of losses and due to uncertainties related to utilization of deferred tax assets. At such time as it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be reduced with a corresponding offset to goodwill. Recent Accounting Pronouncements In December 2004, the FASB issued Statement No. 123R, "Share- Based Payment," which revises SFAS No. 123. SFAS No. 123R requires that a company measure the cost of equity- based service awards based on the grant- date fair value of the award (with limited exceptions). That cost will be 46

Table of Contents recognized as compensation expense over the period during which an employee is required to provide service in exchange for the award or the requisite service period (usually the vesting period). No compensation expense is recognized for the cost of equity- based awards for which employees do not render the requisite service. A company will initially measure the cost of each liability based service award based on the award's initial fair value; the fair value of that award will be remeasured subsequently at each reporting date through the settlement date. Changes in fair value during the requisite service period will be recognized as compensation expense over that period. The grant- date fair value of employee stock options and similar instruments will be estimated using option- pricing models adjusted for the unique characteristics of those instruments. If an equity- based award is modified after the grant date, incremental compensation expense will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. Adoption of SFAS No. 123R is required for our first quarter beginning January 1, 2006. We have not yet determined the impact that the adoption of SFAS No. 123R will have on our consolidated financial position or our results of operations. On December 15, 2004 the FASB issued Statement No. 153, "Exchanges of Nonmonetary Assets," and amended Accounting Principles Board Opinion No. 29, "Accounting for Nonmonetary Transactions." SFAS No. 153 is based on the principle that nonmonetary asset exchanges should be recorded and measured at the fair value of the assets exchanged, with certain exceptions. This standard requires exchanges of productive assets to be accounted for at fair value, rather than at carryover basis, unless (1) neither the asset received nor the asset surrendered has a fair value that is determinable within reasonable limits or (2) the transactions lack commercial substance (as defined). In addition, the Board decided to retain the guidance in APB 29 for assessing whether the fair value of a nonmonetary asset is determinable within reasonable limits. Adoption of SFAS No. 153 is required for nonmonetary exchanges occurring in the third quarter beginning July 1, 2005. We have not yet determined the impact that the adoption of SFAS No. 153 will have on our consolidated financial position or our results of operations. In March 2004, the FASB ratified the consensus of the EITF regarding the recognition and measurement of other- than temporary impairments of certain investments. The effective date of the recognition and measurement guidance in EITF Issue No. 03- 01, "The Meaning of Other- ThanTemporary Impairment and Its Application to Certain Investments," has been delayed until the implementation guidance provided by a FASB staff position on the issue has been finalized. The disclosure guidance was unaffected by the delay and is effective for fiscal years ending after June 15, 2004. We implemented the disclosure provisions of EITF Issue No. 03- 01 in our annual financial statements for the fiscal year ended December 31, 2004 and do not anticipate that the implementation of the recognition and measurement guidance, when released, will have a material effect on our consolidated financial position or our results of operations. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk. Pursuant to the Plan of Reorganization, the Company emerged from bankruptcy with fixed rate debt only. On January 10, 2005 we refinanced our fixed rate debt with floating rate debt. As a result, changes in interest rates would not significantly affect the fair value of the debt. The terms of the Credit Agreement require that we enter into interest rate hedging agreements in an amount equal to at least 50% of our outstanding indebtedness for borrowed money. In accordance with this requirement, we entered into an interest rate hedging agreement with respect to $250 million of our debt in April 2005. After completion of the refinancing, our outstanding floating rate debt totaled $500 million. The primary base interest rate is the three month LIBOR. Assuming the outstanding balance on the new floating rate debt remains constant over a year, a 100 basis point increase in the interest rate would increase pre- tax loss and decrease cash flow by $5 million. Hedging Policy. Leap's policy is to maintain interest rate hedges when required by credit agreements. Leap does not currently engage in any hedging activities against foreign currency exchange rates. 47

Table of Contents Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Leap Wireless International, Inc.: In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of cash flows and of stockholders' equity present fairly, in all material respects, the financial position of Leap Wireless International, Inc. and its subsidiaries (Successor Company) at December 31, 2004 and the results of their operations and their cash flows for the period from August 1, 2004 to December 31, 2004 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As discussed in Note 1 to the consolidated financial statements, the United States Bankruptcy Court for the Southern District of California confirmed the Company's Fifth Amended Joint Plan of Reorganization (the "plan") on October 22, 2003. Consummation of the plan terminated all rights and interests of equity security holders as provided for in the plan. The plan was consummated on August 16, 2004 and the Company emerged from bankruptcy. In connection with its emergence from bankruptcy, the Company adopted fresh- start accounting as of July 31, 2004. PricewaterhouseCoopers LLP San Diego, California May 16, 2005 48 Item 8.

Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Leap Wireless International, Inc.: In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of cash flows and of stockholders' equity (deficit) present fairly, in all material respects, the financial position of Leap Wireless International, Inc. and its subsidiaries (Predecessor Company) at December 31, 2003 and the results of their operations and their cash flows for the period from January 1, 2004 to July 31, 2004, and for each of the two years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in Note 1 to the consolidated financial statements, the Company and substantially all of its subsidiaries voluntarily filed a petition on April 13, 2003 with the United States Bankruptcy Court for the Southern District of California for reorganization under the provisions of Chapter 11 of the Bankruptcy Code. The Company's Plan of Reorganization was consummated on August 16, 2004 and the Company emerged from bankruptcy. In connection with its emergence from bankruptcy, the Company adopted fresh- start accounting as of July 31, 2004. PricewaterhouseCoopers LLP San Diego, California May 16, 2005 49

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEET (In thousands, except share data)
Successor Company December 31, 2004 Predecessor Company December 31, 2003

Assets Cash and cash equivalents Short- term investments Restricted cash, cash equivalents and short- term investments Funds distributed to Leap Creditor Trust (Note 1) Inventories Other current assets Total current assets Property and equipment, net Wireless licenses, net Goodwill Other intangible assets, net Other assets Total assets Liabilities and Stockholders' Equity (Deficit) Accounts payable and accrued liabilities Current maturities of long- term debt (Note 7) Other current liabilities Total current liabilities Long- term debt (Note 7) Other long- term liabilities Total liabilities Liabilities subject to compromise (Note 6) Commitments and contingencies (Notes 1 and 11) Stockholders' equity (deficit): Predecessor Company and Successor Company preferred stock - authorized 10,000,000 shares, $.0001 par value; no shares issued and outstanding Predecessor Company common stock authorized 300,000,000 shares, $.0001 par value; 58,704,224 shares issued and outstanding Successor Company common stock authorized 160,000,000 shares, $.0001 par value; 60,000,000 shares issued and outstanding Additional paid- in capital Unearned stock- based compensation Accumulated deficit Accumulated other comprehensive income (loss) Total stockholders' equity (deficit) Total liabilities and stockholders' equity (deficit)

141,141 113,083 31,427 25,816 35,144 346,611 576,352 652,653 329,619 151,461 33,786

84,070 65,811 55,954 67,800 17,680 39,145 330,460 817,075 560,056 49,252

2,090,482

1,756,843

91,093 40,373 72,741

64,485 74,112 54,923

204,207 371,355 45,070 620,632 -

193,520 55,157 248,677 2,401,522

6 1,478,392 (8,629) 81

1,156,410 (421) (2,048,431) (920)

1,469,850

(893,356)

2,090,482

1,756,843

See accompanying notes to consolidated financial statements. 50

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
Successor Company Five Months Ended December 31, 2004 Seven Months Ended July 31, 2004 (As Restated) (See Note 2) Predecessor Company

Year Ended December 31, 2003

Year Ended December 31, 2002

Revenues: Service revenues Equipment revenues Total revenues Operating expenses: Cost of service (exclusive of items shown separately below) Cost of equipment Selling and marketing General and administrative Depreciation and amortization Impairment of indefinite- lived intangible assets Impairment of longlived assets and related charges Total operating expenses Gains on sale of wireless licenses Operating income (loss) Interest income Interest expense (contractual interest expense was $156.3 million for the seven months ended July 31, 2004 and $257.5 million for the year ended December 31, 2003) Gain on sale of unconsolidated wireless operating company Other income (expense), net Loss before reorganization items and income taxes Reorganization items, net Income (loss) before income taxes Income taxes Net income (loss) Basic and diluted net income (loss) per common share $ 285,647 $ 58,713 398,451 $ 83,196 643,566 $ 107,730 567,694 50,781

344,360

481,647

751,296

618,475

(79,148) (82,402) (39,938) (57,110) (75,324)

(113,988) (97,160) (51,997) (81,514) (177,494)

(199,987) (172,235) (86,223) (162,378) (300,243)

(181,404) (252,344) (122,092) (185,915) (287,942)

(171,140)

(26,919)

(626)

(24,054)

(16,323)

(333,922) 10,438 1,812

(522,779) 532 (40,600) -

(1,116,260) 4,589 (360,375) 779

(1,072,939) 364 (454,100) 6,345

(16,594) (117)

(4,195) (293)

(83,371) (176)

(229,740) 39,518 (3,001)

(4,461) (4,461) (4,168)

(45,088) 962,444 917,356 (4,166)

(443,143) (146,242) (589,385) (8,052)

(640,978) (640,978) (23,821)

(8,629) $

913,190 $

(597,437) $

(664,799)

(0.14) $

15.58 $

(10.19) $

(14.91)

Shares used in per share calculations: Basic and diluted

60,000

58,623

58,604

44,591

See accompanying notes to consolidated financial statements. 51

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Successor Company Five Months Ended December 31, 2004 Seven Months Ended July 31, 2004 (As Restated) (See Note 2) Predecessor Company

Year Ended December 31, 2003

Year Ended December 31, 2002

Operating activities: Net income (loss) $ Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization Gain on sale of unconsolidated wireless operating company Equity in net loss of and writedown of investments in unconsolidated wireless operating company Interest accrued to loans receivable and payable, net Non- cash compensation Gains on sale of wireless licenses Reorganization items, net Change in deferred tax liability Long- lived asset impairment charge Indefinite- lived intangible asset impairment charge Other Changes in assets and liabilities: Inventories Other assets Accounts payable and accrued liabilities Other liabilities Net cash provided by (used in) operating activities before reorganization activities Net cash used for reorganization activities Net cash provided by (used in) operating activities Investing activities: Purchase of property and equipment Refund of deposits for wireless licenses Net proceeds from sale of wireless licenses Net proceeds from sale of unconsolidated wireless operating company Purchase of investments Sale and maturity of investments Restricted cash, cash equivalents and investments, net

(8,629) $

913,190 $

(597,437) $

(664,799)

75,324 -

177,494 -

300,243 -

287,942 (39,518)

16,021 3,865 8,923 (22,247)

4,166 (805) (532) (962,444) 3,370 626 (17,059) (5,343)

166 82,010 243 (4,589) 146,242 7,713 24,054 171,140 12,723 (5,910)

194,761 2,051 (364) (22,772) 16,323 26,919 993 14,935 (5,675)

(4,421) 916

4,761 8,695

24,575 (1,611)

(62,338) 67,726

69,752 -

126,119 (5,496)

159,562 (115,129)

(183,816) -

69,752

120,623

44,433

(183,816)

(43,941) (47,368) 32,494 12,537

(33,241) 2,000 (87,201) 58,333 9,810

(44,671) 4,722 (134,245) 144,188 (26,525)

(102,181) 84,731 380 38,069 (260,615) 255,735 15,345

Net cash provided by (used in) investing activities Financing activities: Proceeds from loans payable to banks and long- term debt Repayment of loans payable to banks, notes payable and long- term debt Issuance of common stock, net Payment of debt financing costs Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $

(46,278)

(50,299)

(56,531)

31,464

(36,727) -

(4,742) 50 -

35,897 (20,178) 463 (5,949)

(36,727) (13,253) 154,394 141,141 $

70,324 84,070 154,394 $

(4,692) (16,790) 100,860 84,070 $

10,233 (142,119) 242,979 100,860

See accompanying notes to consolidated financial statements. 52

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (In thousands, except share data)
Accumulated Other Comprehensive Income (Loss)

Common Stock Shares Amount

Additional Paid- In Capital

Unearned Stock- Based Compensation

Accumulated Deficit

Total

Predecessor Company balance at December 31, 2001 Components of comprehensive loss: Net loss Foreign currency translation adjustment Net unrealized holding losses on investments Total comprehensive loss Issuance of common stock: Arbitration award Employee stock options and benefit plans Unearned stock- based compensation Amortization of stock- based compensation Predecessor Company balance at December 31, 2002 Components of comprehensive loss: Net loss Net unrealized holding gains on investments Total comprehensive loss Issuance of common stock: Stock issued to employees Employee stock options and benefit plans Unearned stock- based compensation Amortization of stock- based compensation Predecessor Company balance at December 31, 2003 Components of comprehensive income: Net income, As Restated Net unrealized holding gains on investments

36,979,664 $

4 $

1,148,337 $

(5,138) $

(786,195) $

1,432 $ 358,440

(664,799) -

(1,449)

(664,799) (1,449)

(1,174)

(1,174)

(667,422)

21,020,431

8,658

8,660

704,094 -

2,967 (3,583) -

3,583 569

2,967 569

58,704,189

1,156,379

(986)

(1,450,994)

(1,191)

(296,786)

(597,437)

(597,437)

271

271

(597,166)

35

353 (322) -

322 243

353 243

58,704,224

1,156,410

(421)

(2,048,431)

(920)

(893,356)

913,190

913,190

47 -

47 913,237

Total comprehensive income, As Restated Issuance of common stock: Employee stock options and benefit plans Unearned stock- based compensation Amortization of stock- based compensation Application of fresh- start reporting: Elimination of Predecessor equity securities, As Restated Issuance of Successor equity securities and fresh- start adjustments, As Restated Successor Company balance at August 1, 2004 Components of comprehensive loss: Net loss Net unrealized holding gains on investments Total comprehensive loss Successor Company balance at December 31, 2004

31 (1,205) -

1,205 (837)

31 (837)

(58,704,224)

(6)

(1,155,236)

53

873 (1,154,316)

60,000,000

1,478,392

1,135,241

2,613,639

60,000,000

1,478,392

1,478,398

(8,629)

(8,629)

81

81

(8,548)

60,000,000 $

6 $

1,478,392 $

- $

(8,629) $

81 $ 1,469,850

See accompanying notes to consolidated financial statements. 53

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. The Company and its Emergence from Chapter 11 Leap Wireless International, Inc. ("Leap"), a Delaware corporation, together with its wholly owned subsidiaries, is a wireless communications carrier that offers digital wireless service in the United States under the brand "Cricket." Leap conducts operations through its subsidiaries and has no independent operations or sources of operating revenue other than through dividends, if any, from its operating subsidiaries. Cricket service is operated by Leap's wholly owned subsidiary, Cricket Communications, Inc. ("Cricket"). Cricket and its subsidiaries that operate Cricket's wireless communications business are collectively referred to herein as the "Cricket Companies." Leap and the Cricket Companies are collectively referred to herein as "the Company." As of December 31 2004, the Company provided wireless service in 39 markets. As discussed in Note 3, references in these financial statements to "Predecessor Company" refer to the Company on or prior to July 31, 2004. References to "Successor Company" refer to the Company after July 31, 2004, after giving effect to the implementation of fresh- start reporting. The Company believes that its existing cash and investments, anticipated cash flows from operations, and available credit facilities will be sufficient to meet its operating and capital requirements through the next 12 months. Chapter 11 Proceedings Under the Bankruptcy Code On April 13, 2003 (the "Petition Date"), Leap, Cricket and substantially all of their subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code ("Chapter 11") in the United States Bankruptcy Court for the Southern District of California (the "Bankruptcy Court") (jointly administered as Case Nos. 03- 03470- A11 to 03- 03535- A11). While in bankruptcy, each of the debtors continued to manage its properties and operate its business as a "debtor- in- possession" under the jurisdiction of the Bankruptcy Court and in accordance with Sections 1107(a) and 1108 of Chapter 11. On October 22, 2003, the Bankruptcy Court entered an order confirming the Fifth Amended Joint Plan of Reorganization dated as of July 30, 2003, including certain technical amendments thereto (the "Plan of Reorganization"), of Leap, Cricket and their debtor subsidiaries. The effectiveness of the Plan of Reorganization was conditioned upon, among other things, the receipt of required regulatory approvals from the Federal Communications Commission (the "FCC") for the transfer of wireless licenses associated with the change of control that occurred upon Leap's emergence from bankruptcy. Leap received the requisite approvals from the FCC on August 5, 2004. On August 16, 2004 (the "Effective Date"), Leap and Cricket satisfied the remaining conditions to the Plan of Reorganization, the Plan of Reorganization became effective, and the Company emerged from Chapter 11 bankruptcy. The Plan of Reorganization implemented a comprehensive financial reorganization that significantly reduced the Company's outstanding indebtedness. On the Effective Date of the Plan of Reorganization, the Company's long- term debt was reduced from a book value of more than $2.4 billion to debt with an estimated fair value of $412.8 million, consisting of new Cricket 13% senior secured pay- in- kind notes due 2011 with a face value of $350 million and an estimated fair value of $372.8 million, issued on the Effective Date, and approximately $40 million of remaining indebtedness to the FCC (net of the repayment of $45 million of principal and accrued interest to the FCC on the Effective Date). The following is a summary of the material actions that occurred as of the Effective Date of the Plan of Reorganization: A new board of directors of Leap was appointed. All of the outstanding shares of Leap common stock, warrants and options were cancelled. The holders of Leap common stock, warrants and options did not receive any distributions under the Plan of Reorganization. 54

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Leap issued 60 million shares of new Leap common stock for distribution to two classes of the Company's creditors, as described below. Leap also issued warrants to purchase 600,000 shares of new Leap common stock pursuant to a settlement agreement. The holders of Cricket's senior secured vendor debt claims received, on a pro rata basis, 96.5% of the issued and outstanding shares of new Leap common stock, or an aggregate of 57.9 million shares, as well as new Cricket 13% senior secured pay- in- kind notes due 2011. The notes were guaranteed by Leap and its direct and indirect domestic subsidiaries and the notes were secured by all of their personal property and owned real property. As discussed in Note 15 of these consolidated financial statements, Cricket redeemed these notes in January 2005. The Leap Creditor Trust, which was formed for the benefit of Leap's general unsecured creditors as contemplated by the Plan of Reorganization, received 3.5% of the issued and outstanding shares of new Leap common stock, or 2.1 million shares, for distribution to holders of allowed Leap general unsecured claims on a pro rata basis. Leap also transferred other assets as specified in the Plan of Reorganization, which were to be liquidated by the Leap Creditor Trust, with the cash proceeds from such liquidation to be distributed to the holders of allowed Leap general unsecured claims. These other assets included a $35 million note receivable from Endesa, S.A., currently in litigation in Chile, nine wireless licenses with a net book value of approximately $1.1 million at August 16, 2004, Leap's equity interest in IAT Communications, Inc. which had no carrying value at August 16, 2004, certain causes of action, and approximately $2.3 million of cash. Prior to August 16, 2004, Leap had transferred $68.8 million of funds to the Leap Creditor Trust to be distributed to holders of allowed Leap general unsecured claims. Certain executory contracts and unexpired leases were assumed by the reorganized debtors, with reorganized Cricket responsible for paying the cure amounts associated with such contracts and leases. The holders of general unsecured claims against Cricket and Leap's other direct and indirect subsidiaries received no distributions under the Plan of Reorganization. All of the debtors' pre- petition indebtedness, other than indebtedness owed to the FCC, was cancelled in full, including approximately $1.6 billion net book value of debt outstanding under Cricket's senior secured vendor credit facilities and approximately $738.2 million net book value of debt outstanding under Leap's 12.5% senior notes ("Senior Notes"), 14.5% senior discount notes ("Senior Discount Notes"), note payable to GLH, Inc. ("GLH") and Qualcomm term loan. The Company paid the FCC approximately $36.7 million of unpaid principal and approximately $8.3 million of accrued interest in connection with the reinstatement of the Company's FCC debt, and approximately $278,000 of unjust enrichment penalties. The Company agreed to repay the approximately $40 million remaining outstanding principal amount of FCC debt, plus accrued interest, in installments scheduled for April and July 2005. As discussed in Note 15 of these consolidated financial statements, the Company repaid the remaining FCC debt in January 2005. Leap entered into a Registration Rights Agreement with Highland Capital Management, L.P. (a beneficial shareholder of Leap and an affiliate of James D. Dondero, a director of Leap) and MHR Institutional Partners II LP and MHR Institutional Partners IIA LP (beneficial shareholders of Leap and affiliates of Dr. Mark H. Rachesky, a director of Leap) pursuant to which Leap granted demand registration rights to such entities and agreed to prepare and file a resale shelf registration statement relating to the shares of new Leap common stock received by such entities under the Plan of Reorganization. Also, on the Effective Date of the Plan of Reorganization, Leap, Cricket and their subsidiaries implemented certain restructuring transactions intended to streamline their corporate structure. As a result, 55

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Leap owns 100% of the issued and outstanding shares of reorganized Cricket and certain other reorganized subsidiaries, and Cricket owns 100% of the issued and outstanding shares of each of the reorganized wireless license holding companies and the reorganized property holding companies. Cash held in reserve by Leap immediately prior to the Effective Date of the Plan of Reorganization that remains following satisfaction of all allowed administrative claims and allowed priority claims against Leap will be distributed to the Leap Creditor Trust. At December 31, 2004, approximately $9.6 million remained in reserve by Leap and was included in restricted cash. On the same date, Cricket had restricted cash and cash equivalents of $20.8 million that included funds set aside or pledged to satisfy payments and administrative and priority claims against the Cricket Companies following their emergence from bankruptcy, and cash restricted for other purposes. Accounting Under Chapter 11 As of the Petition Date, the Company implemented American Institute of Certified Public Accountants' Statement of Position ("SOP") 90- 7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code." SOP 90- 7 requires that the Company's pre- petition liabilities that were subject to compromise be reported separately on the balance sheet at an estimate of the amount that would ultimately be allowed by the Bankruptcy Court. SOP 90- 7 also requires separate reporting of certain expenses, realized gains and losses and provisions for losses related to the Chapter 11 filings as reorganization items. In addition, commencing as of the Petition Date and continuing while in bankruptcy, the Company ceased accruing interest and amortizing debt discounts and debt issuance costs for its pre- petition debt that was subject to compromise, which included its Senior Notes, Senior Discount Notes, senior secured vendor credit facilities, note payable to GLH and Qualcomm term loan. In accordance with SOP 90- 7, changes in accounting principles required to be adopted under accounting principles generally accepted in the United States within twelve months of emerging from bankruptcy are required to be adopted at the date of emergence. However, there were none that had a significant effect on the Company's financial statements as of the date of emergence. Note 2. Summary of Significant Accounting Policies Restatement of Previously Reported Unaudited Interim Consolidated Financial Information Restatement adjustments relating to the Predecessor Company as of July 31, 2004, the date of adoption of fresh- start reporting, and for the one and seven month periods then ended: In connection with the Company's emergence from bankruptcy and adoption of fresh- start reporting, the Company overstated its liabilities by a net amount of $4.9 million as of July 31, 2004. The adjustments necessary to correct these overstatements include: reversing $3.0 million related to the inadvertent duplicate recording of liabilities to certain creditors upon recording the effect of the Plan of Reorganization; recording the discharge through the Chapter 11 proceeding of $1.7 million of vendor obligations; reducing deferred revenue by $3.5 million to its fair value as of the freshstart date, an adjustment to correct errors arising from inadequate account reconciliation procedures; and reducing $4.8 million of deferred rent liability to $0 as required by fresh- start reporting. The two following additional adjustments partially offset the impact of these items. In connection with a review of the Company's leases, management determined that incorrect assumptions, principally related to the expected remediation date, were used to estimate and record the liability for future asset retirement obligations, resulting in a $7.9 million understatement of the liability as of July 31, 2004. Management also determined that the deferred income tax liability associated with wireless licenses revalued upon the adoption of fresh- start reporting was understated by $0.2 million. The per share effects of each of the above adjustments were not material. 56

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The impact of the above adjustments required to correct the errors in the Predecessor Company consolidated financial statements as of and for the seven month period ended July 31, 2004 was as follows (in thousands):
As of July 31, 2004 Previously Reported (Unaudited)

As Restated

Consolidated Balance Sheet Data: Goodwill and other intangible assets Accounts payable and accrued liabilities Other current liabilities Other long- term liabilities

$ $ $ $

500,548 99,168 84,811 14,440

$ $ $ $

495,619 95,314 74,601 23,577

Seven Months Ended July 31, 2004 Previously Reported (Unaudited)

As Restated

Consolidated Statement of Operations Data: Reorganization gain, net Net income Basic and diluted net income per common share

$ $ $

957,516 908,262 15.49

$ $ $

962,444 913,190 15.58

The impact of the above adjustments required to correct the errors relating to the unaudited interim financial information of the Predecessor Company presented in Note 16, Quarterly Financial Data, for the one month period ended July 31, 2004 was as follows (in thousands):
One Month Ended July 31, 2004 Previously Reported (Unaudited)

As Restated (Unaudited)

Revenues Operating loss Net income Basic and diluted net income per common share

$ $ $ $

69,124 (3,335) 954,437 16.28

$ $ $ $

69,124 (3,335) 959,365 16.36

Restatement adjustments relating to the Successor Company's results of operations for the two month unaudited interim period ended September 30, 2004: During the course of the Company's bankruptcy, the Company amended certain leases. For such leases, as well as new and renewed leases, the Company re- assessed the lease term and lease classification. As a result, the terms of certain leases were revised for accounting purposes, and the related rent expense, which is reflected in cost of service, was increased by $0.4 million for the two months ended September 30, 2004 to give effect to previously unrecognized rent expense arising in connection with fixed rent escalation provisions over the applicable lease term. In addition, an adjustment of $0.1 million was recorded to cost of service for the two month period ended September 30, 2004 relating to an increase in the asset retirement obligation from July 31, 2004. In preparing for its annual audit, the Company also identified other errors in the previously reported unaudited interim financial information for the two months ended September 30, 2004. These errors resulted from inadequate account reconciliation procedures and led to the understatement of service revenue by 57

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) $0.9 million, the understatement of equipment revenue by $0.3 million and the understatement of realized investment gains by $0.3 million. The Company also recorded additional income tax expense of $0.4 million for the two months ended September 30, 2004 relating to the above adjustments. The per share effects of each of the above adjustments were not material. The impact of the above adjustments required to correct the errors relating to the unaudited interim financial information of the Successor Company presented in Note 16, Quarterly Financial Data, for the two month period ended September 30, 2004 was as follows (in thousands):
Two Months Ended September 30, 2004 Previously Reported (Unaudited)

As Restated (Unaudited)

Revenues Operating income Net loss Basic and diluted net loss per common share

$ $ $ $

136,586 4,882 (2,572) (0.04)

$ $ $ $

137,783 5,504 (1,982) (0.03)

Principles of Consolidation The consolidated financial statements include the accounts of Leap and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements. While in bankruptcy, the Company continued to present the financial statements of Leap and its wholly owned subsidiaries on a consolidated basis because: (i) Leap and each of its subsidiaries that had filed for bankruptcy continued to manage its properties and operate its business as a debtor- in- possession; (ii) management expected, and the Plan of Reorganization contemplated, that Leap would remain the ultimate parent of each of its subsidiaries (other than two subsidiaries whose stock was pledged as collateral for the GLH note and the Qualcomm term loan, respectively); (iii) Leap had the power to elect or cause the election of the Board of Directors of each of its subsidiaries during the course of the bankruptcy; and (iv) except for assets that were to be transferred to the Leap Creditor Trust, management expected that Leap and its subsidiaries would retain substantially all of their assets through the date of the Company's emergence from bankruptcy. Use of Estimates in Financial Statement Preparation The consolidated financial statements are prepared using accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results could differ from management's estimates. Reorganization Items Reorganization items represent amounts incurred by the Predecessor Company as a direct result of the Chapter 11 reorganization and are presented separately in the Predecessor Company's consolidated statements of operations. 58

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The following table summarizes the components of reorganization items, net, in the Predecessor Company's consolidated statements of operations (in thousands):
Predecessor Company Seven Months Ended July 31, 2004 (As Restated)

Year Ended December 31, 2003

Professional fees Gain on settlement of liabilities Adjustment of liabilities to allowed amounts Post- petition interest income Net gain on discharge of liabilities and the net effect from application of fresh- start accounting

(5,005) 2,500 (360) 1,436 963,873

(12,073) 36,954 (174,063) 2,940 -

Total reorganization items, net $

962,444

(146,242)

Revenues and Cost of Revenues Cricket's business revenues arise from the sale of wireless services, handsets and accessories. Wireless services are generally provided on a month- to- month basis. Amounts received in advance for wireless services from customers who pay in advance are initially recorded as deferred revenues and are recognized as service revenue as services are rendered. Because the Company does not require any of its customers to sign longterm service commitments or submit to a credit check, some of its customers may be more likely to terminate service for inability to pay than the customers of other wireless providers. Accordingly, service revenues for customers who pay in arrears are recognized only after the service has been rendered and payment has been received. The Company also charges customers for service plan changes, activation fees and other service fees. Revenues from service plan change fees are deferred and recorded to revenue over the estimated customer relationship period, and other service fees are recognized when received. In connection with the adoption of Emerging Issues Task Force ("EITF") Issue No. 00- 21, "Accounting for Revenue Arrangements with Multiple Deliverables," on July 1, 2003, the Company began allocating activation fees to the other elements of the multiple element arrangement on a relative fair value basis. Because the fair values of the Company's handsets are higher than the total consideration received for the handsets and activation fees combined, the Company allocates the activation fees entirely to equipment revenues and recognizes the activation fees when received. Activation fees included in equipment revenues during the five months ended December 31, 2004 and the seven months ended July 31, 2004 totaled $7.1 million and $11.8 million, respectively. Activation fees included in equipment revenues for the year ended December 31, 2003 totaled $9.6 million. Direct costs associated with customer activations are expensed as incurred. Cost of service generally includes direct costs and related overhead, excluding depreciation and amortization, of operating the Company's networks. Equipment revenues arise from the sale of handsets and accessories. Revenues and related costs from the sale of handsets are recognized when service is activated by customers. Revenues and related costs from the sale of accessories are recognized at the point of sale. The costs of handsets and accessories sold are recorded in cost of equipment. Amounts due from third- party dealers and distributors for handsets are recorded as deferred revenue upon shipment of the handsets by the Company to such dealers and distributors and are recognized as equipment revenues when service is activated by customers. Handsets sold by third- party dealers and distributors are recorded as inventory until they are sold to and activated by customers. Sales incentives offered without charge to customers and volume- based incentives paid to the Company's third- party dealers and distributors are recognized as a reduction of revenue and as a liability when the related 59

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) service or equipment revenue is recognized. Customers have limited rights to return handsets and accessories based on time and/or usage. Returns of handsets and accessories have historically been insignificant. Cash and Cash Equivalents The Company considers all highly liquid investments with maturity at the time of purchase of three months or less to be cash equivalents. The Company invests its cash with major financial institutions in money market funds, short- term U.S. Treasury securities, obligations of U.S. Government agencies and other securities such as prime- rated short- term commercial paper and investment grade corporate fixed- income securities. The Company has not experienced any significant losses on its cash and cash equivalents. Investments Short- term investments consists of highly liquid fixed- income investments with an original maturity of greater than three months such as U.S. Treasury securities, obligations of U.S. Government agencies, and other securities such as prime- rated commercial paper and investment grade corporate fixed- income securities. Restricted cash, cash equivalents and short- term investments consist primarily of amounts that the Company has set aside to satisfy allowed administrative claims and allowed priority claims against the Company through the Effective Date of the Plan of Reorganization and investments in money market accounts or certificates of deposit that have been pledged to secure operating obligations. The Company applies Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities," to account for its investments in marketable securities. Investments are classified as available- for- sale and stated at fair value as determined by the most recently traded price of each security at each balance sheet date. The net unrealized gains or losses on available- for- sale securities are reported as a component of comprehensive income (loss). The specific identification method is used to compute the realized gains and losses on debt and equity securities. Investments are periodically reviewed for impairment. If the carrying value of an investment exceeds its fair value and the decline in value is determined to be other- than- temporary, an impairment loss is recognized for the difference. Inventories Inventories consist of handsets and accessories not yet placed into service and units designated for the replacement of damaged customer handsets, and are stated at the lower of cost or market using the first- in, first- out method. Investments in Unconsolidated Wireless Operating Companies For certain foreign investments in corporate entities held until divested in 2002, the Company used the equity method when it exercised significant influence but did not control the entity. Under the equity method, the investment is originally recorded at cost and adjusted to recognize the Company's share of net earnings or losses of the investee, limited to the extent of the Company's investment in, advances to and financial guarantees for the investee. Such earnings or losses of the Company's investees were adjusted to reflect the amortization of any differences between the carrying value of the investment and the Company's equity in the net assets of the investee. Property and Equipment Property and equipment are initially recorded at cost. Additions and improvements, including certain labor costs, are capitalized, while expenditures that do not enhance the asset or extend its useful life are 60

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) charged to operating expenses as incurred. Depreciation is applied using the straight- line method over the estimated useful lives of the assets once the assets are placed in service. Upon emergence from Chapter 11 and adoption of fresh- start reporting, the Company re- assessed the carrying values and useful lives of its property and equipment. As a result of this re- assessment, which included a review of the Company's historical usage of and expected future service from existing property and equipment, and a review of industry averages for similar property and equipment, the Company changed the depreciable lives for certain network equipment assets. These network equipment assets that were previously depreciated over periods ranging from two to five years are now depreciated over periods ranging from three to fifteen years. As a result of this change, depreciation expense and net loss were reduced by approximately $51.3 million, or $0.86 per share, for the five months ended December 31, 2004 compared to what they would have been if the useful lives had not been revised. The estimated useful lives for the Company's other property and equipment, which have remained unchanged, are three to five years for computer hardware and software, and three to seven years for furniture, fixtures and retail and office equipment. Property and equipment to be disposed of by sale or exchange is carried at the lower of carrying value or fair value less costs to sell. The following table summarizes the depreciable lives for network equipment (in years):
Prior Depreciable Life Revised Depreciable Life Average Remaining Life at July 31, 2004

Network equipment: Switches Switch power equipment Cell site equipment, and site acquisitions and improvements Towers Antennae

5 5 5 5 2

10 15 7 15 3

6.8 11.8 3.8 11.8 1.8

The Company's network construction expenditures are recorded as construction- in- progress until the network or assets are placed in service, at which time the assets are transferred to the appropriate property and equipment category. As a component of construction- in- progress, the Company capitalizes interest and salaries and related costs of engineering and technical operations employees, to the extent time and expense are contributed to the construction effort, during the construction period. In connection with the adoption of fresh- start reporting, the Company reduced the carrying value of property and equipment to its estimated fair market value. Internal Use Software Costs associated with the acquisition or development of software for internal use are capitalized and amortized using the straight- line method over the expected useful life of the software, which ranges from three to five years. Wireless Licenses Wireless licenses are initially recorded at cost. The Company determined that its wireless licenses met the definition of indefinite- lived intangible assets under SFAS No. 142, "Goodwill and Other Intangible Assets" because the Company expects to continue to provide wireless service using the relevant licenses for the foreseeable future and the wireless licenses may be renewed every ten years for a nominal fee, provided that the Company continues to meet the service and geographic coverage provisions required by the FCC. Therefore, upon the adoption of SFAS No. 142 on January 1, 2002, the Company ceased amortizing its 61

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) wireless license costs. Wireless licenses to be disposed of by sale or exchange are carried at the lower of carrying value or fair value less costs to sell. At December 31, 2004 and 2003, wireless licenses to be disposed of by sale or exchange were not significant. In connection with the adoption of fresh- start reporting, the Company increased the carrying value of wireless licenses to their estimated fair market values. Goodwill and Other Intangible Assets Goodwill represents the excess of reorganization value over the fair value of identified tangible and intangible net assets recorded in connection with fresh- start accounting. Other intangible assets were recorded upon adoption of fresh- start accounting and consist of trademarks, which are being amortized on a straight- line basis over their estimated useful lives of fourteen years, and customer relationships, which are being amortized on a straight- line basis over their estimated useful lives of four years. Impairment of Indefinite- Lived Intangible Assets In accordance with SFAS No. 142, the Company assesses potential impairments to its indefinite- lived intangible assets, including goodwill and wireless licenses, annually and when there is evidence that events or changes in circumstances indicate that an impairment condition may exist. The Successor Company has chosen to conduct its annual test for impairment during the third quarter of each year. An impairment loss is recognized when the fair value of the asset is less than its carrying value, and would be measured as the amount by which the asset's carrying value exceeds its fair value. Any required impairment loss would be recorded as a reduction in the carrying value of the related asset and charged to results of operations. Estimates of fair value of the Company's wireless licenses are based primarily on available market prices, including successful bid prices in FCC auctions and selling prices observed in wireless license transactions. Due to a decline in the value of the Company's wireless licenses, it recorded an impairment charge of $171.1 million during the year ended December 31, 2003 to reduce the carrying value of its wireless licenses to their estimated fair value. Management estimated the fair value of the Company's wireless licenses based on the information available to it, including a valuation report prepared by a third- party consultant in connection with the confirmation hearing for the Company's Plan of Reorganization. In developing its valuation, the firm the Company engaged utilized a market- based approach. The firm considered then- current market conditions, including information on recently announced wireless license sale transactions, the strategic significance of the Company's wireless licenses to potential acquirers, the size of the markets covered by the Company's wireless licenses, the amount of spectrum included in each wireless license and the availability of spectrum from other sellers in the markets covered by such wireless licenses. The firm's valuation assumed that the Company's licenses would be sold in an orderly manner between a willing seller and a willing buyer rather than in a liquidation or forced sale scenario. In its valuation report, the firm noted that market conditions for wireless licenses were weak and that recent wireless license sale transactions had been arranged at large discounts to the prices for comparable licenses auctioned by the FCC in Auction 35, which concluded more than two and onehalf years prior to the date at which the firm valued the Company's wireless licenses. The report also stated that significant amounts of spectrum were for sale and that the pool of potential buyers was generally limited to national and regional carriers with highly specific needs. In addition, the firm's report noted that there was a significant lack of debt financing available for the build- out of new markets, and that the national and regional carriers were generally focused on improving their balance sheets and were generally deferring opportunities to acquire spectrum to fill expected future needs. In preparing its valuation, the firm analyzed the market for each of the Company's licenses and, based on its analysis, estimated the value of each license at a discount to the winning net bids in Auction 35 for 62

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) license(s) covering the same market or, if licenses for the same market were not included in Auction 35, at a discount to the average of the winning net bids in Auction 35 for wireless licenses covering markets of comparable size. These discounts generally ranged from approximately 18% to 90% of comparable winning net bids in Auction 35. In the aggregate, the firm's valuation of the Company's wireless licenses implied a discount to Auction 35 values of approximately 70%. During the year ended December 31, 2002, the Company also recorded an impairment charge of $26.9 million to its then remaining goodwill balance. The goodwill related to the Company's June 2000 acquisition of the remaining interest in Cricket Communications Holdings that it did not already own. The Company previously adopted EITF Issue No. 02- 07, "Unit of Accounting for Testing Impairment of Indefinite- Lived Intangible Assets." EITF Issue No. 02- 07 requires that separately recorded indefinite- lived intangible assets be combined into a single unit of accounting for purposes of testing impairment if they are operated as a single asset and, as such, are essentially inseparable from one another. Management concluded that the Company's wireless licenses in its operating markets should be combined into a single unit of accounting because these wireless licenses as a group represent the highest and best use of the assets, and that the value of the wireless licenses would not be significantly impacted by a sale of one or a portion of the wireless licenses, among other factors. Impairment of Long- Lived Assets In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long- Lived Assets," the Company assesses potential impairments to its long- lived assets, including property and equipment and certain intangible assets, when there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss may be required to be recognized when the undiscounted cash flows expected to be generated by a long- lived asset (or group of such assets) is less than its carrying value. Any required impairment loss would be measured as the amount by which the asset's carrying value exceeds its fair value and would be recorded as a reduction in the carrying value of the related asset and charged to results of operations. During the seven months ended July 31, 2004 and the years ended December 31, 2003 and 2002, the Company recorded impairment charges of $0.6 million, $24.1 million and $16.3 million, respectively, related to the disposal of certain network assets, capitalized costs and related charges associated with cell sites that the Company no longer expects to use in its business. Operating Leases The Company accounts for its operating leases in accordance with SFAS No. 13 and FASB Technical Bulletin No. 85- 3. Rent expense is recorded on a straight- line basis over the initial lease term and those renewal periods that are reasonably assured as determined at lease inception. The difference between rent expense and rent paid is recorded as deferred rent included in other current liabilities in the consolidated balance sheets. Debt Discount and Deferred Financing Costs Debt discount and deferred financing costs are amortized and recognized as interest expense under the effective interest method over the expected term of the related debt. During the year ended December 31, 2003, the Company ceased amortizing debt discounts and deferred financing costs related to debt in default subject to compromise and expensed the remaining unamortized debt discounts and debt issuance costs totaling $174.1 million related to debt in default, subject to compromise. 63

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Advertising and Promotion Costs Advertising and promotion costs are expensed as incurred. Advertising costs totaled $13.4 million for the five months ended December 31, 2004, $12.5 million for the seven months ended July 31, 2004 and $29.6 million and $57.0 million, respectively, for the years ended December 31, 2003 and 2002. Stock- based Compensation The Company measures compensation expense for its employee and director stock- based compensation plans using the intrinsic value method. Stock- based compensation is amortized over the related vesting periods of the stock awards using an accelerated method. All outstanding stock options of the Predecessor Company were cancelled upon emergence from bankruptcy in accordance with the Plan of Reorganization. For the period from August 1, 2004 through December 31, 2004, no stock- based compensation awards were outstanding. The following table shows the effects on net income (loss) and income (loss) per share as if the Predecessor Company had applied the fair value provisions of SFAS No. 123, "Accounting for Stock- Based Compensation" (in thousands, except per share data):
Predecessor Company Seven Months Ended July 31, 2004 (As Restated)

Year Ended December 31, 2003

Year Ended December 31, 2002

Net income (loss): As reported Add back stock- based compensation expense (benefit) included in net income (loss) Less pro forma compensation (expense) benefit, net Pro forma net income (loss)

913,190

(597,437) $

(664,799)

(837)

243

569

6,209 $ 918,562 $

(10,805) (607,999) $

(17,280) (681,510)

Basic and diluted net income (loss) per common share: As reported $ Pro forma $

15.58 15.67

$ $

(10.19) $ (10.37) $

(14.91) (15.28)

Income Taxes Current income tax benefit (expense) is the amount expected to be receivable (payable) for the current year. A deferred tax asset and/or liability is computed for both the expected future impact of differences between the financial statement and tax bases of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be "more likely than not" realized. Tax rate changes are reflected in income in the period such changes are enacted. Basic and Diluted Net Income (Loss) Per Common Share Basic earnings per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per common share reflect the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options and warrants calculated using the treasury stock method. 64

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Recent Accounting Pronouncements In December 2004, the FASB issued SFAS No. 123R, "Share- Based Payment," which revises SFAS No. 123. SFAS No. 123R requires that a company measure the cost of equity- based service awards based on the grant- date fair value of the award (with limited exceptions). That cost will be recognized as compensation expense over the period during which an employee is required to provide service in exchange for the award or the requisite service period (usually the vesting period). No compensation expense is recognized for the cost of equity- based awards for which employees do not render the requisite service. A company will initially measure the cost of each liability based service award based on the award's current fair value; the fair value of that award will be remeasured subsequently at each reporting date through the settlement date. Changes in fair value during the requisite service period will be recognized as compensation expense over that period. The grant- date fair value of employee stock options and similar instruments will be estimated using option- pricing models adjusted for the unique characteristics of those instruments. If an equity- based award is modified after the grant date, incremental compensation expense will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. Adoption of SFAS No. 123R is required for the Company's first quarter beginning January 1, 2006. The Company has not yet determined the impact that the adoption of SFAS No. 123R will have on its consolidated financial position or its results of operations. On December 15, 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets," and amended Accounting Principles Board Opinion No. 29, "Accounting for Nonmonetary Transactions." SFAS No. 153 is based on the principle that nonmonetary asset exchanges should be recorded and measured at the fair value of the assets exchanged, with certain exceptions. This standard requires exchanges of productive assets to be accounted for at fair value, rather than at carryover basis, unless (1) neither the asset received nor the asset surrendered has a fair value that is determinable within reasonable limits or (2) the transactions lack commercial substance (as defined). Adoption of SFAS No. 153 is required for nonmonetary asset exchanges occurring in the third quarter beginning July 1, 2005. The Company has not yet determined the impact that the adoption of SFAS No. 153 will have on its consolidated financial position or its results of operations. In March 2004, the FASB ratified the consensus of the EITF regarding the recognition and measurement of other- than temporary impairments of certain investments. The effective date of the recognition and measurement guidance in EITF Issue No. 03- 01, "The Meaning of Other- ThanTemporary Impairment and Its Application to Certain Investments," has been delayed until the implementation guidance provided by a FASB staff position on the issue has been finalized. The disclosure guidance was unaffected by the delay and is effective for fiscal years ending after June 15, 2004. The Company implemented the disclosure provisions of EITF Issue No. 03- 01 in its annual financial statements for the fiscal year ended December 31, 2004 and does not anticipate that the implementation of the recognition and measurement guidance, when released, will have a material effect on the Company's consolidated financial position or its results of operations. Note 3. Fresh- Start Reporting The Company has adopted the fresh- start accounting provisions of SOP 90- 7. Under SOP 90- 7, the Company was required to apply fresh- start reporting because (i) the reorganization value of the assets of the Company immediately before the date of confirmation was less than the sum of all the allowed claims and post petition liabilities, and (ii) holders of Leap's common shares immediately before the Bankruptcy Court confirmed the Company's Plan of Reorganization received less than fifty percent of the common stock issued by Leap on the date it emerged from bankruptcy. All material conditions to the effectiveness of the Plan of Reorganization were resolved on August 5, 2004 and the Plan of Reorganization became effective on 65

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) August 16, 2004. In light of the proximity of August 5, 2004 to the month ended July 31, 2004 and the immateriality of the results of operations for the period from August 1, 2004 through August 5, 2004, the Company recorded the effects of the consummation of the Plan of Reorganization as well as adjustments for fresh- start reporting in the Company's consolidated financial statements as of July 31, 2004. Under fresh- start reporting, a new entity is deemed to be created for financial reporting purposes. Therefore, as used in these financial statements, the term "Company" refers to the Predecessor Company and its operations for periods on or prior to July 31, 2004, and refers to the Successor Company and its operations for periods after July 31, 2004, after giving effect to the implementation of fresh- start reporting. The financial statements of the Company after July 31, 2004 are not comparable in many respects to the Company's financial statements for prior periods. Under SOP 90- 7, reorganization value represents the fair value of the entity before considering liabilities and approximates the amount a willing buyer would pay for the assets of the entity immediately after the reorganization. Consistent with fresh- start reporting, enterprise value (i.e., debt plus equity) may be used to calculate the reorganization value of the Company. The Company engaged a third party valuation consultant to assist the Company in estimating the Company's enterprise value as of July 31, 2004. In formulating its estimate, the valuation consultant reviewed information about the Company and conducted a discounted cash flow analysis using projected financial information supplied by the Company and an analysis of the market value and trading multiples of selected publicly- held companies in lines of business similar to the Company's business. The valuation consultant estimated that the Company's enterprise value at July 31, 2004 was between $1.9 billion and $2.2 billion. The Company selected the midpoint of the range, $2.05 billion, to represent management's best estimate of the Company's enterprise value for purposes of SOP 90- 7. The Company then adjusted the enterprise value for cash in excess of that necessary for normal operations and for the value of non- debt operating liabilities, each as of the date of adoption of fresh- start reporting, to determine that the reorganization value of the Successor Company's assets was approximately $2.1 billion. The Company engaged valuation firms to provide management with information that management utilized in determining the fair market value of the Company's network assets and wireless licenses, and the fair value of the Company's trademarks, and customer relationships and to evaluate other potential intangible assets. Management used such information in connection with the allocation process described below. In implementing fresh- start reporting, the Company allocated its reorganization value to its assets in conformity with procedures specified by SFAS No. 141, "Business Combinations," and stated its liabilities, other than deferred taxes, at the present value of amounts expected to be paid. The amount remaining after allocation of the reorganization value to the Company's identified tangible and intangible assets is reflected as goodwill, which is subject to periodic evaluation for impairment. In addition, under fresh- start reporting, the Company's accumulated deficit was eliminated and new equity was issued according to the Plan of Reorganization. The adjustments to the Predecessor Company's consolidated balance sheet at July 31, 2004 resulting from the application of fresh- start accounting are summarized below. The summary should be reviewed in 66

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) conjunction with the Company's consolidated financial statements and corresponding notes contained elsewhere in this report (in thousands):
Predecessor Company July 31, 2004 Reorganization Adjustments (As Restated) Fresh- Start Adjustments (As Restated) Successor Company July 31, 2004 (As Restated)

Assets Cash and cash equivalents $ Short- term investments Restricted cash, cash equivalents and shortterm investments Funds distributed to Leap Creditor Trust Inventories Other current assets Total current assets Property and equipment, net Wireless licenses, net Goodwill Other intangible assets Other assets Total assets Liabilities and Stockholders' Equity (Deficit) Accounts payable and accrued liabilities Current maturities of long- term debt Other current liabilities Total current liabilities Long- term debt Other long- term liabilities Total liabilities Liabilities subject to compromise Stockholders' equity (deficit): Common stock Additional paid- in capital Unearned stock- based compensation Accumulated deficit Accumulated other comprehensive loss Total stockholders' equity (deficit) Total liabilities and stockholders' equity (deficit) $ $

152,742 $ 94,741 48,655 68,790 34,739 36,235

1,652a (1,652)a (68,790)a (1,464)a

(1,377)e

154,394 94,741 47,003 34,739 33,394

435,902 675,347 558,913 52,998 1,723,160 $

(70,254) (1,100)a (36,400)a (107,754) $

(1,377) (82,352)e 94,791e 329,619e 166,000e (14)e 506,667 $

364,271 592,995 652,604 329,619 166,000 16,584 2,122,073

69,140 $ 74,799 66,584

27,898b $ (4)b 14,403b

(1,724)e $ 2,638e (6,386)e

95,314 77,433 74,601

210,523 59,052

42,297 372,750c 1,094b

(5,472) (36,569)e

247,348 372,750 23,577

269,575 2,398,230 6 1,155,236 (53) (2,098,961) (873)

416,141 (2,398,230)b -d 909,689d 53d 963,720a- d 873d

(42,041) (586,533)e 1,135,241e -

643,675 6 1,478,392 -

(944,645)

1,874,335

548,708

1,478,398

1,723,160 $

(107,754)

506,667

2,122,073

67

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (a) (b) (c) (d) (e) Adjustments reflected in the condensed consolidated balance sheet above are as follows: To record the transfer of Leap assets to the Leap Creditor Trust. To record the assumption or discharge of liabilities subject to compromise and the cancellation of Predecessor Company debt and other liabilities compromised pursuant to the Plan of Reorganization. To record the issuance of new senior secured pay- in- kind notes, in accordance with the Plan of Reorganization. To record the cancellation of the old common stock and other equity and the issuance of new common stock and warrants in accordance with the Plan of Reorganization.

To adjust the carrying value of assets, liabilities and stockholders' deficit to fair value, in accordance with fresh- start reporting, and record goodwill and other intangible assets for the reorganization value in excess of net assets. The fair values of goodwill and intangible assets reported in the Successor Company's consolidated balance sheet were estimated based upon the Company's estimates of future cash flows and other factors including discount rates. If these estimates or the assumptions underlying these estimates change in the future, the Company may be required to record impairment charges. In addition, a permanent and sustained decline in the market value of the Company's outstanding common stock below the Company's enterprise value less debt could also result in the requirement to recognize impairment charges in future periods. Note 4. Financial Instruments Investments Investments consisted of the following (in thousands):
Successor Company December 31, 2004 Predecessor Company December 31, 2003

Short- term Investments: Commercial paper Mutual funds U.S. government or government agency securities

3,033 110,050

1,130 64,681

$ Restricted Cash, Cash Equivalents and Short- term Investments: Bank deposits $ Cash, cash equivalents and short- term investments restricted pursuant to Plan of Reorganization U.S. government or government agency securities restricted pursuant to the Plan of Reorganization Money market funds $

113,083

65,811

1,150

1,773

24,680

40,440

4,531 1,066 31,427 $

3,386 10,355 55,954

As of December 31, 2004 and 2003, all of the Company's short- term investments were debt securities with contractual maturities of less than one year, classified as available for sale. 68

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Available- for- sale securities were comprised as follows at December 31, 2004 and 2003 (in thousands):
Successor Company Cost Unrealized Gain Unrealized Loss Fair Value

2004 Mutual funds U.S. government or government agency securities U.S. government or government agency restricted pursuant to the Plan of Reorganization

2,944 110,063

89 -

(13)

3,033 110,050

4,534 $ 117,541 $
Unrealized Gain

89 $
Unrealized Loss

(3) (16) $

4,531 117,614

Predecessor Company

Cost

Fair Value

2003 Commercial paper U.S. government or government agency securities U.S. government or government agency restricted pursuant to the Plan of Reorganization

1,170 64,805

209

(40) (333)

1,130 64,681

3,394 $ 69,369 $

3 212 $

(11) (384) $

3,386 69,197

Fair Value of Financial Instruments The carrying values of certain of the Company's financial instruments, including cash equivalents and short- term investments, accounts receivable and accounts payable and accrued liabilities, approximate fair value due to their short- term maturities. Cricket's 13% senior secured credit facilities had a carrying value, which approximates its fair value, of $371.4 million as of December 31, 2004. Loans payable to the U.S. government carry fixed rates of interest and the carrying value approximates the fair value. 69

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 5. Supplementary Financial Information Supplementary Balance Sheet Information (in thousands):
Successor Company December 31, 2004 Predecessor Company December 31, 2003

Property and equipment, net: Network equipment Computer equipment and other Construction- in- progress

599,598 26,285 11,383 637,266 (60,914)

1,385,919 100,031 24,723 1,510,673 (693,598)

Accumulated depreciation $ Accounts payable and accrued liabilities: Trade accounts payable Accrued payroll and related benefits Other accrued liabilities

576,352

817,075

35,184 13,579 42,330

15,300 9,358 39,827

$ Other current liabilities: Accrued taxes Deferred revenue Accrued interest Other

91,093

64,485

49,860 18,145 1,025 3,711 72,741

21,718 23,532 4,502 5,171 54,923

Supplementary Information for Other Intangible Assets (in thousands):

Successor Company December 31, 2004

Other intangible assets, net: Customer relationships Trademarks $ 129,000 37,000 166,000 Accumulated amortization customer relationships Accumulated amortization trademarks $ (13,438) (1,101) 151,461

Amortization expense for the five months ended December 31, 2004 was $14.5 million. Estimated amortization expense for intangible assets for 2005 through 2009 is $34.9 million, $34.9 million, $34.9 million, $21.5 million and $2.6 million, respectively, and $22.7 million thereafter. 70

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Supplementary Cash Flow Information (in thousands):
Successor Company Five Months Ended December 31, 2004 Seven Months Ended July 31, 2004 Predecessor Company Year Ended December 31, 2003 2002

Supplementary disclosure of cash flow information: Cash paid for interest $ Cash paid for income taxes Cash provided by (paid for) reorganization activities: Payments to Leap Creditor Trust Payments for professional fees Cure payments Interest income Supplementary disclosure of non- cash investing and financing activities: Long- term financing to purchase equipment Issuance of common stock related to purchase price adjustment for wireless licenses (Note 12) Deferred income tax liabilities on purchase of wireless licenses

8,227 $ 240

- $ 76

18,168 $ 372

36,006 774

(990)

(67,800)

(7,975) 1,984 1,485

(9,864) (40,405) 2,940

177,390

8,660

3,690

Supplementary Basic and Diluted Net Income (Loss) per Common Share Information: The weighted average number of shares outstanding were the same for the calculation of basic net earnings (loss) per common share and diluted net earnings (loss) per common share for all periods presented in the statement of operations. The following shares were not included in the computation of diluted net earnings (loss) per share as their effect would be antidilutive (in thousands):
Successor Company Five Months Ended December 31, 2004 Seven Months Ended July 31, 2004 Predecessor Company Year Ended December 31, 2003 2002

Employee stock options Non- vested restricted stock Senior Note and Senior Discount Note warrants Qualcomm warrant Warrant to Chase Telecommunications Holdings Warrant to MCG

600

5,312 76 2,830 3,375 95 -

6,935 86 2,830 3,375 95 -

8,402 2,830 3,375 95 -

Pursuant to the Plan of Reorganization, all outstanding options and warrants to purchase Leap common stock were cancelled in connection with the cancellation of the Predecessor Company's common stock as of the Effective Date of the Plan of Reorganization. 71

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 6. Liabilities Subject to Compromise Liabilities subject to compromise refer to liabilities of the Predecessor Company incurred prior to the Petition Date that are with unrelated parties. Substantially all of the Predecessor Company's pre- petition liabilities, other than principal and interest payable to the FCC, have been classified as liabilities subject to compromise in the Predecessor Company's consolidated balance sheet. Adjustments to liabilities subject to compromise resulted from negotiations, actions of the Bankruptcy Court, rejection of certain executory contracts and certain unexpired leases, implementation of the Plan of Reorganization, or other events. The following table summarizes the components of liabilities subject to compromise in the Predecessor Company's consolidated balance sheet (in thousands):
Predecessor Company December 31, 2003

Accounts payable and accrued liabilities Debt in default subject to compromise Other current liabilities Other long- term liabilities Total liabilities subject to compromise

18,590 2,357,484 15,675 9,773

2,401,522

Note 7. Debt Senior Secured Pay- in- Kind Notes Issued Under Plan of Reorganization On the Effective Date of the Plan of Reorganization, Cricket issued new 13% senior secured pay- in- kind notes due 2011 with a face value of $350 million and an estimated fair value of $372.8 million. As of December 31, 2004, the carrying value of the notes was $371.4 million. As noted below, in January 2005, Cricket entered into a new Credit Agreement and a portion of the proceeds from the term loan facility under the Credit Agreement was used to redeem Cricket's 13% senior secured pay- in- kind notes. The pay- in- kind notes were scheduled to mature on August 16, 2011, the seventh anniversary of the Effective Date of the Plan of Reorganization. The notes bore interest at 13% per annum. Interest on the notes was payable semi- annually in February and August. The notes were secured by all of the personal property and owned real property of Leap and its direct and indirect subsidiaries and by all of the stock of Leap's direct and indirect subsidiaries. The notes were guaranteed by Leap and all of its direct and indirect subsidiaries (other than Cricket which was the primary obligor under the notes). U.S. Government Financing The balance in current maturities of long- term debt at December 31, 2003 consisted entirely of debt obligations to the FCC of $74.1 million (net of a $2.6 million discount) incurred as part of the purchase price for wireless licenses. The original terms of the notes included interest rates generally ranging from 6.25% to 7.0% per annum (9.75% per annum on the note associated with the Denver license) and quarterly principal and interest payments until the originally scheduled maturities ranging from September 2006 to June 2007. The Company classified the principal and interest balances outstanding under its U.S. government financing as a short- term obligation as of December 31, 2003 as a result of the Company's Chapter 11 filings, which constituted an event of default of the underlying notes. Payments of principal and interest under the Company's U.S. government financing were stayed during the pendency of the Chapter 11 proceedings. 72

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In its order approving the change of control of the Company's wireless licenses, the FCC denied Leap's request for a waiver of certain FCC regulations relating to Leap's status as a "small business" or "very small business," and determined that Leap would not be a "small business" or "very small business" following its emergence from bankruptcy. Pursuant to the Plan of Reorganization and a settlement agreement between Cricket, certain license subsidiaries and the FCC, the Company paid the FCC, on the Effective Date of the Plan of Reorganization, approximately $36.7 million for unpaid principal and approximately $8.3 million of accrued interest in connection with the reinstatement of its FCC debt, and approximately $278,000 of unjust enrichment penalties. The FCC's order and settlement agreement also required the applicable license subsidiaries to repay approximately $40 million in principal amount that remained outstanding on the Effective Date, plus accrued interest, to the FCC in installments scheduled for April and July 2005. The Company also agreed in the settlement agreement to use reasonable efforts to complete a refinancing on or prior to January 31, 2005 generating net proceeds sufficient to redeem the 13% senior secured pay- in- kind notes that Cricket issued upon emergence from bankruptcy and to repay the Company's remaining indebtedness to the FCC. The remaining obligation to the FCC was secured by the wireless licenses that were originally purchased with installment payment financing from the FCC. The Company repaid the remaining FCC debt in January 2005. New Credit Agreement As described in Note 15, the Company entered into two credit facilities under a new senior secured credit agreement on January 10, 2005 which consists of a term loan and a revolving credit facility. A portion of the proceeds from the term loan borrowing was used by the Company to redeem Cricket's $350 million of 13% senior secured pay- in- kind notes, to pay approximately $43 million of call premium and accrued interest on such notes, to repay approximately $41 million in principal and accrued interest owed to the FCC, and to pay transaction fees and expenses. Debt in Default Subject to Compromise Predecessor Company debt in default subject to compromise, which is included in liabilities subject to compromise at December 31, 2003, is summarized as follows (in thousands):
Predecessor Company December 31, 2003

Senior Notes Senior Discount Notes Senior secured vendor credit facilities Note payable to GLH Qualcomm term loan

224,623 504,393 1,618,284 8,643 1,541 2,357,484

Amounts presented for the Senior Notes, the note payable to GLH and the Qualcomm term loan include principal and interest accrued through the Petition Date. Amounts presented for the Senior Discount Notes include accreted principal and interest accrued through the Petition Date. Amounts presented for the senior secured vendor credit facilities include principal, interest and fees accrued through the Petition Date. On the Effective Date of the Plan of Reorganization, all of the Company's pre- petition indebtedness, other than indebtedness owed to the FCC, was cancelled in full. 73

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 8. Income Taxes The components of the Company's income tax provision are summarized as follows (in thousands):
Successor Company Five Months Ended December 31, 2004 Seven Months Ended July 31, 2004 (As Restated) Predecessor Company Year Ended December 31, 2003 2002

Current provision: Federal State Foreign

302 302

13 13

337 337

(618) 20 1,647 1,049

Deferred provision: Federal State

3,468 398 3,866 $ 4,168 $

3,725 428 4,153 4,166 $

6,920 795 7,715 8,052 $

20,337 2,435 22,772 23,821

A reconciliation of the amount computed by applying the statutory federal income tax rate to the income tax provision is summarized as follows (in thousands):
Successor Company Five Months Ended December 31, 2004 Seven Months Ended July 31, 2004 (As Restated) Predecessor Company

Year Ended December 31, 2003 2002

Amounts computed at statutory federal rate $ Loss on sale of foreign investee State income tax, net of federal benefit Foreign income tax benefit Goodwill impairment Non- deductible expenses Gain on reorganization and adoption of freshstart reporting Other Change in valuation allowance $

(1,561) $ -

321,075 $ -

(206,285) $ -

(224,001) (42,697)

455 1,573

287 175

736 7,050

1,596 1,647 9,422 1,419

(337,422) -

15,134

118

3,701 4,168 $

20,051 4,166 $

191,417 8,052 $

276,317 23,821

74

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The components of the Company's deferred tax assets (liabilities) are summarized as follows (in thousands):
Successor Company December 31, 2004 Predecessor Company December 31, 2003

Deferred tax assets: Net operating loss carryforwards Capital loss carryforwards Goodwill Debt discounts and issue costs Deferred charges Reserves and allowances Property and equipment Other Gross deferred tax assets Valuation allowance Deferred tax liabilities: Wireless licenses Property and equipment Intangible assets Net deferred tax liability $ $ 189,271 29,533 13,434 4,250 11,100 19,559 37,352 304,499 (245,399) (15,281) (59,100) (15,281) $ $ 666,427 32,041 15,424 91,087 16,845 273 966 823,063 (779,135) (58,752) (40,333) (55,157)

The Company's net deferred tax assets at December 31, 2004 are subject to a full valuation allowance. Pursuant to SOP 90- 7, future decreases in the valuation allowance will be accounted for as a reduction in goodwill. Management has established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets. The valuation allowance is based on available evidence, including the Company's historical operating losses. In August 2002, Leap issued 21,020,431 shares of common stock to MCG PCS, Inc. ("MCG") pursuant to a binding arbitration award. The Company's issuance of these shares caused an "ownership change" as defined under Internal Revenue Code Section 382. Accordingly, the Company's ability to utilize its net operating loss and capital loss carryforwards is subject to an annual limitation. In connection with the Company's emergence from bankruptcy, there was a significant reduction of its outstanding indebtedness and an additional ownership change. As a result, the Company realized cancellation of indebtedness income of approximately $232 million which reduced its NOLs. The additional ownership change further limits the Company's ability to utilize its net operating losses and capital loss carryforwards. At December 31, 2004, the Company estimates it had federal NOLs of approximately $468 million which begin to expire in 2022, as well as certain state NOLs. In addition, the Company has federal capital loss carryforwards of approximately $75 million which expire in 2007. Note 9. Stockholders' Equity Predecessor Company Stockholder Rights Plan In September 1998, the Company's Board of Directors adopted a Stockholder Rights Plan (the "Rights Plan"), as amended. Pursuant to the Rights Plan, the Board of Directors declared a dividend, payable on September 16, 1998, of one preferred purchase right (a "Right") for each share of common stock, $.0001 par 75

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) value, of the Company outstanding at the close of business on September 11, 1998. Similar Rights generally were issued in respect of shares of common stock subsequently issued. Each Right entitled the registered holder to purchase from the Company a one one- thousandth share of Series A Junior Participating Preferred Stock, $.0001 par value, at a purchase price of $350 (subject to adjustment). The Rights were exercisable only if a person or group (an "Acquiring Person"), other than Qualcomm with respect to its exercise of the warrants granted to it or acquired by it in connection with the Company's February 2000 units offering, acquired beneficial ownership of 15% or more of the Company's outstanding shares of common stock. Upon exercise, holders other than an Acquiring Person would have had the right (subject to termination) to receive the Company's common stock or other securities having a market value (as defined) equal to twice the purchase price of the Right. The Rights, which would have expired on September 10, 2008, were redeemable in whole, but not in part, at the Company's option at any time for a price of $.01 per Right. In conjunction with the distribution of the Rights, the Company's Board of Directors designated 300,000 shares of Preferred Stock as Series A Junior Participating Preferred Stock and reserved such shares for issuance upon exercise of the Rights. In August 2002, the Company amended the Rights Plan to permit the issuance of 21,548,415 shares of its common stock to pay a purchase price adjustment to MCG, as ordered by an arbitrator, in connection with its acquisition of wireless licenses in Buffalo and Syracuse, New York. At December 31, 2003, no shares of Preferred Stock were outstanding. On the Effective Date of the Plan of Reorganization, the Company's Rights Plan was terminated and all rights thereunder were cancelled. Warrants The Predecessor Company had the following warrants outstanding at December 31, 2003:
Shares Issuable Upon Exercise Exercise Price

Warrant to Chase Telecommunications Holdings, Inc Warrant to Senior and Senior Discount noteholders Warrant to Qualcomm

94,999 2,829,854 3,375,000 6,299,853

4.94 96.80 6.11

On the Effective Date of the Plan of Reorganization, all of the Predecessor Company's outstanding warrants were cancelled. Also on the Effective Date, the Successor Company issued warrants to MCG to purchase 600,000 shares of common stock of reorganized Leap at an exercise price of $16.83 per share, which warrants expire on March 23, 2009. All of MCG's warrants were outstanding as of December 31, 2004. Note 10. Stock- Based Compensation and Benefit Plans Employee Savings and Retirement Plan The Company's 401(k) plan allows eligible employees to contribute up to 30% of their salary, subject to annual limits. The Company matches a portion of the employee contributions and may, at its discretion, make additional contributions based upon earnings. The Company's contribution expenses for the five months ended December 31, 2004 and the seven months ended July 31, 2004 were $428,000 and $613,000, respectively, and for the years ended December 31, 2003 and 2002, were $1,043,000, and $1,632,000, respectively. Successor Company Stock Option Plan In December 2004, Leap adopted the Leap Wireless International, Inc. 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "2004 Plan"), which allows the Board of Directors (or the compensation committee thereof) to grant incentive stock options, non- qualified stock options, restricted stock 76

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) and deferred stock units to the Company's employees, consultants and independent directors, and to the employees and consultants of the Company's subsidiaries. A total of 4,800,000 shares of Leap common stock are reserved for issuance under the 2004 Plan. At December 31, 2004, no options or other awards were outstanding under the 2004 Plan. Predecessor Company Stock Option Plans Prior to the Effective Date, Leap had adopted and granted options under various option plans. On the Effective Date of the Plan of Reorganization, all options to purchase Leap common stock issued under such plans and outstanding immediately prior to the Effective Date were cancelled. The following paragraphs describe these other plans, which are no longer effective. Leap's 1998 Stock Option Plan (the "1998 Plan") allowed the Board of Directors to grant options to selected employees, directors and consultants of the Company to purchase shares of Leap's common stock. A total of 8,000,000 shares of common stock were reserved for issuance under the 1998 Plan. The 1998 Plan provided for the grant of both incentive and non- qualified stock options. Incentive stock options were exercisable at a price not less than 100% of the fair market value of the common stock on the date of grant. Non- qualified stock options were exercisable at a price not less than 85% of the fair market value of the common stock on the date of grant. Generally, options under the 1998 Plan vested over a five- year period and were exercisable for up to ten years from the grant date. Under Leap's 1998 Non- Employee Directors Stock Option Plan (the "1998 NonEmployee Directors Plan"), options to purchase common stock were granted to non- employee directors on an annual basis. A total of 500,000 shares of common stock were reserved for issuance under the 1998 Non- Employee Directors Plan. The options were exercisable at a price equal to the fair market value of the common stock on the date of grant, vested over a five- year period and were exercisable for up to ten years from the grant date. In June 1999, Cricket Communications Holdings, which subsequently merged into Cricket, adopted the 1999 Stock Option Plan (the "1999 Cricket Plan") that allowed the Cricket Communications Holdings Board of Directors to grant options to selected employees, directors and consultants to purchase shares of Cricket Communications Holdings common stock. A total of 7,600,000 shares of Cricket Communications Holdings common stock were reserved for issuance under the 1999 Cricket Plan. The 1999 Cricket Plan provided for the grant of both incentive and nonqualified stock options. Incentive stock options were exercisable at a price not less than 100% of the fair market value of the common stock on the date of grant. Non- qualified stock options were exercisable at a price not less than 85% of the fair market value of the common stock on the date of grant. Generally, options vested over a five- year period and were exercisable for up to ten years from the grant date. In connection with Leap's purchase of the remaining 5.11% of Cricket Communications Holdings that it did not already own in a subsidiary merger on June 15, 2000, each outstanding unexpired and unexercised option under the 1999 Cricket Plan was converted into a stock option to purchase 0.315 shares of Leap common stock. Subsequent to June 15, 2000, the 1999 Cricket Plan was used to grant options in Leap common stock. Under Leap's 2000 Stock Option Plan (the "2000 Plan"), a total of 2,250,000 shares of common stock were reserved for issuance. Terms of the 2000 Plan were comparable to the terms of the 1998 Plan. Leap's 2001 Non- Qualified Stock Option Plan (the "2001 Plan") allowed the Board of Directors to grant non- qualified options to selected employees, directors and consultants to the Company to purchase shares of Leap's common stock. A total of 2,500,000 shares of common stock were reserved for issuance under the 2001 Plan. Non- qualified stock options were exercisable at a price not less than 85% of the fair market value of the common stock on the date of grant. Generally, options vested over a four- year period and were exercisable for up to ten years from the grant date. The number of options that could have been granted to officers and directors of the Company under the 2001 Plan was limited. 77

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A summary of stock option transactions for the 1998 Plan, 1998 Non- Employee Directors Plan, 1999 Cricket Plan, 2000 Plan, and 2001 Plan follows (number of shares in thousands):
Options Outstanding Options Available for Grant Number of Shares Weighted Average Exercise Price

December 31, 2001 Options granted Options cancelled Options exercised December 31, 2002 Options cancelled December 31, 2003 Options cancelled July 31, 2004.

3,810 (2,185) 2,170 3,795 1,466 5,261 (5,261) 0

8,529 $ 2,185 (2,170) (142) 8,402 (1,467) 6,935 (6,935) 0

23.15 2.51 31.84 5.76 13.73 10.34 14.48 14.48

The following table summarizes information about stock options outstanding under the 1998 Plan, the 1998 Non- Employee Directors Plan, the 1999 Cricket Plan, the 2000 Plan and the 2001 Plan at December 31, 2003 (number of shares in thousands):
Options Outstanding Weighted Average Remaining Contractual Life (in Years) Options Exercisable Weighted Average Exercise Price Weighted Average Exercise Price

Exercise Prices

Number of Shares

Number of Shares

$0.20 to $0.30. $0.31 to $0.47. $0.48 to $0.71. $0.72 to $1.08. $1.09 to $1.64. $1.65 to $2.48. $2.49 to $3.73. $3.74 to $5.61. $5.62 to $8.43. $8.44 to $12.66 $12.67 to $19.00. $19.01 to $28.51. $28.52 to $42.79. $42.80 to $64.19. $64.20 to $96.31.

2 5 4 674 422 514 815 1,223 301 28 891 654 863 527 12 6,935

8.71 $ 8.67 8.61 8.57 8.38 3.11 3.59 4.29 5.22 6.91 7.05 6.39 7.45 6.55 6.64 5.96 $

0.25 0.39 0.65 0.90 1.58 2.06 3.19 4.70 6.31 10.02 16.93 20.87 31.67 58.03 72.94 14.48

- $ 1 1 170 254 397 811 1,143 235 14 525 426 423 321 8 4,729 $

0.25 0.39 0.65 0.90 1.58 2.12 3.19 4.67 6.09 10.20 17.25 20.49 31.63 58.04 72.94 12.95

At December 31, 2003 and 2002, 4,729,000 and 4,338,000 options were exercisable by employees of the Company at a weighted average exercise price of $12.95 and $10.79, respectively. 78

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Predecessor Company Employee Stock Purchase Plan Leap's 1998 Employee Stock Purchase Plan (the "1998 ESP Plan") allowed eligible employees to purchase shares of common stock at 85% of the lower of the fair market value of such stock on the first or the last day of each offering period. A total of 500,000 shares of common stock were reserved for issuance under the 1998 ESP Plan. Employees could authorize the Company to withhold up to 15% of their compensation during any offering period, subject to certain limitations. For the year ended December 31, 2002, 260,932 shares were issued under the 1998 ESP Plan at a weighted average price of $4.69 per share. On November 1, 2002, Leap suspended contributions to the 1998 ESP Plan. On the Effective Date, all shares previously issued under the 1998 ESP Plan were cancelled pursuant to the Plan of Reorganization. Predecessor Company Executive Retirement Plan Leap's voluntary retirement plan allowed eligible executives to defer up to 100% of their income on a pre- tax basis. On a quarterly basis, participants received up to a 50% match of their contributions (up to a limit of 20% of their base salary plus bonus) in the form of the Company's common stock based on the then current market price, to be issued to the participant upon eligible retirement. The plan authorized up to 100,000 shares of common stock to be allocated to participants. For the year ended December 31, 2002, 68,418 shares were allocated under the plan and the Company's matching contribution amounted to $141,357. In August 2002, the Company suspended all employee contributions to the executive retirement plan. On the Effective Date, all shares allocated for benefits under the plan were cancelled pursuant to the Plan of Reorganization. Predecessor Company Executive Officer Deferred Stock Bonus Plans Leap's Executive Officer Deferred Stock Plan (the "1999 Executive Officer Plan") provided for mandatory deferral of 25% and voluntary deferral of up to 75% of executive officer bonuses. A total of 25,000 shares of common stock were reserved for issuance under the 1999 Executive Officer Plan. Bonus deferrals were converted into share units credited to the participant's account, with the number of share units calculated by dividing the deferred bonus amount by the fair market value of Leap's common stock on the bonus payday. Share units represented the right to receive shares of Leap's common stock in accordance with the plan. Leap also credited to a matching account that number of share units equal to 20% of the share units credited to the participants' accounts. Matching share units were to vest ratably over three years on each anniversary date of the applicable bonus payday. In April 2001, Leap's shareholders approved the adoption of the 2001 Executive Officer Deferred Bonus Stock Plan (the "2001 Executive Officer Plan"). A total of 275,000 shares of common stock were reserved for issuance under the 2001 Executive Officer Plan. Terms of the 2001 Executive Officer Plan were comparable to the 1999 Executive Officer Plan. For the year ended December 31, 2002, 236,507 shares were issued under the 1999 and 2001 Executive Officer Plans combined. In August 2002, Leap suspended all employee contributions to the 1999 Executive Officer Plan and the 2001 Executive Officer Plan. On the Effective Date, all shares allocated for benefits under the plans were cancelled pursuant to the Plan of Reorganization. Predecessor Company Stock Option Exchange Program In November 2001, the Board of Directors approved a stock option exchange program (the "Exchange Program"). Under this program, eligible employees (excluding officers and outside directors) were given the opportunity to cancel certain stock options previously granted to them in exchange for an equal number of new stock options to be granted at a future date, at least six months and one day from the date the old options were cancelled, provided the individual was still employed or providing service on such date. The participation deadline for the program was December 18, 2001. The exercise price of the new options was the fair market value of Leap's common stock on the date of grant. The new options had the same vesting schedule as the old options and were exercisable as to vested shares six months after the date of grant. The Exchange Program 79

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) resulted in the voluntary cancellation of options to purchase approximately 770,651 shares of common stock with exercise prices ranging from $14.97 to $92.50 per share. In June 2002, Leap granted new stock options to purchase 683,318 shares of common stock with an exercise price of $1.58 per share, pursuant to the Exchange Program. On the Effective Date, all options granted in connection with the Exchange Program were cancelled pursuant to the Plan of Reorganization. Predecessor Company Pro Forma Information For purposes of pro forma disclosures, the fair value of options granted has been estimated at the date of grant using the Black- Scholes optionpricing model using the following weighted average assumptions:
Predecessor Company Year Ended December 31, 2002

Risk- free interest rate: 1999 Cricket Plan 1998 ESP Plan All other plans Volatility: 1999 Cricket Plan 1998 ESP Plan All other plans Dividend yield (all plans) Expected life (years): 1999 Cricket Plan 1998 ESP Plan All other plans The weighted average estimated grant date fair values of stock options were as follows:
Predecessor Company Year Ended December 31, 2002

3.4% 1.3% 3.5% 113.0% 120.3% 102.8% 0.0% 7.4 0.5 7.3

Stock options granted below fair value: 2000 Plan Stock options granted at fair value: 1998 Plan, 1998 Non- Employee Directors Plan, 2000 Plan and 2001 Plan 1999 Cricket Plan 1998 ESP Plan

1.22

$ $ $

2.43 1.11 6.98

No options were granted during the years ended December 31, 2004 and 2003. Note 11. Commitments and Contingencies Cricket has agreed to purchase a wireless license to provide service in Fresno, California for approximately $27.1 million (of which $1.8 million has been paid as a deposit as of December 31, 2004), plus the reimbursement of certain construction expenses not to exceed $500,000. The sale is subject to FCC approval, 80

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) and an application seeking consent to assign the license to Cricket is pending before the FCC. A party involved in the bankruptcy of the seller filed an objection with the FCC to the Company's application for consent to assign the license. The FCC granted its approval of the transfer on May 13, 2005. The FCC's order approving the transfer may be challenged during the 40- day period following the approval date. On the Petition Date, Leap, Cricket and substantially all of their subsidiaries filed voluntary petitions for relief under Chapter 11 in the United States Bankruptcy Court for the Southern District of California. On October 22, 2003, the Bankruptcy Court entered an order confirming the Plan of Reorganization. The effectiveness of the Plan of Reorganization was conditioned upon, among other things, the receipt of required regulatory approvals from the FCC for the transfer of wireless licenses associated with the change of control that occurred upon Leap's emergence from bankruptcy. Leap received the requisite approvals from the FCC on August 5, 2004. On August 16, 2004, Leap and the Cricket Companies satisfied the remaining conditions to the Plan of Reorganization, the Plan of Reorganization became effective, and the Company emerged from Chapter 11 bankruptcy. In connection with the Chapter 11 proceedings, the Bankruptcy Court established deadlines by which the holders of pre- emergence claims against the Company were required to file proofs of claim. The final deadline for such claims, relating to claims that arose during the course of the bankruptcy, was October 15, 2004, 60 days after the Effective Date of the Plan of Reorganization. Parties who were required to, but who failed to, file proofs of claim before the applicable deadlines are barred from asserting such claims against the Company in the future. Generally the Company's obligations have been discharged with respect to general unsecured claims for pre- petition obligations, although the holders of allowed general unsecured pre- petition claims against Leap have (and holders of pending general unsecured claims against Leap may have) a pro rata beneficial interest in the assets of the Leap Creditor Trust. The Company reviewed the remaining claims filed against it (consisting primarily of claims for prepetition taxes and for obligations incurred by the Company during the course of the Chapter 11 proceedings) and filed further objections by the Bankruptcy Court deadline of January 17, 2005. The Company does not believe that the resolution of the outstanding claims filed against it in bankruptcy will have a material adverse impact on the Company's consolidated financial statements. Foreign governmental authorities have asserted or are likely to assert tax claims of approximately $6.3 million, including interest, against Leap with respect to periods prior to the bankruptcy, although the Company believes that the true value of these asserted or potential claims is lower. Leap likely did not mail notice of its bankruptcy filings or the proceedings in the Bankruptcy Court to these governmental authorities. The Company is exploring methods to bring the claims of these foreign authorities within the bankruptcy claims resolution process. If the claims are resolved through the Bankruptcy Court, the Company expects any payment on the claims will be paid from restricted cash previously reserved to satisfy allowed administrative claims and allowed priority claims against Leap. In any event, the Company does not believe that the resolution of these issues will have a material adverse effect on the Company's consolidated financial statements. On December 31, 2002, several members of American Wireless Group, LLC, referred to as AWG, filed a lawsuit against various officers and directors of Leap in the Circuit Court of the First Judicial District of Hinds County, Mississippi, referred to herein as the Whittington Lawsuit. Leap purchased certain FCC wireless licenses from AWG and paid for those licenses with shares of Leap stock. The complaint alleges that Leap failed to disclose to AWG material facts regarding a dispute between Leap and a third party relating to that party's claim that it was entitled to an increase in the purchase price for certain wireless licenses it sold to Leap. In their complaint, plaintiffs seek rescission and/or damages according to proof at trial of not less than the aggregate amount paid for the Leap stock (alleged in the complaint to have a value of approximately $57.8 million in June 2001 at the closing of the license sale transaction), plus interest, punitive or exemplary damages in the amount of not less than three times compensatory damages, and costs and expenses. Leap is not a defendant in the Whittington Lawsuit. Plaintiffs contend that the named defendants are the controlling group that was responsible for Leap's alleged failure to disclose the material facts regarding the third party 81

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) dispute and the risk that the shares held by the plaintiffs might be diluted if the third party was successful in an arbitration proceeding. Defendants filed a motion to compel arbitration or in the alternative, dismiss the Whittington Lawsuit, noting that plaintiffs as members of AWG agreed to arbitrate disputes pursuant to the license purchase agreement, that they failed to plead facts that show that they are entitled to relief, that Leap made adequate disclosure of the relevant facts regarding the third party dispute, and that any failure to disclose such information did not cause any damage to the plaintiffs. In a related action to the action described above, on June 6, 2003, AWG filed a lawsuit in the Circuit Court of the First Judicial District of Hinds County, Mississippi, referred to herein as the AWG Lawsuit, against the same individual defendants named in the Whittington Lawsuit. The complaint generally sets forth the same claims made by the plaintiffs in the Whittington Lawsuit. Leap is not a defendant in the AWG Lawsuit. In its complaint, plaintiff seeks rescission and/or damages according to proof at trial of not less than the aggregate amount paid for the Leap stock (alleged in the complaint to have a value of approximately $57.8 million in June 2001 at the closing of the license sale transaction), plus interest, punitive or exemplary damages in the amount of not less than three times compensatory damages, and costs and expenses. Defendants filed a motion to compel arbitration or in the alternative, dismiss the AWG Lawsuit, making arguments similar to those made in their motion to dismiss the Whittington Lawsuit. Although Leap is not a defendant in either the Whittington or AWG Lawsuits, several of the defendants have indemnification agreements with the Company. Leap's D&O insurers have not filed a reservation of rights letter and have been paying defense costs. Management believes that the liability, if any, from the AWG and Whittington Lawsuits and the related indemnity claims of the defendants against Leap is not probable and estimable; therefore, no accrual has been made in the Company's consolidated financial statements as of December 31, 2004 related to these contingencies. A third party with a large patent portfolio has contacted the Company and suggested that it needs to obtain a license under a number of its patents in connection with the Company's current business operations. The Company understands that the third party has initiated similar discussions with other telecommunications carriers. The Company does not currently expect that the resolution to this matter will have a material adverse effect on the Company's financial statements. The Company is often involved in various other claims arising in the course of business, seeking monetary damages and other relief. The amount of the liability, if any, from such claims cannot currently be reasonably estimated; therefore, no accruals have been made in the Company's consolidated financial statements as of December 31, 2004 for such claims. In the opinion of the Company's management, the ultimate liability for such claims will not have a material adverse effect on the Company's consolidated financial statements. The Company has entered into non- cancelable operating lease agreements to lease its facilities, certain equipment and sites for towers and antennas required for the operation of its wireless networks in the United States. Scheduled future minimum rental payments required for all noncancelable operating leases at December 31, 2004 are as follows (in thousands): Year Ending December 31: 2005 2006 2007 2008 2009 Thereafter Total $ 54,745 33,941 18,457 15,950 13,122 43,863 180,078

82

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Rent expense totaled $24.1 million and $31.7 million for the five months ended December 31, 2004 and the seven months ended July 31, 2004, respectively, and $58.4 million and $60.8 million for the years ended December 31, 2003 and 2002, respectively. Note 12. Acquisitions and Dispositions of Wireless Licenses During the seven months ended July 31, 2004, the Company completed the sale of wireless licenses with an aggregate net carrying value of $1.5 million. The Company received total consideration of $2.0 million and recognized a gain of $0.5 million. During the year ended December 31, 2003, the Company completed the sale of wireless licenses with an aggregate net carrying value of $0.2 million. The Company received total consideration of $4.8 million and recognized a gain of $4.6 million. During the year ended December 31, 2002, the Company completed the exchange of wireless licenses with an aggregate net carrying value of $7.7 million. As there was no cash consideration given or received by the Company as part of the transaction, the wireless licenses received were recorded at the net carrying value of the wireless licenses exchanged. In August 2002, the Company issued an additional 21,020,431 shares of its common stock with a fair value at the time of issuance of $8.7 million as an adjustment to the purchase price of certain wireless licenses purchased during the year ended December 31, 2002, pursuant to a binding arbitration award. Note 13. Investments in Alaska Native Broadband and Pegaso Alaska Native Broadband Investments In November 2004, Cricket and another party formed Alaska Native Broadband 1 LLC ("ANB 1") for the purpose of participating in the FCC's Auction #58 (Note 15) with nominal investments. In December 2004, the Company loaned $8.0 million to ANB 1 which is recorded in other assets. The Company has determined that its investment in ANB 1 is required to be consolidated under FASB Interpretation ("FIN") No. 46- R, "Consolidation of Variable Interest Entities." Such consolidation requirements did not have a material impact on the Company's consolidated financial statements for the year ended December 31, 2004. Investment in Pegaso In September 2002, the Company completed the sale of its 20.1% interest in the outstanding capital stock of Pegaso Telecomunicaciones, S.A. de C.V. ("Pegaso") to Telefnica Mviles, S.A. for cash proceeds of $22.2 million. In addition, the Company received $15.8 million in proceeds for the repayment of the Pegaso notes. The Company recorded a gain of $39.5 million in its results of operations for the year ended December 31, 2002 related to the sale. Note 14. Segment and Geographic Data The Company operated in a single operating segment as a wireless communications carrier that offers digital wireless service in the United States. As of and for the years ended December 31, 2004, 2003 and 2002, all of the Company's revenues and long- lived assets related to operations in the United States. Note 15. Subsequent Events Credit Agreement On January 10, 2005, Cricket entered into a senior secured credit agreement (the "Credit Agreement") with a syndicate of lenders and Bank of America, N.A. (as administrative agent and letter of credit issuer). 83

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The new facilities under the Credit Agreement consist of a six- year $500 million term loan, which was fully drawn at closing, and an undrawn five- year $110 million revolving credit facility. Under the Credit Agreement, the term loan bears interest at the London Interbank Offered Rate (LIBOR) plus 2.5 percent, with interest periods of one, two, three or six months, or bank base rate plus 1.5 percent, as selected by Cricket. Outstanding borrowings under the term loan must be repaid in 20 quarterly payments of $1.25 million each, commencing March 31, 2005, followed by four quarterly payments of $118.75 million each, commencing March 31, 2010. The maturity date for outstanding borrowings under the revolving credit facility is January 10, 2010. The commitment of the lenders under the revolving credit facility may be reduced in the event mandatory prepayments are required under the Credit Agreement and by one- twelfth of the original aggregate revolving credit commitment on January 1, 2008 and by one- sixth of the original aggregate revolving credit commitment on January 1, 2009 (each such amount to be net of all prior reductions) based on certain leverage ratios and other tests. The commitment fee on the revolving credit facility is payable quarterly at a rate of 1.0 percent per annum when the utilization of the facility (as specified in the Credit Agreement) is less than 50 percent and at 0.75 percent per annum when the utilization exceeds 50 percent. Borrowings under the revolving credit facility would currently accrue interest at LIBOR plus 2.5 percent with interest periods of one, two, three or six months or bank base rate plus 1.5 percent, as selected by Cricket, with the rate subject to adjustment based on the Company's leverage ratio. The new credit facilities are guaranteed by Leap and all of its direct and indirect domestic subsidiaries (other than Cricket, which is the primary obligor, ANB 1 and ANB 1 License) and are secured by all present and future personal property and owned real property of Leap, Cricket and all of their direct and indirect domestic subsidiaries. A portion of the proceeds from the term loan borrowing were used by the Company to redeem Cricket's 13% senior secured pay- in- kind notes, to pay approximately $43 million of call premium and accrued interest on such notes, to repay approximately $41 million in principal amount of debt and accrued interest owed to the FCC, and to pay transaction fees and expenses. The remaining note proceeds of approximately $60 million will be used for general corporate purposes. Under the Credit Agreement, the Company is subject to certain limitations, including limitations on its ability: to incur additional debt or sell assets, with restrictions on the use of proceeds; to make certain investments and acquisitions; to grant liens; and to pay dividends and make certain other restricted payments. In addition, the Company will be required to pay down the facilities under certain circumstances if it issues debt or equity, sells assets or property, receives certain extraordinary receipts or generates excess cash flow (as defined in the Credit Agreement). The Company is also subject to financial covenants which include a minimum interest coverage ratio, a maximum total leverage ratio, a maximum senior secured leverage ratio and a minimum fixed charge coverage ratio. Affiliates of Highland Capital Management, L.P. (a beneficial shareholder of Leap and an affiliate of James D. Dondero, a director of Leap) participated in the syndication of the Company's new Credit Agreement in the following amounts: $100 million of the $500 million term loan and $30 million of the $110 million revolving credit facility. On April 15, 2005, the Company obtained a waiver of certain defaults and potential defaults under the Credit Agreement. The Company had not completed the preparation of its audited financial statements for the year ended December 31, 2004 by March 31, 2005 and, as a result, was not able to deliver such financial statements to the administrative agent under the Credit Agreement by such date. The failure to deliver such financial statements by March 31, 2005 was a default under the Credit Agreement. Accordingly, the Company requested and received from the required lenders under the Credit Agreement a waiver of the Company's obligations to provide such audited financial statements to the administrative agent until May 16, 2005. The waiver also extended the Company's obligation to provide its unaudited financial statements for the quarter ended March 31, 2005 to the administrative agent until June 15, 2005, and waived any default that may occur under the Credit Agreement if the Company amends its financial statements for the fiscal quarter ended 84

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) September 30, 2004 or for any earlier period, provided certain conditions are met. The Company expects that it will meet all of the requirements of the waiver in a timely manner. Winning Bids in Auction #58 In February 2005, Cricket's wholly- owned subsidiary, Cricket Licensee (Reauction), Inc., was named the winning bidder in the FCC's Auction #58 for four wireless licenses. In March 2005, Cricket Licensee (Reauction), Inc. paid to the FCC additional payments in the amount of $151.9 million, increasing its total amounts paid to the FCC to $166.9 million, the aggregate purchase price for the four licenses. The transfers of wireless licenses to Cricket Licensee (Reauction), Inc. were subject to FCC approval. The FCC approved the grants of these licenses on May 13, 2005. In addition, in February 2005, a subsidiary of ANB 1 (Note 13) was named the winning bidder in Auction #58 for nine wireless licenses for $68.2 million. The transfers of wireless licenses to ANB 1 License are subject to FCC approval. Although the Company expects that such approvals will be issued in the normal course, there can be no assurance that the FCC will grant such approvals. Upon transfer of the wireless licenses to ANB 1 License, the Company will owe approximately $5.5 million of origination fees to a third party. In March 2005, Cricket made loans under its senior secured credit facility with ANB 1 License in the aggregate principal amount of $56.2 million. ANB 1 License paid these borrowed funds, together with $4.0 million of equity contributions, to the FCC to increase its total FCC payments to $68.2 million, the aggregate purchase price for the nine licenses. Acquisitions and Dispositions In March 2005, subsidiaries of Leap signed an agreement to sell 23 wireless licenses and the Company's operating assets in its Michigan markets for up to $102.5 million. Completion of the transaction is subject to, among other things, FCC approval and other customary closing conditions, including obtaining third party consents. In March 2005, the Company also announced an agreement for the sale of approximately 140 cell towers and cell tower related assets for approximately $18 million. Under the agreement, the Company will lease back space at the tower sites for its networks. The closing of the sale is subject to the purchaser's completion of due diligence and other conditions customary for a sale of this type. Issuance of Stock Option Grants During the first quarter of 2005, under the terms of the 2004 Plan, the Company granted a total of 839,658, net non- qualified stock options to executive officers and employees of the Company and members of the Board of Directors for recognition of current and future service on the Board and other committees. A total of 4,800,000 shares of Leap common stock are reserved for issuance under the 2004 Plan. 85

Table of Contents LEAP WIRELESS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 16. Quarterly Financial Data (Unaudited) The following financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the Company's results of operations for the interim periods. Summarized data for the Successor Company for the two months ended September 30, 2004 and the quarter ended December 31, 2004 and the Predecessor Company for the first and second quarters of 2004, the one month ended July 31, 2004 and each quarterly period for 2003 is as follows (in thousands, except per share data):
Year Ended December 31, 2004 Predecessor Company Three Months Ended March 31, Three Months Ended June 30, One Month Ended July 31, (As Restated)(1) Successor Company Two Months Ended September 30, (As Restated)(1) Three Months Ended December 31,

Revenues $ Operating income (loss) Net income (loss)(2) Basic and diluted net income (loss) per common share

206,822 $

205,701 $

69,124 $

137,783 $

206,577

(22,257)

(15,008)

(3,335)

5,504

4,934

(28,030)

(18,145)

959,365

(1,982)

(6,647)

(0.48)

(0.31)

16.36
Year Ended December 31, 2003

(0.03)

(0.11)

Predecessor Company

Q1

Q2

Q3

Q4

Revenues Operating loss Net loss(3) Basic and diluted net loss per common share (1) (2) (3)

183,847 $ (63,888) (133,538) (2.28)

185,644 $ (227,680) (243,719) (4.16)

192,883 $ (40,356) (47,417) (0.81)

188,922 (28,451) (172,763) (2.95)

See discussion in Note 2 of these consolidated financial statements. During the one month ended July 31, 2004, the Company recorded a net reorganization gain of $963.2 million relating to the net gain on discharge of liabilities and net effect from the application of fresh- start accounting. During the three months ended June 30, 2003, the Company recorded an impairment charge of $171.1 million to reduce the carrying value of its wireless licenses, and ceased accruing interest and amortizing debt issuance costs on all of its debt in default subject to compromise. During the three months ended December 31, 2003, the Company recorded charges of $174.1 million related to the adjustment of the Company's liabilities subject to compromise to their expected allowed amounts and $12.1 million of professional fees for legal, financial advisory and valuation services directly associated with the Company's Chapter 11 filings and reorganization process, offset by $34.8 million of debt forgiveness income from the settlement of certain pre- petition liabilities. 86

Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures Following publication of a letter regarding accounting for leases issued by the Office of the Chief Accountant of the U.S. Securities and Exchange Commission on February 7, 2005, the Company reviewed its accounting for leases, including its site retirement and remediation obligations. As a result of this review, and in connection with preparing for its annual audit, the Company identified accounting errors in its unaudited interim financial statements included in the Company's Quarterly Report on Form 10- Q for the three months ended September 30, 2004. For the one and seven month periods ended July 31, 2004, these errors included the overstatement of deferred rent and certain vendor obligations, and the understatement of asset retirement obligations and deferred income tax liability. For the two month period ended September 30, 2004, the errors included the understatement of lease- related expenses, service and equipment revenue, investment gains and the tax effect of these errors. As more fully described in Note 2 to our Consolidated Financial Statements included in this report, the Company's management and its Audit Committee concluded that the Company's unaudited interim financial statements for the one and seven month periods ended July 31, 2004 and the two month period ended September 30, 2004 should be restated to correct these accounting errors. The Company's management and Audit Committee discussed the proposed restatement with the Company's independent registered public accounting firm. According to the PCAOB's Auditing Standard No. 2, "An Audit of Internal Control over Financial Reporting Performed in Conjunction with an Audit of Financial Statements," restatement of financial statements in prior filings with the SEC is a strong indicator of the existence of a material weakness. A "material weakness" is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the SEC and that such information is accumulated and communicated to management, including its chief executive officer ("CEO") and chief financial officer ("CFO"), as appropriate, to allow for timely decisions regarding required disclosure. Management, with participation by the Company's CEO and CFO, has designed the Company's disclosure controls and procedures to provide reasonable assurance of achieving the desired objectives. As required by SEC Rule 13a15(b), management conducted an evaluation, with the participation of the Company's CEO and CFO, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of December 31, 2004, the end of the period covered by this report. Based upon that evaluation, the Company's CEO and CFO concluded that certain control deficiencies, each of which constituted a material weakness, as discussed below, existed in the Company's internal control over financial reporting as of December 31, 2004. These material weaknesses resulted in restatement to the Company's consolidated financial statements as discussed in the first paragraph above. As a result of the material weaknesses, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2004. The Company performed additional analyses and other post- closing procedures in order to conclude that its consolidated financial statements included in this Annual Report on Form 10- K are presented in accordance with accounting principles generally accepted in the United States of America. Accordingly, management believes that despite these material weaknesses, the consolidated financial statements included in this Annual Report on Form 10- K fairly present in all material respects the Company's financial condition, results of operations and cash flows for the periods presented. 87

Table of Contents The material weaknesses, additional analyses, and other remediation procedures are described more fully below. Insufficient Staffing in the Accounting and Financial Reporting Functions. The Company's accounting and financial reporting functions require additional personnel with appropriate skills and training to identify and address the application of technical accounting literature. The Company has been unable to maintain a sufficient complement of qualified staff in its accounting and financial reporting functions and, as a result of staff turnover, the Company has suffered from an associated lack of knowledge transfer to new employees within these functions. The Company believes that its insufficient complement of staffing and high turnover resulted, in large part, from (1) the significantly increased workload placed on its accounting and financial reporting staff during the Company's bankruptcy and the months after the Company's emergence from bankruptcy during which it was implementing fresh- start reporting, and (2) the departure of some staff members during the Company's bankruptcy and in the first several months after its emergence due to concerns about the Company's prospects. In its efforts to remediate this material weakness, the Company is undertaking an expansion of its accounting and financial reporting department. The Company has been hiring, and continues to actively recruit, appropriately qualified and experienced personnel in the areas of accounting and financial reporting to fill both newly created and currently vacant roles, and has instituted programs to enhance retention. The Company is actively recruiting a chief financial officer (this office is currently filled by an acting chief financial officer). The Company also recently hired a new vice president, chief accounting officer, to serve as the Company's controller, who is expected to commence employment in May 2005. The Company believes these steps, along with its emergence from bankruptcy and the associated reduction of employee uncertainty with respect to the Company's prospects, will result in a permanent increase in the complement of staffing in its accounting and financial reporting functions. Additionally, the Company has hired a firm to assist with documentation of controls and procedures pertaining to internal control over financial reporting as part of its on- going effort to implement Section 404 of the Sarbanes- Oxley Act of 2002. Management believes these documentation efforts will be instrumental in remediating this material weakness and expects to have filled a substantial number of the open positions in the near future. This material weakness contributed to the following three control deficiencies which are individually considered to be material weaknesses. Errors in the Application of Lease- Related Accounting Principles. In its review of its lease accounting, the Company identified errors in assumptions that resulted in the incorrect accounting for rent expense and remediation obligations associated with its leases. The Company has taken the following actions between February and May 2005 to remediate this material weakness: reviewed the terms of over 2,500 cell- site, switch and other leases and re- assessed lease term assumptions to assure proper accounting for the rent expense and asset retirement obligations with respect to these leases; corrected the errors identified in its condensed consolidated interim financial statements for the one and seven month periods ended July 31, 2004 and the two months ended September 30, 2004; made necessary adjustments in its 2004 consolidated financial statements; 88

Table of Contents changed its internal control over financial reporting to identify the procedures to follow for appropriate lease accounting; and educated accounting department personnel regarding correct lease accounting procedures. Management believes these steps, together with the expected hiring of additional qualified personnel as described above, will be effective in remediating this material weakness in the near future. Fresh- Start Reporting Adjustments. In preparing for its annual audit, the Company identified several errors resulting from inadequate oversight of the fresh- start reporting adjustments recorded as of July 31, 2004 in connection with the Company's emergence from bankruptcy. The Company believes these errors occurred as a result of the substantial additional workload on its accounting staff in connection with fresh- start reporting and the insufficient staffing levels and the associated lack of knowledge transfer to new employees within these functions as described above. The Company determined that it overstated deferred rent and certain vendor obligations which should have been eliminated as a result of the emergence from bankruptcy and the implementation of fresh- start reporting. The Company has taken the following actions between February and May 2005 with respect to its fresh- start reporting to remediate this material weakness: reviewed the fresh- start reporting adjustments made in connection with the Company's emergence from bankruptcy; corrected the errors identified in its unaudited interim condensed consolidated financial statements for the one and seven month periods ended July 31, 2004; and made necessary adjustments in its 2004 consolidated financial statements. Management believes these steps, together with the expected hiring of additional qualified personnel as described above, will be effective in remediating this material weakness in the near future. Inadequate Account Reconciliation Procedures. In preparing for its annual audit, the Company identified errors that resulted from inadequate reconciliation of deferred revenue that should have been recognized as service revenue. In addition, with the implementation of fresh- start reporting, our investments were re- valued at fair market value but the Company did not have the reconciliation procedures in place to separately track the gains and losses on such investments subsequent to the implementation of fresh- start reporting. The Company is in the process of remediating this material weakness with respect to its inadequate account reconciliation procedures by taking the following actions: establishing and communicating additional procedures for the analysis, review and approval of account reconciliations; having supervisory personnel review and approve all account reconciliations; correcting the related errors identified in its condensed consolidated interim financial statements for the one and seven month periods ended July 31, 2004 and the two months ended September 30, 2004; and making necessary adjustments in its 2004 consolidated financial statements. Management believes these steps, together with the expected hiring of additional qualified personnel as described above, will be effective in remediating this material weakness in the near future. (b) Changes in Internal Controls Over Financial Reporting There were no changes in the Company's internal controls over financial reporting during the Company's fiscal quarter ended December 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting. The changes to the Company's internal controls over financial reporting described above were implemented after December 31, 2004. 89

Table of Contents Item 9B. None. Item 10. Directors Other Information PART III Directors and Executive Officers of the Registrant
Name Age Position with the Company

Mark H. Rachesky, MD James D. Dondero John D. Harkey, Jr. S. Douglas Hutcheson Robert V. LaPenta Michael B. Targoff

46 42 44 49 59 60

Chairman of the Board Director Director Chief Executive Officer, President and Director Director Director

Mark H. Rachesky, MD has served as a member and chairman of our board of directors since August 2004. Dr. Rachesky is the founder and president of MHR Fund Management LLC, which is an investment manager of various private investment funds that invest in inefficient market sectors, including special situation equities and distressed investments. From 1990 through June 1996, Dr. Rachesky served in various positions at Icahn Holding Corporation, including as a senior investment officer and for the last three years as sole managing director and acting chief investment advisor. Dr. Rachesky also serves as a member of the board of directors of Neose Technologies, Inc. and Novadel Pharma Inc. Dr. Rachesky holds a B.S. in molecular aspects of cancer from the University of Pennsylvania, a M.D. from the Stanford University School of Medicine, and an M.B.A. from the Stanford University School of Business. James D. Dondero has served as a member of our board of directors since August 2004. Mr. Dondero is the founder of Highland Capital Management, L.P. and has served as its president since 1993. Prior to founding Highland Capital Management, L.P, Mr. Dondero served as chief investment officer of a subsidiary of Protective Life Insurance Company. Mr. Dondero is also currently a member of the board of directors of NeighborCare, Inc., Motient Corporation, and American Banknote Corp. Mr. Dondero holds degrees in accounting and finance, beta gamma sigma, from the University of Virginia. Mr. Dondero completed financial training at Morgan Guaranty Trust Company, and is a certified public accountant, a chartered financial analyst and a certified management accountant. John D. Harkey, Jr. has served as a member of our board of directors since March 2005. Since 1998, Mr. Harkey has served as chief executive officer and chairman of Consolidated Restaurant Companies, Inc., and as chief executive officer and vice chairman of Consolidated Restaurant Operations, Inc., and has been manager of the investment firm Cracken, Harkey & Street, L.L.C. since 1997. From 1992 to 1998, Mr. Harkey was a partner with the law firm Cracken & Harkey, LLP. Mr. Harkey was founder and managing director of Capstone Capital Corporation and Capstone Partners, Inc. from 1989 until 1992. He also serves on the Board of Directors of Total Entertainment Restaurant Corporation and on the Executive Board of Circle Ten Council of the Boy Scouts of America. Mr. Harkey obtained his B.B.A. with honors and a J.D. from the University of Texas at Austin and an M.B.A. from Stanford University School of Business. S. Douglas Hutcheson was appointed as our chief executive officer, president and director in February 2005, having previously served as our president and chief financial officer from January 2005 to February 2005, as our executive vice president and chief financial officer from January 2004 to January 2005, as our senior vice president and chief financial officer from August 2002 to January 2004, as our senior vice president and chief strategy officer from March 2002 to August 2002, as our senior vice president, product development and strategic planning from July 2000 to March 2002, as our senior vice president, business development from March 1999 to July 2000 and as our vice president, business development from September 1998 to March 1999. From February 1995 to September 1998, Mr. Hutcheson served as vice president, marketing in the 90

Table of Contents Wireless Infrastructure Division at Qualcomm Incorporated. Mr. Hutcheson holds a B.S. in mechanical engineering from California Polytechnic University and an M.B.A. from University of California, Irvine. Robert V. LaPenta has served as a member of our board of directors since March 2005. Mr. LaPenta is the Chairman and Chief Executive Officer of L- 1 Investment Partners, LLC, an investment firm seeking investments in the biometrics area. Mr. LaPenta served as president, chief financial officer and director of L- 3 Communications Holdings, Inc. from April 1997 until his retirement from those positions effective April 1, 2005. From April 1996, when Loral Corporation was acquired by Lockheed Martin Corporation, until April 1997, Mr. LaPenta was a vice president of Lockheed Martin and was vice president and chief financial officer of Lockheed Martin's C3I and Systems Integration Sector. Prior to the April 1996 acquisition of Loral, he was Loral's senior vice president and controller, a position he held since 1981. He previously served in a number of other executive positions with Loral since he joined that company in 1972. Mr. LaPenta is on the Board of Trustees of Iona College, the Board of Trustees of The American College of Greece and the Board of Directors of Core Software Technologies. Mr. LaPenta received a B.B.A. in accounting from Iona College in New York. Michael B. Targoff has served as a member of our board of directors since September 1998. He is founder of Michael B. Targoff and Co., a company that seeks controlling investments in telecommunications and related industry companies and serves as its chief executive officer. From its formation in January 1996 through January 1998, Mr. Targoff was president and chief operating officer of Loral Space & Communications Limited. Mr. Targoff was senior vice president of Loral Corporation until January 1996. Previously, Mr. Targoff was also the president of Globalstar Telecommunications Limited, the public owner of Globalstar, Loral's global mobile satellite system. Mr. Targoff serves as a member of the board of directors of Kayne Anderson MLP Investment Company, Infocrossing, Inc., Viasat, Inc. and Communications and Power Industries, Inc., in addition to serving as chairman of the boards of directors of two small private telecommunications companies. Before joining Loral Corporation in 1981, Mr. Targoff was a partner in the New York law firm of Willkie Farr & Gallagher. Mr. Targoff holds a B.A. from Brown University and a J.D. from Columbia University School of Law. Executive Officers Biographical information for the executive officers of Leap who are not directors is set forth below. There are no family relationships between any director or executive officer and any other director or executive officer. Executive officers serve at the discretion of the Board of Directors and until their successors have been duly elected and qualified, unless sooner removed by the Board of Directors.
Name Age Position with the Company

Albin F. Moschner Glenn T. Umetsu David B. Davis Robert J. Irving, Jr. Leonard C. Stephens Dean M. Luvisa

52 55 39 49 48 44

Executive Vice President and Chief Marketing Officer Executive Vice President and Chief Technical Officer Senior Vice President, Operations Senior Vice President, General Counsel and Secretary Senior Vice President, Human Resources Acting Chief Financial Officer and Treasurer

Albin F. Moschner has served as our executive vice president and chief marketing officer since January 2005, having previously served as senior vice president, marketing from September 2004 to January 2005. Prior to this, Mr. Moschner was president of Verizon Card Services from December 2000 to November 2003. Prior to joining Verizon, Mr. Moschner was president and chief executive officer of OnePoint Services, Inc., a telecommunications company that he founded and that was acquired by Verizon in December 2000. Mr. Moschner also was a principal and the vice chairman of Diba, Inc., a development stage internet software company, and served as senior vice president of operations, a member of the board of directors and ultimately president and chief executive officer of Zenith Electronics from October 1991 to July 1996. Mr. Moschner holds a master's in electrical engineering from Syracuse University and a B.E. in electrical engineering from the City College of New York. 91

Table of Contents Glenn T. Umetsu has served as our executive vice president and chief technical officer since January 2005, having previously served as our executive vice president and chief operating officer from January 2004 to January 2005, as our senior vice president, engineering operations and launch deployment from June 2002 to January 2004, and as vice president, engineering operations and launch development from April 2000 to June 2002. From September 1996 to April 2000, Mr. Umetsu served as vice president, engineering and technical operations for Cellular One in the San Francisco Bay Area. Before Cellular One, Mr. Umetsu served in various telecommunications operations roles for 24 years with AT&T Wireless, McCaw Communications, RAM Mobile Data (now Cingular Mobile Data), Honolulu Cellular, PacTel Cellular, AT&T Advanced Mobile Phone Service, Northwestern Bell and the United States Air Force. Mr. Umetsu holds a B.A. in mathematics and economics from Brown University. David B. Davis has served as our senior vice president, operations since July 2001, having previously served as our regional vice president, Midwest Region from March 2000 to July 2001. Before joining Leap, Mr. Davis spent six years with Cellular One, CMT Kansas/ Missouri in various management positions culminating in his role as vice president and general manager. Before Cellular One, Mr. Davis was market manager for the PacTel- McCaw joint venture. Mr. Davis holds a B.S. from the University of Central Arkansas. Robert J. Irving, Jr. has served as our as senior vice president, general counsel and secretary since May 2003, having previously served as our vice president, legal from August 2002 to May 2003, and as our senior legal counsel from September 1998 to August 2002. Previously, Mr. Irving served as administrative counsel for Rohr, Inc., a corporation that designed and manufactured aerospace products from 1991 to 1998, and prior to that was vice president, general counsel and secretary for IRT Corporation, a corporation that designed and manufactured x- ray inspection equipment. Before joining IRT Corporation, Mr. Irving was an attorney at Gibson, Dunn & Crutcher. Mr. Irving was admitted to the California Bar Association in 1982. Mr. Irving holds a B.A. from Stanford University, an M.P.P. from The John F. Kennedy School of Government of Harvard University and a J.D. from Harvard Law School, where he graduated cum laude. Leonard C. Stephens has served as our senior vice president, human resources since our formation in June 1998. From December 1995 to September 1998, Mr. Stephens was vice president, human resources operations for Qualcomm Incorporated. Before joining Qualcomm Incorporated, Mr. Stephens was employed by Pfizer Inc., where he served in a number of human resources positions over a 14- year career. Mr. Stephens holds a B.A. from Howard University. Dean M. Luvisa has served as our acting chief financial officer and treasurer since February 2005, having previously served as our vice president of finance and treasurer from May 2002 to February 2005 and as our vice president of finance from September 1998 to May 2002. Prior to joining Cricket, Mr. Luvisa was director of project finance at Qualcomm Incorporated, where he was responsible for Qualcomm's vendor financing activities worldwide. Before Qualcomm, he was the chief financial officer of a finance company associated with Galaxy Latin America, an affiliate of DirecTV and Hughes Electronics. In other capacities at Hughes Electronics, Mr. Luvisa was responsible for project finance, vendor finance, mergers & acquisitions and corporate funding. Mr. Luvisa graduated summa cum laude from Arizona State University with a B.S. in economics, and earned an M.B.A. in finance from The Wharton School at the University of Pennsylvania. Audit Committee Financial Experts Our Board of Directors has determined that Michael B. Targoff, currently the only member of the Audit Committee, meets the definition of an "audit committee financial expert," as set forth in Item 401(h)(2) of SEC Regulation S- K, and meets the NASDAQ standards of independence adopted by the SEC for membership on an audit committee. Stockholder Nominees Nominations of persons for election to the Board of Directors may be made at the annual meeting of stockholders by any stockholder who is entitled to vote at the meeting and who has complied with the notice procedures set forth in Section 8 of the Amended and Restated Bylaws of Leap. Generally, these procedures 92

Table of Contents require stockholders to give timely notice in writing to the Secretary of Leap, including all information relating to the nominee that is required to be disclosed in solicitations of proxies for election of directors and the nominee's written consent to being named in the proxy and to serving as a director if elected. Stockholders are encouraged to review the Bylaws which are filed as an exhibit to this report for a complete description of the procedures. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires Leap's directors and executive officers, and persons who beneficially own more than ten percent of a registered class of Leap's equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of Leap. Officers, directors and greater- than- ten- percent beneficial owners are required by SEC regulations to furnish Leap with copies of all Section 16(a) forms they file. To Leap's knowledge, based solely upon a review of Forms 3 and 4 and amendments thereto furnished to Leap pursuant to Rule 16a- 3(e) during the year ended December 31, 2004, and Forms 5 and amendments thereto furnished to Leap with respect to the year ended December 31, 2004, and written representations that no Form 5 is required, all Section 16(a) filing requirements applicable to its officers, directors and greater- than- tenpercent beneficial owners were complied with. Code of Ethics We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. Our Code of Business Conduct and Ethics is posted on our website www.Leapwireless.com. Item 11. Executive Compensation The following table sets forth compensation information with respect to Leap's chief executive officer and other four most highly paid executive officers for the fiscal year ended December 31, 2004, or the named executive officers. The information set forth in the following tables reflects compensation earned by the named executive officers for services they rendered to us during the 12 months ended December 31, 2004, 2003 and 2002. Harvey P. White, our former chairman of the board and chief executive officer, resigned from his position with us in June 2004. Mr. William M. Freeman, who succeeded Mr. White as chief executive officer, commenced his employment with us in May 2004 and resigned from his position with us in February 2005. Summary Compensation Table
Long- Term Compensation Annual Compensation(1) Name and Principal Positions At Leap Other Annual Compensation(2) Securities Underlying Options (#) All Other Compensation(11)

Year

Salary

Bonus

S. Douglas Hutcheson Chief Executive Officer, President and Director Glenn T. Umetsu Executive Vice President and Chief Technical Officer Leonard C. Stephens Senior Vice President, Human Resources David B. Davis Senior Vice President, Operations

2004 $

334,816 $

602,785(3) $

10,640

- $

22,962

2003 $

290,923 $

159,841(4) $

22,686

- $

23,361

2002 $ 2004 $

262,692 $ 311,846 $

- $ 532,678(3) $

4,527 5,192

- $ - $

21,130 26,028

2003 $ 2002 $ 2004 $

265,385 $ 248,269 $ 284,090 $

100,284(4) $ 129,133 $

4,808 583,259(5) 3,186

- $ - $ - $

28,954 27,604 23,160

405,279(3) $

2003 $ 2002 $ 2004 $

271,115 $ 273,692 $ 250,404 $

136,234(4) $ - $ 378,381(3) $

24,890 7,135 13,136

- $ - $ - $

17,568 95,377 16,644

2003 $ 2002 $

240,423 $ 233,269 $

105,936(4) $ - $ 93

14,833 6,065

- $ - $

11,420 17,631

Table of Contents
Long- Term Compensation Annual Compensation(1) Name and Principal Positions At Leap Other Annual Compensation(2) Securities Underlying Options (#) All Other Compensation(11)

Year

Salary

Bonus

Robert J. Irving, Jr. Senior Vice President, General Counsel and Secretary Harvey P. White Former Chairman of the Board and Chief Executive Officer William M. Freeman Former Chief Executive Officer and Director Officer (1)

2004 $

249,731

386,197(3) $

7,440

35,775

2003 $ 2002 $

224,793 196,900

$ $

98,087(4) $ $

16,601 965

13,757 33,112

26,000(6) $

2004 $

251,063(7) $

233,589(7) $

33,269(7)

421,882

2003 $

498,750

348,536(4) $

53,456

52,517

2002 $ 2004 $

732,692(8) $ 230,769(9) $

120,985

$ $

16,820 60,255(10)

$ $

517,756 9,053

2003 $

2002 $

As permitted by rules established by the SEC, no amounts are shown with respect to certain "perquisites" where the aggregate amounts of such perquisites for a named executive officer do not exceed the lesser of either $50,000 or 10% of the total of annual salary and bonus for the relevant year. Beginning in January 2002, under Leap's paid time- off program, an employee with sufficient accrued time off may elect to receive two days of pay for each paid day off the employee takes, reducing his or her accrued time off by two days. For example, if an employee takes one day off, he or she can elect to be paid for two days, which would reduce his or her accrued time off by two days. Includes enhanced goal payments awarded to executive officers in August 2004, as follows: Mr. Hutcheson, $92,400; Mr. Umetsu, $86,800; Mr. Stephens, $79,100; Mr. Davis, $69,804; and Mr. Irving, $70,000. Also includes emergence bonuses for 2004 as follows: Mr. Hutcheson, $300,000; Mr. Umetsu, $250,000; Mr. Stephens, $175,000; Mr. Davis, $175,000; and Mr. Irving, $175,000. A portion of these bonuses will be paid after the date of this report. See "Emergence Bonus Agreements" and "Employment Agreements- Amended and Restated Executive Employment Agreement with S. Douglas Hutcheson." Includes retention bonuses awarded to executive officers in February 2003, as follows: Mr. White, $80,000; Mr. Hutcheson, $60,000; Mr. Umetsu, $10,000; Mr. Stephens, $45,000; Mr. Davis, $25,000; and Mr. Irving, $25,534. Represents additional compensation resulting from Mr. Umetsu's payment of a note to Leap in the amount of $300,000 by surrender of options to purchase Leap common stock, as permitted by the note. Also includes reimbursement to Mr. Umetsu of taxes of $268,836 payable in connection with the transaction, as previously agreed by Leap. Because the exercise price of the options was greater than the market price of Leap's common stock on the date of surrender, the amount of the note was treated as additional compensation to Mr. Umetsu in 2002. In June and July 2002, Mr. Irving was granted a total of 26,000 options for the purchase of Leap common stock. These options were cancelled unexercised on August 16, 2004, the Effective Date of the Plan of Reorganization. Represents Mr. White's earnings through June 2004. In September 2002, Mr. White voluntarily reduced his annual salary from $787,500 to $487,500. Represents Mr. Freeman's earnings beginning in June 2004. Represents amounts paid to Mr. Freeman in connection with his relocation expenses. Includes matching 401(k) contributions, executive benefits payments, financial planning services, matching benefits under Leap's Executive Retirement Plan, and Executive Officer Deferred Stock Bonus Plan, as follows: 94

(2)

(3)

(4) (5)

(6) (7) (8) (9) (10) (11)

Table of Contents
Matching 401(k) Contributions Executive Benefits Payments Financial Planning Services Executive Retirement Contributions(1) Deferred Stock Matching(2) Total Other Compensation

Name

Year

S. Douglas Hutcheson

2004 $ 2003 $ 2002 $ 2004 $ 2003 $ 2002 $ 2004 $ 2003 $ 2002 $ 2004 $ 2003 $ 2002 $ 2004 $ 2003 $ 2002 $ 2004 $ 2003 $ 2002 $

6,500 $ 6,000 $ 2,377 $ 6,500 $ 6,000 $ 5,500 $ 6,500 $ 6,000 $ 5,500 $ 6,500 $ 6,000 $ 5,500 $ 6,500 $ 6,000 $ 5,500 $ 6,500 $ 6,000 $ 5,500 $

9,386 $ 12,784 $ 14,955 $ 5,711 $ 9,095 $ 8,511 $ 5,902 $ 6,831 $ 15,159 $ 10,144 $ 5,072 $ 6,979 $ 18,388 $ 7,757 $ 22,748 $ 4,829 $ 9,507 $ 7,198 $

7,022 $ 4,577 $ 3,798 $ 13,817 $ 13,859 $ 13,593 $ 10,661 $ 4,737 $ 2,746 $ - $ 348 $ 386 $ 10,887 $ - $ 4,864 $ 33,493 $ 37,010 $ 38,139 $

- $ - $ - $ - $ - $ - $ - $ - $ 71,972 $ - $ - $ 4,766 $ - $ - $ - $ - $ - $ - $

54 $ - $ - $ - $ - $ - $ 97 $ - $ - $ - $ - $ - $ - $ - $ - $ 466 $ - $ - $

22,962 23,361 21,130 26,028 28,954 27,604 23,160 17,568 95,377 16,644 11,420 17,631 35,775 13,757 33,112 421,882(3) 52,517 517,756(4)

Glenn T. Umetsu

Leonard C. Stephens

David B. Davis

Robert J. Irving, Jr.

Harvey P. White

William M. Freeman

2004 $ 2003 $ 2002 $

6,500 $ - $ - $

2,553 $ - $ - $

- $ - $ - $

- $ - $ - $

- $ - $ - $

9,053 -

(1) (2) (3) (4)

All shares of common stock issued under the Executive Retirement Matching Contribution Plan and all benefits thereunder were cancelled on August 16, 2004, the Effective Date of the Plan of Reorganization. All vested and unvested shares of common stock issued under the Executive Officer Deferred Stock Bonus Plan and all benefits thereunder were cancelled on August 16, 2004, the Effective Date of the Plan of Reorganization. Includes payment to Mr. White in the amount of $376,594 in June 2004 pursuant to a severance agreement approved by the Bankruptcy Court on May 13, 2003.

Includes $466,919 for the year ended December 31, 2002, which represents the dollar value of the benefits of premiums paid by Leap for a split- dollar life insurance policy (unrelated to term life insurance coverage). Such payments were suspended in September 2002. OPTION GRANTS IN LAST FISCAL YEAR There were no options granted by the Company to any of the named executive officers during the year ended December 31, 2004. OPTION EXERCISES IN 2004 AND OPTION VALUES AT DECEMBER 31, 2004 There were no exercises of options to purchase common stock of Leap by the named executive officers during the 12 months ended December 31, 2004. All options to purchase common stock granted to the named executive officers prior to December 31, 2004 were cancelled on August 16, 2004, the Effective Date of the Plan of Reorganization. EMPLOYEE BENEFIT PLANS Equity Compensation Plans All of the outstanding shares of Leap common stock, warrants and options were cancelled as of August 16, 2004 pursuant to our Plan of Reorganization. Following our emergence from bankruptcy, as contemplated by Section 5.07 of the Plan of Reorganization, the compensation committee of our board of directors, acting pursuant to a delegation of authority from the board of directors, approved the Leap Wireless 95

Table of Contents International, Inc. 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan effective December 30, 2004. The 2004 Plan authorizes discretionary grants to our employees, consultants and independent directors, and to the employees and consultants of our subsidiaries, of stock options, restricted stock and deferred stock units. The aggregate number of shares of common stock subject to awards under the 2004 Plan will be no more than 4,800,000. Administration. The 2004 Plan will generally be administered by the compensation committee of the Company's board of directors (the "Administrator"). The board of directors, however, will determine the terms and conditions of, and interpret and administer, the 2004 Plan for awards granted to the Company's independent directors and, with respect to these awards, the term "Administrator" refers to the board of directors. As appropriate, administration of the 2004 Plan may be revested in the board of directors. In addition, for administrative convenience, the board of directors may determine to grant to one or more members of the board of directors or to one or more officers the authority to make grants to individuals who are not directors or executive officers. Stock Options. The 2004 Plan provides for discretionary grants of non- qualified stock options to employees, independent directors and consultants. The 2004 Plan also provides for the grant of incentive stock options, which may only be granted to employees. Options may be granted with terms determined by the Administrator; provided that incentive stock options must meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended ("the Code"). The 2004 Plan provides that an option holder may exercise his or her option for three months following termination of employment, directorship or consultancy (12 months in the event such termination results from death or disability). With respect to options granted to employees, an option will terminate immediately in the event of an option holder's termination for cause. The exercise price for stock options granted under the 2004 Plan will be set by the Administrator and may not be less than par value (except for incentive stock options and stock options granted to independent directors which must have an exercise price not less than fair market value on the date of grant). Options granted under the 2004 Plan will generally have a term of 10 years. Restricted Stock. Unless otherwise provided in the applicable award agreement, participants generally have all of the rights of a stockholder with respect to restricted stock. Restricted stock may be issued for a nominal purchase price and may be subject to vesting over time or upon attainment of performance targets. Any dividends or other distributions paid on restricted stock will also be subject to restrictions to the same extent as the underlying stock. Award agreements related to restricted stock may provide that restricted stock is subject to repurchase by the Company in the event that the participant ceases to be an employee, director or consultant prior to vesting. Deferred Stock Units. Deferred stock units represent the right to receive shares of stock on a deferred basis. Stock distributed pursuant to deferred stock units may be issued for a nominal purchase price and deferred stock units may be subject to vesting over time or upon attainment of performance targets. Stock distributed pursuant to a deferred stock unit award will not be issued before the deferred stock unit award has vested, and a participant granted a deferred stock unit award generally will have no voting or dividend rights prior to the time when the stock is distributed. The deferred stock unit award will specify when the stock is to be distributed. The Administrator may provide that the stock will be distributed pursuant to a deferred stock unit award on a deferred basis pursuant to a timely irrevocable election by the participant. The issuance of the stock distributable pursuant to a deferred stock unit award may not occur prior to the earliest of: (1) a date or dates set forth in the applicable award agreement, (2) the participant's termination of employment or service with the Company (or in the case of any officer who is a "specified employee" as defined in Section 409A(a)(2)(B)(i) of the Code, six months after such termination), (3) an unforeseeable financial emergency affecting the participant, or (4) a change in control, as described below. Under no circumstances may the time or schedule of distribution of stock pursuant to a deferred stock unit award be accelerated. Awards Generally Not Transferable. Awards under the 2004 Plan are generally not transferable during the award holder's lifetime, except, with the consent of the Administrator, pursuant to qualified domestic relations orders. The Administrator may allow non- qualified stock options to be transferable to certain permitted transferees (i.e., immediate family members for estate planning purposes). 96

Table of Contents Changes in Control and Corporate Transactions. In the event of certain changes in the capitalization of the Company or certain corporate transactions involving the Company and certain other events (including a change in control, as defined in the 2004 Plan), the Administrator will make appropriate adjustments to awards under the 2004 Plan and is authorized to provide for the acceleration, cash- out, termination, assumption, substitution or conversion of such awards. The Company will give award holders 20 days' prior written notice of certain changes in control or other corporate transactions or events (or such lesser notice as the Administrator determines is appropriate or administratively practicable under the circumstances) and of any actions the Administrator intends to take with respect to outstanding awards in connection with such change in control, transaction or event. Award holders will also have an opportunity to exercise any vested awards prior to the consummation of such changes in control or other corporate transactions or events (and such exercise may be conditioned on the closing of such transactions or events). Term of the 2004 Plan; Amendment and Termination. The 2004 Plan will be in effect until December 2014, unless our board of directors terminates the 2004 Plan at an earlier date. The board of directors may terminate the 2004 Plan at any time with respect to any shares not then subject to an award under the 2004 Plan. The board of directors may also modify the 2004 Plan from time to time, except that the board of directors may not, without prior stockholder approval, amend the 2004 Plan so as to increase the number of shares of stock that may be issued under the 2004 Plan, reduce the exercise price per share of the shares subject to any outstanding option, or amend the 2004 Plan in any manner which would require stockholder approval to comply with any applicable law, regulation or rule. See "Compensation of Directors" and "Awards to Executives under the 2004 Plan" below regarding recent awards under the 2004 Plan. Employee Savings and Retirement Plan Our 401(k) plan allows eligible employees to contribute up to 30% of their salary, subject to annual limits. We match a portion of the employee contributions and may, at our discretion, make additional contributions based upon earnings. Our contribution expenses for the years ended December 31, 2004, 2003 and 2002, were $1,041,000, $1,043,000, and $1,632,000, respectively. Compensation of Directors On March 11, 2005, the board of directors granted to Mr. Michael Targoff non- qualified stock options to purchase 30,000 shares of our common stock, and granted to each of Dr. Mark Rachesky and Mr. James Dondero non- qualified stock options to purchase 21,900 shares of our common stock, in each case in recognition of their service on our board of directors without compensation since our emergence from bankruptcy on August 16, 2004, a period of significant development for the Company and its business. Each of these option awards vests one- third on the award date, one- third on January 1, 2006 and one- third on January 1, 2007. The exercise price for each of these stock options is $26.51 per share. In addition, in recognition of their current service on the board of directors, on March 11, 2005, the board of directors granted to Dr. Rachesky, as Chairman of the Board, non- qualified stock options to purchase 18,300 shares of our common stock and granted to each of Messrs. Dondero and Targoff non- qualified stock options to purchase 7,500 shares of our common stock. Mr. Targoff, as chairman of the Audit Committee, was granted non- qualified stock options to purchase an additional 2,000 shares of our common stock and Mr. Dondero, as chairman of the Compensation Committee, was granted non- qualified stock options to purchase an additional 1,200 shares of our common stock. Each of these option awards vests one- third on January 1, 2006, one- third on January 1, 2007 and one- third on January 1, 2008. The exercise price for each of these stock options is $26.51 per share. In connection with their appointment as directors of the Company on March 11, 2005 and March 14, 2005, respectively, the board granted each of Messrs. John Harkey and Robert LaPenta non- qualified stock options to purchase 5,000 shares of our common stock, which option awards vested fully on the award date, and additional non- qualified stock options to purchase 7,500 shares our common stock, which option awards 97

Table of Contents vest one- third on January 1, 2006, one- third on January 1, 2007 and one- third on January 1, 2008. The exercise price for these option awards is $26.51 per share for Mr. Harkey and $26.45 for Mr. LaPenta. Each of the option awards to non- employee directors described above has a term of ten years, provided that the options terminate 90 days after the option- holder ceases to be a non- employee director of the Company. Special exercise and termination rules apply if the option- holder's relationship with the Company is terminated as a result of death, disability, or cause (as defined in the 2004 Plan). The option awards will vest according to the schedules described above, provided that the relevant option- holder continues to serve as a non- employee director, and will automatically vest in full upon a change of control of the Company, as defined in the 2004 Plan. Leap also reimburses directors for reasonable and necessary expenses, including their travel expenses incurred in connection with attendance at board and board committee meetings. Compensation Committee Interlocks and Insider Participation The current members of Leap's Compensation Committee are Dr. Rachesky and Messrs. Dondero and Targoff. Former directors Robert Dynes and Thomas Page also served on the Compensation Committee during 2004. None of these directors or former directors has at any time been an officer or employee of Leap or any of its subsidiaries. Employment Agreements Resignation Agreement with William M. Freeman On February 24, 2005, Cricket and Leap entered into a Resignation Agreement with William M. Freeman, under which Mr. Freeman resigned as the chief executive officer and as a director of Leap, Cricket and their domestic subsidiaries, effective as of February 25, 2005. This Resignation Agreement superseded the Executive Employment Agreement entered into by Cricket and Mr. Freeman as of May 24, 2004. Under the Resignation Agreement, Mr. Freeman received a severance payment of $1,000,000. Mr. Freeman also relinquished all rights to any stock options, restricted stock and deferred stock unit awards from Leap. Mr. Freeman has executed a general release as a condition to his receipt of the severance payment. This description of the Resignation Agreement with Mr. Freeman is qualified in its entirety by reference to the full text of the Resignation Agreement, a copy of which is filed as an exhibit to this report. Amended and Restated Executive Employment Agreement with S. Douglas Hutcheson Effective as of February 25, 2005, Cricket and Leap entered into an Amended and Restated Executive Employment Agreement with S. Douglas Hutcheson in connection with Mr. Hutcheson's appointment as chief executive officer of Cricket and Leap. The Amended and Restated Executive Employment Agreement amends, restates and supersedes the Executive Employment Agreement dated January 10, 2005, as amended, among Mr. Hutcheson, Cricket and Leap. Mr. Hutcheson's term of employment under the Amended and Restated Executive Employment Agreement expires on December 31, 2008, unless extended by mutual agreement. Under the Amended and Restated Executive Employment Agreement, Mr. Hutcheson will receive an annual base salary of $350,000, subject to adjustment pursuant to periodic reviews by Leap's Board of Directors, and an opportunity to earn an annual performance bonus. Mr. Hutcheson's annual target performance bonus will be 80% of his base salary. The amount of any annual performance bonus will be determined in accordance with Cricket's prevailing annual performance bonus practices that are used to determine annual performance bonuses for the senior executives of Cricket generally. In the event Mr. Hutcheson is employed by Cricket on December 31, 2008, then Mr. Hutcheson will receive the final installment of his 2008 annual performance bonus without regard to whether he is employed by Cricket on the date such final installments are paid to senior executives of Cricket. In addition, the Amended and Restated Executive Employment Agreement also specifies that Mr. Hutcheson is entitled to participate in all insurance and benefit plans generally available to Cricket's executive officers. Mr. Hutcheson is also to receive a success 98

Table of Contents bonus payment of $150,000 on the earlier to occur of September 30, 2005 (provided Mr. Hutcheson is still employed by Cricket on such date) and the date on which Mr. Hutcheson ceases to be employed by Cricket (other than as a result of a termination for cause). If, during the term of the Amended and Restated Executive Employment Agreement, all or substantially all of Cricket's assets, or shares of stock of Leap or Cricket having 50% or more of the voting rights of the total outstanding stock of Leap or Cricket, as the case may be, are sold with the approval of or pursuant to the active solicitation of the Board of Directors of Leap or Cricket, as applicable, to a strategic investor, then if Mr. Hutcheson continues his employment with Cricket or its successor for two months following the closing of such sale, Cricket will pay to Mr. Hutcheson a stay bonus in a lump sum payment equal to his then- current monthly base salary for a period of 18 months. Under the terms of the Amended and Restated Executive Employment Agreement, if Mr. Hutcheson's employment is terminated as a result of his discharge by Cricket without cause or if he resigns with good reason, he will be entitled to receive (1) a lump sum payment equal to his then- current monthly base salary for a period of nine months, (2) continued payment of his then- current base salary for a period of nine months, commencing nine months following his date of termination (which amounts will be reduced by any amounts received by Mr. Hutcheson from employment with a subsequent employer or for services as an independent contractor during such nine- month period), (3) if such termination or resignation occurs on or prior to December 31, 2005, a lump sum payment in an amount equal to the excess (if any) of his 2005 target performance bonus over any portion of his 2005 performance bonus already paid to him, and (4) if he elects continuation health coverage under COBRA, Cricket will pay the premiums for such continuation health coverage for a period of 18 months (or, if earlier, until he is eligible for comparable coverage with a subsequent employer). Mr. Hutcheson will be required to execute a general release as a condition to his receipt of any of these severance benefits. The agreement also provides that if Mr. Hutcheson's employment is terminated by reason of his discharge without cause or his resignation for good reason, in each case within one year of a change in control, and he is subject to excise tax pursuant to Section 4999 of the Internal Revenue Code as a result of any payments to him, then Cricket will pay him a "gross- up payment" equal to the sum of the excise tax and all federal, state and local income and employment taxes payable by him with respect to the gross- up payment. This gross- up payment will not exceed $1,000,000 and, if Mr. Hutcheson's employment was terminated by reason of his resignation for good reason, such payment is conditioned on Mr. Hutcheson's agreement to provide consulting services to Cricket or Leap for up to three days per month for up to a one- year period for a fee of $1,500 per day. If Mr. Hutcheson's employment is terminated as a result of his discharge by Cricket for cause or if he resigns without good reason, he will be entitled only to his accrued base salary through the date of termination. If Mr. Hutcheson's employment is terminated as a result of his death or disability, he will be entitled only to his accrued base salary through the date of death or termination, as applicable, and his pro rata share of his target performance bonus for the year in which his death or termination occurs. Effective January 5, 2005, the Compensation Committee granted Mr. Hutcheson non- qualified stock options to purchase 85,106 shares of Leap's common stock at $26.55 per share under the 2004 Plan. Also effective January 5, 2005, the Compensation Committee conditionally granted Mr. Hutcheson restricted stock awards to purchase 90,000 shares of Leap's common stock at $.0001 per share and deferred stock unit awards to purchase 30,000 shares of Leap's common stock at $.0001 per share, subject to the filing by Leap of a Registration Statement on Form S- 8 with respect to the 2004 Plan, which conditional grant is not effective until such filing takes place. Under the Amended and Restated Executive Employment Agreement, on February 24, 2005, Mr. Hutcheson was granted additional non- qualified stock options to purchase 75,901 shares of Leap's common stock at $26.35 per share. Mr. Hutcheson also received a conditional grant of restricted stock awards to purchase 9,487 shares of Leap's common stock at $.0001 per share, subject to the filing by Leap of a Registration Statement on Form S- 8 with respect to the 2004 Plan, and which conditional grants are not effective until such filing takes place. The forms of award agreements for these awards are attached as Attachments A- 1, A- 2, A- 3, A- 4 and A- 5 to his Amended and Restated Executive Employment 99

Table of Contents Agreement, which is filed as an exhibit to this report. The material terms of such awards are described in Leap's Current Report on Form 8- K filed with the Securities and Exchange Commission on January 11, 2005, which is incorporated herein by reference, except that the additional stock options and restricted stock awards granted to Mr. Hutcheson on February 24, 2005 will vest with respect to up to 30% of the shares subject to such stock options and restricted stock awards upon Leap's achievement of certain EBITDA and net customer addition targets for each of fiscal years 2005, 2006 and 2007 (in each case in approximately March of the following year), and shall vest in their entirety on December 31, 2008, in each case if Mr. Hutcheson is an employee, director or consultant of Leap or Cricket on such date. In addition, if Mr. Hutcheson's employment is terminated by reason of discharge by Cricket other than for cause, or if he resigns for good reason, after February 28, 2006 (1) if Mr. Hutcheson agrees to provide consulting services to Cricket or Leap for up to five days per month for up to a oneyear period for a fee of $1,500 per day, any remaining unvested shares subject to his stock options and restricted stock awards will vest and/or become exercisable on the last day of such one- year period, or (2) such remaining unvested shares subject to his stock options and restricted stock awards will vest and/or become exercisable on the third anniversary of the date of grant (for the January 5, 2005 awards) and on December 31, 2008 (for the February 24, 2005 awards). Mr. Hutcheson will be required to execute a general release as a condition to his receipt of the foregoing accelerated vesting. The description of the Amended and Restated Executive Employment Agreement with Mr. Hutcheson is qualified in its entirety by reference to the full text of the Amended and Restated Executive Employment Agreement, a copy of which is filed as an exhibit to this report. Severance Agreements Leap and Cricket entered into new severance agreements with each of their executive officers to ensure that they would have the continued attention and dedication of their executive officers during the bankruptcy filing by Leap and Cricket. The Bankruptcy Court approved the new severance agreements on May 13, 2003, and the prior severance agreements between Leap and its officers were terminated. If, during the period commencing on May 13, 2003 and ending on August 16, 2005 (the first anniversary of the Effective Date of the Plan of Reorganization for Cricket under Chapter 11 of the Bankruptcy Code), the executive officer is terminated by Cricket other than for cause or if the executive officer resigns for good reason, the executive officer is entitled to: 75% of the executive officer's annual base salary; and the continuation of certain benefits for nine months. In consideration of any benefits provided under these agreements, the executive officer will release Leap and Cricket from their existing claims and agree not to solicit the employees of Cricket for a period of three years. For purposes of the severance agreements, "cause" means: willful and continued failure to substantially perform job duties and follow and comply with lawful directives of the Board; willful commission of acts of fraud or dishonesty; or willful engagement in illegal conduct or gross misconduct that is materially damaging to Cricket. "Good reason" includes: the diminution of the responsibility, position, salary or aggregate benefits of the executive officer; Cricket's breach of the severance agreement; or the involuntary relocation of the executive officer. 100

Table of Contents Emergence Bonus Agreements Effective as of February 17, 2005, Leap entered into Emergence Bonus Agreements with four senior executive officers in connection with the emergence bonuses such officers were awarded in 2004 (See Item 11. Executive Compensation- Summary Compensation Table- Note 3.) The agreements provided that a portion of the emergence bonuses awarded in 2004 would not be paid to the executives until the earlier of September 30, 2005 or the date on which such executives cease to be employed by Cricket, unless such cessation of employment occurs as a result of a termination for cause. The portions of the 2004 emergence bonus covered by the respective Emergence Bonus Agreements are: Glenn T. Umetsu, Executive Vice President and Chief Technical Officer $125,000, David B. Davis, Senior Vice President, Operations $87,500, Robert J. Irving, Jr., Senior Vice President, General Counsel and Secretary $87,500, and Leonard C. Stephens, Senior Vice President, Human Resources $87,500. Awards to Executives under the 2004 Plan Awards. Our board of directors and our Compensation Committee (with the approval of the board) have granted non- qualified stock options to the executive officers of Leap. In addition, our board of directors and our Compensation Committee (again with the approval of the board) have granted restricted stock awards and deferred stock unit awards to the executive officers of Leap, which grants are conditioned on the filing of a Registration Statement on Form S- 8 with respect to the 2004 Plan and are not effective until such filing takes place. We expect to file this Registration Statement on Form S- 8 shortly after filing this report. Options for the following number of shares of our common stock were granted: Mr. Hutcheson, 161,007 shares; Mr. Umetsu, 85,106 shares; Mr. Davis, 27,660 shares; Mr. Irving, 23,404 shares; and Mr. Stephens, 23,404 shares. Shares of restricted stock were granted in the following amounts: Mr. Hutcheson, 99,487 shares; Mr. Umetsu, 76,560 shares; Mr. Davis, 29,250 shares; Mr. Irving, 24,750 shares; and Mr. Stephens, 24,750 shares. Deferred stock unit awards were made with respect to the following shares: Mr. Hutcheson, 30,000 shares; Mr. Umetsu, 25,520 shares; Mr. Davis, 9,750 shares; Mr. Irving, 8,250 shares; and Mr. Stephens, 8,250 shares. Vesting. The stock options described above become exercisable on the third anniversary of the date of grant, and the restricted stock awards described above vest on February 28, 2008, in each case subject to accelerated vesting in increments ranging from a minimum of 10% to a maximum of 30% of the applicable award per year if the Company meets certain performance targets in 2005 and 2006 based on adjusted EBITDA and net customer additions. The deferred stock units are fully vested, but the shares of common stock distributable pursuant to the deferred stock unit awards will not be distributed until the earliest of: (1) August 15, 2005; (2) the executive officer's termination of employment or service with the Company; or (3) the date immediately prior to a change in control. Change in Control Vesting of Stock Options and Restricted Stock. The stock options and restricted stock awards listed above will also become exercisable and/or vested on an accelerated basis in connection with certain changes in control. Except as otherwise described below, an executive officer will be entitled to accelerated vesting and/or exercisability in the event of a change in control only if he is an employee, director or consultant on the effective date of such accelerated vesting and/or exercisability. Suspension of Performance- Based Vesting. Following the date of a change in control, there will be no further additional performance- based vesting and/or exercisability applicable to stock options and restricted stock awards based on our adjusted EBITDA and net customer addition performance. Change in Control prior to January 1, 2006. In the event of a change in control prior to January 1, 2006, each stock option and restricted stock award will automatically accelerate and become exercisable and/or vested (1) immediately prior to the change in control, as to an additional number of shares equal to 50% of the then unvested shares subject to such stock option or restricted stock award, (2) on the first anniversary of the occurrence date of the change in control, as to an additional number of shares equal to 50% of the then unvested shares subject to such stock option or restricted stock award, and (3) on the second anniversary of 101

Table of Contents the occurrence date of the change in control, as to any remaining unvested shares subject to such stock option or restricted stock award. Change in Control during 2006. In the event of a change in control during 2006, each stock option and restricted stock award will automatically accelerate and become exercisable and/or vested (1) immediately prior to the change in control, as to an additional number of shares equal to 75% of the then unvested shares subject to such stock option or restricted stock award, and (2) on the first anniversary of the occurrence date of the change in control, as to any remaining unvested shares subject to such stock option or restricted stock award. Change in Control on or after January 1, 2007. In the event of a change in control on or after January 1, 2007, each stock option and restricted stock award will automatically accelerate and become exercisable and/or vested (1) immediately prior to the change in control, as to an additional number of shares equal to 85% of the then unvested shares subject to such stock option or restricted stock award, and (2) on the first anniversary of the occurrence date of the change in control, as to any remaining unvested shares subject to such stock option or restricted stock award. Discharge Without Cause or Resignation for Good Reason in the Event of a Change in Control. In the event an employee has a termination of employment by reason of discharge by the Company other than for cause, or as a result of the executive officer's resignation for good reason, during the period commencing 90 days prior to a change in control and ending 12 months after such change in control, each stock option and restricted stock award will automatically accelerate and become exercisable and/or vested (1) if the change in control occurs prior to January 1, 2006, as to 25% of the then unvested shares subject to such stock option or restricted stock award, or (2) if the change in control occurs on or after January 1, 2006, as to any remaining unvested shares subject to such stock option or restricted stock award. Such acceleration will occur upon termination of employment or, if later, immediately prior to the change in control. The terms "cause" and "good reason" are defined in the applicable award agreements. This description of the awards under the 2004 Plan is qualified in its entirety by reference to the full text of the 2004 Plan and the various award agreements, copies of which are filed as exhibits to this report. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table contains information about the beneficial ownership of our common stock for: each stockholder known by us to beneficially own more than 5% of our common stock; each of our directors; each of our named executive officers; and all directors and executive officers as a group. The percentage of ownership indicated in the following table is based on 60,000,000 shares of common stock outstanding on May 11, 2005. Information with respect to beneficial ownership has been furnished by each director, officer, beneficial owner of more than 5% of our common stock or selling stockholder and by Schedules 13D and 13G, filed with the SEC. Beneficial ownership is determined in accordance with the rules of the SEC. Except as indicated by footnote and subject to community property laws where applicable, to our knowledge, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person that are currently exercisable or will become exercisable within 60 days after May 11, 2005 are deemed 102

Table of Contents outstanding, while such shares are not deemed outstanding for purposes of computing percentage ownership of any other person.
Beneficial Ownership(1) Number of Shares Percent of Total

5% Stockholders, Officers and Directors

Entities affiliated with Harbert Distressed Investment Master Fund, Ltd.(2) Entities affiliated with Highland Capital Management, L.P.(3) MHR Institutional Advisors II LLC(4) MHR Institutional Partners IIA LP(4) Entities affiliated with Third Point Management Company L.L.C.(5) James D. Dondero(6)(8) Mark H. Rachesky, M.D.(7)(8) John D. Harkey, Jr.(8) Robert V. LaPenta(8) Michael B. Targoff(8) S. Douglas Hutcheson Glenn T. Umetsu Leonard C. Stephens David B. Davis Robert J. Irving, Jr. Harvey P. White William M. Freeman All executive officers and directors as a group (14 persons)

4,407,525 5,442,446 3,340,378 8,415,428 3,665,615 5,449,746 11,763,106 5,000 5,000 10,000 10 0 0 0 61 0 0 17,232,923

7.3 9.1 5.6 14.0 6.1 9.1 19.6 * * * * * * * * * * 28.7

* Represents beneficial ownership of less than 1.0% of the outstanding shares of common stock. (1) Unless otherwise indicated, the address for each person or entity named below is c/o Leap Wireless International, Inc., 10307 Pacific Center Court, San Diego, California 92121. (2) The address for this entity is c/o International Fund Services, Third Floor, Bishop Square Redmonds Hill, Dublin Ireland L2. These shares of common stock may be deemed to be beneficially owned by HMC Distressed Investment Offshore Manager, L.L.C. ("HMC Manager"), the investment manager of Harbert Distressed Investment Master Fund, Ltd. ("Harbert Distressed"), HMC Investors, L.L.C., its managing member ("HMC Investors"), Philip Falcone, a member of HMC Manager and the portfolio manager of Harbert Distressed and Raymond J. Harbert, a member of HMC Investors and Michael D. Luce, a member of HMC Investors. In such capacities, HMC Manager, HMC Investors, Mr. Falcone, Mr. Harbert and Mr. Luce exercise shared voting and dispositive power with respect to these shares of common stock, and each disclaims beneficial ownership of these shares of common stock except to the extent of their pecuniary interest therein. The address for HMC Manager and Mr. Falcone is 555 Madison Avenue, 16th Floor, New York New York 10022. The address for HMC Investors, Mr. Harbert and Mr. Luce is One Riverchase Parkway South, Birmingham, Alabama 35244. Consists of (a) 76,137 shares of common stock held by Highland Floating Rate Advantage Fund ("Highland Advantage"); (b) 76,137 shares of common stock held by Highland Floating Rate Limited Liability Company ("Highland LLC"); (c) 2,309,794 shares of common stock held by Highland Crusader Offshore Partners, L.P. ("Crusader"); (d) 190,342 shares of common stock held by Highland Loan Funding V, Ltd. ("HLF"); (e) 194,148 shares of common stock held by Highland Legacy, Limited ("Legacy"); (f) 552,928 shares of common stock held by ML CBO IV (Cayman), Ltd. ("ML CBO"); (g) 52,504 shares of common stock held by PAM Capital Funding, L.P. ("PAM Capital"); (h) 951,708 shares of common stock held by Highland Equity Focus Fund, L.P. ("Focus"), and (i) 1,038,748 shares of common stock held in accounts for which Highland Capital Management, L.P. 103

(3)

Table of Contents ("HCMLP") has investment discretion. HCMLP is the investment manager for Focus, Highland Advantage and Highland LLC, as well as the general partner of Crusader. Pursuant to certain management agreements, HCMLP serves as collateral manager for HLF, Legacy, ML CBO, and PAM Capital. Strand Advisors, Inc. ("Strand") is the general partner of HCMLP. Mr. Dondero is a director and the President of Strand. Mr. Dondero also serves as a director of the Company. HCMLP, Strand and Mr. Dondero expressly disclaim beneficial ownership of the securities described above, except to the extent of their pecuniary interest therein. The address for Strand, Focus, Highland Advantage, Highland LLC, Crusader, HCMLP and Mr. Dondero is Two Galleria Tower, 13455 Noel Road, Suite 1300, Dallas, Texas 75240. The address for HLF, Legacy, ML CBO, and PAM Capital is P.O. Box 1093 GT, Queensgate House, South Church Street, George Town, Grand Cayman, Cayman Islands. (4) Consists of (a) 3,340,378 shares of common stock held for the account of MHR Institutional Partners II LP, a Delaware limited partnership ("Institutional Partners II") and (b) 8,415,428 shares of common stock held for the account of MHR Institutional Partners IIA LP, a Delaware limited partnership ("Institutional Partners IIA"). MHR Institutional Advisors II LLC ("Institutional Advisors") is the general partner of Institutional Partners II and Institutional Partners IIA. In such capacity, Institutional Advisors may be deemed to be the beneficial owner of these shares of common stock. The address for this entity is 40 West 57th Street, 24th Floor, New York, New York 10019. Daniel S. Loeb is the managing member of Third Point Management Company L.L.C. ("Third Point") and as such, may be deemed to be an indirect beneficial owner. The address for Mr. Loeb and Third Point is 360 Madison Avenue, 24th Floor, New York New York 10017. Consists of the shares in footnote 3 above. Mr. Dondero is the President and a director of Strand and as such, he may be deemed to be an indirect beneficial owner of these shares. Mr. Dondero disclaims beneficial ownership of the shares of common stock held by these entities, except to the extent of his pecuniary interest therein. The address for Mr. Dondero is Two Galleria Tower, 13455 Noel Road, Suite 1300, Dallas, Texas 75240. Consists of the shares in footnote 4 above. Dr. Rachesky is the managing member of Institutional Advisors II and as such, he may be deemed to be a beneficial owner of these shares. Dr. Rachesky disclaims beneficial ownership of the shares of common stock held by these entities. The address for Dr. Rachesky is 40 West 57th Street, 24th Floor, New York, New York 10019.

(5) (6)

(7)

(8)

Includes shares issuable upon exercise of options, as follows: (a) exercisable as of March 11, 2005: Mr. Dondero, 7,300 shares; Dr. Rachesky, 7,300 shares; Mr. Harkey, 5,000 shares, and Mr. Targoff, 10,000 shares; and (b) exercisable as of March 14, 2005: Mr. LaPenta, 5,000 shares. Item 13. Certain Relationships and Related Transactions Transactions with MCG PCS, Inc. Pursuant to an arbitration award, MCG was issued approximately 35.8% of our issued and outstanding stock in August 2002. On January 30, 2004, we entered into a settlement agreement with MCG and other entities to settle various disputes. Pursuant to this settlement agreement, we agreed to pay a portion of MCG's attorneys' fees and expenses incurred in connection with the cases brought against us (subject to a maximum of $750,000). On August 16, 2004, pursuant to the settlement agreement, MCG dismissed its appeal of the Bankruptcy Court's confirmation order of Leap's Plan of Reorganization, Cricket paid $750,000 to MCG, and Leap issued to MCG PCS, Inc. warrants to purchase 600,000 shares of Leap common stock, $0.0001 par value per share, at an exercise price of $16.83 per share. The warrants expire on March 23, 2009, and contain customary anti- dilution and net- issuance provisions. The warrants to purchase Leap common stock were issued without registration under the Securities Act of 1933 in reliance on the provisions of Section 4(2) of the Securities Act of 1933. Other Transactions In August 2004, we entered into a registration rights agreement with certain holders of our common stock, including MHR Institutional Partners II LP, MHR Institutional Partners IIA LP (these entities are 104

Table of Contents affiliated with Mark H. Rachesky, M.D., one of our directors) and Highland Capital Management, L.P. (this entity is affiliated with James D. Dondero, one of our directors), whereby we granted them registration rights with respect to the shares of common stock issued to them on the Effective Date. Pursuant to this registration rights agreement, we are required to register for sale shares of common stock held by these holders upon demand of a holder of a minimum of 15% of our common stock on the Effective Date of the Plan of Reorganization or when we register for sale to the public shares of our common stock. We are also required to effect a "shelf" registration statement pursuant to which these holders may sell their shares of common stock on a delayed or continuous basis. In the event that we register shares of common stock held by these entities, we are obligated to pay all the expenses of registration, other than underwriting fees, discounts and commissions. The registration rights agreement contains crossindemnification provisions, pursuant to which we are obligated to indemnify the selling stockholders in the event of material misstatements or omissions in a registration statement that are attributable to us, and they are obligated to indemnify us for material misstatements or omissions attributable to them. We have entered into indemnification agreements with each of our executive officers and directors. Those indemnification agreements require us to indemnify these individuals to the fullest extent permitted by Delaware law. In addition, we have purchased a policy of directors' and officers' liability insurance that insures our directors and officers against the cost of defense, settlement or payment of a judgment in some circumstances. Affiliates of Highland Capital Management, L.P. (a beneficial shareholder of Leap and an affiliate of James D. Dondero, a director of Leap) participated in the syndication of our new Credit Agreement in the following amounts: $100 million of the $500 million term loan and $30 million of the $110 million revolving credit facility. Item 14. Principal Accounting Fees and Services The following table summarizes the aggregate fees billed to the Company by its independent auditors, PricewaterhouseCoopers, LLP ("PwC"), for the years ended December 31, 2004 and 2003 (in thousands):
2004 2003

Audit fees(1) Audit- related fees(2) Tax fees(3) All other fees(4) Total

1,589 47 245 44 1,925

803 118 393 149 1,463

(1)

Audit fees consist of fees billed for professional services rendered for the audit of the Company's consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by PwC in connection with statutory and regulatory filings or engagements. Audit- related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company's consolidated financial statements and are not reported under "Audit Fees." For the year ending December 31, 2004, this category included consultations on accounting for bankruptcy and other accounting matters and the employee benefit plan audits. For the year ending December 31, 2003, this category included fees related to the preparation of an employment and fee application related to providing ongoing services while the Company operated in bankruptcy, consultations on accounting for bankruptcy and other accounting matters, and the employee benefit plan audits. Tax fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning (domestic and international). These services included assistance regarding federal, state and international tax compliance, acquisitions and international tax planning. 105

(2)

(3)

Table of Contents (4) All other fees consist of fees for products and services other than the services reported above. In 2004, this category included fees related to summarizing billable hours and audit fees for bankruptcy fee applications. In 2003, this category included fees related to the Company's participation in a benchmarking study on the Company's work- force related cost structure and organization. In considering the nature of the services provided by PwC, the Audit Committee determined that such services are compatible with the provision of independent audit services. The Audit Committee discussed these services with PwC and Company management to determine that they are permitted under the rules and regulations concerning auditor independence promulgated by the SEC to implement the Sarbanes- Oxley Act of 2002, as well as the Public Company Accounting Oversight Board. The Audit Committee requires that all services performed by PwC are pre- approved prior to the services being performed. During 2004 all services were pre- approved in accordance with these procedures. 106

Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a) Financial Statements and Financial Statement Schedules. Documents filed as part of this report: 1. Financial Statements: The financial statements of Leap listed below are set forth in Item 8 of this report for the year ended December 31, 2004 Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets at December 31, 2004 and 2003 Consolidated Statements of Operations for the five months ended December 31, 2004, the seven months ended July 31, 2004 and the years ended December 31, 2003 and 2002 Consolidated Statements of Cash Flows for the five months ended December 31, 2004, the seven months ended July 31, 2004 and the years ended December 31, 2003 and 2002 Consolidated Statements of Stockholders' Equity (Deficit) for the five months ended December 31, 2004, the seven months ended July 31, 2004 and the years ended December 31, 2003 and 2002 Notes to the Consolidated Financial Statements 2. Financial Statement Schedules: All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. (b) Exhibits EXHIBIT INDEX
Exhibit Number Description

2.1(1)

2.2(2) 2.3(3) 3.1(4) 3.2(4) 4.1* 4.2(4)

10.1(5)# 10.2(6)

10.2.1(7)

Fifth Amended Joint Plan of Reorganization dated as of July 30, 2003, as modified to reflect all technical amendments subsequently approved by the Bankruptcy Court. Disclosure Statement Accompanying Fifth Amended Joint Plan of Reorganization dated as of July 30, 2003. Order Confirming Debtors' Fifth Amended Joint Plan of Reorganization dated as of July 30, 2003. Amended and Restated Certificate of Incorporation of Leap Wireless International, Inc. Amended and Restated Bylaws of Leap Wireless International, Inc. Form of Common Stock Certificate. Registration Rights Agreement dated as of August 16, 2004, by and among Leap Wireless International Inc., MHR Institutional Partners II LP, MHR Institutional Partners IIA LP and Highland Capital Management, L.P. Form of Indemnity Agreement to be entered into by and between Leap Wireless International, Inc. and its directors and officers. System Equipment Purchase Agreement, effective as of September 20, 1999, by and between Cricket Communications, Inc. and Ericsson Wireless Communications Inc. (including exhibits thereto). Amendment #1 to System Equipment Purchase Agreement, effective as of November 28, 2000, by and between Cricket Communications, Inc. and Ericsson Wireless Communications Inc. (including exhibits thereto). 107

Table of Contents Exhibit Number 10.2.2(7) Description Form of Amendment to System Equipment Purchase Agreement, by and between Cricket Communications, Inc. and Ericsson Wireless Communications Inc. (including exhibits thereto). Schedule to Form of Amendment to System Equipment Purchase Agreement. Amendment #6 to System Equipment Purchase Agreement, effective as of February 5, 2001, by and between Cricket Communications, Inc. and Ericsson Wireless Communications Inc. Amended and Restated Settlement Agreement, entered into as of September 29, 2003, by and among Leap Wireless International, Inc., Cricket Communications, Inc. and Cricket Communications Holdings, Inc., on behalf of themselves and certain other related debtors and debtors in possession whose cases are being jointly administered with the bankruptcy cases of Leap Wireless International, Inc., Cricket and Holdings and which are listed on Exhibit "A" thereto, Cricket Performance 3, Inc. and Ericsson Wireless Communications Inc. Amendment #11 to System Equipment Purchase Agreement, effective as of May 12, 2004, by and between Cricket Communications, Inc. and Ericsson Wireless Communications Inc. Amended and Restated System Equipment Purchase Agreement, entered into as of June 30, 2000, by and between Cricket Communications, Inc. and Lucent Technologies Inc. (including exhibits thereto). Amendment No. 1 to the Amended and Restated System Equipment Purchase Agreement by and between Lucent Technologies Inc. and Cricket Communications, Inc., entered into as of March 22, 2002. Amendment No. 2 to the Amended and Restated System Equipment Purchase Agreement by and between Lucent Technologies Inc. and Cricket Communications, Inc., entered into as of March 22, 2002. Amendment No. 3 to Amended and Restated System Equipment Purchase Agreement by and between Cricket Communications, Inc. and Lucent Technologies Inc., effective March 22, 2002. Amendment No. 4 to Amended and Restated System Equipment Purchase Agreement by and between Cricket Communications, Inc. and Lucent Technologies Inc., effective March 22, 2002. Amendment No. 5 to the Amended and Restated System Equipment Purchase Agreement by and between Cricket Communications, Inc. and Lucent Technologies Inc., executed as of September 23, 2003. Amendment No. 6 to the Amended and Restated System Equipment Purchase Agreement by and between Cricket Communications, Inc. and Lucent Technologies Inc., effective as of February 4, 2004. Amendment No. 7 to the Amended and Restated System Equipment Purchase Agreement by and between Cricket Communications, Inc. and Lucent Technologies Inc., effective as of January 1, 2005. Amended and Restated System Equipment Purchase Agreement, effective as of December 23, 2002, by and between Cricket Communications, Inc. and Nortel Networks Inc. (including exhibits thereto). Amendment No. 1 to Amended and Restated System Equipment Purchase Agreement, effective as of February 7, 2003, by and between Cricket Communications, Inc. and Nortel Networks Inc. (including exhibits thereto). Amendment No. 2 to Amended and Restated System Equipment Purchase Agreement, effective as of December 22, 2004, by and between Cricket Communications, Inc. and Nortel Networks Inc.

10.2.3(8) 10.2.4(8)

10.2.5(9)

10.2.6(10)

10.3(6)

10.3.1(11)

10.3.2(11)

10.3.3(12)

10.3.4(12)

10.3.5(9)

10.3.6(13)

10.3.7(20)

10.4(14)

10.4.1(14)

10.4.2(20)

108

Table of Contents Exhibit Number 10.5(15)# Description Form of Severance Benefits Agreement by and between Leap Wireless International, Inc., Cricket Communications, Inc. and certain officers of Leap and Cricket. Schedule to form of Severance Benefits Agreement. Severance Benefits Agreement, dated May 27, 2003, between Leap Wireless International, Inc., Cricket Communications, Inc. and Robert J. Irving. Resignation Agreement by and among Leap Wireless International, Inc., Cricket Communications, Inc. and William M. Freeman, dated February 25, 2005. Consulting Agreement, dated as of August 1, 2004, by and between Cricket Communications, Inc. and Al Moschner. Indemnity Agreement, dated as of October 26, 2004, by and between Leap Wireless International, Inc. and Manford Leonard. Letter Agreement, dated October 26, 2004, by and between Cricket Communications, Inc. and Manford Leonard. Credit Agreement, dated as of December 22, 2004, among Cricket Communications, Inc., Alaska Native Broadband 1 License, LLC, and Alaska Native Broadband 1, LLC. Amendment, dated January 26, 2005, to the Credit Agreement, dated as of December 22, 2004, among Cricket Communications, Inc., Alaska Native Broadband 1 License, LLC, and Alaska Native Broadband 1, LLC. Leap Wireless International, Inc. 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan. Form of Stock Option Grant Notice and Non- Qualified Stock Option Agreement. Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement. Form of Deferred Stock Unit Award Grant Notice and Deferred Stock Unit Award Agreement. Form of Non- Employee Director Stock Option Grant Notice and Non- Qualified Stock Option Agreement. Amended and Restated Executive Employment Agreement among Leap Wireless International, Inc., Cricket Communications, Inc., and S. Douglas Hutcheson, dated as of January 10, 2005. Credit Agreement, dated January 10, 2005, by and among Cricket Communications, Inc., Leap Wireless International, Inc., the lenders party thereto and Bank of America, N.A., as administrative agent and L/C issuer. Security Agreement, dated January 10, 2005, by and among Cricket Communications, Inc., Leap Wireless International, Inc., the Subsidiary Guarantors and Bank of America, N.A., as collateral agent. Parent Guaranty, dated January 10, 2005, made by Leap Wireless International, Inc. in favor of the secured parties under the Credit Agreement. Subsidiary Guaranty, dated January 10, 2005, made by the Subsidiary Guarantors in favor of the secured parties under the Credit Agreement. Employment offer letter dated January 31, 2005, between Cricket Communications, Inc. and Albin F. Moschner. Emergence Bonus Agreement, dated February 17, 2005, between Leap Wireless International, Inc. and Glenn T. Umetsu. Emergence Bonus Agreement, dated February 17, 2005, between Leap Wireless International, Inc. and David B. Davis. Emergence Bonus Agreement, dated February 17, 2005, between Leap Wireless International, Inc. and Leonard C. Stephens. Emergence Bonus Agreement, dated February 17, 2005, between Leap Wireless International, Inc. and Robert J. Irving, Jr.

10.5.1*# 10.5.2(15)#

10.7*#

10.8(16)# 10.9(16)# 10.10(16)# 10.11*

10.11.1*

10.12(17)# 10.12.1(17)# 10.12.2(17)# 10.12.3(17)# 10.12.4*# 10.13*#

10.14(18)

10.14.1(18)

10.14.2(18)

10.14.3(18)

10.15* 10.16.1* 10.16.2* 10.16.3* 10.16.4*

109

Table of Contents Exhibit Number 21.1* 31.1* 31.2* 32.1** 32.2** Description Subsidiaries of Leap Wireless International, Inc. Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002. Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002. Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002. Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

* Filed herewith. ** These certifications are being furnished solely to accompany this annual report pursuant to U.S.C. 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any fling of Leap Wireless International, Inc. whether made before or after the date hereof, regardless of any general incorporation language in such filing. Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment pursuant to Rule 24b- 2 under the Securities Exchange Act of 1934. # Management contract or compensatory plan or arrangement in which one or more executive officers or directors participates. (1) Filed as an exhibit to Leap's Current Report on Form 8- K/A, dated July 30, 2003, filed with the SEC on May 7, 2004, and incorporated herein by reference. (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) Filed as an exhibit to Leap's Current Report on Form 8- K, dated July 30, 2003, filed with the SEC on August 11, 2003, and incorporated herein by reference. Filed as an exhibit to Leap's Current Report on Form 8- K, dated October 22, 2003, filed with the SEC on November 6, 2003, and incorporated herein by reference. Filed as an exhibit to Leap's Current Report on Form 8- K, dated August 16, 2004, filed with the SEC on August 20, 2004, and incorporated herein by reference. Filed as an exhibit to Leap's Registration Statement on Form 10, as amended (File No. 0- 29752), as filed with the SEC on September 14, 1998 and incorporated herein by reference. Filed as an exhibit to Leap's Quarterly Report on Form 10- Q for the quarter ended September 30, 2000, as filed with the SEC on November 14, 2000, and incorporated herein by reference. Filed as an exhibit to Leap's Annual Report on Form 10- K for the fiscal year ended December 31, 2000, as filed with the SEC on March 2, 2001, and incorporated herein by reference. Filed as an exhibit to Leap's Quarterly Report on Form 10- Q for the quarter ended March 31, 2001, as filed with the SEC on May 15, 2001, and incorporated herein by reference. Filed as an exhibit to Leap's Quarterly Report on Form 10- Q for the fiscal quarter ended September 30, 2003, as filed with the SEC on November 21, 2003, and incorporated herein by reference. Filed as an exhibit to Leap's Quarterly Report on Form 10- Q for the fiscal quarter ended June 30, 2004, as filed with the SEC on August 12, 2004, and incorporated herein by reference. Filed as an exhibit to Leap's Quarterly Report on Form 10- Q for the fiscal quarter ended March 31, 2002, as filed with the SEC on May 14, 2002, and incorporated herein by reference. Filed as an exhibit to Leap's Quarterly Report on Form 10- Q for the fiscal quarter ended September 30, 2002, as filed with the SEC on November 13, 2002, and incorporated herein by reference. Filed as an exhibit to Leap's Quarterly Report on Form 10- Q for the fiscal quarter ended March 31, 2004, as filed with the SEC on May 17, 2004, and incorporated herein by reference. 110

Table of Contents (14) Filed as an exhibit to Leap's Amendment No. 1 to Annual Report on Form 10- K/A for the year ended December 31, 2002, as filed with the SEC on April 16, 2003, and incorporated herein by reference. (15) (16) (17) (18) (19) (20) Filed as an exhibit to Leap's Quarterly Report on Form 10- Q for the fiscal quarter ended June 30, 2003, as filed with the SEC on September 23, 2003, and incorporated herein by reference. Filed as an exhibit to Leap's Quarterly Report on Form 10- Q for the fiscal quarter ended September 30, 2004, as filed with the SEC on November 22, 2004, and incorporated herein by reference. Filed as an exhibit to Leap's Current Report on Form 8- K, dated January 5, 2005, filed with the SEC on January 11, 2005, and incorporated herein by reference. Filed as an exhibit to Leap's Current Report on Form 8- K, dated January 10, 2005, filed with the SEC on January 14, 2005, and incorporated herein by reference. Filed as an exhibit to Leap's Annual Report on Form 10- K for the fiscal year ended December 31, 2003, as filed with the SEC on May 13, 2004, and incorporated herein by reference. Filed as an exhibit to Leap's Current Report on Form 8- K, dated December 31, 2004, filed with the SEC on March 28, 2005, and incorporated herein by reference. 111

Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LEAP WIRELESS INTERNATIONAL, INC. May 16, 2005 By: /s/ S. Douglas Hutcheson S. Douglas Hutcheson, Chief Executive Officer, President and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Signature Title Date

/s/ S. Douglas Hutcheson S. Douglas Hutcheson /s/ Dean M. Luvisa Dean M. Luvisa

Chief Executive Officer, President and Director (Principal Executive Officer) Vice President, Finance, Treasurer and Acting Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) Director

May 16, 2005

May 16, 2005

/s/ James D. Dondero James D. Dondero /s/ John D. Harkey, Jr. John D. Harkey, Jr. /s/ Robert V. LaPenta Robert V. LaPenta /s/ Mark H. Rachesky Mark H. Rachesky /s/ Michael B. Targoff Michael B. Targoff 112

May 16, 2005 May 16, 2005 May 16, 2005 May 16, 2005 May 16, 2005

Director

Director

Chairman of the Board and Director

Director

COMMON STOCK NUMBER --------------------------LEAP

(LEAP(TM) LOGO)

EXHIBIT 4.1 COMMON STOCK SHARES --------------------------------

INCORPORATED UNDER THE CUSIP 521863 30 8 LAWS OF THE STATE OF DELAWARE SEE REVERSE FOR CERTAIN DEFINITIONS THIS CERTIFIES THAT ____________________________________________________________

IS THE RECORD HOLDER OF ________________________________________________________ FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $.0001 PAR VALUE, OF LEAP WIRELESS INTERNATIONAL, INC. transferable on the books of the Corporation in person or by duly authorized attorney on surrender of this certificate properly endorsed. This certificate shall not be valid until countersigned and registered by the Transfer Agent and

Registrar. WITNESS the facsimile seal of the Corporation and the signatures of its duly authorized officers. (SEAL) Dated: SECRETARY EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

COUNTERSIGNED AND REGISTERED TRANSFER AGENT AND REGISTRAR

BY

AUTHORIZED SIGNATURE
LEAP WIRELESS INTERNATIONAL, INC. The Corporation shall furnish without charge to each stockholder who so requests a statement of the powers, designations, preferences and relative participating, optional, or other special rights of each class of stock of the Corporation or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Such requests shall be made to the Corporation's Secretary at the principal office of the Corporation. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COMas tenants in common UNIF GIFT MIN ACT- ____________ Custodian __________________ (Cust} (Minor) TEN ENTas tenants by the entireties under Uniform Gifts to Minors Act ______________________________________ JT TENas joint tenants with right of survivorship (State) and not as tenants in common UN1F TRF MIN ACT- __________ Custodian (until age _________) COM PROPas community property (Cust) __________________ under Uniform Transfers (Minor) to Minors Act ____________________________ (State) Additional abbreviations may also be used though not in the above list. For Value Received, ________________________________________________ hereby sell(s), assign(s) and transfer(s) unto ________________________________________________________________________________________________________________________ PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________________________________________________________________________________________________________ (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE) ________________________________________________________________________________________________________________________ ________________________________________________________________________________________________________________________ _________________________________________________________________________________________________________________ shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint _______________________________________________________________________________________________________ attorney-in-fact to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. Dated __________________________ THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NOTICE: NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER. Signature Guaranteed THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION, (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR DESTROYED THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.

Exhibit 10.5.1 Schedule to Form of Severance Benefits Agreement

Pursuant to Instruction 2 to Item 601 of Regulation S- K, this Schedule sets forth a list of those executive officers of Leap Wireless International, Inc. who have executed the form of Severance Benefits Agreement filed as Exhibit 10.5.1: Glenn P. Umetsu Leonard C. Stephens

David B. Davis

EXHIBIT 10.7 RESIGNATION AGREEMENT This Resignation Agreement (the "Agreement") is hereby entered into by and between Leap Wireless International, Inc., a Delaware corporation ("Leap"), Cricket Communications, Inc. ("Cricket" and together with Leap, the "Company"), and William M. Freeman (the "Executive"). Leap, Cricket and the Executive are sometimes referred to herein as a "Party" or collectively as the "Parties." RECITALS WHEREAS, Executive is currently employed by Cricket as its Chief Executive Officer, serves as the Chief Executive Officer of Leap, and serves on the Board of Directors of each of Leap and Cricket and their domestic subsidiaries; and WHEREAS, Executive and Cricket entered into an Executive Employment Agreement made and entered into as of May 24, 2004 (the "Employment Agreement"); and WHEREAS, Executive and Leap and Cricket wish to enter into this Agreement for the purpose of terminating and superseding the Employment Agreement in its entirety; and WHEREAS, Executive and Cricket wish to terminate their employment relationship through Executive's resignation effective as of February 25, 2005 (the "Termination Date"), and to resolve amicably all of their obligations to each other, including, without limitation, under the Employment Agreement. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the adequacy of which is hereby acknowledged, the Parties hereby agree as follows: 1. Employment Agreement. The Employment Agreement shall be superseded entirely by this Agreement, and the Employment Agreement shall be of no further force or effect. Cricket and Executive each acknowledge and agree that they do not have any claims against the other based on or arising under the Employment Agreement. 2. Employment and Officer Status. Executive hereby resigns as an employee of Cricket effective as of the Termination Date. Executive's separation from employment shall be reflected in Cricket's records as a voluntary resignation. Executive hereby resigns from his position as Chief Executive Officer (and any other officer positions he may hold) of Leap and Cricket (and each of their respective domestic affiliates and subsidiaries) effective as of the Termination Date. Executive shall execute any additional documentation necessary to effectuate such resignations. 3. Resignation From Board. Executive hereby resigns from his position as a member of the Board of Directors of each of Leap and Cricket (and each of their respective domestic affiliates and subsidiaries) effective as of the Termination Date. Executive shall execute any additional documentation necessary to effectuate such resignations. 4. Compensation Through the Termination Date. Executive acknowledges and agrees that on the Termination Date, Cricket will issue Executive his final paycheck, reflecting (a) his earned but unpaid base salary through the Termination Date and (b) all accrued, unused vacation due Executive through the Termination Date. The payments described in this Section shall be subject to all applicable taxes and withholding. Cricket, within thirty- five (35) days after the Termination Date, will reimburse Executive for any and all reasonable and necessary business expenses incurred by Executive in connection with the performance of his job duties prior to the Termination Date, which expenses shall be submitted to Cricket with supporting receipts and/or documentation no later than twenty- one (21) days after the Termination Date. Executive acknowledges and agrees that with his final check, and the expense reimbursement check described in this Section, Executive will have received all monies, bonuses, commissions, expense reimbursement, vacation pay, or other compensation he earned or was due during his employment by Cricket. Executive acknowledges and agrees that the payments and benefits described in this Section constitute the only compensation, benefits or other amounts to which he is entitled pursuant to any policies, practices or benefit programs maintained by Leap or Cricket related to compensation and benefits. Executive further acknowledges and agrees that he currently holds no rights to stock, stock options, restricted stock, or deferred stock units in either Leap or Cricket, or long- term equity- based incentive compensation from the Company (collectively "Equity") under the Employment Agreement or pursuant to any plan, program, or policy of the Company, and hereby waives and relinquishes any claim to such Equity.

5. Entitlement to Benefits. Except as provided in this Agreement, Executive's entitlement to benefits from Leap or Cricket, and eligibility to participate in the benefit plans of Leap and Cricket, shall cease on the Termination Date, except to the extent Executive elects to and is eligible to continue his medical and dental benefits at his sole expense pursuant to COBRA. 6. Severance Payment. Upon the Termination Date, and subject in all respects to (i) Executive's execution and delivery to the Company of the General Release attached hereto as Exhibit A (the "General Release"), and (ii) the expiration of the seven day revocation period following the execution and delivery of the General Release as described therein, without Executive's having given notice of revocation, Cricket shall pay Executive a severance payment in the gross amount of One Million Dollars ($1,000,000) (subject to applicable withholding at the minimum permissible rate) in a lump sum by wire transfer to the account specified on Schedule 1 hereto with immediately available funds on the next business day following the date on which the General Release becomes irrevocable, in lieu of any payments or benefits to which Executive may have been entitled pursuant to the Employment Agreement. The Company will provide prompt notice of the payment of such amount to Michael Movsovich, counsel to Executive by telephone to 212- 446- 4888, or e- mail to mmovsovich@kirkland.com. 2 7. Proprietary Information. Executive acknowledges that certain information, observations and data obtained by him during the course of or related to his employment with the Company (including, without limitation, information with respect to the Company's and its affiliates' operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, shareholders, business plans, marketing plans, proposals or methods, costs, prices, contractual relationships, regulatory status, compensation paid to employees or other terms of employment) are the sole property of the Company and constitute trade secrets of the Company. Promptly following the execution of this Agreement, Executive agrees to return all files, customer lists, financial information or other Company property (excluding documents that have been publicly filed with the SEC) which are in the Executive's possession or control without making copies thereof. Except as required pursuant to applicable law, rule or regulation or other legal compulsion or in order to assert any rights under this Agreement, Executive further agrees that he will not disclose to any person or use for his own account any of the above described trade secret information, observations or data without the written consent of Leap's Board of Directors. Further, Executive acknowledges that any unauthorized use of the above described confidential information will cause irreparable harm to the Leap and Cricket and their affiliates and will give rise to an immediate action by any of them for injunctive relief. Executive continues to be bound by the Invention Disclosure, Confidentiality and Proprietary Rights Agreement that he signed during his employment, in accordance with the terms thereof. 8. Cooperation Clause. Executive agrees to provide reasonable assistance to the Company (including the Board of Directors of Leap and any special committees of the Board of Directors of Leap) and its counsel and accountants in any financial audits or internal investigation involving securities, financial, accounting, or other matters, and in its defense of, or other participation in, any administrative, judicial, or other proceeding arising from any charge, complaint or other action which has been or may be filed relating to the period during which Executive was employed by Cricket. During a period of thirty days following the Termination Date (but not while Executive is on vacation), Executive shall provide such assistance as the Company may reasonably request in connection with negotiating a roaming agreement with Sprint. Unless Executive agrees, he shall not be required to travel in connection with the assistance requested by the Company pursuant to this Section 8. The Company shall compensate Executive at the rate of $275 per hour, with a five hour minimum, for any cooperation or assistance requested by the Company; provided, however, that (i) the first five hours of assistance requested by the Company shall be performed without compensation, and (ii) the Company shall have no obligation to compensate Executive under this Section 8 for his cooperation or assistance in any matter in which he is named as a defendant or respondent, or with respect to which Executive requests indemnification pursuant to Section 12. Cricket agrees to reimburse Executive for his reasonable and actual expenses incurred in providing any cooperation or assistance contemplated by this Agreement (subject to the exception in clause (ii) of the preceding sentence). 9. Confidentiality of Agreement. Except as expressly set forth in Section 10, the provisions of this Agreement shall be held in strictest confidence by the Parties and shall not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) Executive may disclose this Agreement, in confidence, to his immediate family; (b) the Parties may disclose this Agreement in confidence to their respective attorneys, accountants, auditors, tax 3 preparers, and financial advisors; (c) Leap may disclose this Agreement as necessary to fulfill standard or legally required SEC or corporate reporting or disclosure requirements; (d) the Parties may disclose this Agreement insofar as such

disclosure may be necessary to enforce its terms or as otherwise required by law, rule, regulation or other legal compulsion; and (e) Executive may inform third parties that he voluntarily resigned from his positions with Leap and Cricket. Except as required by law, the Company will make only statements consistent with the foregoing. 10. Press Release; Mutual Nondisparagement. Leap shall issue a press release regarding Executive's resignation in the form attached hereto as Exhibit B, or in such other form as the Parties mutually agree to. Except as required by law or court order, Leap, Cricket, and Executive shall not make any additional or inconsistent public statements regarding Executive's resignation, and Leap and Cricket shall cause their directors, agents and affiliates to likewise refrain from making such public statements, unless in response to a prior statement or communication by a Party in violation of this Section 10. Leap, Cricket, and the directors, agents and affiliates of Leap and Cricket, on the one hand, and Executive and his agents and affiliates, on the other hand, shall not disparage or otherwise publish or communicate derogatory statements or opinions about the other to any third party, unless in response to a prior statement or communication by the other side in violation of this Section 10. Each Party shall be responsible for compliance by its directors, agents, and affiliates, as the case may be. Internal communications among the senior management personnel or the Board of Directors of Leap or Cricket shall not be considered communications to a third party for purposes of this Section. 11. Non- Solicitation. a. For the period commencing on the Termination Date and terminating on the second anniversary thereof, Executive shall not, either on Executive's own account or jointly with or as a manager, agent, officer, employee, consultant, partner, joint venturer, owner, shareholder or otherwise, on behalf of any other person, firm or corporation, directly or indirectly solicit or attempt to solicit away from the Company, or any of its affiliates, any of its officers or employees or offer employment to any person who, on or during the six (6) months immediately preceding the date of such solicitation or offer, is or was an officer or employee of the Company, or any of its affiliates; provided, however, that a general advertisement to which an officer or employee of the Company, or any of its affiliates, responds shall in no event be deemed to result in a breach of this Section 11(a). b. In the event that Executive breaches the provisions of Section 11(a), or threatens to do so, in addition to and without limiting or waiving any other remedies available to the Company in law or in equity, the Company shall be entitled to immediate injunctive relief in any court having the capacity to grant such relief, to restrain such breach or threatened breach and to enforce Section 11(a). Executive acknowledges that it is impossible to measure in money the damages that the Company will sustain in the event that Executive breaches or threatens to breach Section 11(a) and, in the event that the Company institutes any action or proceeding to enforce Section 11(a) seeking injunctive relief, Executive hereby waives and agrees not to assert or use as a defense a claim or defense that the Company has an adequate remedy at law. 4 12. Indemnification. Executive will continue to be indemnified by any applicable insurance policies, agreements, certificate of incorporation, or bylaws of the Company and as otherwise required by law for his actions as an employee, officer, and director prior to the Termination Date to the same extent as during his employment to the fullest extent provided by law. 13. Return of Equipment. Within five (5) days of the Termination Date, Executive shall return to the Company in good working order any equipment, instruments, or accessories of the Company in his custody for the purpose of conducting the business of the Company without deleting, removing, or duplicating any data reflecting the Company's proprietary information, or if not returned, account to the Company to its reasonable satisfaction for all such equipment, instruments, or accessories. 14. Attorneys' Fees. Cricket hereby agrees to reimburse Executive for his reasonable legal fees and expenses, up to a maximum of $5,000, incurred in connection with the negotiation and review of this Agreement. 15. Miscellaneous Provisions. a. The provisions of this Agreement are severable. If any provision is held to be invalid or unenforceable it shall not affect the validity or enforceability of any other provision. b. Except as expressly stated herein, this Agreement and its exhibits represent the sole and entire agreement between the Parties with respect to the subject matters contained herein and supersede all prior documents, agreements, negotiations and discussions between the Parties with respect to the subject matters contained herein. The Parties acknowledge and agree that there are no collateral agreements or representations, written or oral, regarding the terms and conditions of Executive's employment with the Company, the separation of Executive's employment with the Company, and settlement of all Claims between the Parties other than those expressly set forth in this Agreement. This Agreement supersedes and terminates the Employment Agreement. Upon the Parties' execution of this Agreement, neither Party shall have any further obligation to the other under the Employment Agreement. c. No provision of this Agreement may be altered, modified or amended unless such alteration, modification, or amendment is agreed to in writing and signed by Executive on the one hand and Leap and Cricket on the other, which writing expressly states the intent of the Parties to modify this Agreement.

d. This Agreement shall be construed as a whole in accordance with its fair meaning and in accordance with the laws of the State of California. The language in the Agreement shall not be construed for or against any particular Party. The headings used herein are for reference only and shall not affect the construction of this Agreement. e. No waiver by any Party hereto at any time of any breach of, or compliance with, any condition or provision of this Agreement to be performed by any other Party hereto shall be deemed a waiver of similar or dissimilar provisions or conditions at the 5
same or at any prior or subsequent time. f. This Agreement may be executed in one or more counterparts, and by facsimile, each of which shall be deemed to be an original as against any Party that has signed it, but all of which together will constitute one and the same instrument.

g. If any Party to this Agreement brings an action to enforce his or its rights hereunder, the prevailing party shall be entitled to recover his or its costs and expenses, including court costs and attorneys' fees, if any, incurred in connection with such suit. h. Executive acknowledges that the payments and benefits provided in this Agreement may have tax ramifications to him. The Company has provided no tax or other advice to Executive on such matters and Executive is free to consult with an accountant, legal counsel, or other tax advisor regarding the tax consequences he may face. i. EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT CAREFULLY, UNDERSTANDS ALL OF ITS TERMS, AND AGREES TO THOSE TERMS KNOWINGLY, FREELY, VOLUNTARILY, AND WITHOUT DURESS. j. Any and all notices or other communications or deliveries required or permitted to be given or made shall be in writing and delivered personally, or sent by certified or registered mail, return receipt requested and postage prepaid, or sent by overnight courier service as follows:
If to Leap or Cricket, at: Leap Wireless International, Inc. 10307 Pacific Center Court San Diego, California 92121 Attention: General Counsel If to the Executive, at: William M. Freeman 12 Orchard Way Warren, New Jersey 07059 With a copy to:

Kirkland & Ellis LLP 153 E. 53rd Street New York, NY 10022 Attention: Michael Movsovich, Esq. or at such other address as any party may specify by notice given to such other party in accordance with this Section 15(j). The date of giving of any such notice shall be the date of 6 hand delivery, five days after the date of the posting of the mail or the day immediately following the date when deposited with the overnight courier. [Signature Page Follows] 7 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the dates indicated below. EXECUTIVE LEAP WIRELESS INTERNATIONAL, INC.
/s/ William M. Freeman William M. Freeman By: Name: Its: /s/ S. Douglas Hutcheson S. Douglas Hutcheson Chief Financial Officer

Dated: February 24, 2005

Dated: February 24, 2005

CRICKET COMMUNICATIONS, INC. By: /s/ S. Douglas Hutcheson Name: S. Douglas Hutcheson Its: Chief Financial Officer Dated: February 24, 2005 8
EXHIBIT A GENERAL RELEASE

1. General Release of Claims. In consideration of the benefits under Section 6 of the Resignation Agreement (the "Agreement"), by and among Leap Wireless International, Inc. ("Leap"), Cricket Communications, Inc. ("Cricket" and together with Leap, the "Company") and William M. Freeman ("Executive"), Executive does hereby for himself and his spouse, beneficiaries, heirs, successors and assigns, release, acquit and forever discharge Cricket, Leap, their subsidiaries, each of the entities affiliated with a present director of Leap, and their respective present and former stockholders, officers, directors, managers, employees, representatives, related entities, successors and assigns, and all persons acting by, through or in concert with them (the "Releasees") of and from any and all claims, actions, charges, complaints, causes of action, rights, demands, debts, damages, or accountings of whatever nature, known or unknown, which Executive may have against the Releasees based on any actions or events which occurred prior to the date of this General Release, including, but not limited to, those related to, or arising from, the Executive Employment Agreement between Cricket and Executive dated May 24, 2004, Executive's employment with Cricket, or the termination thereof, any claims under Title VII of the Civil Rights Act of 1964, as amended, the Federal Age Discrimination and Employment Act, the Equal Pay Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the Civil Rights Act of 1866, 1871 and 1991, the California Fair Employment and Housing Act, the California Occupational Safety and Health Act, claims for unpaid wages and failure to pay wages under the California Labor Code (collectively, "Claims"), including, without limiting the generality of the foregoing, any Claims arising out of, based upon, or relating to Executive's rights to stock, stock options, restricted stock, deferred stock units, long- term equity- based incentive compensation, or any other form of equity interest in either Leap or Cricket (which rights are hereby relinquished), or any contract, agreement or compensation arrangement between Executive and the Company. This General Release shall not, however, constitute a waiver of any of Executive's rights under the Agreement or to any vested benefits under the Company's 401(k) plan. 2. Release of Unknown Claims. IN ADDITION, EXECUTIVE EXPRESSLY WAIVES ALL RIGHTS UNDER SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA, WHICH READS AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. WITH FULL AWARENESS AND UNDERSTANDING OF THE ABOVE PROVISIONS, EXECUTIVE HEREBY WAIVES ANY RIGHTS HE MAY HAVE UNDER SECTION 1542, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. EXECUTIVE INTENDS TO, AND HEREBY DOES, RELEASE THE 9 RELEASEES FROM CLAIMS WHICH EXECUTIVE DOES NOT PRESENTLY KNOW OR SUSPECT TO EXIST AT THIS TIME. 3. Older Workers' Benefit Protection Act. EXECUTIVE AGREES AND EXPRESSLY ACKNOWLEDGES THAT THIS GENERAL RELEASE INCLUDES A WAIVER AND RELEASE OF ALL CLAIMS WHICH EXECUTIVE HAS OR MAY HAVE UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. SECTION 621, ET SEQ. ("ADEA"). THE FOLLOWING TERMS AND CONDITIONS APPLY TO AND ARE PART OF THE WAIVER AND RELEASE

OF ALL CLAIMS INCLUDING BUT NOT LIMITED TO THE ADEA CLAIMS UNDER THIS GENERAL RELEASE: a. That the Agreement and this General Release are written in a manner calculated to be understood by Executive. b. The waiver and release of claims under the ADEA contained in this General Release do not cover rights or claims that may arise after the date on which Executive signs this General Release. c. The Agreement provides for consideration in addition to anything of value to which Executive is already entitled. d. Executive is advised to consult an attorney before signing this General Release. e. Executive is afforded twenty- one (21) days after Executive is provided with this General Release to decide whether or not to sign this General Release, although Executive may waive such period by signing the General Release sooner. If Executive executes this General Release prior to the expiration of such period, Executive does so voluntarily and after having had the opportunity to consult with an attorney. f. Executive will have the right to revoke this General Release within seven (7) days of signing this General Release. In the event this General Release is revoked, this General Release will be null and void in its entirety, and Executive will not receive the benefits described in Section 6 of the Agreement. h. If Executive wishes to revoke the General Release, Executive shall deliver written notice stating his intent to revoke this General Release to Cricket's General Counsel on or before the seventh (7th) day after the date hereof. 4. No Assignment of Claims. Executive represents and warrants to the Releasees that there has been no assignment or other transfer of any interest in any Claim which Executive may have against the Releasees, or any of them, and Executive agrees to indemnify and hold the Releasees harmless from any liability, claims, demands, damages, costs, expenses and attorneys' fees incurred as a result of any person asserting any such assignment or transfer of any rights or Claims under any such assignment or transfer from such party. 10 5. No Suits or Actions. Executive agrees that if he hereafter commences, joins in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any of the Claims released hereunder, or in any manner asserts against the Releasees any of the Claims released hereunder, then he will pay to the Releasees against whom such suit or Claim is asserted, in addition to any other damages caused thereby, all attorneys' fees incurred by such Releasees in defending or otherwise responding to said suit or Claim. 6. No Admission. Executive further understands and agrees that neither the payment of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees.
IN WITNESS WHEREOF, Executive has executed this General Release on the date indicated below. EXECUTIVE ___________________________________ William M. Freeman Date:_____________________________ 11

EXHIBIT B [FORM OF AGREED- UPON PRESS RELEASE] 12 Schedule 1 Wire Transfer Instructions 13

EXHIBIT 10.11
EXECUTION COPY CREDIT AGREEMENT BY AND AMONG

CRICKET COMMUNICATIONS, INC. (AS LENDER)

AND ALASKA NATIVE BROADBAND 1 LICENSE, LLC (AS BORROWER) AND ALASKA NATIVE BROADBAND 1, LLC (AS GUARANTOR) December 22, 2004

CREDIT AGREEMENT This Credit Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT") is entered into as of December 22, 2004 (the "EFFECTIVE DATE"), by and among Cricket Communications, Inc., a Delaware corporation ("LENDER"), Alaska Native Broadband 1 License, LLC, a Delaware limited liability company ("BORROWER"), and Alaska Native Broadband 1, LLC, a Delaware limited liability company ("GUARANTOR," and together with Borrower, the "LOAN PARTIES"). RECITALS WHEREAS, subject to the terms and conditions set forth herein, Lender and the Loan Parties wish to make and establish a line of credit for Borrower in the aggregate amount not to exceed the Loan Commitment Amount for the purposes of Borrower participating as a bidder and obtaining Licenses in the Auction, and to Build- Out and operate the ANB- 1 License Systems. AGREEMENT NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows: SECTION 1. DEFINED TERMS The following terms shall have the following meanings in this Credit Agreement: "AFFILIATE" shall mean, with respect to a Person, any other Person directly or indirectly Controlling, Controlled by or under Common Control with such Person at any time during the period for which the determination of affiliation is being made. "ACQUISITION SUB- LIMIT" shall mean $65.0 million, which shall be used solely to participate in the Auction and to pay the net winning bids for licenses for which Borrower is the Winning Bidder, including to make any required deposits or down payments to the FCC in connection therewith. "AMORTIZATION COMMENCEMENT DATE" shall mean the date that is thirty (30) days after the Substantial Completion Date; provided, however, that if ANB has exercised the Put (as defined in the LLC Agreement) in accordance with the terms of the LLC Agreement prior to such Amortization Commencement Date, the Amortization Commencement Date shall be extended to the date of the closing of the Put as set forth in the LLC Agreement. "ANB" shall mean Alaska Native Broadband, LLC, a Delaware limited liability company. "ANB NEGATIVE PLEDGE AGREEMENT" shall mean the ANB Negative Pledge Agreement in substantially the form of Exhibit A pursuant to which ANB agrees not to cause or permit any liens or encumbrances to attach to any or all of its membership interests in Guarantor or, under certain circumstances, to pledge all of its membership interests in Guarantor. "ANB- 1 LICENSE SYSTEM" shall mean the Commercial Mobile Radio Service system(s) constructed and operated, or to be constructed and operated, by Borrower for the purpose of providing service authorized under a License or Licenses. "APPLICABLE LAW" shall mean with respect to any Person, any federal, state, local or foreign law, statute, ordinance, rule, regulation, Judgment, order, injunction or decree or any interpretation or administration of any of the foregoing by, any Governmental Entity, whether in effect as of the Effective Date or thereafter, and in each case as amended, applicable to such Person or its Affiliates or their respective assets, including, without limitation, the FCC Rules. "AUCTION" shall mean the auction of broadband personal communications service licenses being conducted by the FCC designated by the FCC as Auction No. 58 and described by the FCC in Public Notice, DA 04- 3005 (rel. Sep. 16, 2004) and Public Notice, DA 04- 3270 (rel. Oct. 15, 2004), as the same may be rescheduled or modified by the FCC. "AUCTION DATE" shall mean the date the first round of the bidding in the Auction commences. "AUCTION BENEFITS" shall have the meaning given to that term in the LLC Agreement. "AUCTION FUNDS" shall mean funds paid by the Borrower to the FCC in accordance with FCC Rules (a) to become eligible to participate in the Auction, (b) as a down payment or winning bid payment for any license for which Borrower is the Winning Bidder, or (c) as an Auction related bid withdrawal payment.

"BALANCE AMOUNT" shall have the meaning set forth in Section 2.2(a)(iii). "BIDDING CREDIT" shall mean a "bidding credit" as defined in the FCC Rules at 47 C.F.R. Sections 24.712(b) and 24.717(b). "BORROWER" shall have the meaning set forth in the preamble hereto. "BORROWER CHANGE IN CONTROL EVENT" shall be deemed to have occurred if (a) there shall be consummated (i) any consolidation or merger of Borrower in which Borrower is not the continuing or surviving entity, other than a merger of Borrower in which the holders of the equity securities of Borrower immediately prior to the merger have the same proportionate ownership of the voting equity securities of the surviving entity immediately after the merger, or (ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of Borrower, (b) the member(s) of Borrower approve any plan or proposal for the liquidation or dissolution of Borrower, or (c) Borrower ceases to be a wholly- owned Subsidiary of Guarantor. "BORROWER MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the business, properties, assets, liabilities, prospects or condition (financial or otherwise) of Borrower, except for any such effects resulting directly or indirectly from (i) changes in the wireless industry generally, or (ii) changes in general economic conditions or the securities markets generally. 2 "BORROWER OBLIGATIONS" shall mean the collective reference to the payment and performance by Borrower of each covenant and agreement of Borrower contained in this Credit Agreement and the other Loan Documents to which Borrower is a party or by which it is bound. "BUILD- OUT" shall mean the construction and associated operation by Borrower, if any, of a Commercial Mobile Radio Service system in accordance with the FCC Rules, 47 C.F.R. Section 24.203. "BUILD- OUT LOAN REQUEST" shall have the meaning set forth in Section 2.2(b). "BUILD- OUT SUB- LIMIT" shall mean an amount equal to $4.5 million, which shall be used by Borrower to fund the Build- Out and initial operation of the ANB- 1 License Systems, including payment of management fees, if any, to ANB and Cricket; provided, however, that in the event the Required Capital Contributions have not been fully expended by Borrower in paying to the FCC the amount of the net winning bids for Licenses for which it was the Winning Bidder and any Auction- related bid withdrawal payments, the Build- Out Sub- Limit shall be reduced by the amount of the unused portion of the Required Capital Contributions. "BUSINESS" shall have the meaning given to that term in the LLC Agreement
"BUSINESS DAY" shall mean a day other than (a) a Saturday or Sunday or (b) a day on which banking institutions are authorized or required by law or executive order to remain closed in New York City. "CLAIMS" shall have the meaning set forth in Section 8.4. "COMMERCIAL MOBILE RADIO SERVICE" or "CMRS" shall mean a commercial mobile radio service as defined in 47 C.F.R. Section 20.3.

"COMMITMENT PERIOD" shall mean the period commencing on the Effective Date and expiring on the earliest to occur of (a) the Amortization Commencement Date, (b) the date that the LLC Agreement is terminated by either party pursuant to Section 13.1(b), (c) the date on which the Management Agreement has been terminated (following the expiration of the applicable notice period) by Lender pursuant to Section 10.2(b) thereof (other than Section 10.2(b)(iv)) or by Borrower pursuant to Section 10.2(a)(v) thereof, (d) the date on which Borrower enters into any contract or agreement pursuant to which (i) any direct competitor of Lender or any entity in which any direct competitor of Lender owns, directly or indirectly, an interest in excess of five percent (5%), is engaged to provide management or technical services to Borrower in the nature of those provided by Lender under the Management Agreement, or (ii) Borrower has the right or obligation to use any trademark, service mark, trade name, logo, brand or other similar intellectual property owned, licensed or otherwise controlled by any direct competitor of Lender (other than Borrower or Guarantor) or any entity in which any direct competitor of Lender (other than Borrower or Guarantor) owns, directly or indirectly, an interest in excess of five percent (5%), unless, in either case, the Lender has consented thereto or (e) the Mandatory Prepayment Date. "CONTROL" (including the correlative meanings of the terms "Controlled by," "Controlling" and "under Common Control with") as used with respect to any Person, shall 3

mean the possession, directly or indirectly, of the power to direct or cause the direction of management policies of such Person, whether through the ownership of voting securities, by contract or otherwise. "CONTROL AGREEMENT" shall mean the Control Agreement(s) substantially in the form of Exhibit B pursuant to which each of the Loan Parties shall permit Lender to establish control of any deposit and/or securities accounts either of them has with any banking or brokerage institution. "CREDIT AGREEMENT" shall have the meaning set forth in the preamble hereto. "DEFAULT RATE" shall have the meaning set forth in Section 2.3(e). "DOWN PAYMENT AMOUNT" shall have the meaning set forth in Section 2.2(a)(ii). "EFFECTIVE DATE" shall have the meaning set forth in the preamble hereto. "EVENT OF DEFAULT" shall have the meaning set forth in Section 7.1. "FCC" shall mean the Federal Communications Commission or any successor thereto. "FCC RULES" shall mean the Communications Act of 1934, as amended, the rules and regulations established by the FCC and codified in Title 47 of the Code of Federal Regulations, as the same may be modified or amended from time to time hereafter, and effective orders, rulings, and public notices of the FCC. "FINAL PRINCIPAL AMOUNT" shall have the meaning set forth in Section 2.3(c). "FINANCING STATEMENTS" shall mean such UCC financing statements and other instruments reasonably required by Lender to create, perfect and/or maintain the security interests granted by the Loan Parties and ANB under the ANB Negative Pledge Agreement, the Guarantor Pledge Agreement and the Security Agreement. "FUNDING DATE" shall mean each date on which Lender makes a Loan to Borrower. "GAAP" shall mean United States generally accepted accounting principles, as in effect from time to time. "GOVERNMENTAL ENTITY" shall mean any government or political subdivision thereof, including without limitation, any regional or municipal authority, any governmental department, ministry, commission, board, bureau, agency, regulatory authority, instrumentality, judicial or administrative body, having jurisdiction over the matter or matters in question, including without limitation the FCC. "GUARANTOR" shall have the meaning set forth in the preamble hereto. "GUARANTOR CHANGE IN CONTROL EVENT" shall be deemed to have occurred if (a) there shall be consummated (i) any consolidation or merger of Guarantor in which Guarantor is not the 4 continuing or surviving entity, other than a merger of Guarantor in which the holders of the equity securities of Guarantor immediately prior to the merger have the same proportionate ownership of the voting equity securities of the surviving entity immediately after the merger, or (ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of Guarantor, or (b) the member(s) of Guarantor approve any plan or proposal for the liquidation or dissolution of Guarantor. "GUARANTOR MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the business, properties, assets, liabilities, prospects or condition (financial or otherwise) of Guarantor, except for any such effects resulting directly or indirectly from (i) changes in the wireless industry generally, or (ii) changes in general economic conditions or the securities markets generally. "GUARANTOR OBLIGATIONS" means all liabilities and obligations of Guarantor that may arise under or in connection with the Credit Agreement (including, without limitation, Section 3) and the other Loan Documents to which it is a party or by which it is bound, whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses and otherwise. "GUARANTOR PLEDGE AGREEMENT" shall mean the Pledge Agreement in substantially the form attached hereto as Exhibit C pursuant to which Guarantor shall pledge to Lender all Guarantor's membership interests in Borrower as security for the Obligations. "INITIAL APPLICATION DATE" shall have the meaning set forth in Section 5.8. "INITIAL LOAN DATE" shall have the meaning set forth in Section 2.2(a)(i). "INITIAL LOAN AMOUNT" shall have the meaning set forth in Section 2.2(a)(i). "JUDGMENT" shall mean any judgment, writ, order, injunction, award or decree of any court, judge, justice or magistrate, including any bankruptcy court, or arbiter, and any order of or by any other Governmental Entity. "LENDER" shall have the meaning set forth in the preamble hereto. "LICENSE" shall mean any license (a) issued by the FCC to the Borrower for which Borrower is a Winning Bidder or (b) any other license issued by the FCC (i) now to the Borrower or (ii) hereafter held by Borrower. "LITIGATION" shall mean any claim, action, suit, proceeding, arbitration, investigation, hearing or other activity or procedure that could result in a Judgment, and any notice of any of the foregoing.

"LLC AGREEMENT" shall mean the Amended and Restated Limited Liability Company Agreement of Alaska Native Broadband 1, LLC, a Delaware limited liability company, by and between Lender and ANB dated as of the Effective Date, as amended from time to time. 5
"LOAN COMMITMENT AMOUNT" shall mean the aggregate sum of (a) the Acquisition Sub-Limit and (b) the Build-Out Sub-Limit, which aggregate sum in no event shall exceed $69.5 million.

"LOAN DOCUMENTS" shall mean this Credit Agreement, the Note, the Security Agreement, the Guarantor Pledge Agreement, the Control Agreement(s), the ANB Negative Pledge Agreement and all other agreements, instruments, certificates and other documents at any time executed and delivered pursuant to or in connection herewith or therewith, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time after the Effective Date. For the avoidance of doubt, the Loan Documents shall not include the LLC Agreement, the Management Agreement, the Trademark License Agreement or any agreement, instrument, certificate or other document at any time executed and delivered pursuant to or in connection with the LLC Agreement, the Management Agreement or the Trademark License Agreement, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time after the Effective Date. "LOANS" shall mean the loans to Borrower evidenced by the Note, not to exceed in the aggregate the Loan Commitment Amount. Each advance made under the Note is a Loan. "LOAN PARTIES" shall have the meaning set forth in the preamble hereto. "MANAGEMENT AGREEMENT" shall mean the Management Services Agreement dated as of the Effective Date by and between Borrower and Lender, as amended, amended and restated, supplemented or otherwise modified from time to time. "MANDATORY PREPAYMENT DATE" shall mean the date on which Borrower receives a refund of Auction Funds (less any amounts retained by the FCC) because (a) Borrower is not the Winning Bidder for any licenses or (b) Borrower is the Winning Bidder for a license or licenses and the FCC does not grant at least one such license to Borrower. "MATURITY DATE" shall mean the date that is forty- eight (48) months after the Amortization Commencement Date. "NOTE" shall mean that certain Promissory Note in the form attached hereto as Exhibit D, executed by Borrower in favor of Lender and delivered by Borrower to Lender in accordance with the terms of this Credit Agreement. "PERMITTED LIENS" shall mean (a) any and all liens and security interests created pursuant to any of the Loan Documents, (b) liens for taxes, fees, assessments and governmental charges not delinquent or that are being contested in good faith by appropriate proceedings; provided, however, that Borrower shall have set aside on its books and shall maintain adequate reserves for the payment of same in conformity with GAAP, (c) liens, deposits or pledges made to secure statutory obligations, surety or appeal bonds, or bonds for the release of attachments or for stay of execution, or to secure the performance of bids, tenders, contracts (other than for the payment of borrowed money), leases or for purposes of like general nature in the ordinary course of business, (d) purchase money liens on tangible personal property in the nature of office equipment utilized in the normal operation of the business of Borrower, which liens encumber only the equipment acquired with such indebtedness, and (e) liens for indebtedness permitted 6 under the terms of Section 6.9(b), which liens encumber only the equipment acquired with such purchase money indebtedness. "PERSON" shall mean any natural person, corporation, firm, unincorporated organization, association, partnership, limited liability company, business trust, joint stock company, joint venture organization, entity or business of any kind. "POPS" shall have the meaning commonly given to such term in the United States telecommunications industry and shall be based on 2004 population statistics provided by Claritas, Inc. "REFUND" shall mean any Auction Funds that are refunded to Borrower. "REFUND DATE" shall mean, for each Refund, the date on which Borrower receives such Refund. "REQUIRED CAPITAL CONTRIBUTIONS" shall mean the capital contributions required to be made to Borrower by Guarantor, which shall not be less $4 million (provided Cricket has made capital contributions to Guarantor of at least $3 million), as contemplated by the LLC Agreement. If Cricket fails to make at least $3 million of capital contributions to Guarantor, then "Required Capital Contributions" shall mean capital contributions made to Borrower by Guarantor, which

shall not be less than $1 million. "SECURITY AGREEMENT" shall mean the Security Agreement dated as of the Effective Date by and between Lender and the Loan Parties in substantially the form attached hereto as Exhibit E. "SUBSIDIARY" shall mean, with respect to any legal entity, any other corporation, limited liability company, general or limited partnership, limited liability partnership, joint venture, trust or other entity of which the outstanding capital stock possessing a majority of voting power in the election of directors or their equivalent is owned or controlled by such entity, directly or indirectly. "SUBSTANTIAL COMPLETION DATE" shall mean the date on which Guarantor has notified Cricket, pursuant to the LLC Agreement, that the Build- Out of the ANB- 1 License System for each of the Licenses satisfies the construction requirements of Section 24.203 of the FCC Rules. "TRADEMARK LICENSE AGREEMENT" shall mean a Trademark License Agreement that may be entered into by Lender and Borrower, if any, at any time during the Commitment Period. "WINNING BIDDER" shall mean a Person who is the winning bidder in the Auction for a license offered by the FCC therein (a) as set forth in the FCC's post- Auction public notice identifying Auction winning bidders or (b) by virtue of having accepted the FCC's offer of a license for the amount of its final Auction bid therefor following the default of the winning bidder for that license described in clause (a). "WORKING CAPITAL" shall mean a reasonable amount of working capital (including without limitation the payment of all fees and expenses) as determined in accordance with the 7
operating budget of Borrower, which budget is approved in accordance with the LLC Agreement. SECTION 2. TERMS OF LOAN 2.1 THE LOANS.

Subject to the terms and conditions and in reliance upon the representations and warranties set forth in this Credit Agreement, Lender agrees to make Loans to Borrower from time to time during the Commitment Period in an aggregate principal amount not to exceed at any time the Loan Commitment Amount; provided, however, Lender shall have no obligation to make any Loans if ANB, either directly or through Guarantor (but not the Bidding Manager acting on its own volition or in accordance with the Bidding Protocol (as defined in the LLC Agreement)), causes Borrower to bid on a license that was not a target license as set forth in the Bidding Protocol or causes Borrower to purchase a targeted license by bidding materially in excess of the established bid limits for such license, in each case, without the prior written consent (which may be delivered by electronic mail, facsimile transmission or otherwise) of Lender or of Cricket Communications, Inc. under the Bidding Protocol (which consent shall be deemed given by Cricket if the member of the Auction Committee (as defined in the Bidding Protocol) appointed by Cricket has approved thereof). 2.2 PROCEDURE FOR BORROWING. a. Subject to the terms and conditions and in reliance upon the representations and warranties set forth in this Credit Agreement, Lender shall make the following Loans to Borrower in accordance with the following schedule: (i) On the date (the "INITIAL LOAN DATE") that is two (2) Business Days prior to the date on which Borrower is required under FCC Rules to make an upfront payment to become eligible to participate in the Auction, Lender shall make a Loan to Borrower in the amount of up to $8.0 million, as requested in writing by Borrower at least two (2) Business Days prior to the Initial Loan Date (such requested Loan amount, the "INITIAL LOAN AMOUNT"), all of which Borrower shall timely pay to the FCC in accordance with FCC Rules to become eligible to participate in the Auction. (ii) In the event that Borrower is a Winning Bidder, then on the date that is two (2) Business Days prior to the date on which Borrower is required to submit sufficient funds to bring its total amount of money on deposit with the FCC to twenty percent (20%) of the aggregate amount of Borrower's net winning bids (the "DOWN PAYMENT AMOUNT"), Lender shall make a Loan to Borrower in an amount equal to the following formula (to the extent such sum is greater than zero): (A) the Down Payment Amount, plus (B) the aggregate amount of any bid withdrawal payment obligations incurred by Borrower in the Auction, less (C) the Required Capital Contributions, less (D) the Initial Loan Amount. Borrower shall use the entire proceeds of the foregoing Loan (if any) and the Required Capital Contributions to timely pay the Down Payment Amount to the FCC in accordance with FCC Rules. 8

(iii) In the event that Borrower is a Winning Bidder, then on the date that is two (2) Business Days prior to the date on which Borrower shall be required to submit the then remaining balance of the aggregate amount of its net winning bids to the FCC (the "BALANCE AMOUNT"), Lender shall make a Loan to Borrower in an amount equal to the following formula (to the extent such sum is greater than zero): (A) the Balance Amount, less (B) the Required Capital Contributions to the extent that the Required Capital Contributions were not expended in full in making the payment set forth in Section 2.2(a)(ii). Borrower shall use the proceeds of any Loan made pursuant to this Section 2.2(a)(iii), if any, and any remaining Required Capital Contributions to timely pay the Balance Amount to the FCC in accordance with FCC Rules. (iv) In no event shall Lender be required to make an aggregate amount of Loans under this Section 2.2(a) in excess of the Acquisition Sub- Limit. b. Subject to the terms and conditions and in reliance upon the representations and warranties set forth in this Credit Agreement, Lender shall make Loans to Borrower from time to time, within five (5) Business Days of a written request of Borrower (each, a "BUILD- OUT LOAN REQUEST") for Borrower to fund the Build- Out and initial operation of the ANB- 1 License Systems, including Working Capital (including for expenses incurred prior to, during or after the Auction and prior to the date on which Borrower is granted any Licenses). Each Build- Out Loan Request shall provide the following information (i) the amount of the Loan, which shall not exceed the reasonable amount necessary to fund Borrower's Build- Out expenses and Working Capital for the following calendar quarter, and (ii) wiring instructions. In no event shall Lender be obligated to make an aggregate amount of Loans under this Section 2.2(b) in excess of the BuildOut Sub- Limit. For the avoidance of doubt, if the aggregate amount of the net winning bids for the Licenses purchased by Borrower in connection with the Auction does not exceed the Required Capital Contributions, or if Borrower has any excess proceeds from Loans under Section 2.2(a) that are not remitted to the FCC, Borrower shall not be obligated to make Loans under this Section 2.2(b) until Buyer has expended all of the Required Capital Contributions and any such excess Loan proceeds other than as necessary for its reasonable Working Capital requirements. c. Lender's obligation to make new Loans to Borrower shall terminate upon the expiration of the Commitment Period. d. Borrower may at any time and from time to time prepay the Loans, in whole or in part, without premium or penalty, upon at least three (3) Business Days' notice to Lender, specifying the date and amount of prepayment. If any such notice is given, the amount specified in such notice, together with accrued interest to the date of such prepayment on the amount prepaid, shall be due and payable on the date specified therein. Amounts prepaid may not be reborrowed. Partial or total prepayments of the Loans shall be credited first to any charges or other amounts due to Lender under the terms of this Credit Agreement, then to accrued interest due and payable on the Loans, then to the principal balance outstanding. e. Within three (3) Business Days after any Refund Date, Borrower shall prepay to Lender the principal amount of the Loans in an amount equal to the Refund received on such Refund Date, up to the aggregate principal amount of all Loans previously 9 made to Borrower. If timely paid in accordance with preceding sentence, Borrower shall have no obligation to pay any unpaid accrued interest on the principal amount of the Loans so prepaid. 2.3 INTEREST RATES AND PAYMENTS. a. Interest shall accrue on the aggregate principal balance from time to time outstanding hereunder at a rate equal to Twelve Percent (12.00%) per annum, compounded quarterly. b. All payments by Borrower hereunder and under the Loan Documents shall be made to Lender, at its address set forth in Section 8.10 in immediately available funds on the date on which such payment shall be due. c. Until the Amortization Commencement Date, all interest accrued on the aggregate outstanding principal balance of the Loans shall be added to and become a part of the outstanding principal amount of the Loans on and as of the last day of each calendar quarter and on and as of the day immediately prior to the Amortization Commencement Date (such amount outstanding on the day immediately prior to the Amortization Commencement Date, the "FINAL PRINCIPAL AMOUNT"). Notwithstanding anything foregoing to the contrary any and all interest that is added to the principal balance of the Loans shall not count against the Loan Commitment Amount. d. On each quarterly anniversary of the Amortization Commencement Date Borrower shall pay principal installments equal to one- sixteenth (1/16) of the Final Principal Amount together with interest installments equal to the amount of the unpaid interest accrued on the outstanding Final Principal Amount until the Maturity Date, at which time the entire remaining balance of principal and accrued interest together with all other amounts due and owing under the Loan Documents to the extent not paid shall be due and payable.

e. Notwithstanding any provision hereof to the contrary, all outstanding principal amount of Loans and accrued interest thereon, together with all other amounts due and owing under the Loan Documents to the extent not paid, shall be due and payable upon the termination (following the expiration of the applicable notice period) of the Management Agreement by Borrower pursuant to Section 10.2(a)(v) thereof. f. As long as any payment due under this Credit Agreement, the Note or any of the other Loan Documents remains past due (whether at the stated maturity, by acceleration or otherwise) for five (5) days or more, such overdue amount shall accrue interest at a rate (the "DEFAULT RATE") equal to the lesser of Fifteen Percent (15%) per annum or the maximum rate permitted by Applicable Law, from the date of such non- payment until such overdue amount is paid in full (whether after or before Judgment). 2.4 CONDITIONS PRECEDENT TO LENDER'S OBLIGATION TO MAKE ANY LOAN. a. Lender shall not be required to make any Loan to Borrower under this Credit Agreement unless as of the applicable Funding Date, each of the following conditions has been satisfied to Lender's satisfaction: 10 (i) Borrower shall have executed and delivered to Lender the Note and the Security Agreement. (ii) ANB shall have executed and delivered to Lender the ANB Negative Pledge Agreement. (iii) Guarantor shall have executed and delivered the Guarantor Pledge Agreement and the Security Agreement. (iv) The Loan Parties shall have executed and delivered such Financing Statements and other instruments (other than the Control Agreements) reasonably required by Lender to create, perfect and/or maintain the security interests created pursuant to the Security Agreement. (v) Prior to the date that is two business days prior to the commencement of the Auction, the Loan Parties shall have executed and delivered such Control Agreements reasonably required by Lender to create, perfect and/or maintain the security interests created pursuant to the Security Agreement. (vi) Lender shall have a perfected first priority security interest in all of Guarantor's membership interests in Borrower and, if required pursuant to the ANB Negative Pledge Agreement, all of ANB's membership interests in Guarantor. (vii) Lender shall have received evidence satisfactory to it that the Financing Statements and other instruments delivered to Lender have been filed in all appropriate filing offices and that such filed Financing Statements perfect first priority security interests, subject to any Permitted Lien, in favor of Lender in the property described therein. (viii) With respect to the initial Loan under the Credit Agreement, Lender shall have received customary reports of searches of filings made with Governmental Entities showing that there are no liens on the assets of any Loan Party other than Permitted Liens. (ix) Prior to the date that is two business days prior to the commencement of the Auction, Lender shall have received from the Loan Parties' counsel (which counsel shall be reasonably acceptable to Lender) such legal opinions as to due formation, due authorization, and due execution and delivery (but not as to FCC regulatory matters) with respect to each of ANB and the Loan Parties, as Lender shall reasonably request. (x) Each Loan Party shall have delivered to Lender an officer's certificate signed by an officer of each such Loan Party certifying that as of such Funding Date: (A) The representations and warranties of the Loan Parties contained in Section 5 and of the Loan Parties and ANB in the Loan Documents are true and correct in all material respects at and as of the Funding Date as though then made. (B) Each Loan Party is in full compliance with the covenants set forth in Section 6, and in the case of Guarantor, Section 3. 11 (C) Borrower has taken all action necessary to authorize it to incur the Loan, such Loan is permitted under the terms of the LLC Agreement, and the organizational documents of Borrower and such Loan does not conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, the LLC Agreement or any other agreement to which Borrower is a party or by which it is bound. (D) No Event of Default (or other event that if not timely cured or corrected would, with the notice or passage of time or both, become an Event of Default) shall have occurred or be continuing. (E) All consents required to be received in connection with the Loan and the Loan Documents from any Governmental Entity shall have been received. b. Except for the Loan of the Initial Loan Amount, Lender shall not be required to make any Loan to Borrower under this Credit Agreement unless Lender has repaid and discharged its existing $350,000,000 13% Senior Secured Pay- in- Kind

Notes due 2011 or Lender has obtained the requisite consent of the holders of such Notes to make such Loans in accordance with the terms and conditions of the indenture for such Notes. 2.5 SECURITY DOCUMENTS. The Loans and all amounts outstanding from time to time under the Loan Documents shall be secured by: a. A first priority security interest (subject to Permitted Liens) in all assets of the Loan Parties, now owned or hereafter acquired, and all proceeds and products of such assets. Lender's security interest in the foregoing shall be created by and subject to the provisions of the Security Agreement. b. A first priority security interest in the membership interests of Borrower, and all proceeds and products thereof. Lender's security interest in the foregoing shall be created by and subject to the provisions of the Guarantor Pledge Agreement. c. To the extent required by the ANB Negative Pledge Agreement, a first priority security interest in the membership interests of Guarantor, and all proceeds and products thereof. Lender's security interest in the foregoing, if any, shall be created by and subject to the provisions of the ANB Negative Pledge Agreement. SECTION 3. GUARANTEE 3.1 GUARANTEE. a. Guarantor hereby, unconditionally and irrevocably, guarantees to Lender and its respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower Obligations. 12
b. Guarantor waives any right or claims of right to cause a marshalling of Borrower's assets to the fullest extent permitted by Applicable Law.

3.2 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS. Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against Guarantor and without notice to or further assent by Guarantor, any demand for payment of any of the Borrower Obligations made by Lender may be rescinded by it, and the Borrower Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, increased, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Lender (in accordance with the terms thereof), and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as Lender may deem advisable from time to time (with the consent of Borrower, if required hereunder or thereunder), and any collateral security, guarantee or right of offset at any time held by Lender, for the payment of the Borrower Obligations may be sold, exchanged, waived, surrendered or released. Lender has no obligation to protect, secure, perfect or insure any lien at any time held by it as security for the Borrower Obligations or for the guarantee contained in this Section 3 or any property subject thereto. 3.3 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Borrower Obligations and notice of or proof of reliance by Lender upon the guarantee contained in this Section 3 or acceptance of the guarantee contained in this Section 3; the Borrower Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 3; and all dealings between Borrower and Guarantor, on the one hand, and Lender, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 3. Guarantor waives diligence, presentment, protest, demand for payment and notice of default notice of nonpayment, notice of dishonor and all other notices of any kind to or upon Borrower or Guarantor with respect to the Borrower Obligations and any exemption rights that either Loan Party may have. Guarantor understands and agrees that the guarantee contained in this Section 3 shall be construed as a continuing, absolute and unconditional guarantee of payment and performance without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Borrower Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto

at any time or from time to time held by Lender, (b) any defense, set off or counterclaim (other than a defense of payment or performance in full hereunder) that may at any time be available to or be asserted by Borrower or any other Person against Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of Borrower or Guarantor) that constitutes, or might be construed to constitute, an equitable or legal discharge of Borrower for the Borrower Obligations or of Guarantor under the guarantee contained in this Section 3, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against Guarantor, Lender may, but shall be under no obligation to, make a similar demand on or otherwise pursue 13 such rights and remedies as it may have against Borrower or any other Person or against any collateral security or guarantee for the Borrower Obligations or any right of offset with respect thereto, and any failure by Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from Borrower or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of Borrower or any other Person or any such collateral security, guarantee or right of offset, shall not relieve Guarantor of any Guarantor Obligations, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Lender against Guarantor. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings. 3.4 REINSTATEMENT. The guarantee contained in this Section 3 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Borrower Obligations is rescinded or must otherwise be restored or returned by Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of Borrower, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or collateral agent or similar officer for, Borrower or any substantial part of its property, or otherwise, all as though such payments had not been made. 3.5 PAYMENTS. Guarantor hereby guarantees that payments hereunder will be paid to Lender without set off or counterclaim (other than compulsory counterclaims) in United States dollars in immediately available funds at the address of Lender set forth in Section 8.10. 3.6 COORDINATION WITH PUT PRICE. Notwithstanding the foregoing, Lender acknowledges and consents to the priority of payments provided for in Section 8.5(d) of the LLC Agreement. No payments made in accordance with the requirements of that section shall constitute a default of Guarantor's obligations to Lender hereunder or otherwise. SECTION 4. REPRESENTATIONS AND WARRANTIES OF LENDER Lender hereby represents and warrants to the Loan Parties as follows: 4.1 ORGANIZATION AND STANDING. Lender is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to execute and deliver this Credit Agreement and to perform its obligations hereunder. 4.2 AUTHORIZATION BY LENDER. a. This Credit Agreement has been duly and validly executed and delivered by Lender and constitutes the legal, valid and binding obligation of Lender enforceable 14 against Lender in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights generally or (ii) general principles of equity. b. Neither the execution, delivery and performance of this Credit Agreement by Lender nor the consummation by Lender of the transactions contemplated herein will, with or without the giving of notice or the lapse of time, or both, (i) violate any Applicable Law to which Lender is subject, (ii) conflict with or result in a breach of the terms, conditions or

provisions of, or constitute a default under, the certificate of incorporation or bylaws of Lender or any material agreement or commitment to which Lender is a party or by which Lender or any of Lender's assets, may be bound or affected, or (iii) except with respect to Borrower's participation in the Auction and procurement and retention of any Licenses by Borrower, and except with respect to the exercise of certain of Lender's remedies under the Loan Documents, require Lender to obtain any authorization, consent, approval or waiver from, or to make any filing with, any Governmental Entity or other Person. SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES The Loan Parties hereby jointly and severally represent and warrant to Lender as follows: 5.1 ORGANIZATION AND STANDING OF LOAN PARTIES. Each Loan Party is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware with all requisite power and authority to own its properties, and conduct its business as now being conducted, and is duly qualified to do business as a foreign limited liability company in good standing in each jurisdiction where the ownership of its properties or the conduct of its business makes such qualification necessary, except in those jurisdictions where failure so to qualify will not permanently impair title to a material amount of its properties, permits or licenses or its rights to enforce in all material respects contracts against others or expose it to substantial liabilities in such jurisdictions. Each Loan Party has all licenses (other than FCC licenses), permits and authorizations necessary for the conduct of its business. 5.2 AUTHORIZATION BY THE LOAN PARTIES; CONSENTS. a. Borrower has all requisite power and authority to execute, deliver and perform its obligations under this Credit Agreement, the Note and all other Loan Documents to which it is a party. Borrower has taken all action necessary to authorize this Credit Agreement, the Note and all other Loan Documents to which it is a party, and all such documents have been duly authorized, executed and delivered by Borrower and are legal, valid and binding obligations of Borrower enforceable in accordance with their terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights generally or (ii) general principles of equity. b. Neither the execution, delivery and performance of this Credit Agreement, the Note or the other Loan Documents by Borrower nor the consummation by Borrower of the transactions contemplated herein or therein will, with or without the giving of notice or the lapse of time, or both, (i) violate any Applicable Law to which Borrower is subject 15 (other than relating to any Loan Party's qualification as an "entrepreneur" and a "very small business," under the FCC Rules and to holding any FCC license under provisions of Applicable Law governing alien ownership of common carrier radio licenses to the extent of any alien ownership directly or indirectly attributable to Lender under the FCC Rules, as to all of which the Loan Parties make no representation or warranty hereunder), (ii) conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, its certificate of formation or limited liability company agreement, any license or permit of Borrower or any material contract to which Borrower is a party or by which Borrower may be bound or affected, or (iii) except with respect to Borrower's participation in the Auction and procurement and retention of any Licenses by Borrower and except with respect to the exercise of certain of Lender's remedies under the Loan Documents, require Borrower to obtain any authorization, consent, approval or waiver from, or to make any filing with, any Governmental Entity or other Person. c. Guarantor has all requisite power and authority to execute, deliver and perform its obligations under this Credit Agreement and all other Loan Documents to which it is a party. Guarantor has taken all action necessary to authorize this Credit Agreement and all other Loan Documents to which it is a party, and all such documents have been duly authorized, executed and delivered by Guarantor and are legal, valid and binding obligations of Guarantor enforceable in accordance with their terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, or other similar laws affecting the enforcement of creditors' rights generally or (ii) general principles of equity. d. Neither the execution, delivery and performance of this Credit Agreement or the other Loan Documents by Guarantor nor the consummation by Guarantor of the transactions contemplated herein or therein will, with or without the giving of notice or the lapse of time, or both, (i) violate any Applicable Law to which Guarantor is subject (other than relating to Guarantor's qualification as an "entrepreneur" or "very small business," under the FCC Rules and to holding any FCC license under provisions of Applicable Law governing alien ownership of common carrier radio licenses to the extent of any alien ownership directly or indirectly attributable to Lender under the FCC Rules, as to all of which the Loan Parties

make no representation or warranty hereunder), (ii) conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, its certificate of formation, the LLC Agreement, any license or permit of Guarantor or any material contract to which Guarantor is a party or by which Guarantor may be bound or affected, or (iii) except with respect to Borrower's participation in the Auction and procurement and retention of any Licenses by Borrower and except with respect to the exercise of certain of Lender's remedies under the Loan Documents, require Guarantor to obtain any authorization, consent, approval or waiver from, or to make any filing with, any Governmental Entity or other Person. 5.3 LITIGATION. As of the Effective Date, to the knowledge of the Loan Parties there is no Litigation pending against either Loan Party that (a) seeks to enjoin or obtain damages in respect of the consummation of the transactions contemplated hereby, including the Loans, the Auction and the Build- Out, (b) has or could have a Borrower Material Adverse Effect or Guarantor Material 16
Adverse Effect, or (c) draws into questions the validity or enforceability of any Loan Document or the Management Agreement. 5.4 COMPLIANCE WITH APPLICABLE LAW.

Each Loan Party has complied and presently is in compliance in all material respects with all Applicable Law, except (i) to the extent that failure to comply with the same does not or will not have a Borrower Material Adverse Effect or Guarantor Material Adverse Effect and (ii) the Loan Parties make no representation or warranty with respect to the FCC Rules relating to any Loan Party's qualification as an "entrepreneur" or "very small business."
5.5 SUBSIDIARIES. Borrower has no Subsidiaries. Guarantor has no Subsidiaries other than Borrower. 5.6 ABSENCE OF DEFAULTS.

Neither Loan Party is in material default under or in material violation in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any provision of its constitutive documents or contained in any other material agreement or instrument to which it is a party or by which it is bound or to which any of its properties is subject. 5.7 INDEBTEDNESS. Neither Loan Party has any indebtedness outstanding except the indebtedness permitted pursuant to the terms of this Credit Agreement and obligations under the Loan Documents. Neither Loan Party is in default under any such indebtedness. 5.8 FCC QUALIFICATIONS. ANB qualifies and, for so long as may be required under FCC Rules in order for Borrower to retain the Auction Benefits will qualify, as an "entrepreneur" and a "very small business" under FCC Rules, including but not limited to Sections 1.2110(b)(1), 24.709(a)(1), and 24.720(b)(2) of the FCC Rules. 5.9 BUSINESS AND FINANCIAL EXPERIENCE. Each of the Loan Parties by reason of its own business and financial experience or that of its professional advisors have the capacity to protect its own interests in connection with the transactions contemplated hereby. 5.10 ACCURACY AND COMPLETENESS OF INFORMATION. No representation or warranty of the Loan Parties contained in this Credit Agreement or the other Loan Documents contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not materially misleading. 17

SECTION 6. COVENANTS OF THE LOAN PARTIES Each of the Loan Parties hereby covenants and agrees with Lender as follows:

6.1 USE OF PROCEEDS. a. Each of the Loan Parties shall use 100% of the Loan proceeds under this Credit Agreement solely for the following purposes: (a) to make deposits, down payments, bid withdrawal payments, or payments for Licenses in accordance with the Auction; and (b) to finance the Build- Out and the initial operation of the ANB- 1 License Systems, including Working Capital, as contemplated by the LLC Agreement and the Management Agreement in connection with Licenses. b. If the LLC Agreement is terminated by either party pursuant to Section 13.1(b) or if the Borrower is at any time entitled under applicable FCC Rules to any refunds of Auction Funds, Borrower will apply as promptly as reasonably practicable and permitted under the FCC Rules to obtain a refund of all such refundable Auction Funds. 6.2 COMPLIANCE WITH OTHER AGREEMENTS. Each Loan Party shall at all times observe and perform in all material respects all of the covenants, conditions and obligations required to be performed by it under the Management Agreement and under the Trademark License Agreement (if any) and all other material agreements to which it is a party or by which it is bound, except to the extent the failure to observe and perform such covenants, conditions and obligations will not have a Borrower Material Adverse Effect. 6.3 PAYMENT. Borrower shall promptly pay to Lender with interest the obligations due or to become due at the times and places and in the amount and manner specified in this Credit Agreement, the Note and the other Loan Documents. 6.4 EXISTENCE. Each Loan Party shall maintain: (a) its limited liability company existence under the laws of Delaware; (b) its good standing and its right to carry on its business and operations in Delaware and in each other jurisdiction in which the character of the properties owned or leased by it or the business conducted by it makes such qualification necessary and the failure to be in good standing would preclude such Loan Party or Lender from enforcing its rights with respect to any material assets or expose such Loan Party to any material liability; and (c) all licenses, permits and authorizations necessary to the conduct of its business. 6.5 COMPLIANCE WITH LAWS, TAXES, ETC. Each Loan Party shall comply in all material respects with all Applicable Law, such compliance to include, without limitation, paying before the same become delinquent all taxes, assessments and governmental charges imposed upon it or upon its property except to the extent 18 contested in good faith by appropriate proceedings and for which any reserves required by GAAP have been established. In the event any Loan Party fails to satisfy its obligations under this Section 6.5, as to taxes, assessments and governmental charges, Lender may but is not obligated to satisfy such obligations in whole or in part and any payments made and expenses incurred in doing so shall constitute principal indebtedness hereunder governed by the terms of the Note and shall be paid or reimbursed by Borrower upon demand by Lender. 6.6 BOOKS AND RECORDS. Each Loan Party shall at all times keep proper books and records of accounts in which full, true and correct entries shall be made of its transactions in accordance with GAAP consistently applied and shall permit representatives of Lender to examine such books and records upon reasonable request. Each Loan Party shall permit representatives of Lender to discuss its affairs and finances with the principal officers of such Loan Party and its independent public accountants, all at such times during such normal business hours as Lender shall reasonably request. Borrower shall, promptly upon request of Lender, deliver to Lender copies of all such documents, materials, construction and operating budgets, invoices, receipts and other information reasonably requested by Lender from time to time relating to the Build- Out and the initial operation by Borrower of the ANB- 1 License Systems. 6.7 ASSETS AND INSURANCE.

If Borrower is a Winning Bidder in the Auction, each Loan Party shall maintain in full force and effect from and after the first Initial Grant Date (a) an adequate errors and omissions insurance policy, (b) such other insurance coverage, on all properties of a character usually insured by organizations engaged in the same or similar business against loss or damage of a kind customarily insured against by such organizations, (c) adequate public liability insurance against tort claims that may be asserted against such Loan Party and (d) such other insurance coverage for other hazards as Lender may from time to time reasonably require to protect its rights and benefits under this Credit Agreement and the other Loan Documents. All commercial general liability and property damage insurance policies and any other insurance policies required to be carried hereunder by each Loan Party shall (i) be issued by insurance companies with a then- current Alfred M. Best Company, Inc. (or if no longer in existence, a comparable rating service) general policy holder's rating of "A" or better and financial size category of Class XII or higher and otherwise reasonably satisfactory to Lender; (ii) designate Lender as loss payee and additional insured; (iii) be written as primary policy coverage and not contributing with or in excess of any coverage that Lender may carry; (iv) provide for thirty (30) days prior written notice to Lender of any cancellation or nonrenewal of such policy; and (v) contain contractual liability coverage insuring performance by such Loan Party of the indemnity provisions of the Loan Documents. Each Loan Party shall promptly deliver to Lender upon receipt and from time to time upon Lender's request either a copy of each such policies of insurance or certificates evidencing the coverages required hereunder. 6.8 FINANCIAL STATEMENTS AND OTHER REPORTS. Each Loan Party shall maintain a system of accounting (as to its own operations and financial condition) established and administered in accordance with sound business practices 19 such as to permit the preparation of financial statements in accordance with GAAP and furnish or cause to be furnished to Lender: a. Annual Statements. As soon as practicable following the end of each fiscal year, but in any event within ninety (90) days after the end of each fiscal year, the audited statement of income and audited statement of cash flows for such fiscal year and the audited balance sheet as of the end of such fiscal year, accompanied by the report thereon of independent certified public accountants and accompanying notes to financial statements, on a consolidated basis, prepared in accordance with GAAP. b. Quarterly Statements. As soon as practicable following the end of each fiscal quarter, but in any event within forty- five (45) days after the end of such quarter, an unaudited statement of income and statement of cash flows for such quarter and an unaudited balance sheet as of the end of such quarter on a consolidated basis, prepared in accordance with GAAP. c. Monthly Statements. As soon as possible following the end of each calendar month in each fiscal year, but in any event within thirty (30) days after the end of such month, a monthly report of significant operating and financial statistics including, to the extent applicable, number of subscribers, subscriber churn statistics, minutes of use, average revenues per subscriber, acquisition costs and capital expenditures statistics and such additional statistics and information as may be approved for internal use by such Loan Party, if any. d. Within five (5) Business Days after a Loan Party becomes aware of their occurrence, notice of each of the following events: (i) the commencement of any action, suit, proceeding or arbitration against such Loan Party, or any material development in any action, suit, proceeding or arbitration pending or threatened against such Loan Party; (ii) any Event of Default or other breach by such Loan Party of any covenant or agreement in this Credit Agreement or any of the other Loan Documents; and (iii) the receipt by either Loan Party or both Loan Parties of any notice from the FCC, other than in the ordinary course of business (together with a copy of such FCC notice). e. from time to time, such other information regarding the business, operations, affairs and financial condition of such Loan Party as Lender may reasonably request. 6.9 INDEBTEDNESS. Neither Borrower nor Guarantor shall, directly or indirectly, create, incur, assume, guarantee, or otherwise become or remain directly or indirectly liable with respect to any indebtedness, except: a. the indebtedness created under this Credit Agreement.

20 b. purchase money financing of telecommunications equipment incurred by Borrower of up to $2.0 million in the aggregate if the terms of such financing are more favorable to Borrower than the terms of the Loans. c. purchase money financing for tangible personal property in the nature of office equipment utilized in the ordinary course of business. d. current trade obligations incurred in the ordinary course of business and not overdue (unless the same are being contested in good faith and by appropriate proceedings and adequate reserves are maintained therefor in accordance with GAAP). e. renewals, extensions, replacements, refinancings or refundings of any of the foregoing that do not increase the principal amount of the indebtedness so refinanced or refunded. 6.10 INVESTMENTS. Neither Borrower nor Guarantor shall, directly or indirectly, make or own any investment in any Person, except: (a) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof, (b) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having the highest rating obtainable from either Standard & Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"), (c) commercial paper maturing no more than two hundred seventy (270) days from the date of creation thereof and, at the time of acquisition, having the highest rating obtainable from either S&P or Moody's, (d) demand deposits, or time deposits maturing within one (1) year from the date of creation thereof with, including certificates of deposit issued by, any office located in the United States of any bank or trust company that is organized under the laws of the United States or any state thereof and whose certificates of deposit are rated P- 1 or better by Moody's or A- 1 or better by S&P, and (e) Guarantor's investment in Borrower. 6.11 NEGATIVE COVENANTS. Each Loan Party agrees that it shall not take any of the actions set forth in this Section 6.11 without the prior written approval of Lender, which approval may be withheld in Lender's sole and absolute discretion; provided, however, that for so long as Cricket Communications, Inc. is a member of Guarantor, the approval of Lender shall be deemed given with respect to any action taken by Borrower or Guarantor that may be taken without the approval of Cricket Communications, Inc. under the terms of the LLC Agreement or for which Cricket Communications, Inc. has granted its approval under the terms of the LLC Agreement: a. Sell, lease, convey, transfer, or otherwise dispose of its property or assets now owned or hereafter acquired except in the ordinary course of business. b. Conduct, transact or otherwise engage in, or commit to transact, conduct or otherwise engage in, any business or operations other than the Business. 21 c. Undertake any of the activities permitted by Section 6.11(b) above or own any assets related thereto, other than through or by Borrower. d. Enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or substantially all of its business or property, whether now owned or hereafter acquired, or, except as expressly permitted under the terms of this Credit Agreement, acquire by purchase or otherwise all or substantially all the business or property of, or stock or other evidence of beneficial ownership of, any Person, or acquire, purchase, redeem or retire any membership interests in such Loan Party now or hereafter outstanding for value. e. Create or permit to exist at any time, any mortgage, lien, security interest, pledge, charge or other encumbrance against any of its property or assets now owned or hereafter acquired, or assign or sell any income or revenues (including accounts receivable) or rights in respect thereof, except for Permitted Liens, and shall, at its sole cost and expense, promptly take all such action as may be necessary duly to discharge, or cause to be discharged all such mortgages, liens, security interests, pledges, charges or other encumbrances. f. Become liable, directly or indirectly, contingently or otherwise, for any obligation of any other Person by endorsement, guaranty, surety or otherwise, except in connection with (i) the Loans and (ii) indebtedness permitted pursuant to the terms of this Credit Agreement.

g. Enter into any agreement containing any provision that would be violated or breached by any borrowing hereunder or by the performance of its obligations hereunder or under any document executed pursuant hereto. h. Own, lease, manage or otherwise operate any properties or assets other than in connection with the Business, or incur, create, assume or suffer to exist any indebtedness or other consensual liabilities or financial obligations other than as may be incurred, created or assumed or as may exist in connection with the Business (including without limitation the Loans and other obligations incurred by such Loan Party hereunder). Notwithstanding the foregoing, Borrower may invest excess funds in investments permitted under Section 6.10. i. Make any dividend, distribution or return of capital, except expressly in accordance with its limited liability company agreement, except that (1) Borrower may make distributions to Guarantor (and Guarantor to ANB) to the extent that Section 8.5(d) of the LLC Agreement provides for payments to ANB, (2) Borrower may make distributions to Guarantor (and Guarantor to its members) for tax distributions and (3) Borrower may make distributions to Guarantor for the payment of Guarantor's expenses to the extent consistent with Guarantor's annual business plan and budget under the LLC Agreement. j. Amend or modify its certificate of formation or limited liability company agreement, including the LLC Agreement (except that the LLC Agreement may be amended or modified in accordance with its terms). 22 6.12 REAL PROPERTY. Neither Loan Party shall purchase or acquire any fee interest or other estate in real property, other than a leasehold or license interest in real property. 6.13 FURTHER ASSURANCES. a. Borrower shall use its commercially reasonable efforts to cause the conditions set forth in Sections 2.4(a)(v) and 2.4(a)(ix) to be satisfied on or prior to the date that is two business days prior to the commencement of the Auction. b. At any time and from time to time, upon the written request of Lender, and at the expense of the Loan Parties, each Loan Party shall promptly and duly execute and deliver such further instruments and documents and take such further action as Lender may reasonably determine in its sole discretion to be necessary or advisable to further carry out and consummate the transactions contemplated by the Loan Documents and to perfect or protect the full benefits of this Credit Agreement and the other Loan Documents. 6.14 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not avoid the occurrence of an Event of Default if such action is taken or condition exists. SECTION 7. EVENTS OF DEFAULT AND THEIR EFFECT 7.1 EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default under this Credit Agreement and the Note (each, an "EVENT OF DEFAULT"): a. Failure to Pay. Borrower fails to pay when due any principal payment, interest or other payment required under the terms of the Note that is not cured within five (5) days after the date on which such payment is due and payable; or b. Breaches of Other Covenants. Either Loan Party fails to observe or perform in any material respect any covenant, obligation, condition or agreement contained in this Credit Agreement or any covenant, obligation, condition or agreement under any of the other Loan Documents and such failure shall continue for thirty (30) days after the earlier of (i) notice thereof from Lender or (ii) the actual knowledge of such failure by either Loan Party; provided, however, that a failure to observe any covenant set forth in Section 6.11 shall constitute an Event of Default immediately upon the occurrence thereof and without any cure period; or c. Bankruptcy or Insolvency Proceedings. (i) Either Loan Party (A) applies for or consents to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (B) is unable, or admits in writing its inability, to pay its debts generally as they mature, (C) makes a general assignment for the benefit of its or 23

any of its creditors, (D) is dissolved or liquidated in full or in part, (E) becomes insolvent (as such term may be defined or interpreted under Applicable Law), (F) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect, or (G) takes any action for the purpose of effecting any of the foregoing or (ii) a case or proceeding under the bankruptcy laws of the United States now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law of any jurisdiction now or hereafter in effect is filed against any Loan Party or all or any part of its properties and such application is not dismissed within thirty (30) days after the date of its filing or such Loan Party shall file any answer admitting or not contesting such petition or application or indicates its consent to, acquiescence in or approval of any such action or proceeding or the relief requested is granted sooner; or d. Representations and Warranties. Any representation or warranty made by either Loan Party herein or in any other Loan Document is breached in any material respect and not cured prior to the expiration of any applicable cure period or is false or misleading in any material respect; or e. Change in Control. The occurrence of any Borrower Change in Control Event or Guarantor Change in Control Event; or f. Termination of LLC Agreement. The termination of the LLC Agreement in accordance with its terms; or g. Loan Documents. Any Loan Document ceases to be in full force and effect or any lien in favor of Lender ceases to be, or is not, valid, perfected and prior to all other liens and security interests (other than Permitted Liens); or h. Termination of Management Agreement. The termination (following the expiration of any applicable notice period) of the Management Agreement by Lender pursuant to Section 10.2(b) thereof (other than Section 10.2(b)(iv) thereof); or i. Loss of Status. ANB or any Loan Party admits, or it is determined in an order, notice or ruling of the FCC, that ANB has ceased to qualify as an "entrepreneur" and a "very small business" under FCC Rules, including but not limited to, Sections 1.2110(b), 24.709(a)(1) and 24.720(b)(2) of the FCC Rules, if such qualification is then required under FCC Rules in order for Borrower to retain the Auction Benefits; or j. Cross Default. Any Loan Party (i) defaults in making payments of any indebtedness permitted under Section 6.9 on the scheduled due date with respect thereto; (ii) defaults in making any payment of any interest on such indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such indebtedness was created; or (iii) defaults in the observance or performance of any other agreement or condition relating to such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, which default permits the lender thereunder to declare such indebtedness to be due and payable prior to its stated maturity; provided, however, that any such default by a Loan Party shall not be an Event of Default hereunder if and to the extent that, and for so long as, such Loan 24 Party's default is proximately caused by Cricket's failure to satisfy its funding obligations under this Agreement or the LLC Agreement. 7.2 REMEDIES UPON EVENT OF DEFAULT. a. If any Event of Default shall occur, then Lender may do any or all of the following: (i) terminate or reduce the commitment of Lender to make Loans to Borrower under this Credit Agreement, (ii) declare all obligations of Borrower hereunder and under the Note to be immediately due and payable, whereupon the Borrower Obligations hereunder and under the Note shall immediately become due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything in this Credit Agreement or in any other Loan Document to the contrary notwithstanding and (iii) enforce its rights under any one or more of the Loan Documents in accordance with Applicable Law; provided that upon the occurrence of any Event of Default under Section 7.1(c), 7.1(e) or 7.1(i), the commitment of Lender shall immediately terminate and all Borrower Obligations shall automatically become immediately due and payable without notice or demand of any kind. b. Upon the occurrence of any Event of Default and at any time thereafter so long as any Event of Default shall be continuing, Lender may proceed to protect and enforce this Credit Agreement, the Note and the other Loan Documents by suit or suits or proceedings in equity, at law or in bankruptcy, and whether for the specific performance of any covenant or agreement herein contained or in execution or aid of any power herein granted, or for foreclosure hereunder, or for the appointment of a receiver or receivers for the collateral subject to the applicable Loan Documents or for the recovery of judgment for the indebtedness secured thereby or for the enforcement of any other proper, legal or equitable remedy available under Applicable Law.

c. Borrower shall pay to Lender forthwith upon demand any and all expenses, costs and other amounts due hereunder or under the other Loan Documents before, after or during the exercise of any of the foregoing remedies, including without limitation all reasonable legal fees and other reasonable costs and expenses incurred by Lender by reason of the occurrence of any Event of Default, the enforcement of this Credit Agreement and the other Loan Documents and/or the preservation of Lender's rights hereunder and under the other Loan Documents. SECTION 8. MISCELLANEOUS 8.1 ENTIRE AGREEMENT; AMENDMENT. This Credit Agreement (including the attached Exhibits) constitutes the sole understanding of the parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements, commitments or understandings with respect to such matters. No amendment, modification or alteration of the terms or provisions of this Credit Agreement shall be binding unless the same shall be in writing and duly executed by the parties hereto. 25 8.2 SUCCESSORS AND ASSIGNS. This Credit Agreement may not be assigned by either Loan Party without the consent of Lender, which consent may be withheld in its sole and absolute discretion. Lender may assign this Credit Agreement to an Affiliate of Lender without the consent of the Loan Parties, provided that such Affiliate of Lender agrees to be bound by all of the terms hereof, provided further that, unless Borrower otherwise consents in its sole and absolute discretion, Lender shall remain obligated under this Credit Agreement to make all Loans required hereunder. No such permitted assignment shall relieve any party hereto of any liability for a breach of this Credit Agreement by such party or its assignee. This Credit Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs or successors in interest. 8.3 RIGHTS AND REMEDIES. Unless otherwise provided herein, the rights and remedies of Lender hereunder and under the other Loan Documents shall not be mutually exclusive, and the exercise of one or more remedies by Lender pursuant to this Credit Agreement, the other Loan Documents or Applicable Law shall not preclude the exercise by Lender of any other remedy. 8.4 INDEMNITY; REIMBURSEMENT OF LENDER. a. Each Loan Party agrees to indemnify, defend and hold Lender harmless from and against any and all claims, demands, losses, judgments and liabilities (including but not limited to, liabilities for penalties) of any nature ("CLAIMS"), and to reimburse Lender for all reasonable costs and expenses, including but not limited to attorneys' fees and expenses, arising from any of the Loan Documents or the exercise of any right or remedy granted to Lender hereunder or thereunder, other than any Claim (including of Borrower) arising from Lender's gross negligence, willful misconduct or bad faith, or from Lender's failure to comply with its obligations under this Agreement. In no event shall Lender be liable for any matter or thing in connection with the Loan Documents other than to account for moneys actually received by Lender in accordance with the terms hereof. In addition, in no event shall Lender be liable for any indirect, incidental, consequential or special damages (including without limitation damages for harm to business, lost revenues, lost savings, or lost profits suffered by any of the Loan Parties or other Persons), regardless of the form of action, whether in contract, warranty, strict liability, or tort, including without limitation negligence of any kind whether active or passive, and regardless of whether Lender or the Loan Parties knew of the possibility that such damages could result. b. All indemnities contained in this Section 8.4 and elsewhere in this Credit Agreement shall survive the expiration or earlier termination of this Credit Agreement. 8.5 HIGHEST LAWFUL RATE. Anything herein to the contrary notwithstanding, the obligations of Borrower on the Note shall be subject to the limitation that payments of interest shall not be required, for any period for which interest is computed hereunder, to the extent that contracting for or receipt thereof would be contrary to provisions of any Applicable Law to Lender limiting the highest rate of interest that may be lawfully contracted for, charged or received by Lender, as determined by a final 26

Judgment of a court of competent jurisdiction. Any interest paid in excess of such highest rate shall be applied to the principal balance of the Borrower Obligations. 8.6 COUNTERPARTS. This Credit Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument. 8.7 MODIFICATION AND WAIVER. The parties by mutual written agreement may (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto, or (c) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall only be valid if set forth in an instrument in writing signed on behalf of such party. No waiver by Lender in any one case shall require Lender to give any subsequent waiver. 8.8 PAYMENTS ON BUSINESS DAYS. Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day other than a Business Day, such payment may be made on the next succeeding Business Day and such extension of time shall in such case be included in computing interest, if any, in connection with such payment. 8.9 EXPENSES. Except as specifically provided herein, each party hereto shall pay all costs and expenses incurred by it or on its behalf in connection with this Credit Agreement and the transactions contemplated hereby, including, without limiting the generality of the foregoing, fees and expenses of its own consultants, accountants and counsel. Notwithstanding the foregoing, Borrower shall pay, immediately when due, all present and future stamp and other like duties and applicable taxes, if any, to which this Credit Agreement may be subject or give rise. 8.10 NOTICES. All notices and other communications given to or made upon any party hereto in connection with this Credit Agreement shall, except as otherwise expressly herein provided, be in writing and mailed via certified mail, sent by Federal Express or other similar express delivery service for next day delivery, faxed (with a confirming copy sent by such express delivery service for next day delivery) or hand delivered to the respective parties, as follows: If to Lender: Cricket Communications, Inc. 10307 Pacific Center Court San Diego, CA 92121 Attention: Tim Ostrowski Fax: (858) 882- 6040

27
With a copy (which shall not constitute notice) to: Latham & Watkins LLP 12636 High Bluff Drive, Suite 300 San Diego, CA 92130 Attention: Barry M. Clarkson Fax: (858) 523-5450 Alaska Native Broadband 1 License, LLC c/o ASRC Wireless Services 3900 C Street, Suite 801 Anchorage, AK 99503 Attention: Conrad N. Bagne Fax: (907) 339-6028 Kirkland & Ellis LLP Citigroup Center 1513 East 53rd Street New York, NY 10022

If to Borrower:

With a copy (which shall not constitute notice) to:

If to Guarantor:

With a copy (which shall not constitute notice) to:

Attention: Michael A. Brosse Fax: (212) 446-6460 Alaska Native Broadband 1, LLC c/o ASRC Wireless Services 3900 C Street, Suite 801 Anchorage, AK 99503 Attention: Conrad N. Bagne Fax: (907) 339-6028 Kirkland & Ellis LLP Citigroup Center 1513 East 53rd Street New York, NY 10022 Attention: Michael A. Brosse Fax: (212) 446-6460

or in accordance with any subsequent written direction delivered in accordance with this Section from the recipient party to the sending party. All such notices and other communications shall, except as otherwise expressly herein provided, be effective upon delivery if delivered by hand; in the case of certified mail, three Business Days after the date sent; in the case of any fax, when received; or in the case of express delivery service, the day after delivery of the notice to such service with charges prepaid. 8.11 SEVERABILITY. In case any one or more of the provisions contained in this Credit Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect by a court or other authority of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect 28 any other provision hereof and this Credit Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein and, in lieu of each such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Credit Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable, it being the intent of the parties to maintain the benefit of the bargain for all parties. 8.12 REFORMATION. a. If the FCC should (i) change any FCC Rule in a manner that would adversely affect the enforceability of this Credit Agreement or any of the other Loan Documents, (ii) directly or indirectly reject or take action to challenge the enforceability of this Credit Agreement or any of the other Loan Documents or (iii) take any other steps whatsoever, on its own initiative or by petition from another Person, to (A) challenge or deny the transactions contemplated hereby or thereby, (B) challenge or deny the eligibility of Borrower to realize the Auction Benefits as a result of the transactions contemplated hereby or thereby or (C) challenge or deny the eligibility of Borrower to hold any License, or to avoid unjust enrichment repayment obligations (as provided in 47 C.F.R. Section 1.2111) in connection with acquiring or holding any License, as a result of the transactions contemplated hereby or thereby, then the parties shall promptly consult with each other and negotiate in good faith to reform and amend this Credit Agreement and the other Loan Documents so as to eliminate or amend to make unobjectionable any portion that is the subject of any FCC action, provided, that the relative economic and other rights and benefits expected to be derived by the parties hereunder are preserved. Neither party shall take any action that is reasonably likely to contribute to such FCC action. b. If the FCC should determine that a portion of this Credit Agreement or any of the other Loan Documents, after having been reformed pursuant to paragraph (a) above, continues to violate FCC Rules, then such provisions shall be null and void and the remainder of this Credit Agreement and the other Loan Documents shall continue in full force and effect, provided, that the relative economic and other rights and benefits expected to be derived by the parties hereunder are preserved. 8.13 GOVERNING LAW. This Credit Agreement shall be construed in accordance with and governed by the laws of the State of Delaware applicable to agreements made and to be performed wholly within such jurisdiction. 8.14 ARBITRATION.

a. Arbitration. Any controversy or claim arising out of or relating to this Credit Agreement or any of the other Loan Documents, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Within 15 days after the commencement of arbitration, each party shall select one Person to act as arbitrator and the two selected shall select a third arbitrator within 10 days of their appointment. If the arbitrators selected by the parties are 29 unable or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the American Arbitration Association. The place of arbitration shall be Denver, Colorado or such other place as the parties may agree. The arbitrators shall be knowledgeable in the wireless telecommunications industry and public auctions of FCC licenses. b. Interim Relief. Any party may apply to the arbitrators seeking injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Either party also may, without waiving any remedy under this Credit Agreement or any of the other Loan Documents, seek from any court having jurisdiction any interim or provisional relief that is necessary to protect the rights or property of that party, pending the establishment of the arbitral tribunal (or pending the arbitral tribunal's determination of the merits of the controversy). c. Discovery. Consistent with the expedited nature of arbitration, each party will, upon the written request of the other party, promptly provide the other with copies of documents relevant to the issues raised by any claim or counterclaim on which the producing party may rely in support of or in opposition to any claim or defense. Any dispute regarding discovery, or the relevance or scope thereof, shall be determined by the arbitrators, which determination shall be conclusive. All discovery shall be completed within 45 days following the appointment of the arbitrators. d. Depositions. At the request of a party, the arbitrators shall have the discretion to order examination by deposition of witnesses to the extent the arbitrators deems such additional discovery relevant and appropriate. Depositions shall be limited to a maximum of three per party and shall be held within 20 days of the making of a request. Each deposition shall be limited to a maximum of four hours duration. All objections are reserved for the arbitration hearing except for objections based on privilege and proprietary or confidential information. e. Award. The award shall be made within 90 days of the filing of the notice of intention to arbitrate, and the arbitrators shall agree to comply with this schedule before accepting appointment. However, this time limit may be extended by agreement of the parties and the arbitrators if necessary. f. Consent to Consolidation of Arbitrations. Each party irrevocably consents to consolidating any arbitration proceeding under this Credit Agreement and/or any of the other Loan Documents with any other arbitration proceedings involving any party that may be then pending that are brought under the LLC Agreement, the Trademark License Agreement, the Management Agreement or that certain Agreement of even date herewith by and among Lender, Council Tree Communications, Inc., a Delaware corporation, and, for purposes of Section 3(l) only, Leap Wireless International, Inc., a Delaware corporation (to the extent provided therein). 8.15 LENDER'S DISCRETION. Unless this Credit Agreement shall otherwise expressly provide, Lender shall have the right to make any decision, grant or withhold any consent, and exercise any other right or remedy hereunder in its sole and absolute discretion. 30 8.16 HEADINGS. The descriptive headings in this Credit Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Credit Agreement. [REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS] 31

IN WITNESS WHEREOF, the parties hereto have signed this Credit Agreement, or have caused this Credit Agreement to be signed in their respective names by an officer, hereunto duly authorized, on the date first written above.
CRICKET COMMUNICATIONS, INC. By: /s/ Robert J. Irving Name: Robert J. Irving Title: SVP ALASKA NATIVE BROADBAND 1 LICENSE, LLC By Alaska Native Broadband 1, LLC Its sole member By Alaska Native Broadband, LLC Its Manager By ASRC Wireless Services, Inc., Its Manager By: /s/ Conrad Bagne Name: Conrad Bagne Title: President ALASKA NATIVE BROADBAND 1, LLC By Alaska Native Broadband, LLC Its Manager By ASRC Wireless Services, Inc., Its Manager By: /s/ Conrad Bagne Name: Conrad Bagne Title: President 32

EXHIBITS: A. FORM OF ANB NEGATIVE PLEDGE AGREEMENT B. FORM OF CONTROL AGREEMENT C. FORM OF GUARANTOR PLEDGE AGREEMENT D. FORM OF NOTE E. FORM OF SECURITY AGREEMENT

EXHIBIT 10.11.1 AMENDMENT NO. 1 TO CREDIT AGREEMENT BY AND AMONG

CRICKET COMMUNICATIONS, INC. (AS LENDER) AND ALASKA NATIVE BROADBAND 1 LICENSE, LLC (AS BORROWER) AND ALASKA NATIVE BROADBAND 1, LLC (AS GUARANTOR) January 26, 2005 AMENDMENT NO. 1 TO CREDIT AGREEMENT

This Amendment No. 1 to Credit Agreement ("AMENDMENT NO. 1") is entered into as of January 26, 2005, by and among Cricket Communications, Inc., a Delaware corporation ("LENDER"), Alaska Native Broadband 1 License, LLC, a Delaware limited liability company ("BORROWER"), and Alaska Native Broadband 1, LLC, a Delaware limited liability company ("GUARANTOR," and together with Borrower, the "LOAN PARTIES"). RECITALS WHEREAS, Lender and each of the Loan Parties entered into that certain Credit Agreement dated as of December 22, 2004 (as amended, amended and restated, supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"); and WHEREAS, Lender and each of the Loan Parties desire to amend the Credit Agreement to increase the Acquisition SubLimit, the Build- Out Sub- Limit, and the Loan Commitment Amount. AGREEMENT NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows: Section 1. The definitions for the terms "Acquisition Sub- Limit," "Build- Out Sub- Limit," and "Loan Commitment Amount" shall be deleted in their entirety and replaced with the following definitions: "'ACQUISITION SUB- LIMIT' shall mean $84.5 million, which shall be used solely to participate in the Auction and to pay the net winning bids for licenses for which Borrower is the Winning Bidder, including to make any required deposits or down payments to the FCC in connection therewith." "'BUILD- OUT SUB- LIMIT' shall mean an amount equal to $4.5 million, which shall be used by Borrower to fund the Build- Out and initial operation of the ANB- 1 License Systems, including payment of management fees, if any, to ANB and Cricket; provided, however, that in the event the Required Capital Contributions have not been fully expended by Borrower in paying to the FCC the amount of the net winning bids for Licenses for which it was the Winning Bidder and any Auction- related bid withdrawal payments, the Build- Out Sub- Limit shall be reduced by the amount of the unused portion of the Required Capital Contributions." "'LOAN COMMITMENT AMOUNT' shall mean the aggregate sum of (a) the Acquisition Sub- Limit and (b) the BuildOut Sub- Limit, which aggregate sum in no event shall exceed $89.0 million." Section 2. Except as expressly amended hereby, the Credit Agreement remains in full force and effect in accordance with its terms. 1 IN WITNESS WHEREOF, the parties hereto have signed this Amendment No. 1 to Credit Agreement, or have caused this Amendment No. 1 to Credit Agreement to be signed in their respective names by an officer, hereunto duly authorized, on the date first written above.
CRICKET COMMUNICATIONS, INC. By: --------------------------------Name: ------------------------------Title: ALASKA NATIVE BROADBAND 1 LICENSE, LLC By Alaska Native Broadband 1, LLC Its sole member By Alaska Native Broadband, LLC Its Manager By ASRC Wireless Services, Inc., Its Manager By: Name: Conrad Bagne Title: President ALASKA NATIVE BROADBAND 1, LLC By Alaska Native Broadband, LLC Its Manager By ASRC Wireless Services, Inc., Its Manager By: Name: Conrad Bagne Title: President 2

EXHIBIT 10.12.4 LEAP WIRELESS INTERNATIONAL, INC. 2004 STOCK OPTION, RESTRICTED STOCK AND DEFERRED STOCK UNIT PLAN

STOCK OPTION GRANT NOTICE AND NON-QUALIFIED STOCK OPTION AGREEMENT (FOR NON-EMPLOYEE DIRECTORS)

Leap Wireless International, Inc. (the "COMPANY"), pursuant to its 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN"), hereby grants to the holder listed below ("HOLDER"), an option to purchase the number of shares of the Company's Common Stock set forth below (the "OPTION"). This Option is subject to all of the terms and conditions as set forth herein and in the Non- Qualified Stock Option Agreement attached hereto as Exhibit A (the "STOCK OPTION AGREEMENT") and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Stock Option Agreement. HOLDER: _________________________________ GRANT DATE: _________________________________ EXERCISE PRICE PER SHARE: $___________ per share TOTAL NUMBER OF SHARES SUBJECT TO THE OPTION: [_____]

EXPIRATION DATE: TYPE OF OPTION:

_________________________________ This Option is a Non-Qualified Stock Option and is not an incentive stock option within the meaning of Section 422 of the Code.

VESTING SCHEDULE: The shares of Common Stock subject to the Option (rounded down to the next whole number of shares) shall vest and become exercisable on the dates and in the increments indicated in the vesting provisions set forth in subsection (_) of Section 1 of Exhibit B to this Grant Notice, and as otherwise provided in Section 2 of Exhibit B. By his or her signature and the Company's signature below, Holder agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement and this Grant Notice. Holder has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan. Holder hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan or the Option. LEAP WIRELESS INTERNATIONAL, INC. HOLDER By: ________________________________ By: ________________________________ Print Name: ________________________ Print Name: ________________________ Title: _____________________________ Address: ___________________________ Address: 10307 Pacific Center Court ___________________________ San Diego, California 92121 ___________________________ Stock Option Grant Notice to Non- Employee Directors EXHIBIT A TO STOCK OPTION GRANT NOTICE NON- QUALIFIED STOCK OPTION AGREEMENT Pursuant to the Stock Option Grant Notice ("GRANT NOTICE") to which this Non- Qualified Stock Option Agreement (this "AGREEMENT") is attached, Leap Wireless International, Inc. (the "COMPANY") has granted to Holder an option under the Company's 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN") to purchase the number of shares of Common Stock indicated in the Grant Notice. ARTICLE I GENERAL

1.1 Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice. 1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference. ARTICLE II GRANT OF OPTION 2.1 Grant of Option. In consideration of Holder's past and/or continued employment with or service to the Company or its Subsidiaries and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the "GRANT DATE"), the Company irrevocably grants to Holder the Option to purchase any part or all of an aggregate of the number of shares of Common Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement. The Option shall be a Non- Qualified Stock Option and shall not be an incentive stock option within the meaning of Section 422 of the Code. 2.2 Purchase Price. The purchase price of the shares of Common Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge. ARTICLE III PERIOD OF EXERCISABILITY 3.1 Commencement of Exercisability. (a) Subject to Sections 3.3 and 5.8, the Option shall become vested and exercisable on the dates and in the increments indicated in the vesting provisions set forth in the applicable subsection of Section 1 of Exhibit B to the Grant Notice (as indicated in the Grant Notice), and as otherwise provided in Section 2 of Exhibit B to the Grant Notice. Exhibits to Grant Notice to Non- Employee Directors - 1(b) No portion of the Option which has not become vested and exercisable at Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable, shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and Holder. 3.2 Duration of Exercisability. The increments provided for in the vesting provisions set forth in the applicable subsection of Section 1 of Exhibit B to the Grant Notice (as indicated in the Grant Notice) are cumulative. Each such increment which becomes vested and exercisable pursuant to such vesting provisions shall remain vested and exercisable until it becomes unexercisable under Section 3.3.
Expiration of Option. (a) The Option may not be exercised to any extent by anyone after the first to occur of the following events: (i) The expiration of ten (10) years from the Grant Date; or 3.3

(ii) The expiration of ninety (90) days following the date of Holder's Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable, unless such termination occurs by reason of Holder's death or Disability (as defined below); or (iii) The expiration of one (1) year following the date of Holder's Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable, by reason of Holder's death or Disability.
(b) For purposes of this Agreement, "Disability" means permanent and total disability within the meaning of Section 22(e)(3) of the Code. ARTICLE IV EXERCISE OF OPTION

4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(b) and 5.2(c), during the lifetime of Holder, only Holder may exercise the Option or any portion thereof. After the death of Holder, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Holder's personal representative or by any person empowered to do so under the deceased Holder's will or under the then applicable laws of descent and distribution.

4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3. 4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company or the Secretary's office of all of Exhibits to Grant Notice to Non- Employee Directors - 2the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3: (a) An Exercise Notice in writing signed by Holder or any other person then entitled to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator. Such notice shall be substantially in the form attached as Exhibit C to the Grant Notice (or such other form as is prescribed by the Administrator); and (b) Subject to Section 6.2(d) of the Plan: (i) Full payment (in cash or by check) for the shares with respect to which the Option or portion thereof is exercised; or (ii) With the consent of the Administrator, such payment may be made, in whole or in part, through the delivery of shares of Common Stock which have been owned by Holder for at least six (6) months, duly endorsed for transfer to the Company with a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; or (iii) To the extent permitted under applicable laws, through the delivery of a notice that Holder has placed a market sell order with a broker with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided, that payment of such proceeds is made to the Company upon settlement of such sale; or (iv) With the consent of the Administrator, any combination of the consideration provided in the foregoing paragraphs (i), (ii) and (iii); and (c) A bona fide written representation and agreement, in such form as is prescribed by the Administrator, signed by Holder or the other person then entitled to exercise such Option or portion thereof, stating that the shares of Common Stock are being acquired for Holder's own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Securities Act and then applicable rules and regulations thereunder, and that Holder or other person then entitled to exercise such Option or portion thereof will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above. The Administrator may, in its absolute discretion, take whatever additional actions it deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other federal or state securities laws or regulations. Without limiting the generality of the foregoing, the Administrator may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on an Option exercise does not violate the Securities Act, and may issue stop- transfer orders covering such shares. Share certificates evidencing Common Stock issued on exercise of the Option shall bear an appropriate legend referring to the Exhibits to Grant Notice to Non- Employee Directors - 3provisions of this subsection (c) and the agreements herein. The written representation and agreement referred to in the first sentence of this subsection (c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Securities Act, and such registration is then effective in respect of such shares; and (d) The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which in the discretion of the Administrator may be in the form of consideration used by Holder to pay for such shares under Section 4.3(b), subject to Section 10.4 of the Plan; and (e) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than Holder, appropriate proof of the right of such person or persons to exercise the Option. 4.4 Conditions to Issuance of Stock Certificates. The shares of Common Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any shares of Common Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: (a) The admission of such shares to listing on all stock exchanges on which such Common Stock is then listed; and (b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the

Administrator shall, in its absolute discretion, deem necessary or advisable; and (c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and (d) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience; and (e) The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which may be in the form of consideration used by the Holder to pay for such shares under Section 4.3(b), subject to Section 10.4 of the Plan. 4.5 Rights as Stockholder. Holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until such shares shall have been issued by the Company to such holder. Exhibits to Grant Notice to Non- Employee Directors - 4ARTICLE V OTHER PROVISIONS 5.1 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon Holder, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement. 5.2 Option Not Transferable. (a) Subject to Section 5.2(b), the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until the shares underlying the Option have been issued, and all restrictions applicable to such shares have lapsed. Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of Holder or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. (b) Notwithstanding any other provision in this Agreement, with the consent of the Administrator and to the extent the Option is not intended to qualify as an Incentive Stock Option, the Option may be transferred to one or more Permitted Transferees, subject to the terms and conditions set forth in Section 10.1 of the Plan. (c) Unless transferred to a Permitted Transferee in accordance with Section 5.2(b), during the lifetime of Holder, only Holder may exercise the Option or any portion thereof unless it has been disposed of pursuant to a DRO. After the death of Holder, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Holder's personal representative or by any person empowered to do so under the deceased Holder's will or under the then applicable laws of descent and distribution. 5.3 Restrictive Legends and Stop- Transfer Orders. (a) The share certificate or certificates evidencing the shares of Common Stock purchased hereunder shall be endorsed with any legends that may be required by state or federal securities laws. (b) Holder agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer Exhibits to Grant Notice to Non- Employee Directors - 5agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. (c) The Company shall not be required: (i) to transfer on its books any shares of Common Stock that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such shares of Common Stock or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares

shall have been so transferred. 5.4 Shares to Be Reserved. The Company shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement. 5.5 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to Holder shall be addressed to Holder at the address given beneath Holder's signature on the Grant Notice. By a notice given pursuant to this Section 5.5, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to Holder shall, if Holder is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 by written notice under this Section 5.5. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 5.6 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 5.7 Governing Law; Severability. This Agreement shall be administered, interpreted and enforced under the laws of the State of Delaware without regard to conflicts of laws thereof. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable. 5.8 Conformity to Securities Laws. Holder acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 5.9 Amendments. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Holder or such other person as may be permitted to exercise the Option pursuant to Section 4.1 and by a duly authorized representative of the Company. Exhibits to Grant Notice to Non- Employee Directors - 65.10 No Employment Rights. If Holder becomes an Employee, nothing in the Plan or this Agreement shall confer upon Holder any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are expressly reserved, to discharge Holder at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company and Holder. 5.11 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and his or her heirs, executors, administrators, successors and assigns. Exhibits to Grant Notice to Non- Employee Directors - 7EXHIBIT B TO STOCK OPTION GRANT NOTICE VESTING AND EXERCISABILITY PROVISIONS Capitalized terms used in this Exhibit B and not defined below shall have the meanings given them in the Grant Notice and the Stock Option Agreement. 1. Time- Based Vesting. Subject to any accelerated vesting and exercisability pursuant to Section 2 below, the shares of Common Stock subject to the Option shall vest and become exercisable according to the vesting provisions set forth in one of the following alternative subsections, with the subsection applicable to the Option indicated in the Grant Notice: (a) The shares of Common Stock subject to the Option shall be vested and fully exercisable in their entirety on the Grant Date; OR (b) One- third of the shares of Common Stock subject to the Option shall be vested and fully exercisable on the Grant Date, one- third of the shares of Common Stock subject to the Option shall vest and become exercisable on January 1, 2006 if Holder is an Employee, Director or Consultant on that date, and one- third of the shares of Common Stock subject

to the Option shall vest and become exercisable on January 1, 2007 if Holder is an Employee, Director or Consultant on that date; OR (c) One- third of the shares of Common Stock subject to the Option shall vest and become exercisable on January 1, 2006 if Holder is an Employee, Director or Consultant on that date, one- third of the shares of Common Stock subject to the Option shall vest and become exercisable on January 1, 2007 if Holder is an Employee, Director or Consultant on that date, and one- third of the shares of Common Stock subject to the Option shall vest and become exercisable on January 1, 2008 if Holder is an Employee, Director or Consultant on that date. 2. Change in Control Accelerated Vesting. In the event of a Change in Control, if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, the unvested shares of Common Stock subject to the Option shall then vest and become fully exercisable in their entirety. 3. Limit on Vesting. In no event will the Option become vested and/or exercisable for more than 100% of the shares of Common Stock subject to the Option pursuant to the provisions of this Exhibit B. Exhibits to Grant Notice to Non- Employee Directors - 1EXHIBIT C TO STOCK OPTION GRANT NOTICE FORM OF EXERCISE NOTICE

Effective as of today,______________ , _____________ the undersigned ("HOLDER") hereby elects to exercise Holder's option to purchase _____________ shares of the Common Stock (the "SHARES") of Leap Wireless International, Inc. (the "COMPANY") under and pursuant to the Leap Wireless International, Inc. 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "Plan") and the Stock Option Grant Notice and Non- Qualified Stock Option Agreement (For Non- Employee Directors) dated , (the "OPTION AGREEMENT"). Capitalized terms used herein without definition shall have the meanings given in the Option Agreement. GRANT DATE: ___________________________ NUMBER OF SHARES AS TO WHICH OPTION IS EXERCISED: _____________________________________ EXERCISE PRICE PER SHARE: $____________

TOTAL EXERCISE PRICE: CERTIFICATE TO BE ISSUED IN NAME OF: CASH PAYMENT DELIVERED HEREWITH:

TYPE OF OPTION:

$____________ _____________________________________ $______________ (Representing the full Exercise Price for the Shares, as well as any applicable withholding tax) The Option is a Non-Qualified Stock Option and is not an incentive stock option within the meaning of Section 422 of the Code.

1. Representations of Holder. Holder acknowledges that Holder has received, read and understood the Plan and the Option Agreement. Holder agrees to abide by and be bound by their terms and conditions. 2. Rights as Stockholder. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Shares subject to the Option, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 10.3 of the Plan. 3. Tax Consultation. Holder understands that there are tax consequences to Holder as a result of Holder's purchase or disposition of the Shares. Holder represents that Holder has consulted with any tax consultants Holder deems advisable in connection with the purchase or disposition of the Shares and that Holder is not relying on the Company for any tax advice. 4. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan and the Option Agreement constitute the entire Exhibits to Grant Notice to Non- Employee Directors - 1agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Holder with respect to the subject matter hereof.

ACCEPTED BY: SUBMITTED BY LEAP WIRELESS INTERNATIONAL, INC. HOLDER: By:_________________________________ By:_________________________________ Print Name:__________________________ Print Name: _________________________ Title:_______________________________ Address:_____________________________ Exhibits to Grant Notice to Non- Employee Directors - 2-

EXHIBIT 10.13 CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of January 10, 2005 (the "Effective Date") by and among CRICKET COMMUNICATIONS, INC., a Delaware corporation (the "Company"), LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation (the "Parent"), and Stewart D. Hutcheson, an individual currently residing in San Diego, California ("EXECUTIVE"). EXECUTIVE is currently employed by the Company and serves as an officer of the Parent, the Company and various of their respective subsidiaries. The Company is a subsidiary of the Parent. The Company, the Parent and EXECUTIVE are hereinafter collectively referred to as the "Parties," and individually referred to as a "Party." This Agreement amends, restates and supercedes the Executive Employment Agreement among the Parties made and entered into as of January 10, 2005, as amended. 1. EMPLOYMENT. 1.1 The Company hereby employs EXECUTIVE, and EXECUTIVE hereby accepts and continues employment by the Company, upon the terms and conditions set forth in this Agreement, for the period beginning on the Effective Date and ending as provided in Paragraph 3 hereof (the "Employment Period"). 1.2 Commencing on February 25, 2005 and continuing during the Employment Period, EXECUTIVE shall serve as Chief Executive Officer of the Company on a full- time basis and shall have the normal duties, responsibility and authority of the Chief Executive Officer of the Company, as specified by the Company's Board of Directors from time to time. EXECUTIVE's duties to the Company shall be those customarily assigned to an executive holding similar positions in a comparable corporation engaged in a business similar to the business of the Company. EXECUTIVE shall devote substantially all of his time to the activities of the Company working from the Company's headquarters in San Diego, California, or other business locations, subject to Company- related business travel. EXECUTIVE shall use all reasonable commercial efforts to do and perform all services, acts, or responsibilities necessary or advisable to carry out the job duties of the Chief Executive Officer of the Company, as reasonably assigned by the Board of Directors of the Company from time to time; provided, however, that at all times during his employment EXECUTIVE shall be subject to the direction and policies and procedures from time to time established by the Board of Directors of the Company. 1.3 Commencing on February 25, 2005 and continuing during the Employment Period, EXECUTIVE shall serve as the Chief Executive Officer of the Parent. EXECUTIVE shall have the normal duties, responsibilities and authority of the Chief Executive Officer of the Parent, as specified by the Parent's Board of Directors from time to time. Notwithstanding the provisions of Paragraph 1.2, EXECUTIVE shall use all reasonable commercial efforts to do and perform all services, acts, or responsibilities necessary or advisable to carry out the job duties of Chief Executive Officer of the Parent, as reasonably assigned by the Board of Directors of the Parent from time to time; provided, however, that at all times during his service as Chief Executive Officer of the Parent, EXECUTIVE shall be subject to the direction and policies and procedures from time to time established by the Board of Directors of the Parent. EXECUTIVE's duties to the Parent shall be those customarily assigned to an executive holding similar positions in a comparable corporation engaged in a business similar to the business of the Parent. In his role as Chief Executive Officer of the Parent, EXECUTIVE shall devote such of his time as is appropriate (in light of his position with the Company) to the activities of the Parent working from the Parent's headquarters in San Diego, California, or other

business locations, subject to Parent- related business travel. Executive shall not receive any compensation or benefits for such services other than the compensation and benefits provided for in this Agreement. 2. LOYAL AND CONSCIENTIOUS PERFORMANCE. 2.1 During his employment with the Company, EXECUTIVE shall faithfully and diligently devote EXECUTIVE's full business time and efforts to the performance of his duties as the Chief Executive Officer of the Company (except as otherwise provided in Paragraph 1.3 above and Paragraph 2.2 below), with the degree of loyalty and care prescribed by law, provided that EXECUTIVE shall be permitted to continue to serve on the boards of directors/trustees/advisors of Scientific Materials, Inc. and San Diego Children's Museum, and no other boards of directors or similar obligations, unless approved by the Parent's Board of Directors, so long as his services do not materially and adversely affect EXECUTIVE's ability to perform his duties hereunder as reasonably determined by the Parent's Board of Directors. This Employment Agreement is a personal services contract whereby the Company and Parent are engaging the services of EXECUTIVE. 2.2 The Company and the Parent agree that EXECUTIVE may devote up to three business days per month pursuing outside business interests provided such business interests do not compete with the Company's or the Parent's business. 3. TERM OF EMPLOYMENT. 3.1 EXECUTIVE shall be employed pursuant to the terms of this Agreement for a term beginning on the Effective Date and expiring at midnight on December 31, 2008. The term of employment, including any extension period contemplated in Paragraph 3.2 below, shall be referred to as the "Employment Period." 3.2 This Agreement and EXECUTIVE's employment hereunder may be extended for such period following December 31, 2008, and upon such terms and conditions, as shall be mutually agreed upon by the Company, the Parent and EXECUTIVE and set forth in a written amendment to this Agreement. - 23.3 Notwithstanding Paragraphs 3.1 and 3.2, EXECUTIVE's employment may terminate in accordance with Paragraph 5 and, in the event of such termination, the Employment Period shall end on the Date of Termination (as defined in Paragraph 5.8 below). 4. COMPENSATION AND BENEFITS. 4.1 Beginning with the Effective Date, and during the Employment Period, Company shall pay EXECUTIVE a salary (the "Base Salary") of three hundred fifty thousand dollars ($350,000) per year, payable bi- weekly in accordance with the Company's normal payroll practices for EXECUTIVE, such salary subject to adjustment from time to time pursuant to periodic reviews by the Company's Board of Directors (with input, if any, from the Compensation Committee of the Board of Directors of Parent). 4.2 The Company shall pay EXECUTIVE a success bonus in the amount of three hundred thousand dollars ($300,000) as follows: (i) Not later than fourteen (14) days after the Effective Date, the Company shall pay EXECUTIVE a lump sum payment in cash in the amount of one hundred fifty thousand dollars ($150,000), and (ii) The Company shall pay EXECUTIVE an additional lump sum payment in cash in the amount of one hundred fifty thousand dollars ($150,000) on (or promptly after) the earliest to occur of the following events: (i) September 30, 2005, provided EXECUTIVE is still employed by the Company on such date; and (ii) the date on which EXECUTIVE ceases to be employed by the Company, unless such cessation of employment occurs as a result of a termination for Cause. 4.3 During the Employment Period, EXECUTIVE's annual target performance bonus ("Target Performance Bonus") shall be eighty percent (80%) of EXECUTIVE's Base Salary, and EXECUTIVE shall be eligible to be paid an annual performance bonus with respect to each calendar year (including 2004), with the amount of such bonus to be paid to EXECUTIVE determined in accordance with the Company's prevailing annual performance bonus practices that are used to determine annual performance bonuses for the senior executives of the Company generally; provided, however, that, in the event EXECUTIVE is employed by the Company on December 31, 2008, then EXECUTIVE shall be paid any final installment of his 2008 annual performance bonus, calculated as set forth above, on the date on which the final installments of the 2008 annual performance bonuses for senior executives are paid, without regard to whether EXECUTIVE is then employed by the Company. 4.4 The EXECUTIVE shall be entitled to the following benefits during the Employment Period:

(a) All benefits to which other executive officers of the Company are entitled as determined by the Company's Board of Directors, on terms no less favorable than other such - 3participants, including but not limited to, participation in any and all retirement plans, bonus and incentive payment programs (provided that such participation would not duplicate Executive's bonus entitlement pursuant to Paragraph 4.3), group life insurance policies and plans, medical, health, dental and disability insurance policies and plans, and the like, which may be maintained by the Company for the benefit of its executive officers. (b) Four (4) weeks of Scheduled Time Off ("STO") per year under the Company's Paid Time Off ("PTO") policy, which shall accrue and may be used by EXECUTIVE in accordance with the Company's then prevailing PTO practices. EXECUTIVE shall also be entitled to paid holidays and paid personal/sick days, in a manner consistent with the Company's policies and practices for senior executives. 4.5 The Company shall reimburse EXECUTIVE for all reasonable out- of- pocket expenses incurred by him in the course of performing his duties under this Agreement (whether such reimbursement is sought before or after termination of this Agreement), to the extent consistent with the Company's policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company's requirements with respect to reporting and documentation of such expenses pursuant to Company policy. 4.6 All of EXECUTIVE's compensation shall be subject to applicable federal and state withholding taxes and any other employment taxes as are required to be collected or withheld by the Company. 4.7 The Parent has adopted the Leap Wireless International, Inc. 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "Parent Plan"). Not later than sixty (60) days after the Effective Date, the Parent shall grant, or cause to be granted, to EXECUTIVE the awards described in Exhibit A hereto (the "Awards") under the Plan. The terms and conditions of the Awards shall be set forth in the Restricted Stock Award Grant Notice and Restricted Stock Award Agreement (attached as Attachment A- 1 or Attachment A- 4 hereto, as applicable), the Stock Option Grant Notice and Non- Qualified Stock Option Agreement (attached as Attachment A- 2 or Attachment A- 5 hereto, as applicable) and the Deferred Stock Unit Award Grant Notice and Deferred Stock Unit Award Agreement (attached as Attachment A- 3 hereto), respectively, and shall be subject to the terms and conditions of the Plan (as in effect from time to time). 4.8 If, during the Employment Period, all or substantially all of the assets of the Company or shares of stock of the Company or Parent having fifty percent (50%) or more of the voting rights of the total outstanding stock of the Company or Parent, as the case may be, are sold with the approval of or pursuant to the active solicitation of the Board of Directors of the Company or the Board of Directors of the Parent, whichever is applicable, to a strategic investor (i.e. an investor whose primary business is not financial investing) the Company shall pay to EXECUTIVE a stay bonus in a lump sum payment in cash in an amount equal to EXECUTIVE's Base Salary (at the annual rate then in effect) for a period of eighteen (18) months, if the EXECUTIVE continues his Employment with the Company (or its successor) for a two (2) month period commencing on the date of the closing of such sale. Such lump sum cash payment shall be made within fifteen (15) days following the expiration of the two (2) month period. - 44.9 Not later than March 31, 2006, Parent and the Company will perform an annual performance review of EXECUTIVE and a review of EXECUTIVE's compensation and benefits relative to compensation and benefits provided to executives holding similar positions in comparable corporations engaged in a business similar to the business of Parent and the Company, and following such reviews, Parent, the Company and EXECUTIVE agree to confer and negotiate in good faith any appropriate adjustments to the compensation and benefits payable pursuant to this Paragraph 4. 5. TERMINATION OF EMPLOYMENT. 5.1 EXECUTIVE's employment under this Agreement shall terminate without notice upon the date of EXECUTIVE's death. In the event of EXECUTIVE's death, all rights of EXECUTIVE to compensation hereunder shall automatically terminate immediately upon his death, except that EXECUTIVE's heirs, personal representatives or estate shall be entitled to any unpaid portion of his salary and accrued benefits earned up to the date of his death, including a pro rata share of EXECUTIVE's Target Performance Bonus for the year of his death. 5.2 The Company may terminate EXECUTIVE's employment under this Agreement after thirty (30) days notice in the event that EXECUTIVE is unable to substantially perform his duties for an aggregate period of sixty (60) days during any 180- day period resulting from EXECUTIVE's incapacity due to a physical or mental disability after attempts to reasonably accommodate EXECUTIVE's disability have failed. In the event that, during the Employment Period, EXECUTIVE's employment is terminated for disability, EXECUTIVE shall be entitled to any unpaid portion of his salary and accrued benefits earned up to the Date of Termination, including a pro rata share of EXECUTIVE's Target Performance Bonus for the year in which his termination occurs.

5.3 The Company may terminate EXECUTIVE's employment under this Agreement for Cause (as defined in Paragraph 5.5 below). In the event that, EXECUTIVE's employment is terminated by the Company for Cause during the Employment Period, EXECUTIVE shall be entitled to any unpaid portion of his salary and accrued benefits earned up to the Date of Termination. 5.4 The Company may terminate EXECUTIVE's employment under this Agreement other than for Cause, and EXECUTIVE may terminate his employment under this Agreement for Good Reason (as defined in Paragraph 5.6 below). In the event that, EXECUTIVE's employment is terminated by the Company other than for Cause, or by EXECUTIVE for Good Reason, during the remaining Employment Period, EXECUTIVE shall be entitled to the following: (a) EXECUTIVE shall be entitled to any unpaid portion of his salary and accrued benefits earned up to the Date of Termination. (b) The Company shall pay EXECUTIVE (i) a severance benefit in the form of a lump sum payment in cash in an amount equal to the EXECUTIVE's Base Salary (at the annual rate then in effect) for a period of nine (9) months which shall be made within thirty (30) days after the date of termination and (ii) monthly payments for nine months commencing on the first day of the ninth month following the date of termination equal to the EXECUTIVE's Base - 5Salary; provided, however, that the monthly severance benefit shall be reduced by the amount, if any, that the EXECUTIVE receives from employment with a subsequent employer or for services as an independent contractor during the period during which the monthly payments are paid. Upon written request from the Company, made not more than monthly during the period during which such monthly payments are paid, EXECUTIVE shall furnish the Company with a statement as to whether he is employed or acting as an independent contractor and the amount of compensation (including salary, wages, bonuses and fees for services) therefrom; if EXECUTIVE fails to furnish the statement within thirty (30) days of the Company's request or furnishes a materially false statement, the Company may, in its sole discretion, reduce or permanently discontinue any further monthly payments under this Paragraph 5.4.2. Notwithstanding the foregoing, no payments shall be made to EXECUTIVE under this Paragraph 5.4.2 in the event that EXECUTIVE has been paid or is entitled to a payment under Paragraph 4.8. (c) In the event that the Date of Termination occurs on or prior to December 31, 2005, the Company shall pay EXECUTIVE an additional lump sum payment in cash in an amount equal to the excess (if any) of: (i) EXECUTIVE's Target Performance Bonus for 2005, over (ii) any portion of EXECUTIVE's annual performance bonus for 2005 already paid to EXECUTIVE. Such lump sum cash payment shall be made within thirty (30) days after the Date of Termination and shall be in lieu of any annual performance bonus with respect to 2005, or any remaining installments thereof, otherwise payable under Paragraph 4.3. (d) To the extent EXECUTIVE elects continuation health care coverage for EXECUTIVE and his eligible dependents under Section 4980B of the Internal Revenue Code of 1986, as amended from time to time (the "Code"), and Sections 601- 608 of the Employee Retirement Income Security Act of 1974, as amended from time to time (collectively, "COBRA Coverage"), EXECUTIVE shall not- be required to pay premiums for such COBRA Coverage for the eighteen (18) month period commencing on the Date of Termination (or, if earlier, until EXECUTIVE is eligible for comparable coverage with a subsequent employer). (e) EXECUTIVE shall not be required to mitigate the amount of any payment provided for in this Paragraph 5.4 by seeking other employment or otherwise nor, except as provided in Paragraphs 5.4.2 and 5.4.4, shall the amount of any payment or benefit provided for in this Paragraph 5.4 be reduced by any compensation or benefits earned by EXECUTIVE as the result of employment by another employer or self- employment, by retirement benefits, by offset against any amount claimed to be owed by EXECUTIVE to the Company, or otherwise. 5.5 For purposes of this Paragraph 5, "Cause" shall mean termination of EXECUTIVE's employment by the Company: (i) upon EXECUTIVE's willful failure substantially to perform EXECUTIVE's duties with the Company (or the Parent) (other than any such failure resulting from EXECUTIVE's incapacity due to physical or mental illness or any such actual or anticipated failure after EXECUTIVE's issuance of a Notice of Termination (as defined below) for Good Reason), as reasonably determined by the Company, after a written demand for substantial performance is delivered to EXECUTIVE by the Board of Directors of the Company, which demand specifically identifies the manner in which the Board of Directors of the Company believes that EXECUTIVE has not substantially performed such duties, provided that the EXECUTIVE shall have been given a reasonable period, not to exceed fifteen - 6(15) days, in which to cure such failure (provided such failure is capable of being cured), (ii) upon EXECUTIVE's willful failure substantially to follow and comply with the specific and lawful directives of the Board of Directors of the Company (or the Board of Directors of the Parent) which are consistent with EXECUTIVE's duties with the Company (or the Parent), as reasonably determined by the Board of Directors of the Company (other than any such failure resulting

from EXECUTIVE's incapacity due to physical or mental illness or any such actual or anticipated failure after EXECUTIVE's issuance of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to EXECUTIVE by the Board of Directors of the Company, which demand specifically identifies the manner in which the Board of Directors of the Company believes that EXECUTIVE has not substantially performed such directives, provided that the EXECUTIVE shall have been given a reasonable period not to exceed fifteen (15) days in which to cure such failure (provided such failure is capable of being cured), (iii) upon EXECUTIVE's commission of an act of fraud or dishonesty materially impacting or involving the Company (or the Parent), or (iv) upon EXECUTIVE's willful engagement in illegal conduct or gross misconduct. Notwithstanding the foregoing, EXECUTIVE's employment shall not be deemed terminated for "Cause" pursuant to this Paragraph 5.5 unless and until there shall have been delivered to EXECUTIVE a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors of the Company at a meeting of the Board of Directors of the Company held within three (3) days (or such longer time period as the Board of Directors of the Company may determine) after the Company provides the EXECUTIVE with notice that it has determined that an event described in clauses (i) through (iv) of this Paragraph 5.5 has occurred, at which the EXECUTIVE, together with EXECUTIVE's counsel may be heard for a period of no more than three (3) hours before the Company. The determination of whether the EXECUTIVE's employment shall be terminated for "Cause" shall be made by the Board of Directors of the Company in its sole discretion. 5.6 For purposes of this Paragraph 5, "Good Reason" shall mean, without EXECUTIVE's express written consent, the occurrence of any of the following circumstances unless such circumstances are cured (provided such circumstances are capable of being cured) prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (i) the continuous assignment to EXECUTIVE of any duties materially inconsistent with EXECUTIVE's positions with the Company (or the Parent), a significant adverse alteration in the nature or status of EXECUTIVE's responsibilities or the conditions of EXECUTIVE's employment with the Company (or the Parent), or any other action that results in a material diminution in EXECUTIVE's position, authority, title, duties or responsibilities with the Company (or the Parent); (ii) reduction of EXECUTIVE's annual Base Salary as in effect on the Effective Date or as the same may be increased from time to time thereafter; (iii) the relocation of the Company's offices at which EXECUTIVE is principally employed to a location more than sixty (60) miles from such location, but only after the EXECUTIVE has commuted for a period of one year to the new location (with the Company bearing the reasonable cost of such commuting); (iv) the Company's failure to pay EXECUTIVE any portion of EXECUTIVE's current compensation; (v) the Company's failure to continue in effect any material compensation or benefit plan in which EXECUTIVE participates, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the Company's failure to continue EXECUTIVE's participation therein (or in such substitute or alternative plan) on the basis not materially less favorable, both in terms of the amount of - 7benefits provided and the level of EXECUTIVE's participation relative to other participants; (vi) the Company's failure to continue to provide EXECUTIVE with benefits substantially similar in the aggregate to those enjoyed by EXECUTIVE under any of the Company's life insurance, medical, health and accident, disability, pension, retirement, or other benefit plans in which EXECUTIVE or EXECUTIVE's eligible family members were participating immediately prior thereto, or the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits; or (vii) the continuation or repetition, after written notice of objection from EXECUTIVE, of harassing or denigrating treatment of EXECUTIVE by the Company inconsistent with EXECUTIVE's position with the Company or (viii) if a successor to Company does not retain EXECUTIVE'S services for at least one year on substantially the same terms as Sections 4.1 and 4.2 of this Agreement which includes the obligation to assume the Company's obligations under this Agreement. EXECUTIVE's right to terminate employment with the Company pursuant to Paragraph 5.4 shall not be affected by EXECUTIVE's incapacity due to physical or mental illness. EXECUTIVE's continued employment with the Company shall not constitute consent to, or a waiver of rights with respect to, any circumstance constituting Good Reason thereunder. The appointment or election of EXECUTIVE as Chief Executive Officer of the Company (or the Parent) and the assignment to EXECUTIVE of the duties, responsibilities and authority of such positions shall not constitute "Good Reason." 5.7 Any purported termination of EXECUTIVE's employment by the Company for Cause or other than for Cause, or by EXECUTIVE for Good Reason, shall be communicated by Notice of Termination to the other party hereto in accordance with Paragraph 10. "Notice of Termination" shall mean a written notice that shall indicate the specific termination provision in this Paragraph 5 relied upon and shall set forth in reasonable detail any facts and circumstances claimed to provide a basis for the termination of employment under the provision so indicated. 5.8 For purposes of this Paragraph 5, "Date of Termination" shall mean the date specified in the Notice of Termination (which, in the case of a termination by the Company for Cause may occur immediately upon giving the Notice of Termination, and, in the case of a termination by the Company other than for Cause, or by EXECUTIVE for Good

Reason, shall not be less than fifteen (15) nor more than sixty (60) days after the date such Notice of Termination is given), or, if EXECUTIVE's employment terminates by reason of EXECUTIVE's death or disability, the date of such termination. 5.9 In consideration of, and as a condition to receiving, the benefits to be provided to EXECUTIVE under this Paragraph 5 (other than any unpaid portion of his salary and accrued benefits earned up to the Date of Termination), EXECUTIVE (or, in the event of EXECUTIVE's death, the executor or legal representative of his estate) shall execute and deliver to the Company and to the Parent, the "General Release" set forth on Exhibit B hereto on or after the Date of Termination and not later than twenty- one (21) days after the Date of Termination (or, in the event that the termination of EXECUTIVE's employment with the Company is in connection with an exit incentive or other employment termination program offered to a group or class of employees, not later than forty- five (45) days after the Date of Termination (or, if later, the date EXECUTIVE is provided with the information required in accordance with Section 3(f) of the General Release)). In the event that EXECUTIVE fails to execute and deliver the General Release in accordance with this Paragraph 5.9, or EXECUTIVE revokes the General Release in accordance with the terms thereof, EXECUTIVE shall not receive the benefits set forth in this - 8Paragraph 5 (other than any unpaid portion of his salary and accrued benefits earned up to the Date of Termination). 5.10 As further consideration for the benefits to be provided under this Paragraph 5 (other than any unpaid portion of his salary and accrued benefits earned up to the Date of Termination), EXECUTIVE hereby agrees as follows: (a) For the period commencing on the Date of Termination and terminating on the second anniversary thereof, EXECUTIVE shall not, either on EXECUTIVE's own account or jointly with or as a manager, agent, officer, employee, consultant, partner, joint venturer, owner or shareholder or otherwise on behalf of any other person, firm or corporation, directly or indirectly solicit or attempt to solicit away from the Company, the Parent, or any of their respective affiliates, any of their respective officers or employees or offer employment to any person who, on or during the six (6) months immediately preceding the date of such solicitation or offer, is or was an officer or employee of the Company, the Parent, or any of their respective affiliates; provided, however, that a general advertisement to which an officer or employee of the Company, the Parent, or any of their respective affiliates, responds and any employment resulting from such response shall in no event be deemed to result in a breach of this Paragraph 5.10.1. (b) In the event that EXECUTIVE breaches the provisions of Paragraph 5.10.1, or threatens to do so, in addition to and without limiting or waiving any other remedies available to the Company or the Parent in law or in equity, the Company or the Parent shall be entitled to immediate injunctive relief in any court having the capacity to grant such relief, to restrain such breach or threatened breach and to enforce Paragraph 5.10.1. EXECUTIVE acknowledges that it is impossible to measure in money the damages that the Company will sustain in the event that EXECUTIVE breaches or threatens to breach Paragraph 5.10.1 and, in the event that the Company or the Parent institutes any action or proceeding to enforce Paragraph 5.10.1 seeking injunctive relief, EXECUTIVE hereby waives and agrees not to assert or use as a defense a claim or defense that the Company or the Parent has an adequate remedy at law. Also, in addition to any other remedies available to the Company or the Parent in law or in equity, in the event that EXECUTIVE breaches the provisions of Paragraph 5.10.1 in any material respect, EXECUTIVE shall forfeit EXECUTIVE's right to further benefits under Paragraph 5 and EXECUTIVE shall be obligated to repay to the Company the benefits that EXECUTIVE has received under Paragraph 5. 5.11 Notwithstanding the foregoing provision of this Paragraph 5, the payments provided for in this Paragraph 5 (other than unpaid salary earned prior to termination and the monthly severance payments pursuant paragraph 5.4.2) shall be made not later than the tenth day following the date on which the General Release by EXECUTIVE becomes irrevocable. 6. PARACHUTE PAYMENT EXCISE TAX GROSS- UP. 6.1 In the event that the EXECUTIVE'S employment under this Agreement is (i) terminated by the Company other than for Cause or (ii) by the EXECUTIVE for Good Reason, in each case within one (1) year of a Change in Control (as defined in the Parent Plan, as in effect on the Effective Date) and it is determined under this Paragraph 6 that any payment or benefit to EXECUTIVE or for EXECUTIVE's benefit or on EXECUTIVE's behalf (whether - 9paid or payable or distributed or distributable) pursuant to the terms of this Agreement or any other agreement, arrangement or plan with the Company or any Affiliate (as defined below) (individually, a "Payment" and collectively, the "Payments") would be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then EXECUTIVE shall be entitled to receive from the Company one or more additional payments (individually, a "Gross- Up

Payment" and collectively, the "Gross- Up Payments"), such that the net amount of the Payments and the Gross- Up Payments retained by EXECUTIVE after the payment of all Excise Taxes (and any interest or penalties imposed with respect to such Excise Taxes) on the Payments, and all federal, state and local income tax, employment tax and Excise Taxes (including any interest or penalties imposed with respect to such taxes) on the Gross- Up Payments provided for in this Paragraph 6, shall be equal to the Payments. For purposes of this Paragraph 6, an "Affiliate" shall mean Parent, any successor to all or substantially all of the business and/or assets of the Company or the Parent, any person acquiring ownership or effective control of the Company or the Parent or ownership of a substantial portion of the assets of the Company or the Parent, or any person whose relationship to the Company, the Parent or such person is such as to require attribution under Section 318(a) of the Code. (a) All determinations required to be made under this Paragraph 6, including whether and when any Gross- Up Payment is required and the amount of such Gross- Up Payment, and the assumptions to be utilized in arriving at such determinations shall be made by the Accountants (as defined below) which shall provide EXECUTIVE and the Company with detailed supporting calculations with respect to such Gross- Up Payment within fifteen (15) business days of the receipt of notice from EXECUTIVE or the Company that EXECUTIVE has received or will receive a Payment. For the purposes of this Paragraph 6, the "Accountants" shall mean the Company's independent certified public accountants serving immediately prior to the "change in the ownership or effective control of a corporation" or "change in the ownership of a substantial portion of the assets of a corporation", as defined in Code Section 280G, with respect to which the determination is being made. In the event that the Accountants are also serving as the accountants or auditors for the individual, entity or group effecting the "change in the ownership or effective control of a corporation" or "change in the ownership of a substantial portion of the assets of a corporation", as defined in Code Section 280G, with respect to which the determination is being made, Company shall appoint another nationally recognized public accounting firm, reasonably acceptable to the EXECUTIVE, to make the determinations required hereunder (which accounting firm shall then be referred to as the Accountants hereunder). All fees and expenses of the Accountants shall be borne solely by the Company. (b) For the purposes of determining whether any of the Payments will be subject to the Excise Tax and the amount of such Excise Tax, such Payments shall be treated as "parachute payments" within the meaning of Section 280G of the Code, and all "parachute payments" in excess of the "base amount" (as defined under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax, unless and except to the extent that, in the opinion of the Accountants, such Payments (in whole or in part) either do not constitute "parachute payments" or represent reasonable compensation for services actually rendered (within the meaning of Section 280G(b)(4) of the Code) in excess of the "base amount," or such "parachute payments" are otherwise not subject to such Excise Tax. - 10(c) For purposes of determining the amount of the Gross- Up Payment, EXECUTIVE shall be deemed to pay federal income taxes at the highest applicable marginal rate of federal income taxation for the calendar year in which the GrossUp Payment is to be made and to pay any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which the Gross- Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year (determined without regard to limitations on deductions based upon the amount of EXECUTIVE's adjusted gross income); and to have otherwise allowable deductions for federal, state and local income tax purposes at least equal to those disallowed because of the inclusion of the Gross- Up Payment in EXECUTIVE's adjusted gross income. To the extent practicable, any GrossUp Payment with respect to any Payment shall be paid by the Company at the time EXECUTIVE is entitled to receive the Payment and in no event will any Gross- Up Payment be paid later than five days after the receipt by EXECUTIVE of the Accountant's determination. (d) Any determination by the Accountants shall be binding upon the Company and EXECUTIVE. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accountants hereunder, it is possible that the Gross- Up Payment made will have been an amount less than the Company should have paid pursuant to this Paragraph 6 (the "Underpayment"), or more than the Company should have paid pursuant to this Paragraph 6 (the "Overpayment"). In the event that the Company exhausts its remedies pursuant to Paragraph 6 and EXECUTIVE is required to make a payment of any Excise Tax, the Underpayment shall be promptly paid by the Company to or for EXECUTIVE's benefit (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code. In the event it is determined that there has been an Overpayment, the Overpayment shall be promptly paid by EXECUTIVE to the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). (e) EXECUTIVE shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross- Up Payment. Such notification shall be given as soon as practicable after EXECUTIVE is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. EXECUTIVE shall not pay such claim prior to the expiration of the 30- day period following the date on which EXECUTIVE gives such notice to the Company (or such

shorter period ending on the date that any payment of taxes, interest and/or penalties with respect to such claim is due). If the Company notifies EXECUTIVE in writing prior to the expiration of such period that it desires to contest such claim, EXECUTIVE shall: (i) give the Company any information reasonably requested by the Company relating to such claim; (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company; (iii) cooperate with the Company in good faith in order to effectively contest such claim; and (iv) permit the Company to participate in any proceedings relating to such claims; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify EXECUTIVE for and hold EXECUTIVE harmless from, on an aftertax basis, any - 11Excise Tax or income or other taxes (including interest and penalties with respect thereto) imposed as a result of such representation and payment of all related costs and expenses. (f) Without limiting the foregoing provisions of this Paragraph 6, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct EXECUTIVE to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and EXECUTIVE agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs EXECUTIVE to pay such claim and sue for a refund, the Company shall advance the amount of such payment to EXECUTIVE, on an interest- free basis, and shall indemnify EXECUTIVE for and hold EXECUTIVE harmless from, on an after- tax basis, any Excise Tax or income or other taxes (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance (including as a result of any forgiveness by the Company of such advance); provided, further, that any extension of the statute of limitations relating to the payment of taxes for the taxable year of EXECUTIVE with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross- Up Payment would be payable hereunder and EXECUTIVE shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. (g) Notwithstanding the foregoing provisions of this Paragraph 6.1, if the EXECUTIVE terminated his employment for Good Reason, he shall, upon the written request of the Company and reasonable advance notice, provide consulting services to the Company (or to the Parent at the direction of the Company, or both) for up to three (3) days per month for up to a one (1) year period following his Date of Termination. The EXECUTIVE shall be entitled to payment by the Company in the amount of $1,500 for each day on which he provides consulting services pursuant to such written request from the Company. The Company and the EXECUTIVE shall mutually use their best efforts to schedule the date or dates on which EXECUTIVE will provide the requested consulting services so as not to prevent EXECUTIVE from being gainfully employed by a subsequent employer, and shall be arranged so as to reasonably accommodate EXECUTIVE's vacation or other personal affairs. Notwithstanding any other provision of this Paragraph 6, if EXECUTIVE refuses or otherwise fails to perform the requested consulting services, if any, he shall forfeit his right to the payment of any GrossUp Payments or indemnification hereunder, and if any such Gross- Up Payments or indemnification had previously been paid by the Company to the EXECUTIVE hereunder, EXECUTIVE shall promptly repay such amount or amounts to the Company within five (5) business days following the Company's written demand therefor. (h) Notwithstanding the foregoing provisions of this Paragraph 6, in no event shall the Company's liability for Gross- Up Payments as indemnification under this Paragraph 6 exceed one million dollars ($1,000,000). - 126.2 In the event of the termination of EXECUTIVE's employment with the Company, any Gross- Up Payment to be made to EXECUTIVE pursuant to this Section 6 shall be made not later than the tenth day following the date on which the General Release by EXECUTIVE becomes irrevocable (or, if later, the tenth day following the date the "change in the ownership or effective control of a corporation" or "change in a substantial portion of the assets of a corporation" occurs); provided, however, if the Gross- Up Payment cannot be finally determined on or before such day, the Company shall pay to EXECUTIVE on such day an estimate, as determined in good faith by the Company, of the minimum amount of such Gross Up Payment and shall pay the remainder of such Gross- Up Payment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the Date of Termination. In the event that the amount of the estimated Gross- Up Payment exceeds the amount subsequently determined to have been due, such excess shall constitute a loan by the Company to EXECUTIVE, payable

on the fifth day after demand by the Company (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code). 7. PROPRIETARY AND CONFIDENTIAL INFORMATION. 7.1 Prior to the execution of this Agreement, EXECUTIVE executed the Company's standard form of Invention Disclosure, Confidentiality and Proprietary Rights Agreement which, among other matters, requires EXECUTIVE to maintain the confidentiality of certain Company information. Such Invention Disclosure, Confidentiality and Proprietary Rights Agreement shall remain in full force and effect in accordance with the terms and conditions thereof. 7.2 EXECUTIVE will exercise reasonable care, consistent with good business judgment to preserve in good working order, subject to reasonable wear and tear from authorized usage, and to prevent loss of, any equipment, instruments or accessories of the Company in his custody for the purpose of conducting the business of the Company. Upon request, EXECUTIVE will promptly surrender the same to the Company at the conclusion of his employment, or if not surrendered, EXECUTIVE will account to the Company to its reasonable satisfaction as to the present location of all such instruments or accessories and the business purpose for their placement at such location. At the conclusion of EXECUTIVE's employment with the Company, he agrees to return such instruments or accessories to the Company or to account for same to the Company's reasonable satisfaction. 8. TERMINATION OF SEVERANCE BENEFITS AGREEMENT. 8.1 In consideration of the execution and delivery of this Agreement by the Company and the Parent, the Severance Agreement, dated May 30, 2003, by and among EXECUTIVE, the Parent and the Company (the "Severance Benefits Agreement") is hereby terminated effective as of the Effective Date. From and after the Effective Date, EXECUTIVE waives any and all rights, claims, benefits and awards under the Severance Agreement and releases the Parent and the Company from any liability or obligation for any and all rights, claims, benefits or awards due EXECUTIVE thereunder. - 139. ASSIGNMENT AND BINDING EFFECT. 9.1 This Agreement shall be binding upon and inure to the benefit of EXECUTIVE and EXECUTIVE's heirs, executors, administrators, estate, beneficiaries, and legal representatives. Neither this Agreement nor any rights or obligations under this Agreement shall be assignable by either party without the prior express written consent of the other party; provided, however, that the Company may assign this Agreement and its rights and obligations hereunder to any successor in interest to the Company. This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives. 10. NOTICES. 10.1 All notices or demands of any kind required or permitted to be given by the Company, the Parent or EXECUTIVE under this Agreement shall be given in writing and shall be personally delivered (and receipted for) or sent by facsimile (with confirmation of receipt), or sent by recognized commercial overnight courier, or mailed by certified mail, return receipt requested, postage prepaid, addressed as follows: If to the Company: Cricket Communications, Inc. Attention: General Counsel 10307 Pacific Center Court San Diego, CA 92121 Telephone: (858) 882- 6000 Facsimile: (858) 882- 6080
If to the Parent: Leap Wireless International, Inc. Attention: General Counsel 10307 Pacific Center Court San Diego, CA 92121 Telephone: (858) 882-6000 Facsimile: (858) 882-6010 If to EXECUTIVE: Stewart D. Hutcheson 855 San Antonio Place San Diego, CA 92106 Telephone: (619) 226-4225 Any such written notice shall be deemed received when personally delivered or

upon receipt in the event of facsimile or overnight courier, or three (3) days after its deposit in the United States mail by certified mail as specified above. Either Party may change its address for notices by giving notice to the other Party in the manner specified in this section. -14-

11. CHOICE OF LAW. 11.1 This Agreement is made in San Diego, California. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of California, without regard- to the conflicts of law principles thereof. Any controversy or claim arising out of or relating to this Agreement or breach hereof, whether involving remedies at law or in equity, or arising out of or relating to the rights, duties or obligations of the Company or of EXECUTIVE shall be brought and adjudicated exclusively in San Diego County, California or in such other location as the parties may agree. 12. INTEGRATION AND AMENDMENT. 12.1 This Agreement and the Invention Disclosure, Confidentiality and Proprietary Rights Agreement referred to in Paragraph 7.1 contain the entire agreement of the parties relating to the subject matter hereof, and supersede all prior oral and written employment agreements or arrangements between the Parties, including without limitation, the Executive Employment Agreement among the Parties made and entered into as of January 10, 2005, as amended. This Agreement cannot be amended or modified except by a written agreement signed by EXECUTIVE, the Company and the Parent. 13. WAIVER. 13.1 No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the Party against whom the waiver is claimed, and any waiver of any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach. No failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by either party hereto shall constitute a waiver thereof or shall preclude any other or further exercise of the same or any other right, power or remedy. 14. SEVERABILITY. 14.1 The unenforceability, invalidity, or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal. 15. INTERPRETATION, CONSTRUCTION. 15.1 The headings set forth in this Agreement are for convenience only and shall not be used in interpreting this Agreement. The Parties acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and the normal rule of construction to the effect any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. 16. ATTORNEYS' FEES. 16.1 In any arbitration of a controversy or claim arising out of or relating to this Agreement or the breach thereof, or any lawsuit to enforce a resulting arbitration award, the parties shall bear their own costs and expenses (including legal expenses), provided, however, that if the - 15Company makes a binding offer to settle the dispute (subject only to reasonable and customary conditions) for an amount of money, which offer is rejected (the "Offer") and the arbitration award is in an amount less than the Offer, the Company shall be entitled to recover reasonable fees and costs, including legal expenses) incurred in the arbitration or in any action to enforce the arbitration or this Paragraph 16.1 from the EXECUTIVE. 16.2 The Company hereby agrees to pay EXECUTIVE's reasonable legal fees and expenses up to five thousand dollars $5,000 incurred in connection with the negotiation of this Agreement and any related agreements and documents. 17. COUNTERPARTS. 17.1 This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall together constitute an original thereof. 18. REPRESENTATIONS AND WARRANTIES.

18.1 EXECUTIVE Representations and Warranties. EXECUTIVE represents and warrants that he is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that his execution and performance of this Agreement will not violate or breach any other agreement between EXECUTIVE and any other person or entity. 18.2 Company Representatives and Warranties. (i) Due Authorization. The Company has full corporate power and authority to execute, deliver and perform its obligations under this Agreement, and this Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms; (ii) Conflicts. The execution, delivery and performance of this Agreement by the Company, does not and will not (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Company is subject or any provision of its Certificate of Incorporation, bylaws, or other governing documents or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which the Company is a party or by which the Company is bound or to which any of the Company `s assets is subject. 19. ARBITRATION. 19.1 Any controversy or claim arising out or relating to this Agreement, or the breach hereof, whether involving remedies at law or in equity, or arising out of or relating to the rights, duties or obligations of the Company or of EXECUTIVE shall be settled by binding arbitration conducted in San Diego County, California, or in such other location as the parties may agree, in accordance with, and by an arbitrator appointed pursuant to, the National Rules for the - 16Resolution of Employment Disputes of the American Arbitration Association ("AAA") in effect at the time, and the judgment upon the award rendered pursuant thereto shall be in writing and may be entered in any court having jurisdiction, and all rights or remedies of the Company and of the EXECUTIVE to the contrary are hereby expressly waived. The AAA's administrative fees and the costs of the arbitrator shall be borne by the Company. [SIGNATURE PAGE FOLLOWS] - 17IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written. THE COMPANY: EXECUTIVE: CRICKET COMMUNICATIONS, INC. /s/ S. Douglas Hutcheson By: /s/ Leonard C. Stephens Name: Leonard C. Stephens Title: Senior Vice President, Human Resources THE PARENT: LEAP WIRELESS INTERNATIONAL, INC. By: /s/ Leonard C. Stephens Name: Leonard C. Stephens Title: Senior Vice President, Human Resources

- 18EXHIBIT A
AWARDS UNDER THE LEAP WIRELESS INTERNATIONAL, INC. 2004 STOCK OPTION, RESTRICTED STOCK AND DEFERRED STOCK UNIT PLAN 1. Restricted Stock Awards: Award of 90,000 shares of the Parent's Common Stock, par value $.0001 per share ("Parent Common Stock"), at a purchase price of $.0001 per share, subject to vesting conditions and repurchase and transfer restrictions set forth in Exhibit 1 A-1 attached hereto. Award of 9,487 shares of Parent Common Stock, at a purchase price of $.0001 per share, subject to vesting conditions and

2. Stock Option Grants:

repurchase and transfer restrictions set forth in Exhibit A-4 attached hereto. Grant of option to purchase 85,106 shares of Parent Common Stock, at an exercise price of $26.55 per share, subject to vesting and exercisability conditions set forth in Exhibit A-2 attached hereto.

Grant of option to purchase 75,901 shares of Parent Common Stock, at an exercise price of $26.35 per share, subject to vesting and exercisability conditions set forth in Exhibit A- 5 attached hereto.
3. Deferred Stock Unit Award: Award of 30,000 shares of Deferred Stock Units, at a purchase price of $.0001 per share, fully vested and subject to deferred purchase conditions set forth in Exhibit A-3 attached hereto.

- 19ATTACHMENT A-1 LEAP WIRELESS INTERNATIONAL, INC. 2004 STOCK OPTION, RESTRICTED STOCK AND DEFERRED STOCK UNIT PLAN RESTRICTED STOCK AWARD GRANT NOTICE AND RESTRICTED STOCK AWARD AGREEMENT

Leap Wireless International, Inc. (the "COMPANY"), pursuant to its 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN"), hereby grants to the holder listed below ("HOLDER"), the right to purchase the number of shares of the Company's Common Stock set forth below (the "SHARES") at the purchase price set forth below. This Restricted Stock award is subject to all of the terms and conditions as set forth herein and in the Restricted Stock Award Agreement attached hereto as Exhibit A (the "RESTRICTED STOCK AGREEMENT") and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Restricted Stock Agreement. HOLDER: Stewart D. Hutcheson GRANT DATE: ______________, 2005 PURCHASE PRICE PER SHARE: $0.0001 per share
TOTAL NUMBER OF SHARES OF RESTRICTED STOCK: VESTING SCHEDULE: [__________] The Shares shall be released from the Company's Repurchase Option set forth in Section 3.1 of the Restricted Stock Agreement on the dates and in the percentages indicated in Exhibit B to this Grant Notice.

By his or her signature and the Company's signature below, Holder agrees to be bound by the terms and conditions of the Plan, the Restricted Stock Agreement and this Grant Notice. Holder has reviewed the Restricted Stock Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Restricted Stock Agreement and the Plan. Holder hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan, this Grant Notice or the Restricted Stock Agreement. If Holder is married, his or her spouse has signed the Consent of Spouse attached to this Grant Notice as Exhibit C. LEAP WIRELESS INTERNATIONAL, INC. HOLDER: By: _________________________________ By: __________________________________ Print Name: _________________________ Print Name: Stewart D. Hutcheson Title: ______________________________ Title: _______________________________ Address: 10307 Pacific Center Court Address: _____________________________ San Diego, California _____________________________ 92121

EXHIBIT A TO RESTRICTED STOCK AWARD GRANT NOTICE RESTRICTED STOCK AWARD AGREEMENT

Pursuant to the Restricted Stock Award Grant Notice ("GRANT NOTICE") to which this Restricted Stock Award Agreement (this "AGREEMENT") is attached, Leap Wireless International, Inc. (the "COMPANY") has granted to Holder the right to purchase the number of shares of Restricted Stock under the Company's 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN") indicated in the Grant Notice. ARTICLE I GENERAL 1.1 Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.
1.2 Incorporation of Terms of Plan. The Shares are subject to the terms and conditions of the Plan which are incorporated herein by reference. ARTICLE II GRANT OF RESTRICTED STOCK

2.1 Grant of Restricted Stock. In consideration of Holder's past and/or continued employment with or service to the Company or its Subsidiaries and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the "GRANT DATE"), the Company irrevocably grants to Holder the right to purchase the number of shares of Common Stock set forth in the Grant Notice (the "SHARES"), upon the terms and conditions set forth in the Plan and this Agreement. 2.2 Purchase Price. The purchase price of the Shares shall be as set forth in the Grant Notice, without commission or other charge. The payment of the purchase price shall be paid by cash or check. 2.3 Issuance of Shares. The issuance of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution of this Agreement by the parties or on such other date as the Company and Holder shall agree (the "ISSUANCE DATE"). Subject to the provisions of Article IV below, on the Issuance Date, the Company shall issue the Shares (which shall be issued in Holder's name). 2.4 Conditions to Issuance of Stock Certificates. The Shares, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such Shares shall be fully paid and nonassessable. The Company - 1shall not be required to issue or deliver any Shares prior to fulfillment of all of the following conditions: (a) The admission of such Shares to listing on all stock exchanges on which such Common Stock is then listed; and (b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; and (c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and (d) The lapse of such reasonable period of time following the Issuance Date as the Administrator may from time to time establish for reasons of administrative convenience; and (e) The receipt by the Company of full payment for such Shares, including payment of any applicable withholding tax, which in the discretion of the Administrator may be in the form of consideration used by Holder to pay for such Shares, subject to Section 10.4 of the Plan. 2.5 Rights as Stockholder. Except as otherwise provided herein, upon delivery of the Shares to the escrow holder pursuant to Article IV, Holder shall have all the rights of a stockholder with respect to said Shares, subject to the restrictions herein, including the right to vote the Shares and to receive all dividends or other distributions paid or made with respect to the Shares; provided, however, that any and all cash dividends paid on such Shares and any and all shares of Common Stock, capital stock or other securities received by or distributed to Holder with respect to the Shares as a result of any stock dividend stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company shall also be subject to the Repurchase Option (as defined in Section 3.1 below) and the restrictions on transfer in Section 3.4 below until such restrictions on the underlying Shares lapse or are removed pursuant

to this Agreement. ARTICLE III RESTRICTIONS ON SHARES 3.1 Repurchase Option. Subject to the provisions of Section 3.2 below, if Holder has a Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable, before all of the Shares are released from the Company's Repurchase Option (as defined below), the Company shall, upon the date of such Termination (as reasonably fixed and determined by the Company), have an irrevocable, exclusive option, but not the obligation, for a period of sixty (60) days, commencing ninety (90) days after the date Holder has a Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable, to repurchase all or any portion of the Unreleased Shares (as defined below in Section 3.3) at such - 2time (the "Repurchase Option") at the original cash purchase price per share (the "Repurchase Price"). The Repurchase Option shall lapse and terminate one hundred fifty (150) days after Holder has a Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable. The Repurchase Option shall be exercisable by the Company by written notice to Holder or Holder's executor (with a copy to the escrow agent appointed pursuant to Section 4.1 below) and shall be exercisable, at the Company's option, by delivery to Holder or Holder's executor with such notice of a check in the amount of the Repurchase Price times the number of Shares to be repurchased (the "Aggregate Repurchase Price"). Upon delivery of such notice and the payment of the Aggregate Repurchase Price, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Shares being repurchased by the Company. In the event the Company repurchases any Shares under this Section 3.1, any dividends or other distributions paid on such Shares and held by the escrow agent pursuant to Section 4.1 and the Joint Escrow Instructions shall be promptly paid by the escrow agent to the Company. 3.2 Release of Shares from Repurchase Restriction. The Shares shall be released from the Company's Repurchase Option as indicated in Exhibit B to the Grant Notice. Any of the Shares released from the Company's Repurchase Option shall thereupon be released from the restrictions on transfer under Section 3.4. In the event any of the Shares are released from the Company's Repurchase Option, any dividends or other distributions paid on such Shares and held by the escrow agent pursuant to Section 4.1 and the Joint Escrow Instructions shall be promptly paid by the escrow agent to the Holder. 3.3 Unreleased Shares. Any of the Shares which, from time to time, have not yet been released from the Company's Repurchase Option are referred to herein as "Unreleased Shares." 3.4 Restrictions on Transfer. Unless otherwise permitted by the Administrator pursuant to the Plan, no Unreleased Shares or any dividends or other distributions thereon or any interest or right therein or part thereof, shall be liable for the debts, contracts or engagements of the Holder or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect. ARTICLE IV ESCROW OF SHARES 4.1 Escrow of Shares. To insure the availability for delivery of Holder's Unreleased Shares upon repurchase by the Company pursuant to the Repurchase Option under Section 3.1, Holder hereby appoints the Secretary of the Company, or any other person designated by the Administrator as escrow agent, as his or her attorney- in- fact to assign and transfer unto the Company, such Unreleased Shares, if any, repurchased by the Company pursuant to the Repurchase Option pursuant to Section 3.1 and any dividends or other distributions thereon, and - 3shall, upon execution of this Agreement, deliver and deposit with the Secretary of the Company, or such other person designated by the Administrator, any share certificates representing the Unreleased Shares, together with the stock assignment duly endorsed in blank, attached to the Grant Notice as Exhibit D to the Grant Notice. The Unreleased Shares and stock assignment shall be held by the Secretary of the Company, or such other person designated by the Administrator, in escrow, pursuant to the Joint Escrow Instructions of the Company and Holder attached as Exhibit E to the Grant Notice, until the Company exercises its Repurchase Option as provided in Section 3.1, until such Unreleased Shares are released from the Company's Repurchase Option, or until such time as this Agreement no longer is in effect. Upon release of the Unreleased Shares, the escrow agent shall deliver to Holder the certificate or certificates representing

such Shares in the escrow agent's possession belonging to Holder in accordance with the terms of the Joint Escrow Instructions attached as Exhibit E to the Grant Notice, and the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless retain such certificate or certificates as escrow agent if so required pursuant to other restrictions imposed pursuant to this Agreement. If the Shares are held in book entry form, then such entry will reflect that the Shares are subject to the restrictions of this Agreement. If any dividends or other distributions are paid on the Unreleased Shares held by the escrow agent pursuant to this Section 4.1 and the Joint Escrow Instructions, such dividends or other distributions shall also be subject to the restrictions set forth in this Agreement and held in escrow pending release of the Unreleased Shares with respect to which such dividends or other distributions were paid from the Company's Repurchase Option. 4.2 Transfer of Repurchased Shares. Holder hereby authorizes and directs the Secretary of the Company, or such other person designated by the Administrator, to transfer the Unreleased Shares as to which the Repurchase Option has been exercised from Holder to the Company. 4.3 No Liability for Actions in Connection with Escrow. The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of its judgment. ARTICLE V OTHER PROVISIONS 5.1 Adjustment for Stock Split. In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company, the Administrator shall make appropriate and equitable adjustments in the Unreleased Shares subject to the Repurchase Option and the number of Shares, consistent with any adjustment under Section 10.3 of the Plan. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Shares, to any and all shares of capital stock or other securities which may be issued in respect of, in exchange for, or in substitution of the Shares, and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. 5.2 Taxes. Holder has reviewed with Holder's own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by the - 4Grant Notice and this Agreement. Holder is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Holder understands that Holder (and not the Company) shall be responsible for Holder's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. Holder understands that Holder will recognize ordinary income for federal income tax purposes under Section 83 of the Code. In this context, "restriction" includes the right of the Company to repurchase the Shares pursuant to its Repurchase Option set forth in Section 3.1. Holder understands that Holder may elect to be taxed for federal income tax purposes at the time the Shares are purchased rather than as and when the Repurchase Option lapses by filing an election under Section 83(b) of the Code with the Internal Revenue Service within thirty (30) days from the date of purchase. A form of election under Section 83(b) of the Code is attached to the Grant Notice as Exhibit F. HOLDER ACKNOWLEDGES THAT IT IS HOLDER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b), EVEN IF HOLDER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HOLDER'S BEHALF 5.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Holder is subject to Section 16 of the Exchange Act, the Plan, the Shares and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b- 3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 5.4 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon Holder, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Shares. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement.

5.5 Restrictive Legends and Stop- Transfer Orders. (a) Any share certificate(s) evidencing the Shares issued hereunder shall be endorsed with the following legend and any other legend required by any applicable federal and state securities laws: THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF REPURCHASE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY - 5AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. (b) Holder agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. (c) The Company shall not be required: (i) to transfer on its books any shares of Common Stock that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such shares of Common Stock or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred. 5.6 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to Holder shall be addressed to Holder at the address given beneath Holder's signature on the Grant Notice. By a notice given pursuant to this Section 5.6, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 5.7 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 5.8 Governing Law; Severability. This Agreement shall be administered, interpreted and enforced under the laws of the State of Delaware without regard to conflicts of laws thereof. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable. 5.9 Conformity to Securities Laws. Holder acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Shares are to be issued, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 5.10 Amendments. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Holder and by a duly authorized representative of the Company. 5.11 No Employment Rights. If Holder is an Employee, nothing in the Plan or this Agreement shall confer upon Holder any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its - 6Subsidiaries, which are expressly reserved, to discharge Holder at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company and Holder. 5.12 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and his or her heirs, executors, administrators, successors and assigns. - 7EXHIBIT B

TO RESTRICTED STOCK AWARD GRANT NOTICE VESTING PROVISIONS Capitalized terms used in this Exhibit B and not defined below shall have the meanings given them in the Agreement to which this Exhibit B is attached.

1. Time- Based Vesting. Subject to any accelerated vesting pursuant to paragraphs 2, 3 and 4 below, the Unreleased Shares shall be released from the Company's Repurchase Option in their entirety on the third anniversary of the Grant Date, if the Holder is an Employee, Director or Consultant on such date. 2. Performance- Based Accelerated Vesting. If the Company's EBITDA (as defined below) and the Company's Net Adds (as defined below) both equal or exceed the respective Achievement Threshold amounts for 2005 as set forth in paragraph (a) below and/or both equal or exceed the respective Achievement Threshold amounts for 2006 as set forth in paragraph (b) below, then a certain percentage of the Unreleased Shares shall be released in accordance with the provisions of paragraphs (a) and (b) below; provided, however, that no Unreleased Shares shall be released pursuant to paragraphs (a) or (b) below if either the Company's EBITDA or Net Adds do not at least equal the Achievement Threshold amount for the applicable year. (a) Fiscal Year 2005. If the Company's EBITDA (as defined below) and Net Adds (as defined below) for the Fiscal Year 2005 equal or exceed the EBITDA and Net Adds Achievement Thresholds (as set forth below), then a number of the Unreleased Shares shall be released from the Company's Repurchase Option on the applicable Performance Vesting Effective Date equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Restricted Stock subject to the Award (as shown in the Grant Notice). 2005 PERFORMANCE- BASED VESTING SCHEDULE
Threshold [***] 10% 2005 Net Adds Target [***] 12.5% Maximum [***] 15%

2005 EBITDA (in thousands)

Threshold [***]

Target [***] Maximum [***]

12.5% 15%

20% 22.5%

22.5% 30%

*** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 1The percentage of Unreleased Shares which shall be released from the Company's Repurchase Option if performance is between the Achievement Threshold amount and the Achievement Target amount, or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. (b) Fiscal Year 2006. If the Company's EBITDA (as defined below) and Net Adds (as defined below) for Fiscal Year 2006 equal or exceed the EBITDA and Net Add Achievement Thresholds (as set forth below), then a number of the Unreleased Shares shall be released from the Company's Repurchase Option on the applicable Performance Vesting Effective Date equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Restricted Stock subject to the Award (as shown in the Grant Notice).
2006 Net Adds Threshold Target [***] [***] 10% 12.5% Maximum [***] 15%

2006 EBITDA (in thousands)

Threshold [***]

Target [***] Maximum [***]

12.5% 15%

20% 22.5%

22.5% 30%

The percentage of Unreleased Shares which shall be released from the Company's Repurchase Option if performance is between the Achievement Threshold amount and the Achievement Target amount, or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. (c) Definition of EBITDA. For purposes of this Exhibit B, the term "EBITDA" for a Fiscal Year means the Company's consolidated net income or loss for such period before extraordinary items and before the cumulative effect of any change in accounting principles plus (a) the following to the extent deducted in calculating such consolidated net *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 2income or loss: (i) consolidated interest expense, (ii) all income tax expense deducted in arriving at such consolidated net income or loss, (iii) depreciation and amortization expense, (iv) non- cash impairment of assets (tangible and intangible) and related non- cash charges, (v) charges and expenses related to stock based compensation awards, (vi) net non- cash reorganization expenses and charges, (vii) non- cash dividends or other distributions made with respect to qualified preferred stock as contemplated by the Credit Agreement negotiated among the Company, Cricket Communications Inc., the administrative agent identified therein and others posted to IntraLinks on December 23, 2004 and (viii) other nonrecurring expenses reducing such consolidated net income or loss which do not represent a cash item in such period or any future period (including losses attributable to the sale of assets other than in the ordinary course of business) and minus (b) the following to the extent included in calculating such consolidated net income or loss: (i) income tax credits for such period, (ii) all gains arising in relation to the sale of assets other than in the ordinary course of business and (iii) all noncash items increasing such consolidated net income or loss for such period. (d) Definition of Net Adds. For purposes of this Exhibit B, the term "NET ADDS" means, with respect to any Fiscal Year, "end of period customers" on the last day of such Fiscal Year less "end of period customers" on the last day of the preceding Fiscal Year. If the Company adopts a pre- paid card based service offering, the Administrator shall, in its discretion, equitably adjust the Net Adds Achievement Levels set forth in paragraphs (a) and (b) to reflect the Company's changed scope of operations. (e) Adjustments for Future Changes in the Company's Business. The EBITDA Achievement Levels and Net Adds Achievement Levels set forth in paragraphs (a) and (b) are designed to be measured against the Company's performance in its existing thirty- nine (39) markets. If the Company commences operations in any new markets, or ceases to operate in any existing market, the Administrator shall, in its discretion, equitably adjust the EBITDA Achievement Levels and/or the Net Adds Achievement Levels to reflect the Company's changed scope of operations. (f) Release of Shares Cumulative; Continued Service Condition. The release of Unreleased Shares from the Company's Repurchase Option under paragraphs (a) and (b) shall be cumulative. Except as otherwise provided in subparagraph 2(i), Unreleased Shares shall only be released from the Company's Repurchase Option pursuant to this paragraph 2 if Holder is an Employee, Director or Consultant of the Company or any of its Subsidiaries on the applicable Performance Vesting Effective Date. (g) Definition of Fiscal Year. For purposes of this Exhibit B, the term "FISCAL YEAR" means the Company's fiscal year ending December 31. (h) Definition of Performance Vesting Effective Date. For purposes of this Exhibit B, the term "PERFORMANCE VESTING EFFECTIVE DATE" means, with respect to the release from the Company's Repurchase Option of Unreleased Shares to occur upon the attainment of EBITDA and Net Adds Achievement Levels for 2005 or 2006, as applicable, the date of the public announcement by the Company of EBITDA or Net Adds, as applicable, for the relevant Fiscal Year, but in no event shall the Company make such public announcement later than the date on which the Company files its Form 10- K for the relevant Fiscal Year. - 3(i) Minimum Vesting for Fiscal Year 2006. Notwithstanding the other provisions of this paragraph 2 (other than subparagraph 2(j)), if the Holder is an Employee, Director or Consultant on December 31, 2005, then the minimum number of Unreleased Shares that shall be released from the Company's Repurchase Option under this subparagraph 2 on the Performance Vesting Effective Date for Fiscal Year 2006 (with respect to EBITDA and Net Adds performance for Fiscal Year 2006) shall be twenty percent (20%) of the total number of shares of Restricted Stock subject to the Award (as shown in the Grant Notice). (j) Termination of Performance- Based Vesting. Notwithstanding the foregoing provisions of this paragraph 2, no Unreleased Shares shall be released from the Company's Repurchase Option under this paragraph 2 on or after the date of occurrence of a Change in Control. 3. Change in Control Accelerated Vesting.

(a) Change in Control prior to January 1, 2006. In the event of a Change in Control prior to January 1, 2006, (i) if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, then fifty percent (50%) of the Unreleased Shares shall be released from the Company's Repurchase Option, and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, then an additional fifty percent (50%) of the Unreleased Shares shall be released from the Company's Repurchase Option, and (iii) if the Holder is an Employee, Director or Consultant on the second anniversary of the date of the occurrence of such Change in Control, then any remaining Unreleased Shares shall be released from the Company's Repurchase Option. (b) Change in Control during 2006. In the event of a Change in Control during 2006, (i) if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, then seventy- five percent (75%) of the Unreleased Shares shall be released from the Company's Repurchase Option, and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, then the remaining Unreleased Shares shall be released from the Company's Repurchase Option. (c) Change in Control on or after January 1, 2007. In the event of a Change in Control on or after January 1, 2007, if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, then eighty- five percent (85%) of the Unreleased Shares shall be released from the Company's Repurchase Option and (ii) if the Holder is an Employee, Director or Consultant on the first anniversary of the date of occurrence of such change in Control, then any then remaining Unreleased Shares shall be released from the Company's Repurchase Option. (d) Termination of Employment in the Event of a Change in Control. In the event of a Change in Control, if Holder has a Termination of Employment by reason of discharge by the Company other than for Cause (as defined below), or by reason of resignation by Holder for Good Reason (as defined below), during the period commencing ninety (90) days prior to such Change in Control and ending twelve (12) months after such Change in Control, then (i) if the Change in Control occurs prior to January 1, 2006, twenty- five percent (25%) of the Unreleased Shares shall be released form the Company's Repurchase Option and (ii) if the - 4Change in Control occurs on or after January 1, 2006, the remaining Unreleased Shares shall be released from the Company's Repurchase Option, in each case, on the date of Holder's Termination of Employment (or, if later, immediately prior to the date of the occurrence of such Change in Control). 4. Accelerated Vesting in the Event of Termination of Employment. (a) Accelerated Vesting in the Event of Termination of Employment by the Company Other than for Cause or by Holder for Good Reason After February 28, 2006. In the event of Holder's Termination of Employment by reason of discharge by the Company other than for Cause, or by reason of resignation by the Holder for Good Reason after February 28, 2006, (i) if the Holder, upon written request of the Company and reasonable advance notice, agrees to provide, and does provide, consulting services to the Company (or to the Parent at the direction of the Company, or both) for up to five (5) days a month for up to a one (1) year period for a fee of $1,500 per day, the remaining Unreleased Shares shall be released from the Company's Repurchase Option on the last day of the one year period, or (ii) such remaining Unreleased Shares shall otherwise be released from the Company's Repurchase Option on the third anniversary of the Grant Date. The Company and the Holder shall mutually use their best efforts to schedule the date or dates on which the Holder will provide the requested consulting services so as not to prevent the Holder from being gainfully employed by a subsequent employer, and shall be arranged so as to reasonably accommodate Holder's vacation or other personal affairs. (b) Definitions of Cause and Good Reason. For purposes of this Exhibit B, the terms "CAUSE" and "GOOD REASON" shall have the meanings given to such terms in that certain Amended and Restated Executive Employment Agreement dated as of January 10, 2005, by and between Holder, the Company and Cricket Communications, Inc., as amended from time to time (the "EMPLOYMENT AGREEMENT"). (c) Condition to Release of Shares. The release of Unreleased Shares from the Company's Repurchase Option pursuant to this paragraph 4 shall be conditioned on the Holder's delivery to the Company of an executed General Release in accordance with Section 5.9 of the Employment Agreement and the Holder's non- revocation of such General Release during the time period for such revocation set forth therein. 5. Limit on Release of Shares. In no event will more than 100% of the Unreleased Shares be released from the Company's Repurchase Option pursuant to the provisions of this Exhibit B. 6. Confidentiality. Holder agrees to keep the EBITDA and Net Adds achievement levels set forth in this Exhibit B confidential and not to disclose such thresholds to any third party without the prior written consent of the Company. - 5ATTACHMENT B- 1

METHODOLOGY FOR LINEAR INTERPOLATION

Threshold [***] Threshold 10% [***] Target [***] Maximum [***] 12.5% 15% 2005 Net Adds Target [***] 12.5% Maximum [***] 15%

2005 EBITDA (in thousands)

20% 22.5%

22.5% 30%

The EBITDA amounts in the following examples are shown in thousands. Example 1: 2005 EBITDA: [***] 2005 Net Adds: [***]

PROBLEM: The net adds performance falls exactly on a specified payout range, but performance in EBITDA falls somewhere in- between the schedule. SOLUTION: Start with the net adds payout column and use straight- line interpolation to determine the final payout. PAYOUT CALCULATION: Net additions of [***] dictate a payout of 12.5% for threshold EBITDA performance and 20% for target EBITDA performance. Since EBITDA performance ([***]) is halfway between THRESHOLD and TARGET performance ([***] and [***]), the actual payout should be halfway between the scheduled payouts of 12.5% and 20%. Thus the payout is (1/2)*(20%- 12.5%)+12.5% - Payout = 16.25% Example 2: - 2005 EBITDA: [***] - 2005 Net Adds: [***] *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 6PROBLEM: Neither the net adds performance nor the EBITDA performance fall exactly on a specified payout. SOLUTION: Use straight line interpolation for both measures. Starting with either measure will yield the same result. PAYOUT CALCULATION: EBITDA performance ([***]) is halfway between THRESHOLD and TARGET performance ([***]and [***]), so we can interpolate an EBITDA- based payout schedule by finding the halfway point at each defined level of Net Adds. At [***] net adds, the EBITDA- based payout would be halfway between 10% and 12.5%. At [***] net adds, the EBITDA- based payout would be halfway between 12.5% and 20%. At [***] net adds, the EBITDA- based payout would be halfway between 15% and 22.5%. Thus the interpolated, EBITDA- based payout schedule looks like this:
Threshold [***] 11.25% (midpoint of 10% and 12.5%) 2005 Net Adds Target [***] 16.25% (midpoint of 12.5% and 20%) Maximum [***] 18.75% (midpoint of 15% and 22.5%)

2005 EBITDA

Actual [***] (midpoint of [***]and [***])

To determine the actual payout given this range, we interpolate a payout at [***] net adds based on the scheduled payouts at [***] and [***]. First we determine where [***] lies in the range of [***] to [***]. The length of the range is [***] [***] = [***] net adds. [***] is [***] above the range minimum ([***] - [***] = [***]). So the actual performance of [***] net adds falls 1/3 of the way between [***] net adds (target) and [***] net adds (maximum). This means the actual payout must fall 1/3 of the way between 16.25% and 18.75%. Thus the payout is (1/3)*(18.75%- 16.25%)+16.25% - Payout = 17.08%

*** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 7EXHIBIT C TO RESTRICTED STOCK AWARD GRANT NOTICE CONSENT OF SPOUSE

I, [________________________], spouse of Stewart D. Hutcheson, have read and approve the foregoing Agreement. In consideration of issuing to my spouse the shares of the common stock of Leap Wireless International, Inc. set forth in the Agreement, I hereby appoint my spouse as my attorney- in- fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares of the common stock of Leap Wireless International, Inc. issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement. Dated: [_______________],2005 Signature of Spouse - 1EXHIBIT D TO RESTRICTED STOCK AWARD GRANT NOTICE STOCK ASSIGNMENT

FOR VALUE RECEIVED, the undersigned, Stewart D. Hutcheson, hereby sells, assigns and transfers unto LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation, [_______] shares of the Common Stock of LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation, standing in its name of the books of said corporation represented by Certificate No. [____] herewith and do hereby irrevocably constitute and appoint [____________________] to transfer the said stock on the books of the within named corporation with full power of substitution in the premises. This Stock Assignment may be used only in accordance with the Restricted Stock Award Agreement between LEAP WIRELESS INTERNATIONAL, INC. and the undersigned dated [___________],2005. Dated: _______________, ____ Stewart D. Hutcheson INSTRUCTIONS: Please do not fill in the blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise its "Repurchase Option," as set forth in the Restricted Stock Award Agreement, without requiring additional signatures on the part of Holder. - 1EXHIBIT E TO RESTRICTED STOCK AWARD GRANT NOTICE JOINT ESCROW INSTRUCTIONS ________________, 2005 Secretary Leap Wireless International, Inc. 10307 Pacific Center Court San Diego, California 92121 Ladies and Gentlemen:

As escrow agent (the "ESCROW AGENT") for both Leap Wireless International, Inc., a Delaware corporation (the "COMPANY"), and the undersigned recipient of stock of the Company (the "HOLDER"), you are hereby authorized and directed to hold in escrow the documents delivered to you pursuant to the terms of that certain Restricted Stock Award Agreement ("AGREEMENT") between the Company and the undersigned (the "Escrow"), including the stock certificate and the Assignment in Blank, in accordance with the following instructions: 1. In the event the Company and/or any assignee of the Company (referred to collectively for convenience herein as the "COMPANY") exercises the Company's Repurchase Option as defined in the Agreement), the Company shall give to the Holder and you a written notice specifying the number of shares of stock to be purchased, the purchase price and the time

for a closing hereunder at the principal office of the Company. The Holder and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice. 2. As of the date of closing of the repurchase indicated in such notice, you are directed (a) to date the stock assignments necessary for the repurchase and transfer in question, (b) to fill in the number of shares being repurchased and transferred, and (c) to deliver the same, together with the certificate evidencing the shares of stock to be repurchased and transferred, to the Company or its assignee. 3. Holder irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and substitutions to said shares as defined in the Agreement. Holder does hereby irrevocably constitute and appoint you as Holder's attorney- in- fact and agent for the term of this escrow to execute with respect to such securities all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any required applications for consent to, or notice of transfer of, the securities. Subject to the provisions of this paragraph and the Agreement, Holder shall exercise all rights and privileges of a stockholder of the Company while the stock is held by you. - 14. Upon written request of Holder, but no more than once per calendar month, unless the Company's Repurchase Option has been exercised, you will deliver to Holder a certificate or certificates representing so many shares of stock as are not then subject to the Repurchase Option. Within one hundred twenty (120) days after any voluntary or involuntary termination of Holder's services to the Company for any or no reason, you will deliver to Holder a certificate or certificates representing the aggregate number of shares held or issued pursuant to the Agreement and not repurchased pursuant to the Repurchase Option set forth in Section 3.1 of the Agreement. 5. If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Holder, you shall deliver all of the same to the Holder and shall be discharged of all further obligations hereunder. 6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto. 7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney- in- fact for Holder while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith. 8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction. 9. You shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder. 10. You shall not be liable for the expiration of any rights under any applicable state, federal or local statute of limitations or similar statute or regulation with respect to these Joint Escrow Instructions or any documents deposited with you. 11. You shall be entitled to employ such legal counsel and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. The Company will reimburse you for any reasonable attorneys' fees with respect thereto. - 212. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be an officer or agent of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company shall appoint a successor Escrow Agent. 13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments. 14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such disputes shall have been settled either by mutual written

agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings. 15. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to the Holder or you shall be addressed to the address given beneath Holder's and your signatures on the signature page to this Agreement. By a notice given pursuant to this Section 15, any party may hereafter designate a different address for notices to be given to that party. Any notice, which is required to be given to Holder, shall, if the Holder is then deceased, be given to Holder's designated beneficiary, if any by written notice under this Section 15. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly obtained by the United States Postal Service. 16. By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement. 17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. 18. These Joint Escrow Instructions shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to conflicts of law thereof. (Signature Page Follows) - 3IN WITNESS WHEREOF, the parties have executed these Joint Escrow Instructions as of the date first written above. Very truly yours, LEAP WIRELESS INTERNATIONAL, INC. By: ___________________________________ Name: Title: Address: 10307 Pacific Center Court San Diego, California 92121 HOLDER:
________________________________________ Stewart D. Hutcheson Address _______________________________ _______________________________ ESCROW AGENT: By: ________________________________ Robert Irving, Secretary, Leap Wireless International, Inc. Address: 10307 Pacific Center Court San Diego, California 92121 -4-

EXHIBIT F TO RESTRICTED STOCK AWARD GRANT NOTICE FORM OF 83(B) ELECTION AND INSTRUCTIONS

These instructions are provided to assist you if you choose to make an election under Section 83(b) of the Internal Revenue Code, as amended, with respect to the shares of common stock, par value $0.0001, of Leap Wireless International, Inc. transferred to you. PLEASE CONSULT WITH YOUR PERSONAL TAX ADVISOR AS TO WHETHER AN ELECTION OF THIS NATURE WILL BE IN YOUR BEST INTERESTS IN LIGHT OF YOUR PERSONAL TAX SITUATION. The executed original of the Section 83(b) election must be filed with the Internal Revenue Service not later than 30 days after the date the shares were transferred to you. PLEASE NOTE: There is no remedy for failure to file on time. The steps outlined below should be followed to ensure the election is mailed and filed correctly and in a timely manner. ALSO, PLEASE NOTE: If you make the Section 83(b) election, the election is irrevocable.

1. Complete Section 83(b) election form (attached as Attachment 1) and make four (4) copies of the signed election form. (Your spouse, if any, should sign Section 83(b) election form as well.) 2. Prepare the cover letter to the Internal Revenue Service (sample letter attached as Attachment 2). 3. Send the cover letter with the originally executed Section 83(b) election form and one (1) copy via certified mail, return receipt requested to the Internal Revenue Service at the address of the Internal Revenue Service where you file your personal tax returns. We suggest that you have the package date- stamped at the post office. The post office will provide you with a white certified receipt that includes a dated postmark. Enclose a self- addressed, stamped envelope so that the Internal Revenue Service may return a date- stamped copy to you. However, your postmarked receipt is your proof of having timely filed the Section 83(b) election if you do not receive confirmation from the Internal Revenue Service. 4. One (1) copy must be sent to Leap Wireless International, Inc. for its records and one (1) copy must be attached to your federal income tax return for the applicable calendar year. 5. Retain the Internal Revenue Service file stamped copy (when returned) for your records. Please consult your personal tax advisor for the address of the office of the Internal Revenue Service to which you should mail your election form. - 1ATTACHMENT 1 TO EXHIBIT F ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(B)

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer's receipt of shares (the "Shares") of Common Stock, par value $0.0001 per share, of Leap Wireless International, Inc., a Delaware corporation (the "Company").
1. The name, address and taxpayer identification number of the undersigned taxpayer are: Stewart D. Hutcheson _____________________ _____________________ SSN: The name, address and taxpayer identification number of the Taxpayer's spouse are (complete if applicable): _____________________ _____________________ _____________________ SSN: Description of the property with respect to which the election is being made: __________________(_____) shares of Common Stock, par value $0.0001 per share, of the Company.

2.

3. The date on which the property was transferred was _________, 200_. The taxable year to which this election relates is calendar year 200_. 4. Nature of restrictions to which the property is subject: The Shares are subject to repurchase at their original purchase price if unvested as of the date of termination of employment, directorship or consultancy with the Company. 5. The fair market value at the time of transfer (determined without regard to any lapse restrictions, as defined in Treasury Regulation Section 1.83- 3(a)) of the Shares was $___________ per Share. 6. The amount paid by the taxpayer for Shares was $0.0001 per share. 7. A copy of this statement has been furnished to the Company. - 1Dated: _____________, 200_. Taxpayer Signature ________________________ The undersigned spouse of Taxpayer joins in this election. (Complete if applicable). Dated: _____________, 200_. Spouse's Signature ________________________ Signature(s) Notarized by:

- 2ATTACHMENT 2 TO EXHIBIT F SAMPLE COVER LETTER TO INTERNAL REVENUE SERVICE

__________________, 200_ VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED Internal Revenue Service [Address where taxpayer files returns]

Re: Election under Section 83(b) of the Internal Revenue Code of 1986 Taxpayer:________________________________________________________________ Taxpayer's Social Security Number:_______________________________________ Taxpayer's Spouse:_______________________________________________________ Taxpayer's Spouse's Social Security Number:______________________________ Ladies and Gentlemen: Enclosed please find an original and one copy of an Election under Section 83(b) of the Internal Revenue Code of 1986, as amended, being made by the taxpayer referenced above. Please acknowledge receipt of the enclosed materials by stamping the enclosed copy of the Election and returning it to me in the self- addressed stamped envelope provided herewith. Very truly yours, Stewart D. Hutcheson Enclosures cc: Leap Wireless International, Inc. - 1ATTACHMENT A-2 LEAP WIRELESS INTERNATIONAL, INC. 2004 STOCK OPTION, RESTRICTED STOCK AND DEFERRED STOCK UNIT PLAN

STOCK OPTION GRANT NOTICE AND NON- QUALIFIED STOCK OPTION AGREEMENT Leap Wireless International, Inc. (the "COMPANY"), pursuant to its 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "Plan"), hereby grants to the holder listed below ("HOLDER"), an option to purchase the number of shares of the Company's Common Stock set forth below (the "OPTION"). This Option is subject to all of the terms and conditions as set forth herein and in the Non- Qualified Stock Option Agreement attached hereto as Exhibit A (the "STOCK OPTION AGREEMENT") and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Stock Option Agreement.
HOLDER: GRANT DATE: EXERCISE PRICE PER SHARE: TOTAL NUMBER OF SHARES SUBJECT TO THE OPTION: EXPIRATION DATE: TYPE OF OPTION: Stewart D. Hutcheson _________________, 2005 $___________ per share [_____] __________________, 2015 This Option is a Non-Qualified Stock Option and is not an incentive stock option within the meaning of Section 422 of the Code. The shares of Common Stock subject to the Option (rounded down to the next whole number of shares) shall vest and become exercisable on the dates and in the percentages indicated in Exhibit B to this Grant Notice.

VESTING SCHEDULE:

By his or her signature and the Company's signature below, Holder agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement and this Grant Notice. Holder has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan. Holder hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any

questions arising under the Plan or the Option.

LEAP WIRELESS INTERNATIONAL, INC. By:_____________________________ Print Name:_____________________ Title:__________________________ Address: 10307 Pacific Center Court San Diego, California 92121 HOLDER: By:__________________________________ Print Name: Stewart D. Hutcheson Title:_______________________________ Address:_____________________________ _____________________________

EXHIBIT A TO STOCK OPTION GRANT NOTICE NON- QUALIFIED STOCK OPTION AGREEMENT Pursuant to the Stock Option Grant Notice ("GRANT NOTICE") to which this Non- Qualified Stock Option Agreement (this "AGREEMENT") is attached, Leap Wireless International, Inc. (the "COMPANY") has granted to Holder an option under the Company's 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN") to purchase the number of shares of Common Stock indicated in the Grant Notice. ARTICLE I GENERAL 1.1 Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.
1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference. ARTICLE II GRANT OF OPTION

2.1 Grant of Option. In consideration of Holder's past and/or continued employment with or service to the Company or its Subsidiaries and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the "GRANT DATE"), the Company irrevocably grants to Holder the Option to purchase any part or all of an aggregate of the number of shares of Common Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement. The Option shall be a Non- Qualified Stock Option and shall not be an incentive stock option within the meaning of Section 422 of the Code. 2.2 Purchase Price. The purchase price of the shares of Common Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge. ARTICLE III PERIOD OF EXERCISABILITY 3.1 Commencement of Exercisability. (a) Subject to Sections 3.3 and 5.8, the Option shall become vested and exercisable in such amounts and at such times as are set forth in Exhibit B to the Grant Notice. (b) No portion of the Option which has not become vested and exercisable at Termination of Employment, Termination of Directorship or Termination of Consultancy, as - 1applicable, shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and Holder. 3.2 Duration of Exercisability. The installments provided for in the vesting schedule set forth in Exhibit B to the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in Exhibit B to the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3.
3.3 Expiration of Option. (a) The Option may not be exercised to any extent by anyone after

the first to occur of the following events: (i) The expiration of ten (10) years from the Grant Date; or

(ii) The expiration of ninety (90) days following the date of Holder's Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable (or, if later, with respect to any shares of Common Stock that become exercisable pursuant to subparagraph 2(j) or subparagraph 4(a) of Exhibit B hereto, ninety (90) days following the date such shares become exercisable), unless such termination occurs by reason of Holder's death or Disability (as defined below) or the Holder's termination by the Company for Cause (as defined in Exhibit B hereto); or (iii) The expiration of one (1) year following the date of Holder's Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable, by reason of Holder's death or Disability; or (iv) The date of Termination of Employment, Termination of Directorship or Termination of Consultancy for Cause (as defined in Exhibit B hereto). (b) For purposes of this Agreement, "Disability" means permanent and total disability within the meaning of Section 22(e)(3) of the Code. ARTICLE IV EXERCISE OF OPTION 4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(b) and 5.2(c), during the lifetime of Holder, only Holder may exercise the Option or any portion thereof. After the death of Holder, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Holder's personal representative or by any person empowered to do so under the deceased Holder's will or under the then applicable laws of descent and distribution. 4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3. - 24.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company or the Secretary's office of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3: (a) An Exercise Notice in writing signed by Holder or any other person then entitled to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator. Such notice shall be substantially in the form attached as Exhibit C to the Grant Notice (or such other form as is prescribed by the Administrator); and (b) Subject to Section 6.2(d) of the Plan: (i) Full payment (in cash or by check) for the shares with respect to which the Option or portion thereof is exercised; or (ii) With the consent of the Administrator, such payment may be made, in whole or in part, through the delivery of shares of Common Stock which have been owned by Holder for at least six (6) months, duly endorsed for transfer to the Company with a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof; or (iii) To the extent permitted under applicable laws, through the delivery of a notice that Holder has placed a market sell order with a broker with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided, that payment of such proceeds is made to the Company upon settlement of such sale; or (iv) With the consent of the Administrator, any combination of the consideration provided in the foregoing paragraphs (i), (ii) and (iii); and (c) A bona fide written representation and agreement, in such form as is prescribed by the Administrator, signed by Holder or the other person then entitled to exercise such Option or portion thereof, stating that the shares of Common Stock are being acquired for Holder's own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Securities Act and then applicable rules and regulations thereunder, and that Holder or other person then entitled to exercise such Option or portion thereof will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above. The Administrator may, in its absolute discretion, take whatever additional actions it deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other federal or state securities laws or regulations. Without limiting the generality of the foregoing, the Administrator may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on an

Option exercise does not violate the Securities Act, - 3and may issue stop- transfer orders covering such shares. Share certificates evidencing Common Stock issued on exercise of the Option shall bear an appropriate legend referring to the provisions of this subsection (c) and the agreements herein. The written representation and agreement referred to in the first sentence of this subsection (c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Securities Act, and such registration is then effective in respect of such shares; and (d) The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which in the discretion of the Administrator may be in the form of consideration used by Holder to pay for such shares under Section 4.3(b), subject to Section 10.4 of the Plan; and (e) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than Holder, appropriate proof of the right of such person or persons to exercise the Option. 4.4 Conditions to Issuance of Stock Certificates. The shares of Common Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any shares of Common Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: (a) The admission of such shares to listing on all stock exchanges on which such Common Stock is then listed; and (b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; and (c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and (d) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience; and (e) The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which in the discretion of the Administrator may be in the form of consideration used by the Holder to pay for such shares under Section 4.3(b), subject to Section 10.4 of the Plan. 4.5 Rights as Stockholder. Holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until such shares shall have been issued by the Company to such holder. - 4ARTICLE V OTHER PROVISIONS 5.1 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon Holder, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement. 5.2 Option Not Transferable. (a) Subject to Section 5.2(b), the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until the shares underlying the Option have been issued, and all restrictions applicable to such shares have lapsed. Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of Holder or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

(b) Notwithstanding any other provision in this Agreement, with the consent of the Administrator and to the extent the Option is not intended to qualify as an Incentive Stock Option, the Option may be transferred to one or more Permitted Transferees, subject to the terms and conditions set forth in Section 10.1 of the Plan. (c) Unless transferred to a Permitted Transferee in accordance with Section 5.2(b), during the lifetime of Holder, only Holder may exercise the Option or any portion thereof unless it has been disposed of pursuant to a DRO. After the death of Holder, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Holder's personal representative or by any person empowered to do so under the deceased Holder's will or under the then applicable laws of descent and distribution. 5.3 Restrictive Legends and Stop- Transfer Orders. (a) The share certificate or certificates evidencing the shares of Common Stock purchased hereunder shall be endorsed with any legends that may be required by state or federal securities laws. (b) Holder agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer - 5agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. (c) The Company shall not be required: (i) to transfer on its books any shares of Common Stock that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such shares of Common Stock or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred. 5.4 Shares to Be Reserved. The Company shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement. 5.5 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to Holder shall be addressed to Holder at the address given beneath Holder's signature on the Grant Notice. By a notice given pursuant to this Section 5.5, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to Holder shall, if Holder is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 by written notice under this Section 5.5. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 5.6 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 5.7 Governing Law; Severability. This Agreement shall be administered, interpreted and enforced under the laws of the State of Delaware without regard to conflicts of laws thereof. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable. 5.8 Conformity to Securities Laws. Holder acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 5.9 Amendments. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Holder or such other person as may be permitted to exercise the Option pursuant to Section 4.1 and by a duly authorized representative of the Company. - 65.10 No Employment Rights. If Holder is an Employee, nothing in the Plan or this Agreement shall confer upon Holder any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are expressly reserved, to discharge Holder at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company and Holder. 5.11 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and his or her heirs, executors,

administrators, successors and assigns. - 7EXHIBIT B TO STOCK OPTION GRANT NOTICE VESTING AND EXERCISABILITY PROVISIONS Capitalized terms used in this Exhibit B and not defined below shall have the meanings given them in the Grant Notice and the Stock Option Agreement. 1. Time- Based Vesting. Subject to any accelerated vesting and exercisability pursuant to paragraphs 2, 3 and 4 below, the shares of Common Stock subject to the Option shall vest and become exercisable in their entirety on the third anniversary of the Grant Date, if Holder is an Employee, Director or Consultant on that date. 2. Performance- Based Accelerated Vesting. If the Company's EBITDA (as defined below) and the Company's Net Adds (as defined below) both equal or exceed the respective Achievement Threshold amounts for 2005 as set forth in paragraph (a) below and/or both equal or exceed the Achievement Threshold amounts for 2006 as set forth in paragraph (b) below, then a certain percentage of the number of shares of Common Stock subject to the Option shall vest and become exercisable in accordance with the provisions of paragraphs (a) and (b) below; provided, however, that no shares subject to the Option shall vest and become exercisable pursuant to paragraphs (a) or (b) below, if either the Company's EBITDA or Net Adds do not at least equal the Achievement Threshold amount for the applicable year. (a) Fiscal Year 2005. If the Company's EBITDA (as defined below) and Net Adds (as defined below) for Fiscal Year 2005 equal or exceed the EBITDA and Net Adds Achievement Thresholds (as set forth below), then the Option shall vest and become exercisable as to that number of shares of Common Stock equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Common Stock subject to the Option (as set forth in the Grant Notice). 2005 PERFORMANCE- BASED VESTING SCHEDULE
2005 Net Adds Threshold Target Maximum [***] [***] [***] 2005 EBITDA (in thousands) Threshold [***] Target [***] Maximum [***] 10% 12.5% 15% 12.5% 20% 22.5% 15% 22.5% 30%

*** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 1The percentage for determining the number of shares of Common Stock that shall vest and become exercisable if performance is between the Achievement Threshold amount and the Achievement Target amount or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. (b) Fiscal Year 2006. If the Company's EBITDA and Net Adds for Fiscal Year 2006 equal or exceed the EBITDA and Net Adds Achievement Thresholds (as set forth below), then the Option shall vest and become exercisable as to that number of shares of Common Stock equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Common Stock subject to the Option (as set forth in the Grant Notice).
2006 Net Adds Threshold Target Maximum [***] [***] [***] 2006 EBITDA (in thousands) Threshold [***] Target [***] 10% 12.5% 12.5% 20% 15% 22.5%

Maximum [***]

15%

22.5%

30%

The percentage for determining the number of shares of Common Stock that shall vest and become exercisable if performance is between the Achievement Threshold amount and the Achievement Target amount or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. (c) Definition of EBITDA. For purposes of this Exhibit B, the term "EBITDA" for a Fiscal Year means the Company's consolidated net income or loss for such period before extraordinary items and before the cumulative effect of any change in accounting principles plus (a) the following to the extent deducted in calculating such consolidated net income or loss: (i) consolidated interest expense, (ii) all income tax expense deducted in arriving *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 2at such consolidated net income or loss, (iii) depreciation and amortization expense, (iv) non- cash impairment of assets (tangible and intangible) and related non- cash charges, (v) charges and expenses related to stock based compensation awards, (vi) net non- cash reorganization expenses and charges, (vii) non- cash dividends or other distributions made with respect to qualified preferred stock as contemplated by the Credit Agreement negotiated among the Company, Cricket Communications Inc., the administrative agent identified therein and others posted to IntraLinks on December 23, 2004 and (viii) other non- recurring expenses reducing such consolidated net income or loss which do not represent a cash item in such period or any future period (including losses attributable to the sale of assets other than in the ordinary course of business) and minus (b) the following to the extent included in calculating such consolidated net income or loss: (i) income tax credits for such period, (ii) all gains arising in relation to the sale of assets other than in the ordinary course of business and (iii) all non- cash items increasing such consolidated net income or loss for such period. (d) Definition of Net Adds. For purposes of this Exhibit B, the term "NET ADDS" means, with respect to any Fiscal Year, the Company's "end of period customers" on the last day of such Fiscal Year less "end of period customers" on the last day of the preceding Fiscal Year. If the Company adopts a pre- paid card based service offering, the Administrator shall, in its discretion, equitably adjust the Net Adds Achievement Levels set forth in paragraphs (a) and (b) to reflect the Company's changed scope of operations. (e) Adjustments for Future Changes in the Company's Business. The EBITDA Achievement Levels and Net Adds Achievement Levels set forth in paragraphs (a) and (b) are designed to be measured against the Company's performance in its existing thirty- nine (39) markets. If the Company commences operations in any new markets, or ceases to operate in any existing market, the Administrator shall, in its discretion, equitably adjust the EBITDA Achievement Levels and/or the Net Adds Achievement Levels to reflect the Company's changed scope of operations. (f) Accelerated Vesting Cumulative; Continued Service Condition. The vesting and exercisability of the Option as to shares of Common Stock under paragraphs 2(a) and 2(b) shall be cumulative. Except as otherwise provided in subparagraph 2(j), the Option shall vest and become exercisable as to shares of Common Stock pursuant to this paragraph 2 if Holder is an Employee, Director or Consultant of the Company or any of its Subsidiaries on the applicable Performance Vesting Effective Date. (g) Definition of Performance Vesting Effective Date. For purposes of this Exhibit B, the term "PERFORMANCE VESTING EFFECTIVE DATE" means, with respect to vesting and exercisability to occur upon the attainment of EBITDA and Net Adds Achievement Levels for 2005 or 2006, as applicable, the date of the public announcement by the Company of EBITDA or Net Adds, as applicable, for the relevant Fiscal Year, but in no event shall the Company make such public announcement later than the date on which the Company files its Form 10- K for the relevant Fiscal Year. (h) Definition of Fiscal Year. For purposes of this Exhibit B, the term "FISCAL YEAR" means the Company's fiscal year ending December 31. - 3(i) Termination of Performance- Based Vesting. Notwithstanding the foregoing provisions of this paragraph 2, the Option shall not vest and become exercisable as to any additional shares of Common Stock pursuant to performance- based accelerated vesting and exercisability under this paragraph 2 on or after the date of the occurrence of a Change in Control. (j) Minimum Vesting For Fiscal Year 2006. Notwithstanding the other provisions of this paragraph 2 (other than subparagraph 2(i)), if Holder is an Employee, Director or Consultant on December 31, 2005, then the minimum additional number of shares of Common Stock that shall vest and become exercisable under this paragraph 2 on the Performance Vesting Effective Date for Fiscal Year 2006 (with respect to EBITDA and Net Adds performance for Fiscal Year 2006)

shall equal twenty percent (20%) of the total number of shares of Common Stock subject to the Option (as set forth in the Grant Notice). 3. Change in Control Accelerated Vesting. (a) Change in Control prior to January 1, 2006. In the event of a Change in Control prior to January 1, 2006, (i) if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, the Option shall then vest and become exercisable as to a number of shares of Common Stock equal to fifty percent (50%) of the number of then unvested shares of Common Stock subject to the Option and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, the Option shall then vest and become exercisable as to an additional number of shares of Common Stock equal to fifty percent (50%) of the number of then unvested shares of Common Stock subject to the Option, and (iii) if Holder is an Employee, Director or Consultant on the second anniversary of the date of the occurrence of such Change in Control, the Option shall then vest and become exercisable as to the remaining unvested shares of Common Stock subject to the Option. (b) Change in Control during 2006. In the event of a Change in Control during 2006, (i) if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, the Option shall then vest and become exercisable as to a number of shares of Common Stock equal to seventy- five percent (75%) of the number of then unvested shares of Common Stock subject to the Option, and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, the Option shall then vest and become exercisable as to the remaining unvested shares of Common Stock subject to the Option. (c) Change in Control on or after January 1, 2007. In the event of a Change in Control on or after January 1, 2007, if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, the Option shall then vest and become exercisable as to a number of shares of Common Stock equal to eighty- five percent (85%) of the number of then unvested shares of Common Stock subject to the Option, and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, the Option shall then vest and become exercisable as to any then remaining unvested shares of Common Stock subject to the Option. - 4(d) Termination of Employment in the Event of a Change in Control. In the event of a Change in Control, if the Holder has a Termination of Employment by reason of discharge by the Company other than for Cause (as defined below), or by reason of resignation by Holder for Good Reason (as defined below), during the period commencing ninety (90) days prior to such Change in Control and ending twelve (12) months after such Change in Control, then (i) if the Change in Control occurs prior to January 1, 2006, twenty- five percent (25)% of the number of then unvested shares of Common Stock subject to the Option shall vest and become exercisable and (ii) if the change in Control occurs on or after January 1, 2006, the remaining unvested shares of Common Stock subject to the Option shall vest and become exercisable on the date of Holder's Termination of Employment (or, if later, immediately prior to the date of the occurrence of such Change in Control). 4. Accelerated Vesting in the Event of Termination of Employment. (a) Termination of Employment by the Company Other than for Cause or by Holder for Good Reason After February 28, 2006. In the event of Holder's Termination of Employment (without regard to any consulting services provided pursuant to this paragraph (a)) by reason of discharge by the Company other than for Cause, or by reason of resignation by the Holder for Good Reason after February 28, 2006, (i) if the Holder, upon written request of the Company and reasonable advance notice, agrees to provide, and does provide, consulting services to the Company (or to the Parent at the direction of the Company, or both) for up to five (5) days a month for up to a one (1) year period for a fee of $1,500 per day, the remaining unvested shares of Common Stock subject to the Option shall vest and become exercisable on the last day of the one (1) year period, or (ii) such remaining unvested shares of Common Stock subject to the Option shall otherwise vest and become exercisable on the third anniversary of the Grant Date. The Company and the Holder shall mutually use their best efforts to schedule the date or dates on which the Holder will provide the requested consulting services so as not to prevent the Holder from being gainfully employed by a subsequent employer, and shall be arranged so as to reasonably accommodate Holder's vacation or other personal affairs. (b) Definitions of Cause and Good Reason. For purposes of this Exhibit B, the terms "CAUSE" and "GOOD REASON" shall have the meanings given to such terms in that certain Amended and Restated Executive Employment Agreement dated as of January 10, 2005, by and among Holder, the Company and Cricket Communications, Inc., as amended from time to time (the "EMPLOYMENT AGREEMENT"). (c) Condition to Accelerated Vesting and Exercisability. The

accelerated vesting and exercisability of shares of Common Stock subject to the Option pursuant to this paragraph 4 shall be conditioned on the Holder's delivery to the Company of an executed General Release in accordance with Section 5.9 of the Employment Agreement and the Holder's non- revocation of such General Release during the time period for such revocation set forth therein. 5. Limit on Vesting. In no event will the Option become vested and/or exercisable for more than 100% of the shares of Common Stock subject to the Option pursuant to the provisions of this Exhibit B. - 56. Confidentiality. Holder agrees to keep the EBITDA and Net Adds achievement levels set forth in this Exhibit B confidential and not to disclose such thresholds to any third party without the prior written consent of the Company. - 6ATTACHMENT B- 1 METHODOLOGY FOR LINEAR INTERPOLATION
2005 Net Adds Threshold Target Maximum [***] [***] [***] 2005 EBITDA (in thousands) Threshold [***] Target [***] Maximum [***] 10% 12.5% 15% 12.5% 20% 22.5% 15% 22.5% 30%

The EBITDA amounts in the following examples are shown in thousands. Example 1: - 2005 EBITDA: [***] - 2005 Net Adds: [***]

PROBLEM: The net adds performance falls exactly on a specified payout range, but performance in EBITDA falls somewhere in- between the schedule. SOLUTION: Start with the net adds payout column and use straight- line interpolation to determine the final payout. PAYOUT CALCULATION: Net additions of [***] dictate a payout of 12.5% for threshold EBITDA performance and 20% for target EBITDA performance. Since EBITDA performance ([***]) is halfway between THRESHOLD and TARGET performance ([***] and [***]), the actual payout should be halfway between the scheduled payouts of 12.5% and 20%. Thus the payout is (1/2)*(20%- 12.5%)+12.5% - Payout = 16.25% Example 2: - 2005 EBITDA: [***] - 2005 Net Adds: [***] PROBLEM: Neither the net adds performance nor the EBITDA performance fall exactly on a specified payout. *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 7SOLUTION: Use straight line interpolation for both measures. Starting with either measure will yield the same result. PAYOUT CALCULATION: EBITDA performance ([***]) is halfway between THRESHOLD and TARGET performance ([***] and [***]), so we can interpolate an EBITDA- based payout schedule by finding the halfway point at each defined level of Net Adds. At [***] net adds, the EBITDA- based payout would be halfway between 10% and 12.5%. At [***] net adds, the EBITDA- based payout would be halfway between 12.5% and 20%. At [***] net adds, the EBITDA- based payout would be halfway between 15% and 22.5%. Thus the interpolated, EBITDA- based payout schedule looks like this:
Threshold [***] 11.25% 2005 Net Adds Target [***] 16.25% Maximum [***] 18.75%

Actual

2005 EBITDA

[***] (midpoint of [***] and [***])

(midpoint of 10% and 12.5%)

(midpoint of 12.5% and 20%)

(midpoint of 15% and 22.5%)

To determine the actual payout given this range, we interpolate a payout at [***] net adds based on the scheduled payouts at [***] and [***]. First we determine where [***] lies in the range of [***] to [***]. The length of the range is [***] [***] = [***] net adds. [***] is [***] above the range minimum ([***] - [***] = [***]). So the actual performance of [***] net adds falls 1/3 of the way between [***] net adds (target) and [***] net adds (maximum). This means the actual payout must fall 1/3 of the way between 16.25% and 18.75%. Thus the payout is (1/3)*(18.75%- 16.25%)+16.25% - Payout = 17.08% *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 8EXHIBIT C TO STOCK OPTION GRANT NOTICE FORM OF EXERCISE NOTICE

Effective as of today,______________ , ______________ the undersigned ("HOLDER") hereby elects to exercise Holder's option to purchase _______________ shares of the Common Stock (the "SHARES") of Leap Wireless International, Inc. (the "COMPANY") under and pursuant to the Leap Wireless International, Inc. 200__ Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "Plan") and the Stock Option Grant Notice and Non- Qualified Stock Option Agreement dated _______________, 2005, (the "OPTION AGREEMENT"). Capitalized terms used herein without definition shall have the meanings given in the Option Agreement.
GRANT DATE: NUMBER OF SHARES AS TO WHICH OPTION IS EXERCISED: EXERCISE PRICE PER SHARE: TOTAL EXERCISE PRICE: CERTIFICATE TO BE ISSUED IN NAME OF: CASH PAYMENT DELIVERED HEREWITH: ___________________________ , 2005 _____________________________________ $____________ $____________ _____________________________________ $______________ (Representing the full Exercise Price for the Shares, as well as any applicable withholding tax)

TYPE OF OPTION: The Option is a Non- Qualified Stock Option and is not an incentive stock option within the meaning of Section 422 of the Code. 1. Representations of Holder. Holder acknowledges that Holder has received, read and understood the Plan and the Option Agreement. Holder agrees to abide by and be bound by their terms and conditions. 2. Rights as Stockholder. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any' other rights as a stockholder shall exist with respect to Shares subject to the Option, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 10.3 of the Plan. 3. Tax Consultation. Holder understands that there are tax consequences to Holder as a result of Holder's purchase or disposition of the Shares. Holder represents that Holder has consulted with any tax consultants Holder deems advisable in connection with the purchase or disposition of the Shares and that Holder is not relying on the Company for any tax advice. 4. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan and the Option Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Holder with respect to the subject matter hereof. - 1ACCEPTED BY: LEAP WIRELESS INTERNATIONAL, INC. SUBMITTED BY HOLDER:

By:____________________________ By:_________________________________ Print Name:____________________ Print Name: _________________________ Title:_________________________ Address:_____________________________ - 2ATTACHMENT A-3 LEAP WIRELESS INTERNATIONAL, INC. 2004 STOCK OPTION, RESTRICTED STOCK AND DEFERRED STOCK UNIT PLAN DEFERRED STOCK UNIT AWARD GRANT NOTICE AND DEFERRED STOCK UNIT AWARD AGREEMENT

Leap Wireless International, Inc. (the "COMPANY"), pursuant to its 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN"), hereby grants to the holder listed below ("HOLDER"), the number of Deferred Stock Units set forth below (the "DEFERRED STOCK UNITS"). The Deferred Stock Units are subject to all of the terms and conditions as set forth herein and in the Deferred Stock Unit Award Agreement attached hereto as Exhibit A (the "DEFERRED STOCK UNIT AGREEMENT") and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Deferred Stock Unit Agreement.
HOLDER: GRANT DATE: PURCHASE PRICE PER DEFERRED STOCK UNIT: TOTAL NUMBER OF DEFERRED STOCK UNITS: Stewart D. Hutcheson ______________________, 2005 $0.0001 per share ______________________

VESTING SCHEDULE: DISTRIBUTION SCHEDULE:

The Deferred Stock Units shall be immediately vested. The Deferred Stock Units shall be distributable in accordance with Section 2.4 of the Deferred Stock Unit Agreement.

By his or her signature and the Company's signature below, Holder agrees to be bound by the terms and conditions of the Plan, the Deferred Stock Unit Agreement and this Grant Notice. Holder has reviewed the Deferred Stock Unit Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Deferred Stock Unit Agreement and the Plan. Holder hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan, this Grant Notice or the Deferred Stock Unit Agreement. LEAP WIRELESS INTERNATIONAL, HOLDER: INC. By:___________________________________ By:_________________________________ Print Name:___________________________ Print Name: Stewart D. Hutcheson Title:________________________________ Address:_____________________________ Address:10307 Pacific Center Court San Diego, California 92121
EXHIBIT A TO DEFERRED STOCK UNIT AWARD GRANT NOTICE DEFERRED STOCK UNIT AWARD AGREEMENT

Pursuant to the Deferred Stock Unit Award Grant Notice ("GRANT NOTICE") to which this Deferred Stock Unit Award Agreement (this "AGREEMENT") is attached, Leap Wireless International, Inc. (the "COMPANY") has granted to Holder the number of Deferred Stock Units under the Company's 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN") indicated in the Grant Notice. ARTICLE I GENERAL 1.1 Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice. 1.2 Incorporation of Terms of Plan. The Deferred Stock Units and the shares of Common Stock issuable with respect thereto are subject to the terms and conditions of the Plan which are incorporated herein by reference.

ARTICLE II GRANT, VESTING AND DISTRIBUTION OF DEFERRED STOCK UNITS 2.1 Grant of Deferred Stock Units. In consideration of Holder's past and/or continued employment with or service to the Company or its Subsidiaries and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the "GRANT DATE"), the Company irrevocably grants to Holder an award of the number of Deferred Stock Units indicated in the Grant Notice, subject to all of the terms and conditions in the Plan and this Agreement. A Deferred Stock Unit shall represent the right to purchase a share of Common Stock at the time the Deferred Stock Unit is available for distribution on a deferred basis in accordance with the terms and conditions of the Plan and this Agreement. 2.2 Purchase Price. The purchase price of the shares of Common Stock issuable pursuant to the Deferred Stock Units shall be as set forth in the Grant Notice, without commission or other charge. 2.3 Vesting of Deferred Stock Units. On the Grant Date, the Deferred Stock Units will be fully vested and shall not be subject to forfeiture. 2.4 Distribution of Deferred Stock Units. (a) Shares of Common Stock shall be available for purchase by Holder (or in the event of Holder's death, to his or her estate) with respect to such Holder's vested Deferred Stock Units granted to Holder pursuant to this Agreement, subject to the terms and provisions of - 1the Plan and this Agreement, for a period of thirty (30) days commencing following the earliest to occur of the following events (each, a "DISTRIBUTION Event"): (i) the date Holder has a Termination of Employment, Termination of Consultancy or Termination of Directorship, as applicable; (ii) the date immediately prior to a Change in Control; or (iii) August 15, 2005. (b) Following a Distribution Event, Holder may purchase the shares of Common Stock issuable with respect to his or her vested Deferred Stock Units by delivery to the Secretary of the Company or the Secretary's office of all of the following within thirty (30) days following the occurrence of the Distribution Event. (i) A Purchase Notice in writing signed by the Holder or any other person then entitled to purchase the shares of Common Stock issuable with respect to the vested Deferred Stock Units, stating that such shares of Common Stock are being purchased, such notice complying with all applicable rules established by the Administrator. Such notice shall be substantially in the form attached as Exhibit B to the Grant Notice (or such other form as is prescribed by the Administrator); and (ii) Full payment (in cash or by check) for the shares of Common Stock to be purchased by Holder, including payment of any applicable withholding tax, which in the discretion of the Administrator may be in any form permitted by Section 10.4 of the Plan; and (iii) A bona fide written representation and agreement, in such form as is prescribed by the Administrator, signed by Holder or the other person then entitled to purchase the shares of Common Stock issuable with respect to the vested Deferred Stock Units, stating that the shares of Common Stock are being acquired for Holder's own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Securities Act and then applicable rules and regulations thereunder, and that Holder or the other person then entitled to purchase the shares of Common Stock issuable with respect to the vested Deferred Stock Units will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above. The Administrator may, in its absolute discretion, take whatever additional actions it deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other federal or state securities laws or regulations. Without limiting the generality of the foregoing, the Administrator may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired by Holder does not violate the Securities Act, and may issue stop- transfer orders covering such shares. Share certificates evidencing Common Stock issued pursuant to the Deferred Stock Units shall bear an appropriate legend referring to the provisions of this subsection (c) and the agreements - 2herein.The written representation and agreement referred to in the first sentence of this subsection (c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Securities Act, and such registration is then effective in respect of such shares; and (iv) In the event the shares of Common Stock issuable with respect to the vested Deferred Stock Units shall be purchased

pursuant to this Section 2.4(b) by any person or persons other than Holder, appropriate proof of the right of such person or persons to purchase such shares of Common Stock. (c) Subject to the conditions of Sections 2.4(b) and 2.6, the Company shall distribute any shares of Common Stock purchased pursuant to this Section 2.4(b) in a single lump sum distribution. If Holder does not purchase the shares of Common Stock issuable with respect to any vested Deferred Stock Units within thirty (30) days following the occurrence of a Distribution Event, such Deferred Stock Units shall terminate. (d) All distributions shall be made by the Company in the form of whole shares of Common Stock (and cash in an amount equal to the value of any fractional Deferred Stock Unit, determined based on the Fair Market Value as of the distribution date). (e) Neither the time nor form of distribution of the Deferred Stock Units under this Agreement may be changed, except as may be provided under the Plan. (f) Notwithstanding the foregoing, shares of Common Stock shall be issuable pursuant to a Deferred Stock Unit at such times and upon such events as are specified in this Agreement only to the extent issuance under such terms will not cause the Deferred Stock Units or the shares of Common Stock issuable pursuant to the Deferred Stock Units to be includible in the gross income of Holder under Section 409A of the Code prior to such times or the occurrence of such events, as permitted by the Code and the regulations and other guidance thereunder. 2.5 Restrictions on Transfer. Unless otherwise permitted by the Administrator pursuant to the Plan, no Deferred Stock Units or shares of Common Stock issuable with respect thereto or any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Holder or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect. 2.6 Conditions to Issuance of Stock Certificates. The shares of Common Stock deliverable with respect to the Deferred Stock Units, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any shares of Common Stock with respect to the Deferred Stock Units prior to fulfillment of all of the following conditions: (a) The admission of such shares to listing on all stock exchanges on which such Common Stock is then listed; and - 3(b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; and (c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and (d) The lapse of such reasonable period of time following the applicable Distribution Event as the Administrator may from time to time establish for reasons of administrative convenience; and (e) The receipt by the Company of full payment for such shares, including payment of all amounts which, under federal, state or local tax law, the Company (or other employer corporation) is required to withhold upon issuance of such shares in accordance with Section 10.4 of the Plan. 2.7 Rights as Stockholder. Except as otherwise provided herein, the Holder shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares issuable pursuant to the Deferred Stock Units unless and until such shares shall have been issued by the Company to Holder. ARTICLE III OTHER PROVISIONS 3.1 Adjustment for Stock Split. In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company, appropriate adjustments shall be made in the Deferred Stock Units and/or the shares of Common Stock issuable with respect thereto, consistent with any adjustment under Section 10.3 of the Plan. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Deferred Stock Units and the shares of Common Stock issuable with respect thereto, to any and all shares of capital stock or other securities which may be issued in respect of, or in exchange for, in substitution of the Deferred Stock Units and the shares of Common Stock issuable with respect thereto, and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof.

3.2 Taxes. Notwithstanding anything to the contrary in this Agreement, the Company shall be entitled to require payment to the Company or any of its Subsidiaries in cash or deduction from other compensation payable to Holder of any sums required by federal, state or local tax law to be withheld with respect to the issuance or distribution of the Deferred Stock Units or shares of Common Stock issuable with respect thereto. The Company shall not be obligated to deliver any new certificate representing shares of Common Stock issuable with respect to the Deferred Stock Units to Holder or his legal representative unless and until Holder or his legal representative shall have paid or otherwise satisfied in full the amount of all federal, - 4state and local taxes applicable to the taxable income of Holder resulting from the grant of the Deferred Stock Units or the distribution of the shares of Common Stock issuable with respect thereto. 3.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Holder is subject to Section 16 of the Exchange Act, the Plan, the Deferred Stock Units and the shares of Common stock issuable with respect thereto and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b- 3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 3.4 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon Holder, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Deferred Stock Units. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement. 3.5 Restrictive Legends and Stop- Transfer Orders. (a) Any share certificate(s) evidencing the shares of Common Stock issued hereunder shall be endorsed with any legend required by any applicable federal and state securities laws. (b) Holder agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. (c) The Company shall not be required: (i) to transfer on its books any shares of Common Stock that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such shares of Common Stock or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred. 3.6 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to Holder shall be addressed to Holder at the address given beneath Holder's signature on the Grant Notice. By a notice given pursuant to this Section 3.6, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) - 5and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 3.7 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 3.8 Governing Law; Severability. This Agreement shall be administered, interpreted and enforced under the laws of the State of Delaware without regard to conflicts of laws thereof. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable. 3.9 Conformity to Securities Laws. Holder acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Deferred Stock Units are granted, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

3.10 Amendments. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Holder and by a duly authorized representative of the Company. 3.11 No Employment Rights. If Holder is an Employee, nothing in the Plan or this Agreement shall confer upon Holder any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are expressly reserved, to discharge Holder at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company and Holder. 3.12 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and his or her heirs, executors, administrators, successors and assigns. 3.13 Unfunded, Unsecured Obligations. The obligations of the Company under the Plan and this Agreement shall be unfunded and unsecured, and nothing contained herein shall be construed as providing for assets to be held in trust or escrow or any other form of segregation of the assets of the Company for the benefit of Holder or any other person. Holder shall have only the rights of a general, unsecured creditor of the Company with respect to the Deferred Stock Units, unless and until shares of Common Stock shall be distributed to Holder under the terms and conditions of this Agreement. - 6EXHIBIT B TO DEFERRED STOCK UNIT AWARD GRANT NOTICE FORM OF PURCHASE NOTICE

Effective as of today, ____________, _______, the undersigned ("Holder") hereby elects to purchase shares of the Common Stock (the "SHARES") of Leap Wireless International, Inc. (the "COMPANY") under and pursuant to the Leap Wireless International, Inc. 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN") and the Deferred Stock Unit Award Grant Notice and Deferred Stock Unit Award Agreement dated____________, _______, (the "AWARD AGREEMENT"). Capitalized terms used herein without definition shall have the meanings given in the Award Agreement.
GRANT DATE: NUMBER OF SHARES BEING PURCHASED: PURCHASE PRICE PER SHARE: TOTAL PURCHASE PRICE: CERTIFICATE TO BE ISSUED IN NAME OF: CASH PAYMENT DELIVERED HEREWITH: ___________________________ , 200__ _____________________________________ $____________ $____________ _____________________________________ $______________ (Representing the full Purchase Price for the Shares, as well as any applicable withholding tax)

1. Representations of Holder. Holder acknowledges that Holder has received, read and understood the Plan and the Award Agreement. Holder agrees to abide by and be bound by their terms and conditions. 2. Rights as Stockholder. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Shares, notwithstanding the delivery of this Purchase Notice. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 10.3 of the Plan. 3. Tax Consultation. Holder understands that there are tax consequences to Holder as a result of Holder's purchase or disposition of the Shares. Holder represents that Holder has consulted with any tax consultants Holder deems advisable in connection with the purchase or disposition of the Shares and that Holder is not relying on the Company for any tax advice. 4. Entire Agreement. The Plan and Award Agreement are incorporated herein by reference. This Purchase Notice, the Plan and the Award Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Holder with respect to the subject matter hereof. - 1ACCEPTED BY: LEAP WIRELESS INTERNATIONAL, INC. SUBMITTED BY HOLDER:

By:_________________________________ By:_________________________________ Print Name:__________________________ Print Name: Stewart D. Hutcheson Title:_______________________________ Address:_____________________________ - 2ATTACHMENT A-4 LEAP WIRELESS INTERNATIONAL, INC. 2004 STOCK OPTION, RESTRICTED STOCK AND DEFERRED STOCK UNIT PLAN RESTRICTED STOCK AWARD GRANT NOTICE AND RESTRICTED STOCK AWARD AGREEMENT

Leap Wireless International, Inc. (the "COMPANY"), pursuant to its 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN"), hereby grants to the holder listed below ("HOLDER"), the right to purchase the number of shares of the Company's Common Stock set forth below (the "SHARES") at the purchase price set forth below. This Restricted Stock award is subject to all of the terms and conditions as set forth herein and in the Restricted Stock Award Agreement attached hereto as Exhibit A (the "RESTRICTED STOCK AGREEMENT") and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Restricted Stock Agreement. HOLDER: Stewart D. Hutcheson GRANT DATE: ______________, 2005 PURCHASE PRICE PER SHARE: $0.0001 per share TOTAL NUMBER OF SHARES OF RESTRICTED STOCK: [__________] VESTING SCHEDULE: The Shares shall be released from the Company's Repurchase Option set forth in Section 3.1 of the Restricted Stock Agreement on the dates and in the percentages indicated in Exhibit B to this Grant Notice. By his or her signature and the Company's signature below, Holder agrees to be bound by the terms and conditions of the Plan, the Restricted Stock Agreement and this Grant Notice. Holder has reviewed the Restricted Stock Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Restricted Stock Agreement and the Plan. Holder hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan, this Grant Notice or the Restricted Stock Agreement. If Holder is married, his or her spouse has signed the Consent of Spouse attached to this Grant Notice as Exhibit C. LEAP WIRELESS INTERNATIONAL, HOLDER: INC. By: _______________________________ By: _______________________________ Print Name: _______________________ Print Name: Stewart D. Hutcheson Title: ____________________________ Title: ____________________________ Address: 10307 Pacific Center Court Address: ___________________________ San Diego, California 92121 ___________________________
EXHIBIT A TO RESTRICTED STOCK AWARD GRANT NOTICE RESTRICTED STOCK AWARD AGREEMENT

Pursuant to the Restricted Stock Award Grant Notice ("GRANT NOTICE") to which this Restricted Stock Award Agreement (this "AGREEMENT") is attached, Leap Wireless International, Inc. (the "COMPANY") has granted to Holder the right to purchase the number of shares of Restricted Stock under the Company's 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN") indicated in the Grant Notice. ARTICLE I

GENERAL 1.1 Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.
1.2 Incorporation of Terms of Plan. The Shares are subject to the terms and conditions of the Plan which are incorporated herein by reference. ARTICLE II GRANT OF RESTRICTED STOCK

2.1 Grant of Restricted Stock. In consideration of Holder's past and/or continued employment with or service to the Company or its Subsidiaries and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the "GRANT DATE"), the Company irrevocably grants to Holder the right to purchase the number of shares of Common Stock set forth in the Grant Notice (the "SHARES"), upon the terms and conditions set forth in the Plan and this Agreement. 2.2 Purchase Price. The purchase price of the Shares shall be as set forth in the Grant Notice, without commission or other charge. The payment of the purchase price shall be paid by cash or check. 2.3 Issuance of Shares. The issuance of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution of this Agreement by the parties or on such other date as the Company and Holder shall agree (the "ISSUANCE DATE"). Subject to the provisions of Article IV below, on the Issuance Date, the Company shall issue the Shares (which shall be issued in Holder's name). 2.4 Conditions to Issuance of Stock Certificates. The Shares, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such Shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any Shares prior to fulfillment of all of the following conditions: - 1(a) The admission of such Shares to listing on all stock exchanges on which such Common Stock is then listed; and (b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; and (c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and (d) The lapse of such reasonable period of time following the Issuance Date as the Administrator may from time to time establish for reasons of administrative convenience; and (e) The receipt by the Company of full payment for such Shares, including payment of any applicable withholding tax, which in the discretion of the Administrator may be in the form of consideration used by Holder to pay for such Shares, subject to Section 10.4 of the Plan. 2.5 Rights as Stockholder. Except as otherwise provided herein, upon delivery of the Shares to the escrow holder pursuant to Article IV, Holder shall have all the rights of a stockholder with respect to said Shares, subject to the restrictions herein, including the right to vote the Shares and to receive all dividends or other distributions paid or made with respect to the Shares; provided, however, that any and all cash dividends paid on such Shares and any and all shares of Common Stock, capital stock or other securities received by or distributed to Holder with respect to the Shares as a result of any stock dividend stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company shall also be subject to the Repurchase Option (as defined in Section 3.1 below) and the restrictions on transfer in Section 3.4 below until such restrictions on the underlying Shares lapse or are removed pursuant to this Agreement. ARTICLE III RESTRICTIONS ON SHARES 3.1 Repurchase Option. Subject to the provisions of Section 3.2 below, if Holder has a Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable, before all of the Shares are released from the Company's Repurchase Option (as defined below), the Company shall, upon the date of such Termination (as reasonably fixed and determined by the Company), have an irrevocable, exclusive option, but not the obligation, for a period of sixty (60) days, commencing ninety (90) days after the date Holder has a Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable, to repurchase all or any portion of the Unreleased Shares (as defined below in Section 3.3) at such time (the "Repurchase Option") at the original cash purchase price per share (the

"Repurchase Price"). The Repurchase Option shall lapse and terminate one hundred fifty (150) days after - 2Holder has a Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable. The Repurchase Option shall be exercisable by the Company by written notice to Holder or Holder's executor (with a copy to the escrow agent appointed pursuant to Section 4.1 below) and shall be exercisable, at the Company's option, by delivery to Holder or Holder's executor with such notice of a check in the amount of the Repurchase Price times the number of Shares to be repurchased (the "Aggregate Repurchase Price"). Upon delivery of such notice and the payment of the Aggregate Repurchase Price, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Shares being repurchased by the Company. In the event the Company repurchases any Shares under this Section 3.1, any dividends or other distributions paid on such Shares and held by the escrow agent pursuant to Section 4.1 and the Joint Escrow Instructions shall be promptly paid by the escrow agent to the Company. 3.2 Release of Shares from Repurchase Restriction. The Shares shall be released from the Company's Repurchase Option as indicated in Exhibit B to the Grant Notice. Any of the Shares released from the Company's Repurchase Option shall thereupon be released from the restrictions on transfer under Section 3.4. In the event any of the Shares are released from the Company's Repurchase Option, any dividends or other distributions paid on such Shares and held by the escrow agent pursuant to Section 4.1 and the Joint Escrow Instructions shall be promptly paid by the escrow agent to the Holder. 3.3 Unreleased Shares. Any of the Shares which, from time to time, have not yet been released from the Company's Repurchase Option are referred to herein as "Unreleased Shares." 3.4 Restrictions on Transfer. Unless otherwise permitted by the Administrator pursuant to the Plan, no Unreleased Shares or any dividends or other distributions thereon or any interest or right therein or part thereof, shall be liable for the debts, contracts or engagements of the Holder or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect. ARTICLE IV ESCROW OF SHARES 4.1 Escrow of Shares. To insure the availability for delivery of Holder's Unreleased Shares upon repurchase by the Company pursuant to the Repurchase Option under Section 3.1, Holder hereby appoints the Secretary of the Company, or any other person designated by the Administrator as escrow agent, as his or her attorney- in- fact to assign and transfer unto the Company, such Unreleased Shares, if any, repurchased by the Company pursuant to the Repurchase Option pursuant to Section 3.1 and any dividends or other distributions thereon, and shall, upon execution of this Agreement, deliver and deposit with the Secretary of the Company, or such other person designated by the Administrator, any share certificates representing the - 3Unreleased Shares, together with the stock assignment duly endorsed in blank, attached to the Grant Notice as Exhibit D to the Grant Notice. The Unreleased Shares and stock assignment shall be held by the Secretary of the Company, or such other person designated by the Administrator, in escrow, pursuant to the Joint Escrow Instructions of the Company and Holder attached as Exhibit E to the Grant Notice, until the Company exercises its Repurchase Option as provided in Section 3.1, until such Unreleased Shares are released from the Company's Repurchase Option, or until such time as this Agreement no longer is in effect. Upon release of the Unreleased Shares, the escrow agent shall deliver to Holder the certificate or certificates representing such Shares in the escrow agent's possession belonging to Holder in accordance with the terms of the Joint Escrow Instructions attached as Exhibit E to the Grant Notice, and the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless retain such certificate or certificates as escrow agent if so required pursuant to other restrictions imposed pursuant to this Agreement. If the Shares are held in book entry form, then such entry will reflect that the Shares are subject to the restrictions of this Agreement. If any dividends or other distributions are paid on the Unreleased Shares held by the escrow agent pursuant to this Section 4.1 and the Joint Escrow Instructions, such dividends or other distributions shall also be subject to the restrictions set forth in this Agreement and held in escrow pending release of the Unreleased Shares with respect to which such dividends or other distributions were paid from the Company's Repurchase Option. 4.2 Transfer of Repurchased Shares. Holder hereby authorizes and directs the Secretary of the Company, or such other person designated by the Administrator, to transfer the Unreleased Shares as to which the Repurchase Option has been exercised from Holder to the Company.

4.3 No Liability for Actions in Connection with Escrow. The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of its judgment. ARTICLE V OTHER PROVISIONS 5.1 Adjustment for Stock Split. In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification, or similar change in the capital structure of the Company, the Administrator shall make appropriate and equitable adjustments in the Unreleased Shares subject to the Repurchase Option and the number of Shares, consistent with any adjustment under Section 10.3 of the Plan. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to the Shares, to any and all shares of capital stock or other securities which may be issued in respect of, in exchange for, or in substitution of the Shares, and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. 5.2 Taxes. Holder has reviewed with Holder's own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by the Grant Notice and this Agreement. Holder is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Holder understands that - 4Holder (and not the Company) shall be responsible for Holder's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. Holder understands that Holder will recognize ordinary income for federal income tax purposes under Section 83 of the Code. In this context, "restriction" includes the right of the Company to repurchase the Shares pursuant to its Repurchase Option set forth in Section 3.1. Holder understands that Holder may elect to be taxed for federal income tax purposes at the time the Shares are purchased rather than as and when the Repurchase Option lapses by filing an election under Section 83(b) of the Code with the Internal Revenue Service within thirty (30) days from the date of purchase. A form of election under Section 83(b) of the Code is attached to the Grant Notice as Exhibit F. HOLDER ACKNOWLEDGES THAT IT IS HOLDER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO TIMELY FILE THE ELECTION UNDER SECTION 83(b), EVEN IF HOLDER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HOLDER'S BEHALF 5.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Holder is subject to Section 16 of the Exchange Act, the Plan, the Shares and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b- 3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule. 5.4 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon Holder, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Shares. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement. 5.5 Restrictive Legends and Stop- Transfer Orders. (a) Any share certificate(s) evidencing the Shares issued hereunder shall be endorsed with the following legend and any other legend required by any applicable federal and state securities laws: THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF REPURCHASE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. - 5(b) Holder agrees that, in order to ensure compliance with the

restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. (c) The Company shall not be required: (i) to transfer on its books any shares of Common Stock that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such shares of Common Stock or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred. 5.6 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to Holder shall be addressed to Holder at the address given beneath Holder's signature on the Grant Notice. By a notice given pursuant to this Section 5.6, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 5.7 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 5.8 Governing Law; Severability. This Agreement shall be administered, interpreted and enforced under the laws of the State of Delaware without regard to conflicts of laws thereof. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable. 5.9 Conformity to Securities Laws. Holder acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Shares are to be issued, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 5.10 Amendments. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Holder and by a duly authorized representative of the Company. 5.11 No Employment Rights. If Holder is an Employee, nothing in the Plan or this Agreement shall confer upon Holder any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are expressly reserved, to discharge Holder at any time for any reason - 6whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company and Holder. 5.12 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and his or her heirs, executors, administrators, successors and assigns. - 7EXHIBIT B TO RESTRICTED STOCK AWARD GRANT NOTICE VESTING PROVISIONS Capitalized terms used in this Exhibit B and not defined below shall have the meanings given them in the Agreement to which this Exhibit B is attached.

1. Time- Based Vesting. Subject to any accelerated vesting pursuant to paragraphs 2, 3 and 4 below, the Unreleased Shares shall be released from the Company's Repurchase Option in their entirety on December 31, 2008, if the Holder is an Employee, Director or Consultant on such date. 2. Performance- Based Accelerated Vesting. If the Company's EBITDA (as defined below) and the Company's Net Adds (as defined below) both equal or exceed the respective Achievement Threshold amounts for 2005 as set forth in paragraph (a) below and/or both equal or exceed the respective Achievement Threshold amounts for 2006 as set forth in paragraph (b) below and/or both equal or exceed the respective Achievement Threshold amounts for 2007 as set forth in paragraph (c) below, then a certain percentage of the Unreleased Shares shall be released in accordance with the provisions of paragraphs (a), (b) and (c) below; provided, however, that no Unreleased Shares shall be released pursuant to paragraphs (a), (b) or (c) below if either the Company's EBITDA or Net Adds do not at least equal the Achievement Threshold amount for the applicable year.

(a) Fiscal Year 2005. If the Company's EBITDA (as defined below) and Net Adds (as defined below) for the Fiscal Year 2005 equal or exceed the EBITDA and Net Adds Achievement Thresholds (as set forth below), then a number of the Unreleased Shares shall be released from the Company's Repurchase Option on the applicable Performance Vesting Effective Date equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Restricted Stock subject to the Award (as shown in the Grant Notice). 2005 PERFORMANCE- BASED VESTING SCHEDULE
Threshold [***] 10% 2005 Net Adds Target [***] 12.5% Maximum [***] 15%

2005

Threshold [***]

*** Certain information on this page has been omitted and filed separately with the Commission. Confindential treatment has been requested with respect to the omitted portions. - 1EBITDA (in thousands) Target [***] Maximum [***] 12.5% 15% 20% 22.5% 22.5% 30%

The percentage of Unreleased Shares which shall be released from the Company's Repurchase Option if performance is between the Achievement Threshold amount and the Achievement Target amount, or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. (b) Fiscal Year 2006. If the Company's EBITDA (as defined below) and Net Adds (as defined below) for Fiscal Year 2006 equal or exceed the EBITDA and Net Adds Achievement Thresholds (as set forth below), then a number of the Unreleased Shares shall be released from the Company's Repurchase Option on the applicable Performance Vesting Effective Date equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Restricted Stock subject to the Award (as shown in the Grant Notice).
Threshold [***] 10% -----12.5% 15% 2006 Net Adds Target Maximum [***] [***] 12.5% 15% ----20% 22.5% ----22.5% 30%

2006 EBITDA (in thousands)

Threshold [***] --------Target [***] Maximum [***]

The percentage of Unreleased Shares which shall be released from the Company's Repurchase Option if performance is between the Achievement Threshold amount and the Achievement Target amount, or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 2(c) Fiscal Year 2007. If the Company's EBITDA (as defined below) and Net Adds (as defined below) for Fiscal Year 2007 equal or exceed the EBITDA and Net Adds Achievement Thresholds (as set forth below), then a number of the Unreleased Shares shall be released from the Company's Repurchase Option on the applicable Performance Vesting

Effective Date equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Restricted Stock subject to the Award (as shown in the Grant Notice).
Threshold [***] 10% -----12.5% 15% 2007 Net Adds Target Maximum [***] [***] 12.5% 15% ----20% 22.5% -----22.5% 30%

2007 EBITDA (in thousands)

Threshold [***] --------Target [***] Maximum [***]

The percentage of Unreleased Shares which shall be released from the Company's Repurchase Option if performance is between the Achievement Threshold amount and the Achievement Target amount, or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. (d) Definition of EBITDA. For purposes of this Exhibit B, the term "EBITDA" for a Fiscal Year means the Company's consolidated net income or loss for such period before extraordinary items and before the cumulative effect of any change in accounting principles plus (a) the following to the extent deducted in calculating such consolidated net income or loss: (i) consolidated interest expense, (ii) all income tax expense deducted in arriving at such consolidated net income or loss, (iii) depreciation and amortization expense, (iv) non- cash impairment of assets (tangible and intangible) and related noncash charges, (v) charges and expenses related to stock based compensation awards, (vi) net non- cash reorganization expenses and charges, (vii) non- cash dividends or other distributions made with respect to qualified preferred stock as contemplated by the Credit Agreement negotiated among the Company, Cricket Communications Inc., the administrative agent identified therein and others posted to IntraLinks on December 23, 2004 and (viii) other non- recurring expenses reducing such consolidated net income or loss which do not represent a cash item in such period or any future period (including losses attributable to the sale of assets other than in the ordinary course of business) and minus (b) the following to the extent included in calculating such consolidated net *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 3income or loss: (i) income tax credits for such period, (ii) all gains arising in relation to the sale of assets other than in the ordinary course of business and (iii) all non- cash items increasing such consolidated net income or loss for such period. (e) Definition of Net Adds. For purposes of this Exhibit B, the term "NET ADDS" means, with respect to any Fiscal Year, "end of period customers" on the last day of such Fiscal Year less "end of period customers" on the last day of the preceding Fiscal Year. If the Company adopts a pre- paid card based service offering, the Administrator shall, in its discretion, equitably adjust the Net Adds Achievement Levels set forth in paragraphs (a), (b) and (c) to reflect the Company's changed scope of operations. (f) Adjustments for Future Changes in the Company's Business. The EBITDA Achievement Levels and Net Adds Achievement Levels set forth in paragraphs (a), (b) and (c) are designed to be measured against the Company's performance in its existing thirty- nine (39) markets. If the Company commences operations in any new markets, or ceases to operate in any existing market, the Administrator shall, in its discretion, equitably adjust the EBITDA Achievement Levels and/or the Net Adds Achievement Levels to reflect the Company's changed scope of operations. (g) Release of Shares Cumulative; Continued Service Condition. The release of Unreleased Shares from the Company's Repurchase Option under paragraphs (a), (b) and (c) shall be cumulative. Except as otherwise provided in subparagraph 2(j), Unreleased Shares shall only be released from the Company's Repurchase Option pursuant to this paragraph 2 if Holder is an Employee, Director or Consultant of the Company or any of its Subsidiaries on the applicable Performance Vesting Effective Date. (h) Definition of Fiscal Year. For purposes of this Exhibit B, the term "FISCAL YEAR" means the Company's fiscal year ending December 31. (i) Definition of Performance Vesting Effective Date. For purposes of this Exhibit B, the term "PERFORMANCE VESTING EFFECTIVE DATE" means, with respect to the release from the Company's Repurchase Option of Unreleased Shares to occur upon the attainment of EBITDA and Net Adds Achievement Levels for 2005, 2006 or 2007, as applicable, the date of the public announcement by the Company of EBITDA or Net Adds, as applicable, for the relevant Fiscal Year,

but in no event shall the Company make such public announcement later than the date on which the Company files its Form 10- K for the relevant Fiscal Year. (j) Minimum Vesting for Fiscal Year 2006. Notwithstanding the other provisions of this paragraph 2 (other than subparagraph 2(k)), if the Holder is an Employee, Director or Consultant on December 31, 2005, then the minimum number of Unreleased Shares that shall be released from the Company's Repurchase Option under this subparagraph 2 on the Performance Vesting Effective Date for Fiscal Year 2006 (with respect to EBITDA and Net Adds performance for Fiscal Year 2006) shall be twenty percent (20%) of the total number of shares of Restricted Stock subject to the Award (as shown in the Grant Notice). (k) Termination of Performance- Based Vesting. Notwithstanding the foregoing provisions of this paragraph 2, no Unreleased Shares shall be released from the - 4Company's Repurchase Option under this paragraph 2 on or after the date of occurrence of a Change in Control. 3. Change in Control Accelerated Vesting.

(a) Change in Control prior to January 1, 2006. In the event of a Change in Control prior to January 1, 2006, (i) if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, then fifty percent (50%) of the Unreleased Shares shall be released from the Company's Repurchase Option, and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, then an additional fifty percent (50%) of the Unreleased Shares shall be released from the Company's Repurchase Option, and (iii) if the Holder is an Employee, Director or Consultant on the second anniversary of the date of the occurrence of such Change in Control, then any remaining Unreleased Shares shall be released from the Company's Repurchase Option. (b) Change in Control during 2006. In the event of a Change in Control during 2006, (i) if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, then seventy- five percent (75%) of the Unreleased Shares shall be released from the Company's Repurchase Option, and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, then the remaining Unreleased Shares shall be released from the Company's Repurchase Option. (c) Change in Control on or after January 1, 2007. In the event of a Change in Control on or after January 1, 2007, if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, then eighty- five percent (85%) of the Unreleased Shares shall be released from the Company's Repurchase Option and (ii) if the Holder is an Employee, Director or Consultant on the first anniversary of the date of occurrence of such change in Control, then any then remaining Unreleased Shares shall be released from the Company's Repurchase Option. (d) Termination of Employment in the Event of a Change in Control. In the event of a Change in Control, if Holder has a Termination of Employment by reason of discharge by the Company other than for Cause (as defined below), or by reason of resignation by Holder for Good Reason (as defined below), during the period commencing ninety (90) days prior to such Change in Control and ending twelve (12) months after such Change in Control, then (i) if the Change in Control occurs prior to January 1, 2006, twenty- five percent (25%) of the Unreleased Shares shall be released form the Company's Repurchase Option and (ii) if the Change in Control occurs on or after January 1, 2006, the remaining Unreleased Shares shall be released from the Company's Repurchase Option, in each case, on the date of Holder's Termination of Employment (or, if later, immediately prior to the date of the occurrence of such Change in Control). 4. Accelerated Vesting in the Event of Termination of Employment. (a) Accelerated Vesting in the Event of Termination of Employment by the Company Other than for Cause or by Holder for Good Reason After February 28, 2006. In the event of Holder's Termination of Employment by reason of discharge by the Company other - 5than for Cause, or by reason of resignation by the Holder for Good Reason after February 28, 2006, (i) if the Holder, upon written request of the Company and reasonable advance notice, agrees to provide, and does provide, consulting services to the Company (or to the Parent at the direction of the Company, or both) for up to five (5) days a month for up to a one (1) year period for a fee of $1,500 per day, the remaining Unreleased Shares shall be released from the Company's Repurchase Option on the last day of the one year period, or (ii) such remaining Unreleased Shares shall otherwise be released from the Company's Repurchase Option on December 31, 2008. The Company and the Holder shall mutually use their best efforts to schedule the date or dates on which the Holder will provide the requested consulting services so as not to prevent the Holder from being gainfully employed by a subsequent employer, and shall be arranged so as to reasonably accommodate Holder's vacation or other personal affairs.

(b) Definitions of Cause and Good Reason. For purposes of this Exhibit B, the terms "CAUSE" and "GOOD REASON" shall have the meanings given to such terms in that certain Amended and Restated Executive Employment Agreement dated as of January 10, 2005, by and between Holder, the Company and Cricket Communications, Inc., as amended from time to time (the "EMPLOYMENT AGREEMENT"). (c) Condition to Release of Shares. The release of Unreleased Shares from the Company's Repurchase Option pursuant to this paragraph 4 shall be conditioned on the Holder's delivery to the Company of an executed General Release in accordance with Section 5.9 of the Employment Agreement and the Holder's non- revocation of such General Release during the time period for such revocation set forth therein. 5. Limit on Release of Shares. In no event will more than 100% of the Unreleased Shares be released from the Company's Repurchase Option pursuant to the provisions of this Exhibit B. 6. Confidentiality. Holder agrees to keep the EBITDA and Net Adds achievement levels set forth in this Exhibit B confidential and not to disclose such thresholds to any third party without the prior written consent of the Company. - 6ATTACHMENT B- 1 METHODOLOGY FOR LINEAR INTERPOLATION
2005 Net Adds Threshold Target [***] [***] 10% 12.5% -----12.5% 15% -----20% 22.5% Maximum [***] 15% -----22.5% 30%

2005 EBITDA (in thousands)

Threshold [***] --------Target [***] Maximum [***]

The EBITDA amounts in the following examples are shown in thousands. Example 1: - 2005 EBITDA: [***] - 2005 Net Adds: [***]

PROBLEM: The net adds performance falls exactly on a specified payout range, but performance in EBITDA falls somewhere in- between the schedule. SOLUTION: Start with the net adds payout column and use straight- line interpolation to determine the final payout. PAYOUT CALCULATION: Net additions of [***] dictate a payout of 12.5% for threshold EBITDA performance and 20% for target EBITDA performance. Since EBITDA performance ([***]) is halfway between THRESHOLD and TARGET performance ([***] and [***]), the actual payout should be halfway between the scheduled payouts of 12.5% and 20%. Thus the payout is (1/2)*(20%- 12.5%)+12.5% - Payout = 16.25% Example 2: - 2005 EBITDA: [***] - 2005 Net Adds: [***] *** Certain information on this page has been omitted and field separately with the Confindential treatment has been requested with respect to the omitted portions. - 7PROBLEM: Neither the net adds performance nor the EBITDA performance fall exactly on a specified payout. SOLUTION: Use straight line interpolation for both measures. Starting with either measure will yield the same result. PAYOUT CALCULATION: EBITDA performance ([***]) is halfway between THRESHOLD and TARGET performance ([***] and [***]), so we can interpolate an EBITDA- based payout schedule by finding the halfway point at each defined level of Net Adds. At [***] net adds, the EBITDA- based payout would be halfway between 10% and 12.5%. At [***] net adds, the EBITDA- based payout would be halfway between 12.5% and 20%. At [***] net adds, the EBITDA- based payout would be halfway between 15% and 22.5%. Thus the interpolated, EBITDA- based payout

schedule looks like this:

2005 Net Adds Threshold [***] 11.25% (midpoint of 10% and 12.5%) Target [***] 16.25% (midpoint of 12.5% and 20%) Maximum [***] 18.75% (midpoint of 15% and 22.5%)

2005 EBITDA

Actual [***] (midpoint of [***] and [***])

To determine the actual payout given this range, we interpolate a payout at [***] net adds based on the scheduled payouts at [***] and [***]. First we determine where [***] lies in the range of [***] to [***]. The length of the range is [***] [***] = [***] net adds. [***] is [***] above the range minimum ([***] - [***] = [***]). So the actual performance of [***] net adds falls 1/3 of the way between [***] net adds (target) and [***] net adds (maximum). This means the actual payout must fall 1/3 of the way between 16.25% and 18.75%. Thus the payout is (1/3)*(18.75%- 16.25%)+16.25% - Payout = 17.08% *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 8EXHIBIT C TO RESTRICTED STOCK AWARD GRANT NOTICE CONSENT OF SPOUSE

I, [________________________], spouse of Stewart D. Hutcheson, have read and approve the foregoing Agreement. In consideration of issuing to my spouse the shares of the common stock of Leap Wireless International, Inc. set forth in the Agreement, I hereby appoint my spouse as my attorney- in- fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares of the common stock of Leap Wireless International, Inc. issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement. Dated: [_______________], 2005 Signature of Spouse - 1EXHIBIT D TO RESTRICTED STOCK AWARD GRANT NOTICE STOCK ASSIGNMENT

FOR VALUE RECEIVED, the undersigned, Stewart D. Hutcheson, hereby sells, assigns and transfers unto LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation, [_______] shares of the Common Stock of LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation, standing in its name of the books of said corporation represented by Certificate No. [____] herewith and do hereby irrevocably constitute and appoint [____________________] to transfer the said stock on the books of the within named corporation with full power of substitution in the premises. This Stock Assignment may be used only in accordance with the Restricted Stock Award Agreement between LEAP WIRELESS INTERNATIONAL, INC. and the undersigned dated [___________], 2005. Dated: _______________, ____ Stewart D. Hutcheson INSTRUCTIONS: Please do not fill in the blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise its "Repurchase Option," as set forth in the Restricted Stock Award Agreement, without requiring additional signatures on the part of Holder. - 1EXHIBIT E

TO RESTRICTED STOCK AWARD GRANT NOTICE JOINT ESCROW INSTRUCTIONS ________________, 2005 Secretary Leap Wireless International, Inc. 10307 Pacific Center Court San Diego, California 92121 Ladies and Gentlemen:

As escrow agent (the "ESCROW AGENT") for both Leap Wireless International, Inc., a Delaware corporation (the "COMPANY"), and the undersigned recipient of stock of the Company (the "HOLDER"), you are hereby authorized and directed to hold in escrow the documents delivered to you pursuant to the terms of that certain Restricted Stock Award Agreement ("AGREEMENT") between the Company and the undersigned (the "Escrow"), including the stock certificate and the Assignment in Blank, in accordance with the following instructions: 1. In the event the Company and/or any assignee of the Company (referred to collectively for convenience herein as the "COMPANY") exercises the Company's Repurchase Option as defined in the Agreement), the Company shall give to the Holder and you a written notice specifying the number of shares of stock to be purchased, the purchase price and the time for a closing hereunder at the principal office of the Company. The Holder and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice. 2. As of the date of closing of the repurchase indicated in such notice, you are directed (a) to date the stock assignments necessary for the repurchase and transfer in question, (b) to fill in the number of shares being repurchased and transferred, and (c) to deliver the same, together with the certificate evidencing the shares of stock to be repurchased and transferred, to the Company or its assignee. 3. Holder irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and substitutions to said shares as defined in the Agreement. Holder does hereby irrevocably constitute and appoint you as Holder's attorney- in- fact and agent for the term of this escrow to execute with respect to such securities all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any required applications for consent to, or notice of transfer of, the securities. Subject to the provisions of this paragraph and the Agreement, Holder shall exercise all rights and privileges of a stockholder of the Company while the stock is held by you. - 14. Upon written request of Holder, but no more than once per calendar month, unless the Company's Repurchase Option has been exercised, you will deliver to Holder a certificate or certificates representing so many shares of stock as are not then subject to the Repurchase Option. Within one hundred twenty (120) days after any voluntary or involuntary termination of Holder's services to the Company for any or no reason, you will deliver to Holder a certificate or certificates representing the aggregate number of shares held or issued pursuant to the Agreement and not repurchased pursuant to the Repurchase Option set forth in Section 3.1 of the Agreement. 5. If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Holder, you shall deliver all of the same to the Holder and shall be discharged of all further obligations hereunder. 6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto. 7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney- in- fact for Holder while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith. 8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction. 9. You shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.

10. You shall not be liable for the expiration of any rights under any applicable state, federal or local statute of limitations or similar statute or regulation with respect to these Joint Escrow Instructions or any documents deposited with you. 11. You shall be entitled to employ such legal counsel and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. The Company will reimburse you for any reasonable attorneys' fees with respect thereto. - 212. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be an officer or agent of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company shall appoint a successor Escrow Agent. 13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments. 14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings. 15. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to the Holder or you shall be addressed to the address given beneath Holder's and your signatures on the signature page to this Agreement. By a notice given pursuant to this Section 15, any party may hereafter designate a different address for notices to be given to that party. Any notice, which is required to be given to Holder, shall, if the Holder is then deceased, be given to Holder's designated beneficiary, if any by written notice under this Section 15. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly obtained by the United States Postal Service. 16. By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement. 17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. 18. These Joint Escrow Instructions shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to conflicts of law thereof. (Signature Page Follows) - 3IN WITNESS WHEREOF, the parties have executed these Joint Escrow Instructions as of the date first written above. Very truly yours, LEAP WIRELESS INTERNATIONAL, INC. By:_________________________________ Name: Title: Address: 10307 Pacific Center Court San Diego, California 92121 HOLDER: Stewart D. Hutcheson Address _____________________________ ESCROW AGENT: By: _________________________ Robert Irving, Secretary, Leap Wireless International, Inc.

Address: 10307 Pacific Center Court San Diego, California 92121 - 4EXHIBIT F TO RESTRICTED STOCK AWARD GRANT NOTICE FORM OF 83(B) ELECTION AND INSTRUCTIONS

These instructions are provided to assist you if you choose to make an election under Section 83(b) of the Internal Revenue Code, as amended, with respect to the shares of common stock, par value $0.0001, of Leap Wireless International, Inc. transferred to you. PLEASE CONSULT WITH YOUR PERSONAL TAX ADVISOR AS TO WHETHER AN ELECTION OF THIS NATURE WILL BE IN YOUR BEST INTERESTS IN LIGHT OF YOUR PERSONAL TAX SITUATION. The executed original of the Section 83(b) election must be filed with the Internal Revenue Service not later than 30 days after the date the shares were transferred to you. PLEASE NOTE: There is no remedy for failure to file on time. The steps outlined below should be followed to ensure the election is mailed and filed correctly and in a timely manner. ALSO, PLEASE NOTE: If you make the Section 83(b) election, the election is irrevocable. 1. Complete Section 83(b) election form (attached as Attachment 1) and make four (4) copies of the signed election form. (Your spouse, if any, should sign Section 83(b) election form as well). 2. Prepare the cover letter to the Internal Revenue Service (sample letter attached as Attachment 2). 3. Send the cover letter with the originally executed Section 83(b) election form and one (1) copy via certified mail, return receipt requested to the Internal Revenue Service at the address of the Internal Revenue Service where you file your personal tax returns. We suggest that you have the package date- stamped at the post office. The post office will provide you with a white certified receipt that includes a dated postmark. Enclose a self- addressed, stamped envelope so that the Internal Revenue Service may return a date- stamped copy to you. However, your postmarked receipt is your proof of having timely filed the Section 83(b) election if you do not receive confirmation from the Internal Revenue Service. 4. One (1) copy must be sent to Leap Wireless International, Inc. for its records and one (1) copy must be attached to your federal income tax return for the applicable calendar year. 5. Retain the Internal Revenue Service file stamped copy (when returned) for your records. Please consult your personal tax advisor for the address of the office of the Internal Revenue Service to which you should mail your election form. - 1ATTACHMENT 1 TO EXHIBIT F ELECTION UNDER INTERNAL REVENUE CODE SECTION 83(B)

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer's receipt of shares (the "Shares") of Common Stock, par value $0.0001 per share, of Leap Wireless International, Inc., a Delaware corporation (the "Company").
1. The name, address and taxpayer identification number of the undersigned taxpayer are: Stewart D. Hutcheson ____________________________ ____________________________ SSN: The name, address and taxpayer identification number of the Taxpayer's spouse are (complete if applicable): ________________________ ________________________ ________________________ SSN: Description of the property with respect to which the election is being made: __________________(_____) shares of Common Stock, par value $0.0001 per share, of the Company.

2.

3. The date on which the property was transferred was _________, 200_. The taxable year to which this election relates is calendar year 200_. 4. Nature of restrictions to which the property is subject: The Shares are subject to repurchase at their original purchase price if unvested as of the date of termination of employment, directorship or consultancy with the Company. 5. The fair market value at the time of transfer (determined without regard to any lapse restrictions, as defined in Treasury Regulation Section 1.83- 3(a)) of the Shares was $___________ per Share. 6. The amount paid by the taxpayer for Shares was $0.0001 per share. 7. A copy of this statement has been furnished to the Company. - 1Dated: _____________, 200_. Taxpayer Signature ________________________ The undersigned spouse of Taxpayer joins in this election. (Complete if applicable). Dated: ______________, 200_. Spouse's Signature ________________________ Signature(s) Notarized by:

- 2ATTACHMENT 2 TO EXHIBIT F SAMPLE COVER LETTER TO INTERNAL REVENUE SERVICE __________________, 200_ VIA CERTIFIED MAIL RETURN RECEIPT REQUESTED Internal Revenue Service [Address where taxpayer files returns]

Re: Election under Section 83(b) of the Internal Revenue Code of 1986 Taxpayer:_________________________________________________________________ Taxpayer's Social Security Number:________________________________________ Taxpayer's Spouse:________________________________________________________ Taxpayer's Spouse's Social Security Number:_______________________________ Ladies and Gentlemen: Enclosed please find an original and one copy of an Election under Section 83(b) of the Internal Revenue Code of 1986, as amended, being made by the taxpayer referenced above. Please acknowledge receipt of the enclosed materials by stamping the enclosed copy of the Election and returning it to me in the self- addressed stamped envelope provided herewith. Very truly yours, Stewart D. Hutcheson Enclosures cc: Leap Wireless International, Inc. - 1ATTACHMENT A-5 LEAP WIRELESS INTERNATIONAL, INC. 2004 STOCK OPTION, RESTRICTED STOCK AND DEFERRED STOCK UNIT PLAN

STOCK OPTION GRANT NOTICE AND NON- QUALIFIED STOCK OPTION AGREEMENT Leap Wireless International, Inc. (the "COMPANY"), pursuant to its 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN"), hereby grants to the holder listed below ("HOLDER"), an option to purchase the number of shares of the Company's Common Stock set forth below (the "OPTION"). This Option is subject to all of the terms and conditions as set forth herein and in the Non- Qualified Stock Option Agreement attached hereto as Exhibit A (the "STOCK OPTION AGREEMENT") and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Stock Option Agreement.

HOLDER: Stewart D. Hutcheson GRANT DATE: _________________, 2005 EXERCISE PRICE PER SHARE: $___________ per share TOTAL NUMBER OF SHARES SUBJECT TO THE OPTION: [______]

EXPIRATION DATE: TYPE OF OPTION:

__________________, 2015 This Option is a Non-Qualified Stock Option and is not an incentive stock option within the meaning of Section 422 of the Code.

VESTING SCHEDULE: The shares of Common Stock subject to the Option (rounded down to the next whole number of shares) shall vest and become exercisable on the dates and in the percentages indicated in Exhibit B to this Grant Notice. By his or her signature and the Company's signature below, Holder agrees to be bound by the terms and conditions of the Plan, the Stock Option Agreement and this Grant Notice. Holder has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan. Holder hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator of the Plan upon any questions arising under the Plan or the Option. LEAP WIRELESS INTERNATIONAL, INC. HOLDER: By:__________________________________ By:____________________________________ Print Name:__________________________ Print Name: Stewart D. Hutcheson Title:_______________________________ Title:_________________________________ Address: 10307 Pacific Center Court Address:_______________________________ San Diego, California 92121 _______________________________ EXHIBIT A TO STOCK OPTION GRANT NOTICE NON- QUALIFIED STOCK OPTION AGREEMENT Pursuant to the Stock Option Grant Notice ("GRANT NOTICE") to which this Non- Qualified Stock Option Agreement (this "AGREEMENT") is attached, Leap Wireless International, Inc. (the "COMPANY") has granted to Holder an option under the Company's 2004 Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "PLAN") to purchase the number of shares of Common Stock indicated in the Grant Notice. ARTICLE I GENERAL 1.1 Defined Terms. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.
1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference. ARTICLE II GRANT OF OPTION

2.1 Grant of Option. In consideration of Holder's past and/or continued employment with or service to the Company or its Subsidiaries and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the "GRANT DATE"), the Company irrevocably grants to Holder the Option to purchase any part or all of an aggregate of the number of shares of Common Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement. The Option shall be a Non- Qualified Stock Option and shall not be an incentive stock option within the meaning of Section 422 of the Code. 2.2 Purchase Price. The purchase price of the shares of Common Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge. ARTICLE III

PERIOD OF EXERCISABILITY 3.1 Commencement of Exercisability. (a) Subject to Sections 3.3 and 5.8, the Option shall become vested and exercisable in such amounts and at such times as are set forth in Exhibit B to the Grant Notice. (b) No portion of the Option which has not become vested and exercisable at Termination of Employment, Termination of Directorship or Termination of Consultancy, as - 1applicable, shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and Holder. 3.2 Duration of Exercisability. The installments provided for in the vesting schedule set forth in Exhibit B to the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in Exhibit B to the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3.
3.3 Expiration of Option. (a) The Option may not be exercised to any extent by anyone after the first to occur of the following events: (i) The expiration of ten (10) years from the Grant Date; or

(ii) The expiration of ninety (90) days following the date of Holder's Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable (or, if later, with respect to any shares of Common Stock that become exercisable pursuant to subparagraph 2(k) or subparagraph 4(a) of Exhibit B hereto, ninety (90) days following the date such shares become exercisable), unless such termination occurs by reason of Holder's death or Disability (as defined below) or the Holder's termination by the Company for Cause (as defined in Exhibit B hereto); or (iii) The expiration of one (1) year following the date of Holder's Termination of Employment, Termination of Directorship or Termination of Consultancy, as applicable, by reason of Holder's death or Disability; or (iv) The date of Termination of Employment, Termination of Directorship or Termination of Consultancy for Cause (as defined in Exhibit B hereto). (b) For purposes of this Agreement, "Disability" means permanent and total disability within the meaning of Section 22(e)(3) of the Code. ARTICLE IV EXERCISE OF OPTION 4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(b) and 5.2(c), during the lifetime of Holder, only Holder may exercise the Option or any portion thereof. After the death of Holder, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Holder's personal representative or by any person empowered to do so under the deceased Holder's will or under the then applicable laws of descent and distribution. 4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3. - 24.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company or the Secretary's office of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3: (a) An Exercise Notice in writing signed by Holder or any other person then entitled to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator. Such notice shall be substantially in the form attached as Exhibit C to the Grant Notice (or such other form as is prescribed by the Administrator); and (b) Subject to Section 6.2(d) of the Plan: (i) Full payment (in cash or by check) for the shares with respect to which the Option or portion thereof is exercised; or (ii) With the consent of the Administrator, such payment may be made, in whole or in part, through the delivery of shares of Common Stock which have been owned by Holder for at least six (6) months, duly endorsed for transfer to the Company with a Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised

portion thereof; or (iii) To the extent permitted under applicable laws, through the delivery of a notice that Holder has placed a market sell order with a broker with respect to shares of Common Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided, that payment of such proceeds is made to the Company upon settlement of such sale; or (iv) With the consent of the Administrator, any combination of the consideration provided in the foregoing paragraphs (i), (ii) and (iii); and (c) A bona fide written representation and agreement, in such form as is prescribed by the Administrator, signed by Holder or the other person then entitled to exercise such Option or portion thereof, stating that the shares of Common Stock are being acquired for Holder's own account, for investment and without any present intention of distributing or reselling said shares or any of them except as may be permitted under the Securities Act and then applicable rules and regulations thereunder, and that Holder or other person then entitled to exercise such Option or portion thereof will indemnify the Company against and hold it free and harmless from any loss, damage, expense or liability resulting to the Company if any sale or distribution of the shares by such person is contrary to the representation and agreement referred to above. The Administrator may, in its absolute discretion, take whatever additional actions it deems appropriate to ensure the observance and performance of such representation and agreement and to effect compliance with the Securities Act and any other federal or state securities laws or regulations. Without limiting the generality of the foregoing, the Administrator may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on an Option exercise does not violate the Securities Act, - 3and may issue stop- transfer orders covering such shares. Share certificates evidencing Common Stock issued on exercise of the Option shall bear an appropriate legend referring to the provisions of this subsection (c) and the agreements herein. The written representation and agreement referred to in the first sentence of this subsection (c) shall, however, not be required if the shares to be issued pursuant to such exercise have been registered under the Securities Act, and such registration is then effective in respect of such shares; and (d) The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which in the discretion of the Administrator may be in the form of consideration used by Holder to pay for such shares under Section 4.3(b), subject to Section 10.4 of the Plan; and (e) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than Holder, appropriate proof of the right of such person or persons to exercise the Option. 4.4 Conditions to Issuance of Stock Certificates. The shares of Common Stock deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued shares or issued shares which have then been reacquired by the Company. Such shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any shares of Common Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: (a) The admission of such shares to listing on all stock exchanges on which such Common Stock is then listed; and (b) The completion of any registration or other qualification of such shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; and (c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; and (d) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience; and (e) The receipt by the Company of full payment for such shares, including payment of any applicable withholding tax, which in the discretion of the Administrator may be in the form of consideration used by the Holder to pay for such shares under Section 4.3(b), subject to Section 10.4 of the Plan. 4.5 Rights as Stockholder. Holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any shares purchasable upon the exercise of any part of the Option unless and until such shares shall have been issued by the Company to such holder. - 4ARTICLE V OTHER PROVISIONS

5.1 Administration. The Administrator shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Administrator in good faith shall be final and binding upon Holder, the Company and all other interested persons. No member of the Administrator shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Administrator under the Plan and this Agreement. 5.2 Option Not Transferable. (a) Subject to Section 5.2(b), the Option may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until the shares underlying the Option have been issued, and all restrictions applicable to such shares have lapsed. Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of Holder or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. (b) Notwithstanding any other provision in this Agreement, with the consent of the Administrator and to the extent the Option is not intended to qualify as an Incentive Stock Option, the Option may be transferred to one or more Permitted Transferees, subject to the terms and conditions set forth in Section 10.1 of the Plan. (c) Unless transferred to a Permitted Transferee in accordance with Section 5.2(b), during the lifetime of Holder, only Holder may exercise the Option or any portion thereof unless it has been disposed of pursuant to a DRO. After the death of Holder, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Holder's personal representative or by any person empowered to do so under the deceased Holder's will or under the then applicable laws of descent and distribution. 5.3 Restrictive Legends and Stop- Transfer Orders. (a) The share certificate or certificates evidencing the shares of Common Stock purchased hereunder shall be endorsed with any legends that may be required by state or federal securities laws. (b) Holder agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instructions to its transfer - 5agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. (c) The Company shall not be required: (i) to transfer on its books any shares of Common Stock that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such shares of Common Stock or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such shares shall have been so transferred. 5.4 Shares to Be Reserved. The Company shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement. 5.5 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company, and any notice to be given to Holder shall be addressed to Holder at the address given beneath Holder's signature on the Grant Notice. By a notice given pursuant to this Section 5.5, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to Holder shall, if Holder is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 by written notice under this Section 5.5. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 5.6 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 5.7 Governing Law; Severability. This Agreement shall be administered, interpreted and enforced under the laws of the State of Delaware without regard to conflicts of laws thereof. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.

5.8 Conformity to Securities Laws. Holder acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 5.9 Amendments. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by Holder or such other person as may be permitted to exercise the Option pursuant to Section 4.1 and by a duly authorized representative of the Company. - 65.10 No Employment Rights. If Holder is an Employee, nothing in the Plan or this Agreement shall confer upon Holder any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which are expressly reserved, to discharge Holder at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company and Holder. 5.11 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Holder and his or her heirs, executors, administrators, successors and assigns. - 7EXHIBIT B TO STOCK OPTION GRANT NOTICE VESTING AND EXERCISABILITY PROVISIONS Capitalized terms used in this Exhibit B and not defined below shall have the meanings given them in the Grant Notice and the Stock Option Agreement. 1. Time- Based Vesting. Subject to any accelerated vesting and exercisability pursuant to paragraphs 2, 3 and 4 below, the shares of Common Stock subject to the Option shall vest and become exercisable in their entirety on December 31, 2008, if Holder is an Employee, Director or Consultant on that date. 2. Performance- Based Accelerated Vesting. If the Company's EBITDA (as defined below) and the Company's Net Adds (as defined below) both equal or exceed the respective Achievement Threshold amounts for 2005 as set forth in paragraph (a) below and/or both equal or exceed the Achievement Threshold amounts for 2006 as set forth in paragraph (b) below and/or both equal or exceed the Achievement Threshold amounts for 2007 as set forth in paragraph (c) below, then a certain percentage of the number of shares of Common Stock subject to the Option shall vest and become exercisable in accordance with the provisions of paragraphs (a), (b) and (c) below; provided, however, that no shares subject to the Option shall vest and become exercisable pursuant to paragraphs (a), (b) or (c) below, if either the Company's EBITDA or Net Adds do not at least equal the Achievement Threshold amount for the applicable year. (a) Fiscal Year 2005. If the Company's EBITDA (as defined below) and Net Adds (as defined below) for Fiscal Year 2005 equal or exceed the EBITDA and Net Adds Achievement Thresholds (as set forth below), then the Option shall vest and become exercisable as to that number of shares of Common Stock equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Common Stock subject to the Option (as set forth in the Grant Notice). 2005 PERFORMANCE- BASED VESTING SCHEDULE
2005 Net Adds Target Maximum [***] [***] 12.5% 15%

2005

Threshold [***]

Threshold [***] 10%

*** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

- 1EBITDA (in thousands) Target [***] Maximum [***] 12.5% 15% 20% 22.5% 22.5% 30%

The percentage for determining the number of shares of Common Stock that shall vest and become exercisable if performance is between the Achievement Threshold amount and the Achievement Target amount or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. (b) Fiscal Year 2006. If the Company's EBITDA and Net Adds for Fiscal Year 2006 equal or exceed the EBITDA and Net Adds Achievement Thresholds (as set forth below), then the Option shall vest and become exercisable as to that number of shares of Common Stock equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Common Stock subject to the Option (as set forth in the Grant Notice).
Threshold [***] 10% ---12.5% 15% 2006 Net Adds Target Maximum [***] [***] 12.5% 15% ---20% 22.5% ---22.5% 30%

2006 EBITDA (in thousands)

Threshold [***] --------Target [***] Maximum [***]

The percentage for determining the number of shares of Common Stock that shall vest and become exercisable if performance is between the Achievement Threshold amount and the Achievement Target amount or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. (c) Fiscal Year 2007. If the Company's EBITDA and Net Adds for Fiscal Year 2007 equal or exceed the EBITDA and Net Adds Achievement Thresholds (as set forth *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 2below), then the Option shall vest and become exercisable as to that number of shares of Common Stock equal to the number obtained by multiplying the percentage determined in accordance with the following table, by the total number of shares of Common Stock subject to the Option (as set forth in the Grant Notice). 2007 Net Adds Target Maximum [***] [***] 12.5% 15% ---20% 22.5% ---22.5% 30%

2007 EBITDA (in thousands)

Threshold [***] --------Target [***] Maximum [***]

Threshold [***] 10% ---12.5% 15%

The percentage for determining the number of shares of Common Stock that shall vest and become exercisable if performance is between the Achievement Threshold amount and the Achievement Target amount or between the Achievement Target amount and the Achievement Maximum amount shall be determined by linear interpolation between the applicable Achievement amounts for each measure in accordance with the method described in Attachment B- 1. (d) Definition of EBITDA. For purposes of this Exhibit B, the term "EBITDA" for a Fiscal Year means the Company's consolidated net income or loss for such period before extraordinary items and before the cumulative effect of any change in accounting principles plus (a) the following to the extent deducted in calculating such consolidated net income or loss: (i) consolidated interest expense, (ii) all income tax expense deducted in arriving at such consolidated net income or loss, (iii) depreciation and amortization expense, (iv) non- cash impairment of assets (tangible and intangible) and related noncash charges, (v) charges and expenses related to stock based compensation awards, (vi) net non- cash reorganization expenses and charges, (vii) non- cash dividends or other distributions made with respect to qualified preferred stock as contemplated by the Credit Agreement negotiated among the Company, Cricket Communications Inc., the administrative agent identified therein and others posted to IntraLinks on December 23, 2004 and (viii) other non- recurring expenses reducing such consolidated net income or loss which do not represent a cash item in such period or any future period (including losses attributable to the sale of assets other than in the ordinary course of business) and minus (b) the following to the extent included in calculating such consolidated net income or loss: (i) income tax credits for such period, (ii) all gains arising in relation to the sale of assets other than in the ordinary course of business and (iii) all non- cash items increasing such consolidated net income or loss for such period. *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 3(e) Definition of Net Adds. For purposes of this Exhibit B, the term "NET ADDS" means, with respect to any Fiscal Year, the Company's "end of period customers" on the last day of such Fiscal Year less "end of period customers" on the last day of the preceding Fiscal Year. If the Company adopts a pre- paid card based service offering, the Administrator shall, in its discretion, equitably adjust the Net Adds Achievement Levels set forth in paragraphs (a), (b) and (c) to reflect the Company's changed scope of operations. (f) Adjustments for Future Changes in the Company's Business. The EBITDA Achievement Levels and Net Adds Achievement Levels set forth in paragraphs (a), (b) and (c) are designed to be measured against the Company's performance in its existing thirty- nine (39) markets. If the Company commences operations in any new markets, or ceases to operate in any existing market, the Administrator shall, in its discretion, equitably adjust the EBITDA Achievement Levels and/or the Net Adds Achievement Levels to reflect the Company's changed scope of operations. (g) Accelerated Vesting Cumulative; Continued Service Condition. The vesting and exercisability of the Option as to shares of Common Stock under paragraphs 2(a), 2(b) and 2(c) shall be cumulative. Except as otherwise provided in subparagraph 2(k), the Option shall vest and become exercisable as to shares of Common Stock pursuant to this paragraph 2 if Holder is an Employee, Director or Consultant of the Company or any of its Subsidiaries on the applicable Performance Vesting Effective Date. (h) Definition of Performance Vesting Effective Date. For purposes of this Exhibit B, the term "PERFORMANCE VESTING EFFECTIVE DATE" means, with respect to vesting and exercisability to occur upon the attainment of EBITDA and Net Adds Achievement Levels for 2005, 2006 or 2007, as applicable, the date of the public announcement by the Company of EBITDA or Net Adds, as applicable, for the relevant Fiscal Year, but in no event shall the Company make such public announcement later than the date on which the Company files its Form 10- K for the relevant Fiscal Year. (i) Definition of Fiscal Year. For purposes of this Exhibit B, the term "FISCAL YEAR" means the Company's fiscal year ending December 31. (j) Termination of Performance- Based Vesting. Notwithstanding the foregoing provisions of this paragraph 2, the Option shall not vest and become exercisable as to any additional shares of Common Stock pursuant to performance- based accelerated vesting and exercisability under this paragraph 2 on or after the date of the occurrence of a Change in Control. (k) Minimum Vesting For Fiscal Year 2006. Notwithstanding the other provisions of this paragraph 2 (other than subparagraph 2(j)), if Holder is an Employee, Director or Consultant on December 31, 2005, then the minimum additional number of shares of Common Stock that shall vest and become exercisable under this paragraph 2 on the Performance Vesting Effective Date for Fiscal Year 2006 (with respect to EBITDA and Net Adds performance for Fiscal Year 2006) shall equal twenty percent (20%) of the total number of shares of Common Stock subject to the Option (as set forth in the Grant Notice). - 43. Change in Control Accelerated Vesting.

(a) Change in Control prior to January 1, 2006. In the event of a Change in Control prior to January 1, 2006, (i) if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, the Option shall then vest and become exercisable as to a number of shares of Common Stock equal to fifty percent (50%) of the number of then unvested shares of Common Stock subject to the Option and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, the Option shall then vest and become exercisable as to an additional number of shares of Common Stock equal to fifty percent (50%) of the number of then unvested shares of Common Stock subject to the Option, and (iii) if Holder is an Employee, Director or Consultant on the second anniversary of the date of the occurrence of such Change in Control, the Option shall then vest and become exercisable as to the remaining unvested shares of Common Stock subject to the Option. (b) Change in Control during 2006. In the event of a Change in Control during 2006, (i) if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, the Option shall then vest and become exercisable as to a number of shares of Common Stock equal to seventy- five percent (75%) of the number of then unvested shares of Common Stock subject to the Option, and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, the Option shall then vest and become exercisable as to the remaining unvested shares of Common Stock subject to the Option. (c) Change in Control on or after January 1, 2007. In the event of a Change in Control on or after January 1, 2007, if Holder is an Employee, Director or Consultant immediately prior to such Change in Control, the Option shall then vest and become exercisable as to a number of shares of Common Stock equal to eighty- five percent (85%) of the number of then unvested shares of Common Stock subject to the Option, and (ii) if Holder is an Employee, Director or Consultant on the first anniversary of the date of the occurrence of such Change in Control, the Option shall then vest and become exercisable as to any then remaining unvested shares of Common Stock subject to the Option. (d) Termination of Employment in the Event of a Change in Control. In the event of a Change in Control, if the Holder has a Termination of Employment by reason of discharge by the Company other than for Cause (as defined below), or by reason of resignation by Holder for Good Reason (as defined below), during the period commencing ninety (90) days prior to such Change in Control and ending twelve (12) months after such Change in Control, then (i) if the Change in Control occurs prior to January 1, 2006, twenty- five percent (25)% of the number of then unvested shares of Common Stock subject to the Option shall vest and become exercisable and (ii) if the change in Control occurs on or after January 1, 2006, the remaining unvested shares of Common Stock subject to the Option shall vest and become exercisable on the date of Holder's Termination of Employment (or, if later, immediately prior to the date of the occurrence of such Change in Control). 4. Accelerated Vesting in the Event of Termination of Employment. - 5(a) Termination of Employment by the Company Other than for Cause or by Holder for Good Reason After February 28, 2006. In the event of Holder's Termination of Employment (without regard to any consulting services provided pursuant to this paragraph (a)) by reason of discharge by the Company other than for Cause, or by reason of resignation by the Holder for Good Reason after February 28, 2006, (i) if the Holder, upon written request of the Company and reasonable advance notice, agrees to provide, and does provide, consulting services to the Company (or to the Parent at the direction of the Company, or both) for up to five (5) days a month for up to a one (1) year period for a fee of $1,500 per day, the remaining unvested shares of Common Stock subject to the Option shall vest and become exercisable on the last day of the one (1) year period, or (ii) such remaining unvested shares of Common Stock subject to the Option shall otherwise vest and become exercisable on December 31, 2008. The Company and the Holder shall mutually use their best efforts to schedule the date or dates on which the Holder will provide the requested consulting services so as not to prevent the Holder from being gainfully employed by a subsequent employer, and shall be arranged so as to reasonably accommodate Holder's vacation or other personal affairs. (b) Definitions of Cause and Good Reason. For purposes of this Exhibit B, the terms "CAUSE" and "GOOD REASON" shall have the meanings given to such terms in that certain Amended and Restated Executive Employment Agreement dated as of January 10, 2005, by and among Holder, the Company and Cricket Communications, Inc., as amended from time to time (the "EMPLOYMENT AGREEMENT"). (c) Condition to Accelerated Vesting and Exercisability. The accelerated vesting and exercisability of shares of Common Stock subject to the Option pursuant to this paragraph 4 shall be conditioned on the Holder's delivery to the Company of an executed General Release in accordance with Section 5.9 of the Employment Agreement and the Holder's non- revocation of such General Release during the time period for such

revocation set forth therein. 5. Limit on Vesting. In no event will the Option become vested and/or exercisable for more than 100% of the shares of Common Stock subject to the Option pursuant to the provisions of this Exhibit B. 6. Confidentiality. Holder agrees to keep the EBITDA and Net Adds achievement levels set forth in this Exhibit B confidential and not to disclose such thresholds to any third party without the prior written consent of the Company. - 6ATTACHMENT B- 1 METHODOLOGY FOR LINEAR INTERPOLATION
2005 Net Adds Threshold Target [***] [***] 10% 12.5% ---12.5% 15% ---20% 22.5% Maximum [***] 15% ---22.5% 30%

2005 EBITDA (in thousands)

Threshold [***] --------Target [***] Maximum [***]

The EBITDA amounts in the following examples are shown in thousands. Example 1: - 2005 EBITDA: [***] - 2005 Net Adds: [***]

PROBLEM: The net adds performance falls exactly on a specified payout range, but performance in EBITDA falls somewhere in- between the schedule. SOLUTION: Start with the net adds payout column and use straight- line interpolation to determine the final payout. PAYOUT CALCULATION: Net additions of [***] dictate a payout of 12.5% for threshold EBITDA performance and 20% for target EBITDA performance. Since EBITDA performance ([***]) is halfway between THRESHOLD and TARGET performance ([***] and [***]), the actual payout should be halfway between the scheduled payouts of 12.5% and 20%. Thus the payout is (1/2)*(20%- 12.5%)+12.5% - Payout = 16.25% Example 2: - 2005 EBITDA: [***]

- 2005 Net Adds: [***] PROBLEM: Neither the net adds performance nor the EBITDA performance fall exactly on a specified payout. *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. -7-

SOLUTION: Use straight line interpolation for both measures. Starting with either measure will yield the same result. PAYOUT CALCULATION: EBITDA performance ([***]) is halfway between THRESHOLD and TARGET performance ([***] and [***]), so we can interpolate an EBITDA- based payout schedule by finding the halfway point at each defined level of Net Adds. At [***] net adds, the EBITDA- based payout would be halfway between 10% and 12.5%. At [***] net adds, the EBITDA- based payout would be halfway between 12.5% and 20%. At [***] net adds, the EBITDA- based payout would be halfway between 15% and 22.5%. Thus the interpolated, EBITDA- based payout schedule looks like this:
2005 Net Adds Threshold [***] 11.25% (midpoint of 10%and 12.5%) Target [***] 16.25% (midpoint of 12.5% and 20%) Maximum [***] 18.75% (midpoint of 15% and 22.5%)

2005 EBITDA

Actual [***] (midpoint of [***] and [***])

To determine the actual payout given this range, we interpolate a payout at [***] net adds based on the scheduled payouts at [***] and [***]. First we determine where [***] lies in the range of [***] to [***]. The length of the range is [***] [***] = [***] net adds. [***] is [***] above the range minimum ([***] - [***] = [***]). So the actual performance of [***] net adds falls 1/3 of the way between [***] net adds (target) and [***] net adds (maximum). This means the actual payout must fall 1/3 of the way between 16.25% and 18.75%. Thus the payout is (1/3)*(18.75%- 16.25%)+16.25% - Payout = 17.08% *** Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions. - 8EXHIBIT C TO STOCK OPTION GRANT NOTICE FORM OF EXERCISE NOTICE

Effective as of today, , the undersigned ("HOLDER") hereby elects to exercise Holder's option to purchase shares of the Common Stock (the "SHARES") of Leap Wireless International, Inc. (the "COMPANY") under and pursuant to the Leap Wireless International, Inc. 200__ Stock Option, Restricted Stock and Deferred Stock Unit Plan (the "Plan") and the Stock Option Grant Notice and Non- Qualified Stock Option Agreement dated , 2005, (the "OPTION AGREEMENT"). Capitalized terms used herein without definition shall have the meanings given in the Option Agreement.
GRANT DATE: NUMBER OF SHARES AS TO WHICH OPTION IS EXERCISED: EXERCISE PRICE PER SHARE: TOTAL EXERCISE PRICE: CERTIFICATE TO BE ISSUED IN NAME OF: CASH PAYMENT DELIVERED HEREWITH: ___________________________ , 2005 _____________________________________ $____________ $____________ _____________________________________ $______________ (Representing the full Exercise Price for the Shares, as well as any applicable withholding tax)

TYPE OF OPTION: The Option is a Non- Qualified Stock Option and is not an incentive stock option within the meaning of Section 422 of the Code. 1. Representations of Holder. Holder acknowledges that Holder has received, read and understood the Plan and the Option Agreement. Holder agrees to abide by and be bound by their terms and conditions. 2. Rights as Stockholder. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any' other rights as a stockholder shall exist with respect to Shares subject to the Option, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 10.3 of the Plan. 3. Tax Consultation. Holder understands that there are tax consequences to Holder as a result of Holder's purchase or disposition of the Shares. Holder represents that Holder has consulted with any tax consultants Holder deems advisable in connection with the purchase or disposition of the Shares and that Holder is not relying on the Company for any tax advice. 4. Entire Agreement. The Plan and Option Agreement are incorporated herein by reference. This Exercise Notice, the Plan and the Option Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Holder with respect to the subject matter hereof. - 1ACCEPTED BY: LEAP WIRELESS INTERNATIONAL, INC. SUBMITTED BY HOLDER:

By:_________________________________ By:_________________________________ Print Name:_________________________ Print Name: _________________________ Title:______________________________ Address:_____________________________ - 2-

EXHIBIT B GENERAL RELEASE

1. GENERAL RELEASE OF CLAIMS. In consideration of the benefits under Paragraph 5 of the Amended and Restated Executive Employment Agreement (as amended from time to time, the "Agreement"), dated as of January 10, 2005, by and among Cricket Communications, Inc. ("the "Company"), Leap Wireless International, Inc. (the "Parent"), and Stewart D. Hutcheson ("EXECUTIVE"), EXECUTIVE does hereby for himself or herself and his or her spouse, beneficiaries, heirs, successors and assigns, release, acquit and forever discharge the Company, the Parent, their subsidiaries, and their respective stockholders, officers, directors, any of the directors' affiliated entities, managers, employees, representatives, related entities, successors and assigns, and all persons acting by, through or in concert with them (the "Releasees") of and from any and all claims, actions, charges, complaints, causes of action, rights, demands, debts, damages, or accountings of whatever nature, known or unknown, which EXECUTIVE may have against the Releasees based on any actions or events which occurred prior to the date of this General Release, including, but not limited to, those related to, or arising from, EXECUTIVE's employment with the Company, or the termination thereof, any claims under Title VII of the Civil Rights Act of 1964, as amended, the Federal Age Discrimination and Employment Act, the Equal Pay Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the Civil Rights Act of 1866, 1871 and 1991, the California Fair Employment and Housing Act, the California Occupational Safety and Health Act, claims for unpaid wages and failure to pay wages under the California Labor Code (collectively, "Claims"). This General Release shall not, however, constitute a waiver of any of EXECUTIVE's rights under the Agreement or under any outstanding stock option granted to EXECUTIVE, or under the terms of any employee benefit plan of the Companies in which EXECUTIVE is a participant after this General Release becomes effective and remains unrevoked for eight days. 2. RELEASE OF UNKNOWN CLAIMS. IN ADDITION, EXECUTIVE EXPRESSLY WAIVES ALL RIGHTS UNDER SECTION 1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA, WHICH READS AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. 3. OLDER WORKER'S BENEFIT PROTECTION ACT. EXECUTIVE AGREES AND EXPRESSLY ACKNOWLEDGES THAT THIS GENERAL RELEASE INCLUDES A WAIVER AND RELEASE OF ALL CLAIMS WHICH EXECUTIVE HAS OR MAY HAVE UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. SECTION 621, ET SEQ. ("ADEA"). THE FOLLOWING TERMS AND CONDITIONS APPLY TO AND ARE PART OF THE WAIVER AND RELEASE OF ALL CLAIMS INCLUDING BUT NOT LIMITED TO THE ADEA CLAIMS UNDER THIS GENERAL RELEASE: - 11) That the Agreement and this General Release are written in a manner calculated to be understood by EXECUTIVE. 2) The waiver and release of claims under the ADEA contained in this General Release do not cover rights or claims that may arise after the date on which EXECUTIVE signs this General Release. 3) The Agreement provides for consideration in addition to anything of value to which EXECUTIVE is already entitled. 4) EXECUTIVE is advised to consult an attorney before signing this General Release. 5) EXECUTIVE is afforded twenty- one (21) days (or, in the event that the termination of EXECUTIVE's employment is in connection with an exit incentive or other employment termination program, forty- five (45) days) after EXECUTIVE is provided with this General Release to decide whether or not to sign this General Release. If EXECUTIVE executes this General Release prior to the expiration of such period, EXECUTIVE does so voluntarily and after having had the opportunity to consult with an attorney. 6) In the event that the termination of EXECUTIVE's employment is in connection with an exit incentive or other employment termination program, EXECUTIVE is provided with written information, calculated to be understood by the average individual eligible to participate, as to: (i) any class, unit, or group of individuals covered by such program, any eligibility factors for such program, and any time limits applicable to such programs; and (ii) the job titles and ages of all individuals eligible or selected for the program, and the ages of all individuals in the same job classification or organizational unit who are not eligible or not selected for the program.

7) EXECUTIVE will have the right to revoke this General Release within seven (7) days of signing this General Release. In the event this General Release is revoked, this General Release will be null and void in its entirety, and EXECUTIVE will not receive the benefits described in Section 5.3 of the Agreement. 8) If EXECUTIVE wishes to revoke the General Release, EXECUTIVE shall deliver written notice stating his intent to revoke this General Release to the Company's General Counsel on or before the seventh (7th) day after the date hereof. 4. NO ASSIGNMENT OF CLAIMS. EXECUTIVE represents and warrants to the Releasees that there has been no assignment or other transfer of any interest in any Claim which EXECUTIVE may have against the Releasees, or any of them, and EXECUTIVE agrees to indemnify and hold the Releasees harmless from any liability, claims, demands, damages, costs, expenses and attorneys' fees incurred as a result of any person asserting any such assignment or transfer of any rights or Claims under any such assignment or transfer from such party. - 25. NO SUITS OR ACTIONS. EXECUTIVE agrees that if he or she hereafter commences, joins in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any of the Claims released hereunder, or in any manner asserts against the Releasees any of the Claims released hereunder, then he or she will pay to the Releasees against whom such suit or Claim is asserted, in addition to any other damages caused thereby, all attorneys' fees incurred by such Releasees in defending or otherwise responding to said suit or Claim. 6. NO ADMISSION. EXECUTIVE further understands and agrees that neither the payment of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees. EXECUTIVE Date: _______________________ Stewart D. Hutcheson - 3-

EXHIBIT 10.15 [CRICKET COMMUNICATIONS, INC. LETTERHEAD] January 31, 2005 Albin F. Moschner 660 Northcroft Court Lake Forest, IL 60045 Dear Albin: We are pleased to offer you the position of Executive Vice President and Chief Marketing Officer, reporting to Doug Hutcheson, Chief Executive Officer & President. The terms of the offer are as follows: 1. A starting bi- weekly salary of $11,923.08; if annualized, $310,000. 2. Eligibility to participate in our Bonus Plan. You will have an opportunity to earn a target bonus up to 65% of your base compensation. The bonus payout will be based on company and individual performance. 3. A competitive comprehensive benefits package for you and your eligible dependents. Attached you will find a detailed copy of our benefits package for your information. 4. We will facilitate your relocation from Lake Forest, IL to San Diego, CA. A copy of our relocation package/program is enclosed for your review. The company will provide you with temporary living (housing) for one year from your date of employment. During this one year period, you will also be eligible for two trips per month to your primary residence. The company will reimburse the cost of a rental automobile for one year from the date of your employment or we will pay the reasonable and customary cost to ship your personal vehicle from Lake Forest, Ill to San Diego, A. 5. You will be eligible to participate in the company's long term incentive plan. Subject to and effective upon your acceptance of employment with the Company, the Board of Directors of Leap Wireless International, Inc. has granted you an award for 20,000 shares of restricted common stock and an option to purchase 127,660 shares of common stock at an exercised price of $26.55 per share or, if higher, the closing price of Leap's common stock on the date preceding the date of the option grant becomes effective. The specifics of these awards will be provided to you in the form of restricted stock/stock option agreements. Al Moschner January 31, 2005

Page Two In connection with your employment by the Company, you will be required to take and pass a drug and alcohol test, the results of a background investigation must be acceptable to the Company, and you will be required to sign the Company's Invention Disclosure, Confidentiality & Proprietary Rights Agreement. The Leap Human Resources department will initiate the background investigation. Included with this letter is a clinic passport that contains the name, address, and telephone number of the medical center that you will go to in order to complete your drug and alcohol test specimen collection. Please take this passport with you when you go for your test. You must appear at Labcorp PSC, 71 N Waukegan Road, Suite 800, Lake Bluff, IL 60044, (847) 735- 0026, (please call first before going) for your drug and alcohol test promptly after your receipt of this offer letter. Please be sure to have a photo ID with you when you check in for the screening. Please return a signed copy of this offer letter along with the attached Terms of Employment and Invention Disclosure, Confidentiality & Proprietary Rights Agreement. Please note that this offer is valid for five days from the date of this letter. If you have any questions, please do not hesitate to call me at (858) 882 - 6015. Congratulations and welcome! Sincerely, /s/ Leonard C. Stephens Leonard C. Stephens Sr Vice President, Human Resources I accept the offer of employment made to me by Cricket Communications, Inc. and agree to the terms set forth above. Offer accepted: Albin F. Moschner /s/ Albin F. Moschner Printed Name Signature

EXHIBIT 10.16.1 EMERGENCE BONUS AGREEMENT This Emergence Bonus Agreement, effective as of February 17, 2005, is entered into between Glenn Umetsu ("Executive") and Cricket Communications, Inc. ("Cricket). Recitals

A. On April 13, 2003, Cricket, Leap Wireless International, Inc. ("Leap"), and substantially all of their respective subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. B. Cricket, Leap and their respective debtor subsidiaries emerged from bankruptcy on August 16, 2004 when the Amended and Restated Joint Plan of Reorganization of Leap, Cricket and other debtors party thereto became effective. C. Executive served as an executive officer of Leap and Cricket for all or substantially all of the time that these two corporations were in bankruptcy. D. To help assure its continued operations and the retention of its employees during its financial restructuring, Cricket instituted various retention and bonus compensation programs in 2003 and 2004, including a program referred to as the Key Employee Retention Program ("KERP") which provided employees who were selected to participate in the program with bonus payments in October 2004 and February 2005. No executive officer of Leap or Cricket participated in the KERP. E. In recognition of the services that Executive rendered to Leap and Cricket, including the services that Executive rendered to Leap and Cricket during the pendency of these corporations' bankruptcies, the Compensation Committee of the Board of Directors of Leap authorized the payment of a cash emergence bonus to Executive. For good and valuable consideration, the receipt of which is hereby acknowledged, Cricket has agreed to pay to Executive the portion of such bonus that remains to be paid as set forth below. Agreement 1. Cricket shall pay Executive a bonus in an amount equal to $125,000 on (or promptly after) the earliest to occur of the following events: (a) September 30, 2005, provided Executive is still employed by Cricket on such date; (b) the date on which Executive ceases to be employed by Cricket, unless such cessation of employment occurs as a result of a termination for Cause.

As used in this agreement, the terms "Cause" shall have the meaning ascribed to such term in the standard form of Stock Option Grant Notice and Non- Qualified Stock Option Agreement filed as Exhibit 10.2 to Leap's Current Report on From 8- K, filed with the Securities and Exchange Commission on January 5, 2005. IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the date first written above. EXECUTIVE CRICKET COMMUNICATIONS, INC. By: Name: S.D. Hutcheson Title: President, CFO
EXHIBIT 10.16.2 EMERGENCE BONUS AGREEMENT This Emergence Bonus Agreement, effective as of February 17, 2005, is entered into between David Davis ("Executive") and Cricket Communications, Inc. ("Cricket). Recitals

A. On April 13, 2003, Cricket, Leap Wireless International, Inc. ("Leap"), and substantially all of their respective subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. B. Cricket, Leap and their respective debtor subsidiaries emerged from bankruptcy on August 16, 2004 when the Amended and Restated Joint Plan of Reorganization of Leap, Cricket and other debtors party thereto became effective. C. Executive served as an executive officer of Leap and Cricket for all or substantially all of the time that these two corporations were in bankruptcy. D. To help assure its continued operations and the retention of its employees during its financial restructuring, Cricket instituted various retention and bonus compensation programs in 2003 and 2004, including a program referred to as the Key Employee Retention Program ("KERP") which provided employees who were selected to participate in the program with bonus payments in October 2004 and February 2005. No executive officer of Leap or Cricket participated in the KERP. E. In recognition of the services that Executive rendered to Leap and Cricket, including the services that Executive rendered to Leap and Cricket during the pendency of these corporations' bankruptcies, the Compensation Committee of the Board of Directors of Leap authorized the payment of a cash emergence bonus to Executive. For good and valuable consideration, the receipt of which is hereby acknowledged, Cricket has agreed to pay to Executive the portion of such bonus that remains to be paid as set forth below. Agreement 1. Cricket shall pay Executive a bonus in an amount equal to $87,500 on (or promptly after) the earliest to occur of the following events: (a) September 30, 2005, provided Executive is still employed by Cricket on such date; (b) the date on which Executive ceases to be employed by Cricket, unless such cessation of employment occurs as a result of a termination for Cause. As used in this agreement, the terms "Cause" shall have the meaning ascribed to such term in the standard form of Stock Option Grant Notice and Non- Qualified Stock Option Agreement filed as Exhibit 10.2 to Leap's Current Report on From 8- K, filed with the Securities and Exchange Commission on January 5, 2005. IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the date first written above. EXECUTIVE CRICKET COMMUNICATIONS, INC. By: Name: S.D. Hutcheson Title: President, CFO EXHIBIT 10.16.3

EMERGENCE BONUS AGREEMENT This Emergence Bonus Agreement, effective as of February 17, 2005, is entered into between Leonard C. Stephens ("Executive") and Cricket Communications, Inc. ("Cricket). Recitals A. On April 13, 2003, Cricket, Leap Wireless International, Inc. ("Leap"), and substantially all of their respective subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. B. Cricket, Leap and their respective debtor subsidiaries emerged from bankruptcy on August 16, 2004 when the Amended and Restated Joint Plan of Reorganization of Leap, Cricket and other debtors party thereto became effective. C. Executive served as an executive officer of Leap and Cricket for all or substantially all of the time that these two corporations were in bankruptcy. D. To help assure its continued operations and the retention of its employees during its financial restructuring, Cricket instituted various retention and bonus compensation programs in 2003 and 2004, including a program referred to as the Key Employee Retention Program ("KERP") which provided employees who were selected to participate in the program with bonus payments in October 2004 and February 2005. No executive officer of Leap or Cricket participated in the KERP. E. In recognition of the services that Executive rendered to Leap and Cricket, including the services that Executive rendered to Leap and Cricket during the pendency of these corporations' bankruptcies, the Compensation Committee of the Board of Directors of Leap authorized the payment of a cash emergence bonus to Executive. For good and valuable consideration, the receipt of which is hereby acknowledged, Cricket has agreed to pay to Executive the portion of such bonus that remains to be paid as set forth below. Agreement 1. Cricket shall pay Executive a bonus in an amount equal to $87,500 on (or promptly after) the earliest to occur of the following events: (a) September 30, 2005, provided Executive is still employed by Cricket on such date; (b) the date on which Executive ceases to be employed by Cricket, unless such cessation of employment occurs as a result of a termination for Cause. As used in this agreement, the terms "Cause" shall have the meaning ascribed to such term in the standard form of Stock Option Grant Notice and Non- Qualified Stock Option Agreement filed as Exhibit 10.2 to Leap's Current Report on From 8- K, filed with the Securities and Exchange Commission on January 5, 2005. IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the date first written above. EXECUTIVE CRICKET COMMUNICATIONS, INC. By: Name: S.D. Hutcheson Title: President, CFO EXHIBIT 10.16.4 EMERGENCE BONUS AGREEMENT This Emergence Bonus Agreement, effective as of February 17, 2005, is entered into between Robert J. Irving, Jr. ("Executive") and Cricket Communications, Inc. ("Cricket). Recitals A. On April 13, 2003, Cricket, Leap Wireless International, Inc. ("Leap"), and substantially all of their respective subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. B. Cricket, Leap and their respective debtor subsidiaries emerged from bankruptcy on August 16, 2004 when the Amended and Restated Joint Plan of Reorganization of Leap, Cricket and other debtors party thereto became effective. C. Executive served as an executive officer of Leap and Cricket for all or substantially all of the time that these two corporations were in bankruptcy. D. To help assure its continued operations and the retention of its employees during its financial restructuring, Cricket instituted various retention and bonus compensation programs in 2003 and 2004, including a program referred to as the Key Employee Retention Program ("KERP") which provided employees who were selected to participate in the program

with bonus payments in October 2004 and February 2005. No executive officer of Leap or Cricket participated in the KERP. E. In recognition of the services that Executive rendered to Leap and Cricket, including the services that Executive rendered to Leap and Cricket during the pendency of these corporations' bankruptcies, the Compensation Committee of the Board of Directors of Leap authorized the payment of a cash emergence bonus to Executive. For good and valuable consideration, the receipt of which is hereby acknowledged, Cricket has agreed to pay to Executive the portion of such bonus that remains to be paid as set forth below. Agreement 1. Cricket shall pay Executive a bonus in an amount equal to $87,500 on (or promptly after) the earliest to occur of the following events: (a) September 30, 2005, provided Executive is still employed by Cricket on such date; (b) the date on which Executive ceases to be employed by Cricket, unless such cessation of employment occurs as a result of a termination for Cause. As used in this agreement, the terms "Cause" shall have the meaning ascribed to such term in the standard form of Stock Option Grant Notice and Non- Qualified Stock Option Agreement filed as Exhibit 10.2 to Leap's Current Report on From 8- K, filed with the Securities and Exchange Commission on January 5, 2005. IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the date first written above. EXECUTIVE CRICKET COMMUNICATIONS, INC. By: Name: S.D. Hutcheson Title: President, CFO
. . . Exhibit 21.1

Subsidiaries

Backwire.com, Inc. Chasetel Licensee Corp. Cricket Communications, Inc. (dba Cricket Wireless, Inc. in Pennsylvania) (dba Cricket Wireless, Inc. in Florida) Telephone Entertainment Network, Inc. Cricket Holdings Dayton, Inc. Cricket Licensee (Albany), Inc. Cricket Licensee (Columbus), Inc. Cricket Licensee (Denver) Inc. Cricket Licensee (Lakeland) Inc. Cricket Licensee (Macon), Inc. Cricket Licensee (North Carolina) Inc. Cricket Licensee (Pittsburgh) Inc. Cricket Licensee (Reauction), Inc. Cricket Licensee I, Inc. Cricket Licensee II, Inc. Cricket Licensee III, Inc. Cricket Licensee IV, Inc. Cricket Licensee V, Inc. Cricket Licensee VI, Inc. Cricket Licensee VII, Inc. Cricket Licensee VIII, Inc. Cricket Licensee IX, Inc. Cricket Licensee X, Inc. Cricket Licensee XII, Inc.

Delaware Delaware Delaware

Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware

Cricket Licensee XIII, Inc. Cricket Licensee XIV, Inc. Cricket Licensee XV, Inc. Cricket Licensee XVI, Inc. Cricket Licensee XVII, Inc. Cricket Licensee XVIII, Inc. Cricket Licensee XIX, Inc. Cricket Licensee XX, Inc. Chasetel Real Estate Holding Company, Inc. Cricket Alabama Property Company Cricket Arizona Property Company Cricket Arkansas Property Company Cricket California Property Company Cricket Colorado Property Company Cricket Florida Property Company Cricket Georgia Property Company Cricket Idaho Property Company Cricket Illinois Property Company Cricket Indiana Property Company Cricket Kansas Property Company Cricket Kentucky Property Company Cricket Michigan Property Company Cricket Minnesota Property Company Cricket Mississippi Property Company Cricket Nebraska Property Company Cricket Nevada Property Company Cricket New Mexico Property Company Cricket New York Property Company Cricket North Carolina Property Company Cricket Ohio Property Company Cricket Oklahoma Property Company Cricket Oregon Property Company Cricket Pennsylvania Property Company Cricket Texas Property Company Cricket Utah Property Company Cricket Washington Property Company Cricket Wisconsin Property Company Leap Wireless Mexico S.A. de C.V. Leap PCS Mexico, Inc. MCG PCS Licensee Corporation, Inc. Orrengrove Investments Limited

Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Tennessee Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware Mexico California Delaware Cyprus

Exhibit 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES- OXLEY ACT OF 2002

I, S. Douglas Hutcheson, certify that: 1. I have reviewed this annual report on Form 10- K of Leap Wireless International, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e) and 15d- 15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,

is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 16, 2005 By: /s/ S. DOUGLAS HUTCHESON S. Douglas Hutcheson Chief Executive Officer and President Exhibit 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES- OXLEY ACT OF 2002

I, Dean M. Luvisa, certify that: 1. I have reviewed this annual report on Form 10- K of Leap Wireless International, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e) and 15d- 15(e)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 16, 2005 By: /s/ DEAN M. LUVISA Dean M. Luvisa Acting Chief Financial Officer and Treasurer
Exhibit 32.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Leap Wireless International, Inc. (the "Company") hereby certifies, to such officer's knowledge, that:

(i) the accompanying Annual Report on Form 10- K of the Company for the year ended December 31, 2004 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: May 16, 2005 /s/ S. DOUGLAS HUTCHESON S. Douglas Hutcheson Chief Executive Officer and President A signed original of this written statement required by Section 906 has been provided to Leap Wireless International, Inc. and will be retained by Leap Wireless International, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Leap Wireless International, Inc. (the "Company") hereby certifies, to such officer's knowledge, that:

(i) the accompanying Annual Report on Form 10- K of the Company for the year ended December 31, 2004 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: May 16, 2005 /s/ DEAN M. LUVISA Dean M. Luvisa Acting Chief Financial Officer and Treasurer A signed original of this written statement required by Section 906 has been provided to Leap Wireless International, Inc. and will be retained by Leap Wireless International, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.