EXHIBIT 10.4
PLEDGE AND SECURITY AGREEMENT
This Pledge and Security Agreement (this "Agreement"), dated as
of December 12, 2001, is entered into by and between ViaSat, Inc., a Delaware
corporation ("Pledgor"), and Wildblue Communications, Inc., a Delaware
corporation ("Secured Party").
RECITALS
A. Concurrently herewith, Pledgor has purchased 16,153,846.15
Class B Units (the "Units") of U.S. Monolithics, LLC, an Arizona limited
liability company (the "Company"), pursuant to a Unit Purchase Agreement dated
as of December 12, 2001 by and between Secured Party and Pledgor (the "Purchase
Agreement").
B. As part of the consideration paid by Pledgor for the Units,
Pledgor issued a secured promissory note of even date herewith in favor of
Secured Party in the aggregate principal amount of Six Million U.S. Dollars
(US$6,000,000) (the "Note").
C. As security for the Note, Pledgor agreed to pledge to Secured
Party 9,692,307.69 of the Units.
AGREEMENT
In consideration of the premises herein, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Secured Party and Pledgor hereby agree as follows:
1. Definitions.
1.1 "UCC" shall mean the Uniform Commercial Code -- Secured
Transactions as amended as the same may, from time to time, be in effect in the
State of California; provided, however, in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of the security interest in any collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of
California, the term "UCC" shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of definitions related
to such provisions.
1.2 All capitalized terms used, but not otherwise defined
herein, shall have the meanings provided in the Purchase Agreement.
2. Assignment, Pledge and Grant of Security Interest.
2.1 To secure the timely payment and performance of the Secured
Obligations (as defined below), Pledgor hereby pledges to Secured Party, and
grants to Secured Party a first priority security interest in all the estate,
right, title and interest of Pledgor in and to 9,692,307.69 Class B Units of the
Company (the "Pledged Collateral") represented by a certificate of interest
in the Company in the name of Secured Party and duly assigned by Secured Party
to Pledgor (the "Certificate").
2.2 Within two business days of the date of this Agreement, (a)
Secured Party, on behalf of Pledgor, will cause to be delivered and deposited
into escrow (the "Escrow") with Computershare Trust Company, Inc., a Colorado
corporation (the "Escrow Agent"), in pledge, the Certificate, and (b) Pledgor
will deliver to the Escrow Agent undated unit powers signed in blank by Pledgor.
The parties acknowledge and agree that the Escrow Agreement of even date
herewith by and among Pledgor, Secured Party and the Escrow Agent (the "Escrow
Agreement") shall exclusively govern the release of the Pledged Collateral from
the Escrow.
2.3 This Agreement and all of the Pledged Collateral secure the
payments and performance by Pledgor of the Note (the "Secured Obligations").
3. Events of Default. The failure of Pledgor to pay to Secured Party all
principal and interest due and owing under the Note by January 31, 2002 in the
manner contemplated in Section 2 of the Escrow Agreement shall constitute an
"Event of Default" hereunder.
4. Remedies Upon Event of Default.
4.1 If any Event of Default has occurred and is continuing, in
addition to any and all remedies available to Secured Party under the Note:
(a) Secured Party may (but shall be under no obligation to) take
possession of the Pledged Collateral as provided for in the Escrow Agreement.
Secured Party may also, without notice except as specified below, sell by any
lawful manner the Pledged Collateral or any part thereof in one or more lots at
public or private sale, at any exchange, broker's board or at any of Secured
Party's offices or elsewhere, for cash, on credit or for future delivery, and at
such price or prices and upon such other terms as are commercially reasonable.
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days' prior written notice to Pledgor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Secured Party shall not be obligated to make
any sale of Pledged Collateral regardless of notice of sale having been given.
Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. All
cash proceeds received by Secured Party in respect of any sale of, collection
from, or other realization upon all or any part of the Pledged Collateral may,
in the discretion of Secured Party, be held by Secured Party as collateral for,
and/or then or at any time thereafter be applied in whole or in part against,
all or any part of the Secured Obligations. Any surplus of such cash or cash
proceeds held by Secured Party and remaining after payment in full of all the
Secured Obligations shall be paid over to Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.
(b) Secured Party, at any time and from time to time, at its
option and at the expense of Pledgor, may (i) transfer into its own name, or
into the name of its nominee, all or any part of the Pledged Collateral,
thereafter receiving all dividends, income or other distributions upon the
Pledged Collateral; (ii) take control of, vote and manage all or any of the
Pledged Collateral; and (iii) apply to the payment of any of the Secured
Obligations, whether any
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be due and payable or not, any moneys, including cash dividends and income from
the Pledged Collateral, now or hereafter in the hands of Secured Party, on
deposit or otherwise, belonging to Pledgor, as Secured Party, in its sole
discretion, shall determine.
4.2 So long as no Event of Default has occurred and is
continuing, Pledgor reserves the right to receive all income and other
distributions in respect of the Pledged Collateral and exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this Agreement.
5. Remedies Cumulative; Delay Not Waiver.
5.1 No right, power or remedy herein conferred upon or reserved
to Secured Party is intended to be exclusive of any other right, power or
remedy, and every such right, power and remedy shall, to the extent permitted by
applicable law, be cumulative and in addition to every other right, power and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy. Resort to any or all security now or hereafter held by Secured
Party, may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken nonjudicial
proceedings, or both.
5.2 No delay or omission of Secured Party to exercise any right
or power accruing upon the occurrence and during the continuance of any Event of
Default as aforesaid shall impair any such right or power or shall be construed
to be a waiver of any such Event of Default or an acquiescence therein. Every
power and remedy given by this Agreement may be exercised from time to time, and
as often as shall be deemed expedient, by Secured Party.
6. Further Assurances; Financing Statements.
6.1 Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor shall promptly execute and deliver all further instruments and
documents, and take all further action, that may be reasonably necessary, or
that Secured Party may reasonably request, in order to protect the security
interest granted or intended to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to the
Pledged Collateral.
6.2 Pledgor shall, promptly upon request, provide to Secured
Party all information and evidence it may reasonably request concerning the
Pledged Collateral to enable Secured Party to enforce the provisions of this
Agreement.
7. Place of Business; Location of Records. Unless Secured Party is
otherwise notified by Pledgor, the chief executive office of Pledgor is, and all
records of Pledgor concerning the Pledged Collateral are and will be, located at
the following address:
ViaSat, Inc.
6155 El Camino Real
Carlsbad, CA 92009-1699
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8. Continuing Assignment and Security Interest; Transfer of Note. This
Agreement shall create a continuing pledge and assignment of and security
interest in the Pledged Collateral and shall (a) remain in full force and effect
until payment in full of the Note; (b) be binding upon Pledgor and its
successors and assigns; and (c) inure, together with the rights and remedies of
Secured Party, to the benefit of Secured Party and its successors, transferees
and assigns. The release of the security interest in any or all of the Pledged
Collateral, the taking or acceptance of additional security, or the resort by
Secured Party to any security it may have in any order it may deem appropriate,
shall not affect the liability of any person on the indebtedness secured hereby.
9. Termination. This Agreement shall terminate upon the payment and
performance by Pledgor of the Secured Obligations.
10. Amendments; Waivers; Consents. No amendment, modification,
termination or waiver of any provision of this Agreement, or consent to any
departure by Pledgor therefrom, shall in any event be effective without the
written concurrence of Secured Party and Pledgor.
11. Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given three
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Secured Party:
Wildblue Communications, Inc.
4600 South Syracuse, Suite 500
Denver, CO 80237
Fax No.: 720-554-7500
Attn: David Brown, General Counsel
With a copy to: Brownstein Hyatt & Farber, P.C.
410 Seventeenth Street, 22nd Floor
Denver, CO 80202
Fax No.: 303-223-0970
Attn: John L. Ruppert, Esq.
If to Pledgor:
ViaSat, Inc.
6155 El Camino Real
Carlsbad, CA 92009-1699
Fax No.: 760-929-3926
Attn: Keven K. Lippert, Esq.
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With a copy to: Latham & Watkins
12636 High Bluff Drive, Suite 300
San Diego, CA 92130-2071
Fax No.: 858-523-5450
Attn: Craig M. Garner, Esq.
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, or ordinary mail). Each such notice, request, demand, claim, or
other communication shall be deemed to have been duly given (i) if by fax, when
such fax has been transmitted to the fax number set forth in this Section 11 and
evidence of receipt is received or (ii) if given by any other means, upon
delivery or refusal of delivery at the address set forth in this Section 11. Any
party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other party
notice in the manner herein set forth.
12. Governing Law. This Agreement, including all matters of
construction, validity, performance and the creation, validity, enforcement or
priority of the lien of, and security interests created by, this Agreement in or
upon the Pledged Collateral shall be governed by the laws of the State of
California, without reference to conflicts of law, except as required by
mandatory provisions of law and except to the extent that the validity or
perfection or priority of the lien and security interest hereunder, or remedies
hereunder, in respect of the Pledged Collateral are governed by the laws of a
jurisdiction other than the State of California.
13. Severability. The provisions of this Agreement are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Agreement in any jurisdiction.
14. Headings Descriptive. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
15. Entire Agreement. This Agreement, together with any other written
agreement executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
16. Time. Time is of the essence of this Agreement.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same agreement. Each party shall accept the
facsimile signature of the other party hereto and shall be bound by its own
facsimile signature; provided, however, that the parties shall exchange original
signatures by overnight mail.
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18. Mediation/Arbitration. If a dispute arises out of or relates to this
Agreement, or the breach thereof, Pledgor and Secured Party shall negotiate in
good faith to settle such dispute, controversy or claim within fifteen (15)
calendar days of notice thereof. If Pledgor and Secured Party are unable to
resolve such dispute, controversy or claim arising out of this Agreement or the
performance, breach or termination thereof within fifteen (15) calendar days, it
shall be settled by arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The place of arbitration shall be
Denver, Colorado. The arbitration shall be conducted by a neutral arbitrator
selected by mutual agreement of Pledgor and Secured Party within ten days after
notice by either party to the other requesting such arbitration. If Pledgor and
Secured Party fail to agree within ten days on the selection of the arbitrator,
an arbitrator shall be promptly appointed by the American Arbitration
Association. Prior to issuing a final arbitration award, the arbitrator shall
provide Pledgor and Secured Party with a preliminary ruling and allow Pledgor
and Secured Party a reasonable period (not to exceed five (5) business days) to
respond in writing to the preliminary ruling. Judgment upon the arbitration
award rendered may be entered in any court having jurisdiction. The prevailing
party shall be entitled to all costs of arbitration including, but not limited
to, reasonable attorneys' fees and out-of-pocket expenses. The parties shall be
entitled to discovery in the same manner as though the dispute was within the
jurisdiction of the County Court, Denver, Colorado. Except as otherwise required
by law (or by the fiduciary duties of Pledgor's directors), all information
resulting from or otherwise pertaining to any dispute shall be nonpublic and
handled by Pledgor, Secured Party and their respective agents in such a way as
to prevent the public disclosure of such information.
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IN WITNESS WHEREOF, each of the undersigned has caused this Pledge and
Security Agreement to be duly executed and delivered as of the date first above
written.
BUYER: SELLER:
VIASAT, INC., a Delaware corporation WILDBLUE COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ Gregory D. Monahan By: /s/ David M. Brown
------------------------------------ ---------------------------------
Name: Gregory D. Monahan Name: David M. Brown
Title: VP General Counsel and Secretary Title: Vice President
[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]