Exhibit 10.2
PLEDGE AGREEMENT
This PLEDGE AGREEMENT dated as of
January 15, 2009 (together with all amendments, if any, from
time to time hereto, this “ Agreement ”) between
Broadwind Energy, Inc., a Delaware corporation (the “
Pledgor ”) and Bank of America, N.A (the “
Secured Party ”).
WITNESSETH:
WHEREAS, pursuant to that certain
Loan and Security Agreement dated January 17, 1997 (as amended
from time to time, the “ Loan Agreement ”) among
Brad Foote Gear Works, Inc. (f/k/a BFG Acquisition Corp.)
(“ Borrower ”), as Borrower, and Bank of
America, N.A. (f/k/a LaSalle Bank National Association, f/k/a
LaSalle National, f/k/a LaSalle Bank NI), as lender (in such
capacity, the “ Lender ”), the Lender made term
loans (the “ Term Loans ”) and has agreed to
make revolving loans (the “ Revolving Loans
”);
Whereas, pursuant to the Subsidiary
Loan Documents, the Lender has additionally made term loans to
certain subsidiaries of the Borrower (the “ Subsidiary
Loans ”, and together with the Term Loans and the
Revolving Loans, the “ Loans ”);
WHEREAS, the Pledgor has executed
and delivered an Unconditional Guaranty dated as of the date
hereof, (the “ Guaranty ”) of the obligations of
the Borrower, 1309 and 5100 in respect of the Loan Agreement, the
Loan Documents and the Subsidiary Loan Documents and the
obligations of the Pledgor under the Guaranty are to be secured
pursuant to this Agreement;
WHEREAS, the Pledgor is the record
and beneficial owner of the Securities listed in Part A
of Schedule I hereto and the holder of certain
indebtedness or other accounts owed to the Pledgor by Borrower,
1309 or 5100;
WHEREAS, the Pledgor benefits from
the credit facilities made available to Borrower under the Loan
Agreement;
WHEREAS, in consideration of the
Lender making the Loans as provided for in the Loan Agreement and
the Subsidiary Loan Documents, the Pledgor has agreed to pledge its
Pledged Collateral to Lender in accordance herewith;
NOW, THEREFORE, in consideration of
the premises and the covenants hereinafter contained and to induce
the Lender to make certain amendments to the Loan Agreement, the
other Loan Documents and the Subsidiary Loan Documents, it is
agreed as follows:
1.
Definitions
. Unless otherwise defined
herein, terms defined in the Loan Agreement are used herein as
therein defined, and the following shall have (unless otherwise
provided elsewhere in this Agreement) the following respective
meanings (such meanings being equally applicable to both the
singular and plural form of the terms defined):
“ Bankruptcy Code
” means title 11, United States Code , as amended from
time to time, and any successor statute thereto;
“ Pledged Collateral
” has the meaning assigned to such term in
Section 2 hereof;
“ Pledged Debt ”
means all indebtedness or monetary obligations owed to the Pledgor
by Borrower, 1309 or 5100, and any promissory notes or other
evidence thereof;
“ Pledged Entity
” means an issuer of Pledged Securities or Pledged
Debt;
“ Pledged Entity
Acknowledgment ” means an acknowledgment substantially in
the form of Schedule III hereto;
“ Pledged Securities
” means those Securities of the Borrower owned by the
Pledgor;
“ Secured Obligations
” means with respect to the Pledgor all obligations of the
Pledgor to the Lender (including monetary obligations accrued
during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or
allowable in such proceeding), howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now
or hereafter existing, or due or to become due, which arise out of
or in connection with (a) its Guaranty and this Agreement,
(b) under any rate management agreement to which the Pledgor
is a party, in each case as the same may be amended,
modified, extended or renewed from time to time, and
(c) treasury management services (other than treasury
management services provided after the Termination Date) provided
to the Pledgor by the Lender or affiliate of the Lender.
“ Securities ”
means all shares, options, warrants, general or limited partnership
interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited
liability company or equivalent entity whether voting or nonvoting,
including common stock, preferred stock or any other “equity
security” (as such term is defined in Rule 3al1-1 of the
General Rules and Regulations promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of
1934).
“ Termination Date
” means the first date hereafter on which (i) all of the
Secured Obligations described in clause (a) of the
definition thereof shall have been paid in full, (ii) all rate
management agreements and all treasury management agreements
between the Lender, on the one hand, and Borrower, 1309 or 5100, on
the other hand, have been terminated and (iii) all commitments
of the Lender to make financial accommodations under the Loan
Documents have terminated.
2.
Pledge . The Pledgor hereby pledges to the
Secured Party and grants to the Secured Party a security interest
in all of the Pledgor’s right, title and interest, whether
now owned or held or hereafter acquired, in, to and under the
following (collectively, the “ Pledged Collateral
”):
(a)
the Pledged Securities, which as of
the date here of are listed in Part A of Schedule
I, and the certificates, if any, representing such Pledged
Securities, and all dividends, distributions, cash, instruments,
options, warrants and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Pledged Securities;
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(b)
any additional Securities of the
Borrower from time to time acquired by the Pledgor in any manner
(which securities shall be deemed to be part of the Pledged
Securities), and the certificates representing such additional
shares, if any, and all dividends, distributions, cash, instruments
and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange
for any or all of such Securities;
(c)
the Pledged Debt, which as of the
date hereof is in the amount listed on Part B of
Schedule I , and any instruments and other writings
representing such Pledged Debt, and all interest, principal and
other amounts from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
Pledged Debt;
(d)
any additional indebtedness or other
monetary obligations owed to the Pledgor by Borrower, 1309 or 5100
(which indebtedness shall be deemed to be part of the Pledged
Debt), and any instruments representing such additional
indebtedness, and all interest, principal and other amounts from
time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such debt;
and
(e)
all proceeds (as such term is
defined in Section 9-102(a)(64) of the Uniform Commercial
Code) of such Pledged Collateral.
3.
Security for
Obligations . This
Agreement secures, and the Pledgor’s Pledged Collateral is
security for, the prompt payment in full when due, whether at
stated maturity, by acceleration or otherwise, and performance of,
the Pledgor’s Secured Obligations including, without
limitation, all fees, costs and expenses whether in connection with
collection actions hereunder or otherwise.
4.
Delivery of Pledged Collateral
and Acknowledgments . All certificates and all promissory
notes and instruments evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of the Secured Party pursuant
hereto. All Pledged Securities shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in
form and substance satisfactory to the Secured Party. All
promissory notes, instruments or other writing evidencing Pledged
Debt shall be accompanied by (i) an allonge or such other
endorsement as may be requested by the Secured Party and
(ii) a subordination agreement in form and substance
satisfactory to the Secured Party in its sole discretion. The
Pledgor shall cause each Pledged Entity to execute a Pledged Entity
Acknowledgement.
5.
Representations and
Warranties . The
Pledgor represents and warrants to the Secured Party with respect
to itself and its Pledged Collateral that:
(a)
The Pledgor is, and at the time of
delivery of the Pledged Securities to the Secured Party will be,
the sole holder of record and the sole beneficial owner of such
Pledged Collateral pledged by the Pledgor free and clear of any
lien thereon or affecting the title thereto, except for Permitted
Liens; the Pledgor is and at the time of delivery of the Pledged
Debt to the Secured Party will be, the sole owner
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of such Pledged Collateral free and
clear of any lien thereon or affecting title thereto, except for
Permitted Liens;
(b)
All of its Pledged Securities have
been duly authorized, validly issued and are fully paid and
non-assessable;
(c)
All of its Pledged Debt is
subordinated to all Guaranteed Obligations (as defined in the
Guaranty);
(d)
The Pledgor has the right and
requisite authority to pledge, assign, transfer, deliver, deposit
and set over the Pledged Collateral pledged by the Pledgor to the
Secured Party as provided herein;
(e)
None of the Pledged Securities has
been issued or transferred in violation of the securities
registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be
subject;
(f)
All of the Pledged Securities are
presently owned by the Pledgor, and are either presently
uncertificated or represented by the certificates as listed on
Part A of Schedule I hereto. As of
the date hereof, there are no existing options, warrants, calls or
commitments of any character whatsoever relating to such Pledged
Securities. All of the Pledged Debt is presently owned by
Pledgor and is presently represented by the promissory notes or
other instruments listed on Part B of Schedule I
hereto.
(g)
No consent, approval, authorization
or other order or other action by, and no notice to or filing with,
any governmental authority or any other Person is required
(i) for the pledge by the Pledgor of its Pledged Collateral
pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor, or (ii) for the
exercise by the Secured Party of the voting or other rights
provided for in this Agreement or the remedies in respect of the
Pledged Collateral pursuant to this Agreement, except as may be
required in connection with such disposition by laws affecting the
offering and sale of securities generally;
(h)
The pledge of such Pledged
Collateral pursuant to this Agreement will create a valid lien on,
and the filing of a financing statement against the Pledgor in its
state of organization describing the Pledged Collateral or, in the
case of Pledged Securities represented by certificates and Pledged
Debt represented by promissory notes or other instruments, delivery
of such certificate or promissory note or other instrument together
with any necessary stock powers or allonges, will create a
perfected security interest in favor of, the Secured Party in such
Pledged Collateral and the proceeds thereof, securing the payment
of the Secured Obligations, subject to no other lien other than
Permitted Liens;
(i)
This Agreement has been duly
authorized, executed and delivered by the Pledgor and constitutes a
legal, valid and binding obligation of the Pledgor enforceable
against the Pledgor in accordance with its terms;
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(j)
The Pledged Securities constitute
the percentage of the issued and outstanding Securities of each
Pledged Entity set forth in Part A of Schedule I hereto;
and
(k)
(i) the Pledgor’s true
legal name as registered in the jurisdiction in which the Pledgor
is incorporated, state of incorporation, organizational
identification number as designed by the state of its
incorporation, chief executive office, and principal place of
business (or, if it has more than one place of business, its chief
executive office) are as set forth on Schedule V hereto and
the Pledgor has not maintained its chief executive office and
principal place of business at any other locations during the four
months prior to the date hereof; (ii) except as disclosed on
Schedule V , the Pledgor is not now known and during the
five years preceding the date hereof has not previously been known
by any trade name; (iii) except as disclosed on Schedule
V , during the five years preceding the date hereof the Pledgor
has not been known by any legal name different from the one set
forth on the signature page of this Agreement and
(iv) except as disclosed on Schedule V , during the
year preceding the date hereof, the Pledgor has not been the
subject of any merger or other corporate reorganization.
6.
Covenants . The Pledgor covenants and agrees with
respect to itself and its Pledged Collateral that until the
Termination Date:
(a)
Without the prior written consent of
the Secured Party, the Pledgor will not sell, assign, transfer,
pledge, or otherwise encumber any of its rights in or to the
Pledged Collateral, or any unpaid dividends, interest or other
distributions or payments with respect to the Pledged Collateral or
grant a lien in the Pledged Collateral, other than Permitted
Liens;
(b)
The Pledgor will, at its expense,
promptly execute, acknowledge and deliver all such instruments and
take all such actions as the Secured Party from time to time may
request in order to ensure to the Secured Party the benefits of the
liens in and to the Pledged Collateral intended to be created by
this Agreement, including the filing of any necessary financing
statements, which may be filed by the Secured Party and will
cooperate with the Secured Party, at the Pledgor’s expense,
in obtaining all necessary approvals and making all necessary
filings under federal, state, local or foreign law in connection
with such liens or any sale or transfer of the Pledged
Collateral;
(c)
The Pledgor has and will defend the
title to the Pledged Collateral and the liens of the Secured Party
in the Pledged Collateral against the claim of any Person and will
maintain and preserve such liens; and
(d)
The Pledgor will, upon obtaining
ownership of any additional Securities or promissory notes or
instruments of a Pledged Entity or Securities or promissory notes
or instruments otherwise required to be pledged to the Secured
Party pursuant to any of the Loan Documents, which Securities,
notes or instruments are not already Pledged Collateral, promptly
(and in any event within three (3) Business Days)
(i) deliver to the Secured Party a Pledge Amendment,
duly
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executed by the Pledgor, in
substantially the form of Schedule II hereto (a “
Pledge Amendment ”) in respect of any such additional
Securities, notes or instruments, pursuant to which the Pledgor
shall pledge to the Secured Party all of such additional
Securities, notes and instruments and (ii) shall deliver all
such additional Securities, notes or instruments. The Pledgor
hereby authorizes the Secured Party to attach each Pledge Amendment
to this Agreement and agrees that all Pledged Securities listed on
any Pledge Amendment delivered to the Secured Party shall for all
purposes hereunder be considered Pledged Collateral.
(e)
The Pledgor agrees that it shall
not, and shall not permit any other Person to, without the Secured
Party’s consent, amend or restate the organizational
documents of any Pledged Entity to opt into Article 8 of the
Uniform Commercial Code or, if not currently represented by
certificates, issue certificates evidencing the Pledged
Securities.
(f)
The Pledgor agrees that is shall not
change the name, identity, structure or chief executive office or
principal place of business of the Pledgor or reorganize the
Pledgor under the laws of another jurisdiction unless (i) the
Pledgor shall have given the Secured Party at least thirty (30)
days prior notice of such change, (ii) obtained any requisite
consent under the Loan Agreement or the other Loan Documents and
(iii) taken all actions necessary or as requested by the
Secured Party to ensure that the security interest in its Pledged
Collateral remains a perfected, first priority security interest
subject only to Permitted Liens.
7.
Pledgor’s Rights
. As long as no Event of
Default shall have occurred and be continuing and until written
notice shall be given to a Pledgor in accordance with
Section 8(a) hereof:
(a)
The Pledgor shall have the right,
from time to time, to vote and give consents with respect to its
Pledged Collateral, or any part thereof for all purposes not
inconsistent with the provisions of this Agreement, the Loan
Agreement, the Subsidiary Loan Documents or any other Loan
Document; provided, however , that no vote shall be cast,
and no consent shall be given or action taken, which would have the
effect of impairing the position or interest of the Secured Party
in respect of the Pledged Collateral or which would authorize,
effect or consent to (unless and to the extent expressly permitted
by the Loan Agreement):
(i)
the dissolution or liquidation, in
whole or in part, of a Pledged Entity;
(ii)
the consolidation or merger of a
Pledged Entity with any other Person;
(iii)
the sale, disposition or encumbrance
of all or substantially all of the assets of a Pledged Entity,
except for liens in favor of the Secured Party;
(iv)
any change in the authorized number
of shares, the stated capital or the authorized share capital of a
Pledged Entity or the issuance by it of any additional Securities;
or
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(v)
the alteration of the voting rights
with respect to the Securities of a Pledged Entity; and
(b)
(i)
The Pledgor shall be entitled, from
time to time, to collect and receive for its own use all cash
dividends and interest paid in respect of the Pledged Securities to
the extent not in violation of the Loan Agreement, the Subsidiary
Loan Documents or the other Loan Documents other than any
and all: (A) dividends and interest paid or payable other than
in cash in respect of any Pledged Collateral, and instruments and
other property received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Collateral;
(B) dividends and other distributions paid or payable in cash
in respect of any Pledged Securities in connection with a partial
or total liquidation or dissolution or in connection with a
reduction of capital, capital surplus or paid-in capital of a
Pledged Entity; and (C) cash paid, payable or otherwise
distributed, in respect of principal of, or in redemption of, or in
exchange for, any Pledged Collateral; provided ,
however , that until actually paid all rights to such
distributions shall remain subject to the lien created by this
Agreement; provided , further , that the Pledgor
hereby acknowledges that as of the date hereof the Loan Agreement
expressly prohibits the making of any dividends or the payment of
any other amounts on any of the Pledged Collateral other than
non-cash payments of interest booked as capitalized interest by the
Pledgor in respect of all such indebtedness or other accounts owed
to the Pledgor by Borrower, 1309 or 5100, and nothing contained
herein shall be deemed to contradict such prohibition or otherwise
authorize any such distributions; and
(ii)
all dividends and interest (other
than such cash dividends and interest as are permitted to be paid
to the Pledgor in accordance with clause i above) and all
other distributions in respect of any of the Pledged Securities,
whenever paid or made, shall be delivered to the Secured Party to
hold as Pledged Collateral and shall, if received by the Pledgor,
be received in trust for the benefit of the Secured Party, be
segregated from the other property or funds of the Pledgor, and be
forthwith delivered to the Secured Party as Pledged Collateral in
the same form as so received (with any necessary
endorsement).
8.
Defaults and Remedies;
Proxy .
(a)
Upon the occurrence of an Event of
Default and during the continuation of such Event of Default, and
concurrently with written notice to the Pledgor, the Secured Party
(personally or through an agent) in addition to any other remedies
available to it under applicable law, is h
