Exhibit 10.4

 

AMENDMENT NO. 1 dated as of May 31, 2013 (this “Amendment”), to the CREDIT
AGREEMENT dated as of May 30, 2012 (as the same may be further amended,
restated, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”) among GENERAC ACQUISITION CORP., a Delaware
corporation (“Holdings”), GENERAC POWER SYSTEMS, INC., a Wisconsin corporation
(the “Lead Borrower”), the Domestic Subsidiaries of the Lead Borrower listed on
the signature pages thereto, as borrowers (and together with the Lead Borrower,
collectively, the “Borrowers”), the financial institutions party thereto from
time to time as lenders (collectively, the “Lenders”), and BANK OF AMERICA,
N.A., as administrative agent (in such capacity, together with its successors
and assigns, the “Administrative Agent”) and the other agents named therein

 

The Lead Borrower has requested an amendment to the Credit Agreement pursuant to
which certain provisions of the Credit Agreement will be amended as set forth
herein.

 

Accordingly, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

 

SECTION 1.                            Defined Terms.  Capitalized terms used but
not otherwise defined herein (including the preliminary statements hereto) have
the meanings assigned to them in the Credit Agreement.

 

SECTION 2.                            Amendments.

 

Effective as of the Amendment No. 1 Effectiveness Date, the Credit Agreement is
hereby amended as follows:

 

(a)                                 Section 1.01 of the Credit Agreement is
hereby amended by amending and restating the definition of “Maturity Date” in
its entirety as follows:

 

““Maturity Date” shall mean May 31, 2018.””

 

(b)                                 Section 1.01 of the Credit Agreement is
hereby amended by amending and restating the second paragraph of the definition
of “Availability Reserve” in its entirety as follows:

 

“Notwithstanding anything to the contrary in this Agreement, (i) such
Availability Reserves shall not be established or changed except upon not less
than three (3) Business Days’ (or such shorter period as may be agreed by the
Lead Borrower) prior written notice to the Lead Borrower, which notice shall
include a reasonably detailed description of such applicable Availability
Reserve being established (during which period (a) the Administrative Agent
shall, if requested, discuss any such Availability Reserve or change with the
Lead Borrower and (b) the Lead Borrower may take such action as may be required
so that the event, condition or matter that is the basis for such Availability
Reserve or change thereto no longer exists or exists in a manner that would
result in the establishment of a lower Availability Reserve or result in a
lesser change thereto, in a manner and to the

 

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extent reasonably satisfactory to the Administrative Agent), and (ii) the amount
of any Availability Reserve established by the Administrative Agent, and any
change in the amount of any Availability Reserve, shall have a reasonable
relationship to the event, condition or other matter that is the basis for such
Availability Reserve or such change.  Notwithstanding clause (i) of the
preceding sentence, changes to the Availability Reserves solely for purposes of
correcting mathematical or clerical errors (and such other changes as are
otherwise agreed by the Lead Borrower) shall not be subject to such notice
period, it being understood that no Default or Event of Default shall be deemed
to result therefrom, if applicable, for a period of three (3) Business Days.”

 

(c)                                  Section 1.01 of the Credit Agreement is
hereby amended by amending the definition of “EBITDA” to replace the second
proviso in clause (a)(iv) of such definition with the following:

 

“provided further that the aggregate amount added back to EBITDA pursuant to
this clause (iv) in any period shall not exceed 20% of the EBITDA (or 25% in the
case of any Permitted Business Acquisitions (it being understood that any such
add backs in excess of the 20% threshold shall solely relate to Permitted
Business Acquisitions)) of the Lead Borrower and the Restricted Subsidiaries for
such period (prior to giving effect to any such add back)”

 

(d)                                 Section 1.01 of the Credit Agreement is
hereby amended by amending and restating the definition of “Noticed Hedge” in
its entirety as follows:

 

““Noticed Hedge” shall mean Secured Bank Product Obligations arising under a
Swap Agreement, in respect of which the notice delivered to the Administrative
Agent by the applicable Secured Bank Product Provider and the applicable
Borrower (as required under the definition of “Secured Bank Product Provider”)
confirms that such Swap Agreement shall be deemed a “Noticed Hedge” hereunder
for all purposes, including the application of Availability Reserves and
Section 7.02, so long as no Overadvance would result from establishment of a
Bank Product Reserve with respect to such Swap Agreement; provided that, if the
amount of Secured Bank Product Obligations arising under such Swap Agreement is
increased in accordance with the definition of “Secured Bank Product
Obligations”, then such Secured Bank Product Obligations shall only constitute a
Noticed Hedge to the extent that a Bank Product Reserve can be established with
respect to such Swap Agreement without resulting in an Overadvance.”

 

(e)                                  Section 1.01 of the Credit Agreement is
hereby amended by amending the definition of “Pro Forma Basis” to replace the
proviso in the second paragraph of such definition with the following:

 

“provided, however that the aggregate amount of any such adjustments pursuant to
clause (y) shall not exceed (together with the aggregate add back to EBITDA
pursuant to clause (a)(iv) thereof with respect to the applicable four
(4) fiscal quarter period) 20% of the EBITDA (or 25% in the case of any
Permitted

 

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Business Acquisitions (it being understood that any such add backs or
adjustments in excess of the 20% threshold shall solely relate to Permitted
Business Acquisitions)) of the Lead Borrower and the Restricted Subsidiaries for
any four (4) fiscal quarter period (prior to giving effect to any add back
pursuant to clause (a)(iv) thereof)”

 

(f)                                   Section 1.01 of the Credit Agreement is
hereby amended by amending and restating the definition of “Secured Bank Product
Obligations” in its entirety as follows:

 

“Secured Bank Product Obligations” shall mean Bank Product Debt, including,
without limitation, the Bank Product Debt set forth in Schedule 1.01(a) as of
the date hereof, owing to a Secured Bank Product Provider, up to the maximum
amount (in the case of any Secured Bank Product Provider other than Bank of
America and its Affiliates so long as Bank of America is the Administrative
Agent) reasonably specified by such provider in writing to the Administrative
Agent, which amount may be established or increased (by further written notice
to the Administrative Agent from time to time) as long as no Default or Event of
Default exists.”

 

(g)                                  Section 1.01 of the Credit Agreement is
hereby amended by amending and restating clauses (a)(ii) and (a)(iii) of the
definition of “Transactions” as follows:

 

“(ii) the repayment of the Existing Debt (as defined in the Term Facility) and
(iii) the making of Amendment No. 1 Effective Date Dividend and”

 

(h)                                 Section 1.01 of the Credit Agreement is
hereby amended by amending the definition of “Unrestricted Subsidiary” to remove
the words “that is acquired or created after the Closing Date” from such
definition.

 

(i)                                     Section 1.01 of the Credit Agreement is
hereby amended by adding the following definitions”

 

““Amendment No. 1 Effectiveness Date” shall mean May 31, 2013.”

 

““Amendment No. 1 Effectiveness Date Dividend” shall mean the dividend, in an
amount not to exceed $345.0 million, to be paid on, or within 45 days of, the
Amendment No. 1 Effectiveness Date from the Lead Borrower to Holdings from the
proceeds of the Term Loans and to be paid from Holdings to Parent and from
Parent to the holders of the Equity Interests of Parent.”

 

““Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), and any successor statute.”

 

““Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
as applicable, such Swap Obligation (or any Guarantee thereof) is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the

 

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Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Guarantor’s failure to
constitute an “eligible contract participant,” as defined in the Commodity
Exchange Act and the regulations thereunder, at the time the Guarantee of (or
grant of such security interest by, as applicable) such Guarantor becomes or
would become effective with respect to such Swap Obligation.  If a Swap
Obligation arises under a master agreement governing more than one Swap, such
exclusion shall apply only to the portion of such Swap Obligation that is
attributable to Swaps for which such Guarantee or security interest is or
becomes illegal.”

 

““Guarantor” shall have the meaning assigned to such term in the Collateral
Agreement.”

 

““Monthly Reporting Period” shall mean the occurrence of a date when for a
period of five consecutive Business Days either (x) the sum of outstanding
Revolver Loans and LC Obligations have exceeded $15.0 million or
(y) Availability has been less than $100.0 million, until such date that (x) the
sum of outstanding Revolver Loans and LC Obligations have not exceeded $15.0
million and (y) Availability has not been less than $100.0 million, in each
case, for a period of five consecutive Business Days.”

 

““Revolving Priority Collateral” shall have the meaning assigned to such term in
the Intercreditor Agreement.”

 

““Swap” shall mean any agreement, contract, or transaction that constitutes a
“swap” within the meaning of section 1a(47) of the Commodity Exchange Act.”

 

““Swap Obligation” shall mean, with respect to any person, any obligation to pay
or perform under any Swap.”

 

(j)                                    Section 3.06 of the Credit Agreement is
hereby amended by replacing “2011” of such Section with “2012”.

 

(k)                                 Section 4.02 of the Credit Agreement is
hereby amended by deleting clause (b) thereof in its entirety and replacing it
with the following:

 

“(b)                           (i) Availability on the proposed date of such
Borrowing shall be adequate to cover the amount of such Borrowing and (ii) if,
on a Pro Forma Basis immediately after giving effect to such proposed Borrowing
or issuance, amendment, extension or renewal of a Letter of Credit, either
(x) outstanding Revolver Loans and LC Obligations would exceed $15.0 million or
(y) Availability would be less than $100.0 million (such event, a “Reporting
Trigger Event”), then the Borrowers shall deliver an updated Borrowing Base
Certificate that would have been delivered if a Monthly Reporting Period was
then in effect, which shall only be required to contain updates as to the amount
of the gross Accounts and Inventory; provided that the Borrowers shall not be
required to deliver an updated Borrowing Base Certificate for each subsequent
Credit Extension after such Reporting Trigger Event; provided however that to
the extent

 

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the Borrowers are no longer subject to a Monthly Reporting Period and a
subsequent Reporting Trigger Event occurs, the Borrower will be required to
provide an updated Borrowing Base Certificate as described above in connection
with such Credit Extension.  For the avoidance of doubt, delivery of any updated
Borrowing Base Certificate pursuant to this Section 4.02(b) shall be in addition
to, and shall not affect, the Borrowers’ requirements to deliver Borrowing Base
Certificates pursuant to Section 5.12(a).”

 

(l)                                     Section 5.12(a) of the Credit Agreement
is hereby amended by deleting such provision in its entirety and replacing it
with the following:

 

“Borrowing Base Certificates. The Borrowers shall deliver to the Administrative
Agent (and the Administrative Agent shall promptly deliver same to the Lenders)
quarterly Borrowing Base Certificates within 20 days of the fiscal quarter then
ended prepared as of the close of business on the last Business Day of the
previous fiscal quarter (provided that (1) during a Monthly Reporting Period,
the Borrowers shall deliver to the Administrative Agent monthly Borrowing Base
Certificates by the 20th day of each month prepared as of the close of business
on the last Business Day of the previous month or (2) a Liquidity Event shall
have occurred and be continuing, the Borrowers shall deliver to the
Administrative Agent weekly Borrowing Base Certificates by Wednesday of every
week prepared as of the close of business on Friday of the previous week, which
weekly Borrowing Base Certificates shall be in standard form unless otherwise
reasonably agreed to by the Administrative Agent; it being understood that
(i) Inventory amounts shown in the Borrowing Base Certificates delivered on a
weekly basis will be based on the Inventory amount (a) set forth in the most
recent weekly report, where possible, and (b) for the most recently ended month
for which such information is available with regard to locations where it is
impracticable to report Inventory more frequently, and (ii) the amount of
Eligible Accounts shown in such Borrowing Base Certificate will be based on the
amount of the gross Accounts set forth in the most recent weekly report, less
the amount of ineligible Accounts reported for the most recently ended month). 
All calculations of Availability in any Borrowing Base Certificate shall be made
by the Borrowers and certified by a Responsible Officer, provided that the
Administrative Agent may from time to time review and adjust any such
calculation in consultation with the Lead Borrower (a) to reflect its reasonable
estimate of declines in value of any Collateral, due to collections received in
the Dominion Account or otherwise; (b) to adjust advance rates to reflect
changes in dilution, quality, mix and other factors affecting Collateral; and
(c) to the extent the calculation is not made in accordance with this Agreement
or does not accurately reflect the Availability Reserve.  By the 20th day after
the end of each fiscal quarter (commencing with the fiscal quarter ending
June 30, 2012), the Borrowers shall deliver (i) to the Administrative Agent an
Applicable Margin Certificate setting forth a calculation of the Average
Availability for the fiscal quarter most recently ended and the corresponding
Applicable Margins, and (ii) updates, if any, to Schedule O to the Collateral
Questionnaire to reflect all locations of Inventory at the end of the fiscal
quarter then ended.”

 

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(m)                             Section 6.01(j) of the Credit Agreement is
hereby amended and restated in its entirety as follows:

 

“(j) Indebtedness of the Borrowers under the Term Facility in an aggregate
outstanding principal (or committed) amount not to exceed $1,200.0 million,
provided that such amount may be increased by any Incremental Term Loans and/or
Incremental Equivalent Debt (each as defined in the Term Facility) so long as
the sum of (x) any Revolver Commitment Increase, (y) the aggregate initial
principal amount of Incremental Term Loans and (z) the aggregate initial
principal amount of Incremental Equivalent Debt does not exceed $300.0 million”

 

(n)                                 Section 6.01(aa) of the Credit Agreement is
hereby amended and restated in its entirety as follows:

 

“(aa) (i) additional Indebtedness of Foreign Subsidiaries in an aggregate amount
not to exceed $50.0 million and (ii) any Permitted Refinancing Indebtedness in
respect thereof; provided that, in each case, such Indebtedness is secured only
by Liens permitted by Section 6.02(gg); and”

 

(o)                                 Section 6.05(g) of the Credit Agreement is
hereby amended and restated in its entirety as follows:

 

“Dispositions by any Borrower or any Restricted Subsidiary of (i) Revolving
Priority Collateral in an aggregate amount after the Amendment No. 1
Effectiveness Date not to exceed $10.0 million and (ii) Term Priority
Collateral, in each case, not otherwise permitted by this Section 6.05; provided
that the consideration for any Disposition shall be at least 75% cash
consideration (provided that for purposes of the 75% cash consideration
requirement (w) the amount of any Indebtedness or other liabilities of any
Borrower or any Restricted Subsidiary (as shown on such person’s most recent
balance sheet or in the notes thereto) that are assumed by the transferee of any
such assets, (x) the amount of any trade-in value applied to the purchase price
of any replacement assets acquired in connection with such Disposition, (y) any
securities received by such Restricted Subsidiary from such transferee that are
converted by such Restricted Subsidiary into cash or cash equivalents (to the
extent of the cash or cash equivalents received) following the closing of the
applicable Disposition and (z) any Designated Non-Cash Consideration received in
respect of such Disposition having an aggregate fair market value, taken
together with all other Designated Non-Cash Consideration received pursuant to
this clause (z) that is at that time outstanding, not in excess of $25.0 million
in each case, shall be deemed to be cash); provided further that immediately
prior to and after giving effect to such Disposition, no Event of Default shall
have occurred or be continuing; provided further that prior to or concurrently
with any such Disposition of Revolving Priority Collateral, an updated Borrowing
Base Certificate (based on the Borrowing Base Certificate most recently provided
or required to be provided as of that date by the Lead Borrower) shall have been
provided to the Administrative

 

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Agent setting forth the adjusted figures thereon on a Pro Forma Basis for such
Disposition;”

 

(p)                                 Section 6.06 of the Credit Agreement is
hereby amended by (i) deleting the “and” after clause (l) of such Section,
(ii) replacing the “.” at the end of clause (m) of such Section with an “; and”
and (iii) adding the following as a new clause (n):

 

“(n) the Lead Borrower may make the Amendment No. 1 Effectiveness Date
Dividend.”

 

(q)                                 Section 9.01(a)(i) of the Credit Agreement
is hereby amended and restated in its entirety as follows:

 

“if to any Loan Party, to Generac Power Systems, Inc., Highway 59 and Hillside
Road, P.O. Box 8, Waukesha Wisconsin, 53187, attention York Ragen and Joseph
Kavalary, Telecopier:  (262) 968-9372, Electronic Addresses: 
york.ragen@generac.com and joe.kavalary@generac.com, with a copy to Weil,
Gotshal & Manges LLP, 200 Crescent Court, Suite 300, Dallas, Texas 75201-6950,
Attention Angela L. Fontana, Telecopier:  (214) 746-7777, Electronic Address:
angela.fontana@weil.com;”

 

(r)                                    Section 9.06 of the Credit Agreement is
hereby amended by adding the following at the end of such section:

 

“Notwithstanding the foregoing, no amounts set off from any Loan Party shall be
applied to Excluded Swap Obligations of such Loan Party.”

 

(s)                                   Schedules 6.01, 6.02, 6.04 and 6.07
attached hereto shall amend and restate the corresponding schedules, as
applicable, to the Credit Agreement.

 

It is understood and agreed that, in accordance with Section 9.04(b) of the
Credit Agreement, in connection with this Amendment, KeyBank National
Association will become a Lender with a Revolver Commitment of $20,000,000 and
that after giving effect to this Amendment, Schedule 2.01 attached hereto shall
amend and restate the corresponding schedule in the Credit Agreement.  For the
avoidance of doubt, no separate Assignment and Acceptance will be entered into
in connection with such assignment.

 

SECTION 3.                            Representations and Warranties.  The Loan
Parties hereby represent and warrant as of the date hereof to each other party
hereto that:

 

(a)                                 The execution, delivery and performance by
each Loan Party to this Amendment, and the consummation of the transactions
contemplated hereby, are within their respective corporate or other powers, have
been duly authorized by all necessary corporate or other organizational action,
and do not and will not (i) violate the certificate or articles of incorporation
or other constitutive documents or by-laws of any Loan Party, (ii) result in the
creation or imposition of any Lien on any asset of any Loan Party, except Liens
created under the Loan Documents and Liens permitted by Section 6.02 of the
Credit Agreement, (iii) violate or result in a default under any provision of
any indenture,

 

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certificate of designation for preferred stock, agreement or other instrument to
which Holdings, any Borrower or any such Subsidiary Loan Party is a party or by
which any of them or any of their property is or may be bounds or (iv) violate
any law, statute, rule or regulation applicable to such party; except with
respect to any breach, default, contravention or violation referred to in
clauses (ii), (iii) or (iv), to the extent that such breach, default,
contravention or violation would not reasonably be expected to have a Material
Adverse Effect.

 

(b)                                 This Amendment has been duly executed and
delivered by each of the Loan Parties party thereto, and constitutes a legal,
valid and binding obligation of each such Loan Party, enforceable against it in
accordance with its terms, subject to (i) the effects of bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance or other similar laws
affecting creditors’ rights generally, (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (iii) implied covenants of good faith and fair dealing.

 

(c)                                  No Default has occurred and is continuing.

 

SECTION 4.                            Effectiveness.  This Amendment (other than
Section 1(a) hereof) shall become effective on and as of the date (such date,
the “Amendment No. 1 Effectiveness Date”) on which each of the following
conditions is satisfied:

 

(a)                                 the Administrative Agent shall have executed
a counterpart hereof and shall have received duly executed counterparts of this
Amendment that, when taken together, bear the signatures of each Loan Party and
the Lenders required pursuant to Section 9.08(b) of the Credit Agreement;

 

(b)                                 all fees and expenses due to the
Administrative Agent, the Arrangers and the Lenders invoiced at least 2 days
prior to the Amendment No. 1 Effectiveness Date (including to the extent
invoiced prior to the Amendment No. 1 Effectiveness Date, pursuant to Section 9
hereof) required to be paid on the Amendment No. 1 Effectiveness Date shall have
been paid;

 

(c)                                  the representations and warranties of each
Borrower and each Guarantor contained in Section 3 of this Amendment shall be
true and correct in all material respects on and as of the date hereof;
provided, that, any representation and warranty that is qualified as to
“materiality,” “Material Adverse Effect” or similar language shall be true and
correct (after giving effect to any qualification therein) in all respects on
the date hereof; and

 

(d)                                 The Administrative Agent shall have
received, on behalf of itself and the Lenders on the Amendment No. 1
Effectiveness Date, a written opinion of Weil, Gotshal & Manges LLP, special
counsel for Holdings and the Borrowers, (A) dated the Amendment No. 1
Effectiveness Date, (B) addressed to the Administrative Agent and the Lenders on
the Amendment No. 1 Effectiveness Date and (C) in form and substance reasonably
satisfactory to the Administrative Agent and covering such other matters
relating to the Loan Parties and the transactions contemplated hereby as the
Administrative Agent shall reasonably request, and each of Holdings and the
Borrowers hereby instruct its counsel to deliver such opinions;

 

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(e)                                  The Administrative Agent shall have
received with respect to each Mortgaged Property located in the United States or
any territory thereof, (i) a completed “life-of-loan” Federal Emergency
Management Agency standard flood hazard determination (together with a notice
about Special Flood Hazard Area status and flood disaster assistance duly
executed by the applicable Loan Party relating thereto) and (ii) a copy of, or a
certificate as to coverage under, and a declaration page relating to, the
insurance policies required by Section 5.02(b) of the Credit Agreement and the
applicable provisions of the Security Documents, each of which shall (A) be
endorsed or otherwise amended to include a “standard” or “New York” lender’s
loss payable or mortgagee endorsement (as applicable), (B) name the
Administrative Agent, on behalf of the Secured Parties, as additional insured
and loss payee/mortgagee and (C) identify the address of each property that has
improvements located in a Special Flood Hazard Area, the applicable flood zone
designation and the flood insurance coverage and deductible relating thereto and
(iv) be otherwise in form and substance reasonably satisfactory to the
Administrative Agent;

 

(f)                                   the Administrative Agent shall have
received in the case of each Loan Party each of the items referred to in clauses
(i), (ii), (iii) and (iv) below:

 

(i)                                     a copy of the certificate or articles of
incorporation, certificate of limited partnership or certificate of formation,
including all amendments thereto, of each Loan Party, certified as of a recent
date by the Secretary of State (or other similar official) of the jurisdiction
of its organization, and a certificate as to the good standing (to the extent
such concept or a similar concept exists under the laws of such jurisdiction) of
each such Loan Party as of a recent date from such Secretary of State (or other
similar official);

 

(ii)                                  a certificate of the secretary or
assistant secretary or similar officer of each Loan Party dated the Amendment
No. 1 Effectiveness Date and certifying:

 

(A)                               that attached thereto is a true and complete
copy of the by-laws (or limited partnership agreement, limited liability company
agreement or other equivalent governing documents) of such Loan Party as in
effect on the Amendment No. 1 Effectiveness Date,

 

(B)                               that attached thereto is a true and complete
copy of resolutions duly adopted by the board of directors (or equivalent
governing body) of such Loan Party authorizing the execution, delivery and
performance of this Amendment to which such person is a party and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect on the Amendment No. 1 Effectiveness Date,

 

(C)                               that the certificate or articles of
incorporation, certificate of limited partnership or certificate of formation of
such Loan Party has not been amended since the date of the last amendment
thereto disclosed pursuant to clause (i) above,

 

(D)                               as to the incumbency and specimen signature of
each officer executing this Amendment or any other document delivered in
connection herewith on behalf of such Loan Party, and

 

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(E)           as to the absence of any pending proceeding for the dissolution or
liquidation of such Loan Party;

 

(iii)          a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary or similar officer
executing the certificate pursuant to clause (ii) above; and

 

(iv)          a certificate of a Responsible Officer of Holdings or the Lead
Borrower certifying that as of the Amendment No. 1 Effectiveness Date (i) all
the representations and warranties described in Section 4.01(b) are true and
correct in all material respects as of the date hereof, except to the extent
such representations and warranties expressly relate to an earlier date (in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date) and (ii) that as of the Amendment
No. 1 Effectiveness Date, no Default or Event of Default has occurred and is
continuing or would result from any Borrowing to occur on the date hereof or the
application of the proceeds thereof.

 

With respect to the Amendments in Section 1(a) only, in addition to subsections
(a) through (c) above, the effectiveness of the provisions set forth in
Section 1(a) shall be conditioned upon the delivery by each Lender to the
Administrative Agent of a consent to this Amendment.

 

SECTION 5.                            Post-Closing Requirements.

 

Within 90 days after the Amendment No. 1 Effectiveness Date, or such later date
as the Administrative Agent may agree in its sole discretion, the Loan Parties
shall deliver to the Administrative Agent the following items:

 

(a)           With respect to each Mortgaged Property, an executed amendment to
the existing Mortgage encumbering such Mortgaged Property in form and substance
reasonably satisfactory to the applicable Administrative Agent and in form
suitable for recording in the applicable jurisdiction (each a “Mortgage
Amendment”);

 

(b)           With respect to each Mortgage Amendment, a “down-date” endorsement
to the existing Title Policy in form and substance reasonably satisfactory to
the Administrative Agent revising the date of said Title Policy to be the date
and time of recording of said Mortgage Amendment, or if such endorsement is not
available, a “modification” endorsement together with a current title search,
reflecting that the applicable Mortgaged Property is free and clear of all Liens
other than Liens permitted under the Mortgage (each a “Title Endorsement”);

 

(c)           With respect to each Mortgage Amendment, favorable opinions of
counsel in the jurisdiction in which the Mortgaged Property is located and the
jurisdiction in which the applicable mortgagor or grantor is formed, addressed
to the Administrative Agent and the Secured Parties, and in form and substance
reasonably satisfactory to the Administrative Agent; and

 

(d)           Evidence of payment of all title insurance premiums, search and
examination charges, mortgage recording taxes, fees, costs and expenses, and
escrow and related

 

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charges required for the recording of each Mortgage Amendment and issuance of
each Title Endorsement.

 

SECTION 6.         Effect of this Amendment; Amendment Arrangers; Certain
Authorizations and Waivers.

 

(a)           Except as expressly set forth herein, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver of, or otherwise
affect the rights and remedies of the Agents, the Issuing Bank, the Swingline
Lender or the Lenders under the Credit Agreement or any other Loan Document, and
shall not alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document, all of which are ratified and affirmed in
all respects and shall continue in full force and effect.  Nothing herein shall
be deemed to entitle any Loan Party to a consent to, or a waiver, amendment,
modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan
Document in similar or different circumstances.

 

(b)           On and after the Amendment No.1 Effectiveness Date, each reference
in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or
words of like import, and each reference to the Credit Agreement in any other
Loan Document, shall be deemed to be a reference to the Credit Agreement as
amended hereby.  This Amendment shall constitute a “Loan Document” for all
purposes of the Credit Agreement and the other Loan Documents.

 

(c)           The Issuing Bank, the Swingline Lender and the Lenders party
hereto hereby authorize the Administrative Agent to enter into such amendment or
amendments to the Credit Agreement or any other Loan Document (including,
without limitation, an amendment to the Collateral Agreement in substantially
the form of Exhibit A attached hereto) as shall be appropriate, in the judgment
of the Administrative Agent, to give effect to the transactions contemplated
hereby or to cure any ambiguity, omission, defect or inconsistency relating to
effectuation of the transactions contemplated hereby.

 

SECTION 7.         Counterparts.  This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  Delivery by facsimile or
electronic transmission of an executed counterpart of a signature page to this
Amendment shall be effective as delivery of an original executed counterpart of
this Amendment.

 

SECTION 8.         Governing Law.

 

(a)           THIS AMENDMENT AND ALL ACTIONS ARISING UNDER THIS AMENDMENT,
WHETHER SOUNDING IN CONTRACT LAW, EQUITY, TORT LAW OR OTHERWISE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES).

 

11

--------------------------------------------------------------------------------

 

(b)           The waiver of venue, waiver of jury trial, jurisdiction and
consent to service of process provisions set forth in Sections 9.11 and 9.15 of
the Credit Agreement are hereby incorporated by reference, mutatis mutandis, in
this Amendment.

 

SECTION 9.         Expenses. The Lead Borrower agrees to reimburse the
Administrative Agent for its reasonable and documented out-of-pocket expenses
incurred by them in connection with this Amendment, including the reasonable
fees, charges and disbursements of Cahill Gordon & Reindel LLP, counsel for the
Administrative Agent.

 

SECTION 10.       Headings.  Section headings used herein are for convenience of
reference only, are not part of this Amendment and shall not affect the
construction of, or be taken into consideration in interpreting, this Amendment.

 

[Remainder of page intentionally left blank]

 

12

--------------------------------------------------------------------------------

 

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

 

 

GENERAC ACQUISITION CORP.

 

 

 

 

 

By:

/s/ York A. Ragen

 

 

Name: York A. Ragen

 

 

Title: Chief Financial Officer

 

 

 

 

 

GENERAC POWER SYSTEMS, INC.

 

 

 

 

 

By:

/s/ York A. Ragen

 

 

Name: York A. Ragen

 

 

Title: Chief Financial Officer

 

 

 

[OTHER BORROWERS]

 

--------------------------------------------------------------------------------

 

 

LENDER SIGNATURE PAGE TO AMENDMENT

 

NO. 1 TO ABL CREDIT AGREEMENT OF

 

GENERAC POWER SYSTEMS, INC.,

 

as Lead Borrower

 

 

 

JPMorgan Chase Bank, N.A.

 

 

 

 

 

By:

/s/ Aized A. Rabbani

 

 

Name: Aized A. Rabbani

 

 

Title: Executive Director

 

 

 

 

 

Wells Fargo Bank, N.A.

 

 

 

 

 

By:

/s/ David Klages

 

 

Name: David Klages

 

 

Title: Authorized Signatory

 

 

 

 

 

Goldman Sachs Bank USA

 

 

 

 

 

By:

/s/ Mark Walton

 

 

Name: Mark Walton

 

 

Title: Authorized Signatory

 

 

 

 

 

Key Bank National Association

 

 

 

 

 

By:

/s/ Nadine M. Eames

 

 

Name: Nadine M. Eames

 

 

Title: Vice President

 

14

--------------------------------------------------------------------------------

 

 

BANK OF AMERICA, N.A., as Lender and as Administrative Agent

 

 

 

 

 

By:

/s/ Jason Riley

 

 

Name: Jason Riley

 

 

 

 

 

Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

Schedules

 

--------------------------------------------------------------------------------

 

Schedule 2.01
Revolver Commitments

 

Lender

 

Revolver
Commitments

 

Bank of America, N.A.

 

$

52,500,000

 

JPMorgan Chase Bank, N.A.

 

$

30,000,000

 

Wells Fargo Bank, N.A.

 

$

27,500,000

 

Goldman Sachs Bank USA

 

$

20,000,000

 

KeyBank National Association

 

$

20,000,000

 

Total

 

$

150,000,000

 

 

1

--------------------------------------------------------------------------------

 

Schedule 6.01
Indebtedness

 

1.              $9,000,000 revolving line of credit pursuant to certain
promissory notes, made by Ottomotores Comercializadora S.A. de C.V. in favor of
Banco Nacional de Mexico, SA;

 

2.              $8,000,000 revolving line of credit pursuant to that certain
Sexto Convenio Modificatorio, by and between Ottomotores Commercializadora S.a.
de C.V. and BBVA Bancomer, SA; and

 

3.              $5,500,000 revolving line of credit pursuant to certain
Santander Comex, between Ottomotores S.A. de C.V. and Banco Santander (Mexico),
SA.

 

2

--------------------------------------------------------------------------------

 

Schedule 6.02(a)
Liens

 

Jurisdiction

 

Debtor

 

Secured Party

 

Filing Info

 

Collateral

Wisconsin

 

Generac Power Systems,

 

IBM Credit LLC

 

UCC-1

 

All of IBM

 

 

Inc.

 

1 North Castle Drive

 

070000035917

 

Equipment and

 

 

757 N Newcomb St

 

Armonk, NY 10504

 

1/2/2007

 

related software

 

 

Waukesha, WI 53187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems,

 

Chemical Methods Leasco,

 

UCC-1

 

Lease # 250254

 

 

Incorporated

 

Inc.

 

070007732726

 

One CMA

 

 

211 Murphy Drive

 

12700 Knott Avenue

 

5/29/2007

 

Dishmachine

 

 

Eagle, WI 53119

 

Garden Grove, CA 92841

 

 

 

Model L-1X

 

 

 

 

 

 

 

 

 

 

 

Additional Debtor:

 

 

 

 

 

Undercounter

 

 

Eagle Training Center

 

 

 

 

 

SN# 170716

 

 

(at same address)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional Debtor:

 

 

 

 

 

 

 

 

Bill Mongan

 

 

 

 

 

 

 

 

(at same address)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems,

 

Carrier Corporation

 

UCC-1

 

Air condition and

 

 

Inc.

 

7310 W. Morris Street

 

070010625923

 

related equipment

 

 

Highway 59 and Hillside

 

Indianapolis, IN 46231

 

7/27/2007

 

 

 

 

Road

 

 

 

 

 

 

 

 

Waukesha, WI 53187

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems Inc.

 

Wisconsin Lift Truck

 

UCC-1

 

Used 2005 JLG

 

 

Highway 59 and Hillside

 

3125 Intertech Dr.

 

090003175420

 

Model 1930;

 

 

Dr.

 

Brookfield, WI 53045

 

3/13/2009

 

Truck SN#

 

 

PO Box 8

 

 

 

 

 

0200133766;

 

 

Waukesha, WI 53187

 

 

 

 

 

Used Truck

 

 

 

 

 

 

 

 

111312

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems

 

Morris Midwest, LLC

 

UCC-1

 

One (1) Okuma

 

 

Hwy 59 & Hillside Road

 

9300 W Heather Avenue

 

090008671830

 

Machine Tool

 

 

Waukesha, WI 53187

 

Milwaukee, WI 53224

 

7/15/2009

 

Model

 

 

 

 

 

 

 

 

MA500HB HMC,

 

 

 

 

 

 

 

 

Contract

 

 

 

 

 

 

 

 

#m6150224,

 

 

 

 

 

 

 

 

Serial Number

 

 

 

 

 

 

 

 

615.134257,

 

 

 

 

 

 

 

 

Equipped with all attachments and accessories, etc.

 

3

--------------------------------------------------------------------------------

 

Jurisdiction

 

Debtor

 

Secured Party

 

Filing Info

 

Collateral

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems

Hwy 59 & Hillside Road

Waukesha, WI 53187

 

Doosan Infracore America

Corporation

2905 Shawnee Industrial Way

Suwanee, GA 30024

 

UCC-1

090010522414

9/1/2009

 

All equipment, inventory, accounts, contracts and all proceeds, etc. in
connection with contracts with the secured party

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems,

Inc.

Highway 59 and Hillside Rd

Waukesha, WI 53187

 

IBM Credit LLC

1 North Castle Drive

Armonk, NY 10504

 

UCC-1

100000116311

1/5/2010

 

All equipment together with all related software, etc.

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems,

Inc.

S45W29290 Hwy 59

Waukesha, WI 53189-9053

 

IBM Credit LLC

1 North Castle Drive

Armonk, NY 10504

 

UCC-1

110015957330

12/29/2011

 

All equipment together with all related software, etc.

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems,

Inc.

S45W29290 Hwy 59

Waukesha, WI 53189-9053

 

IBM Credit LLC

1 North Castle Drive

Armonk, NY 10504

 

UCC-1

120000079319

01/03/2012

 

All equipment together with all related software, etc.

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems,

Inc.

S45W29290 Hwy 59

Waukesha, WI 53189-9053

 

IBM Credit LLC

1 North Castle Drive

Armonk, NY 10504

 

UCC-1

120004331617

3/30/2012

 

All equipment together with all related software, etc.

 

 

 

 

 

 

 

 

 

Wisconsin

 

Generac Power Systems,

Inc.

S45 W29290 Hwy 59

Waukesha, WI 53189

 

Gosiger Inc

3315 Intertech Drive

Brookfield, WI 53045

 

120015030615

11/26/2012

 

Haas VF-2, Vertical Machining Center, Serial number 1100192, including all
options and accessories.

 

 

 

 

 

 

 

 

 

Wisconsin

 

Magnum Power Products,

LLC

215 Power Drive

Green Bay, WI 54301

 

U.S. Venture, Inc.

425 Better Way

Appleton, WI 54915

 

130001552619

02/01/2013

 

A purchase money security interest in the equipment.

 

 

 

 

 

 

 

 

 

Wisconsin

 

Magnum Power Products,

LLC

215 Power Drive

Green Bay, WI 54301

 

Nissan Motor Acceptance

Corporation

8900 Freeport Parkway

Irving, TX 75063

 

130001798530

02/07/2013

 

Nissan Forklifts and related equipment

 

4

--------------------------------------------------------------------------------

 

Schedule 6.04
Investments, Loans and Advances

 

None.

 

--------------------------------------------------------------------------------

 

Schedule 6.07
Transactions with Affiliates

 

None.

 

--------------------------------------------------------------------------------

 

Exhibit A

 

--------------------------------------------------------------------------------

 

EXECUTION VERSION

 

FIRST AMENDMENT TO GUARANTEE AND COLLATERAL AGREEMENT

 

FIRST AMENDMENT TO GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 31, 2013
(this “Amendment”), to that certain Guarantee and Collateral Agreement, dated as
of May 30, 2012 (as amended, supplemented or otherwise modified from time to
time, the “Guarantee and Collateral Agreement”), made by Generac Holdings Inc.
(“Parent”), Generac Acquisition Corp. (“Holdings”), Generac Power Systems, Inc.
(the “Lead Borrower”), the subsidiaries of the Lead Borrower party hereto
(together with the Lead Borrower, the “Borrowers” and the Borrowers, together
with Parent and Holdings, the “Loan Parties”) and Bank of America, N.A., as
administrative agent for the Secured Parties (the “Administrative Agent”).

 

W I T N E S S E T H:

 

WHEREAS Holdings and the Borrowers are parties to that certain Credit Agreement,
dated as of May 30, 2012 and as further amended as of May 31, 2013 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Holdings, the Borrowers, the lenders party thereto, the Administrative
Agent and the other agents party thereto;

 

WHEREAS, the Guarantee and Collateral Agreement is a Loan Document as defined in
the Credit Agreement;

 

WHEREAS, pursuant to Section 9.08(b) of the Credit Agreement, a Loan Document
may be amended pursuant to an agreement or agreements in writing consented to by
the Required Lenders and entered into by each other party thereto and the
Administrative Agent;

 

WHEREAS, pursuant to Section 9.08(b) of the Credit Agreement, the Lenders have
authorized the Administrative Agent to enter into an amendment to the Guarantee
and Collateral Agreement; and

 

WHEREAS, the parties hereto now wish to amend the Guarantee and Collateral
Agreement in certain respects;

 

NOW THEREFORE, in consideration of the premises and mutual covenants hereinafter
set forth, the parties hereto agree as follows:

 

SECTION 1.         Definitions. Unless otherwise specifically defined herein,
each term used herein (including in the recitals above) has the meaning assigned
to such term in the Credit Agreement or the Guarantee and Collateral Agreement,
as the context may require.

 

SECTION 2.         Amendments to the Guarantee and Collateral Agreement.

 

2.1          Amendments to Section 1.1 of the Guarantee and Collateral Agreement

 

(a)                                 The definition of “Secured Obligations”
shall be amended by inserting the following immediately prior to the “.” at the
end thereof:

 

“; provided, that for purposes of determining any Guarantor Obligations of any
Guarantor under this Agreement, the definition of “Secured Obligations” shall
not create any guarantee by any Guarantor of any Excluded Swap Obligations of
such Guarantor.”

 

--------------------------------------------------------------------------------

 

(b)                                 The following term shall be inserted into
Section 1.1 in appropriate alphabetical order:

 

“Qualified ECP Guarantor”: in respect of any Swap Obligation, each Loan Party
that, at the time the relevant guarantee (or grant of the relevant security
interest, as applicable) becomes effective with respect to such Swap Obligation,
has total assets exceeding $10,000,000 or otherwise constitutes an “eligible
contract participant” under the Commodity Exchange Act or any regulations
promulgated thereunder with respect to such Swap Obligation at such time by
entering into an agreement pursuant to section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.

 

2.2                               Amendments to Section 2 of the Guarantee and
Collateral Agreement

 

(a)                                 The first sentence of Section 2.1(a) shall
be amended by inserting the words “(other than, with respect to any Guarantor,
any Excluded Swap Obligations of such Guarantor)” after the words “Secured
Obligations.”

 

(b)                                 New Section 2.8 shall be inserted as
follows:

 

“2.8. Cross-guaranty. Each Qualified ECP Guarantor hereby jointly and severally
absolutely, unconditionally and irrevocably guarantees the obligations of each
Guarantor under this guarantee in respect of any Swap Obligation (provided,
however, that each Qualified ECP Guarantor shall only be liable under this
Section 2.8 for the maximum amount of such liability that can be hereby incurred
without rendering its obligations under this Section 2.8, or otherwise under
this guarantee, voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer, and not for any greater amount). The obligations of each
Qualified ECP Guarantor under this Section 2.8 shall remain in full force and
effect until the Termination Date. Each Qualified ECP Guarantor intends that
this Section 2.8 constitute, and this Section 2.8 shall be deemed to constitute,
a “guarantee or other agreement” for the benefit of each other Guarantor for all
purposes of section 1a(18)(A)(v)(II) of the Commodity Exchange Act.”

 

2.3                               Amendments to Section 6.5 of the Guarantee and
Collateral Agreement

 

(c)                                  Section 6.5 shall be amended by inserting
the following sentence at the end thereof:

 

“Notwithstanding the foregoing, no amounts received from any Guarantor shall be
applied to any Excluded Swap Obligations of such Guarantor.”

 

2.4.                            Amendments to Section 8.6 of the Guarantee and
Collateral Agreement

 

(a)                                 Section 8.6 shall be amended by inserting
the following sentence at the end thereof:

 

2

--------------------------------------------------------------------------------

 

“Notwithstanding the foregoing, no amounts received from any Agreement Party
shall be applied to any Excluded Swap Obligations of such Agreement Party.”

 

SECTION 3.         Conditions. This Amendment shall become effective on the date
this Amendment shall have been duly executed and delivered by the Loan Parties
and the Administrative Agent.

 

SECTION 4.         Effect of Amendment.

 

4.1.         Except as expressly set forth herein, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver of or otherwise
affect the rights and remedies of the Lenders or the Administrative Agent under
the Credit Agreement or any other Loan Document, and shall not alter, modify,
amend or in any way affect any of the terms, conditions, obligations, covenants
or agreements contained in the Credit Agreement or any other provision of the
Credit Agreement or of any other Loan Document, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. Nothing
herein shall be deemed to entitle the Borrowers to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document in similar or different circumstances.

 

SECTION 5.         General.

 

5.1.         GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

5.2.         Costs and Expenses. The Borrowers shall pay all reasonable fees,
costs and expenses of the Administrative Agent incurred in connection with the
negotiation, preparation and execution of this Amendment and the transactions
contemplated hereby.

 

5.3.         Counterparts. This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Amendment by email or
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.

 

5.4.         Headings. The headings of this Amendment are used for convenience
of reference only, are not part of this Amendment and shall not affect the
construction of, or be taken into consideration in interpreting, this Amendment.

 

5.5.         Miscellaneous. This Amendment shall constitute a Security Document
for all purposes of the Credit Agreement.

 

[remainder of page intentionally left blank]

 

3

--------------------------------------------------------------------------------

 

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

 

 

GENERAC HOLDINGS INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

GENERAC ACQUISITION CORP.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

GENERAC POWER SYSTEMS, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

MAGNUM POWER PRODUCTS, LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Signature Page to Guarantee and Collateral Agreement Amendment

 

--------------------------------------------------------------------------------

 

 

BANK OF AMERICA, N.A., as Administrative Agent

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Signature Page to Guarantee and Collateral Agreement Amendment

 

--------------------------------------------------------------------------------