Exhibit 10.14


 


SUBSCRIPTION AND STOCK PURCHASE
AGREEMENT


 


This SUBSCRIPTION AND STOCK PURCHASE AGREEMENT is made as of September 2,
2009 (the “Agreement”),  by and between GPS CCMP
Acquisition Corp., a Delaware corporation (the “Company”),  and CCMP Generac Co-Invest, L.P. (the
“Purchaser”).


 


W I T N E S S E T H :


 


WHEREAS, reference is made to that certain Exchange Agreement, dated as
of and after November 25, 2008 (the “Exchange Agreement”),
by and among CCMP Capital Investors II., L.P. and CCMP
Capital Investors (Cayman) II, L.P. (collectively, the “CCMP Capital
Investors”)  and
the Company, pursuant to which from time to time between December 2, 2008
and July 17, 2009 the Company issued an aggregate of 7,760.8845 shares of Series A
Preferred Stock (“Series A Preferred Stock”),  par value $0.01 per share, to CCMP
Capital Investors II., L.P. and CCMP Capital Investors (Cayman) II, L.P. (collectively,
the “CCMP Capital Investors”)  in a series of exchanges for
certain First Lien Term Loans and Second Lien Term Loans (as such terms are
defined in that certain Credit Agreement, dated as of November 10, 2006, by
and among Generac Power Systems, Inc., as borrower, and the other parties
thereto) in an aggregate principal amount equal to $154,814,528 (collectively, the
“Exchange”);


 


WHEREAS, the CCMP Capital Investors also purchased 1,550 shares of the
Company’s Series A Preferred Stock in an equity investment of $15,500,000
(together with the Exchange, the “CCMP Transactions”);


 


WHEREAS, pursuant to the Certificate of Designations Establishing the
Voting Powers, Designations, Preferences, Limitations, Restrictions and
Relative Rights of Series A Preferred Stock (as amended, modified or
supplemented from time to time, the “Certificate of Designations”),  among
other things, the Series A Preferred Paid-in Capital (as defined in the
Certificate of Designations) of shares of the Company’s Series A Preferred
Stock obtained by the CCMP Capital Investors from time to time in connection
with the CCMP Transactions (the “CCMP Shares”)  was initially the amount paid for
each CCMP Share when it was issued (i.e., $10,000 per share) and such amount
for each CCMP Share has increased from the date of issuance of each CCMP Share
at a rate of 14% per annum (calculated quarterly and compounded on the basis of
a 360 day year of 12 months);


 


WHEREAS, the board of directors of the Company authorized the issuance
of an additional 2,000 shares (the “Newly Issued Shares”)  of Series A Preferred Stock (the
“New
Issuance”  and,
together with the CCMP Transactions, the “Transactions”),  resulting in the total number of
securities issued or to be issued by the Company pursuant to the Transactions
being equal to 11,310.8845 shares of Series A Preferred Stock (the “Securities”);


 

















 


WHEREAS, in accordance with (i) Section 4.04
of that certain Shareholders’ Agreement, dated as of November 10, 2006 (as
modified by that certain Waiver Agreement, dated November 25, 2008, the “Shareholders’ Agreement”),  by and among the Company and the
other parties thereto, (ii) Section 3.3(c) of that
certain Amended and Restated Limited Partnership Agreement of CCMP Generac
Co-Invest, L.P., dated as of November 6, 2006 (the “Co-Invest L.P. Agreement”)  among CCMP Generac Co-Invest GP, LLC
and the other parties thereto, in connection with the Transactions and pursuant
to that certain Offer Notice, dated July 23, 2009 (the “Offer
Notice”),  by
the Company to the Purchaser, the CCMP Capital Investors and the Company
offered the Purchaser, and certain other investors in the Company, the opportunity
to purchase a number of Securities equal to the Purchaser’s pro rata share of
the Securities;


 


WHEREAS, for purposes of administrative convenience, the Purchaser is
purchasing all of the Purchased Shares (as defined below) directly from the
Company rather than purchasing the Purchaser’s applicable pro rata share of the
CCMP Shares from the CCMP Capital Investors and separately purchasing the
Purchaser’s applicable pro rata share of the Newly Issued Shares from the
Company;


 


WHEREAS, the parties hereto desire the Series A Preferred
Unreturned Paid-in Capital (as defined in the Certificate of Designations) in
respect of all of the Securities, including the shares to be purchased
hereunder, to be a weighted average that includes all of the increases to the Series A
Preferred Paid-In Capital on all of the Securities since the date of issuance
thereof under the terms of the Certificate of Designations, the methodology for
which is set for on Schedule I attached hereto;


 


WHEREAS, in connection with the Offer Notice and on the terms and
subject to the conditions set forth herein, the Purchaser desires to subscribe
for and purchase, and the Company desires to sell to the Purchaser that number
of shares of Offered Securities set forth on Schedule II attached hereto
opposite the Purchaser’s name (each share, a “Purchased Share”  and, collectively, the “Purchased
Shares”),  which
Purchased Shares shall have a Series A Preferred Unreturned Paid-in
Capital as set forth on Schedule II opposite the Purchaser’s name;


 


WHEREAS, the sale of the Purchased Shares shall be in full satisfaction
of the obligations of the Company under (i) Section 4.04 of
the Shareholders’ Agreement and any other rights that the Purchaser has or may
have had with respect to the Transactions pursuant to the Shareholders’ Agreement,
including, without limitation, under any of the other sections of Article 4
thereof, and (ii) Section 3.3(c) of the Co-Invest L.P. Agreement
and any other rights that the Purchaser has or may have had with respect to the
Transactions pursuant to the Co-Invest L.P. Agreement, including, without
limitation, under any of the other sections of Article III thereof;
and


 


NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy


 


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of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:


 


ARTICLE I


 


PURCHASE
AND SALE OF SHARES


 


1.1           Sale and Issuance of Shares.  Subject to the terms and conditions of this
Agreement, the Purchaser does hereby subscribe for and agree to purchase, and
the Company does hereby agree to sell to the Purchaser, the number of Purchased
Shares set forth in the column “Number of Series A Preferred Shares” on Schedule
II hereto opposite the Purchaser’s name for the aggregate purchase price
set forth in the column “Total Cost” on Schedule II opposite the
Purchaser’s name.


 


1.2           Series A Preferred Unreturned Paid-In Capital
of Purchased Shares. For purposes of clarity and notwithstanding
anything to the contrary herein or otherwise, the parties hereto hereby agree, acknowledge
and confirm in all respects that the Series A Unreturned Preferred Paid-in
Capital in respect to each Purchased Share will be as set forth on Schedule
II opposite the Purchaser’s name and the same shall be reflected on the
books and records of the Company. The Series A Preferred Unreturned
Paid-in Capital of each Purchased Share shall continue to increase or decrease
pursuant to the terms of the Certificate of Designations.


 


ARTICLE II


 


REPRESENTATIONS
AND WARRANTIES OF THE COMPANY


 


The Company hereby represents and warrants to the
Purchaser as follows:


 


2.1           Organization and Standing. The Company
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and
authority to carry on its business as now conducted and as proposed to be
conducted.


 


2.2           Authorization. The Company has full
corporate power and authority to execute and deliver this Agreement and all
other agreements and instruments contemplated hereby to which the Company is a
party and to perform its obligations hereunder and thereunder. All corporate
action on the part of the Company necessary for the authorization, execution, delivery
and performance of this Agreement by the Company, and for the authorization, issuance
and delivery of the Purchased Shares being sold under this Agreement, has been
taken. This Agreement, when executed and delivered by all parties hereto, shall
constitute the valid and legally binding obligation of the Company, except to
the extent the enforceability thereof may be limited by bankruptcy laws, insolvency
laws, reorganization laws, moratorium laws or other laws affecting creditors’ rights
generally or by general equitable principles.


 


2.3           Validity of Shares. The Purchased Shares, when
issued, sold and delivered in accordance with the terms of this Agreement, shall
be duly and validly


 


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issued,
and fully paid and nonassessable, free and clear of all liens and encumbrances
(other than those created by the Purchaser).


 


2.4           Securities Act. The sale of
Purchased Shares in accordance with the terms of this Agreement (assuming the
accuracy of the representations and warranties of the Purchaser contained in Article III
hereof) is exempt from the registration requirements of the Securities Act of
1933, as amended (the “1933 Act”).


 


ARTICLE III


 


REPRESENTATIONS,
WARRANTIES

AND AGREEMENTS OF THE PURCHASER


 


3.1           The Purchaser hereby represents and warrants to the
Company that:


 


(a)           Authorization. The Purchaser
is authorized and qualified and has full right and power to execute and deliver
this Agreement and all other agreements and instruments contemplated hereby to
which the Purchaser is a party, and to perform its obligations hereunder and
thereunder. This Agreement and all other agreements and instruments
contemplated hereby to which the Purchaser is a party have been duly authorized,
executed and delivered by or on behalf of the Purchaser. Assuming the due
authorization, execution, delivery and performance of this Agreement and all
other agreements and instruments contemplated hereby by the other parties
hereof and thereof, this Agreement and all other agreements and instruments
contemplated hereby to which the Purchaser is a party are legal, valid and
binding agreements, enforceable against the Purchaser in accordance with their
terms.


 


(b)           Investment
Representations.


 


(i)      The
Purchased Shares to be received by the Purchaser will be acquired by it for its
own account (or in the case of a custodian, for the account of its affiliated
funds), not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof in violation of applicable federal and state
securities laws, and it has no current intention of selling, granting a
participation in or otherwise distributing the same, in each case, in violation
of applicable federal and state securities laws. By executing this Agreement, the
Purchaser further represents that it does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant a participation to
such person, or to any third person, with respect to any of the Purchased
Shares to be received by the Purchaser, in each case, in violation of
applicable federal and state securities laws.


 


(ii)      The
Purchaser has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of its investment. The
Purchaser further represents that it has


 


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had, during the course of the transactions contemplated hereby and
prior to its purchase of the Purchased Shares, the opportunity to ask questions
of, and receive answers from the Company concerning the terms and conditions of
the offering and to obtain additional information necessary to verify the
accuracy of any information furnished to it or to which it had access. The
Purchaser understands that no federal or state agency has passed upon this
investment or upon the Company, nor has any such agency made any finding or
determination as to this investment.


 


(iii)      The Purchaser
understands that the Purchased Shares to be received may not be sold, transferred
or otherwise disposed of without registration under the 1933 Act or an
exemption therefrom, and that in the absence of an effective registration
statement covering such Purchased Shares or an available exemption from
registration under the 1933 Act, such Purchased Shares must be held
indefinitely. The Purchaser is prepared to bear the economic risk of this
investment for an indefinite period of time. In particular, the Purchaser
acknowledges that it is aware that such Purchased Shares may not be sold
pursuant to Rule 144 promulgated under the 1933 Act unless all of the
conditions of that Rule are met. Among the current conditions for use of Rule 144
by certain holders is the availability to the public of current information
about the Company. Such information is not now available, and the Company has
no current plans to make such information available. The Purchaser represents
that, in the absence of an effective registration statement covering such
Purchased Shares, it will sell, transfer or otherwise dispose of such Purchased
Shares only in a manner consistent with its representations set forth herein and
then only in accordance with the Shareholders’ Agreement.


 


(iv)      The Purchaser
acknowledges that this investment is not recommended for investors who have any
need for a current return on this investment or who cannot bear the risk of
losing their entire investment. The Purchaser acknowledges that: (i) it
has adequate means of providing for its current needs and possible personal
contingencies and has no need for liquidity in this investment; (ii) its
commitment to investments which are not readily marketable is not
disproportionate to its net worth; and (iii) its investment in the
Purchased Shares will not cause its overall financial commitments to become
excessive.


 


3.2           Legends; Stop Transfer.


 


(a)           The Purchaser acknowledges that all certificates evidencing
the Purchased Shares shall bear the following legend:


 


“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A


 


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VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT
OF 1933.”


 


3.3           The
certificates evidencing the Purchased Shares shall also bear any legend
required by any applicable state securities law.


 


ARTICLE IV


 


MISCELLANEOUS


 


4.1           No Waiver; Modifications in Writing. This
Agreement sets forth the entire understanding of the parties, and supersedes
all prior agreements, arrangements and communications, whether oral or written,
with respect to the specific subject matter hereof. No waiver of or consent to
any departure from any provision of this Agreement shall be effective unless
signed in writing by the party entitled to the benefit thereof. Except as
otherwise provided herein, no amendment, modification or termination of any
provision of this Agreement shall be effective unless signed in writing by or
on behalf of the Company and the Purchaser.


 


4.2           Execution of Counterparts. This
Agreement may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same Agreement.


 


4.3           Binding Effect; Assignment.
The rights and obligations of each party under this Agreement may not be
assigned to any other person; provided that the Purchaser shall have the
right to assign its rights and obligations hereunder to any of its affiliated
investment funds. Except as expressly provided in this Agreement, this
Agreement shall not be construed so as to confer any right or benefit upon any
person other than the parties to this Agreement, and their respective
successors and assigns. This Agreement shall be binding upon the Company and
the Purchaser and their respective successors and permitted assigns.


 


4.4           Governing Law. This
Agreement shall be governed by the laws of the State of Delaware as to all
matters, including but not limited to matters of validity, construction, effect,
performance and remedies.


 


4.5           Severability of Provisions. Any provision
of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the


 


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remaining provisions hereof or affecting the validity or enforceability
of such provision in any other jurisdiction.


 


4.6           Survival of
Agreements, Representations and Warranties. All agreements, representations
and warranties contained herein or made in writing by or on behalf the Company
or the Purchaser, as the case may be, in connection with the transactions
contemplated by this Agreement shall survive the execution and delivery of this
Agreement and the sale and purchase of the Purchased Shares and payment
therefor.


 


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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.


 


	
   

  	
  GPS CCMP ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Aaron P. Jagdfeld

  
	
   

  	
   

  	
  Name:

  	
  Aaron P. Jagdfeld

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tim Walsh

  
	
   

  	
   

  	
  Name:

  	
  Tim Walsh

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CCMP GENERAC CO-INVEST, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CCMP
  Generac Co-Invest GP, LLC,

  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  [ILLEGIBLE]

  



 


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