Exhibit 10.9


 


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 John Bowlin (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 Transaction”);


 


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 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 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, 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 obligation
of the Company under 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


 


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


 


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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 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


 


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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 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


 


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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
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


 


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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 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


 


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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

  
	
   

  	
   

  
	
   

  	
  JOHN
  BOWLIN

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John Bowlin

  



 


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AGREEMENT SIGNATURE PAGE]