Exhibit 10.27


 


EXCHANGE AGREEMENT


 


This
EXCHANGE AGREEMENT is made as of September 25, 2007 (the “Agreement”),
by and among CCMP Capital Investors II, L.P. (“CCMP”), CCMP Capital Investors (Cayman) II, L.P. (“Cayman”,
and together with CCMP, the “Investors”) and GPS CCMP Acquisition Corp., a Delaware corporation (the “Company”).


 


RECITALS


 


WHEREAS, Generac Acquisition Corp., a
wholly-owned subsidiary of the Company, Generac Power Systems, Inc. (the “Borrower”),
JPMorgan Chase Bank, N.A., as administrative agent, J.P. Morgan Securities
Inc., as syndication agent, Barclays Bank
PLC, as documentation agent, Wilmington Trust Company, as collateral agent,
Goldman Sachs Credit Partners L.P., and J.P. Morgan Securities Inc., as joint
lead arrangers, and the lenders party thereto (the “Lenders”), are each
a party to that certain Credit Agreement, dated as of November 10, 2006 (the “Second
Lien Credit Agreement”), pursuant to which the Lenders made certain term
loans to the Borrower upon the terms and conditions set forth therein (such
term loans, the “Second Lien Term Loans”);


 


WHEREAS, the Borrower is an indirect,
wholly-owned subsidiary of the Company;


 


WHEREAS, as of September 25, the Investors and
their affiliates own, in the aggregate, 60,290 shares of the Company’s Class B
Voting Common Stock, par value $0.01 per share (the “Class B Common Stock”);


 


WHEREAS, the Investors have purchased Second
Lien Term Loans in an aggregate principal amount of $4,000,000 (the “Purchased
Loans”) for an aggregate purchase price of $2,880,000, and, as a result
thereof, have become Lenders under the Second Lien Credit Agreement;


 


WHEREAS, the Investors desire transfer such
Purchased Loans to the Company (the “Exchange”)
in exchange for that number of shares of Class B Common Stock (the “Shares”),
as set forth opposite each such Investor’s name on Exhibit A hereto,
which Shares shall have a fair market value of $10,000.00 per Share and, in the
aggregate, shall have a value equivalent to the aggregate purchase price that
the Investors paid to purchase the Purchased Loans;


 


NOW,
THEREFORE, in
consideration of the foregoing premises, the parties hereto hereby agree as
follows:


 


1.             Exchange.  The parties hereby agree that effective
immediately upon the execution and delivery
of this Agreement, each Investor is transferring to the Company, and the
Company is accepting and receiving, the Purchased Loans in exchange for the
number of Shares set forth opposite such Investor’s name on Exhibit A
hereto. The parties further agree that upon
the Exchange and the delivery of the Shares in exchange therefor, (i)
the Investors and the Company will execute and deliver the Assignment


 

















 


and Acceptance Agreement required to be executed and
delivered under the Second Lien Credit
Agreement in connection with the Exchange, (ii) neither Investor shall have any
further obligations in respect of any of the Purchased Loans, and (iii) the
Shares, when issued, shall be fully paid and non-assessable.


 


2.             Investor Representation and Warranties. In connection with the consummation of the
transactions contemplated hereby, each Investor represents and warrants to the
Company as follows:


 


(a)           Authority. Such Investor has full power and authority to enter
into this Agreement and to carry out the transactions contemplated hereby. Such
Investor has taken all action required by law or otherwise to authorize the
execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby, and this
Agreement is a valid and binding agreement of such Investor enforceable in
accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally and by general principles of equity.


 


(b)           Accredited Investor. Such Investor is an “Accredited
Investor” as such term is defined in Regulation D under the Securities Act of
1933, as amended, and has business or financial experience from which it could
be reasonably assumed that the Investor has the capacity to protect its own
interest in connection with the transaction.


 


3.             Company Representation and Warranties. In connection with the consummation of the
transactions contemplated hereby, the Company represents and warrants to each
Investor as follows:


 


(a)           Authority. The Company has all requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the transactions contemplated hereby by the Company
have been duly authorized by all company action on the part of the
Company. This Agreement has been duly
executed and delivered by the Company and, assuming the due execution and delivery
by the Investor, constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.


 


(b)           Authorization of Shares. The Shares have been duly authorized.


 


4.             Miscellaneous.


 


(a)           Counterparts. This Agreement
may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. This Agreement may be executed by
facsimile signature and a facsimile signature shall constitute an original for
all purposes.


 


2

















 


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


 


(c)           Entire Agreement. This Agreement is intended by the
parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. 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. There are no restrictions, promises, warranties or undertakings
with respect to the subject matter hereof other than those set forth or
referred to herein. All exhibits hereto shall be deemed a part of this
Agreement.


 


(d)           No Waiver; Amendments in Writing. 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, provided that notice
of any such waiver shall be given to each party hereto as set forth below.
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 each Investor.


 


(e)           Binding Effect; Assignment. The rights and obligations of each
party under this Agreement may not be assigned to any other person; provided
that each Investor 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 each Investor and their respective successors and
assigns.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


3

















 


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


 


	
   

  	
  GPS CCMP
  ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Aaron Jagdfeld

  
	
   

  	
   

  	
  Name: Aaron Jagdfeld

  
	
   

  	
   

  	
  Title: C.F.O.

  
	
   

  	
   

  
	
   

  	
  CCMP CAPITAL INVESTORS (CAYMAN) II, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  CCMP Capital Associates, L.P.,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CCMP Capital Associates GP, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tim Walsh

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  CCMP CAPITAL
  INVESTORS II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CCMP Capital Associates, L.P., 

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  CCMP Capital Associates GP,
  LLC, 

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tim Walsh

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


4

















 


EXHIBIT
A


 


Shares to be exchanged for Purchased Loans


 


	
  Investor

  	
   

  	
  Value of Purchased Loan

  Exchanged

  	
   

  	
  Number of Shares

  Received

  	
   

  
	
  CCMP

  	
   

  	
  $

  	
  2,487,867.64

  	
   

  	
  248.786764

  	
   

  
	
  Cayman

  	
   

  	
  $

  	
  392,132.36

  	
   

  	
  39.213236