Exhibit 10.31


 


EXCHANGE
AGREEMENT


 


This EXCHANGE AGREEMENT is made as of November 13, 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 November 13,
2007, the Investors and their affiliates own, in the aggregate, 62,950 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 $8,750,000
(the “Purchased Loans”) and, as a result thereof, have become Lenders
under the Second Lien Credit Agreement;


 


WHEREAS, the Investors desire to
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 principal
amount of 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.


 


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(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.


 


(f)            Recapitalization.  The Exchange is intended to qualify as a
recapitalization within the meaning of Section 368(a)(1)(E) of the
Internal Revenue Code of 1986, as amended, and the parties hereto shall not
take any action inconsistent with the treatment of the Exchange as such.


 


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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
  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:
  Tim Walsh

  
	
   

  	
   

  	
  Title:
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  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:
  Tim Walsh

  
	
   

  	
   

  	
  Title:
  Managing Director

  



 


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EXHIBIT A


 


Shares to
be exchanged for Purchased Loans


 


	
  Investor

  	
   

  	
  Value of Purchased Loans

  Exchanged

  	
   

  	
  Number of Shares

  Received

  	
   

  
	
  CCMP

  	
   

  	
  $

  	
  7,720,889.28

  	
   

  	
  772.0889280

  	
   

  
	
  Cayman

  	
   

  	
  $

  	
  1,029,110.72

  	
   

  	
  102.9110720

  	
   

  



 


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