Exhibit 10.37


 


EXCHANGE
AGREEMENT


 


This EXCHANGE AGREEMENT is made
as of April 18, 2008 (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 April 18, 2008, the Investors and their affiliates own, in the aggregate, 68,775 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 $5,000,000 (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/ [ILLEGIBLE]

  
	
   

  	
   

  	
  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/ [ILLEGIBLE]

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


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EXHIBIT A


 


Shares to
be exchanged for Purchased Loans


 


	
  Investor

  	
   

  	
  Value of Purchased Loans

  Exchanged

  	
   

  	
  Number of Shares

  Received

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CCMP

  	
   

  	
  $

  	
  4,411,936.73

  	
   

  	
  441.193673

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cayman

  	
   

  	
  $

  	
  588,063.27

  	
   

  	
  58.806327

  	
   

  



 


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