Exhibit 10.35


 


EXCHANGE
AGREEMENT


 


This EXCHANGE AGREEMENT is made as of
December 6, 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 December 6, 2007,
the Investors and their affiliates own, in the aggregate, 65,775 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 $11,000,000 (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/ Tim Walsh

  
	
   

  	
   

  	
  Name:
  Tim Walsh

  
	
   

  	
   

  	
  Title:
  MD

  
	
   

  	
   

  	
   

  
	
   

  	
  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:
  MD

  



 


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EXHIBIT A


 


Shares to
be exchanged for Purchased Loans


 


	
  Investor

  	
   

  	
  Value of Purchased Loans

  Exchanged

  	
   

  	
  Number of Shares

  Received

  	
   

  
	
  CCMP

  	
   

  	
  $

  	
  9,706,260.81

  	
   

  	
  970.6260810

  	
   

  
	
  Cayman

  	
   

  	
  $

  	
  1,293,739.19

  	
   

  	
  129.3739190

  	
   

  



 


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