Exhibit 10.11


 


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 Roger W. Schaus, Jr. (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 Transactions”);


 


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 Capital Investors from time to time in connection
with 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
obligations 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 consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:


 

















 


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


 

















 


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


 

















 


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


 

















 


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


 

















 


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

  
	
   

  	
   

  	
   

  
	
   

  	
  ROGER W. SCHAUS, JR.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  



 


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