Document:

<PAGE>
                                                                   Exhibit 10.21

                              EXCHANGE AGREEMENT

         This EXCHANGE AGREEMENT (this "Agreement") is entered into as of May 7,
2001, by and among Global Power Equipment Group Inc. (the "Company"), a Delaware
corporation, and each of the Persons named on Schedule I attached hereto (each
such Person, a "Purchaser" and, collectively, the "Purchasers").

         Capitalized terms used and not otherwise defined herein shall have the
respective meaning given such term in the Limited Liability Company Agreement of
GEEG Holdings, L.L.C. ("GHLLC"), a Delaware limited liability company, dated as
of August 1, 2000.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, each Purchaser owns the number of Preferred Units and Class A
Common Units (collectively, with respect to such Purchaser, "Units") in GHLLC
set forth opposite such Purchaser's name on Schedule I attached hereto;

         WHEREAS, each Purchaser desires to contribute such Purchaser's Units to
the Company in exchange for shares of common stock (the "Common Stock"), par
value $0.01 per share, of the Company;

         WHEREAS, the Company desires to issue shares of Common Stock to each
such Purchaser in exchange for all of such Purchaser's Units; and

         WHEREAS, with respect to each Purchaser other than GEEG Acquisition
Holdings Corp., the parties hereto intend for the transactions contemplated
hereby to qualify as a tax free contribution under Section 351(d) of the
Internal Revenue Code of 1986, as amended (the "Code") and, with respect to GEEG
Acquisition Holdings Corp., the parties hereto intend for the transactions
contemplated hereby to qualify as a tax free reorganization under Section
368(a)(1) of the Code.

         NOW, THEREFORE, in consideration of the mutual agreements herein
contained and the mutual benefits hereby provided, the Company and the
Purchasers, intending to be bound legally, hereby agree as follows:

         Section 1. Exchanges of Units for Common Stock.

         1.1. Exchanges. Subject to the terms and conditions hereinafter set
forth, each Purchaser hereby agrees to transfer to the Company such Purchaser's
Units and the Company hereby agrees to issue to such Purchaser shares of Common
Stock as follows:

         (a) Each Common Unit shall be exchanged for a number of shares of
     Common Stock equal to the quotient resulting from dividing 31,558,522 by
     the number of Common Units issued and outstanding on the date of execution
     and delivery of the underwriting agreement (the "Underwriting Agreement")
     by and among the Company,
<PAGE>
     Credit Suisse First Boston Corporation, Salomon Smith Barney Inc., Deutsche
     Bank Alex. Brown Inc. and Raymond James & Associates, Inc., as
     representatives of the several underwriters, with respect to the IPO by
     each of the parties thereto (the "Effective Date"); and

         (b) Each Preferred Unit shall be exchanged for the number of shares
     of Common Stock equal to the amount obtained when one hundred (100) is
     divided by the initial price per share at which shares of Common Stock will
     be offered in the IPO.

         1.2. Issuance of Stock Certificates. The Company shall issue separate
stock certificates to, or cause separate book entries to be made on behalf of,
each Purchaser with respect to the Common Stock issued pursuant to each of
Section 1.1(a) and 1.1(b) hereof.

         1.3. No Fractional Shares. No fractional shares of Common Stock of the
Company shall be issued under this Agreement and any fractional share interests
will not entitle the owner thereof to vote or to have any rights of a holder of
Common Stock of the Company. In lieu of any such fractional shares, each holder
of shares of Common Stock of the Company who would otherwise have been entitled
to a fraction of a share of Common Stock of the Company pursuant to Section
1.1(a) or 1.1(b) hereof shall be paid an amount in cash (without interest) equal
to the product of (i) such fractional part of a share of Common Stock of the
Company multiplied by (ii) the initial price per share at which shares of Common
Stock will be offered in the IPO; provided, however, that if a holder of shares
of Common Stock of the Company would be entitled to fractional shares of Common
Stock of the Company under 1.1(a) and 1.1(b) hereof in an aggregate amount equal
to or greater than one whole share of Common Stock of the Company, such holder
shall receive one additional share of Common Stock of the Company (which share
of Common Stock shall be deemed to be issued pursuant to Section 1.1(b)) and the
remaining fractional shares shall be paid in cash as set forth above. As
promptly as practicable after the determination of the amount of cash, if any,
to be paid to holders of fractional interests, the Company will forward payments
to such holders of fractional interests subject to and in accordance with the
terms hereof.

         1.4. Closing. The exchanges referred to in Section 1.1 (the "Closing")
shall take place at the offices of White & Case LLP, 1155 Avenue of the
Americas, New York, New York 10036, or such other place as shall be mutually
agreed to by the parties hereto, on the Effective Date. Such date is herein
referred to as the "Closing Date."

         Section 2. Representations of the Purchasers

         Each Purchaser represents and warrants to the Company as follows:

         2.1. Such Purchaser represents that such Purchaser is not acquiring the
Common Stock with a view to, or for resale in connection with, any distribution
of the Common Stock in violation of the Securities Act of 1933 (the "Securities
Act"). Such Purchaser understands that the Common Stock has not been registered
under the Securities Act or the securities laws of any state and that the Common
Stock has been issued to such Purchaser by reason of specific exemptions under
the provisions thereof which depend in part upon the investment intent of such
Purchaser and upon the other representations made by such Purchaser

                                       -2-
<PAGE>
in this Agreement. Such Purchaser understands that the Company is relying upon
the representations and agreements made by such Purchaser in this Agreement.

         2.2. Such Purchaser understands that such Purchaser may not sell or
transfer the Common Stock purchased pursuant to this Agreement unless the Common
Stock is registered pursuant to the requirements of the Securities Act and of
any applicable state or "blue sky" securities laws or regulations, or, if
required by the Company, such Purchaser furnishes an opinion of counsel, in form
and substance satisfactory to the Company, to the effect that registration is
not then required under the Securities Act or under any applicable state or
"blue sky" securities laws or regulations. Such Purchaser further understand
that the Company has no obligation or present intention of so registering the
Common Stock (other than its obligations under the Registration Rights
Agreement, dated as of the date hereof, by and among the Company and the other
parties thereto), and that there is no assurance that any exemption from
registration under the Securities Act will be available or, if available, that
such exemption will allow such Purchaser to dispose of or otherwise transfer any
or all of the shares of Common Stock in the amounts or at the times that such
Purchaser may propose.

         2.3. Such Purchaser (i) has such knowledge, sophistication and
experience in business and financial matters that such Purchaser is capable of
evaluating the merits and risks of the exchange referred to in Section 1.1
hereof, (ii) fully understands the nature, scope and duration of the limitations
applicable to the Common Stock, (iii) is able to bear the economic risk of the
exchange referred to in Section 1.1 hereof, and (iv) is an "Accredited Investor"
as defined in Regulation D under the Securities Act.

         Section 3. Miscellaneous

         3.1. Effectiveness. This Agreement shall be effective immediately
following the execution and delivery of the Underwriting Agreement by each of
the parties thereto on the Effective Date.

         3.2. Legend. Each certificate representing any portion of the shares of
Common Stock shall be stamped or otherwise imprinted with a legend in the
following form:

     "The securities represented by this certificate have not been registered
     under the Securities Act of 1933, as amended (the "Securities Act"), and
     such securities may not be offered, sold, pledged or otherwise transferred
     except (1) pursuant to an exemption from, or in a transaction not subject
     to, the registration requirements under the Securities Act or (2) pursuant
     to an effective registration statement under the Securities Act, in each
     case in accordance with any applicable securities laws of any State of the
     United States."

Any legend endorsed on a certificate representing any portion of the shares of
Common Stock pursuant to this Section 3.2 and any stop transfer instructions or
notations on the Company's records with respect to such Common Stock shall be
removed or lifted and the Company shall issue a certificate without such legend
to the holder of such Common Stock if (i) the transfer of such Common Stock has
been registered under the Securities Act or (ii) such holder provides the
Company with an opinion of counsel (which counsel and opinion are reasonably
satisfactory to

                                       -3-
<PAGE>
the Company) stating that a public sale or transfer of such Common Stock may be
made without registration under the Securities Act and that such legend is not
required under any applicable state securities laws.

         3.3. Termination, Waiver, Amendment. Neither this Agreement nor any
provisions hereof shall be waived, modified, changed, discharged or terminated
except by an instrument in writing signed by the party against whom such waiver,
modification, change, discharge or termination is sought; provided, however that
if the transactions contemplated by this Agreement are not consummated by August
31, 2001, this Agreement shall terminate.

         3.4. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Company or any Purchaser, without the prior written
consent of the other parties hereto (in the case of a proposed assignment by the
Company) or the Company (in the case of a proposed assignment by such
Purchaser).

         3.5. Power of Attorney. (a) Each Purchaser, by its execution hereof,
hereby irrevocably makes, constitutes and appoints the Board of Directors as its
true and lawful agent and attorney-in-fact, with full power of substitution and
full power and authority in its name, place and stead to make, execute, sign,
acknowledge, swear to, record and register all certificates and other
instruments deemed advisable by the Board of Directors to carry out the
provisions of this Agreement.

         (b) The foregoing power of attorney:

                  (i) is coupled with an interest, shall be irrevocable and
         shall survive the death, incapacity or bankruptcy of each Purchaser;
         and

                  (ii) may be exercised by the Board of Directors either by
         authorizing a Person to sign separately as attorney-in-fact for each
         Purchaser or, after listing all of the Purchasers executing an
         instrument, by a single signature of a Person authorized by the Board
         of Directors acting as attorney-in-fact for all of them.

         3.6. Severability. If any provision of this Agreement or the
application of any such provision to any Person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.

         3.7. Section and Other Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         3.8. Entire Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior arrangements or understandings (whether written or oral)
with respect thereto.

                                       -4-
<PAGE>
         3.9. Counterparts. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties hereto and each
such executed counterpart shall be deemed to be an original instrument.

         3.10. Notices. All notices and other communications provided for herein
and all legal process in regard hereto shall be validly given, made or served,
if in writing and delivered by personal delivery, overnight courier, telecopier
or registered or certified mail, return-receipt requested and postage prepaid
addressed as follows:

         If to a Purchaser, to:

         The address set forth under such Purchaser's name on Schedule I
         attached hereto

         If to the Company, to:

         Global Power Energy Group Inc.
         c/o Harvest Partners, Inc.
         280 Park Avenue, 33rd Floor
         New York, NY 10017
         Attention: Stephen Eisenstein

         Any such communication shall be deemed given, made or served as of the
date so delivered or, in the case of any communication delivered by mail, as of
the date so received.

         3.11. GOVERNING LAW. THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO SUCH STATE'S CHOICE OF LAW PROVISIONS.

                                    * * * * *

                                       -5-
<PAGE>
         IN WITNESS WHEREOF, the Company and each Purchaser has executed this
Agreement as of the date first written above.

                                       GEEG ACQUISITION HOLDINGS CORP.

                                       By:/s/ Stephen Eisenstein
                                          -------------------------
                                          Name: Stephen Eisenstein
                                          Title:
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       GEEG ACQUISITION HOLDINGS L.L.C.

                                       By:/s/ Stephen Eisenstein
                                          -------------------------
                                          Name: Stephen Eisenstein
                                          Title:
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       GLOBAL POWER EQUIPMENT GROUP INC.

                                       By:/s/  Larry  Edwards
                                          -------------------------
                                          Name: Larry Edwards
                                          Title: President
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       SMC POWER HOLDINGS, L.L.C.

                                       By:/s/  Howard  Unger
                                          -------------------------
                                          Name:  Howard Unger
                                          Title: Managing Member
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       SAW MILL INVESTMENTS, L.L.C.

                                       By:/s/  Howard  Unger
                                          -------------------------
                                          Name: Howard Unger
                                          Title: President
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       CASCADE INVESTMENT PARTNERS,
                                          L.L.C.

                                       By:/s/ Timothy J. MacKenze
                                          -------------------------
                                          Name: Timothy J. MacKenze
                                          Title: Managing Director
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       PARIBAS PRINCIPAL INCORPORATED

                                       By:/s/ Steven  Alexander
                                          -------------------------
                                          Name: Steven Alexander
                                          Title: President
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       INDOSUEZ GEEG PARTNERS

                                       By: Signature  Illegible
                                          -------------------------
                                          Name:
                                          Title:
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:/s/  William M. Gerstner
                                          -------------------------
                                          William M. Gerstner
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:/s/ Larry  Edwards
                                          -------------------------
                                          Larry Edwards
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:/s/  Gary  Obermiller
                                          -------------------------
                                          Gary Obermiller
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:/s/  Gene  Schockemoehl
                                          -------------------------
                                          Gene Schockemoehl
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:/s/  Michael  Hackner
                                          -------------------------
                                          Michael Hackner
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:/s/  James  Wilson
                                          -------------------------
                                          James Wilson
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:/s/  Jack  Silver
                                          -------------------------
                                          Jack Silver
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:/s/  Albert  Breuer
                                          -------------------------
                                          Albert Breuer

<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:    /s/  Tike Wong
                                           -------------------------------------
                                           Tike Wong
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:    /s/  John Rieckman
                                           -------------------------------------
                                           John Rieckman
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:    /s/  Monte Ness
                                           -------------------------------------
                                           Monte Ness
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:    /s/  Kevin Zahler
                                           -------------------------------------
                                           Kevin Zahler
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:    /s/  Jack McSweeney
                                           -------------------------------------
                                           Jack McSweeney
<PAGE>
                  [Signature page for this Exchange Agreement]

                                       By:    /s/  Bengt Sohlen
                                           -------------------------------------
                                           Bengt Sohlen
<PAGE>
                                                                      SCHEDULE I

<TABLE>
<CAPTION>
                                          Preferred Units      Class A Common
            Purchaser                        Exchanged         Units Exchanged
            ---------                        ---------         ---------------
<S>                                       <C>                  <C>
GEEG Acquisition Holdings Corp.              558,517.44           620,575.3
c/o Harvest Partners, Inc.
280 Park Avenue
33rd Floor
New York, NY 10017
Attn: Stephen Eisenstein

GEEG Acquisition Holdings LLC                248,850.00           276,500.0
c/o Harvest Partners, Inc.
280 Park Avenue
33rd Floor
New York, NY 10017
Attn: Stephen Eisenstein

SMC Power Holdings, L.L.C.                    24,423.81            27,137.5
c/o Saw Mill Capital, LLC
555 Pleasantville Rd.
South Building, Suite 220
Briarcliff Manor, NY 10510
Attn: Howard Unger

Saw Mill Investments, L.L.C.                  26,263.32            29,181.5
c/o Saw Mill Capital, LLC
555 Pleasantville Rd.
South Building, Suite 220
Briarcliff Manor, NY 10510
Attn: Howard Unger

Cascade Investment Partners,                   8,100.00             9,000.0
L.L.C.
c/o Capital Concepts LLC
300 South Wacker Dr.
Suite 2400
Chicago, IL  60606
</TABLE>
<PAGE>
                                                                      Schedule I
                                                                          Page 2

<TABLE>
<CAPTION>
<S>                                           <C>                  <C>
Paribas Principal Incorporated                15,157.63            16,841.8
c/o Paribas
787 Seventh Avenue
New York, NY 10019
Attn: Ed Irwin

Indosuez GEEG Partners                        13,137.09            14,596.8
666 Third Avenue
9th Floor
New York, NY 10017
Attn: Ken Kencel

William M. Gerstner                            2,918.15             3,242.4
c/o Saw Mill Capital, LLC
555 Pleasantville Rd.
South Building, Suite 220
Briarcliff Manor, NY 10510
Attn: Howard Unger

Larry Edwards                                 20,120.06            22,355.6
Global Energy Equipment Group
6120 South Yale
Suite 1480
Tulsa, Oklahoma  74136

Gary Obermiller                               15,638.32            17,375.9
Deltak, L.L.C.
2905 Northwest Blvd.
Suite 150
Plymouth, Minnesota  55441

Gene Schockemoehl                             14,916.36            16,573.7
Global Energy Equipment Group
6120 South Yale
Suite 1480
Tulsa, Oklahoma  74136
</TABLE>
<PAGE>
                                                                      Schedule I
                                                                          Page 3

<TABLE>
<CAPTION>
<S>                                           <C>                  <C>
Michael Hackner                                8,130.44             9.033.8
Deltak, L.L.C.
2905 Northwest Blvd.
Suite 150
Plymouth, Minnesota  55441

James Wilson                                   6,965.30             7,739.2
Global Energy Equipment Group
6120 South Yale
Suite 1480
Tulsa, Oklahoma  74136

Jack Silver                                    4,626.12             5,140.2
Global Energy Equipment Group
6120 South Yale
Suite 1480
Tulsa, Oklahoma  74136

Albert Breuer                                  4,515.06             5,016.7
Global Energy Equipment Group
6120 South Yale
Suite 1480
Tulsa, Oklahoma  74136

Tike Wong                                      4,415.65             4,906.3
Deltak, L.L.C.
2905 Northwest Blvd.
Suite 150
Plymouth, Minnesota  55441

John Rieckman                                  4,570.59             5,078.5
Global Energy Equipment Group
6120 South Yale
Suite 1480
Tulsa, Oklahoma  74136
</TABLE>
<PAGE>
                                                                      Schedule I
                                                                          Page 4

<TABLE>
<CAPTION>
<S>                                           <C>                  <C>

Monte Ness                                     4,920.47             5,467.2
Deltak, L.L.C.
2905 Northwest Blvd.
Suite 150
Plymouth, Minnesota  55441

Kevin Zahler                                   4,781.63             5,312.9
Deltak, L.L.C.
2905 Northwest Blvd.
Suite 150
Plymouth, Minnesota  55441

Jack McSweeney                                18,000.00            20,000.0
Consolidated Fabricators, Inc.
41 Monroe Turnpike
Trumbell, CT  06611

Bengt Sohlen                                          0             1,205.0
c/o Harvest Partners, Inc.
280 Park Avenue
New York, NY
Attn: Stephen Eisenstein
</TABLE><PAGE>
                                                                   Exhibit 10.26

                             WAIVER AND AMENDMENT TO
                       SENIOR SUBORDINATED LOAN AGREEMENT

            WAIVER AND AMENDMENT, dated as of May 1, 2001 ("Agreement"), in
reference to the SENIOR SUBORDINATED LOAN AGREEMENT, dated as of August 1, 2000
(as thereafter from time to time amended, supplemented, amended and restated, or
otherwise modified, the "Loan Agreement"), among GLOBAL ENERGY EQUIPMENT GROUP,
L.L.C., a Delaware limited liability company (the "Borrower"), and the various
lenders party thereto (the "Lenders").

                               W I T N E S S E T H:
                               - - - - - - - - - -

            WHEREAS, Global Power Equipment Group Inc. (f/k/a GEEG Inc.)
("GPEG"), a wholly-owned subsidiary of the Borrower, intends to conduct an
initial public offering (the "IPO") of its common stock, and has provided the
Lenders with a copy of the registration statement relating to the IPO that was
filed with the Securities and Exchange Commission on April 17, 2001;

            WHEREAS, in connection with the IPO, GEEG Acquisition Holdings
Corp., GEEG Holdings L.L.C. ("GHLLC"), GEEG Acquisition Holdings, LLC, GPEG and
the Borrower intend to conduct a series of reorganization transactions more
fully described in Annex 1 (the "Reorganization"); and

            WHEREAS, the Required Lenders agree to consent to the waivers to and
amendment of the Loan Agreement as provided herein, subject to the terms and
conditions herein;

            NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy, and sufficiency of which are hereby acknowledged, the Borrower and the
Required Lenders agree as follows:
<PAGE>
                                      -2-

                                    ARTICLE I

                                   DEFINITIONS

            Unless otherwise defined herein or the context otherwise requires,
terms for which meanings are provided in the Loan Agreement shall have such
meanings when used in this Agreement.

                                   ARTICLE II

                              WAIVER AND AMENDMENT

      SECTION 2.1. Waivers. Subject to the conditions and on the terms set forth
herein, and in reliance on the representations and warranties of the Borrower
contained herein, each Lender party hereto consents to the consummation of the
Reorganization and agrees to waive, pursuant to Section 8.4 of the Loan
Agreement, any Default or Event of Default which may occur pursuant to Section
8.1 of the Loan Agreement solely by reason of the consummation thereof,
including, without limitation, any failure of the Borrower to comply with (such
waivers to become effective immediately prior to, and subject to the immediately
subsequent, consummation of the IPO):

            (a) Section 3.2(a) or (b) of the Loan Agreement, with respect to any
      Change of Control or Asset Sale which may arise solely as a result of the
      Reorganization, it being understood that GPEG shall be required to prepay
      Loans to the extent, and on the terms, described in the penultimate
      sentence of Annex I hereto; provided, however, that no Change of Control
      under clause (a) of the definition thereof shall have occurred and be
      continuing after the Reorganization;

            (b) Section 7.1 of the Loan Agreement, as it would apply to the
      merger of the Borrower with and into GHLLC, with GHLLC as the surviving
      entity; provided GPEG shall comply with the provisions of Section
      7.1(a)(i) and 7.1(b) in respect of the subsequent merger of GHLLC with and
      into GPEG, with GPEG as the surviving entity and, thereafter, the
      "Borrower" pursuant to the Loan Agreement; provided that Section
      7.1(a)(iii) of the Loan Agreement shall not be violated by the
      Reorganization;

            (c) Section 6.7(a) of the Loan Agreement, to the extent of cash
      payments of up to $6.8 million to holders of GHLLC's preferred units
      pursuant to the Reorganization; provided that such cash payments shall
      count as Restricted Payments under Section
<PAGE>
                                      -3-

      6.7(a)(C) of the Loan Agreement for purposes of calculating the amount of
      Restricted Payments made on or after the Closing Date; and

            (d) Section 6.13 of the Loan Agreement, as a result of the issuance
      by GPEG of shares of its common stock in exchange for membership interests
      in GHLLC pursuant to the Reorganization.

      SECTION 2.2. Amendment. Subject to the conditions and on the terms set
forth herein, and in reliance on the representations and warranties of the
Borrower contained herein, clause (vi) of Section 6.10(b) of the Loan Agreement
is restated in its entirety as follows (such restatement to become effective
immediately prior to, and subject to the immediately subsequent, consummation of
the IPO):

      "(vi) so long as no Default has occurred and is continuing, (A) payments
      not exceeding, in any fiscal year, $1.25 million to Harvest and its
      Affiliates in respect of management and advisory services rendered by them
      to the Borrower, so long as such fees accrue ratably throughout the year
      and are payable in advance semi-annually beginning on August 1, 2001, (B)
      a payment of $500,000 to Harvest in connection with the refinancing of the
      Senior Credit Facility and (C) payment of $278,711 to Saw Mill Capital
      L.L.C. for termination of the management agreement between Holdings and
      Saw Mill L.L.C.".

                                   ARTICLE III

                              CONDITIONS PRECEDENT

            This Agreement shall become effective, as of the date hereof, upon
satisfaction of each of the conditions precedent set forth in this Article III
(the first date as of which each such condition has been satisfied being herein
called the "Effective Date").

      SECTION 3.1. Counterparts and Lender Consents. Each Lender shall have been
sent counterparts hereof executed on behalf of the Borrower and the Required
Lenders.

      SECTION 3.2. Closing Fees, Expenses. The Borrower shall have paid the
reasonable fees and disbursements of Cahill Gordon & Reindel incurred in
connection with this Agreement.
<PAGE>
                                      -4-

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

            In order to induce each Lender to enter into this Agreement, the
Borrower represents and warrants unto each Lender, as of the date hereof, as set
forth in this Article IV.

      SECTION 4.1. Representations and Warranties. The representations and
warranties set forth in Article VI of the Loan Agreement and in each other
Credit Document are, in each case, true and correct in all material respects
with the same effect as if made as of the date hereof (unless stated to relate
to a specified earlier date, in which case such representations and warranties
are true and correct in all material respects as of such earlier date).

      SECTION 4.2. Due Authorization, Non-Contravention, Etc. The execution,
delivery and performance by the Borrower of this Agreement and each other Credit
Document executed or to be executed by it, and the execution, delivery and
performance by each other Obligor of each Credit Document executed or to be
executed by it, and each Obligor's participation in the transactions
contemplated hereby (including each aspect of the Reorganization) are (or, in
the case of the consummation of the Reorganization, will be) within each
Obligor's corporate powers, have been (or, in the case of the consummation of
the Reorganization, will be) duly authorized by all necessary corporate action,
and do not (or, in the case of the consummation of the Reorganization, will be)

            (a) contravene (i) the charter or by-laws or similar organizational
      documents of any Obligor, (ii) any material contractual restriction
      binding on or affecting any Obligor, (iii) any court decree or order
      binding on or affecting any Obligor or (iv) any material law or
      governmental regulation binding on or affecting any Obligor; or

            (b) result in, or require the creation or imposition of, any Lien on
any Obligor's properties (except as permitted by the Senior Credit Facility).

      SECTION 4.3. Government Approval, Regulation, Etc. Other than those
authorizations, approvals or other actions by, and notices to or filings with,
any governmental authority or regulatory body, if any, which have been duly
obtained or made and are in full force and effect, no additional material
authorization or approval or other action by, and no additional notice to or
filing with, any governmental authority or regulatory body or other Person is
required for the due execution, delivery or performance by the Borrower or any
other Obligor of this Agreement, the Loan Agreement or any other Credit Document
to which it is a party.
<PAGE>
                                      -5-

      SECTION 4.4. Validity, Etc. Each of this Agreement and the Loan Agreement
constitutes the valid and legally binding obligations of the Borrower,
enforceable against the Borrower in accordance with its respective terms
(except, in any case, as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and by principles of equity); and each Credit Document executed
pursuant hereto by each other Obligor will, on the due execution and delivery
thereof by such Obligor, be the legal, valid and binding obligation of such
Obligor, enforceable in accordance with its terms (except, in any case, as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and by
principles of equity).

      SECTION 4.5. Accuracy of Information. The information that has been
heretofore or is contemporaneously furnished or will be furnished to the Lenders
by or on behalf of any Obligor in connection with this Agreement does not, and
will not, as of the date such information is furnished or certified, contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were furnished, not misleading.

      SECTION 4.6. Compliance With Loan Agreement. As of the execution and
delivery of this Agreement, each Obligor is in compliance in all material
respects with all the terms and conditions of the Loan Agreement and the other
Credit Documents to be observed or performed by it thereunder, and no Default
has occurred and is continuing.

                                    ARTICLE V

                                  MISCELLANEOUS

      SECTION 5.1. Full Force and Effect. Except as expressly set forth herein,
the terms, provisions and conditions of the Loan Agreement and the other Credit
Documents shall remain in full force and effect and are in all respects hereby
ratified and confirmed. Other than as specifically provided herein, this
Agreement shall not operate as a waiver or amendment of any right, power or
privilege of any Lender under the Loan Agreement or any other Credit Document or
of any other term or condition of the Loan Agreement or any other Credit
Document. The Obligors further acknowledge and agree that the acceptance by the
Lenders of this Agreement shall not be construed in any manner to establish (or
indicate) any course of dealing on any Lender's part, including, without
limitation, the providing of any notice or the requesting of any acknowledgment
not otherwise expressly provided for in any Credit Document with respect to any
future amendment, waiver, supplement or other modification to any Credit
Document or any arrangement contemplated by any Credit Document.
<PAGE>
                                      -6-

      SECTION 5.2. Credit Document Pursuant to Loan Agreement. This Agreement is
a Credit Document executed pursuant to the Loan Agreement and shall be
construed, administered and applied in accordance with all of the terms and
provisions of the Loan Agreement. Any breach of any representation or warranty
in any material respect, or any breach of any covenant or agreement, contained
in this Agreement shall be deemed to be an Event of Default for all purposes of
the Loan Agreement and the other Credit Documents.

      SECTION 5.3. Headings. The various headings of this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.

      SECTION 5.4. Execution in Counterparts. This Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

      SECTION 5.5. Cross-References. References in this Agreement to any Article
or Section are, unless otherwise specified or otherwise required by the context,
to such Article or Section of this Agreement.

      SECTION 5.6. GOVERNING LAW; Entire Agreement. THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. This Agreement and the other Credit Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersede any prior agreements, written or oral, with respect thereto.

      SECTION 5.7. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

                  [REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
                                      -7-

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the day and year
first above written.

                                    GLOBAL ENERGY EQUIPMENT GROUP, L.L.C.,
                                       a Delaware limited liability company

                                    By:  /s/  Larry Edwards
                                       -----------------------------------------
                                       Name:  Larry Edwards
                                       Title:  Chief Financial Officer
<PAGE>
                                      -8-

                                    Name of Lender:

                                    ARES Leveraged Investment Fund, L.P.
                                    -------------------------------------------
                                    (please print name)

                                    By:  /s/  Jeff Serota
                                       -----------------------------------------
                                    Name:  Jeff Serota
                                    Title:  Vice President

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 3,750,000
                                     --------------
<PAGE>
                                      -9-

                                    Name of Lender:

                                    ARES Leveraged Investment Fund II, L.P.
                                    --------------------------------------------
                                    (please print name)

                                    By:  /s/  Jeff Serota
                                       -----------------------------------------
                                    Name:  Jeff Serota
                                    Title:  Vice President

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 3,750,000
                                     --------------
<PAGE>
                                      -10-

                                    Name of Lender:

                                    Cartyle High Yield Partners, L.P.
                                    --------------------------------------------
                                    (please print name)

                                    By:  /s/  Jack Mann
                                       -----------------------------------------
                                    Name:  Jack Mann
                                    Title:  Managing Director

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 3,000,000
                                     --------------
<PAGE>
                                      -11-

                                    Name of Lender:

                                    DLJ ESC II, L.P.
                                    --------------------------------------------
                                    (please print name)

                                    By:  /s/  Edward A. Poletti
                                       -----------------------------------------
                                    Name:  Edward A. Poletti
                                    Title:  Senior Vice President

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 1,722,215
                                     --------------
<PAGE>
                                      -12-

                                    Name of Lender:

                                    DLJ Investment Funding II, Inc.
                                    --------------------------------------------
                                    (please print name)

                                    By:  /s/  Tony Daddino
                                       -----------------------------------------
                                    Name:  Tony Daddino
                                    Title:  President

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 737,987
                                     --------------
<PAGE>
                                      -13-

                                    Name of Lender:

                                    Illegible
                                    --------------------------------------------
                                    (please print name)

                                    By:  /s/  Edward A. Poletti
                                       -----------------------------------------
                                    Name:  Edward A. Poletti
                                    Title:  Vice President

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 3,468,795
                                     --------------
<PAGE>
                                      -14-

                                    Name of Lender:

                                    Illegible
                                    --------------------------------------------
                                    (please print name)

                                    By:  /s/  Edward A. Poletti
                                       -----------------------------------------
                                    Name:  Edward A. Poletti
                                    Title:  Vice President

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 7,805,504
                                     --------------
<PAGE>
                                      -15-

                                    Name of Lender:

                                    DLJ Securities Corporation
                                    --------------------------------------------
                                    (please print name)

                                    By:  /s/  Howard Shams
                                       -----------------------------------------
                                    Name:  Howard Shams
                                    Title:  Managing Director

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $
                                     --------------
<PAGE>
                                      -16-

                                    Name of Lender:

                                    Golden Tree Asset Management as Agent for
                                    Deutsche Bank Sharps Pixley Inc.
                                    --------------------------------------------
                                    (please print name)

                                    By:  Signature Illegible
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $
                                     --------------------------
<PAGE>
                                      -17-

                                    Name of Lender:

                                    Golden Tree Management as Agent for
                                    Highbridge International LLC
                                    --------------------------------------------
                                    (please print name)

                                    By:     Signature Illegible
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $
                                     -------------------
<PAGE>
                                      -18-

                                    Name of Lender:

                                    Golden Tree High Yield Partners
                                    --------------------------------------------
                                    (please print name)

                                    By: Signature Illegible
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $
                                     ------------------
<PAGE>
                                      -19-

                                    Name of Lender:

                                    GSC Partners  CDO Fund, Limited
                                    --------------------------------------------
                                    (please print name)

                                    By:  Signature Illegible
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $
                                     ------------------
<PAGE>
                                      -20-

                                    Name of Lender:

                                    J.H. Whitney Market Value Fund, L.P.
                                    By: Whitney Market Value GP, LLC
                                    --------------------------------------------
                                    (please print name)

                                    By:  /s/  Michael B. DeFlorio
                                       -----------------------------------------
                                    Name:  Michael B. DeFlorio
                                    Title:  Managing Director

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 3,000,000
                                     ------------------
<PAGE>
                                      -21-

                                    Name of Lender:

                                    Magnetite Asset Investors L.L.C.
                                    By: Black Rock Financial Management, Inc.
                                    --------------------------------------------
                                    (please print name)

                                    By:  /s/  Dennis M. Schaney
                                       -----------------------------------------
                                    Name:  Dennis M. Schaney
                                    Title:  Managing Director

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 7,500,000
                                     ------------------
<PAGE>
                                      -22-

                                    NORSE CBO, LTD.

                                    By: Regiment Capital Management, LLC
                                    as its Investment Advisor

                                    By: Regiment Capital Advisors, LLC
                                    its Manager and pursuant to delegated
                                    authority

                                    By:  /s/  Timothy Peterson
                                       -----------------------------------------
                                    Name:  Timothy Peterson
                                    Title:  President

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 1,000,000
                                     ------------------
<PAGE>
                                      -23-

                                    REGIMENT CAPITAL, LTD

                                    By: Regiment Capital Management, LLC
                                    as its Investment Advisor

                                    By: Regiment Capital Advisors, LLC
                                    its Manager and pursuant to delegated
                                    authority

                                    By:  /s/  Timothy Peterson
                                       -----------------------------------------
                                    Name:  Timothy Peterson
                                    Title:  President

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $ 1,000,000
                                     ------------------
<PAGE>
                                      -24-

                                    Stanfield CLO Ltd.
                                    By: Stanfield Capital Partners LLC as its
                                    Collateral Manager

                                    By:  /s/  Christopher A. Bondy
                                       -----------------------------------------
                                    Name:  Christopher A. Bondy
                                    Title:  Partner

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $
                                     ------------------
<PAGE>
                                      -25-

                                    Stanfield/RMF Transatlantic CDO Ltd.
                                    By: Stanfield Capital Partners LLC as its
                                    Collateral Manager

                                    By:  /s/  Christopher A. Bondy
                                       -----------------------------------------
                                    Name:  Christopher A. Bondy
                                    Title:  Partner

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $
                                     ------------------
<PAGE>
                                      -26-

                                    Windsor Loan Funding, Limited
                                    By: Stanfield Capital Partners LLC as its
                                    Investment Advisor

                                    By:  /s/  Christopher A. Bondy
                                       -----------------------------------------
                                    Name:  Christopher A. Bondy
                                    Title:  Partner

                                    If second signature necessary:

                                    By:
                                       -----------------------------------------
                                    Name:
                                    Title:

                                    Amount of Loans:
                                    $
                                     ------------------

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