EX-10.4



 Exhibit 10.4 

FIRST AMENDMENT TO 

GUARANTY AND SECURITY AGREEMENT 

This First Amendment to Guaranty and Security Agreement (this “Amendment”) is entered into as of June 28, 2016,
by and among WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Wells Fargo”), in its capacity as administrative agent for the Lender Group and the Bank Product Providers (in such capacity, together with
its successors and assigns in such capacity, “Agent”), and the Persons listed on the signature pages hereof as Grantors (collectively, jointly and severally, “Grantors” and each, individually, a
“Grantor”). 
 W I T N E S S E T H: 

WHEREAS, Agent and Grantors have entered into that certain Guaranty and Security Agreement dated as of June 28, 2013 (as amended,
restated, supplemented, or otherwise modified from time to time, the “Guaranty and Security Agreement”); and 
 WHEREAS,
pursuant to that certain Second Amended and Restated Credit Agreement dated as of June 28, 2016 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) by and among Power Solutions
International, Inc., a Delaware corporation (“Parent”), Professional Power Products, Inc., an Illinois corporation (“PPPI”), each other borrower from time to time party thereto (together with Parent and PPPI,
collectively, “Borrowers”, and each, a “Borrower”), the lenders party thereto as “Lenders” (each of such Lenders, together with its successors and assigns, is referred to hereinafter as a
“Lender”), and Agent, the Lender Group and the Bank Product Providers have agreed to make certain financial accommodations available to Borrowers from time to time pursuant to the terms and conditions thereof; and 

WHEREAS, Grantors, Agent and Lenders have agreed to modify the Guaranty and Security Agreement as provided herein, subject to the terms and
provisions hereof. 
 NOW, THEREFORE, for and in consideration of the foregoing and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agrees as follows: 
 1. Definitions; Construction. Initially
capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Guaranty and Security Agreement or, if not defined therein, in the Credit Agreement, and this Amendment shall be subject to the
rules of construction set forth in Section 1(b) of the Guaranty and Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis. 

2. Amendments. Subject to the satisfaction of the conditions set forth in Section 6 below and in reliance upon the
representations and warranties of Grantors set forth in Section 7 below, the Guaranty and Security Agreement is amended as follows: 

(a) Section 1(a) of the Guaranty and Security Agreement is hereby amended by deleting the definitions of “Activation
Instruction”, “Availability Conditions”, “Rescission”, and “Triggering Event” in their entirety. 







 (b) Clause (iii) of the last paragraph of Section 3 of the Guaranty and Security
Agreement is hereby amended by adding the following at the end thereof: 
 and (x) the Grantors together with their Affiliates do not
have voting power sufficient to amend such documents (or obtain consent) to allow the pledge of such Equity Interests and (y) such prohibition was in existence prior to the date of acquisition by a Grantor of such non-Wholly-owned Subsidiary
and was not created in connection with, or in contemplation of, such acquisition 
 (c) Section 6(h)(v)(i) of the Guaranty and
Security Agreement is hereby amended by amending and restating the third sentence thereof in its entirety as follows: 
 Upon the making of
such filings, Agent shall have a first priority perfected security interest in the Collateral (subject to the prior preferred Lien of Term Loan Agent in the Term Priority Collateral pursuant to the terms of the Intercreditor Agreement) to the extent
such security interest can be perfected by the filing of a financing statement. 
 (d) Section 7(k)(ii) of the Guaranty and
Security Agreement is hereby amended and restated in its entirety as follows: 
 (ii) Unless Agent has otherwise agreed in
writing, each Grantor shall establish and maintain Controlled Account Agreements with Agent and the applicable Controlled Account Bank, in form and substance reasonably acceptable to Agent. Each such Controlled Account Agreement shall provide, among
other things, that (A) the Controlled Account Bank will comply with any instructions originated by Agent directing the disposition of the funds in such Controlled Account without further consent by the applicable Grantor, (B) the
Controlled Account Bank waives, subordinates, or agrees not to exercise any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for payment of its service fees and other charges directly related to
the administration of such Controlled Account and for returned checks or other items of payment, and (C) with respect to each Controlled Account, the applicable Controlled Account Bank will forward by daily sweep all amounts in such Controlled
Account to the Agent’s Account. 
 (e) The proviso at the end of Section 7(k)(iii) of the Guaranty and Security Agreement
is hereby deleted in its entirety. 
 (f) Section 16(a) of the Guaranty and Security Agreement is hereby amended by amending and
restating the last sentence thereof as follows: 
 The power-of-attorney and proxy granted hereby is coupled with an interest and shall be
irrevocable until the date that the Obligations have been paid in full in accordance with the provisions of the Credit Agreement and the Commitments have expired or have been terminated. 

  
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 (g) The Guaranty and Security Agreement is hereby amended by inserting a new
Section 29 immediately following Section 28 thereof as follows: 
 29. Intercreditor Agreement. 

(a) Notwithstanding anything herein to the contrary, in the event of any conflict between any provision in this Agreement and
any provision in the Intercreditor Agreement, such provision in the Intercreditor Agreement shall control. 
 (b) Without
limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, any obligation of any Grantor hereunder with respect to the delivery or control of any Collateral that constitutes Term Priority Collateral shall be
deemed to be satisfied if such Grantor delivers or provides control of such Term Priority Collateral to the Term Loan Agent in accordance with the requirements of the corresponding provision of the applicable Term Loan Document. 

(h) The schedules to the Guaranty and Security Agreement are hereby amended and restated in their entirety as set forth on Exhibit A
hereto. 
 3. Continuing Effect. Except as expressly set forth in Section 2 of this Amendment, nothing in this Amendment
shall constitute a modification or alteration of the terms, conditions or covenants of the Guaranty and Security Agreement or any other Loan Document, or a waiver of any other terms or provisions thereof, and the Guaranty and Security Agreement and
the other Loan Documents shall remain unchanged and shall continue in full force and effect, in each case as amended and supplemented hereby. This Amendment is a Loan Document. 

4. References to Guaranty and Security Agreement. Each of the undersigned agrees that all references in the Guaranty and Security
Agreement to the “Credit Agreement” shall be deemed to refer to the Credit Agreement. Each reference in the Guaranty and Security Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or
words of like import, and each reference to the Guaranty and Security Agreement in the Credit Agreement or in any other Loan Document, or other agreements, documents or other instruments executed and delivered pursuant to the Guaranty and Security
Agreement or the Credit Agreement, shall mean and be a reference to the Guaranty and Security Agreement as modified and supplemented by this Amendment. 

5. Reaffirmation and Confirmation. Each Grantor hereby ratifies, affirms, acknowledges and agrees that the Guaranty and Security
Agreement and the other Loan Documents represent the valid, enforceable and collectible obligations of such Grantor, and further acknowledges that there are no existing claims, defenses, personal or otherwise, or rights of setoff whatsoever with
respect to the Guaranty and Security Agreement or any other Loan Document. Each Grantor hereby agrees that this Amendment in no way acts as a release or relinquishment of the Liens and rights securing payments of the Obligations. The Liens and
rights securing payment of the Obligations are hereby ratified and confirmed by Grantors in all respects. 

  
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 6. Conditions to Effectiveness. Agent shall have received a copy of this Amendment
executed and delivered by Grantors. 
 7. Representations and Warranties. In order to induce Agent and Lenders to enter into this
Amendment, each Grantor hereby represents and warrants to Agent and Lenders, after giving effect to this Amendment: 
 (a) All
representations and warranties contained in the Guaranty and Security Agreement are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on and as of the date hereof (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true
and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date); provided
that the parties hereto agree that for purposes of this Section 7, all representations and warranties of each Grantor set forth in the Guaranty and Security Agreement that are expressly made as of the Closing Date or as of the date of
the Guaranty and Security Agreement shall also be made as of the date hereof; 
 (b) All of the information contained in the schedules
attached to the Guaranty and Security Agreement (as such information has been amended, restated, supplemented or modified to date) remains true and correct, except to the extent such schedules are amended and restated and attached hereto as
Exhibit A; 
 (c) No Default or Event of Default has occurred and is continuing; and 

(d) This Amendment and the Guaranty and Security Agreement, as amended hereby, constitute legal, valid and binding obligations of such Grantor
and are enforceable against such Grantor in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally. 
 8. Miscellaneous. 

(a) Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Delivery of an executed counterpart of this Amendment by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment. 

  
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 (b) Choice of Law and Venue; Jury Trial Waiver. THIS AMENDMENT SHALL BE SUBJECT TO THE
PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE GUARANTY AND SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

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 IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to the Guaranty and
Security Agreement to be executed and delivered as of the day and year first above written. 
  

							
	GRANTORS:	 		 	POWER SOLUTIONS INTERNATIONAL, INC.,
		 		 	a Delaware corporation
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	PROFESSIONAL POWER PRODUCTS, INC., an Illinois corporation
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	POWERTRAIN INTEGRATION ACQUISITION, LLC, an Illinois limited liability company
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	BI-PHASE TECHNOLOGIES, LLC, a Minnesota limited liability company
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer



  
 Signature Page to First Amendment to
Guaranty and Security Agreement 









							
		 		 	THE W GROUP, INC., a Delaware corporation
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	POWER SOLUTIONS, INC., an Illinois corporation
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	POWER GREAT LAKES, INC., an Illinois corporation
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	AUTO MANUFACTURING, INC., an Illinois corporation
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	TORQUE POWER SOURCE PARTS, INC., an Illinois corporation
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer



  
 Signature Page to First Amendment to
Guaranty and Security Agreement 









							
		 		 	POWER PROPERTIES, L.L.C., an Illinois limited liability company
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	POWER PRODUCTION, INC., an Illinois corporation
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	POWER GLOBAL SOLUTIONS, INC., an Illinois corporation
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	PSI INTERNATIONAL, LLC, an Illinois limited liability company
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer

			
		 		 	XISYNC LLC, an Illinois limited liability company
				
		 		 	By:	 	/s/ Michael P. Lewis
		 		 	Name:	 	 Michael P. Lewis

		 		 	Title:	 	 Chief Financial Officer



  
 Signature Page to First Amendment to
Guaranty and Security Agreement 









							
	AGENT:	 		 	WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
				
		 		 	By:	 	/s/ Brian Hynds
		 		 	Name:	 	 Brian Hynds

		 		 	Title:	 	 Vice President



  
 Signature Page to First Amendment to
Guaranty and Security Agreement 








 EXHIBIT A 

TO 
 FIRST AMENDMENT TO
GUARANTY AND SECURITY AGREEMENT 
 Amended and Restated Schedules to the Guaranty and Security Agreement 

See attached.