Document:

EX-10.4

 Exhibit 10.4 

SHAREHOLDERS AGREEMENT 

dated as of March 20, 2017 

by and among 
 POWER SOLUTIONS
INTERNATIONAL, INC. 
 WEICHAI AMERICA CORP. 

and 
 Each of the
persons 
 listed on Exhibit A hereto 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
		
	 ARTICLE I DEFINITIONS AND INTERPRETATION
	  	 	1	 
			
	 Section 1.1.
	 	 Definitions
	  	 	1	 
			
	 Section 1.2.
	 	 Interpretation and Rules of Construction
	  	 	5	 
		
	 ARTICLE II VOTING AGREEMENT
	  	 	6	 
			
	 Section 2.1.
	 	 Stockholder Approval
	  	 	6	 
			
	 Section 2.2.
	 	 Voting on Fundamental Corporate Matters
	  	 	7	 
			
	 Section 2.3.
	 	 Voting on and Nomination of Directors
	  	 	8	 
			
	 Section 2.4.
	 	 Grant of Irrevocable Proxy; Appointment of Proxy
	  	 	9	 
			
	 Section 2.5.
	 	 Restrictions on Transfers
	  	 	10	 
		
	 ARTICLE III RIGHT OF FIRST REFUSAL
	  	 	10	 
			
	 Section 3.1.
	 	 Transfer Notice
	  	 	10	 
			
	 Section 3.2.
	 	 Right of First Refusal
	  	 	10	 
			
	 Section 3.3.
	 	 Exempt Transfers
	  	 	12	 
		
	 ARTICLE IV REPRESENTATIONS AND WARRANTIES
	  	 	13	 
			
	 Section 4.1.
	 	 Representations and Warranties of the Founders
	  	 	13	 
			
	 Section 4.2.
	 	 Representations and Warranties of the Investor
	  	 	14	 
		
	 ARTICLE V GENERAL PROVISIONS
	  	 	15	 
			
	 Section 5.1.
	 	 Term
	  	 	15	 
			
	 Section 5.2.
	 	 Best Efforts
	  	 	15	 
			
	 Section 5.3.
	 	 Notices
	  	 	15	 
			
	 Section 5.4.
	 	 Governing Law
	  	 	16	 
			
	 Section 5.5.
	 	 Dispute Resolution
	  	 	16	 
			
	 Section 5.6.
	 	 Severability
	  	 	17	 
			
	 Section 5.7.
	 	 No Third Party Beneficiaries
	  	 	18	 
			
	 Section 5.8.
	 	 Successors and Assigns
	  	 	18	 
			
	 Section 5.9.
	 	 Construction
	  	 	18	 
			
	 Section 5.10.
	 	 Counterparts
	  	 	18	 
			
	 Section 5.11.
	 	 Calculation of Investor Shares
	  	 	18	 
			
	 Section 5.12.
	 	 Specific Performance
	  	 	18	 
			
	 Section 5.13.
	 	 Amendment; Waiver
	  	 	19	 

  
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	 Section 5.14.
	 	 Expenses
	  	 	19	 
			
	 Section 5.15.
	 	 Additional Securities
	  	 	19	 
			
	 Section 5.16.
	 	 Disclosure
	  	 	19	 

  
 ii 

 SHAREHOLDERS AGREEMENT 

THIS SHAREHOLDERS AGREEMENT (this “Agreement”) is made and entered into as of 20, 2017 by and among, each of the individuals
listed on Schedule A attached hereto (each a “Founder”, and collectively, the “Founders”), Power Solutions International, Inc., a Delaware corporation (the “Company”) and Weichai America
Corp., a company organized under the laws of the State of Illinois (the “Investor”). 
 RECITALS 

WHEREAS, concurrently herewith, Investor and the Company are entering into a Share Purchase Agreement (the “Share Purchase
Agreement”) pursuant to which the Company has agreed to issue and sell to the Investor certain the Securities (as hereinafter defined), on the terms and conditions set forth therein; 

WHEREAS, as of the date hereof, each Founder is the record (except as noted on Schedule A) and beneficial owner (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) of certain shares of Common Stock, par value $0.001 per share, of the Company (“Common
Stock”)) as set forth in the column titled “Owned Shares” opposite such Founder’s name on Schedule A hereto (such Owned Shares, together with any other Securities acquired (whether beneficially or of record) by
such Founder after the date hereof and prior to the termination of all of such Founder’s obligations under this Agreement, including any Securities acquired by means of purchase, dividend or distribution, or issued upon the exercise of any
Company options or warrants or the conversion of any convertible securities or otherwise, being collectively referred to herein as the “Founder Shares”); and 

WHEREAS, in order to induce the Investor and the Company to enter into the Share Purchase Agreement and consummate the transactions
contemplated thereby, the Founders and the Company have agreed to enter into this Agreement, relating to the voting and transfer of securities of the Company. 

NOW, THEREFORE, in consideration of the premises set forth above, the mutual promises and covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
 ARTICLE I

 DEFINITIONS AND INTERPRETATION 

Section 1.1.    Definitions. For the purposes of this Agreement: 

“Affiliates” means (a) in the case of a Person that is a natural person, such Person’s (i) parents, (ii) spouse
and the spouse’s parents and siblings, (iii) siblings and their spouses, (iv) descendants and their spouses (whether by blood or adoption and including stepchildren), and (v) any entity Controlled by such Person; and (b) in
the case of a Person that is an entity, any other Person that, directly or indirectly, through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such first Person, including such first Person’s
subsidiaries and holding companies and the subsidiaries of any such holding companies; 

 “Agreement” has the meaning set forth in the preamble; 

“Arbitral Tribunal” has the meaning set forth in Section 5.4(a); 

“Beneficial ownership” or “beneficially own” or similar term shall mean beneficial ownership as defined
under Rule 13d-3 under the Exchange Act; 
 “Board” means the board of directors of
the Company; 
 “Business Day” shall mean any day, other than a Saturday, Sunday or a day on which banking institutions in
the People’s Republic of China, Hong Kong or the City of New York, New York is authorized or obligated by law or executive order to remain closed; 

“Closing” has the meaning set forth in the Share Purchase Agreement; 

“Closing Date” has the meaning set forth in the Share Purchase Agreement; 

“Common Stock” has the meaning set forth in the recitals; 

“Company” has the meaning set forth in the preamble; 

“Control” (including the terms “Controlled by” and “under common Control with”) means the
possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including the
ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person or securities that represent a majority of the outstanding voting securities of such
Person; 
 “Director” means a Person who is a member of the Board; 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder; 
 “Expiration Time” has the meaning set forth in Section 2.1; 

“Founders” has the meaning set forth in the preamble; 

“Founders Pledged Common Stock” has the meaning set forth in Section 2.1; 

“Founder Shares” has the meaning set forth in the preamble; 

“Fully-Diluted Basis” means, when used with respect to issued and outstanding share capital of the Company, the total number
of all Common Stock which are or would be issued and outstanding assuming the full conversion of all other rights, options or warrants to acquire Common Stock and any notes, debentures, preference shares (including, without limitation, the Preferred
Stock), warrants (including, without limitation, the Warrant) or other securities or rights, which are ultimately convertible or exercisable into, or exchangeable for, Common Stock. 

  
 2 

 “Governmental Authority” means any federal, national, foreign, supranational,
state, provincial, local, municipal or other political subdivision or other government, governmental, regulatory or administrative authority, agency, board, bureau, department, instrumentality or commission or any court, tribunal, judicial or
arbitral body of competent jurisdiction or stock exchange; 
 “Independent Director” means a director of the Company that
satisfies the requirements to be an “Independent Director” as such term in Section 5605(A)(2) of the Nasdaq Listing Rules. 

“Investor” has the meaning set forth in the preamble; 

“Investor Director” means each individual whom the Investor designates for appointment or election as a Director from time to
time pursuant to the Investor Rights Agreement; 
 “Investor Rights Agreement” means that certain Investor Rights
Agreement, dated as of the date hereof by and among the Company and the Investor, as it may be amended, modified or supplemented from time to time in accordance with the terms thereof; 

“Involuntary Transfers” has the meaning set forth in Section 3.1; 

“Law” means any federal, national, foreign, supranational, state, provincial or local statute, law, ordinance, regulation,
rule, code, order, requirement or rule of law (including common law), official policy, rule or interpretation of any Governmental Authority with jurisdiction over the Company or the parties hereto, as the case may be; 

“LCIA Court” has the meaning set forth in Section 5.5(b); 

“LCIA Rules” has the meaning set forth in Section Section 5.5(a); 

“Lien” means any security interest, pledge, mortgage, lien, charge, claim, hypothecation, title defect, right of first option
or refusal, right of preemption, third-party right or interests, put or call right, lien, adverse claim of ownership or use, or other encumbrance of any kind; 

“Nasdaq” shall mean the Nasdaq Stock Market; 

“Nominating Committee” has the meaning set forth in Section 2.3(b); 

“Offer Price” has the meaning set forth in Section 3.2(a); 

“Offered Shares” has the meaning set forth in Section 3.2(a); 

“Permitted Transfer” has the meaning set forth in Section 3.3; 

“Permitted Transferee” has the meaning set forth in Section 3.3; 

“Person” means any individual, partnership, corporation, association, joint stock company, trust, joint venture, limited
liability company, organization, entity or Governmental Authority; 

  
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 “Preferred Stock” means the Series B redeemable convertible stock, par value
$0.001 per share, of the Company; 
 “Purchase Notice” has the meaning set forth in Section 3.2(b); 

“Securities” means any Common Stock or any equity interest of, or shares of any class in the share capital (ordinary,
preferred or otherwise) of, the Company and any convertible securities, options, warrants and any other type of equity or equity-linked securities convertible, exercisable or exchangeable for any such equity interest or shares of any class in the
share capital of the Company; 
 “Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder; 
 “Selling Shareholder” has the meaning set forth in Section 3.1; 

“Shareholder” or “Shareholders” means Persons who hold the Common Stock from time to time; 

“Share Purchase Agreement” has the meaning set forth in the recitals; 

“Stock Pledge Agreement” has the meaning set forth in Share Purchase Agreement; 

“Stockholder Approval” shall have the meaning accorded to such term in the Share Purchase Agreement; 

“Stockholder Proposal” shall have the meaning accorded to such term in the Share Purchase Agreement; 

“Stockholder Written Consent” shall have the meaning accorded to such term in the Share Purchase Agreement; 

“Third Party” means any bona fide third party and not the Investor, the Founders nor their respective Affiliates; 

“Trading Day” means any day on which the U.S. national stock exchange on which the Common Stock are then listed and traded is
open for trading in securities based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); 

“Transaction Documents” means this Agreement and each of the other agreements and documents entered into or delivered by the
parties hereto in connection with the transactions contemplated by this Agreement, including the Share Purchase Agreement, Warrant and the Investor Rights Agreement; 

“Transfer” (or any correlative term) means, in respect of any Securities, a direct or indirect sale, assignment, pledge,
charge, mortgage, hypothecation, gift, placement in trust (voting or otherwise) or transfer by operation of Law of such Securities, or the creation of a security interest in, or Lien on, or any other disposal (directly or indirectly and whether or
not 

  
 4 

 
voluntary) on such Securities, and shall include any transfer by will or intestate succession or entry into any swap or other derivatives transaction that transfers to any person, in whole or in
part, any of the economic benefits or risks of ownership of such Securities, whether any such transaction is to be settled by delivery of such Securities or other Securities, in cash or otherwise; 

“Transfer Notice” has the meaning set forth in Section 3.1; 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on an established U.S. national or non-U.S. securities exchange, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
securities exchange on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), or (b) if the Common Stock is not listed or
quoted on an established U.S. national or non-U.S. securities exchange but is then quoted on an over-the-counter market, the
volume weighted average closing sales prices of the Common Stock for such date (or the nearest preceding date) on such over-the-counter market as applicable; and 

“Warrant” means the 2018 Warrant (as such term is defined in the Share Purchase Agreement). 

Section 1.2.    Interpretation and Rules of Construction. In this Agreement, except to the extent otherwise
provided or that the context otherwise requires: 
 (a)    when a reference is made in this Agreement to an Article,
Section or Schedule, such reference is to an Article, Section or Schedule of or to this Agreement; 
 (b)    the
headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement; 

(c)    the words “hereof,” “herein” and “hereunder” and words of similar import, when used
in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement; 

(d)    all terms defined in this Agreement have the defined meanings when used in any certificate or other document made
or delivered pursuant hereto, unless otherwise defined therein; 
 (e)    the definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and any noun or pronoun shall be deemed to cover all genders; 

(f)    references to a Person are also to its successors and permitted assigns; and 

(g)    the use of the term “or” is not intended to be exclusive. 

  
 5 

 ARTICLE II 

VOTING AGREEMENT 

Section 2.1.    Stockholder Approval. From and after the date hereof, until the earlier of the
(x) effectiveness of the Stockholder Approval and the (y) termination of this Agreement pursuant to and in compliance with the terms hereof (such earlier time, the “Expiration Time”), each Founder shall: 

(a)    if the Stockholder Written Consent is executed and delivered, then thereafter refrain from revoking or seeking to
revoke the Stockholder Written Consent; 
 (b)    reject any other transaction, proposal, agreement or action which is
made in opposition to the Stockholder Proposal or in competition or inconsistent with the Stockholder Proposal; 

(c)    reject any other action, agreement or transaction that is intended, that could reasonably be expected, or the
effect of which could reasonably be expected, to materially impede, interfere with, delay, postpone, discourage or adversely affect the transactions contemplated under the Stock Purchase Agreement or the other Transaction Documents, or the
performance by such Founder of its obligations under this Agreement; and 
 (d)    reject any action, proposal,
transaction or agreement that would reasonably be expected to result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of the Company contained in the Share Purchase Agreement, or of such
Founder contained in this Agreement or otherwise reasonably requested by the Investor in order to consummate the transactions contemplated under the Share Purchase Agreement; and 

(e)    use reasonable best efforts to procure the effectiveness of the Stockholder Approval within 180 days following the
Closing Date. 
 On or prior to the Closing Date, the Founders shall pledge to the Investor 4,180,545 shares of Common Stock of Founder
Shares (“Founder Pledged Common Stock”) pursuant to the Stock Pledge Agreement and execute all such applications and other instruments as may be reasonably required by the Investor in connection with securing the Founder Pledged
Common Stock or perfecting any Lien (as defined in the Stock Pledge Agreement) (including any UCC filings). In the event that the Stockholder Approval is not effective on or prior to the first anniversary of Closing Date, the Founders shall, upon
request of the Investor, either (i) grant all necessary proxies and/or written consents to authorize the Investor to vote the same number of Founder Shares as the Preferred Stock issued to the Investor on all matters submitted to a vote at any
meeting of the stockholders, adjournment, postponement or continuation thereof, during the period commencing from the first anniversary following Closing Date until the conversion of the Preferred Stock (“Interim Period”), or
(ii) pursuant to the terms of the Stock Pledge Agreement, (A) transfer, register or otherwise put into the Investor’s name or the name of the nominee or nominees of the Investor the Founder Pledged Common Stock, and such Founder shall
take any steps deemed necessary or helpful by the Investor to cause such transfer or registration, and (B) grant all necessary proxies and/or written consents to authorize the Investor to vote an additional 590,703 shares of Common Stock held
by the Founder as of such time (other than the Founder 

  
 6 

 
Pledged Common Stock), on all matters submitted to a vote at any meeting of the stockholders, adjournment, postponement or continuation thereof. Upon the effectiveness of the Stockholder
Approval, all of Founders’ obligations under this Section 2.1 and under the Stock Pledge Agreement will terminate and the Liens and security interests granted under the Stock Pledge Agreement, the Founder Pledged Common Stock and any other
property then held as part of the Pledged Stock in accordance with the provisions of the Stock Pledge Agreement shall be returned to the Founders. 

Section 2.2.    Voting on Fundamental Corporate Matters. Subject to and commencing upon the Closing, each of
the Founders agrees not to, and to cause its Affiliates not to, vote the Founder Shares beneficially owned by him or his Affiliates at any time, whether at any stockholders meeting, adjournment, postponement or continuation thereof, by proxy or in
person, or in connection with any action by written consent in lieu of any such annual or special meeting of stockholders of the Company, in favor of any matter of the nature forth below in this Section 2.2, or call or seek to call or
requisition any meeting of stockholders of the Company or make any solicitation of written consent in lieu of any such annual or special meeting of stockholders of the Company, for the purpose of approving any matter of the nature forth below in
this Section 2.2, unless previously agreed in writing by the Investor: 
 (a)    any merger, consolidation or other
business combination transaction, including any stockholder resolutions upon which any such acquisition, disposition, merger, consolidation or other business combination transaction is contingent; 

(b)     a sale, transfer, lease or other disposition of all or substantially all of the assets of the Company (or any
series of related transactions resulting in such sale, transfer, or lease of all or substantially all of the assets of the Company); 

(c)    any amendment, modification, supplement, restatement or other change to the Company’s certificates of
incorporation, bylaws or other governing documents, including any non-binding shareholder proposals with respect thereto; 

(d)    the commencement of or consent to any proceeding seeking (i) to adjudicate the Company as bankrupt or
insolvent, (ii) any reorganization, liquidation, winding up, dissolution, reorganization, or arrangement of the Company under any Law relating to bankruptcy, insolvency or reorganization or relief of debtors, or (iii) the entry of an order
for relief or the appointment of a receiver, trustee, or other similar official for the Company or for any substantial part of the Company’s property; 

(e)    the re-domestication, continuance or removal of the Company to any other
jurisdiction; 
 (f)    the appointment or removal of the Company’s auditors; and 

(g)    any issuance, sale, pledge, distribution or other disposition of capital stock requiring approval of stockholders
under Rule 5635 of the Nasdaq Listing Rules (or any comparable successor rule(s)) or by applicable Law. 

  
 7 

 Section 2.3.    Voting on and Nomination of Directors. Subject to
and commencing upon the Closing: 
 (a)    each of the Founders agrees: 

(i)    not to remove any Investor Director from the Board, or seek to call or requisition any meeting of
the Board or any written consent of the Directors for the purpose of removing any Investor Director, or call or seek to call or requisition any meeting of stockholders of the Company or make any solicitation of written consent in lieu of any such
annual or special meeting of stockholders of the Company, for the purpose of removing any Investor Director from the Board, unless such Investor Director has engaged in an action which would constitute fraud under applicable Law or has engaged in
willful misconduct or gross negligence with respect to the Company; 
 (ii)    from and after the time
the Board has been reconstituted to seven (7) members in connection with the Closing in accordance with the Share Purchase Agreement and the Investor Rights Agreement, not to take any action to increase or decrease the size of the Board without
the express written consent of the Investor unless directed to do so by the Investor in writing; and 

(iii)    that, at any annual or special meeting of the stockholders of the Company, however called, or in
connection with any action by written consent in lieu of any such annual or special meeting of stockholders of the Company, at which the appointment or removal of Directors is to be approved, ratified or otherwise considered, such Founder shall vote
or cause to be voted (including by proxy or through the execution of one or more written consents if stockholders of the Company are requested to vote through the execution of an action by written consent in lieu of any such annual or special
meeting of stockholders of the Company, if applicable) all of its Founder Shares in favor for the election of the Investor Directors and shall not seek to call or requisition any meeting of stockholders of the Company or any written consent of the
stockholders of the Company for the purpose of, or vote in favor of, removing any Investor Director unless directed to do so by the Investor in writing. 

(b)    The Company, the Investor and the Founders agree that, from and following the Closing, the Board maintains a
Nominating and Governance Committee (the “Nominating Committee”), and the Nominating Committee shall at all times have a majority of Independent Directors. As of the Closing, the number of members of the Board shall be increased
from five (5) to seven (7). Prior to April 6, 2017, the Board may designate a person to act as an additional Independent Director, and in connection therewith, Gary Winemaster shall resign as a director of the Company, effective
immediately prior to the appointment by the Board of such person as an Independent Director. If Gary Winemaster has not resigned as a director prior to April 6, 2017, then Gary Winemaster shall resign as a director of the Company on
April 6, 2017. Following Closing, the parties agree that the Nominating Committee shall have the exclusive authority to nominate non-Investor Directors
(“Non-Investor Director Nominees”) for election by the stockholders of the Company. The Investor and the Founders shall have no obligation to vote in favor of or against the election of any
such Non-Investor Director Nominees. If any Non-Investor Director Nominee is not elected by the stockholders of the Company, or if any Non-Investor

  
 8 

 
Director ceases to be a director during the term of such director’s appointment, the Board shall have the authority to fill such vacancy in accordance with the Company’s bylaws, and
such appointee shall serve as a Non-Investor Director until the next annual or special meeting of stockholders of the Company at which directors of the Company are elected. 

(c)    The Company, the Investor and the Founders agree that at all times the composition of the Board and any committees
of the Board shall comply with all applicable Law and stock exchange requirements. Without limiting the foregoing in any manner, the parties agree that: 

(i)    following the Closing, and so long as the Company is not a “controlled company” within the
meaning of the Nasdaq Listing Rules, a majority of the Board members shall be Independent Directors; and 

(ii)    immediately after the Investor exercises the Warrant in full, the Company will be a
“controlled company” within the meaning of the Nasdaq Listing Rules and, so long as it remains a controlled company, the Company shall be exempted from Rule 5615 of the Nasdaq Listing Rules of Rules 5605(b), (d) and (e) (except for the
requirements of subsection (b)(2) which pertain to executive sessions of Independent Directors) of the Nasdaq Listing Rules, 

(iii)    provided, in each case, unless prohibited by applicable Law and stock exchange
requirements, the Investor shall have the right to nominate all of the Investor Directors as non-Independent Directors serving on the Board. 

Section 2.4.    Grant of Irrevocable Proxy; Appointment of Proxy.

(a)    Each Founder and the Investor further agrees not to take any other actions as a stockholder of the Company or in any
other capacity intended to or reasonably likely to, directly or indirectly, circumvent, avoid or nullify the voting arrangements required by this Article II. 

(b)    Each Founder hereby irrevocably appoints the Investor and any designee thereof as its proxy and attorney-in-fact (with full power of substitution), to vote or cause to be voted (including by proxy, if applicable) such Founder’s Founder Shares (i) in accordance
with Section 2.1 above, and (ii) subject to and commencing upon the Closing, in accordance with Section 2.3(a)(iii) above, in each case at any annual or special meeting of the shareholders of the Company, however called, including any
adjournment or postponement thereof, at which any of the matters described in Section 2.1 or Section 2.3(a)(iii) above is to be considered. Each Founder represents that all proxies, powers of attorney, instructions or other requests given by
such Founder prior to the execution of this Agreement in respect of the voting of such Founder’s Founder Shares, if any, are not irrevocable and each Founder hereby revokes any and all previous proxies, powers of attorney, instructions or other
requests with respect to such Founder’s Founder Shares. Each Founder shall take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy. 

(c)    Each Founder affirms that the irrevocable proxy set forth in this Section 2.4 is given in connection with the
execution of the Share Purchase Agreement, and that such irrevocable proxy is given to secure the performance of the duties of such Founder under this 

  
 9 

 
Agreement. Each Founder further affirms that the irrevocable proxy is coupled with an interest and, except as set forth in this Section 2.4, is intended to be irrevocable; provided, that
such proxy shall be automatically terminated in respect of the matters described in Section 2.1 at the Expiration Time. If for any reason the proxy granted herein is not irrevocable, then each Shareholder agrees to vote such Shareholder’s
Securities in accordance with Section 2.1 and Section 2.3(a)(iii) above (in the case of the matters described in Section 2.1, prior to the Expiration Time). The parties hereto agree that the foregoing is a voting agreement. 

Section 2.5.    Restrictions on Transfers. Each Founder hereby agrees that, from the date hereof until
the Expiration Time, such Founder shall not, and shall cause its Affiliates not to, directly or indirectly, (a) Transfer any Founder Shares if such Transfer (x) has, or would reasonably be expected to have, the effect of reducing or
limiting such Founder’s economic interest in such Founder Shares or (y) grants a third party the right to vote or direct the voting of such Founder Shares, (b) deposit any Founder Shares into a voting trust or enter into a voting
agreement or arrangement or grant any proxy or power of attorney with respect thereto that is inconsistent with this Agreement, (c) convert or exchange, or take any action which would result in the conversion or exchange of, any Founder Shares,
(d) knowingly take any action that would make any representation or warranty of such Founder set forth in this Agreement untrue or incorrect or have the effect of preventing, disabling, or delaying such Founder from performing any of its
obligations under this Agreement, or (e) agree (whether or not in writing) to take any of the actions referred to in the foregoing clauses (a), (b), (c) or (d). 

ARTICLE III 
 RIGHT OF
FIRST REFUSAL 
 Section 3.1.    Transfer Notice. Subject to Section 3.3, if at any time upon and
after the Closing (a) any of the Founders (the “Selling Shareholder”) proposes to Transfer any Securities of the Company held by such Selling Shareholder, in whole or in part, to one or more Third Parties; or (b) any
Securities held directly or indirectly by the Selling Shareholder are Transferred involuntarily pursuant to divorce, legal separation, bankruptcy or other proceedings, death or any other involuntary Transfer (collectively, “Involuntary
Transfers”), then such Selling Shareholder (or its, his or her executor) shall first comply with the provisions of Section 3.2. Notwithstanding the foregoing, a Transfer resulting from the death of a Founder shall not be deemed to be
an Involuntary Transfer if the transferee, upon request of any party hereto or receiving a Purchase Notice, executes the written agreement contemplated in the proviso at the end of Section 3.3, in which case such transferee shall be deemed to
be a Permitted Transferee. 
 Section 3.2.    Right of First Refusal. 

(a)    Prior to making or accepting an offer to Transfer any of its Securities to any third party, a Selling Shareholder
(or its, his or her executor) shall give the Investor a written notice of its intention to make such Transfer (the “Transfer Notice”), which shall include (i) a description (including the class and the total number) of
Securities to be Transferred (the “Offered Shares”); (ii) the identity of the prospective transferee(s); and (iii) the proposed offer price per Offered Shares (the “Offer Price”) and the material terms and
conditions upon which the proposed Transfer is to be made. The Transfer Notice shall certify that the Transferor has received a firm offer from the prospective bona fide transferee(s) or otherwise believes in good faith that a

  
 10 

 
binding agreement for the Transfer is obtainable on the terms set forth in the Transfer Notice. The Transfer Notice shall also include a copy of any written proposal, term sheet or letter of
intent or other agreement relating to the proposed Transfer. The Selling Shareholder and the Investor shall thereafter comply with the following provisions of Section 3.2. 

(b)    The Investor shall be granted the right of first refusal by the terms of the Transfer Notice, which the Investor
can exercise upon giving written notice to the Selling Shareholder (the “Purchase Notice”) within thirty (30) days after its receipt of the Transfer Notice. The Purchase Notice shall specify the maximum number of Offered Shares
which the Investor desires to purchase. The Investor will have the right to purchase all of the Offered Shares, on the same terms and conditions as set forth in the Transfer Notice, subject to Section 3.2(d) and (e). 

(c)    In the event that the Transfer in question is an Involuntary Transfer, the price per share shall be the greater of
the original purchase price paid by the Selling Shareholder for such Offered Shares (appropriately adjusted for share splits, share dividends, combinations and the like) and the fair market value of such Offered Shares, which, if the Common Stock is
at the relevant time listed on an established U.S. national or non-U.S. securities exchange or reported through or an established
over-the-counter trading system, shall be determined with reference to the price per share of Common Stock based on the trailing average VWAP over the preceding ten
(10) consecutive Trading Days prior to the effective date of the Involuntary Transfer. 
 (d)    In the event the
consideration for the Offered Shares specified in a Transfer Notice is payable in property other than cash and the Selling Shareholder and the Investor cannot agree on the cash value of such property within ten (10) days after the
Investor’s receipt of the Transfer Notice, the value of such property shall be determined by an appraiser of recognized standing selected jointly by the Selling Shareholder on one hand and the Investor on the other hand. If they cannot agree on
an appraiser within twenty (20) days after receipt of the Transfer Notice by the Investor, within a further five (5)-day period, the Selling Shareholder on one hand and the Investor on the other hand
shall each select an appraiser of recognized standing and the two appraisers shall designate a third appraiser of recognized standing to determine the value of such property. The value of such property shall be determined by the appraiser selected
pursuant to this Section within one month from its appointment, and such determination shall be final and binding on the Selling Shareholder and the Investor. The cost of such appraisal shall be shared equally by the Selling Shareholder on one hand
and the Investor on the other hand. If the thirty (30) day period as specified in Section 3.2(b) has expired but for the determination of the value of the consideration for the Offered Shares offered by the Selling Shareholder, then such thirty
(30) day period shall be extended to the fifth (5th) Business Day after such valuation shall have been determined to be final and binding pursuant to this Section. 

(e)    Notwithstanding anything to the contrary in this Section 3.2, in the event that a Investor elects to purchase
any Offered Shares pursuant to its right of first refusal hereunder and the Common Stock is at the relevant time listed on an established U.S. national or non-U.S. securities exchange or reported through or an
established over-the-counter trading system, the Offer Price payable by the Investor shall be the lower of (i) the Offer Price as set forth in the Transfer Notice,
subject to Section 3.2(d), and (ii) the trailing average VWAP over the preceding ten (10) consecutive Trading Days immediately prior to the delivery of the Purchase Notice by the Investor to the Selling Shareholder in respect of such
Offered Shares. 

  
 11 

 (f)    To the extent that the Investor has not exercised their rights to
purchase the Offered Shares subject to the Transfer Notice, the Selling Shareholder shall have a period of sixty (60) days from the expiration of such rights in which to sell any remaining Offered Shares, upon terms and conditions (including,
without limitation, the purchase price) no more favorable to the purchaser than those specified in the Transfer Notice, to the third party transferee(s) identified in the Transfer Notice and the Offered Shares that are sold shall not be subject to
the terms and provisions of this Agreement and all proxies granted hereunder shall terminate but solely with respect to the Offered Shares that have been sold. In the event a Selling Shareholder does not consummate the sale or disposition of the
Offered Shares within the sixty (60) day period from the expiration of these rights, the Investor’ right of first refusal shall continue to be applicable to any subsequent disposition of any Common Stock by any Selling Shareholder.
Furthermore, the exercise or non-exercise by the Investor to purchase Offered Shares by the Selling Shareholder shall not adversely affect the Investor’s rights to make subsequent purchases from any
Selling Shareholder. Any proposed Transfer on terms and conditions significantly different than those described in the Transfer Notice, as well as any subsequent proposed Transfer of any of the Offered Shares by a Selling Shareholder shall again be
subject to the right of first refusal of the Investor as provided under this Section 3.2 and shall require compliance by the relevant Selling Shareholder with the procedures described in this Agreement. 

Section 3.3.    Exempt Transfers. Subject to this Section 3.3, none of the restrictions and/or
requirements contained in Section 3.1 and Section 3.2 with respect to Transfers of Securities shall apply to any: 

(a)    Transfer of the Securities, directly or indirectly, by the Founder to the Founder’s ancestors, descendants,
immediate family members, or spouse or to trusts for the benefit of such persons or parties or to the entities in which the Founder and/or his ancestors, descendants, immediate family members, or spouse holds 100% of the equity or beneficial
interests; 
 (b)    Transfer of Securities by a Founder for estate planning purposes to a limited partnership, trust,
association or other entity that is wholly-owned or controlled by such Founder; 
 (c)    Transfers of Securities by the
Investor to any of its Affiliates (such transfers contemplated under clause (a) and clause (b) above and this clause (c) a “Permitted Transfer” and such transferees a “Permitted Transferee”); 

(d)    issuance of Common Stock upon conversion of the Preferred Stock or exercise of the Warrant; or 

(e)    bona fide sale of Securities by a Founder or the Investor to a Third Party of less than 3% of the Securities held
by such Founder or the Investor, as applicable, during any three month period; 
 provided, that each Permitted Transferee shall, as
a condition to the effectiveness of any such Permitted Transfer, furnish the parties hereto with a written agreement to be bound by and comply with this Agreement, including, without limitation, all provisions of ARTICLE II and ARTICLE III, as if
such transferee(s) were the transferor hereunder, as well as the terms of the agreement pursuant to which such Offered Shares were issued; provided, further, that the transferor shall remain liable for any breach by such Permitted Transferee of any
provision hereunder. 

  
 12 

 ARTICLE IV 

REPRESENTATIONS AND WARRANTIES 

Section 4.1.    Representations and Warranties of the Founders. Except as set forth on Schedule A, each of the
Founders, on a several and not joint and several basis, represents and warrants to the Investor as follows: 

(a)    Ownership. Such Founder (i) is as of the date hereof the beneficial owner of, and has good and valid
title to, its Owned Shares as set forth in Schedule A, and, immediately prior to the Closing, will be the beneficial owner of, and will have good and valid title to, its Securities, in each case free and clear of Liens other than as created
by this Agreement, and (ii) has as of the date hereof with respect to all of its Owned Shares as set forth in Schedule A and will have immediately prior to the Closing with respect to all of its Founder Shares sole or shared (together
with Affiliates controlled by such Founder) voting power, power of disposition, and power to demand dissenter’s rights, with no limitations, qualifications, or restrictions on such rights, subject to applicable United States federal securities
Laws and the terms of this Agreement; (iii) except pursuant hereto, there are no options, warrants or other rights, agreements, arrangements or commitments of any character to which such Founder is a party relating to the pledge, disposition or
voting of any of its Founder Shares and its Founder Shares are not subject to any voting trust agreement or other contract to which such Founder is a party restricting or otherwise relating to the voting or Transfer of such Founder Shares other than
this Agreement; (iv) as of the date hereof and as of the Closing Date, other than its Owned Shares, such Founder does not own, beneficially or of record, or have the right to acquire, any shares of Common Stock or other securities of the
Company, or any direct or indirect interest in any such securities (including by way of derivative securities); and (v) such Founder has not appointed or granted any proxy or power of attorney that is still in effect with respect to any of its
Owned Shares, except as contemplated by this Agreement; 

(b)    Non-Contravention; No Conflicts. Except for the applicable
requirements of the Securities Exchange Act of 1934, no filing or notice by the Founders with or to any Governmental Authority, and no authorization, consent, permit or approval from any Governmental Authority or any other Person is necessary for
the execution and delivery of this Agreement or the performance obligations herein. The execution and delivery of this Agreement does not, and the performance of such Founder’s obligations under this Agreement and the consummation of the
transactions contemplated by this Agreement, will not (1) conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination,
cancellation or acceleration of any obligation or loss of any material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any Person under, or result in the creation of any Liens upon its assets or
properties under, any provision of (A) any contract, agreement or other instrument to which any of the Founders is party or by which any of his assets or properties is bound, (B) any judgment, order, injunction, decree or Law applicable to
the Founders or their assets or properties or (2) require any consent of, registration, declaration or filing with, notice to or permit from any Governmental Authority. For purposes of clarity it is acknowledged that a

  
 13 

 
Founder is not making any representation or warranty regarding any contract, agreement or other instrument to which the Company or any other person (other than such Founder) is a party or by
which any of a person’s assets are bound or any judgement, order, injunction, decree or Law applicable to the Company or any other person (other than such Founder). 

(c)    No Action. As of the date of this Agreement, there are no proceedings, claims, actions, suits or
governmental or regulatory investigations pending or, to the knowledge of the Founders threatened against the Founders that could reasonably be expected to impair the ability of the Founders to timely perform in all material respects their
obligations hereunder or to consummate the transactions contemplated hereby on a timely basis. 

Section 4.2.    Representations and Warranties of the Investor. The Investor represents and warrants to the
Founders as follows: 
 (a)    Capacity; Authorization; Validity of Agreement; Necessary Action. The Investor is
duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction in which the Investor is organized or formed (in the case of good standing, to the extent the concept is recognized by such jurisdiction). The
Investor has the legal capacity and authority (including corporate, limited partnership, trust or other organizational power, as applicable) to execute and deliver this Agreement and perform the Investor’s obligations hereunder and to
consummate the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by the Investor and constitutes a legal, valid and binding agreement of the Investor enforceable against the Investor in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles. 

(b)    Non-Contravention; No Conflicts. Except for the applicable
requirements of the Securities Exchange Act of 1934, no filing or notice by the Investor with or to any Governmental Authority, and no authorization, consent, permit or approval from any Governmental Authority or any other Person is necessary for
the execution and delivery of this Agreement by the Investor or the performance by the Investor of the Investor’s obligations herein. The execution and delivery of this Agreement by the Investor does not, and the performance by the Investor of
its obligations under this Agreement and the consummation by the Investor of the transactions contemplated by this Agreement, will not (1) conflict with, or result in any violation or breach of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or loss of any material benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any
Person under, or result in the creation of any Liens upon its assets or properties under, any provision of (A) any contract, agreement or other instrument to which the Investor is party or by which any of its assets or properties is bound,
(B) any charter or organizational documents of the Investor or (C) any judgment, order, injunction, decree or Law applicable to the Investor or its assets or properties or (2) require any consent of, registration, declaration or
filing with, notice to or permit from any Governmental Authority. 
 (c)    No Action. As of the date of this
Agreement, there are no proceedings, claims, actions, suits or governmental or regulatory investigations pending or, to the knowledge of the Investor, threatened against the Investor that could reasonably be expected to impair the ability of the
Investor to timely perform in all material respects its obligations hereunder or to consummate the transactions contemplated hereby on a timely basis. 

  
 14 

 (d)    Ownership. As of the date hereof and as of the Closing, other
than pursuant to the Share Purchase Agreement and the transactions contemplated thereunder, the Investor and its Affiliates do not own, beneficially or of record, or have the right to acquire, any shares of Common Stock or other Securities of the
Company, or any direct or indirect interest in any such Securities (including by way of derivative securities). 
 ARTICLE V 

GENERAL PROVISIONS 

Section 5.1.    Term. This Agreement, and the obligations of the parties hereunder, shall terminate
immediately upon the earlier to occur of (a) a written agreement to that effect, signed by all parties hereto, (b) the date on which the Investor owns less than five percent (5%) of the Common Stock on a Fully-Diluted Basis, and
(c) upon the valid termination of the Share Purchase Agreement in accordance with Article VI thereof; provided, that the provisions set forth in this Section 5.1 and Section 5.15 shall survive the termination of this Agreement;
provided, further, that any liability incurred by any party hereto as a result of a breach of a term or condition of this Agreement prior to such termination shall survive the termination of this Agreement. 

Section 5.2.    Best Efforts. Each of the Founders agrees to use their respective reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, to assist the Company to promptly resolve the Company’s financial accounting issues and restatements, delisting, and any investigation, claim and
action arising therefrom. 
 Section 5.3.    Notices. Except as may be otherwise provided herein, any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon
receipt, when sent by email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (c) one (1) Business Day after deposit with an internationally recognized overnight
courier service; in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 

If to the Founders, as set forth on Exhibit A: 
 If to
the Investor: 
 Weichai America Corp. 

Attention: Victory Liu 
 3100 Golf
Road 
 Rolling Meadows, Illinois 60008 

Email:    victor.liu@weichaiamerica.com 

  
 15 

 with a copy (which shall not constitute notice) to: 

King & Wood Mallesons 

20th Floor, East Tower, World Financial Center 

1 Dongsanhuan Zhonglu, Chaoyang District Beijing 100020 

People’s Republic of China 

Attention:    Xu Ping 

Email:          xuping@cn.kwm.com 

and 
 O’Melveny &
Myers LLP 
 37th Floor, Yin Tai Centre, Office Tower 

No. 2 Jianguomenwai Avenue, Beijing 100022 

People’s Republic of China 

Attention:    Ke Geng and Nima Amini 

Email:          kgeng@omm.com; namini@omm.com 

If to the Company: 
 Power Solutions
International, Inc. 
 201 Mittel Drive 

Wood Dale, Illinois 60191 

Attention:    Gary Winemaster, CEO 

Email:          Gary.Winemaster@Psiengines.com 

with a copy (which shall not constitute notice) to: 

Power Solutions International, Inc. 

Legal Department 
 201 Mittel
Drive 
 Wood Dale, Illinois 60191 

Attention:    William Buzogany, General Counsel 

Email:          Wbuzogany@Psiengines.com 

A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 5.3 by giving
the other party written notice of the new address in the manner set forth above. 
 Section 5.4.    Governing
Law. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of New York, without regard to principles of conflict of Laws thereunder other than New York General Obligations Law
Section 5-1401. 
 Section 5.5.    Dispute Resolution. 

(a)    Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of,
relating to or in connection with the validity, negotiation, 

  
 16 

 
execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration
provision) shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the London Court of International Arbitration (“LCIA Rules”) by one or more arbitrators appointed in accordance with the LCIA
Rules (the “Arbitral Tribunal”); 
 (b)    The arbitration shall be conducted by a sole arbitrator
unless either party objects, in which case the arbitration shall be conducted by a panel of three arbitrators. Where the arbitration is to be conducted by a sole arbitrator, the parties shall attempt to agree upon the selection of the sole
arbitrator. If they cannot reach agreement within 30 days from the commencement of the arbitration, the sole arbitrator shall be appointed by the Court of the LCIA (the “LCIA Court”) in accordance with the LCIA Rules. Where the
arbitration is to be conducted by a panel of three arbitrators, each party shall nominate one arbitrator and the two party-nominated arbitrators shall then select the chairman of the Arbitral Tribunal. If the two party-nominated arbitrators are
unable to do so within 30 days after the commencement of the arbitration or any mutually agreed extension thereof, the chairman shall be selected by the LCIA Court in accordance with the LCIA Rules; 

(c)    The place of arbitration shall be London; 

(d)    The language of the arbitration shall be English; 

(e)    Each arbitrator shall be licensed to practice law in New York; 

(f)    Each party shall have the right to apply to any court of competent jurisdiction and/or to the Arbitral Tribunal for
an order or award of interim, provisional or conservatory measures in order to maintain the status quo or to protect its rights or property pending arbitration pursuant to this Agreement or for the purpose of compelling a party to arbitrate and
seeking temporary or preliminary relief in aid of an arbitration hereunder, and any such application shall not be deemed incompatible with, or a waiver of, the parties’ agreement to arbitrate; 

(g)    The Arbitral Tribunal shall have power to take whatever interim measures it deems necessary, including injunctive
relief, specific performance and other equitable relief, including in accordance with the provisions set forth in Section 5.12 of this Agreement; 

(h)    The award rendered by the Arbitral Tribunal shall be final and binding between the parties and not subject to
appeal or other recourse; and 
 (i)    Recognition and enforcement of any award rendered by the Arbitral Tribunal may
be sought in any court of competent jurisdiction. 
 Section 5.6.    Severability. If any provision of this
Agreement is found to be invalid or unenforceable, then such provision shall be construed, to the extent feasible, so as to render the provision enforceable and to provide for the consummation of the transactions contemplated hereby on substantially
the same terms as originally set forth herein, and if no feasible interpretation would save such provision, it shall be severed from the remainder of this Agreement, which shall remain in full force and effect unless the severed provision is
essential to 

  
 17 

 
the rights or benefits intended by the parties. In such event, the parties shall use commercially reasonable efforts to negotiate, in good faith, a substitute, valid and enforceable provision or
agreement, which most nearly effects the parties’ intent in entering into this Agreement. 

Section 5.7.    No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the
benefit of, and be enforceable by, only the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever, under or by reason of this Agreement. 
 Section 5.8.    Successors and Assigns. The provisions
of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the parties hereto. Except as otherwise provided herein, neither this Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any party hereto (whether by operation of Law or otherwise) without the prior written consent of the Investor, on the one hand, and the Founders, on the other hand. 

Section 5.9.    Construction. Each of the parties has participated in the drafting and negotiation of this
Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of
authorship of any of the provisions of this Agreement. 
 Section 5.10.    Counterparts. This Agreement may
be executed in one or more counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same document. Signatures to this Agreement transmitted by facsimile transmission, by electronic
mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document will have the same effect as physical delivery of the paper
document bearing the original signature. 
 Section 5.11.    Calculation of Investor Shares. In calculating
the Investor’s ownership of Common Stock at any given time and from time to time for purposes of determining the availability of any Investor rights under this Agreement, all Securities held or acquired by the Investor and/or its Affiliates
shall be aggregated together and any Securities other than Common Stock which are ultimately convertible or exercisable into, or exchangeable for, Common Stock rights will be deemed to have been convertible or exercisable into Common Stock
(regardless of whether at such time conversion or exercise is permissible under the terms of such Security). 

Section 5.12.    Specific Performance. Except as otherwise expressly provided herein, any and all remedies
provided herein will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties
hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by the parties hereto in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the
Investor, on the one hand, and each of the Founders, on the other hand, shall be entitled to seek an injunction or injunctions, specific performance and 

  
 18 

 
other equitable remedies to prevent breaches of this Agreement by the other (as applicable) and to seek to enforce specifically the terms and provisions of this Agreement and to thereafter cause
the transactions contemplated by this Agreement to be consummated on the terms and subject to the conditions thereto set forth in this Agreement. The foregoing rights are in addition to and without limitation of any other remedy to which the parties
may be entitled at law or in equity. The parties further agree not to assert that a remedy of specific performance is unenforceable, invalid, contrary to law or inequitable for any reason, nor to assert that a remedy of monetary damages would
provide an adequate remedy. Each of the parties hereto hereby waives (i) any defenses in any action for specific performance, including the defense that a remedy at law would be adequate and (ii) any requirement under any Law to post a
bond or other security as a prerequisite to obtaining equitable relief. 
 Section 5.13.    Amendment;
Waiver. Any provision of this Agreement may be amended, modified or supplemented only by a written instrument duly executed by all the parties hereto. The observance of any provision in this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only by the written consent of the party against whom such waiver is to be effective. Any amendment or waiver effected in accordance with this Section 5.13 shall be binding upon
the Investor, the Founders and their respective assigns. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. 

Section 5.14.    Expenses. Except as expressly provided herein, each party will bear its own costs and
expenses incurred by it or on its behalf in connection with the Transaction Documents and the transactions contemplated thereby. 

Section 5.15.    Additional Securities. Each of the Founders and Investor covenants and agrees to promptly
(and in any event within 48 hours) notify the other parties of any new Securities of the Company with respect to which beneficial ownership is acquired by such party or their respective Affiliates, including, without limitation, by purchase, as a
result of a share dividend, share split, recapitalization, combination, reclassification, exchange or change of such shares, or upon exercise or conversion of any securities of the Company, if any, after the date hereof. Any such Securities shall
automatically become subject to the terms of this Agreement and Schedule A hereto shall be deemed amended accordingly. 

Section 5.16.    Disclosure. Unless required by Law, any stock exchange rules, or upon request of any
Governmental Authority or stock exchange, each of the Parties shall not, and shall cause their respective Affiliates not to, make any press release, public announcement or other public communication that criticizes or disparages this Agreement or
the Share Purchase Agreement or the transactions contemplated hereby or thereby, without the prior written consent of the other parties. Each party (a) consents to and authorizes the publication and disclosure by any party of the other
parties’ identity and ownership of the Securities and the existence and terms of this Agreement (including, for the avoidance of doubt, the disclosure of this Agreement) and any other information, in each case, that a party reasonably
determines in its good faith judgment is required to be disclosed by Law or any stock exchange rules in any press release, 

  
 19 

 
any other disclosure document in connection with the Share Purchase Agreement or this Agreement and any filings with or notices to any Governmental Authority or stock exchange in connection with
the Share Purchase Agreement or this Agreement (or the transactions contemplated thereby or hereby) and (b) agrees promptly to give to any party any information they may reasonably request for the preparation of any such documents. 

[Signature Page Follows] 

  
 20 

 IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to
execute this Shareholders Agreement as of the date and year first above written. 
  

			
	WEICHAI AMERICA CORP.
		
	By:	 	 /s/ Victor Liu

	Name:	 	Victor Liu
	Title:	 	Chairman

  
 [Signature Page to
Shareholders Agreement] 

			
	POWER SOLUTIONS INTERNATIONAL, INC.
		
	By:	 	 /s/ Gary Winemaster

	Name:	 	Gary Winemaster
	Title:	 	Chief Executive Officer

  
 [Signature Page to
Shareholders Agreement] 

 
			
	GARY WINEMASTER
		
	By:	 	 /s/ Gary Winemaster

	
	KENNETH WINEMASTER
		
	By:	 	 /s/ Kenneth Winemaster

  
 [Signature Page to
Shareholders Agreement] 

 LIST OF EXHIBIT AND SCHEDULES 

Schedule A    Owned Shares and Notice Details of the Founders 

 SCHEDULE A 

 

					
	FOUNDER	  	Owned Shares	 
	 Gary Winemaster
	  	 	3,880,896	* 
	 Ken Winemaster
	  	 	2,180,545	 

  

	*	Gary Winemaster has 2,000,000 shares which are free of any lien or encumbrance. 

  
 Schedule A to
Shareholders AgreementEX-10.5

 Exhibit 10.5 

 
  

Strategic Collaboration Agreement 
  

 
 between 

Weichai Power Co, Ltd. 

and 
 Power Solutions
International, Inc. 

 Table of Contents 

 

							
	 1.
	 	 Definitions
	  	 	3	 
	 2.
	 	 Principles and Aims of Strategic Collaboration
	  	 	6	 
	 3.
	 	 Organization and Procedure for Strategic Collaboration
	  	 	6	 
	 4.
	 	 Implementation of the Collaboration Projects
	  	 	10	 
	 5.
	 	 Specific Collaboration Projects
	  	 	11	 
	 6.
	 	 Sharing of Best Practice
	  	 	12	 
	 7.
	 	 Representations and Warranties
	  	 	13	 
	 8.
	 	 IP Rights
	  	 	13	 
	 9.
	 	 Confidentiality
	  	 	15	 
	 10.
	 	 Termination
	  	 	16	 
	 11.
	 	 Miscellaneous
	  	 	17	 
	 Exhibit A
	  	 	23	 
	 Exhibit B
	  	 	27	 

 This Strategic Collaboration Agreement (the “Agreement”) is entered into on March 20, 2017
by and between 
  

	(1)	Weichai Power Co, Ltd., a company limited by shares incorporated under the laws of the People’s Republic of China and registered with the State Administration for Industry and Commerce under registration no.
370000400003581, having its business address at Section A, 197, Fu Shou East Street, High Technology Industrial Development Zone, Weifang, Shandong Province, the People’s Republic of China, Postal Code: 261061 (“Weichai”); and

  

	(2)	Power Solutions International, Inc. a corporation constituted and validly existing in accordance with the laws of the State of Delaware, USA, with its primary headquarter in 201 Mittel Drive Wood Dale IL U.S.A. 60191
(“PSI”). 

 Weichai and PSI are hereinafter jointly referred to as the “Parties” and individually as a
“Party”. 
 WHEREAS 
  

	(A)	Weichai is a leading equipment manufacturing group in China specializing in the manufacturing and sale, also through its subsidiaries and connected companies, of a wide range of industrial products, including but not
limited to drivetrain, auto parts and components and commercial vehicles. 

  

	(B)	PSI is a global producer and distributor of a broad range of high performance, certified low-emission, power systems that primarily run on
non-diesel fuels such as natural gas, propane and gasoline, which are designed to meet emission standards of the Environmental Protection Agency (“EPA”) and the California Air Resources Board
(“CARB”). 

  

	(C)	Concurrently with the execution of this Agreement, Weichai, Weichai US, PSI, and the founding stockholders of PSI, as applicable, have entered into the warrants, the share purchase agreement, investor rights agreement
and the shareholders’ agreement (together with this Agreement, “Transaction Documents”) for the purpose of implementing the transactions contemplated therein (“Transaction”). 

 

	(D)	As part of the Transaction, the Parties agree and acknowledge that the cooperation between Weichai and PSI is an important component to achieve their respective strategic objectives, and they desire to continue and
further enhance the strategic cooperation alliance between them as contemplated under this Agreement. 

 NOW, THEREFORE, in
consideration of the promises contained herein and intending to be legally bound, the Parties agree as follows: 
  

	1.	Definitions 

  

	1.1	Affiliate means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with such Person; provided
that neither Party nor their respective Subsidiaries shall be deemed an Affiliate of the other Party or its Subsidiaries. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by”
and “under common control with”), as used with respect to any Person, means the direct or indirect possession of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. For the avoidance of doubt, Shandong Heavy Industry Group Co., Ltd. and its subsidiaries are Affiliates of Weichai. 

	1.2	Applicable Laws means, with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule,
regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified
otherwise. 

  

	1.3	Approval Authorities means any governmental authority or body which by virtue of Applicable Laws has competency to approve any transaction referred to or foreseen hereunder. 

 

	1.4	Arbitration Tribunal shall have the meaning set out in Section 11.13(a) 

  

	1.5	Background IP refers to information which is held by the Parties prior to the beginning of a Collaboration Project, as well as any Independent Technology and Intellectual Property Rights pertaining to such
information, and which is needed for carrying out the Collaboration Project or for using Foreground IP. 

  

	1.6	Board means the board of directors or supervisory board of a Party where applicable. 

  

	1.7	Business Days means any day, other than a Saturday, Sunday or other day on which commercial banks in Beijing, Hong Kong or New York City are authorized or required by Applicable Laws to close. 

 

	1.8	CARB shall have the meaning set out in the preamble. 

  

	1.9	Collaboration Projects shall have the meaning set out in Section 2.2.1. 

  

	1.10	Confidential Material shall have the meaning set out in Section 9.1(a). 

  

	1.11	Constitutional Documents means the articles of association, articles of incorporation, charter, by-law or other similar corporate constitutional documents of a Party where
applicable. 

  

	1.12	Cost Control Committee shall be the body referred to in Section 3.2.1(c). 

  

	1.13	                              
                                         
                    

  

	1.14	Effective Date shall mean the Closing Date as defined under SPA. 

  

	1.15	EPA shall have the meaning set out in the preamble. 

  

	1.16	Foreground IP means the results, including information, whether or not they can be protected, which are generated under a Collaboration Project including any Intellectual Property Rights pertaining to such
information. 

  

	1.17	Gas Engine shall have the meaning set out in Section 5.1.1. 

  

	1.18	Governmental Authority means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry
self-regulatory organization. 

  

	1.19	Implementation Plan shall have the meaning set out in Section 3.2.1. 

  

	1.20	Independent Technology means Technology and associated Intellectual Property Rights owned solely by a Party, which is conceived prior to the Effective Date and/or at any time outside of the course of a
Collaboration Projects, provided, where such conception occurred after the Effective Date, the owning Party made no use of or reliance upon the other Party’s Technology for such conception or any subsequent reduction to practice.

  

	***	Information Redacted for Confidential Treatment. Confidential information has been separately filed with the Securities and Exchange Commission under an application for Confidential Treatment. 

  
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	1.21	Intellectual Property Rights mean protected know-how, trademarks, service marks, trade names, trade secrets, methodologies, domain names, patents, inventions, registered
and unregistered design rights, copyrights, semi-conductor topography rights, database rights and all other similar protected rights in any part of the world including, where such rights are obtained or enhanced by registration, any registration of
such rights and applications and rights to apply for such registrations. 

  

	1.22	Investor Rights Agreement shall have the meaning set out in the Share Purchase Agreement. 

  

	1.23	Joint Foreground IP shall have the meaning set out in Section 8.1(b). 

  

	1.24	Joint R&D Committee shall be the body referred to in Section 3.2.1(d). 

  

	1.25	LCIA Court shall have the meaning set out in Section 11.13(b). 

  

	1.26	LCI Rules shall have the meaning set out in Section 11.13(a). 

  

	1.27	Marketing & Sales Committee shall be the body referred to in Section 3.2.1(a). 

  

	1.28	North America means the United States and Canada. 

  

	1.29	Person means any individual, corporation, partnership, trust, association, limited liability company or any other entity or organization. 

 

	1.30	PRC means the People’s Republic of China excluding Hong Kong, Macau and Taiwan. 

  

	1.31	Procurement Committee shall be the body referred to in Section 3.2.1(b). 

  

	1.32	Product Development Plan shall have the meaning set out in Section 3.2.1(d). 

  

	1.33	Project Implementation Agreement shall have the meaning set out in Section 4.2. 

  

	1.34	Receiving Party shall have the meaning set out in Section 9.1(a). 

  

	1.35	Secondment Employee shall have the meaning set out in Section 3.3.2. 

  

	1.36	Sharing Program shall have the meaning set out in Section 6.1. 

  

	1.37	SPA means the share purchase agreement entered into between PSI and Weichai US on the date hereof. 

  

	1.38	Steering Committee shall have the meaning set out in Section 3.1.1. 

  

	1.39	Subsidiary with respect to either Party means any corporation, partnership or other entity or Person of which such Party directly or indirectly owns a majority of either the equity or the voting interests.

  

	1.40	Technology means all tangible or intangible knowledge, concepts, procedures, schematics, trade secrets, technical information and data, ideas, processes, inventions, technology, discoveries, improvements,
methods, compositions, formulae, techniques, test results, devices, designs, and/or manufacturing specifications and procedures, strategic business information, financial information, and any information regarding sources and prices for raw
materials, subassemblies, parts and manufacturing services. 

  

	1.41	Weichai Base Engine shall have the meaning set out in Section 5.1.1. 

  

	1.42	Weichai Diesel Engine shall have the meaning set out in Section 5.2.1. 

  
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	1.43	Weichai US means Weichai America Corporation, an indirect wholly owned subsidiary of Weichai. 

  

	2.	Principles and Aims of Strategic Collaboration 

  

	2.1	Aims 

 The purpose of the strategic collaboration to be developed by the Parties in accordance
with this Agreement (the “Strategic Collaboration”) is to form a strategic partnership and share experiences, expertise and resources to enable the Parties to maximize the growth and profitability of their existing business, as well
create and enhance synergies through joint and cooperative activities to achieve long-term success in delivering high quality power systems in North America and the rest of the world. In pursuing such objectives, the Parties shall give due
consideration to the following targets: 
  

	 	a.	Maximizing total benefits; 

  

	 	b.	Reducing cost and increasing profitability; 

  

	 	c.	Identifying and sharing of customers, distribution networks and channels; 

  

	 	d.	Increasing competitiveness and market share; 

  

	 	e.	Leveraging PSI’s sales channel and network to promote and expand sale of Weichai products in North America; 

  

	 	f.	Leveraging Weichai’s sales channel and network to promote and expand sale of PSI products in the PRC; 

  

	 	g.	Developing new power system products and related businesses; and 

  

	 	h.	Entering or expanding into new markets. 

  

	2.2	Scope of Strategic Collaboration 

  

	2.2.1	The Parties agree to further enhance, define, confirm and firmly implement the Strategic Collaboration by jointly identifying from time to time specific areas of potential opportunities to cooperate which are of mutual
interest and by exploring the possibility and feasibility of a cooperation in such areas. The Parties will jointly identify, negotiate in good faith and, if supported by both Parties, agree on specific cooperation projects (individually referred to
as a “Collaboration Project” and collectively referred to as “Collaboration Projects”). 

  

	2.2.2	In order to pursue and initially implement the Strategic Collaboration, the Parties have identified and agreed to further elaborate and, as the case may be, to carry out the specific initial Collaboration Projects more
particularly set out in Sections 5 through 6 of this Agreement (such Collaboration Projects, the “Initial Collaboration Projects”). 

  

	3.	Organization and Procedure for Strategic Collaboration 

 The Parties agree to establish
the following structure to oversee the implementation of the Strategic Collaboration: 
  

	3.1	Steering Committee 

  

	3.1.1	 The Parties shall establish an overall steering committee, which shall be comprised of six (6) members,
including three (3) members appointed by Weichai and three (3) members appointed 

  
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by PSI (the “Steering Committee”). The chairmanship of the Steering Committee shall rotate between Weichai and PSI every two (2) years, with the chairman for the Steering
Committee for the first two (2) years shall be the representative of Weichai. Where one Party appoints the chairman, the other Party shall have the right to appoint vice-chairman. Each Party, in its sole discretion, would be permitted to change
its own Steering Committee members by providing written notice to the other Party. 

  

	3.1.2	The Steering Committee would meet at least once quarterly or as otherwise deemed necessary. Either the chairman or vice-chairman of the Steering Committee may call ad hoc Steering Committee meetings upon at least ten
(10) Business Days prior written notice if such Party reasonably believes that a significant matter must be addressed prior to the next scheduled meeting. The chairman shall provide to give each member of the Steering Committee (by email or
otherwise) notice and the agenda for each meeting at least five (5) Business Days prior to such meeting. 

  

	3.1.3	The location for in-person meetings would alternate between Weichai (or Weichai US if appropriate) and PSI host facilities. Alternatively, the Steering Committee, at its
discretion, could conduct these meeting via telephone or video conference, as long as each participating Steering Committee member can hear and be heard by each other participating members. Each Party will be responsible for its own expenses
relating to such meetings. 

  

	3.1.4	A quorum for the meeting shall consist of at least four (4) members of the Steering Committee. If a Steering Committee member is not present at two consecutive meetings and/or adjournments of meetings, at the next
meeting or adjournment thereof, the presence of such Steering Committee member shall not be required for a quorum and such Steering Committee member shall be deemed to be in attendance of such meeting for the purposes of meeting the quorum
requirement. 

  

	3.1.5	In general, the functions of the Steering Committee would be to provide strategic direction to and make decisions on the proposals made by the sub-committees as further elaborate
below and make informed decisions regarding the direction, management and implementation of the Collaboration Projects. The Steering Committee shall directly report to the Board of each Party. The Steering Committee shall have the overall
responsibility in relation to the Parties’ cooperation activities under the Strategic Collaboration, in particular but without limitation: 

  

	 	a.	determining the kick-off of the Collaboration Projects; 

  

	 	b.	establishing sub-committees and determining the size and composition of such sub-committees; 

 

	 	c.	adopting rules, procedures, regulations, functions and duties of the sub-committees; 

  

	 	d.	reviewing and approving the Development Plan and Implementation Plan (as defined below) or the modification thereof, if applicable, for each Collaboration Project (including the Initial Collaboration Projects) submitted
by the relevant sub-committees; 

  

	 	e.	overseeing, supervising, guiding and coordinating the implementation of the Collaboration Projects by the relevant sub-committees; 

 

	 	f.	discussing and approving on any Foreground IP and Joint Foreground IP (as defined below) matters relating to the Collaboration Projects; 

 

	 	g.	regularly reviewing the project status, acceptance check on all milestones of the projects and conducting and approving the final acceptance check on the products result from the work performed under the Collaboration
Projects; 

  
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	 	h.	identifying new areas for collaboration and establishment of any new Collaboration Projects to the extent feasible and economically advantageous; and 

 

	 	i.	any other responsibilities as the Parties may agree. 

  

	3.1.6	For purposes of any approval or action taken by the Steering Committee, each member of the Steering Committee shall have one (1) vote. All actions of the Steering Committee shall require the affirmative vote of at
least four (4) members present at a duly-convened meeting of the Steering Committee at which a quorum is present, or require the unanimous written consent of the Steering Committee without a meeting. For the avoidance of doubt, the chairman and
vice-chairman shall not be entitled to any second or casting vote or any veto right whether in the event of a deadlock or otherwise. In the event that the Steering Committee fails to obtain the requisite vote to approve on a matter, the chairman or
vice chairman of the Steering Committee shall first discussed in good-faith to reach an agreement, if no agreement can be reached between the chairman and vice-chairman, such matter shall be dropped without prejudice, provided that either chairman
or vice-chairman may, refer such matter to CEOs of the Parties for resolution. The CEOs of the Parties shall promptly, latest within one (1) month upon receipt of the written notice from such person, meet and discuss in good faith to resolve
each matter referred to them by such member. 

  

	3.2	Sub-Committees 

  

	3.2.1	For the purpose of facilitating and implementing the Strategic Collaboration between the Parties, the Steering Committee may establish one or more sub-committees for specific
areas of Strategic Collaboration. The sub-committees shall have the duties and functions designated by the Steering Committee from time to time. The sub-committee shall
formulate an implementation plan for a specific Collaboration Project within its area (“Implementation Plan”) (except for the Joint R&D Committee, which shall first formulate a Project Development Plan (as defined below) for
approval before formulate the Implementation Plan) and submit the same to the Steering Committee for approval. The Parties hereby agree to establish the following initial sub-committees immediately after the
Effective Date and in no event later than 30 days hereafter: 

  

	 	a.	a marketing and sales Committee, which shall be responsible, including without limitation, for exchanging and reviewing information and data about the other Party’s customer base, sales and distribution channels as
well as the after-sales network in North America and the PRC respectively and with the goal to promote and sell Weichai products in North America using PSI sales network and promote and sell PSI products in the PRC using Weichai sales network
(“Marketing & Sales Committee”); 

  

	 	b.	a procurement committee, which shall be responsible, including without limitation, for reviewing and assessing the procurement network, channel, policies, procedures and frameworks of PSI with the goal to optimize
quality and efficiency of PSI’s procurement system and maximize profitability by leveraging Weichai’s production capabilities and procurement system; (“Procurement Committee”); 

 

	 	c.	a cost control committee, which shall be responsible, including without limitation, reviewing costs, budgets, and contract procedures of PSI and suggest measures to reduce cost and improve competitiveness and
profitability by leveraging Weichai’s capabilities and resources (“Cost Control Committee”); and 

  

	 	d.	a joint research and development committee, which shall be responsible, including without limitation, for preparing the a project development plan for collaboration products (which shall include time schedule, method of
collaboration, milestones and development budgets) (“Project Development Plan”) and preparing and implementing the Implementation Plans for such products (“Joint R&D Committee”). 

  
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	3.2.2	The Steering Committee shall determine the size of each sub-committee, and each sub-committee shall be composed of equal number of members
appointed by Weichai and PSI. Each Party, in its sole discretion, would be permitted to change its own sub-committee members by providing written notice to the other Party. 

 

	3.2.3	Each sub-committee would meet at least once every two weeks or as otherwise deemed necessary. Any sub-committee member may call ad hoc
meetings upon at least three (3) Business Days prior written notice if such member reasonably believes that a significant matter must be addressed prior to the next scheduled meeting. 

 

	3.2.4	Each sub-committee shall follow the rules of procedures as adopted by the Steering Committee from time to time. 

 

	3.2.5	Each Party shall afford the sub-committee members appointed by the other Party reasonable access to all relevant information, Confidential Material, Technology, data, material,
documents, books and records to the extent as required by such sub-committee to perform its duties and functions hereunder and as designated by the Steering Committee. 

 

	3.3	Weichai Secondment to PSI 

  

	3.3.1	For the purpose of advancing the Collaboration Projects in the most efficient manner, the Parties agree to allow Weichai to second a limited number of certain technical, marketing, sales, procurement and financing
personnel to work in the Company. 

  

	3.3.2	Subject to the terms of this Agreement, Weichai (or Weichai US as appropriate) agrees to second to PSI, and PSI agrees to accept the secondment of, certain numbers of Weichai (or Weichai US as appropriate) employees
pursuant to Exhibit A, such list may be updated from time to time by mutual agreement of the Parties (each a “Secondment Employee”), for the purpose of performing the job functions stipulated in Exhibit
A. The number of Secondment Employees for each job title and new job title/functions may be added or revised to Exhibit A from time to time upon the mutual consent of the Parties, which will be fully binding on the Parties for
all purposes under this Agreement. 

  

	3.3.3	Weichai will select the Secondment Employees either from its existing talent pool or by new hire to fill each job title and a list of such employees will be sent to PSI for approval, such approval shall not be
unreasonably withheld if the individuals selected are capable of handling their respective work. Weichai may replace a Secondment Employee with another individual at any time by providing a prior written notice to PSI. Those rights and obligations
of the Parties under this Agreement that relate to individuals that were Secondement Employees but then later removed, which rights and obligations accrued before the removal of such individual, will survive the removal of such individual as
Secondment Employee to the extent necessary to enforce such rights and obligations. 

  

	 	3.3.4	 In consideration of Weichai (or Weichai US as appropriate) making available to PSI the services of the Secondment
Employees, PSI agrees to bear the salaries, 401(k) contributions, bonuses, healthcare coverage and insurances (including workers’ compensation and disability insurances) of the Secondment Employees and any other benefits enjoyed by the PSI
employees at the same or similar positions. Prior to the start of the secondment, PSI and Weichai (or Weichai US as appropriate) shall collectively determine the compensation package (including the salary and bonus) for each of the Secondment
Employee in good faith. PSI shall apply for and obtain visas and work permits for the Secondment Employees to the extent necessary. The Secondment Employees shall commence working for PSI pursuant to starting time stipulated under the Investor
Rights Agreement for the vice president and the Exhibit A for the other Secondment Employees subject to obtaining the requisite visa and work permit if needed. In the event that such

  
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other Secondment Employees cannot start working for PSI within the prescribed timeline due to the failure or delay of obtaining the requisite visa or work permit on time, upon obtaining the
requisite visa and work permit, the PSI shall immediately appoint such other Secondment Employees to their respective position without delay. 

  

	3.3.5	During the secondment period, PSI shall: 

  

	 	a.	be ultimately and fully responsible for the daily work assignments of Secondment Employees, including supervision of their the day-to-day
work activities and performance consistent with the purposes and the job functions set forth in Exhibit A; 

  

	 	b.	set the hours of work and the holidays and vacation schedules for Secondment Employees; and 

  

	 	c.	have the right to determine training which will be received by the Secondment Employees. 

  

	3.3.6	In the course and scope of performing any Secondment Employee’s job functions, the Secondment Employee will be integrated into the organization of PSI, will report into PSI’s management structure, and will be
under the direct management and supervision of PSI employees. 

  

	3.3.7	So long as a Secondment Employee is still an employee of Weichai (or Weichai US as appropriate), PSI and its Affiliates shall not, without the prior written consent of Weichai, directly recruit or solicit the Secondment
Employee to leave his or her employment with Weichai during the secondment or prior to the period ending twenty-four (24) months after the end of secondment. 

 

	4.	Implementation of the Collaboration Projects 

  

	4.1	After the Steering Committee approves an Implementation Plan submitted by a sub-committee for a Collaboration Project, such sub-committee
implement the Collaboration Project on the basis of the Implementation Plan. For Joint R&D Committee, after the Steering Committee approves the Product Development Plan, it shall prepare the Implementation Plan on the basis of the Project
Development Plan and the comments collected from the Steering Committee, if any, and submitting the same to the Steering Committee for approval. 

  

	4.2	Notwithstanding the provisions set forth in this Agreement, the Parties agree that, to the extent necessary, the Parties may enter into specific binding agreements to implement any specific Collaboration Project with
customary terms and conditions to be mutually agreed upon by the Parties on good faith in accordance with the provisions of this Agreement (“Project Implementation Agreements”). The Parties accordingly agree that Collaboration
Projects shall be identified and, as the case may be and including the Initial Collaboration Projects, shall be implemented according to the process set out in Exhibit B. 

 

	4.3	Each sub-committee shall prepare a written report every three (3) months during the life of any Collaboration Projects that outlines all research and development activities
that have transpired, the current status of such activities, any relevant conclusions, future activities under contemplation, and any proposed changes to the Development Plan. The report shall also include a clear explanation and documentation of
any inventions, discoveries, improvements, etc. that have been made and shall be submitted to the Steering Committee for review on a regular basis. 

  

	4.4	In the event that new technology, products, materials and the like, including any resulting intellectual property related thereto, are developed under this Agreement, the Parties agree to set forth their respective
rights regarding the ownership and use of such technology, products, materials and associated intellectual property pursuant to Section 8 of this Agreement. 

  
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	4.5	Costs and Expenses 

 Unless otherwise provided in this Agreement, the Project Implementation
Agreements or any other separate definitive agreements reached by the Parties for any specific Collaboration Project, the Parties agree that as a general principle each Party shall bear the costs and expenses it incurs for the implementation of the
Collaboration Projects, including without limitation, the costs of its personnel, travel and accommodation, business development costs etc. 
  

	4.6	Communication Alignment 

 The Parties shall take a joint approach with respect to communication
with government authorities, regulators, investors, customers, suppliers or potential co-operation parties which relates to this Agreement and/or any Collaboration Project and as to be agreed upon by the
Steering Committee. The Parties shall pay particular attention to maintaining amicable relationships with their existing customers. 
  

	5.	Specific Collaboration Projects 

 The Parties have initially identified the following
Initial Collaboration Projects, which shall be evaluated and implemented subject to further discussion, consideration and mutual agreement between the Parties in each case in the form of a Project Implementation Agreement. The Parties have agreed to
implement these Initial Collaboration Projects and shall engage in good faith and in the spirit and pursuant to the terms and conditions of this Agreement in all customary project assessment and implementation practices. 

 

	5.1	Collaboration on Stationary Natural Gas Application 

  

	5.1.1	The Parties shall jointly develop engines for stationary natural gas application (“Gas Engines”) based on Weichai’s base engines meeting the EPA and CARB emission standards (“Weichai Base
Engines”) by leveraging Weichai’s existing products, the development undertaken by Weichai US already, as well as PSI’s engineering capabilities. Joint R&D Committee shall formulate a Product Development Plan as soon as
practicable following the Effective Date, which shall set out the project milestones and target timeline, and submit such Product Development Plan to the Steering Committee for approval. 

 
  

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	5.2	Collaboration on Weichai Diesel Engines 

  

	5.2.1	The Joint R&D Committee shall formulate a Product Development Plan to define specific Weichai diesel engines to be developed / modified / improved for sale in North America 

 

	***	Information Redacted for Confidential Treatment. Confidential information has been separately filed with the Securities and Exchange Commission under an application for Confidential Treatment. 

  
 11/28 

	 	
(“Weichai Diesel Engines”). PSI shall work closely with Weichai (including Weichai US) to provide technical assistance and support by leveraging its research and development as
well as engineering capability to develop / improve / modify Weichai Diesel Engines on meeting the EPA and CARB emission standards. 

  

	5.2.2	For those Weichai Diesel Engines that are not in PSI’s existing product portfolio, PSI shall use its sales and marketing network to promote and sell such Weichai Diesel Engines in North America; for those Weichai
Diesel Engines that are in PSI’s existing product portfolio, PSI shall, to the extent economically advantageous and as soon as practicable, phase out third party products with substantially similar specifications and performance to such Weichai
Diesel Engines and use such Weichai Diesel Engines to replace such third party products. 

  

	5.2.3	Weichai shall be the preferred supplier of PSI for other diesel engines (either new or existing products) manufactured by Weichai which meet the criteria including EPA and CARB emission standards. 

 

	5.3	Supply of Castings 

  

	5.3.1	In recognition of Weichai’s capabilities of producing good quality engine components such as castings at competitive cost, PSI agrees to establish a long-term supply relationship with Weichai for castings in order
to meet its needs of securing long term supply. 

  

	5.3.2	Immediately after the Effective Date but latest within 3 months upon the Effective Date, the Parties shall negotiate in good faith and enter into a long-term supply agreement for castings, which will provide that
(i) Weichai (or its Affiliates) will be the main and preferred supplier of castings required by PSI for its 4.3L and 8.8L gasoline engines and other engines of PSI., provided that the form fit, function, durability, quality, price and other
terms of supply offered by Weichai (or its Affiliates) shall be no less favorable, in any material aspect, than the existing third party suppliers of PSI; and (ii) Weichai will be guaranteed to supply not less than 90% of the total annual
quantities of castings required by PSI and its Affiliates as long as Weichai (or its Affiliates) is able to supply such castings according to the terms of such supply agreement. 

 

	6.	Sharing of Best Practice 

  

	6.1	The Parties recognize the strengths of each other party in its respective areas of operation and will establish a joint program for purpose of sharing the best practice of each other (the “Sharing
Program”). The Steering Committee shall, as soon as practically possible, prepare a proposal of the Sharing Program which shall identify the initial areas for sharing of best practices. The Sharing Program may include, amongst others, the
following actions and will be subject to review and adjustment on an annual basis: 

  

	 	a.	adopting regular visit program of the other Parties’ facility as may be agreed upon by the Parties; 

  

	 	b.	adopting regular training programs and workshops on specific subjects; 

  

	 	c.	adopting regular employee exchange program allowing certain development and engineering personnel to work in the facilities of the other Party; and 

 

	 	d.	exchanging of information and knowledge in the identified areas as may be agreed upon by the Parties, 

in each case subject to limitations under Applicable Laws, to customary know-how protection and the
regulations on confidentiality as set forth in this Agreement. 

  
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	7.	Representations and Warranties 

 Each Party represents that: 

 

	 	a.	the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the
part of the Party; 

  

	 	b.	the execution and delivery of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby do not and will not (i) contravene or conflict with its
Constitutional Documents, (ii) contravene or conflict with the provisions of Applicable Laws or court judgments, and (iii) any contract or agreement to which it is a party or that is binding upon it; 

 

	 	c.	this Agreement has been duly executed and delivered, and constitutes legal, valid and binding obligations of the Party, enforceable against such Party in accordance with its terms, subject to the Applicable Laws; and

  

	 	d.	it does now and will at all times exert best efforts to remain in compliance with all Applicable Laws. 

  

	8.	IP Rights 

  

	8.1	Rights to Foreground IP 

  

	 	a.	Any Foreground IP shall be the property of the Party which has paid for the entire work generating that Foreground IP, or developed solely using the Background IP of such Party. Each Party has a right, but no
obligation, to take appropriate actions to protect the Foreground IP developed for that Party and to use and exploit such Foreground IP. The granting of any exclusive licenses to use and exploit Foreground IP shall be subject to the other
Party’s prior written consent. Upon request, the Party owning the Foreground IP shall grant the other Party to such Foreground IP a non-exclusive license upon fair and reasonable conditions.

  

	 	b.	Where the Parties have jointly paid for the work generating the Foreground IP, or the composition of the Foreground IP consist of the Background IP from both Parties and where their respective share of the contribution
cannot be ascertained, they shall have joint ownership of such Foreground IP and shall discuss in good faith and agree whether they may jointly apply for or obtain the relevant Intellectual Property Rights for such Foreground IP or whether
Intellectual Property Rights should be obtained in the name of one Party, for example if one Party has made the predominant inventive contribution, or if the invention is mainly based on or useful in connection with Background IP of one Party (the
“Joint Foreground IP”). The arrangements for the ownership, applying, maintaining, sharing and exploiting the Joint Foreground IP shall be discussed and agreed upon by the Steering Committee on a case-by-case basis pursuant to Section 3.1.5(f) or pursuant to the Project Implementation Agreement (if any). 

  

	 	c.	The owning Party of the Foreground IP or the Joint Foreground IP as determined pursuant to Section 8.1(b) above shall have the right, in its own discretion, to file patent applications in North America and in any other
country of the world in its own name. The other Party, at the request of the owning Party, shall exercise reasonable efforts to support the filing of patent applications by the owning Party. Such efforts shall include support by inventors and
execution of all legal documents (applications, assignments and declarations). All costs of preparing, filing and prosecuting patent applications owned by the owning Party, and of maintaining such patents, shall be borne by said Party. The owning
Party shall grant the non-owning Party an irrevocable, non-exclusive, permanent, worldwide and royalty-free license to use such Foreground IP or Joint Foreground IP.

  
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	 	d.	In the event the owning Party decides against filing a patent application directed to any Foreground IP or Joint Foreground IP that it owns under this Agreement and, additionally, the owning Party does not wish to
maintain such Foreground IP as a trade secret, the other non-owning Party shall have the right to take ownership of such Foreground IP or Joint Foreground IP for no additional consideration, and agrees that it
shall bear all costs associated with the procurement and maintenance of any patents. Analogously, if the owner of a patent directed to Foreground IP or Joint Foreground IP resulting from this Agreement is no longer interested in maintaining such
patent, the owning Party will provide the non-owning Party with reasonable advanced notice of its intent to allow the patent to lapse to give the non-owning Party the
opportunity to pay the maintenance fees and assume ownership of the patent in question for no additional consideration. Also, if the owning Party decides against filing a patent application directed to Foreground IP or Joint Foreground IP in a
particular country or countries that are of interest to the non-owning Party, the owning Party will allow the non-owning Party to effectuate the filings in those other
countries, at the non-owning Party’s expense, and the non-owning Party will assume ownership of that patent application and any patent(s) issuing therefrom without
the need to pay any additional consideration. 

  

	 	e.	The Transfer of partial ownership to Joint Foreground IP to a third party (not an Affiliate) shall be subject to the prior written consent of the other Party. In any case, the assignor of the partial ownership to
Foreground IP shall pass on all obligations regarding that Foreground IP under this Agreement to the assignee including the obligation to pass those obligations on to any subsequent assignee. 

 

	 	f.	If employees or other personnel working for a Party are entitled to claim rights to Foreground IP, such as for example the right to be named as inventor, the respective Party shall ensure that it is possible to exercise
those rights in a manner compatible with its obligations under this Agreement and shall indemnify the other Party from any claims of its employees or other personnel. 

 

	 	g.	No derivatives products shall be created by one Party based on the Foreground IP of the other Party unless otherwise agreed between the Parties. It is understood and agreed that any Joint Foreground IP is to be utilized
by the Parties for the benefit of both Parties and that no Party may make, use, develop, create or disclose derivatives from the Joint Foreground IP for its own use or benefit unless otherwise agreed between the Parties. 

 

	8.2	Background IP 

  

	 	a.	Each Party shall keep all Intellectual Property rights to its Background IP. Each Party acknowledges and agrees that, as between the Parties, each Party is and shall remain for all purposes hereunder the sole and
exclusive owner of all right, title and interest in and to its Independent Technology and all associated Intellectual Property Rights. Each Party acknowledges that it acquires no rights under this Agreement to the other Party’s Independent
Technology or associated Intellectual Property Rights other than the limited licenses expressly granted in this Agreement. 

  

	 	b.	In case any Background IP of a Party is needed to complete a Collaboration Project, a respective non-exclusive, royalty-free license to such Background IP limited to the
implementation of the respective Collaboration Project subject to any provisions that may be contained in the Project Implementation Agreement (if any). 

  

	8.3	Project Implementation Agreements and this Agreement 

  

	 	a.	Notwithstanding anything set forth in this Agreement, if there are any inconsistent terms between the Project Implementation Agreements and this Agreement, the Project Implementation Agreements shall prevail.

  
 14/28 

	 	b.	If and to the extent the allocation of ownership and Intellectual Property Rights to Foreground IP, Joint Foreground IP and/or Background IP is explicitly regulated under the Project Implementation Agreements, such
allocation under the Project Implementation Agreements shall prevail over the allocation set forth under Sections 8.1 and 8.2. 

  

	9.	Confidentiality 

 It is expected that the Parties will be exchanging Confidential
Material (as defined below) with each other: (i) during their mutual evaluation of potential opportunities to collaborate with each other in the commercial exploitation of their respective products and technologies, (ii) during any
cooperative research and development of newly developed products and technologies, and (iii) during the commercial phase of any cooperative exploitation of a Party’s products and/or technologies. Accordingly, this Section 9 sets forth
the terms and conditions for the disclosure, receipt and use of the other Party’s Confidential Material. 
  

	9.1	Confidentiality Obligation and Know-how protection 

  

	 	a.	Each Party shall keep confidential and shall procure that its Affiliates and third party providers keep confidential and shall not make available or disclose to any person and shall procure that its Affiliates and third
party providers not make available or disclose any know-how, information, data or material of the other Party or its Affiliates that is or has been (i) disclosed by such other Party or its Affiliates
under or in connection with this Agreement or any Project Implementation Agreement, whether orally, electronically, in writing or otherwise, including copies, or (ii) learned, acquired, or generated by the Party in connection with this
Agreement or any Project Implementation Agreement and the activities contemplated thereby, including the terms of this Agreement and the Project Implementation Agreements (collectively, “Confidential Material”), or make or permit
any use of such Confidential Material outside the Collaboration Projects without the prior written consent of the other Party. In particular, and without limiting the foregoing, the Party receiving Confidential Material (“Receiving
Party”) shall not use and shall procure that its Affiliates and third party providers do not use such Confidential Material to compete or to help others to compete with the Party and/or its Affiliates disclosing the Confidential Material.

  

	 	b.	Notwithstanding the foregoing, Confidential Material may be disclosed on an as needed basis to personnel, employee or director of the Receiving Party and its subcontractors as and to the extent required for the purpose
of complying with the Receiving Party’s obligations under this Agreement or any Project Implementation Agreement. Each Party shall take all reasonable steps to ensure that any such Confidential Material disclosed to any such person in
accordance with this Section 9 is treated as confidential by such person and shall require its subcontractors to enter into a confidentiality agreement which imposes confidentiality obligations no less protective of the Confidential Material
than those imposed upon the Parties under this Agreement. 

  

	 	c.	This Section 9 shall not prohibit disclosure or use of any Confidential Material if and to the extent: 

  

	 	aa.	the disclosure or use is required by Applicable Law; 

  

	 	bb.	the disclosure or use is required for the purpose of any judicial proceedings arising out of this Agreement or any other agreement entered into under or pursuant to this Agreement or the disclosure is made to a tax
authority in connection with the tax affairs of any Party; 

  
 15/28 

	 	cc.	the disclosure is made to professional advisers of the Parties on a need to know basis and on terms that such professional advisers undertake to comply with the provisions of this Section 9 in respect of such
Confidential Material as if they were a party to this Agreement; 

  

	 	dd.	the Confidential Material is or becomes publicly available (other than by breach of this Agreement); 

  

	 	ee.	the Confidential Material has been legitimately in the other Party’s possession prior to disclosure; 

  

	 	ff.	the Confidential Material is independently developed without reference to any Confidential Material; or 

  

	 	gg.	the Confidential Material is disclosed with the written consent of the other party, 

 provided
that prior to a disclosure or use of any Confidential Material pursuant to this Section 9.1(c) aa. or bb., the Party required to disclose or use the Confidential Material shall, if legally permitted, promptly notify the other Party of such
requirement with a view to providing such other Party with the opportunity to contest such disclosure or use or otherwise to agree the timing and content of such disclosure or use. 

 

	 	d.	Each Party shall immediately inform the other Party in the event that it becomes aware of the possession, use or knowledge of any of such other Party’s Confidential Material by any person not authorized to possess,
use or have knowledge of the Confidential Material and shall at the request of such other Party provide such reasonable assistance as is required by such other Party to mitigate any damage caused thereby. 

 

	9.2	Reports and Statements 

 The Parties agree that they will not issue any reports, statements or
releases pertaining to this Agreement, any Collaboration Projects or contemplated hereunder, unless agreed beforehand by the Parties, except that each Party may issue any such report, statement or release if such issuance is required in order to
comply with Applicable Laws or a requirement of any Approval Authorities, provided that such Party shall have disclosed to the other Parties the type and nature of information being disclosed in such issuance. The Parties will cooperate with each
other as to the timing and content of press releases or other forms of public announcements in this regard. 
  

	10.	Termination 

  

	10.1	Effectiveness 

 The Agreement shall become effective at the date hereof and shall have the term
of three (3) years. Within two (2) months prior to the end of the term or the extension thereof, the Parties may mutually agree on the extension of this Agreement and depending on the status on each of the Collaboration Project, the
Parties may mutually agree on amending the terms and conditions of this Agreement to be applied for the next extension term. 
  

	10.2	Ordinary termination 

 This Agreement may be terminated by the Parties at any time with mutual
written consent. 

  
 16/28 

	10.3	Extraordinary termination 

 Any Party is entitled to terminate this Agreement with immediate
effect by serving a unilateral written notice to the other Parties in the following circumstances: 
  

	 	a.	Material breach of the provisions of this Agreement (including the representation and warranties under Section 7), provided that any of the other Party has sent a notice of breach to the other Party and the breach
is not cured within thirty (30) Business Days from the date on which such notice is served; 

  

	 	b.	Any procedure is commenced with a view to the winding-up or reorganization of a Party, save that no right to terminate will arise in respect of any procedure commenced for the
purpose of a solvent amalgamation or reconstruction with the prior written consent of the other Party (such consent not to be unreasonably withheld or delayed); 

  

	 	c.	Any procedure is commenced with a view to the appointment of an administrator, receiver, administrative receiver or trustee in bankruptcy in relation to a Party or all or substantially all of its assets;

  

	 	d.	The holder of any security over all or substantially all of the assets of a Party takes any step to enforce that security; 

  

	 	e.	All or substantially all of the assets of a Party are subject to attachment, sequestration, execution or any similar process; or 

  

	 	f.	A Party is unable to pay its debts as they fall due or enters into a composition or arrangement with its creditors or any class of them. 

 

	10.4	Consequences of termination 

  

	10.4.1	In case of termination of this Agreement, a meeting of the Steering Committee shall promptly take place in order to discuss the most appropriate exit strategy and the effects of the termination on the activities under
Section 3.3, 5 and 6 above. 

  

	10.4.2	Unless otherwise resolved by the Steering Committee, the termination shall have no effect on the implementation of the Collaboration Projects that as of the termination date are already at an execution stage on the
basis of a Project Implementation Agreement. These Collaboration Projects will therefore be completed. 

  

	10.4.3	The confidentiality obligation set out by Section 9 above shall survive the termination of this Agreement and a meeting of the Steering Committee shall promptly take place upon termination in order to discuss the
practical measures to be adopted in order to ensure that no violation of such confidentiality obligation may occur prior to or following such termination. 

  

	10.4.4	The non-terminating Parties may decide to continue this Agreement amongst them and, if so, shall agree in good faith on any required amendment to this Agreement resulting from the
terminating Party exiting the Agreement. 

  

	11.	Miscellaneous 

  

	11.1	Complete Agreement 

 This Agreement shall constitute the entire agreement between the Parties
with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. 

  
 17/28 

	11.2	Counterparts 

 This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed will be deemed to be an original, but all of which taken together will constitute one and the same agreement. 

 

	11.3	Notices 

 All notices, requests, claims, demands and other communications under this Agreement
shall be in writing in Chinese and English and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile with receipt confirmed (followed by delivery
of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses: 

 

			
	To Weichai:	  	Weichai Power Co, Ltd
		  	Attn.: Executive President
		  	Section A, 197, Fu Shou East Street
		  	High Technology Industrial Development Zone
		  	Weifang, Shandong Province
		  	The People’s Republic of China
		  	Postal Code: 261061
		  	Fax: +86 5368 231074
		
	To Weichai US:	  	Weichai America Corp.
		  	Attention: Victory Liu
		  	3100 Golf Road Rolling Meadows
		  	IL 60008
		  	Email:    victor.liu@weichaiamerica.com
		
	To PSI:	  	Power Solutions International, Inc.
		  	Attention: Gary Winemaster, CEO
		  	201 Mittel Dr.
		  	Wood Dale IL 60191
		  	Email:    Gary.Winemaster@Psiengines.com

  

	11.4	Waivers 

 The failure of any Party to require strict performance by any other Party of any
provision in this Agreement will not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof. 
  

	11.5	Amendments 

 This Agreement may not be amended or modified except by an instrument in writing
signed by each of the Parties. 
  

	11.6	Assignment 

 Except as otherwise provided for in this Agreement, this Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void. 

  
 18/28 

	11.7	Successors and Assigns 

 Subject to 11.6, the provisions of this Agreement and the obligations
and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and against) the Parties and their respective successors and permitted transferees and assigns. 

 

	11.8	Severability 

 Should any provision of this Agreement be or become invalid or unenforceable, the
validity and enforceability of the other provisions of this Agreement shall not be affected thereby. The invalid or unenforceable provision shall be deemed to be substituted by a valid and enforceable provision which, to the extent legally
permissible, comes as close as possible to the economic intent and purpose of the invalid or unenforceable provision. The same shall apply if the Parties have unintentionally failed to address a certain matter in this Agreement, in this case a
suitable and equitable provision shall be deemed to have been agreed upon which comes as close as possible to what the Parties, in the light of the economic intent and purpose of this Agreement, would have agreed upon if they had considered the
matter. 
  

	11.9	Force Majeure 

 No Party (or any Person acting on its behalf) shall be liable for failure or
delay in the performance of any of its obligations hereunder, if such failure or delay is due to causes beyond its reasonable control, including acts of God, earthquakes, fires, strikes, acts of war, or intervention of any governmental authority,
but any such delay or failure will be remedied by such Party as soon as practicable after the removal of the cause of such failure or delay. Upon the occurrence of an event of force majeure, the Party failing or delaying performance will promptly
notify the other Party in writing, setting forth the nature of the occurrence, its expected duration and how such Party’s performance is affected. 
  

	11.10	Compliance with Applicable Laws 

 The Parties agree and acknowledge that all provisions of, and
all transactions contemplated by, this Agreement are subject to Applicable Laws and applicable stock exchange rules. If any provision of this Agreement violates, or would otherwise cause any Party to breach, any Applicable Laws and applicable stock
exchange rules, the Parties shall use their commercially reasonable best efforts to apply to the relevant governmental entities or relevant stock exchange for waivers in respect of such violation or breach of the Applicable Laws or applicable stock
exchange rules, failing which the Parties agree to use all commercially reasonable best efforts to agree on amendments to the affected provisions of this Agreement but only to the extent necessary to address the violation or breach of the Applicable
Laws or applicable stock exchange rules. 
  

	11.11	Relationship of the Parties 

 Nothing in this Agreement or in the relationship between the
Parties will be construed to constitute, create, give effect or otherwise imply an agency, partnership or other formal business organization or any employer/employee relationship of any kind among the Parties. 

 

	11.12	Governing Law 

 This Agreement shall be governed by and construed in accordance with the laws of
the United Kingdom. 

  
 19/28 

	11.13	Dispute Resolution 

  

	 	a.	Any and all disputes which cannot be settled amicably, including any ancillary claims of any party, arising out of, relating to or in connection with the validity, negotiation, execution, interpretation, performance or non-performance of this Agreement (including the validity, scope and enforceability of this arbitration provision) shall be referred to and finally resolved by arbitration under the Rules of Arbitration of the
London Court of International Arbitration (“LCIA Rules”) by one or more arbitrators appointed in accordance with the LCIA Rules (the “Arbitral Tribunal”); 

 

	 	b.	The arbitration shall be conducted by a sole arbitrator unless either party objects, in which case the arbitration shall be conducted by a panel of three arbitrators. Where the arbitration is to be conducted by a sole
arbitrator, the parties shall attempt to agree upon the selection of the sole arbitrator. If they cannot reach agreement within 30 days from the commencement of the arbitration, the sole arbitrator shall be appointed by the Court of the LCIA (the
“LCIA Court”) in accordance with the LCIA Rules. Where the arbitration is to be conducted by a panel of three arbitrators, each party shall nominate one arbitrator and the two party-nominated arbitrators shall then select the
chairman of the Arbitral Tribunal. If the two party-nominated arbitrators are unable to do so within 30 days after the commencement of the arbitration or any mutually agreed extension thereof, the chairman shall be selected by the LCIA Court in
accordance with the LCIA Rules; 

  

	 	c.	The place of arbitration shall be London; 

  

	 	d.	The language of the arbitration shall be English; 

  

	 	e.	Each arbitrator shall be licensed to practice law in New York; 

  

	 	f.	Each party shall have the right to apply to any court of competent jurisdiction and/or to the Arbitral Tribunal for an order or award of interim, provisional or conservatory measures in order to maintain the status quo
or to protect its rights or property pending arbitration pursuant to this Agreement or for the purpose of compelling a party to arbitrate and seeking temporary or preliminary relief in aid of an arbitration hereunder, and any such application shall
not be deemed incompatible with, or a waiver of, the parties’ agreement to arbitrate; 

  

	 	g.	The Arbitral Tribunal shall have power to take whatever interim measures it deems necessary, including injunctive relief, specific performance and other equitable relief; 

 

	 	h.	The award rendered by the Arbitral Tribunal shall be final and binding between the parties and not subject to appeal or other recourse; and 

 

	 	i.	Recognition and enforcement of any award rendered by the Arbitral Tribunal may be sought in any court of competent jurisdiction. 

  

	11.14	Language 

 This Agreement is written in English. The English version shall be binding on the
Parties. 
 [Signature page to follow] 

  
 20/28 

 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed on their behalf by their duly
authorized officer as of the date first written above. 
  

			
	 WEICHAI POWER CO., LTD.

represented by:

		
	By:	 	 /s/ Jiang Kui

	Name:	 	Jiang Kui
	Title:	 	Director

 [Signature Page to Strategic Collaboration Agreement] 

			
	 POWER SOLUTIONS INTERNATIONAL, INC.

represented by:

		
	By:	 	 /s/ Gary Winemaster

	Name:	 	Gary Winemaster
	Title:	 	Chief Executive Officer

 [Signature Page to Strategic Collaboration Agreement] 

 Exhibit A 

Secondment Plan 
 Secondment Employee

  

									
	 Job Title
	  	 Number of
Secondees
	  	 Starting Date
	  	 Job Description

	 Vice President
  
	  	 1
  
	  	 Effective Date pursuant to Investor Rights Agreement

 
	  	 a)
  
	  	 shall be invited to attend all PSI’s executive meetings;

 

		  		  	  	 b)
  
	  	 shall receive all relevant documents/information prior to any executive meeting;

 

		  		  	  	 c)
  
	  	 upon receiving all relevant information from PSI, adopt feasible measures and formulate Implementation Plans for resource
sharing between the Parties on business models and sales network by leveraging the strength of the Parties;
  

		  		  	  	 d)
  
	  	 implement the Implementation Plan upon the approval from Steering Committee;

 

		  		  		  	 e)
  
	  	 report to CEO.
  

	 Vice Director of Sales
  
	  	 1
  
	  	 Effective Date
  
	  	 a)
  
	  	 shall be invited to attend all meetings related sales ;

 

	  		  		  	 b)
  
	  	 shall receive all relevant documents/information prior to any meeting related sales;

 

		  		  		  	 c)
  
	  	 visit customers, and understand the demands and expectations of the customers;

 

		  		  		  	 d)
  
	  	 study and analyze the market, and formulate Implementation Plan for Weichai products to be used in PSI;

 

		  		  		  	 e)
  
	  	 implement the Implementation Plans upon the approval from Steering Committee;

 

		  		  		  	 f)
  
	  	 report to sales director;
  

		  		  		  	 g)
  
	  	 report to Steering Committee in writing from time to time.

 

	 Senior Sales Engineer
  
	  	 1
  
	  	 Effective Date
  
	  	 a)
  
	  	 shall be invited to attend all meetings related to sales;

 

	  		  		  	 b)
  
	  	 shall receive all relevant documents/information prior to any meeting related to sales;

 

		  		  		  	 c)
  
	  	 visit customers, and better understand the demands and expectations of the customers;

 

  
 [Signature Page to
Strategic Collaboration Agreement] 

									
		  		  		  	d)	  	 formulate base engine development plans for the North American market after fully understanding the demands and
expectations of the customers;

					
		  		  		  	e)	  	 help ensure the product development is on time and on schedule and the product meets the market demand;

					
		  		  		  	f)	  	 report to sales director;

					
		  		  		  	g)	  	 report to Steering Committee in writing from time to time.

					
	 Vice Director of Supply Chain
  
	  	 1
  
	  	 Effective Date
  
	  	 a)
  
	  	 shall be invited to attend all meetings related to procurement;

 

	  		  		  	b)	  	 shall receive all relevant documents/information prior to any meeting related to procurement;

					
		  		  		  	c)	  	 analyze and formulate Implementation Plans by using Weichai’s existing procurement networks and channels, or
seeking new suppliers in China, with the goal to reduce procurement cost of PSI;

					
		  		  		  	d)	  	 implement the Implementation Plan upon the approval from the Steering Committee;

					
		  		  		  	e)	  	 report to procurement director;

					
		  		  		  	f)	  	 report to Steering Committee in writing from time to time.

					
	 Vice Director of Finance
  
	  	 1
  
	  	 Effective Date
  
	  	 a)
  
	  	 shall be invited to attend all meetings related to finance / accounting;

 

	  		  		  	b)	  	 shall receive all relevant documents/information prior to any meeting related to finance / accounting;

					
		  		  		  	c)	  	 analyze the costs of PSI, and propose Implementation Plan on cost reduction of PSI;

					
		  		  		  	d)	  	 conduct cost analysis on all proposals to be approved by the Steering Committee;

					
		  		  		  	e)	  	 report to finance director;

					
		  		  		  	f)	  	 report to Steering Committee in writing from time to time.

  
 24/28 

									
					
	 Vice Director of Quality Control
  
	  	 1
  
	  	 Effective Date
  
	  	 a)
  
	  	 shall be invited to attend all meetings related to quality;

 

	  		  		  	b)	  	 shall receive all relevant documents/information prior to any meeting related to quality;

					
		  		  		  	c)	  	 analyze pros and cons of the Parties on quality control;

					
		  		  		  	d)	  	 formulate Implementation Plans on improving the quality of PSI products at a reduced cost by leveraging the strength of
the Parties;

					
		  		  		  	e)	  	 implement the Implementation Plans upon the approval from the Steering Committee;

					
		  		  		  	f)	  	 report to the quality control director;

					
		  		  		  	g)	  	 report to Steering Committee in writing from time to time.

					
	 Chief Engineer of 40L
  
	  	 1
  
	  	 Date approving the Project Development Plan
  
	  	 a)
  
	  	 attend meetings related to Product Development Plan and Implementation Plan related to 40L;

 

	  	  	  	 b)
  
	  	 participate in the formulation of Product Development Plan and Implementation Plan related to 40L;

 

		  		  	  	 c)
  
	  	 implement the Implementation Plan upon the approval by the Steering Committee;

 

		  		  		  	d)	  	 report to the Joint R&D Committee;

					
		  		  		  	e)	  	 report to Steering Committee in writing from time to time.

					
	 Chief engineer of 52L
  
	  	 1
  
	  	 Date approving Project Development Plan
  
	  	 a)
  
	  	 attend meetings related to Product Development Plan and Implementation Plan related to 52L;

 

	  	  	  	 b)
  
	  	 participate in the formulation of Product Development Plan and Implementation Plan related to 52L;

 

	  	  	  	 c)
  
	  	 implement the Implementation Plan upon the approval by the Steering Committee;

 

	  	  	  	 d)
  
	  	 report to the Joint R&D Committee;

 

		  		  		  	e)	  	 report to Steering Committee in writing from time to time.

  
 25/28 

									
	 Chief engineer of 66L
  
	  	 1
  
	  	 Date approving the Project Development Plan
  
	  	 a)
  
	  	 attend meetings related to Product Development Plan and Implementation Plan related to 66L;

 

	  	  	  	 b)
  
	  	 participate in the formulation of Product Development Plan and Implementation Plan related to 66L;

 

		  	  	  	 c)
  
	  	 implement the Implementation Plan upon the approval by the Steering Committee;

 

		  		  		  	d)	  	 report to the Joint R&D Committee;

					
		  		  		  	e)	  	 report to Steering Committee in writing from time to time.

  
 26/28 

 Exhibit B 

Collaboration Projects Implementation Process 
  

	 	a.	The Steering Committee shall identify potential Collaboration Projects (not required for the Initial Collaboration Projects); 

  

	 	b.	The Steering Committee shall decide upon the release of a potential Collaboration Project (not required for the Initial Collaboration Projects); 

 

	 	c.	Each sub-committee (except Joint R&D Committee) shall conduct customary feasibility studies, including, without limitation, an anti-trust analysis and detailed due diligence
for each Collaboration Project; 

  

	 	d.	The detailed Implementation Plan shall be formulated in good faith by each sub-committee and submit the same to the Steering Committee for approval; 

 

	 	e.	The Steering Committee shall decide upon the Collaboration Project upon reviewing the Implementation Plan; 

  

	 	f.	The Project Implementation Agreements (to the extent necessary) may be negotiated in good faith and submitted to the Parties for approval, taking into account the terms stated in the Implementation Plan;

  

	 	g.	The Project Implementation Agreements shall be executed (to the extent necessary); 

  

	 	h.	The Collaboration Project will be implemented. 

 For Joint R&D Committee: 

 

	 	i.	The Steering Committee shall identify potential Collaboration Projects (not required for the Initial Collaboration Projects); 

  

	 	j.	The Steering Committee shall decide upon the release of a potential Collaboration Project (including Initial Collaboration Projects); 

 

	 	k.	Joint R&D Committee shall conduct customary feasibility studies, including, without limitation, an anti-trust analysis for each Collaboration Project; 

 

	 	l.	The Product Development Plan shall be formulated in good faith (including the Initial Collaboration Projects) by the Joint R&D Committee and submit the same to the Steering Committee for approval; 

 

	 	m.	Upon approving Project Development Plan, the Parties shall conduct mutual due diligence as may be reasonably required for each Party to make a fully informed decision on the Collaboration Project and subject to
customary confidentiality undertakings, the Joint R&D Committee shall formulate a detailed Implementation Plan for Steering Committee to approve; 

  

	 	n.	The Steering Committee shall decide upon the Collaboration Project upon reviewing the Implementation Plan; 

  

	 	o.	The Project Implementation Agreements (to the extent necessary) may be negotiated in good faith and submitted to the Parties for approval, taking into account the terms stated in the Implementation Plan;

  
 27/28 

	 	p.	The Project Implementation Agreements shall be executed (to the extent necessary); 

  

	 	q.	The Collaboration Project will be implemented. 

  
 28/28

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