On May 12, 2023, Power Solutions International, Inc. (the “Company” or “PSI”) amended and restated its $25 million shareholder's loan agreement (the “Second Shareholder's Loan Agreement”) with its majority stockholder, Weichai America Corp. (“Weichai”), to extend the loan maturity date to May 20, 2024. The $25 million loan under the Second Shareholder's Loan Agreement has been fully drawn as of the date of this report and is subordinated to the Company's existing $130 million senior secured revolving credit facility with Standard Chartered Bank ($125 million loan outstanding as of the date of this report).

Borrowings under the Second Shareholder's Loan Agreement will incur interest at the applicable Secured Overnight Financing Rate (“SOFR”), plus 4.05% per annum. Further, if the applicable term SOFR is negative, the interest rate per annum shall be deemed as 4.05% per annum. If the interest rate for any loan under the Second Shareholder's Loan Agreement is lower than Weichai's borrowing cost, the interest rate for such loan shall be equal to Weichai's borrowing cost plus 1%.

The Company previously entered into three other separate loan agreements with Weichai, including the $130 million third amended and restated shareholder's loan agreement (the “First Shareholder's Loan Agreement”) with maturity date of March 24, 2024, the $50 million shareholder's loan agreement (the “Third Shareholder's Loan Agreement”) with maturity date of November 30, 2023, and the $30 million first amended and restated shareholder's loan agreement (the “Fourth Shareholder's Loan Agreement”) with maturity date of March 31, 2024. As of May 17, 2023, PSI had no borrowings under the First Shareholder's Loan Agreement, $50 million of borrowings under the Third Shareholder's Loan Agreement and $4.8 million of borrowings under the Fourth Shareholder's Loan Agreement.