What are the key terms and conditions of the partnership with Weichai America Corp.?

The partnership between Power Solutions International (PSIX) and Weichai America Corp. is a significant strategic investment and collaboration agreement that strengthens PSIX's financial position and establishes growth and cost savings opportunities. The key terms and conditions of this partnership are as follows: 1. **Investment**: Weichai America Corp. will invest $60 million in PSIX through a combination of newly issued common equity and preferred shares. This investment will enhance PSIX's capital structure and provide the necessary funds for growth and expansion. 2. **Board Membership**: PSIX's board of directors has been increased to seven members, with the appointment of Shaojun Sun and Jiang Kui, two individuals designated by Weichai America, as directors. Mr. Sun has also been named chairman of the board of directors, succeeding Gary Winemaster. 3. **Collaboration**: The partnership between PSIX and Weichai America includes specific areas of initial cooperation: - Development of engines for stationary natural gas applications based on Weichai's base engines. - Identification of suitable Weichai products to be developed for sale in North America. - Commitment to a long-term supply agreement under which Weichai will provide castings to PSI at a competitive cost. 4. **Financial Position**: The $60 million equity investment from Weichai America has strengthened PSIX's financial position, allowing the company to retire and satisfy a $60 million term loan with a lender. This modification of its debt structure has significantly improved PSIX's capitalization and liquidity. 5. **Global Reach**: Through this alliance, PSIX gains access to Weichai's international manufacturing facilities and supply chain network, which will support its global growth strategy and brand recognition in key North American markets. These terms and conditions outline the framework for a strengthened partnership between PSIX and Weichai America, focusing on financial investment, board representation, collaborative projects, and strategic growth opportunities.