Document:

Salary Continuation Agreement

 Exhibit 10.14 
 CANYON NATIONAL BANK 
 SALARY CONTINUATION AGREEMENT 
 THIS SALARY CONTINUATION AGREEMENT (the “Agreement”) is adopted this 15th day of May, 2006, by and between CANYON NATIONAL BANK, a
nationally-chartered commercial bank located in Palm Springs, California (the “Bank”) and STEPHEN HOFFMANN (the “Executive”). 
 The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development, and future business
success of the Bank. This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time. 
 Article 1 
 Definitions

 Whenever used in this Agreement, the following words and phrases shall have the meanings specified: 
  

	1.1	“Accrual Balance” means the liability that should be accrued by the Bank, under Generally Accepted Accounting Principles (“GAAP”), for the Bank’s
obligation to the Executive under this Agreement, by applying Accounting Principles Board Opinion Number 12 (“APB 12”) as amended by Statement of Financial Accounting Standards Number 106 (“FAS 106”) and the Discount Rate. Any
one of a variety of amortization methods may be used to determine the Accrual Balance. However, once chosen, the method must be consistently applied. The Accrual Balance shall be reported annually by the Bank to the Executive.

  

	1.2	“Beneficiary” means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive determined
pursuant to Article 4. 

  

	1.3	“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan
Administrator to designate one or more Beneficiaries. 

  

	1.4	“Board” means the Board of Directors of the Bank as from time to time constituted. 

  

	1.5	“Change in Control” means (a) the sale of all or substantially all of the assets of the Bank; (b) the transfer of shares of the Bank’s voting common
stock such that one entity or one person acquires (or is deemed to acquire when applying Section 318 of the Code) more than fifty percent (50%) of the Bank’s outstanding voting common stock, other than the acquisition of substantially
all of the outstanding common stock of the Bank by a holding company as the result of a holding company reorganization, which holding company is owned by the shareholders of the Bank as constituted immediately prior to such reorganization (a
“Holding Company Reorganization”); or (c) a merger or reorganization involving the Bank (other than the Holding Company Reorganization) after which more than fifty percent (50%) of the outstanding voting common stock of the
survivor of such merger or reorganization is no longer, directly or indirectly, owned by the shareholders of the Bank as constituted immediately prior to such merger or reorganization. 

  

	1.6	“Code” means the Internal Revenue Code of 1986, as amended. 

  

	1.7	“Discount Rate” means the rate used by the Plan Administrator for determining the Accrual Balance. The initial Discount Rate is six percent (6%). However, the Plan
Administrator, in its discretion, may adjust the Discount Rate to maintain the rate within reasonable standards according to GAAP and/or applicable bank regulatory guidance. 

  

	1.8	“Early Termination” means Separation from Service before Normal Retirement Age except when such Separation from Service occurs: (i) following a Change in
Control; or (ii) due to death or Termination for Cause. 

  

	1.9	“Effective Date” means January 1, 2006. 

	1.10	“Extraordinary Items” means those items recognized by Generally Accepted Accounting Principles as extraordinary that substantially affect shareholder equity and/or
the Bank’s assets. 

  

	1.11	“Normal Retirement Age” means the Executive attaining age sixty-five (65). 

  

	1.12	“Plan Administrator” means the plan administrator described in Article 6. 

  

	1.13	“Plan Year” means each twelve-month period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the
Effective Date of this Plan and end on the following December 31. 

  

	1.14	“Return On Beginning Equity” or “ROBE” means the Bank’s after tax net income at the end of the most recent fiscal year, adjusted for
Extraordinary Items, divided by the Bank’s shareholder’s equity at the beginning of the fiscal year, as determined by the Bank’s independent auditor based upon certified financial statements for the pertinent year.

  

	1.15	“Separation from Service” means the termination of the Executive’s employment or other service with the Bank for reasons other than death. Whether a Separation
from Service takes place is determined based on the facts and circumstances surrounding the termination of the Executive’s employment and whether the Bank and the Executive intended for the Executive to provide significant services for the Bank
following such termination. A termination of employment will not be considered a Separation from Service if: 

  

	 	(a)	the Executive continues to provide services as an employee of the Bank at an annual rate that is twenty percent (20%) or more of the services rendered, on average, during the
immediately preceding three full calendar years of employment (or, if employed less than three years, such lesser period) and the annual remuneration for such services is twenty percent (20%) or more of the average annual remuneration earned
during the final three full calendar years of employment (or, if less, such lesser period), or 

  

	 	(b)	the Executive continues to provide services to the Bank in a capacity other than as an employee of the Bank at an annual rate that is fifty percent (50%) or more of the
services rendered, on average, during the immediately preceding three full calendar years of employment (or if employed less than three years, such lesser period) and the annual remuneration for such services is fifty percent (50%) or more of
the average annual remuneration earned during the final three full calendar years of employment (or if less, such lesser period). 

  

	1.16	“Specified Employee” means a key employee (as defined in Section 416(i) of the Code without regard to paragraph 5 thereof) of the Bank if any stock of the Bank
is publicly traded on an established securities market or otherwise. 

  

	1.17	“Termination for Cause” means Separation from Service for: 

  

	 	(a)	Gross negligence or gross neglect of duties; 

  

	 	(b)	Commission of a felony; 

  

	 	(c)	Breach of fiduciary duty involving personal profit; 

  

	 	(d)	Willful and material violation of any agreement with, or order imposed by, the Comptroller of the Currency or any other bank regulatory authority; or 

  

	 	(e)	Fraud. 

  

	1.18	“Vested Retirement Benefit” means the Normal Retirement Benefit described in Section 2.1.1 that the Executive has earned as of the end of the Plan Year
preceding either: (i) Separation from Service; or (ii) the Executive’s death. 

 Article 2 
 Distributions During Lifetime 
  

	2.1	Normal Retirement Benefit. Upon the Executive reaching Normal Retirement Age while in the active service of the Bank, the Bank shall distribute to the Executive the benefit
described in this Section 2.1 as his “Normal Retirement Benefit” in lieu of any other benefit under this Article. 

	 	2.1.1 	Amount of Benefit. The initial annual benefit under this Section 2.1 is Twelve Thousand Dollars ($12,000), provided that the Bank achieves an ROBE of at least fifteen
percent (15%), as measured from January 1, 2006 to December 31, 2006. The annual benefit shall be increased by an additional Twelve Thousand Dollars ($12,000), provided that the Bank achieves an ROBE of at least fifteen percent (15%), as
measured from January 1, 2007 to December 31, 2007. Furthermore, the annual benefit shall be increased by an additional Twelve Thousand Dollars ($12,000), provided that the Bank achieves an ROBE of at least fifteen percent (15%), as
measured from January 1, 2008 to December 31, 2008. 

  

	 	2.1.2 	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month
following the Executive attaining Normal Retirement Age. The annual benefit shall be distributed to the Executive for fifteen (15) years. 

  

	2.2	Early Termination Benefit. Upon the Executive’s Early Termination, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of
any other benefit under this Article. 

  

	 	2.2.1 	Amount of Benefit. The benefit under this Section 2.2 is one hundred percent (100%) of the Vested Retirement Benefit. 

  

	 	2.2.2 	Distribution of Benefit. The Bank shall distribute the benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month
following the Executive attaining Normal Retirement Age. The annual benefit shall be distributed to the Executive for fifteen (15) years. 

  

	2.3	Change in Control Benefit. Upon a Change in Control, followed by the Executive’s Separation from Service, the Bank shall distribute to the Executive the benefit
described in this Section 2.3 in lieu of any other benefit under this Article. 

  

	 	2.3.1 	Amount of Benefit. The benefit under this Section 2.3 is the Normal Retirement Benefit described in Section 2.1.1., calculated (i) as if the Executive
remains in the continuous employ with the Bank until January 1, 2009; and (ii) the Bank achieved a ROBE of at least fifteen percent (15%) from the beginning of the year in which such Change in Control occurs until January 1,
2009, provided that for all years prior to the year in which the Change in Control occurs, Executive’s Normal Retirement Benefit shall be calculated based on the actual ROBE for such years. 

  

	 	2.3.2 	Distribution of Benefit. The Bank shall distribute the annual benefit to the Executive in twelve (12) equal monthly installments commencing on the first day of the month
following the Executive attaining Normal Retirement Age. The annual benefit shall be distributed to the Executive for fifteen (15) years. 

  

	 	2.3.3 	Parachute Payments. Notwithstanding any provision of this Agreement to the contrary, to the extent any distribution(s), if made, under this Section 2.3 would be treated
as an “excess parachute payment” under Section 280G of the Code, the Bank shall reduce or delay the distribution(s) to eliminate any excess parachute payment as determined by the Bank. 

  

	2.4	Restriction on Timing of Distribution. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Separation
from Service under such procedures as established by the Bank in accordance with Section 409A of the Code, benefit distributions that are made upon Separation from Service may not commence earlier than six (6) months after the date of
such Separation from Service. Therefore, in the event this Section 2.4 is applicable to the Executive, any distribution which would otherwise be paid to the Executive within the first six months following the Separation from Service
shall be accumulated and paid to the Executive in a lump sum on the first day of the seventh month following the Separation from Service. All subsequent distributions shall be paid in the manner specified. 

  

	2.5	 Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the inclusion of any portion of the Accrual Balance into the Executive’s
income as a result of the failure of this non-qualified deferred compensation plan to comply with the requirements of Section 409A of the Code, to the extent such tax 

	 	 
liability can be covered by the participant’s vested Accrual Balance, a distribution shall be made as soon as is administratively practicable following
the discovery of the plan failure. 

 Article 3 
 Distribution at Death 
  

	3.1	Death During Active Service. If the Executive dies while in the active service of the Bank, the Bank shall distribute to the Beneficiary the benefit described in this
Section 3.1. This benefit shall be distributed in lieu of the benefits under Article 2. 

  

	 	3.1.1 	Amount of Benefit. The benefit under this Section 2.2 is one hundred percent (100%) of the Vested Retirement Benefit. 

  

	 	3.1.2 	Distribution of Benefit. The Bank shall distribute the annual benefit to the Beneficiary in twelve (12) equal monthly installments commencing with the month following
the month in which the date of death occurs. The annual benefit shall be distributed to the Beneficiary for a period of fifteen (15) years. 

  

	3.2	Death During Distribution of a Benefit. If the Executive dies after any benefit distributions have commenced under this Agreement but before receiving all such distributions,
the Bank shall distribute to the Beneficiary the remaining benefits at the same time and in the same amounts they would have been distributed to the Executive had the Executive survived. 

  

	3.3	Death After Separation from Service But Before Benefit Distributions Commence. If the Executive is entitled to benefit distributions under this Agreement, but
dies prior to the commencement of said benefit distributions, the Bank shall distribute to the Beneficiary the same benefits that the Executive was entitled to prior to death except that the benefit distributions shall commence within thirty
(30) days following receipt by the Bank of the Executive’s death certificate. 

 Article 4 
 Beneficiaries 
  

	4.1	Beneficiary. The Executive shall have the right, at any time, to designate a Beneficiary(ies) to receive any benefit distributions under this Agreement upon the death of the
Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other plan of the Bank in which the Executive participates. 

  

	4.2	Beneficiary Designation: Change; Spousal Consent. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to
the Plan Administrator or its designated agent. If the Executive names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Plan Administrator, must be signed by the Executive’s spouse and
returned to the Plan Administrator. The Executive’s beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently
dissolved. The Executive shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to
time. Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form
filed by the Executive and accepted by the Plan Administrator prior to the Executive’s death. 

  

	4.3	Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received, accepted and acknowledged in writing by the Plan Administrator or
its designated agent. 

  

	4.4	No Beneficiary Designation. If the Executive dies without a valid beneficiary designation, or if all designated Beneficiaries predecease the Executive, then the
Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made to the personal representative of the Executive’s estate. 

	4.5	Facility of Distribution. If the Plan Administrator determines in its discretion that a benefit is to be distributed to a minor, to a person declared incompetent, or to a
person incapable of handling the disposition of that person’s property, the Plan Administrator may direct distribution of such benefit to the guardian, legal representative or person having the care or custody of such minor, incompetent person
or incapable person. The Plan Administrator may require proof of incompetence, minority or guardianship as it may deem appropriate prior to distribution of the benefit. Any distribution of a benefit shall be a distribution for the account of the
Executive and the Executive’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Agreement for such distribution amount. 

 Article 5 
 General Limitations 
  

	5.1	Termination for Cause. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if Executive’s
employment with the Bank is terminated due to a Termination for Cause. 

  

	5.2	Suicide. No benefits shall be distributed if the Executive commits suicide within two years after the Effective Date of this Agreement. 

  

	5.3	Removal. Notwithstanding any provision of this Agreement to the contrary, the Bank shall not distribute any benefit under this Agreement if the Executive is subject to
a final removal or prohibition order issued by an appropriate federal banking agency pursuant to Section 8(e) of the Federal Deposit Insurance Act. 

 Article 6 
 Administration of Agreement 
  

	6.1	Plan Administrator Duties. This Agreement shall be administered by a Plan Administrator which shall consist of the Board, or such committee or person(s) as the Board shall
appoint. The Plan Administrator shall also have the discretion and authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Agreement and (ii) decide or resolve any and all
questions including interpretations of this Agreement, as may arise in connection with the Agreement. 

  

	6.2	Agents. In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit, (including acting
through a duly appointed representative), and may from time to time consult with counsel who may be counsel to the Bank. 

  

	6.3	Binding Effect of Decisions. The decision or action of the Plan Administrator with respect to any question arising out of or in connection with the administration,
interpretation and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement. 

  

	6.4	Indemnity of Plan Administrator. The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses or
liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members. 

  

	6.5	Bank Information. To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters
relating to the date and circumstances of the retirement, death, or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require. 

  

	6.6	Annual Statement. The Plan Administrator shall provide to the Executive, within one hundred twenty (120) days after the end of each Plan Year, a statement setting forth
the benefits to be distributed under this Agreement. 

 Article 7 
 Claims and Review Procedures 
  

	7.1	Claims Procedure. An Executive or Beneficiary (“claimant”) who has not received benefits under the Agreement that he or she believes should be distributed shall
make a claim for such benefits as follows: 

  

	 	7.1.1 	Initiation – Written Claim. The claimant initiates a claim by submitting to the Plan Administrator a written claim for the benefits. 

  

	 	7.1.2 	Timing of Plan Administrator Response. The Plan Administrator shall respond to such claimant within 90 days after receiving the claim. If the Plan Administrator
determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 90 days by notifying the claimant in writing, prior to the end of the initial 90-day
period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. 

  

	 	7.1.3 	Notice of Decision. If the Plan Administrator denies part or all of the claim, the Plan Administrator shall notify the claimant in writing of such denial. The Plan
Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth: 

  

	 	(a)	The specific reasons for the denial; 

  

	 	(b)	A reference to the specific provisions of the Agreement on which the denial is based; 

  

	 	(c)	A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why it is needed; 

  

	 	(d)	An explanation of the Agreement’s review procedures and the time limits applicable to such procedures; and 

  

	 	(e)	A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. 

  

	7.2	Review Procedure. If the Plan Administrator denies part or all of the claim, the claimant shall have the opportunity for a full and fair review by the Plan Administrator of
the denial, as follows: 

  

	 	7.2.1 	Initiation – Written Request. To initiate the review, the claimant, within 60 days after receiving the Plan Administrator’s notice of denial, must file with the
Plan Administrator a written request for review. 

  

	 	7.2.2 	Additional Submissions – Information Access. The claimant shall then have the opportunity to submit written comments, documents, records and other information relating
to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the
claimant’s claim for benefits. 

  

	 	7.2.3 	Considerations on Review. In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim,
without regard to whether such information was submitted or considered in the initial benefit determination. 

  

	 	7.2.4 	Timing of Plan Administrator Response. The Plan Administrator shall respond in writing to such claimant within 60 days after receiving the request for review. If the Plan
Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional 60 days by notifying the claimant in writing, prior to the end of the
initial 60-day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision. 

  

	 	7.2.5	Notice of Decision. The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner
calculated to be understood by the claimant. The notification shall set forth: 

  

	 	(a)	The specific reasons for the denial; 

	 	(b)	A reference to the specific provisions of the Agreement on which the denial is based; 

  

	 	(c)	A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as
defined in applicable ERISA regulations) to the claimant’s claim for benefits; and 

  

	 	(d)	A statement of the claimant’s right to bring a civil action under ERISA Section 502(a). 

 Article 8 
 Amendments and Termination 
  

	8.1	Amendments or Terminations. This Agreement may be amended or terminated only by a written agreement signed by the Bank and the Executive. However, the Bank may unilaterally
amend this Agreement to conform with written directives to the Bank from its auditors or banking regulators or to comply with legislative or tax law, including without limitation Section 409A of the Code and any and all regulations and guidance
promulgated thereunder. 

  

	8.2	Plan Terminations Under Section 409A. The Bank may make distributions in the following circumstances, in accordance with Section 409A of the Code or the regulations
thereunder: 

  

	 	(a)	Within thirty (30) days before, or twelve (12) months after a Change in Control, provided that all distributions are made no later than twelve (12) months following
such termination of the Agreement and further provided that all the Bank’s arrangements which are substantially similar to the Agreement are terminated so the Executive and all participants in the similar arrangements
are required to receive all amounts of compensation deferred under the terminated arrangements within twelve (12) months of the termination of the arrangements; 

  

	 	(b)	Upon the Bank’s dissolution or with the approval of a bankruptcy court provided that the amounts deferred under the Agreement are included in the Executive’s gross income
in the latest of (i) the calendar year in which the Agreement terminates; (ii) the calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (iii) the first calendar year in which the distribution
is administratively practical; or 

  

	 	(c)	Upon the Bank’s termination of this and all other non-account balance plans (as referenced in Section 409A of the Code or the regulations thereunder), provided that all
distributions are made no earlier than twelve (12) months and no later than twenty-four (24) months following such termination, and the Bank does not adopt any new non-account balance plans for a minimum of five (5) years following
the date of such termination. 

 The Bank may distribute the Accrual Balance to the Executive in a lump sum subject to the above
terms, determined as of the date of the termination of the Agreement for the entire Normal Retirement Benefit calculated as if (i) the Executive had remained as of the date of termination in the continuous employ of the Bank until
January 1, 2009, and (ii) the Bank achieved a ROBE of at least fifteen percent (15%) for all years from the beginning of the year in which the termination occurs until January 1, 2009, provided that for all years ended prior to
the year in which the termination occurs, Executive’s Normal Retirement Benefit shall be calculated based on the actual ROBE for such years. 
 Article 9 
 Miscellaneous 
  

	9.1	Binding Effect. This Agreement shall bind the Executive and the Bank, and their beneficiaries, survivors, executors, administrators and transferees. 

 

	9.2	No Guarantee of Employment. This Agreement is not a contract for employment, and Executive’s employment is “at will” except to the extent expressly provided in
any written employment agreement between the Bank and Executive. It does not give the Executive the right to remain as an employee of the Bank, nor does it interfere with the Bank’s right to discharge the Executive. It also does not require the
Executive to remain an employee nor interfere with the Executive’s right to terminate employment at any time. 

	9.3	Non-Transferability. Benefits under this Agreement cannot be sold, transferred, assigned, pledged, attached or encumbered in any manner. 

  

	9.4	Tax Withholding. The Bank shall withhold any taxes that are required to be withheld, under Section 409A of the Code and regulations thereunder, from the benefits
provided under this Agreement. The Executive acknowledges that the Bank’s sole liability regarding taxes is to forward any amounts withheld to the appropriate taxing authority(ies). 

  

	9.5	Applicable Law. The Agreement and all rights hereunder shall be governed by the laws of the State of CALIFORNIA, except to the extent preempted by the laws of the United
States of America. 

  

	9.6	Unfunded Arrangement. The Executive and Beneficiary are general unsecured creditors of the Bank for the distribution of benefits under this Agreement. The benefits represent
the mere promise by the Bank to distribute such benefits. The rights to benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on
the Executive’s life or other informal funding asset is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim. 

  

	9.7	Reorganization. The Bank shall not merge or consolidate into or with another bank, or reorganize, or sell substantially all of its assets to another bank, firm, or
person unless such succeeding or continuing bank, firm, or person agrees to assume and discharge the obligations of the Bank under this Agreement. Upon the occurrence of such event, the term “Bank” as used in this Agreement shall be deemed
to refer to the successor or survivor bank. 

  

	9.8	Entire Agreement. This Agreement constitutes the entire agreement between the Bank and the Executive as to the subject matter hereof. No rights are granted to the
Executive by virtue of this Agreement other than those specifically set forth herein. 

  

	9.9	Interpretation. Wherever the fulfillment of the intent and purpose of this Agreement requires, and the context will permit, the use of the masculine gender includes the
feminine and use of the singular includes the plural. 

  

	9.10	Alternative Action. In the event it shall become impossible for the Bank or the Plan Administrator to perform any act required by this Agreement, the Bank or Plan
Administrator may in its discretion perform such alternative act as most nearly carries out the intent and purpose of this Agreement and is in the best interests of the Bank. 

  

	9.11	Headings. Article and section headings are for convenient reference only and shall not control or affect the meaning or construction of any of its provisions.

  

	9.12	Validity. In case any provision of this Agreement shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but
this Agreement shall be construed and enforced as if such illegal and invalid provision has never been inserted herein. 

  

	9.13	Notice. Any notice or filing required or permitted to be given to the Bank or Plan Administrator under this Agreement shall be sufficient if in writing and hand-delivered, or
sent by registered or certified mail, to the address below: 

 Canyon National Bank 
 Attn: Jonathan J. Wick 
 Executive Vice
President/Chief 
 Financial Officer/Chief Operating 
 Officer 
 1711 East Palm Canyon Dr 
 Palm Springs, CA 92264 
 Such notice shall be
deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 

 Any notice or filing required or permitted to be given to the Executive under this Agreement shall be
sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Executive. 
  

	9.14	Compliance with Section 409A. This Agreement shall at all times be administered and the provisions of this Agreement shall be interpreted consistent with the
requirements of Section 409A of the Code and any and all regulations thereunder, including such regulations as may be promulgated after the Effective Date of this Agreement. 

  

	9.15	Rescissions. Any modification to the terms of this Agreement that would inadvertently result in an additional tax liability on the part of the Executive, shall have no effect
to the extent the change in the terms of the plan is rescinded by the earlier of a date before the right is exercised (if the change grants a discretionary right) and the last day of the calendar year during which such change occurred.

 IN WITNESS WHEREOF, the Executive and a duly authorized representative of the Bank have signed this Agreement. 

 

									
	EXECUTIVE:	 		 	BANK:
			
		 		 	CANYON NATIONAL BANK
				
	 /s/ Stephen Hoffmann
	 		 	 By
	 	 /s/ Richard Shalhoub

	 Stephen Hoffmann
	 		 	Title	 	 Chairman, Compensation CommitteeAsset Purchase Agreement dated as of June 30,2006

 EXHIBIT 10.1 
 Execution Copy 
 ASSET PURCHASE AGREEMENT 
 Dated as of June 30, 2006 
 By and
Among 
 DEFIANCE, INC., 
 PRECISION ENGINE PRODUCTS CORP. 
 and 
 STANADYNE CORPORATION 

 TABLE OF CONTENTS 
  

							
	 	 	 	 	 	 	Page
	1.	 	Definitions	 	1
	2.	 	Acquisition of the Business by Buyer.	 	9
		 	2.1.	 	Purchase and Sale of PEPL Quotas and Acquired Assets	 	9
		 	2.2.	 	Excluded Assets	 	11
		 	2.3.	 	Assumption of Liabilities	 	12
		 	2.4.	 	Liabilities Not Assumed	 	12
		 	2.5.	 	Purchase Price	 	14
		 	2.6.	 	Purchase Price Adjustment.	 	14
		 	2.7.	 	Earn-Out.	 	17
		 	2.8.	 	The Closing	 	20
		 	2.9.	 	Deliveries at the Closing.	 	20
	3.	 	Representations and Warranties of Seller	 	21
		 	3.1.	 	Organization	 	21
		 	3.2.	 	Authorization of Transaction	 	21
		 	3.3.	 	Noncontravention; Governmental Authorities; Consents	 	21
		 	3.4.	 	Brokers’ Fees	 	22
		 	3.5.	 	Ownership of PEPL Quotas	 	22
		 	3.6.	 	Financial Statements.	 	22
		 	3.7.	 	Title to Assets	 	23
		 	3.8.	 	Legal and Other Compliance.	 	23
		 	3.9.	 	Taxes.	 	24
		 	3.10.	 	Property, Plant and Equipment.	 	26
		 	3.11.	 	Intellectual Property.	 	27
		 	3.12.	 	Environmental Matters.	 	28
		 	3.13.	 	Contracts	 	29
		 	3.14.	 	Litigation	 	30
		 	3.15.	 	Employee Benefit Plans	 	30
		 	3.16.	 	Labor Matters.	 	32
		 	3.17.	 	Product Warranties	 	33
		 	3.18.	 	Affiliated Transactions	 	33
		 	3.19.	 	Customers, Suppliers	 	33
		 	3.20.	 	Absence of Certain Changes	 	33
		 	3.21.	 	Insurance	 	35
		 	3.22.	 	Receivables	 	35
		 	3.23.	 	Inventory	 	35
		 	3.24.	 	Disclaimer of other Representations and Warranties	 	35
	4.	 	Representations and Warranties of Stanadyne	 	35
		 	4.1.	 	Organization	 	35
		 	4.2.	 	Authorization of Transaction	 	35
		 	4.3.	 	Noncontravention	 	36

  

 -i- 

							
		 	4.4.	 	Brokers’ Fees	 	36
		 	4.5.	 	Ownership of PEPL Quotas	 	36
	5.	 	Representations and Warranties of Buyer	 	36
		 	5.1.	 	Organization of Buyer	 	36
		 	5.2.	 	Authority for Agreement	 	36
		 	5.3.	 	Noncontravention	 	36
		 	5.4.	 	Financing	 	37
		 	5.5.	 	Broker’s Fees	 	37
	6.	 	Covenants	 	37
		 	6.1.	 	General	 	37
		 	6.2.	 	Notices and Consents	 	37
		 	6.3.	 	Operation of Business	 	37
		 	6.4.	 	Taxes.	 	39
		 	6.5.	 	Preservation of Business	 	42
		 	6.6.	 	Full Access.	 	42
		 	6.7.	 	Notice of Developments	 	43
		 	6.8.	 	Future Assurances	 	43
		 	6.9.	 	Employees and Employee Benefits.	 	44
		 	6.10.	 	Exclusivity	 	45
		 	6.11.	 	Termination of Related-Party Arrangements	 	45
		 	6.12.	 	Confidentiality	 	45
	7.	 	Conditions to Obligation to Close.	 	46
		 	7.1.	 	Conditions to Obligation of Buyer	 	46
		 	7.2.	 	Conditions to Obligations of Seller	 	47
	8.	 	Post-Closing Covenants.	 	48
		 	8.1.	 	Noncompetition and Nonsolicitation.	 	48
		 	8.2.	 	Accounts Receivable and Correspondence	 	49
		 	8.3.	 	Warranty Claims	 	50
	9.	 	Indemnification.	 	50
		 	9.1.	 	Indemnity by Seller.	 	50
		 	9.2.	 	Indemnity by Buyer.	 	51
		 	9.3.	 	Tax Treatment of Indemnity Payments	 	52
		 	9.4.	 	Matters Involving Third Parties.	 	52
		 	9.5.	 	Survival of Indemnification Claims	 	53
		 	9.6.	 	Fraud; Intentional Misrepresentation	 	53
		 	9.7.	 	Determination of Loss Amount.	 	54
		 	9.8.	 	Exclusive Remedy	 	54
	10.	 	Termination.	 	55
		 	10.1.	 	Termination of Agreement	 	55
		 	10.2.	 	Effect of Termination	 	55
	11.	 	Miscellaneous.	 	55
		 	11.1.	 	Press Releases and Public Announcements	 	55
		 	11.2.	 	No Third Party Beneficiaries	 	56
		 	11.3.	 	Entire Agreement	 	56
		 	11.4.	 	Succession and Assignment	 	56
		 	11.5.	 	Counterparts	 	56

  

 -ii- 

							
		 	11.6.	 	Headings	 	56
		 	11.7.	 	Notices	 	56
		 	11.8.	 	No Additional Representations; Disclaimer	 	58
		 	11.9.	 	Governing Law	 	58
		 	11.10.	 	Amendments and Waivers	 	58
		 	11.11.	 	Severability	 	58
		 	11.12.	 	Expenses	 	58
		 	11.13.	 	Construction	 	59
		 	11.14.	 	Incorporation of Exhibits and Schedules	 	59
		 	11.15.	 	Consent to Jurisdiction; Venue; Service of Process.	 	59
		 	11.16.	 	Waiver of Jury Trial	 	60
		 	11.17.	 	Specific Performance	 	60
		 	11.18.	 	Bulk Sales Laws	 	60

  

					
	Schedules	  		    	
			
	Schedule 2.1(c)	  	-	    	Intellectual Property
	Schedule 2.2(h)	  	-	    	Other Excluded Assets
	Schedule 2.4(g)	  	-	    	Assumed Debt
	Schedule 2.6	  	-	    	Closing Balance Sheet and Working Capital Example
	Schedule 2.7(f)(vi)	  	-	    	Changes Reflected in EBITDA
	Schedule 6.9(a)	  	-	    	Transferred Employees
	Schedule 6.11	  	-	    	Surviving Affiliated Transactions
	Schedule 7.1(c)	  	-	    	Seller and Stanadyne Consents
	Schedule 7.2(c)	  	-	    	Buyer Consents
	Disclosure Schedule	  	-	    	Exceptions to Representations and Warranties

	*	The registrant shall furnish supplementally a copy of any omitted exhibits or schedules to the Commission upon request. 

  

 -iii- 

 ASSET PURCHASE AGREEMENT 
 This Asset Purchase Agreement (the “Agreement”) is entered into on June 30, 2006, by and among Defiance, Inc., a Delaware
corporation (“Buyer”), Precision Engine Products Corp., a Delaware corporation (“Seller”), and Stanadyne Corporation, a Delaware corporation (“Stanadyne”). Buyer, Seller and Stanadyne are
collectively referred to herein as the “Parties.” 
 This Agreement contemplates a transaction in which Buyer shall purchase
substantially all of the assets of Seller and certain assets of Stanadyne, including the purchase of all of the issued and outstanding quotas of Precision Engine Products LTDA, a commercial limited liability company incorporated under the laws of
Brazil (“PEPL” and, together with Seller, “PEP Group”). The assets to be purchased by Buyer all relate to the design, manufacture and sale of hydraulic valve lifters, including roller rocker arm assemblies, lash
adjusters, roller rocker arms, roller finger followers, tappets, roller tappets, roller valve lifters and slipper valve lifters, as conducted by PEP Group at the Tallahassee Facility and/or the Curitiba Facility (the “Business”). In
consideration of the sale of such assets, Buyer shall assume certain liabilities of Seller related to the Business and shall pay to Seller the Purchase Price (as defined below). 
 Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows. 
 1. Definitions.  
 “Accounting Standards” means GAAP applied using the specific accounting policies and practices as described on Section 3.6 of the
Disclosure Schedule. 
 “Acquired Assets” has the meaning set forth in §2.1. 
 “Acquired Employee Plan” means each Employee Plan that is sponsored and maintained by PEPL and is set forth in §3.15 of the Disclosure
Schedule. 
 “Acquired Intellectual Property” means all Intellectual Property included in the Acquired Assets. 
 “Action” means any claim, action, cause of action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental
Authority. 
 “Affiliate” means, as to any specified Person at any time, each Person directly or indirectly controlling, controlled
by or under direct or indirect common control with such specified Person at such time. 
 “Agreement” has the meaning set forth in
the preamble above. 
 “Allocation Schedule” has the meaning set forth in §2.6(d). 
 “Ancillary Agreements” means (i) a Deed of Transfer, (ii) a Bill of Sale, (iii) the Special Warranty Deed; (iv) the
Amendment to PEPL’s Articles of Organization reflecting the transfer 

 by Stanadyne and Seller of their interests in the PEPL Quotas; (v) the Transitional Services Agreement;
(vi) the Instrument of Assumption (the “Assumption Agreement”); (vii) the Assignment of Patents and Trademarks, and (viii) a Supply Agreement between Buyer and Stanadyne for the tappet assembly product for use in the
“Integrated Fuel System”, in each case of (i) – (viii) in a form mutually acceptable to Buyer and Seller. 
 “Assumed Liabilities” has the meaning set forth in §2.3. 
 “Basket” has the meaning set forth in
§9.1(b). 
 “Brazilian Withholding Taxes” has the meaning set forth in §2.10. 
 “Business” has the meaning set forth in the recitals above. 
 “Business Day” means any day on which banking institutions in New York, New York are customarily open for the purpose of transacting business. 
 “Buyer” has the meaning set forth in the preamble above. 
 “Buyer Indemnified Parties” has the meaning set forth in §9.1(a). 
 “Cap” has the
meaning set forth in §9.1(b). 
 “Cash” means cash and cash equivalents (including marketable securities and short term
investments). 
 “CERCLA” has the meaning set forth in §3.12(c). 
 “Closing” has the meaning set forth in §2.8. 
 “Closing Date” has the meaning set forth in §2.8. 
 “Closing Balance Sheet” has the
meaning set forth in §2.6(b)(i). 
 “Closing Date Statement” has the meaning set forth in §2.6(b)(i). 
 “Closing Working Capital” has the meaning set forth in §2.6(a)(i). 
 “COBRA” has the meaning set forth in §3.15(c). 
 “Code” means the United States Internal Revenue Code of 1986, as amended. 
 “Confidential
Information” means any and all information concerning the Business other than that information which is already generally or readily obtainable by the public or is publicly known or becomes publicly known through no fault of Buyer. 

“Contracts” has the meaning set forth in §2.1(e). 
  

 -2- 

 “Contractual Obligation” means, with respect to any Person, any contract, agreement, purchase
order, deed, mortgage, lease, license, commitment, undertaking, arrangement or understanding, but excluding the charter and by-laws of such Person, to which or by which such Person is a party, has any rights or is otherwise subject or bound or to
which or by which any property or right of such Person is subject or bound, whether oral or written. 
 “Curitiba Facility” means
the real property and buildings leased by PEP Group located at Rua João Chede, 2713, Curitiba / Paranã, Brazil. 
 “Debt” of any Person means all obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the Ordinary Course of Business), (iv) under capital leases, (v) under letters of credit or similar instruments and (vi) in the nature of Guarantees of the obligations described in clauses
(i) through (v) above of any other Person. 
 “Disclosure Schedule” has the meaning set forth in §3. 
 “Earn-Out Amount” has the meaning set forth in §2.7(d). 
 “Earn-Out Income Statement” has the meaning set forth in §2.7(a). 
 “Earn-Out Objection
Notice” has the meaning set forth in §2.7(a). 
 “Earn-Out Period” has the meaning set forth in §2.7(a). 

“Earn-Out Threshold” has the meaning set forth in §2.7(d). 
 “EBITDA” has the meaning set forth in §2.7(f). 
 “Employee Plans” has the meaning set forth in §3.15. 
 “Enforceable” means, with
respect to any Contractual Obligation, that such Contractual Obligation is a legal, valid and binding obligation enforceable in accordance with its terms, except to the extent that enforcement of the rights and remedies created thereby is subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and to general principles of equity (regardless of whether enforceability is considered in a proceeding
in equity or at law). 
 “Environment” means any surface water, groundwater, land surface, subsurface strata, river sediment, plant
or animal life, natural resources, air (including indoor air and ambient air) and soil. 
 “Environmental Claim” means any claim,
action, cause of action, investigation or notice by any person or entity alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) the presence or Release of any Substances at any location, whether or not owned or operated by Seller, or (b) circumstances forming the basis
of any violation, or alleged violation, of any Environmental Laws. 
  

 -3- 

 “Environmental Laws” means any Legal Requirement in effect as of the Closing Date concerning:
(i) the Environment, including related to pollution, contamination, cleanup, preservation, protection, and reclamation of the Environment; (ii) any Release or threatened Release of or exposure to any Substance, including investigation,
monitoring, clean up, removal, treatment, or any other action to address such Release or threatened Release; (iii) human health as it relates to exposure to Substances; and (iv) the Handling of Substances. 
 “Environmental Permits” means any licenses, permits, authorizations, orders, registrations, certificates, approvals, consents, and franchises
issued under Environmental Laws. 
 “ERISA” has the meaning set forth in §3.15(a). 
 “Estimated Working Capital” has the meaning set forth in §2.6(a)(i). 
 “Estimated Closing Balance Sheet” has the meaning set forth in §2.6(a)(i). 
 “Excluded Assets” has the meaning set forth in §2.2. 
 “Excluded Liabilities” has the meaning set forth in §2.4. 
 “Final Closing Balance
Sheet” has the meaning set forth in §2.6(b)(iv)(iii). 
 “Final Closing Date Statement” has the meaning set forth in
§2.6(b)(iv)(iii). 
 “Final Earn-Out Income Statement” has the meaning set forth in §2.7(a). 
 “Financial Statements” has the meaning set forth in §3.6. 
 “Foreign Plans” has the meaning set forth in §3.15(e). 
 “GAAP” means United States
generally accepted accounting principles. 
 “Governmental Authority” means any United States federal, state or local or any
foreign government, governmental authority, regulatory or administrative agency, governmental commission, court or tribunal (or any department, bureau or division thereof) or any arbitral body. 
 “Guarantee” means (i) any guarantee of the payment or performance of, or any contingent obligation in respect of, any Debt or other
obligation of any other Person, (ii) any other arrangement whereby credit is extended to one obligor on the basis of any promise or undertaking of another Person (A) to pay the Debt or other obligation of such obligor, (B) to purchase
any obligation owed by such obligor, (C) to purchase or lease assets (other than inventory in the Ordinary Course of Business) under circumstances that would enable such obligor to discharge one or more of its obligations or (D) to
maintain the capital, working capital, solvency or general financial condition of such obligor and (iii) any liability as a general partner of a partnership or as a venturer in a joint venture in respect of indebtedness or other obligations of
such partnership or venture. 
  

 -4- 

 “Handling of Substances” means the production, use, generation, Release, storage, treatment,
formulation, processing, labeling, distribution, introduction into commerce, registration, transportation, reclamation, recycling, or other disposition of, or exposure to, Substances. 
 “Income Taxes” means any federal, state, local or foreign Tax based on or measured by reference to net income (including gains and capital
gains), including any interest, penalty or addition thereto, whether disputed or not. 
 “Indemnified Party” has the meaning set
forth in §9.4(a). 
 “Indemnifying Party” has the meaning set forth in §9.4(a). 
 “Independent Accountants” has the meaning set forth in §2.6(b)(iii). 
 “Intellectual Property” means domestic and foreign patents, copyrights, Trademarks, trade secrets, Internet domain names, all pending
applications for any of the foregoing, and any Contractual Obligations granting rights related to the foregoing (i) subsisting in, covering, reading on, directly applicable to or existing in the Products or Technology, including, without
limitation, all Intellectual Property identified in Schedule 2.1(c) or (ii) that are owned, licensed or controlled in whole or in part by Seller and relate exclusively to the Business. 
 “Interim Balance Sheet” has the meaning set forth in §3.6. 
 “Interim Financials” has the meaning set forth in §3.6. 
 “Inventory” or
“Inventories” means all finished goods, work in process, raw materials, and all other materials and supplies (including such items as are in transit to Seller, being held in stock for Seller or have been ordered by Seller prior to Closing
and (i) have been paid for by Seller or are reflected in the accounts payable used in calculating the Closing Working Capital, and (ii) are included in the Inventory used in calculating the Closing Working Capital) held for use or
consumption by Seller or Buyer in the production of the Products. 
 “Knowledge” means the actual knowledge of Stephen Langin,
Shawn Sullivan, Richard Cerini, Doug Mattson, and Silvio Henrique, after reasonable investigation. 
 “Kohlberg” means Kohlberg
Management IV, L.L.C., a Delaware limited liability company. 
 “Legal Requirement” means any federal, state, local or foreign law,
statute, standard, ordinance, code, order, rule, regulation, resolution or promulgation, or any order, injunction, common law, judgment or decree of any Governmental Authority, or any license, franchise, permit or similar right granted under any of
the foregoing, or any similar provision having the force and effect of law. 
  

 -5- 

 “Liability” means any liability or obligation (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether incurred or consequential and whether due or to become due), including any liability for Taxes. 
 “Lien” means any mortgage, pledge, lien, security interest, charge, adverse or prior claim, encumbrance, restriction on transfer, conditional
sale or other title retention device or arrangement (including without limitation a capital lease), easement, right-of-way, encroachment, building or use restriction, transfer for the purpose of subjection to the payment of any Debt or other
obligation, or restriction on the creation of any of the foregoing, whether relating to any property or right or the income or profits therefrom. 
 “Losses” has the meaning set forth in §9.1(a). 
 “Material Adverse Effect” means any change in or effect
on the Business or the Acquired Assets that, when considered either singly or in the aggregate, has had or would reasonably be expected to have a material adverse effect on the business, operations, results of operations, condition (financial or
otherwise) or Liabilities of the Business, or on the Acquired Assets, or on the ability of Seller to consummate the transactions contemplated hereby, except any adverse effect related to or resulting from (i) events affecting the United States
or global economy or capital or financial markets generally which do not disproportionately affect the Business, or (ii) changes in laws, regulations or GAAP, or in the authoritative interpretations thereof or in regulatory or interpretive
guidance related thereto which, in each case, do not disproportionately affect the Business, or (iii) this Agreement, the announcement thereof, the transactions contemplated hereby and the identity or involvement by Buyer or its Affiliates.

 “Material Contract” has the meaning set forth in §3.13. 
 “Michigan Lease” means Seller’s leasehold interest in the property located at 100 West Big Beaver Road, Suite 200, Troy, MI 48084.

 “Most Recent Fiscal Year End Balance Sheet” has the meaning set forth in §3.6. 
 “Notice of Disagreement” has the meaning set forth in §2.6(b)(ii). 
 “Ordinary Course of Business” means the ordinary course of business consistent with past custom and practice (including with respect to
quantity and frequency) of the Person in question. 
 “Organizational Documents” has the meaning set forth in §3.1.

 “Owned Real Properties” has the meaning set forth in §3.10(a). 
 “Party” and “Parties” have the meanings set forth in the preamble above. 
 “PEP Group” has the meaning set forth in the recitals above. 
 “PEPL” has the meaning set forth in the recitals above. 
  

 -6- 

 “PEPL Quotas” means the Seller Quotas and the Stanadyne Quota, representing all of the issued
and outstanding quotas in the capital of PEPL. 
 “Permitted Lien” means (i) statutory liens for Taxes to the extent that the
payment thereof is not in arrears or otherwise due, (ii) encumbrances in the nature of zoning restrictions, easements, rights or restrictions of record on the use of real property if the same do not impair its use in the Business as currently
conducted, (iii) statutory or common law liens to secure landlords, lessors or renters under leases or rental agreements confined to the premises rented to the extent that no payment or performance under any such lease or rental agreement is in
arrears or is otherwise due, (iv) deposits or pledges made in connection with, or to secure payment of, worker’s compensation, unemployment insurance, old age pension programs mandated under applicable Legal Requirements or other social
security and (v) statutory or common law liens in favor of carriers, warehousemen, mechanics and materialmen, statutory or common law liens to secure claims for labor, materials or supplies and other like liens arising in the Ordinary Course of
Business, which secure obligations to the extent that payment thereof is not in arrears or otherwise due. 
 “Person” means an
individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization, or a Governmental Authority. 
 “Post-Closing Tax Period” has the meaning set forth in §3.9(g). 
 “Pre-Closing Environmental Matters” means (i) the Handling of Substances on or prior to the Closing Date either in, on, under or from any
Seller Property including the effects of such Handling of Substances on resources, Persons or real or personal property within or outside the boundaries of any Seller Property, (ii) the presence or Release as of or prior to the Closing Date of
Substances in, on or under any Seller Property regardless of how the Substances came to rest at, on or under such Facility, (iii) the failure on or prior to the Closing Date of the Seller or PEPL or any of their subsidiaries to be in compliance
with any Environmental Laws, (iv) any actual liability pursuant to CERCLA or any similar Environmental Laws related to any Release of Substances or any other act or omission on or prior to the Closing Date; (v) any other act, omission or
condition existing or occurring with respect to any Acquired Assets, Seller Properties or the Business on or prior to the Closing Date which give rise to liability under any Environmental Laws; and (vi) any Environmental Claims arising out of
events, conditions or circumstances occurring on or prior to the Closing Date. 
 “Pre-Closing Tax Period” has the meaning set
forth in §3.9(b). 
 “Products” means all products and services of Seller relating exclusively to the Business. 
 “Purchase Price” has the meaning set forth in §2.5. 
 “Purchase Price Adjustment” has the meaning set forth in §2.6. 
 “Real Property
Leases” has the meaning set forth in §3.10(b). 
  

 -7- 

 “Release” means any release, spill, emission, discharge, leaking, pumping, injection, deposit,
disposal, dispersal, leaching or migration of Substances into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any property, including the
movement of Substances through or in the air, soil, surface water, groundwater or property. 
 “Seller” has the meaning set forth
in the preamble. 
 “Seller Indemnified Parties” has the meaning set forth in §9.2. 
 “Seller Permits” has the meaning set forth in §3.8. 
 “Seller Property” has the meaning set forth in §3.10(b). 
 “Seller Quotas” has the
meaning set forth in §3.5. 
 “Seller’s Tax Contest Claim” has the meaning set forth in §6.4(e). 
 “Special Warranty Deed” means the special warranty deed for the transfer of the Owned Real Properties in the form attached as Exhibit
A-3. 
 “Stanadyne” has the meaning set forth in the preamble. 
 “Stanadyne Affiliates” means the Affiliates of Stanadyne and Seller other than (i) Kohlberg and (ii) any Persons that would not be
Affiliates of Stanadyne if they were not otherwise Affiliates of Kohlberg. 
 “Stanadyne Quota” has the meaning set forth in
§4.5. 
 “Straddle Period” has the meaning set forth in §6.4(d). 
 “Substances” means any waste, substance, product, pollutant or material, whether solid, liquid or gaseous, that (i) is or includes
asbestos, polychlorinated biphenyls, radioactive materials, oil, petroleum or any fraction thereof, (ii) requires removal, remediation or reporting under any Environmental Law, or is defined, listed or identified as a “contaminant”,
“pollutant”, “toxic substance”, “toxic material”, “hazardous waste” or “hazardous substance” or words of similar meaning and regulatory effect thereunder or (iii) is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is regulated as such by any Governmental Authority under any Environmental Law. 
 “Tallahassee Facility” means the real property and buildings owned by Seller located at 2919 Commonwealth Boulevard, Tallahassee, Florida 32303 and used in the conduct of the Business. 
 “Target Working Capital” has the meaning set forth in §2.6(a)(ii). 
 “Tax” or “Taxes” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, 
  

 -8- 

 customs duties, capital stock, franchise, profits, withholding, social security (or similar, including FICA),
unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto.

 “Tax Contest Claims” has the meaning set forth in §6.4(e). 
 “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof. 
 “Technology” means all inventions, utility models,
copyrightable works, discoveries, innovations, know-how, software and proprietary information (including formulas, compositions, processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and
cost information, business and marketing plans and proposals, documentation, and manuals), whether or not protectible or protected by patent, copyright, mask work right, trade secret law or otherwise, in each case relating exclusively to the
Business. 
 “Termination Date” has the meaning set forth in §9.5. 
 “Third Party Claim” has the meaning set forth in §9.4(a). 
 “Trademarks” means any trademarks, service marks, trade dress, and logos, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith.

 “Transfer” has the meaning set forth in §6.3(a). 
 “Transferred Employees” has the meaning set forth in §6.9(a). 
 “Transferred Employee Records” has the meaning set forth in §2.1(k). 
 “Transitional Services Agreement” means that certain Transitional Services Agreement entered into by and between Buyer, Seller and Stanadyne on
the Closing Date. 
 “WARN” means the Worker Adjustment and Retraining Act of 1988, as from time to time in effect. 
 “Warranty Claims” means claims for replacement for defective Products that are specifically permitted under Seller’s warranties in effect
as of the Closing Date. 
 2. Acquisition of the Business by Buyer. 
 2.1. Purchase and Sale of PEPL Quotas and Acquired Assets. At the Closing, Seller and Stanadyne shall sell, convey, transfer, assign and deliver to Buyer, and Buyer shall purchase and acquire from Seller and
Stanadyne, subject to the exclusions contained in §2.2 and subject to and upon the other terms and conditions contained herein, all of Seller’s and Stanadyne’s right, title and interest in and to the PEPL Quotas and the following
assets, properties and rights of PEP 
  

 -9- 

 Group (collectively, the “Acquired Assets”), free and clear of all Liens other than Permitted Liens, and
no other properties or assets of PEP Group or Stanadyne: 
 (a) all tangible personal property of PEP Group (such as
machinery, equipment, spare parts, control systems, inventories, raw materials, supplies, manufactured and purchased parts, works in progress, finished goods, computer and office equipment, furniture, automobiles, trucks, tractors, trailers, tools,
jigs and dies) which is used or held for use primarily in the conduct of the Business on the date hereof, and all such assets of PEP Group that are acquired after the date hereof and prior to the Closing for use primarily in the Business (in each
case other than assets that have been disposed of in the Ordinary Course of Business and in accordance with the terms of this Agreement), including without limitation all such assets located at the Tallahassee Facility and the Curitiba Facility;

 (b) all rights of PEP Group under transferable licenses (other than as set forth in §2.1(c)), permits, authorizations,
orders, registrations, certificates, approvals, consents and franchises used or held for use primarily in connection with the conduct of the Business or any pending applications or renewals relating to any of the foregoing, including without
limitation any Environmental Permits; 
 (c) all Intellectual Property and Technology owned, licensed or controlled by PEP
Group used exclusively or held for use exclusively in the conduct of the Business, goodwill associated therewith, licenses and sublicenses granted in respect thereto and rights thereunder, remedies against infringements thereof and rights to
protection of interest therein, including without limitation the Intellectual Property and software described in Schedule 2.1(c); 
 (d) all papers, books and records primarily related to the Business in whatever form, including all customer lists and files and supplier lists and files primarily related to the Business; 
 (e) all rights of PEP Group under Contractual Obligations relating primarily to the conduct of the Business (the
“Contracts”), except as expressly set forth in Section 2.2; 
 (f) all of PEP Group’s rights to the
use of the name “Precision Engine Products”; 
 (g) all accounts receivable as of the Closing Date related
exclusively to the Business; 
 (h) all other current assets of PEP Group, excluding Cash; 
 (i) all leasehold interests held for use primarily in the conduct of the Business (including without limitation the leasehold interest in
the Curitiba Facility) other than the Michigan Lease; 
  

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 (j) all prepaid rent, prepaid property and ad valorem Taxes (but only as and to the
extent reflected on the Final Closing Balance Sheet), prepaid supplies, advances and other prepaid expenses and deposits to the extent primarily related to the Business; 
 (k) all records of Seller that relate primarily to the Transferred Employees, but only to the extent that such records may be transferred
under applicable Legal Requirements (the “Transferred Employee Records”) 
 (l) all claims, deposits,
refunds, causes of action, choses in action, rights of recovery, rights of set off and rights of recoupment, to the extent they are transferable to Buyer and continue after Closing; 
 (m) all amounts owed to Seller by PEPL pursuant to intercompany notes and accounts, including the Intercompany Notes set forth on
§2.4(g) of the Disclosure Schedule; and 
 (n) the Owned Real Properties, and all buildings, improvements, fixtures and
fittings thereon, and easements, rights-of-way and other appurtenants thereto. 
 2.2. Excluded Assets. There shall be excluded from
the Acquired Assets to be sold and transferred to Buyer hereunder, and, to the extent in existence on the Closing Date, Seller and Stanadyne shall retain all of Seller’s and Stanadyne’s right, title and interest in and to the following
assets, properties and rights of Seller (collectively, the “Excluded Assets”): 
 (a) Cash; 
 (b) the consideration delivered to Seller by Buyer pursuant to this Agreement; 
 (c) all claims, deposits, refunds, causes of action, choses in action, rights of recovery, rights of set off and rights of recoupment
which have, and to the extent they have, arisen in connection with the conduct of the Business by Seller; 
 (d) all Employee
Plans, except Acquired Employee Plans, and assets related thereto; 
 (e) all rights in and with respect to insurance policies
of Seller, except for any proceeds of such insurance and claims therefor relating to the Acquired Assets; 
 (f) all
financial, computer and human resource systems of Stanadyne used by Seller, whether or not used primarily in the conduct of the Business, including those to be used in providing services to Buyer under the Transitional Services Agreement;

 (g) all rights to the name “Stanadyne”; 
 (h) all assets described on Schedule 2.2(h); 
 (i) for the avoidance of doubt, all deferred Tax assets and prepaid Taxes other than those described in §2.1(j); 
  

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 (j) any obligations under Seller’s leasehold interest in the Michigan Lease;

 provided, however, that the assets set forth on Schedule 2.2(k) shall be provided to Buyer under the Transitional Services Agreement and the
Transitional Services Agreement shall provide that, prior to the end of the term during which such assets are provided to Buyer under the Transitional Services Agreement, Buyer may elect to acquire all or any of such assets to the extent they are
transferable, and Seller and Stanadyne shall cooperate with Buyer to obtain any consents required in connection with the transfer of any such assets to Buyer. 
 2.3. Assumption of Liabilities. At the Closing, Buyer shall deliver to Seller the Assumption Agreement, whereby on the terms and subject to the conditions set forth herein and except as excluded by §2.4
hereof, Buyer shall undertake, assume, agree to satisfy or perform when due and hold Seller harmless from and indemnify Seller against the following Liabilities of Seller (the “Assumed Liabilities”): 
 (a) all Liabilities under the Contracts, to the extent performance is due after the Closing Date or relating to events occurring after the
Closing Date; 
 (b) all Liabilities incurred by Seller in the Ordinary Course of Business as reflected on the Final Closing
Balance Sheet; 
 (c) all Liabilities for non-Income Taxes relating to the Business (but only as and to the extent reflected
on the Final Closing Balance Sheet); and 
 (d) accounts payable of Seller, to the extent they are related to the Business and
reflected on the Final Closing Balance Sheet. 
 2.4. Liabilities Not Assumed. Except as expressly set forth in this Agreement, Buyer
shall not assume or perform any Liabilities not covered in §2.3 hereof nor any of the following Liabilities (the “Excluded Liabilities”): 
 (a) any Liability of Seller that does not relate primarily to the conduct of the Business or the Acquired Assets or that has not been
incurred in the Ordinary Course of Business; 
 (b) any Liability owing from Seller or the Business to any Affiliate of Seller
other than any Liability incurred in the Ordinary Course of Business to Holley Performance Products, Inc.; 
 (c) any
Liability of Seller for Income Taxes whether or not relating to the Business and whether or not incurred prior to the Closing; 
 (d) except as provided in §11.12, any Liability for non-Income Taxes relating to the Business for periods or portions thereof ending prior to the Closing Date and not reflected on the Final Closing Balance Sheet; 
  

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 (e) any Liability arising out of or related to any Action against Seller or any Action
which adversely affects the Acquired Assets and which shall have been asserted on or prior to the Closing Date; 
 (f) any
Liability (including any Liability for Warranty Claims) that relates to Products manufactured or sold on or prior to the Closing Date by Seller; 
 (g) any Debt of Seller or the Business, except as set forth on Schedule 2.4(g); 
 (h)
any obligation of Seller to indemnify any Person by reason of the fact that such Person was a director, officer, employee or agent of Seller or was serving at the request of Seller as a partner, trustee, director, officer, employee or agent of
another entity (whether such indemnification is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses or otherwise, and whether such indemnification is pursuant to any statute, charter document, bylaw,
agreement or otherwise); 
 (i) any Liability of Seller for costs and expenses incurred in connection with this Agreement, the
making or performance of this Agreement and the transactions contemplated hereby; 
 (j) any Liability of Seller under this
Agreement; 
 (k) except with respect to Liabilities assumed pursuant to §2.3(b) related to Transferred Employees or as
provided in §6.9, any Liability to or in respect of, or arising out of or in connection with, the employment by Seller or cessation of employment by Seller of any employees or former employees of Seller on or prior to the Closing Date,
including without limitation (i) any employment agreement, whether or not written, between Seller and any person, (ii) any Liability under any Employee Plan, other than a Liability with respect to an Acquired Employee Plan, (iii) any
severance obligation of Seller, (iv) any claim of an unfair labor practice or grievance or any claim under any unemployment compensation, employment standards, pay equity or worker’s compensation law or regulation or under any federal,
state, provincial or foreign employment discrimination law or regulation, which shall have been asserted on or prior to the Closing Date or is based on acts or omissions which occurred on or prior to the Closing Date, whether or not the affected
employees are hired by Buyer, (v) any Liability relating to payroll, vacation or sick pay for any current or former employee, director, officer, consultant or independent contractor of Seller other than with respect to Transferred Employees,
and (vi) with respect to any actual or alleged agreements or promises to current or former employees, directors, officers, consultants or independent contractors regarding stock options, equity or equity based compensation plans, programs or
arrangements maintained by Seller; 
 (l) any Liability of Seller for accounts payable not included in the calculation of
Closing Working Capital; and 
 (m) all Liabilities for Pre-Closing Environmental Matters. 
  

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 2.5. Purchase Price. Buyer agrees to assume the Assumed Liabilities and to pay to Seller at the
Closing an amount in cash equal to Twenty-Five Million Dollars ($25,000,000.00) (the “Purchase Price”), adjusted by any Purchase Price adjustment pursuant to §2.6(a), payable by wire transfer of immediately available funds in
accordance with written instructions of Seller given to Buyer not less than two (2) Business Days prior to the Closing Date. 
 2.6.
Purchase Price Adjustment. 
 (a) Pre-Closing Purchase Price Adjustments. 
 (i) No later than two (2) business days prior to the Closing Date, Seller shall deliver to Buyer an estimated consolidated balance
sheet of the Business as of immediately prior to the Closing (the “Estimated Closing Balance Sheet”), together with a written statement setting forth in reasonable detail Seller’s good faith estimate of the Closing Working
Capital (the “Estimated Working Capital”). The Estimated Closing Balance Sheet shall be prepared in accordance with the Accounting Standards, applied in a manner consistent with the preparation of the Interim Balance Sheet.
“Closing Working Capital” shall mean (A) the current assets of the Business (excluding Cash and Excluded Assets) minus (B) the current liabilities of the Business (excluding Excluded Liabilities, any reserve for warranty
claims or returns and giving effect to Seller’s payment of any payables on the Closing Date), all as reflected on the Closing Balance Sheet and the records of Seller maintained in the Ordinary Course of Business and calculated in accordance
with the Accounting Standards applied in a manner consistent with the preparation of the Interim Balance Sheet. For illustrative purposes only, attached as Schedule 2.6 hereto is a sample Closing Balance Sheet and calculation of Closing
Working Capital, assuming that the Closing occurred on May 31, 2006. 
 (ii) On the Closing Date, the Purchase Price
described in §2.5 shall be adjusted by either (A) subtracting the amount, if any, by which Estimated Working Capital is less than $9,778,518 (“Target Working Capital”) or (B) adding the amount by which Estimated
Working Capital is greater than Target Working Capital. 
 (b) Preparation of Closing Date Statement. 
 (i) Within 45 days after the Closing Date, Seller shall deliver to Buyer a consolidated balance sheet of the Business as of the Closing
Date (the “Closing Balance Sheet”), together with a written statement (the “Closing Date Statement”) setting forth in reasonable detail (A) Seller’s determination of the Closing Working Capital and
(B) the amount of any adjustment to the Purchase Price to be paid and by whom pursuant to §2.6(c) and the basis therefor. The Closing Balance Sheet shall be prepared in accordance with the Accounting Standards, applied in a manner
consistent with the preparation of the Interim Balance Sheet, without giving effect to the changes to the balance sheet as a result of the transactions contemplated hereby. 
  

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 (ii) Following the Closing, each of Buyer and Seller shall give the other party
reasonable access at all reasonable times to the properties, books, records and personnel of the Business for purposes of preparing, reviewing and resolving any disputes concerning the Closing Date Statement. Buyer shall have 30 days following the
delivery to Buyer of the Closing Date Statement during which to provide written notice to Seller of any dispute of any item contained in the Closing Balance Sheet or Closing Date Statement (a “Notice of Disagreement”), which notice
shall set forth in reasonable detail any item on the Closing Balance Sheet and/or the Closing Date Statement that Buyer believes (a) has not been prepared in accordance with the Accounting Standards, applied in a manner consistent with the
preparation of the Interim Balance Sheet, or in accordance with the definition of Closing Working Capital set forth herein, or (b) contains a mathematical error. If Buyer fails to provide a Notice of Disagreement to Seller within such 30-day
period, the Closing Balance Sheet and the Closing Date Statement shall be conclusive and binding on the Parties. In the event that Buyer shall provide a Notice of Disagreement to Seller within such 30-day period, Buyer and Seller shall cooperate in
good faith to resolve the dispute as promptly as possible. 
 (iii) If Buyer timely provides a Notice of Disagreement to
Seller, and if Buyer and Seller fail to resolve the dispute with respect to the Closing Balance Sheet, the Closing Date Statement and the calculation of the Closing Working Capital within thirty 30 days of Seller’s receipt of the Notice of
Disagreement, Buyer and Seller shall submit the issues remaining in dispute to Ernst & Young LLP (the “Independent Accountants”) for resolution applying the Accounting Standards; provided, however, that the
Independent Accountants shall be limited to selecting either the Closing Working Capital amount reflected on Seller’s Closing Statement or the Closing Working Capital amount reflected on the Notice of Disagreement submitted by Buyer. If issues
are submitted to the Independent Accountants for resolution, (A) Buyer and Seller shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the
Independent Accountants may request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the
Independent Accountants; (B) Buyer and Seller shall instruct the Independent Accountants to review only those items and amounts specifically set forth and objected to in the Notice of Disagreement, to make their determination based solely on
such materials presented by Buyer and Seller (i.e., not on the basis of an independent review) and to resolve the dispute with respect to each such specified item and amount in accordance with the Accounting Standards, applied in a manner consistent
with the preparation of the Interim Balance Sheet, and in accordance with the definition of Closing Working Capital set forth in this Agreement; (C) the determination of the Closing Balance Sheet and the Closing Working Capital by the
Independent Accountants, as set forth in a notice to be delivered to both Buyer and Seller within sixty (60) days of the submission to the Independent Accountants of the issues remaining in dispute (or as soon thereafter as 
  

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 practicable), shall be final, binding and conclusive on the parties; and (D) the fees and costs of
the Independent Accountants shall be borne (x) by Buyer if the Independent Accountants select the Closing Balance Sheet and/or Seller’s calculation of Closing Working Capital reflected on the Closing Statement, or (y) by Seller, if
the Independent Accountants select Buyer’s Closing Balance Sheet or calculation of the Closing Working Capital reflected on the Notice of Disagreement. The Closing Balance Sheet and the Closing Date Statement, either as agreed to by Buyer and
Seller or as determined by the Independent Accountants pursuant to this paragraph, shall be final and binding and shall be referred to respectively as the “Final Closing Balance Sheet” and the “Final Closing Date
Statement.” 
 (iv) No objection may be raised and no adjustment may be proposed to any entry or item contained in
the Closing Balance Sheet or the Closing Date Statement except on the grounds that such item or entry is not in accordance with the provisions of this Agreement or the Accounting Standards, applied in a manner consistent with the preparation of the
Interim Balance Sheet, or that such item or entry contains a mathematical error. 
 (c) Post-Closing Purchase Price Adjustments.

 (i) On the tenth business day following the determination of the Final Closing Date Statement; either (A) Buyer shall
pay to Seller the amount by which (x) Closing Working Capital as set forth in the Final Closing Date Statement is greater than (y) the Estimated Working Capital, or (B) Seller shall pay to Buyer the amount by which (x) Closing
Working Capital as set forth in the Final Closing Date Statement is less than (y) the Estimated Working Capital. 
 (ii)
The amount referred to in §2.6(c)(i) shall be paid by the paying party under §2.6(c)(i) by wire transfer in immediately available funds to an account designated by the other party. 
 (iii) Buyer or Seller may offset any amounts currently due to it from the other Party under this Agreement against any amounts currently
due from it to the other Party under this §2.6(c). 
 (d) The Parties agree that $29,000 of the total consideration, as
determined for tax purposes, will be allocated to the PEPL Quotas. The Parties agree that the total consideration, as determined for tax purposes (less the amount allocated to the PEPL Quotas), paid for the Acquired Assets, will be allocated to such
assets in accordance with Section 1060 of the Code and the rules and regulations promulgated thereunder and any similar provision of state, local and foreign law, as appropriate. Seller shall provide Buyer with a proposed schedule detailing
such allocation within ninety (90) days following the Closing Date (the “Allocation Schedule”), and Seller and Buyer shall mutually agree on a final allocation within 75 days thereafter. The purchase price allocation shall be
revised for any adjustments to the total consideration paid hereunder as necessary, including for adjustment pursuant to §2.7, as mutually agreed to by Seller 
  

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 and Buyer. Except as otherwise required by law, the parties to this Agreement will file all Tax Returns
and information reports in a manner consistent with the Allocation Schedule; provided, however, that nothing contained herein shall prevent Buyer, Stanadyne or Seller from settling any proposed deficiency or adjustment by any taxing
authority based upon or arising out of the purchase price allocation, and none of Buyer, Seller and Stanadyne shall be required to litigate before any court, any proposed deficiency or adjustment by any taxing authority challenging such purchase
price allocation. The parties will promptly inform one another of any challenge by any governmental authority to any allocation made in accordance with the Allocation Schedule, and the parties agree to consult and keep one another informed with
respect to the status of, and any discussion, proposal or submission with respect to, such challenge. 
 2.7. Earn-Out. 
 (a) As promptly as practicable after the one year anniversary of the Closing Date, but in no event later than ninety (90) days
thereafter, Buyer shall deliver to Seller a statement of income (loss) of the Business as operated by Seller, Buyer or its successors or assigns (the “Earn-Out Income Statement”) for the period starting on (x) if the Closing
Date occurs on or before the fifteenth fiscal day of the month in which the Closing occurs, the first fiscal day of such month or (y) if the Closing Date occurs after the fifteenth fiscal day of the month in which the Closing occurs, the first
fiscal day of the month immediately following the Closing Date (the date referred to in (x) or (y), the “Earn Out Start Date”) until the last fiscal day of the month that is twelve months after the Earn Out Start Date (the
“Earn-Out Period”), including, without limitation, a calculation of EBITDA (as defined below) for the Earn-Out Period. The Earn-Out Income Statement shall be prepared in accordance with the Accounting Standards applied in a manner
consistent with the preparation of the Interim Statements. The portion of such statement covering the year ended December 31, 2006 shall be included in the consolidated financial statements audited by Buyer’s accounting firm. During the
Earn-Out Period, Buyer shall use commercially reasonable efforts to operate the Business in the Ordinary Course of Business in a commercially reasonable fashion (including by not taking any action or making any operational changes having the
principal purpose of reducing EBITDA) and shall maintain books and records adequate to permit an audit of the Business as a stand-alone division. Without limiting the generality of the foregoing, Buyer agrees and covenants that, during the Earn-Out
Period, (i) Buyer will not divert any business opportunity relating to the Products, customers or sales of Products from Buyer to any of Buyer’s Affiliates or other business divisions; (ii) Buyer will continue to manufacture Products
so long as, in Buyer’s good faith judgment, sufficient demand exists for such Products (and if Buyer determines that sufficient demand does not exist, Buyer will provide supporting documentation, such as written communication from customers, to
that effect), in order to meet such demand; and (iii) all sales of Products, whether effected by Buyer or an Affiliate of Buyer, will be included in the calculation of EBITDA; provided, however ̧ that none of the obligations in clauses
(i) through (iii) above shall apply to any products of a type that Buyer can demonstrate was manufactured by Buyer or an Affiliate of Buyer prior to Closing. 
  

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 (b) Following the one year anniversary of the Closing Date, each of Buyer and Seller
shall give the other party reasonable access at all reasonable times to the properties, books, records and personnel of the Business for purposes of preparing, reviewing and resolving any disputes concerning the Earn-Out Income Statement. Seller
shall have 30 days following the delivery to Seller of the Earn-Out Income Statement during which to provide written notice to Buyer of any dispute of any item contained in the Earn-Out Income Statement (the “Earn-Out Objection
Notice”), which notice shall set forth in reasonable detail the basis for such dispute and Seller’s calculation of EBITDA for the Earn-Out Period. If Seller fails to provide an Earn-Out Objection Notice to Buyer within such 30-day
period, the Earn-Out Income Statement shall be conclusive and binding on the Parties. In the event that Seller shall provide an Earn-Out Objection Notice to Buyer within such 30-day period, Buyer and Seller shall cooperate in good faith to resolve
the dispute as promptly as possible and agree upon a mutually satisfactory income statement which reflects EBITDA for the Earn-Out Period. If Seller timely provides an Earn-Out Objection Notice to Buyer, and if Buyer and Seller are unable to resolve
such objections within 30 days of Buyer’s receipt of the Earn-Out Objection Notice, Buyer and Seller shall submit the items remaining in dispute to the Independent Accountant; provided, however, that the Independent Accountants
shall be limited to selecting either the EBITDA amount reflected on Buyer’s Earn-Out Income Statement or the EBITDA amount reflected on the Earn-Out Objection Notice submitted by Seller. If issues are submitted to the Independent Accountants
for resolution, (A) Buyer and Seller shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the Independent Accountants may request and are
available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants; (B) Buyer and Seller
shall instruct the Independent Accountants to make their determination based solely on such materials presented by Buyer and Seller (i.e., not on the basis of an independent review) and to resolve the dispute with respect to each such specified item
and amount in accordance with the Accounting Standards, applied in a manner consistent with the preparation of the Interim Statements, and in accordance with the definition of EBITDA set forth in this Agreement; (C) the determination of EBITDA
for the Earn-Out Period by the Independent Accountants, as set forth in a notice to be delivered to both Buyer and Seller within sixty (60) days of the submission to the Independent Accountants of the issues remaining in dispute (or as soon
thereafter as practicable), shall be final, binding and conclusive on the parties; and (D) the fees and costs of the Independent Accountants shall be borne (x) by Seller if the Independent Accountants select Buyer’s calculation of
EBITDA for the Earn-Out Period reflected on the Earn-Out Income Statement, or (y) by Buyer, if the Independent Accountants select Seller’s calculation of EBITDA for the Earn-Out Period reflected on the Earn-Out Objection Notice. The
Earn-Out Income Statement, either as agreed to by Buyer and Seller or as determined by the Independent Accountants pursuant to this paragraph, shall be final and binding and shall be referred to as the “Final Earn-Out Income
Statement” for the respective Earn-Out Period. Any amounts to be paid pursuant to §2.7(d) below shall be paid within fifteen (15) days of the determination of the Final Earn-Out Income Statement for such Earn-Out Period.

  

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 (c) No objection may be raised and no adjustment may be proposed to any entry or item
contained in the Earn-Out Income Statement or the calculation of EBITDA (as defined below), except on the grounds that such item or entry is not in accordance with the provisions of this Agreement or the Accounting Standards, applied in a manner
consistent with the preparation of the Interim Statements, or that such item or entry contains a mathematical error. 
 (d)
For the Earn-Out Period, Buyer shall pay to Seller, as an adjustment to the Purchase Price, in immediately available funds to a United States bank account designated to Buyer by Seller in writing at least two (2) Business Days prior to the date
of such payment, the product (the “Earn-Out Amount”) of (i) the excess, if a positive number, of (A) EBITDA for the Earn-Out Period over (B) the Earn-Out Threshold (as hereinafter defined), multiplied by (ii) 5;
provided, however, that in no event shall the Earn-Out Amount exceed $10,000,000. The “Earn-Out Threshold” shall initially mean $5,000,000, subject to adjustment as provided below. 
 (e) If, during the Earn-Out Period, Buyer sells, leases, transfers or otherwise disposes of assets material to the Business, or buys,
leases or otherwise acquires material assets related to the Business which are subsequently operated as part of the Business, Buyer and Seller agree to negotiate in good faith an adjustment to the Earn-Out Threshold, which shall be adjusted to
reflect the impact of such acquisition or disposition. 
 (f) For purposes of this §2.7, “EBITDA” shall
mean the consolidated net income of the Business before interest income or expense, taxes, depreciation expense, amortization expense, and non-recurring or extraordinary gains or charges and shall be calculated based on the following principles:

 (i) Sales or transfers of products and the provision of services from Buyer to or from its Affiliates will be valued at
prices charged to regular customers of Buyer or its Affiliates, as the case may be, for similar products or services (or, if such products or services are not sold or provided to regular customers, then they will be valued at cost); 
 (ii) EBITDA shall exclude any expense related to the transactions contemplated by this Agreement; 
 (iii) EBITDA shall exclude all corporate and allocated overhead charges above $500,000, including any management or license fees charged
by Buyer or its Affiliates; 
 (iv) EBITDA shall exclude one-time costs and expenses incurred in connection with the sale of
the Business by Seller to Buyer, including any restructuring costs, severance costs, or other one-time carve-out costs; 
  

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 (v) EBITDA shall exclude any expense for lease or rental payments of any property or
equipment, other than property or equipment that is leased by Seller or PEPL as of the Closing Date (or any property or equipment rented or leased to replace such property or equipment); and 
 (vi) EBITDA shall exclude any income or expense directly attributable to any significant operational change to the Business made by Buyer
after the Closing, except for the changes set forth on Schedule 2.7(f)(vi), which will include the termination of 12 employees by Seller and termination of the Michigan Lease by Seller. For the avoidance of doubt, capital improvements in excess of
$1,000,000 with respect to a single project (excluding any capital improvements currently planned or commenced by Seller) shall constitute a significant operational change for purposes of this Section 2.7(f)(vi). 
 (g) Buyer may offset any amounts currently due from Seller to Buyer under this Agreement against any amounts currently due to Seller under
this §2.7. 
 2.8. The Closing. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Ropes & Gray LLP in New York, New York, commencing at 10:00 a.m. eastern time on July 31, 2006 or such other date as the Parties may mutually determine (the “Closing Date”).

 2.9. Deliveries at the Closing. 
 (a) At the Closing Seller shall deliver to Buyer (i) the various certificates, instruments, and documents referred to in §7.1 below, (ii) such other instruments of sale, transfer, conveyance and
assignment as Buyer and its counsel may reasonably request, and (iii) the Ancillary Agreements to which Seller is to be a party. At the Closing, Buyer shall deliver the Ancillary Agreements to which Buyer is to be a party and shall deliver the
Purchase Price specified in §2.5 above. 
 (b) To the extent that the assignment to Buyer of any outstanding contract,
agreement, license, lease, permit or authorization pursuant to this Agreement is not permitted without the consent of another party, this Agreement shall not be deemed to constitute an undertaking to assign the same if such consent is not given;
provided, that Seller and Buyer shall use reasonable best efforts, both before and after the Closing, to obtain all such consents and, at Buyer’s request, Seller shall cooperate in any arrangement designed to provide Buyer with the
benefits and obligations of any such contract, agreement, license, lease, permit or authorization. If and when any such consents are obtained after the Closing, Seller shall promptly assign its rights and obligations under the related contract,
agreement, license, lease, permit or authorization to Buyer and Buyer shall, without payment of any consideration therefore, assume such rights and obligations. 
 2.10. Withholdings. Buyer shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to Seller, such amounts as it is required to deduct and withhold with
respect to the making of such payment under the Brazilian 
  

 -20- 

 Tax law. To the extent that such amounts are so withheld by Buyer, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to Seller. If the Brazilian taxing authority determines that withholding tax in excess of the amount withheld at Closing is due with respect to the transfer of the PEPL Quotas, Seller agrees to bear the
burden of such withholding tax (including any interest and penalties thereon) (such amounts, “Brazilian Withholding Taxes”). 
 3.
Representations and Warranties of Seller. Seller represents and warrants to Buyer that, except as set forth in the disclosure schedule attached to this Agreement (the “Disclosure Schedule”): 
 3.1. Organization. Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. PEPL has
been duly organized as a private company under the laws of Brazil and is validly existing under the laws of Brazil. Seller and PEPL have full corporate power and limited liability company power, respectively, to carry on the Business as it is now
being conducted and to own and lease the properties and assets they now own or lease, as applicable. Seller and PEPL are each duly qualified or licensed to do business as a foreign corporation or limited liability company and are each in good
standing in each jurisdiction in which such qualification is required for the operation of the Business, except where any failure to be so qualified has not had, and would not reasonably be expected to have, a Material Adverse Effect. Copies of the
organizational documents of the Seller and PEPL, including the members’ register and the Articles of Organization of PEPL currently in place and subsequent amendments, have been heretofore delivered to Buyer and they are complete and correct
copies of such instruments as in effect as of the date of this Agreement (the “Organizational Documents”). Section 3.1 of the Disclosure Schedule sets forth a true, correct and complete list of all jurisdictions in which Seller
and PEPL are qualified to do business. 
 3.2. Authorization of Transaction. Seller has the power (including full corporate power) to
execute and deliver this Agreement and the other agreements contemplated hereby and to carry out the transactions contemplated hereby. Seller and its officers and directors have taken all corporate actions necessary to duly and validly authorize the
execution and delivery of this Agreement and the Ancillary Agreements, the consummation of the transactions contemplated hereby and thereby, and the performance of its obligations hereunder and thereunder. This Agreement and the Ancillary Agreements
to which Seller is a party have been duly executed and delivered by Seller and, assuming due execution and delivery by Buyer, are Enforceable against Seller in accordance with their terms. 
 3.3. Noncontravention; Governmental Authorities; Consents. Except as set forth in Section 3.3 of the Disclosure Schedule, neither the
execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in §2 above), will (i) violate any material Legal Requirement to which PEP
Group or any of its property is subject, (ii) violate any provision of the Organizational Documents, (iii) violate, or be in conflict with, or constitute a default (or an event which, with notice or lapse of time or both, would constitute
a default) under, or result in or give to others any rights of termination of, or accelerate the performance required by, or cause the acceleration of the maturity of any Debt or obligation pursuant to, any Contractual Obligations of PEP Group, or
(iv) result in the creation of a Lien on the PEPL Quotas or any of the Acquired Assets, except, 
  

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 in the case of clauses (i), (iii) and (iv), as has not had and would not reasonably be expected to have a Material
Adverse Effect. Except for the filing with the Board of Trade of the State of Parana of the Amendment to the PEPL Articles of Organization reflecting the assignment and transfer of PEPL Quotas, no notice to, consent, approval or authorization of, or
designation, declaration or filing with, any Governmental Authority or other Person is required on the part of Seller or any of its Affiliates with respect to the execution or delivery of this Agreement or the consummation of the transactions
contemplated hereby, except as otherwise disclosed in Section 3.3 of the Disclosure Schedule. 
 3.4. Brokers’ Fees. No
broker, finder, or agent has acted directly or indirectly for Seller with respect to the transactions contemplated by this Agreement. 
 3.5.
Ownership of PEPL Quotas. Seller is the lawful record holder and beneficial owner of fifty thousand eight hundred eighty (50,880) PEPL Quotas, as reflected in the PEPL Articles of Association (the “Seller Quotas”), free
and clear of any Liens other than restrictions on transfer pursuant to any applicable Brazilian Legal Requirement or any Legal Requirement regarding the issuance, sale, or transfer of securities. The Seller Quotas and the Stanadyne Quota constitute
all of the issued and outstanding equity interests of PEPL. The PEPL Quotas have been duly authorized, validly issued and are fully paid up, and were not issued in violation of any preemptive rights. There are no commitments or obligations of any
kind or character for (A) the issuance of PEPL Quotas or any other equity interests of PEPL or (B) the repurchase, redemption or other acquisition of PEPL Quotas. There are no voting trusts, stockholder agreements, proxies or other
agreements in effect with respect to the voting or transfer of the PEPL Quotas. PEPL does not own of record or beneficially any equity interests in any Person. 
 3.6. Financial Statements. 
 (a) Section 3.6 of the Disclosure Schedule contains
true, correct and complete copies of the following financial statements (collectively, the “Financial Statements”): (i) the audited balance sheets of the Business as of December 31, 2005 (the “Most Recent Fiscal
Year End Balance Sheet”), December 31, 2004 and December 31, 2003 and the related statements of income and cash flows for the fiscal years then ended accompanied by any notes thereto and the report of Deloitte & Touche
LLP therein; (ii) the unaudited balance sheet of the Business as of May 31, 2006 (the “Interim Balance Sheet”) and the related unaudited statement of income and cash flows for the five months then ended (the
“Interim Financials”); (iii) the unaudited balance sheets of PEPL as of December 31, 2005, December 31, 2004 and December 31, 2003 and the related statements of income and cash flows for the fiscal years
then ended; and (iv) the unaudited balance sheet of PEPL as of May 31, 2006 and the related unaudited statement of income and cash flows for the five months then ended. Except as set forth in §3.6(a) of the Disclosure Schedule, the
Financial Statements present fairly in all material respects the financial position of the Business and PEPL at the respective dates thereof, and the results of its operations and cash flow activity for the periods referred to therein, in accordance
with the Accounting Standards consistently applied across such periods (subject in the case of the Interim Financials to the lack of footnote disclosure and changes resulting from normal year-end adjustments, none of which will be significant
individually or in the aggregate). 
  

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 (b) There are no Liabilities of the Business that would be required to be accrued on a
balance sheet prepared in accordance with the Accounting Standards, applied on a basis consistent with the preparation of the Most Recent Fiscal Year End Balance Sheet, other than Liabilities (i) reflected and reserved against on the Interim
Balance Sheet, or (ii) incurred since May 31, 2006 in the Ordinary Course of Business and in accordance with the terms of this Agreement, which Liabilities will be reflected and reserved against on the Closing Balance Sheet. 
 3.7. Title to Assets. Seller has good title to, and the power to sell or transfer to Buyer, all of the Acquired Assets of Seller, and PEPL has
good title to all of the assets of PEPL, free and clear of any Liens, except for Permitted Liens. Except for disposals in the Ordinary Course of Business and in accordance with the terms of this Agreement, all properties, assets, rights, preferences
and agreements (real, personal and mixed, tangible and intangible) used or held for use primarily in, or material or necessary to, the conduct of the Business as conducted on the date hereof and on the Closing Date, are (a) included in the
Acquired Assets or (b) will be made available to Buyer pursuant to, and subject to the terms of, the Transitional Services Agreement and are described on Schedule 2.2(h). Each such tangible asset included in the Acquired Assets
(i) has been maintained in accordance with normal industry practice and (ii) is in good operating condition and repair (subject to normal wear and tear). No such tangible asset included in the Acquired Assets is in need of repair or
replacement other than as part of routine maintenance in the Ordinary Course of Business. Following the consummation of the transactions contemplated by this Agreement, PEPL will continue to own, pursuant to good title, or lease, under valid and
subsisting leases, or otherwise retain, its interest in the Acquired Assets owned by PEPL without incurring any penalty or other adverse consequence, including, without limitation, any increase in rentals, royalties, or licenses or other fees
imposed as a result of, or arising from, the consummation of the transactions contemplated by this Agreement. 
 3.8. Legal and Other
Compliance. 
 (a) Seller and PEPL are in compliance with all applicable Legal Requirements relating to the conduct of the
Business, no Action has been filed or commenced against Seller or PEPL alleging any failure so to comply, and neither Seller nor PEPL has received a notice of any investigation or review by any Governmental Authority with respect to the Business or
the Acquired Assets, except as would not, in the aggregate, reasonably be expected to have a Material Adverse Effect. Seller and PEPL hold all material permits, registrations, licenses, orders and approvals of all Governmental Authorities necessary
to conduct the Business as it is presently conducted, each of which is in full force and effect (the “Seller Permits”), except where the failure to be in full force and effect would not reasonably be expected to have a Material
Adverse Effect. Seller and PEPL are in compliance in all respects with the terms of Seller Permits, except where the failure to be in compliance would not reasonably be expected to have a Material Adverse Effect. There are no Actions pending nor, to
the Knowledge of Seller, threatened that seek the revocation, cancellation, suspension or adverse modification of any Seller Permit. Section 3.8 of the Disclosure Schedule sets forth a true, correct and complete list of all of the Seller
Permits. 
  

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 (b) Neither Seller, PEPL, nor any of their Affiliates, nor any director, officer, agent
or employee of any of them, has (i) used any funds for unlawful contributions, gifts, entertainment, or other unlawful expenses related to political activity, (ii) made any unlawful payment or offered anything of value to foreign or
domestic government officials, employees, political parties, or campaigns, (iii) made any other unlawful payment, or (iv) violated any applicable export control, money laundering, or anti-terrorism law or regulation, nor have any of them
otherwise taken any action that would cause the Seller, PEPL, or any of their Affiliates to be in violation of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable law of similar effect. Any inaccuracies in the representations
and warranties contained in this § 3.8(b) of which Seller does not have Knowledge shall constitute a breach hereof by Seller only if such inaccuracies, in the aggregate, have had, or would reasonably be expected to have, a Material Adverse
Effect. 
 3.9. Taxes. Except as otherwise disclosed in Section 3.9 of the Disclosure Schedule: 
 (a) PEPL has timely filed (or caused to be timely filed) with the appropriate Tax authorities all Tax Returns required to be filed with
respect to PEPL, its assets, operations or income. Each of such Tax Returns is true, complete and correct in all material respects (provided that this representation shall not give Seller liability for Taxes attributable to any Post-Closing Tax
Period). Seller and Stanadyne each has timely filed (or caused to be timely filed) with the appropriate Tax authorities all material Tax Returns required to be filed with respect to the Acquired Assets and the income and operations of Business.

 (b) PEPL has paid or will pay prior to Closing in full all Taxes that have accrued or are due and payable, in each case in
respect of (i) any taxable periods that end on or before the Closing Date and (ii) any taxable period that begins before the Closing Date and ends thereafter, to the extent that such Taxes are attributable under the terms of §6.4(d)
to the portion of such period ending on and including the Closing Date (each taxable period or portion thereof ending on or before the Closing Date, a “Pre-Closing Tax Period”), other than Taxes for which a reserve or liability has
been or will be established on the Final Closing Balance Sheet and which reserve or liability is reflected in the calculation of Closing Working Capital (other than any reserve for deferred Taxes established to reflect timing differences between
book and Tax income). Seller and Stanadyne each has paid or will pay in full or discharged or will discharge all Taxes the nonpayment of which would result in a Lien or other encumbrance on the Acquired Assets in the hands of the Buyer, excepting in
each case such Taxes as will not be due until after the Closing Date. 
 (c) There is no audit or other matter in controversy
with respect to any Taxes due and owing by PEPL, and there is no Tax deficiency or claim assessed or, to the Knowledge of Seller or Stanadyne, proposed or threatened in writing against PEPL, other than in respect of any such audits, controversies,
deficiencies, assessments, or proposed assessments that are being contested in good faith, for which adequate reserves have been or will be established on the Final Closing Balance Sheet, and which are disclosed on Schedule 3.9(c).

  

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 (d) PEPL has withheld all Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party, and such withheld Taxes have either been duly paid to the proper Governmental Authority or set aside in accounts for such purpose.

 (e) None of Seller, Stanadyne, or PEPL has waived any statutory period of limitations for the assessment of any Taxes
relating to PEPL, the Acquired Assets or the income or operations of the Business, or agreed to any extension of time with respect to a Tax assessment or deficiency relating to PEPL, the Acquired Assets or the income or operations of the Business,
other than in the case of any such waivers or extensions in respect of an assessment or deficiency of Tax the liability of which has been satisfied or settled. PEPL does not have any liability for the Taxes of any other person or dissolved entity
under sections 128 until 137 of the Brazilian National Tax Code (Law no 5172/66 or any similar provision of federal,
state, federal district, municipal, or foreign law), as a transferee, successor, or by any contract primarily related to Taxes or otherwise. 
 (f) No claim has been made in writing by an authority in a jurisdiction where PEPL does not file Tax Returns that PEPL is or may be subject to taxation by that jurisdiction. 
 (g) PEPL shall not be required to include in a taxable period or portion thereof ending on or after the Closing Date (a
“Post-Closing Tax Period”) taxable income attributable to income of PEPL that accrued in a Pre-Closing Tax Period but was not recognized for tax purposes in any Pre-Closing Tax Period for any reason, including any provision of any
foreign, federal, state, federal district or local Tax law having similar effect, such as those mentioned in sections 407, 409 and 421 of the Brazilian federal income tax regulations (Decree 3000/99). 
 (h) PEPL does not have any obligation under (i) any Tax allocation or Tax sharing agreement with Seller, Stanadyne or any other PEPL
Affiliate or (ii) any Tax allocation or sharing agreement primarily related to Taxes. 
 (i) There are no Liens or other
encumbrances related to Taxes on the assets of PEPL or the Acquired Assets, other than for current Taxes that are not yet due and payable. 
 (j) PEPL is not a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code and is not treated as a U.S. corporation under Section 7874(b) of the Code. 
 (k) PEPL (i) does not have an investment in U.S. property within the meaning of Section 956 of the Code or (ii) is not
engaged in a United States trade or business for U.S. federal income Tax purposes. Except to the extent the liability for Taxes relating to such amount is included in the Final Closing Balance Sheet and taken into account in the calculation of
Closing Working Capital, Buyer would not be required to include 
  

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 any amount in gross income with respect to PEPL pursuant to Section 951 of the Code if the taxable
year of PEPL were deemed to end on the day after the Closing Date, but not taking into account any activities or income of PEPL on such day. 
 (l) PEPL is treated as an association for United States income tax purposes under Treasury Regulation Section 301.7701-3(b)(2). PEPL has not filed an IRS Form 8832 to change its default classification.

 3.10. Property, Plant and Equipment. 
 (a) Section 3.10(a) of the Disclosure Schedule sets forth a true, correct and complete list of the addresses or locations of all real property and interests in real property used primarily in, or which are
material or necessary to, the conduct of the Business as presently conducted and owned by Seller or PEPL (collectively, the “Owned Real Properties”). Seller and PEPL have, and at Closing Seller will transfer to Buyer, good and
marketable title to all Owned Real Properties, free and clear of all Liens other than Permitted Liens. 
 (b)
Section 3.10(b) of the Disclosure Schedule sets forth a true, correct and complete list of all leases, subleases and other agreements pursuant to which Seller or PEPL uses or occupies or has the right to use or occupy any real property (the
“Real Property Leases,” and the real properties specified in such Real Property Leases, together with the Owned Real Properties, being referred to herein individually as a “Seller Property” and collectively as the
“Seller Properties”), and Seller has provided to Buyer true, correct and complete copies of each such Real Property Lease, including all amendments and supplements thereto. Seller and PEPL have, and at Closing Seller will transfer
to Buyer (with the exception of the Michigan Lease), a valid leasehold interest in all of the real properties subject to the Real Property Leases, free and clear of all Liens other than Permitted Liens. Seller and PEPL enjoy peaceful and undisturbed
possession of all of the Seller Properties. The Seller Properties constitute all real property used primarily in, or material or necessary to, the conduct of the Business as presently conducted. 
 (c) Each of Seller and PEPL has complied in all material respects with the terms of the Real Property Leases under which it is in
occupancy and such Real Property Leases are in full force and effect. No event has occurred which (with notice, lapse of time or both) would constitute a material breach or default under the Real Property Leases by Seller or PEPL or, to the
Knowledge of Seller, by any other party thereto. None of Seller, PEPL and each of their Affiliates has received any written notice of cancellation or termination of, or any written expression or indication of an intention or desire to cancel or
terminate, any of the Real Property Leases, nor will the sale, assignment or transfer of the PEPL Quotas constitute a cause for such termination. 
 (d) There are no leases, subleases, licenses, occupancy agreements, options, rights, concessions or other agreements or arrangements, written or oral, granting to any other Person the right to purchase, use or occupy
any of the Seller Properties. 
  

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 (e) There are no pending or, to the Knowledge of Seller, threatened condemnation
proceedings or other Actions relating to any Seller Property. All Seller Properties have received all required approvals of Governmental Authorities (including without limitation permits and a certificate of occupancy or other similar certificate
permitting lawful occupancy of the Seller Properties) required in connection with the operation thereof and have been operated and maintained in all material respects in accordance with applicable Legal Requirements. Seller has not received notice
of any special assessment relating to any Seller Property and there is no pending or, to the Knowledge of Seller, threatened special assessment. 
 3.11. Intellectual Property. 
 (a) Seller or PEPL owns or has obtained license rights to the Intellectual
Property and Technology necessary for or used in the operation of the Business as presently conducted, and the title or license rights to such Intellectual Property and Technology will be transferred to Buyer at Closing free and clear of all Liens
other than Permitted Liens. 
 (b) Neither Seller nor PEPL has infringed or misappropriated any Intellectual Property or
Technology of third parties in connection with the conduct of the Business, and there is no pending or, to the Knowledge of Seller, threatened Action with respect thereto. To the Knowledge of Seller, no third party has infringed or misappropriated
any Intellectual Property or Technology of Seller or PEPL relating to the conduct of the Business, and there is no pending or threatened Action by Seller with respect thereto. 
 (c) Section 3.11(c) of the Disclosure Schedule identifies each patent, registered Trademark, registered copyright and Internet domain
name that has been issued to Seller, PEPL or Stanadyne with respect to the Acquired Intellectual Property, each pending patent, Trademark or copyright application that has been made with respect to the Acquired Intellectual Property, a list of all
jurisdictions in which such Acquired Intellectual Property is registered or applied for and all registration and application numbers, and each Contractual Obligation that Seller or PEPL has entered into with any third party (whether as licensee or
licensor) with respect to any of the Acquired Intellectual Property (together with any exceptions). Seller has made available to Buyer correct and complete copies of all such patents, Trademarks, copyrights, applications, and Contractual Obligations
(as amended to date). Section 3.11(c) of the Disclosure Schedule also identifies each trade name or unregistered Trademark included in the Acquired Intellectual Property. With respect to each item of Acquired Intellectual Property: 

(i) Seller or PEPL is the sole owner of and possesses all right, title and interest in and to, or has a transferable license to the
item, free and clear of any Lien, other than Permitted Liens; 
 (ii) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; 
  

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 (iii) with respect to patents, registered Trademarks and registered copyrights, the item
has been duly registered and maintained, is subsisting and has not expired or been cancelled or abandoned; 
 (iv) no Action
is pending or, to the Knowledge of Seller, is threatened, which challenges the legality, validity, enforceability, use, or ownership of the item; and 
 (v) to the Knowledge of Seller, no other Person has the right to use the item, except pursuant to a Contractual Obligation identified on §3.11(c) of the Disclosure Schedule. 
 (d) Except as expressly set forth in this §3.11(c), neither Seller nor PEPL makes any representation or warranty with respect to the
validity, enforceability, prosecution or maintenance of any item of Intellectual Property. 
 3.12. Environmental Matters. 

(a) Except as disclosed in Section 3.12 of the Disclosure Schedule or except as would not be material, (i) Seller, PEPL and
their subsidiaries are and at all times have been in compliance with, and have no liability under, any and all applicable Environmental Laws, and (ii) Seller, PEPL and their subsidiaries are in compliance with all of their Environmental
Permits, and (iii) and all instances of past noncompliance have been cured, settled, and resolved in all material respects. 
 (b) Except as disclosed in Section 3.12 of the Disclosure Schedule or except as would not be material, all Environmental Permits have been obtained as of the date hereof by or on behalf of Seller, PEPL and their subsidiaries, as
applicable, for the lawful operation of Acquired Assets and Seller Properties, and remain in full force and effect, and there are no pending judicial or regulatory proceedings by any Governmental Authority that could reasonably be expected to result
in the termination, revocation, or adverse modification of any such Environmental Permit. A list of all Environmental Permits required for the lawful operation of the Acquired Assets, Seller Properties, PEPL and the Business is set forth on
Section 3.12 of the Disclosure Schedule. 
 (c) Except as disclosed in Section 3.12 of the Disclosure Schedule or
settled or resolved, none of Seller, PEPL and each of their subsidiaries has received any written request for information, or been notified in writing that it is a potentially responsible party, under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“CERCLA”), or any similar state, local or foreign law with respect to any of the Acquired Assets, Seller Properties or any other location used in connection with the Business.

 (d) Except as disclosed in Section 3.12 of the Disclosure Schedule or settled or resolved in all material respects,
none of Seller, PEPL and each of their subsidiaries has received any notice of any violation or alleged violation of any Environmental Law. 
  

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 (e) Except as disclosed in Section 3.12 of the Disclosure Schedule, (i) in
connection with the Acquired Assets, Seller Properties or the Business, there are no outstanding writs, injunctions, decrees, orders or judgments pursuant to or arising under any Environmental Laws to which Seller, PEPL or any of their subsidiaries
is a party, and (ii) there are no Environmental Claims to which Seller, PEPL or any of their Subsidiaries is a party that are pending or, to the Knowledge of Seller, threatened, relating to the compliance of Seller, PEPL or any of their
Subsidiaries with, or the liability of Seller, PEPL or any of their subsidiaries under, any Environmental Laws in respect of the Acquired Assets, Seller Properties or the Business. 
 (f) Except as disclosed in Section 3.12 of the Disclosure Schedule, none of Acquired Assets, Seller Properties nor any property or
location to which Substances may have been disposed of by the Seller or PEPL (or their subsidiaries) in connection with operation of the Acquired Assets and Business, is listed or, to the Knowledge of Seller, proposed for listing on the
“National Priorities List” under CERCLA, or on the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the United States Environmental Protection Agency, as updated through the Closing Date, or
any similar state or foreign list of sites requiring investigation or cleanup. 
 (g) Except as disclosed in Section 3.12
of the Disclosure Schedule or in any of the environmental reports or documents listed in Section 3.12 of the Disclosure Schedule, there is no Substance that poses or could reasonably be expected to pose any material risk to safety, health or
the Environment on, at or under any of the Acquired Assets or Seller Properties, and there has heretofore been no Release of any such Substance on, at or under such Acquired Assets or Seller Properties, in either case in an amount and of a nature
which could reasonably be expected to result in material liability to the Seller, PEPL or any of their subsidiaries. 
 (h)
Except as disclosed in Section 3.12 of the Disclosure Schedule, none of Seller, PEPL and each of their subsidiaries is a party to any contract in respect of the Business, Acquired Assets or Seller Properties pursuant to which it is obligated to
indemnify any other person with respect to, or be responsible for any liability pursuant to, or violation of, any Environmental Law. 
 (i) Seller and PEPL have made available to, or provided the Buyer with, true and correct copies of all Phase I and Phase II reports and any other material environmental studies in the possession of Seller, PEPL and any of their subsidiaries
relating to any Acquired Asset or Seller Properties, or any Handling of Substances. 
 3.13. Contracts. Section 3.13 of the
Disclosure Schedule lists all of the following Contractual Obligations of PEP Group that relate primarily to the conduct of the Business or the Acquired Assets (each a “Material Contract” and collectively, the “Material
Contracts”): (i) any Contractual Obligation which involves annual consideration in excess of $100,000; (ii) any employee, consulting, or severance agreement; (iii) any credit agreement, loan agreement, indenture, note,
mortgage, security agreement, loan commitment, evidence of Debt, or other contract relating to the borrowing of funds; (iv) any Contractual Obligation required to be listed 
  

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 in §3.11(c) of the Disclosure Schedule; (v) any agreement with any customer or supplier listed in §3.19 of
the Disclosure Schedule; (vi) any agreement with any Governmental Authority; (vii) any collective bargaining agreement; (viii) any agreement relating to the acquisition or disposition of any business (including without limitation, any
transitional services agreement); (ix) any agreement that restricts or prohibits Seller or PEPL from engaging in any line of business or from competing with any person or entity; (x) any agreement containing “change in control”
or similar provisions relating to a change in control of Seller or PEPL; (xi) any agreement pursuant to which Seller or PEPL is obligated to indemnify any person or entity; (xii) any contract that will result in the payment by, or the
creation or acceleration of any Liability to pay on behalf of Buyer, Seller or PEPL any severance, termination, “golden parachute,” or other similar payments to any present or former personnel following termination of employment or
otherwise as a result of the consummation of the transactions contemplated by this Agreement; (xiii) any labor or union contract, or agreement to comply with the terms set by any national union; (xiv) any other Contractual Obligation
material to Seller, PEPL, the Business, or the Acquired Assets; and (xv) any other Contractual Obligation not entered into in the Ordinary Course of Business. Seller has made available to Buyer a correct and complete copy of each Material
Contract, including all amendments and supplements thereto. Each of the Material Contracts listed is in full force and effect and Enforceable. None of Seller, PEPL and each of their Affiliates has received any written notice of cancellation or
termination of, or any expression or indication of an intention or desire to cancel or terminate, any of the Material Contracts. There exists no event of default, condition or act on the part of Seller or to the Knowledge of Seller, on the part of
the other parties to any Material Contract, which constitutes or would constitute (with notice or lapse of time or both) a material breach of or material default under any of the Material Contracts. 
 3.14. Litigation. Except as set forth in §3.14 of the Disclosure Schedule, there are no Actions pending or, to the Knowledge of Seller,
threatened, against Seller, PEPL or any of their Affiliates that relate to or would affect the Business or any of the Acquired Assets, or that question the validity of this Agreement or of any action taken or to be taken pursuant to or in connection
with the provisions of this Agreement. There are no judgments, orders, decrees, citations, fines or penalties under any Legal Requirement to which Seller, PEPL or any of their Affiliates are subject affecting the Business, the Acquired Assets, the
PEPL Quotas or the Assumed Liabilities. 
 3.15. Employee Benefit Plans. Section 3.15 of the Disclosure Schedule contains a true
and complete list of each material Employee Plan. For purposes of this Agreement, “Employee Plan” shall mean each employee benefit plan (including each employee benefit plan within the meaning of Section 3(3) of ERISA) and each other
deferred compensation and each bonus or other incentive compensation, severance or termination pay, stock purchase, stock option and other equity compensation plan, program, agreement or arrangement in which employees of the Business participate
that is sponsored, maintained or contributed to or required to be contributed to by Seller or an Affiliate for employees of the Business or with respect to which PEPL may have any Liability or obligation (the “Employee Plans”). The
Seller will use commercially reasonable efforts to make available a copy of each Employee Plan to Buyer. Except as otherwise provided in §3.15 of the Disclosure Schedule: 
 (a) each Employee Plan has been operated and administered in all material respects in accordance with its terms and applicable Legal
Requirements, including but not limited to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and the Code; 
  

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 (b) each Employee Plan that is intended to be “qualified” within the meaning of
Section 401(a) of the Code has received a favorable determination letter from the IRS as to the qualified status of the Plan and, to the Knowledge of Seller, nothing has occurred that would reasonably be expected to cause the revocation of such
letter; 
 (c) none of the Employee Plans is subject to Title IV of ERISA or is a “multiemployer plan” within the
meaning of Section 3(37) of ERISA; 
 (d) none of the Employee Plans provides for medical or death benefits beyond
termination of service or retirement, other than pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), or any similar state or local law with respect to which Buyer has or will have any
liability; 
 (e) no amount that could be received (whether in cash or property or the vesting of property) as a result of any
transaction contemplated hereby by any employee, officer or director of Seller or an Affiliate of Seller who is a “disqualified individual” (as such term is defined in proposed Treasury Regulation Section 1.280G-1) under any
employment, severance or termination agreement, other compensation arrangement or Employee Plan could be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code); 
 (f) neither the Seller nor any trade or business (whether or not incorporated) that is treated as a single employer with the Seller under
Section 414(b) or Section 414(c) of the Code has incurred or is reasonably expected to incur any liability under Title IV or Section 302 of ERISA for which Buyer could reasonably be expected to be liable; 
 (g) neither the execution and delivery of this Agreement or any of the Ancillary Agreements by any Seller or Stanadyne, nor the
consummation of the transactions contemplated hereby or thereby (either alone or contingent upon the occurrence of any additional or subsequent events) will result in forgiveness of indebtedness or the acceleration or creation of any rights of any
person to compensation or benefits under any Employee Plan (including the acceleration of the accrual or vesting of any benefits under any Employee Plan or the acceleration or creation of any rights under any severance, parachute or change in
control agreement or the right to receive any transaction bonus or other similar payment); and 
 (h) all Employee Plans
intended to cover employees located in a jurisdiction other than the United States (“Foreign Plans”) are, and have been, established and maintained in all material respects in accordance with the terms of such Foreign Plans
(excluding any arrangement mandated by statute and which is not established or maintained by Company) including the terms of the material documents that support 
  

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 such Foreign Plans, any applicable collective agreement and all applicable laws. To the Knowledge of
Seller, no event has occurred respecting any Foreign Plan which would result in the revocation of the registration of such Foreign Plan or entitle any person (without consent of Seller) to wind up or terminate any Foreign Plan, in whole or in part,
or which could otherwise reasonably be expected to adversely affect the tax status of any such Foreign Plan. None of the Foreign Plans provides for benefit increases or the acceleration of, or an increase in, funding obligations that are contingent
upon, or will be triggered by the completion of the transactions contemplated herein. With respect to each Foreign Plan, the fair market value of the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded
through insurance or the book reserve established for any Foreign Plan, together with any accrued contributions, is sufficient, in all material respects, to procure or provide for the accrued benefit obligations, as of the date of this Agreement,
with respect to all current and former participants in such plan, and no transaction contemplated by this Agreement shall cause such assets, reserve or insurance obligations to be less than such benefit obligations. None of the Foreign Plans
provides benefits beyond retirement or other termination of service to employees or former employees or to the beneficiaries or dependents of such employees. There is no proceeding, action, suit or claim (other than claims for payments of benefits
in the ordinary course) pending or threatened involving any Foreign Plan or its assets that is reasonably expected to result in any material liability. 
 3.16. Labor Matters. 
 (a) Except as set forth in § 3.16 of the Disclosure
Schedule, neither Seller nor PEPL is a party or subject to any labor agreement with respect to its employees with any labor organization, union, group or association and there are no employee unions (nor any other similar labor or employee
organizations) under local statues, custom or practice. In the past five years, neither Seller nor PEPL has experienced any attempt by organized labor or its representatives to make Seller or PEPL conform to demands of organized labor relating to
its employees or to enter into a binding agreement with organized labor that would cover the employees of Seller or PEPL. There is no labor strike or labor disturbance pending or, to the knowledge of Seller, threatened against Seller or PEPL nor is
any grievance currently being asserted, and in the past five years neither Seller nor PEPL has experienced a work stoppage or other labor difficulty, and is not and has not engaged in any unfair labor practice or been subject to any unfair labor
practice complaint or related or successor employer application and no such complaints or applications are, to Seller’s knowledge, threatened. Each of Seller and PEPL is in compliance with all applicable foreign, federal, state and local laws,
rules and regulations respecting employment, employment practices, terms and conditions of employment, worker classification and wages and hours, in each case, with respect to its current and former employees, directors, officers, consultants and
independent contractors, except where the failure to be so in compliance would not reasonably be expected to have a Material Adverse Effect. Except as set forth in Section 3.16 of the Disclosure Schedule, neither Seller nor PEPL has incurred
any liability for the misclassification of employees as consultants or independent contractors or, since January 1, 2005, any material liability arising from non-compliance with Brazilian labor health and safety regulations. 
  

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 (b) Except as set forth in §3.16(b) of the Disclosure Schedule, during the last five
years there has been no “mass layoff” or “plant closing” as defined by WARN in respect of Seller. Neither Seller nor PEPL been affected by any transactions or engaged in layoffs or employment terminations sufficient in number to
trigger application of any state, local or foreign Legal Requirements or regulation which is similar to WARN. 
 3.17. Product
Warranties. To the Knowledge of Seller, each product manufactured, sold, leased, or delivered by Seller or PEPL in the conduct of the Business has been in conformity in all material respects with all applicable Legal Requirements and Contractual
Obligations and all express and implied warranties. No product manufactured, sold, leased, or delivered by Seller in the conduct of the Business is subject to any guaranty, warranty, or other indemnity beyond the applicable standard terms and
conditions of sale or lease. 
 3.18. Affiliated Transactions. Except as set forth in §3.18 of the Disclosure Schedule, no
Affiliate of Seller or any of Seller’s or any of its Affiliates’ respective officers, directors, stockholders, members, partners or Affiliates has been a party in any business arrangement or relationship with Seller or PEPL during the past
two (2) years or which was not on arm’s-length terms. 
 3.19. Customers, Suppliers. Section 3.19 of the Disclosure
Schedule sets forth a complete and accurate list of (i) the ten (10) largest customers (by dollar volume) of the Business during the most recent fiscal year, indicating any existing Contractual Obligation with each such customer and
(ii) the ten (10) largest suppliers of materials or services to the Business, indicating any Contractual Obligation for continued supply from such Person. To the Knowledge of Seller, since December 31, 2005, there has been no
(i) reduction, or indication of an intention to reduce, the level of orders placed by any customer listed in Section 3.19 of the Disclosure Schedule with the Business that is reasonably likely to result in a 15% or greater reduction in
sales to such customer over the twelve-month period following Closing compared to sales during the twelve-month period just prior to Closing, (ii) increase in, or indication of an intention to increase, the prices charged by any supplier listed
in Section 3.19 of the Disclosure Schedule for the provision of materials or services to the Business by 15% or more, or (iii) indication that any customer or supplier listed in Section 3.19 of the Disclosure Schedule wishes or
intends to cease doing business with the Business. As of the date of this Agreement, to the Knowledge of the Seller there is no reason to believe that there will be any change in the relationships of the Business with the customers and suppliers
listed on §3.19 of the Disclosure Schedule as a result of the transactions contemplated by this Agreement. 
 3.20. Absence of
Certain Changes. Since the date of the Most Recent Fiscal Year End Balance Sheet, and except as set forth in §3.20 of the Disclosure Schedule, the Business has been conducted in the Ordinary Course of Business. Without limiting the
generality of the foregoing, except as set forth in §3.20 of the Disclosure Schedule, since the date of the Most Recent Fiscal Year End Balance Sheet, there has not been: 
 (a) any Material Adverse Effect; 
  

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 (b) any damage, destruction or loss to any of the assets of Seller used primarily in the
conduct of the Business that, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect; 
 (c) any sale, assignment, transfer, lease or other disposition or agreement to sell, assign, transfer, lease or otherwise dispose of any of the assets of Seller used primarily in the conduct of the Business, other than in the Ordinary
Course of Business consistent with past practices; 
 (d) a cancellation, termination or material amendment of any Material
Contract, Real Property Lease, or Seller Permit; 
 (e) any material change in any method of accounting or accounting practice
used by Seller or PEPL with respect to the Business; 
 (f) (A) any employment, deferred compensation, severance or
similar agreement entered into or amended, other than in the Ordinary Course of Business, (B) other than individual (as opposed to across-the-board) increases in the Ordinary Course of Business for employees other than senior management of the
Business, any increase in the compensation payable or to become payable by Seller or PEPL to any employee, officer, director, or consultant, (C) other than individual (as opposed to across-the-board) increases in the Ordinary Course of Business
for employees other than senior management of the Business, any increase in the coverage or benefits available under any vacation pay, company awards, salary continuation or disability, sick leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other Plan, payment or arrangement made to, for or with any employee, officer, director, or consultant, (D) severance pay arrangements made to, for or with any employee, (E) any modification of any
Employee Plan, arrangement, or practice described in the Disclosure Schedule, or (F) any change in employee relations which has, or is reasonably likely to have, a Material Adverse Effect; 
 (g) any capital expenditure by the Business, other than capital expenditures involving payments that do not, individually or in the
aggregate, exceed $25,000; 
 (h) a revaluation of any of the Acquired Assets, including without limitation, writing off notes
or accounts receivable or revaluing Inventory, other than in the Ordinary Course of Business; 
 (i) any material Tax election
or any agreement in respect of Taxes relating to the Business or PEPL, including the settlement of any material Tax controversy, adoption or change of any material accounting method in respect of Taxes, consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of Taxes; or 
 (j) any agreement to take any actions
specified in this §3.20 except for this Agreement and the agreements contemplated hereby. 
  

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 3.21. Insurance. Section 3.21 of the Disclosure Schedule lists all insurance policies
covering the Business and the Acquired Assets (including policies providing property, casualty, liability and workers’ compensation coverage). All of such policies are of the type and in the amounts customarily carried by Persons conducting
businesses similar to the Business. All premiums due and payable in respect of such policies have been paid in full, and no default or other circumstance exists that would create the substantial likelihood of the cancellation or non-renewal of any
such policy prior to the Closing Date. 
 3.22. Receivables. All accounts, notes and other receivables and amounts owing to the
Business (i) represent arm’s-length sales in the Ordinary Course of Business, (ii) constitute valid claims of the Business, free and clear of all Liens other than Permitted Liens, and (iii) are not and will not be subject to any
valid claims, set-off or other defense or counterclaims, other than returns in the Ordinary Course of Business. 
 3.23. Inventory.
All Inventory (whether or not allocated to contracts in process), including Inventory shown on the Interim Balance Sheet or acquired thereafter, was acquired or manufactured in the Ordinary Course of Business, and is generally of a quality and
quantity usable and saleable consistent in all material respects with past practice in the Ordinary Course of Business. 
 3.24.
Disclaimer of other Representations and Warranties. Except as expressly set forth in this §3 and the following §4, Seller and Stanadyne make no representation or warranty, express or implied, at law or in equity, in respect of any
of their or PEPL’s assets (including, without limitation, the Acquired Assets and the PEPL Quotas), liabilities or operations (including, without limitation, the Business), including, without limitation, with respect to merchantability or
fitness for any particular purpose, and any such other representations or warranties are hereby expressly disclaimed. 
 4. Representations and Warranties
of Stanadyne. Stanadyne represents and warrants to Buyer that, except as set forth in the Disclosure Schedule: 
 4.1.
Organization. Stanadyne is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. Stanadyne has full corporate power and authority to carry on its business as it is now being conducted
and to own and lease the properties and assets it now owns or leases. 
 4.2. Authorization of Transaction. Stanadyne has the power
and authority (including full corporate power and authority) to execute and deliver this Agreement and the other agreements contemplated hereby and to carry out the transactions contemplated hereby. Stanadyne and its officers and directors have
taken all actions necessary to duly and validly authorize the execution and delivery of this Agreement and the Ancillary Agreements, the consummation of the transactions contemplated hereby and thereby, and the performance of its obligations
hereunder and thereunder. This Agreement and the Ancillary Agreements to which Stanadyne is a party have been duly executed and delivered by Stanadyne and, assuming due execution and delivery by Buyer, are Enforceable against Stanadyne. 

 

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 4.3. Noncontravention. Except as set forth in §4.3 of the Disclosure Schedule, neither the
execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in §2 above), will (i) violate any material Legal Requirement to which
Stanadyne or any of its property is subject, (ii) violate any provision of the organizational documents of Stanadyne or (iii) violate, or be in conflict with, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in or give to others any rights of termination of, or accelerate the performance required by, or cause the acceleration of the maturity of any Debt or obligation pursuant to, any Contractual
Obligations of Stanadyne, or (iv) result in the creation of a Lien on the PEPL Quotas or any of the Acquired Assets, except, in the case of clauses (i), (iii) and (iv), as has not had and would not reasonably be expected to have a Material
Adverse Effect. 
 4.4. Brokers’ Fees. No broker, finder, or agent has acted directly or indirectly for Stanadyne with respect to
the transactions contemplated by this Agreement. 
 4.5. Ownership of PEPL Quotas. Stanadyne is the lawful record holder and
beneficial owner of one (1) PEPL Quota, as reflected in the PEPL Articles of Organization (the “Stanadyne Quota”), free and clear of any Liens other than restrictions on transfer pursuant to applicable Brazilian laws. The
Seller Quotas and the Stanadyne Quota constitute all of the issued and outstanding equity interests of PEPL. The PEPL Quotas have been duly authorized, validly issued and are fully paid up, and were not issued in violation of any preemptive rights.
There are no commitments or obligations of any kind or character for (A) the issuance of PEPL Quotas or any other equity interests of PEPL or (B) the repurchase, redemption or other acquisition of PEPL Quotas. There are no voting trusts,
stockholder agreements, proxies or other agreements in effect with respect to the voting or transfer of the PEPL Quotas. PEPL does not of record or beneficially own any equity interests in any Person. 
 5. Representations and Warranties of Buyer. Buyer represents and warrants to Seller that: 
 5.1. Organization of Buyer. Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware.

 5.2. Authority for Agreement. Buyer has the power and authority (including full corporate power and authority) to execute and
deliver this Agreement and has taken all actions necessary to duly and validly authorize the consummation of the transactions contemplated herein and the performance of its obligations hereunder. This Agreement and the Ancillary Agreements to which
Buyer is a party have been duly executed and delivered by Buyer and, assuming due execution and delivery by Seller and Stanadyne, are Enforceable against Buyer. 
 5.3. Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in §2
above), will violate (i) any Legal Requirement to which Buyer is subject or (ii) any provision of its certificate of incorporation or by-laws, except, in the case of clause (i), as would not have a material adverse effect on the ability of
Buyer to consummate the transactions contemplated hereby. 
  

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 5.4. Financing. Buyer shall have available to it on the Closing Date adequate cash on hand to pay
the Purchase Price. 
 5.5. Broker’s Fees. No broker, finder, or agent has acted directly or indirectly for Buyer with respect to
the transactions contemplated by this Agreement. 
 6. Covenants. Buyer, Seller, and Stanadyne agree as follows: 
 6.1. General. Each of Buyer, Seller and Stanadyne shall use its commercially reasonable efforts to take all actions and to do all things necessary,
proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including (i) satisfaction, but not waiver, of the closing conditions set forth in §7 below, (ii) obtaining of all
necessary actions or non-actions, waivers, consents and approvals from applicable Governmental Authorities and the making of all other necessary registrations and filings (including any filings required to be made and approvals required to be
obtained pursuant to Brazilian antitrust Legal Requirements with respect to the transactions contemplated hereby), and (iii) transferring or reissuing to Buyer or Buyer’s designee all of the Environmental Permits listed on Schedule
3.12. 
 6.2. Notices and Consents. Prior to the Closing, each of Buyer and Seller shall give any notices to third parties
required by it, and shall use its commercially reasonable efforts to obtain any third party consents required to be obtained by it, and shall execute and deliver any additional instruments that are necessary or desirable to transfer the Acquired
Assets and the PEPL Quotas to Buyer. Seller and Stanadyne shall prepare and timely make any filings required to be made pursuant to Brazilian antitrust Legal Requirements with respect to the transactions contemplated hereby, and Buyer shall have the
opportunity to review and approve such filings prior to their submission to Brazilian regulatory authorities. 
 6.3. Operation of
Business. Prior to the Closing, Stanadyne and Seller shall not, and Seller shall cause PEPL not to, engage in any practice, take any action, or enter into any transaction with respect to the conduct of the Business outside the Ordinary Course of
Business. In addition, from the date of this Agreement to the Closing Date, without the prior written consent of Buyer, which consent shall not be unreasonably withheld, neither Seller nor Stanadyne shall, and Seller shall cause PEPL not to, as
relates to the Business, the PEPL Quotas or the Acquired Assets: 
 (a) sell, pledge, lease, dispose of or grant any Lien on,
other than Permitted Liens (collectively, “Transfer”), or otherwise authorize the Transfer of any of the Acquired Assets except for (i) Transfers of Inventory and (ii) Transfers of Acquired Assets having a value of less
than $500 individually, in each case in the Ordinary Course of Business; 
 (b) sell, pledge or otherwise Transfer any of the
PEPL Quotas; 
 (c) except as required to transfer the PEPL Quotas in connection with this Agreement, change or authorize any
change in the Organizational Documents, as they relate to the Business; 
 (d) adopt a plan of complete or partial liquidation
or undertake a dissolution; 
  

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 (e) incur any Liabilities that are Assumed Liabilities, except in the Ordinary Course of
Business; 
 (f) modify or amend in any material respect or terminate any of the Material Contracts, Real Property Leases,
Seller Permits or other instruments material to the Business, or waive, release or assign any rights or claims of substantial value, except as required by applicable Legal Requirements; 
 (g) enter into any Contractual Obligation that, if it had been entered into as of the date hereof, would constitute a Material Contract;

 (h) award or increase any bonuses, salaries, or other compensation to any Transferred Employee or employee of PEPL, other
than increases in the Ordinary Course of Business for employees other than senior management of the Business, enter into or take any action with respect to any existing employment, severance, or similar Contractual Obligation with any Transferred
Employee, or enter into any agreement, contract, arrangement or understanding with any U.S. or foreign labor union representing employees of the Business except as required by Legal Requirements or pursuant to the terms of any existing contract or
collective bargaining agreement set forth in §3.16 of the Disclosure Schedule; 
 (i) transfer any Employee Plan
(including any related Liabilities) that is not an Acquired Employee Plan to PEPL; 
 (j) make any change in the key
management structure of Seller or PEPL, including without limitation the hiring of additional officers or the termination of existing officers; 
 (k) adopt, enter into or amend any Employee Plan, agreement, trust, fund or other arrangement for the benefit or welfare of any employee of PEPL or Transferred Employee, except for any such amendment as may be
required to comply with applicable Legal Requirements and those amendments with respect to group plans covering Transferred Employees that are across-the-board changes; 
 (l) fail to use its commercially reasonable efforts to (i) retain Seller’s or PEPL’s employees, (ii) maintain the
Business so that such employees will remain available to Buyer on and after the Closing Date; or 
 (m) establish or increase
the benefits payable or to be provided under any Employee Plan or establish any new bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing or other employee benefit plan for Transferred Employees; 
 (n) revalue any of the Acquired Assets, including, without limitation, writing off receivables or reserves or revaluing Inventory, other
than as required by GAAP, applied consistently with past practice, or applicable Legal Requirements; 
  

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 (o) change any method of accounting or accounting practice with respect to the Business,
other than such changes required by a change in Legal Requirements or GAAP; 
 (p) acquire capital stock of or other ownership
interests in, or merge or consolidate with, or purchase substantially all of the assets of, or otherwise acquire any material assets or business of, any Person or any other business organization or division thereof; 
 (q) make any capital expenditure or incur any Liability therefor, except as set forth on Schedule 6.3(q); 
 (r) fail to maintain the Acquired Assets in substantially their current state of repair, excepting normal wear and tear, or fail to
replace, consistent with past practice, inoperable, worn-out, obsolete or destroyed Acquired Assets; 
 (s) settle any Actions
in a manner that would affect the Acquired Assets or for which any Liability would be reflected on the Final Closing Balance Sheet; 
 (t) make any loans or advances to any Person that would be reflected on the Final Closing Balance Sheet or included in the Acquired Assets; 
 (u) collect accounts receivable and pay accounts payable other than in the Ordinary Course of Business; 
 (v) change any material election in respect of Taxes (other than elections reflected on the 2005 Brazilian income tax return), settle or compromise any Tax claim, or consent to any extension or waiver of the
limitation period applicable to any Tax claim; 
 (w) file an IRS Form 8832 to change PEPL’s classification for U.S.
income tax purposes; 
 (x) (i) make, pay or declare any dividend or distribution with respect to the PEPL Quotas;
(ii) redeem or repurchase any of the PEPL Quotas; or (iii) issue or grant any PEPL Quotas or rights (including options) to acquire any PEPL Quotas; 
 (y) do any other act that would cause any condition set forth in §7.1 not to be satisfied; or 
 (z) enter into a Contractual Obligation to do any of the foregoing, or authorize or announce an intention to do any of the foregoing.

 6.4. Taxes. 
 (a) Buyer and Seller agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information (including access to books and records and individuals) and assistance relating to the Business as is
reasonably 
  

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 requested for the filing of any Tax Return and any other filings in connection with the transactions
contemplated by this Agreement or otherwise and for the preparation of any audit and for the prosecution or defense of any Tax claim. Buyer and Seller agree that each shall preserve and keep all books and records with respect to Taxes and Tax
Returns in such party’s possession as of the Closing Date, or as later come into such party’s possession, until the expiration of the applicable statute of limitations. Any information obtained under this Section 6.4(a) shall be kept
confidential except (i) as may be otherwise necessary in connection with the filing of Tax Returns or claims for refund or in conducting an audit or other proceeding or (ii) with the consent of Buyer or Seller, as the case may be.

 (b) Seller shall reasonably determine in good faith and advise Buyer in writing as soon as practicable and in any event
within 60 days after the Closing Date whether an election under Section 338 of the Code with respect to the acquisition of PEPL (the “338 Election”) can be made without any adverse effect on Seller. If Seller determines that
there is no adverse effect, Buyer may make a 338 Election without the Seller’s prior written consent. If Seller determines that there is an adverse effect, Buyer shall not make a 338 Election without the Seller’s prior written consent.
Seller shall provide Buyer with (i) a reasonably detailed calculation of the Tax liability that Seller would incur as a result of Buyer making a 338 Election and (ii) a reasonably detailed calculation of the amount Seller would need to be
paid so that on an after-Tax basis, there is no incremental Tax owed by Seller as a result of Buyer making a 338 Election. Buyer and Seller shall negotiate in good faith to determine the amount, if any, that Seller would need to be paid so that on
an after-Tax basis there is no incremental Tax owed by Seller as a result of Buyer making a 338 Election and if Buyer agrees to pay such amount to Seller, then Seller will consent to Buyer making such election. 
 (c) PEPL and Other Returns. Seller shall prepare or cause to be prepared all Tax Returns for PEPL that are required to be filed on
or before the Closing Date. Except to the extent otherwise required by law and except with respect to the 2005 Brazilian income tax return, such Tax Returns shall be prepared on a basis consistent with the past practices of such entities. Buyer
shall prepare all Tax Returns of PEPL and all Tax Returns relating to the Business that are required to be filed after the Closing Date. Buyer shall provide Seller with drafts of all income Tax Returns of PEPL for all Pre-Closing Tax Periods
(including Tax Returns that cover Straddle Periods) prepared by Buyer no later than thirty (30) days prior to the earlier of the due date or filing date thereof. Seller shall have the right to review and provide comments on Returns during the
fifteen (15)-day period following the receipt of such Returns and Buyer shall accept all reasonable comments to the extent such comments affect Taxes of PEPL in a Pre-Closing Tax Period. No later than five (5) Business Days prior to the due
date for the payment of any Taxes with respect to any such Tax Return (giving effect to extensions) or five (5) Business Days following written request from the Buyer, whichever is later, the Seller shall pay the Buyer an amount equal to the
portion of Taxes attributable to the Pre-Closing Tax Period, as determined pursuant to the principles set forth in Section 6.4(d), except to the extent such Taxes are accrued on the Final Closing Balance Sheet and taken into account in
determining Closing Date Net Working Capital. 
  

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 (d) For purposes of this Agreement, in the case of any Taxes that are payable for a
taxable period that begins on or before, and ends after the Closing Date (a “Straddle Period”), the portion of such Taxes that is attributable to the Pre-Closing Tax Period shall (i) in the case of any property or ad valorem Taxes, be
deemed to be the amount of such Tax for the entire Tax period multiplied by a fraction the numerator of which is the number of days in the Tax period ending on the Closing Date and the denominator of which is the number of days in the entire Tax
period, and (ii) in the case of all other Taxes, be deemed equal to the amount which would be payable as computed on a “closing-of-the-books” basis if the relevant Tax period ended on the Closing Date. The portion of such Taxes that
is attributable to the Post-Closing Tax Period shall be equal to the total amount of Tax for such Straddle Period less the amount of Tax that is allocable to the Pre-Closing Tax Period. 
 (e) Tax Contests. Buyer shall promptly notify the Seller in writing upon receipt by PEPL of a written notice of any pending or
threatened Tax audits or assessments for which Seller may have liability pursuant to this Agreement; provided, however, that no delay on the part of the Buyer in notifying the Seller shall relieve the Buyer from any obligation
hereunder unless (and then solely to the extent) Seller is thereby prejudiced. Seller shall have right to control the conduct of any audit or assessment of Tax of PEPL for a period that ends on or prior to the Closing Date and for any audit or
assessment of withholding Tax on the transfer of the PEPL Quotas (each such claim, a “Seller’s Tax Contest Claim”) so long as (i) Seller notifies the Buyer in writing within 30 days after the Buyer notifies the Seller of
such Tax Contest Claim that the Seller shall indemnify the Buyer in connection with such Seller’s Tax Contest Claim, (ii) Seller conducts the defense of the Seller’s Tax Contest Claim actively and diligently, (iii) Seller pays
the fees and disbursements incurred in connection with the Seller’s Tax Contest Claim and (iv) Seller keeps the Buyer informed regarding the progress and substantive aspects of the Seller’s Tax Contest Claim. Seller shall not
compromise or settle any Seller’s Tax Contest Claim, without obtaining the Buyer’s consent, which consent shall not be unreasonably withheld or delayed. Buyer shall have the right to control the conduct of any audit or assessment of Tax of
PEPL for any Straddle Period, provided if Seller could have any liability pursuant to this Agreement for Taxes owed with respect to a Straddle Period Tax claim (such claim, a “Straddle Period Tax Contest Claim”), Buyer and
Seller shall jointly engage Deloitte & Touche or such other internationally recognized accounting firm as Buyer and Seller mutually agree to conduct the defense of such Straddle Period Tax Contest Claim taking into account the interests of
Buyer and Seller. Neither Buyer nor Seller shall settle any Straddle Period Tax Contest Claim without obtaining written consent of the other party hereto, provided that such consent shall not be unreasonably withheld, conditioned, or delayed. Except
as otherwise provided herein, Buyer shall control all other audit, examinations or administrative proceedings in respect of Taxes of PEPL. To the extent of any conflict between this § 6.4(e) and § 9.4, this § 6.4(e) shall control.

  

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 (f) Seller’s Post-Closing Obligation for Taxes. Seller shall promptly pay
after the Closing when due all Taxes for Pre-Closing Tax Periods that have given rise to, or could give rise to, a Lien on the Acquired Assets in the hands of the Buyer, except for (i) any non-Income Taxes of the Seller for Pre-Closing Tax
Periods that are Assumed Liabilities and (ii) any Transfer Taxes to be paid by Buyer pursuant to § 11.12. For purposes of this obligation, the Taxes for any Pre-Closing Tax Period shall be determined under § 6.4(d) hereof. 

(g) Refunds. Any tax refunds of PEPL that are received by PEPL, and any amounts credited against Taxes that would otherwise be
payable by PEPL in a Post-Closing Tax Period, with respect to Taxes paid by PEPL in a Pre-Closing Tax Period (net of reasonable out-of-pocket expenses incurred to obtain such Tax refunds or credit and net of any Taxes imposed on PEPL as a result of
the receipt of such Tax refund or credits) shall be for the account of Seller and Buyer shall pay over to Seller any such refund or the amount of any such credit within 15 days after receipt or entitle thereto. In addition, to the extent that a
claim for Tax refund or a Tax proceeding results in a payment or credit against Tax by a taxing authority to Buyer or PEPL of any Tax liability accrued on the Final Closing Balance Sheet and taken into account in the calculation of Closing Working
Capital, Buyer shall pay such amount (net of any reasonable out-of-pocket expenses incurred to obtain such Tax refund or credit and net of any Taxes imposed on Buyer or PEPL as a result of the receipt of such Tax refunds or credit) to Seller within
15 days after receipt or entitle thereto. Notwithstanding the foregoing, Seller shall not be entitled to receive any Tax refunds or credits of PEPL (i) that arise from the carryback of an item of loss, deduction, credit or other Tax benefit
which arises after the Closing Date or (ii) that are set forth on the Final Closing Balance Sheet and included in the calculation of Closing Working Capital. 
 6.5. Preservation of Business. Prior to the Closing, Seller shall, and shall cause PEPL to, (i) operate the Business in the Ordinary Course of Business, (ii) use commercially reasonable efforts to
keep the Business and Acquired Assets substantially intact, including the present operations, physical facilities, working conditions, (iii) comply in all material respects with all Legal Requirements applicable to the Business, and
(iv) use commercially reasonable efforts to preserve relationships with lessors, licensors, suppliers, customers, and employees relating to the Business. 
 6.6. Full Access. 
 (a) Prior to the Closing, Seller shall permit and shall cause PEPL
to permit representatives of Buyer to have full access at all reasonable times, and in a manner not to unreasonably interfere with Seller’s or PEPL’s operation of the Business, to all premises, properties, personnel, books, records,
Contractual Obligations, and documents of or pertaining to the Business, and shall promptly furnish to Buyer any additional financial, operating and other data and information concerning the Business as Buyer and its representatives may reasonably
request. Prior to Closing, Buyer shall treat and hold as confidential any such Confidential Information it receives from Seller or PEPL, and shall not use any of the Confidential Information, except in connection with this Agreement or as required
by applicable Legal Requirements or any listing 
  

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 agreement with a national securities exchange. If this Agreement is terminated for any reason whatsoever,
Buyer shall return to Seller all tangible embodiments (and copies) of the Confidential Information which are in its possession. 
 (b) Prior to the Closing, Seller shall permit Buyer or its representatives to contact such customers and suppliers of the Business as Buyer may reasonably request in order to conduct reasonable due diligence on the relationship of such
customers and suppliers with the Business and to discuss product performance and supply issues. 
 (c) Buyer shall have the
right, at its sole cost and expense, to (A) conduct tests of the soil, surface or subsurface waters, and air quality at, in, on, beneath or about the Owned Real Property and the Leased Real Property, and such other procedures as may be deemed
appropriate by Buyer, (B) inspect records, reports, permits, applications, monitoring results, studies, correspondence, data and any other information or documents relevant to environmental conditions or environmental noncompliance, and
(C) inspect all buildings and equipment at the Tallahassee Facility and the Curitiba Facility, including without limitation the visual inspection of such facilities for asbestos-containing construction materials; provided that, in each case,
such tests and inspections shall be conducted only during regular business hours and in a manner which will not unreasonably interfere with the operation of the Business and/or the use of, access to or egress from such facilities. 
 6.7. Notice of Developments. Prior to the Closing, the Parties shall give prompt written notice to the other Parties of (i) any material
development causing or reasonably expected to cause a breach of any of its own representations and warranties in §§3, 4 and 5 above, (ii) any material failure to comply with or satisfy any of its respective covenants, conditions or
agreements required to be complied with or satisfied by it under this Agreement, and (iii) any fact, event, circumstance, change, condition or effect that has had or would reasonably be expected to have a Material Adverse Effect, or if PEP
Group experiences a material adverse change in its relationship with any customer or supplier. No disclosure by any Party pursuant to this §6.7, however, shall be deemed to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentations, breach of warranty, or breach of covenant. Seller and PEPL shall provide Buyer with an unaudited consolidated balance sheet and the related statements of income and cash flows for the Business, prepared in a manner consistent
with that used previously for comparable interim financial reports of Seller and PEPL, for each month, from the date hereof through the Closing Date, as soon as practicable after the end of such month, but in any event within 15 Business Days.

 6.8. Future Assurances. At any time and from time to time after the Closing, at the request of Buyer and without further
consideration, Seller or Stanadyne shall execute and deliver, and Seller shall cause PEPL to execute and deliver, such other instruments of sale, transfer, conveyance, assignment and confirmation and take such action as Buyer may reasonably
determine is necessary to transfer, convey and assign to Buyer, and to confirm Buyer’s title to or interest in the Acquired Assets, to put Buyer in actual possession and operating control thereof and to assist Buyer in exercising all rights
with respect thereto. 
  

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 6.9. Employees and Employee Benefits. 
 (a) Employment. Effective immediately prior to the Closing Date, Seller shall terminate the employment and Buyer shall offer
employment (such employment to be effective immediately following the Closing) to those individuals Buyer desires to hire who are, as of the Closing, active full time or part time employees of the Business, excluding employees employed by PEPL whose
employment will continue without interruption or changes (the “Transferred Employees”), on terms determined by Buyer, in its sole discretion. 
 (b) Seller Plans. Except with respect to Acquired Employee Plans and Assumed Liabilities related to Transferred Employees pursuant
to §2.3(b), Seller shall be solely responsible for the Employee Plans and all obligations and liabilities thereunder. Except with respect to Acquired Employee Plans and Assumed Liabilities pursuant to §2.3(b) related to Transferred
Employees, Buyer shall not assume any of the Employee Plans or any obligation or liability thereunder. 
 (c) Buyer
Plans. Buyer shall be responsible for all liabilities and obligations arising with respect to compensation or benefits provided to Transferred Employees under employee benefit plans of the Buyer after the Closing. 
 (d) Records. Seller shall provide Buyer with all employment-related records necessary to continue the employment of the Transferred
Employees, except that if the provision of such records requires consent of the Transferred Employees under applicable Legal Requirements, such records will be provided to Buyer only following receipt of such consent. After the date of this
Agreement, Seller and PEPL shall provide Buyer reasonable access to, and facilitate meetings with, the Transferred Employees and the employees of PEPL for purposes of making announcements concerning and preparing for the consummation of, the
transactions contemplated by this Agreement. Neither Seller nor PEPL shall, without the prior written consent of Buyer (which consent shall not be unreasonably withheld), make any material communications to the Transferred Employees or the employees
of PEPL regarding the transactions contemplated by this Agreement other than those required under the terms of the Employee Plans or in accordance with Legal Requirements. Seller and PEPL shall provide to Buyer such information as Buyer may
reasonably request with respect to compensation, benefit plan designs, service and other information reasonably relating to Seller’s and PEPL’s employment of the Transferred Employees and the employees of PEPL, respectively. 
 (e) Worker Notification. On or before the Closing Date, Seller shall provide to Buyer a list of the name and site of employment of
any and all employees of the Business who have experienced, or will experience, an employment loss or layoff – as defined by WARN – within ninety (90) days prior to the Closing Date. Seller shall update this list up to and including
the Closing Date. Seller shall not, at any time ninety (90) days before the Closing Date, without complying fully with the notice requirements and other requirements of the WARN Act, effectuate (i) a plant closing as defined in the WARN
Act affecting any site of employment or one or more facilities or operating units within any site of employment of the Business; (ii) a mass layoff as defined in the WARN Act affecting any site of employment of the Business; or (iii) any
similar action under the WARN Act requiring notice to employees in the event of an employment loss or layoff. 
  

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 (f) No Right of Employment. Nothing contained herein, expressed or implied, is
intended to confer upon any Transferred Employee any right to continued employment for any period by reason of this Agreement, nor shall anything herein interfere with the right of Buyer to terminate the employment of any Transferred Employee at any
time, with or without cause, or restrict Buyer in the exercise of its independent business judgment in modifying any of the terms and conditions of the employment of the Transferred Employees. Nothing contained herein is intended to confer upon any
Transferred Employee any particular term or condition of employment in the future. 
 (g) Within three Business Days after the
date of this Agreement, Seller will provide to Buyer a schedule that is a correct and complete in all material respects as of the date of such schedule, of all present full-time, part-time and temporary employees (including any such employee who is
on a leave of absence or on layoff status or entitled to any job tenure or guarantee) of each of (i) Seller related to the Business and (ii) PEPL, including with respect to each such employee: (a) the employee’s name;
(b) aggregate dollar amounts of total compensation and all share-based incentive grants for the most recently ended fiscal year; (c) such employee’s annualized base salary and bonus opportunity as of the date of this Agreement;
(d) a job title for such employee; (e) the location of such employee’s principal place of employment; (f) each employee’s date of hire and (g) whether the employee is in active employment or on a leave of absence
(including the date of leave commencement and expected return date). 
 6.10. Exclusivity. From the date hereof through the Closing
Date or earlier termination of this Agreement pursuant to Section 10, neither Stanadyne nor any of its subsidiaries (including Seller and PEPL) shall, nor shall any of them knowingly permit its respective Affiliates, officers, directors,
employees, representatives and agents to, directly or indirectly, encourage, solicit, participate in, consider or initiate discussions or negotiations with, or provide any information to, any Person or group of Persons (other than Buyer and any of
its Affiliates) in furtherance of any merger, sale of assets, sale of shares of capital stock or similar transactions involving Seller or PEPL. Without limiting the obligations under the preceding sentence, Stanadyne and Seller shall immediately
notify Buyer (orally and in writing) if any inquiry or proposal is made, any information is requested or any offer is made with respect to Seller, PEPL, the Business or any Acquired Assets. 
 6.11. Termination of Related-Party Arrangements. Seller shall cause all Contractual Obligations described in §3.18 of the Disclosure
Schedule, other than those listed in Schedule 6.11, to be terminated immediately prior to the Closing with no further liability or obligation on the part of any party thereto. 
 6.12. Confidentiality. For a period of three (3) years after the Closing Date, neither Seller nor Stanadyne will, and each will not permit
its officers, directors, employees, accountants, counsel, consultants, advisors and agents and Affiliates to, directly or indirectly, disclose or use or authorize, license or otherwise permit other Persons to use in any way that is 
  

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 detrimental to Buyer or the Business any and all information concerning (i) the Business or (ii) Buyer and its
Affiliates obtained in the performance of this Agreement or the Ancillary Agreements, other than that information which is already generally or readily obtainable by the public, or is publicly known or becomes publicly known through no fault of
Seller, or is required by applicable Legal Requirements to be disclosed. 
 6.13. Operations. After the Closing Date, Seller shall not
continue to operate or conduct any business under the name “Precision Engine Products Corp.” 
 7. Conditions to Obligation to Close.

 7.1. Conditions to Obligation of Buyer. The obligation of Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions on or prior to the Closing: 
 (a) Representations
and Warranties. The representations and warranties of Seller set forth in §3 and of Stanadyne set forth in §4 above (A) if subject to any limitations as to “material” or “Material Adverse Effect,” shall be true
and correct in all respects on the date of this Agreement and at and as of the Closing as if made at and as of such time (except to the extent expressly by its terms made as of an earlier date, in which case as of such earlier date), and (B) if
not subject to any limitations as to “material” or “Material Adverse Effect,” shall be true and correct in all material respects on the date of this Agreement and at and as of the Closing as if made at and as of such time (except
to the extent expressly by its terms made as of an earlier date, in which case as of such earlier date); 
 (b) Performance
by Seller and Stanadyne. Each of Seller and Stanadyne shall have performed and complied in all material respects with all of its covenants, agreements and obligations hereunder through the Closing; 
 (c) Consents. Seller and Stanadyne shall have procured all of the governmental approvals, consents or authorizations and third
party consents listed on Schedule 7.1(c); 
 (d) Environmental Permits. All of the Environmental Permits listed on
§3.12 of the Disclosure Schedule, to the extent required by law to be transferred prior to the Closing, shall have been transferred or reissued to Buyer or Buyer’s designee without modifications to the terms and conditions thereof, unless
such modifications are solely attributable to any acts or omissions of Buyer. 
 (e) Material Adverse Effect. Since the
date of this Agreement, there shall have been no events, changes or effects that, individually or in the aggregate, have had, or would reasonably be expected to result in, a Material Adverse Effect; 
 (f) Absence of Litigation. No Action shall be pending or threatened wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following 
  

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 consummation, or (iii) would be reasonably likely to have a Material Adverse Effect or affect
adversely the right of Buyer to own the Acquired Assets or the PEPL Quotas or to operate the Business (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect); and no Legal Requirement shall be in effect that would
prohibit or make illegal the transactions contemplated by this Agreement; 
 (g) Certificates. Seller and Stanadyne
shall have each delivered to Buyer a certificate of an executive officer of Seller and Stanadyne, respectively, to the effect that each of the conditions specified above in §7.1(a) and (b) are satisfied in all respects; 
 (h) Seller shall have delivered to Buyer a certificate of “non-foreign status” as provided in Treasury Regulations under Code
Section 1445; 
 (i) Ancillary Agreements. Each of Seller and Stanadyne shall have executed and delivered the
Ancillary Agreements to which it is a party as of the Closing Date; 
 (j) Title Policy. Buyer shall have received a
current ALTA form extended coverage owner’s policy or policies of title insurance, insuring fee title to the Owned Real Property with no exceptions that pertain to any Lien securing any Debt that is not an Assumed Liability; and 
 (k) All Necessary Actions. All actions to be taken by Seller, Stanadyne or PEPL in connection with the consummation of the
transactions contemplated hereby and all certificates, opinions, instruments and other documents required to effect the transactions contemplated hereby shall be reasonably satisfactory in form and substance to Buyer. 
 7.2. Conditions to Obligations of Seller. The obligation of Seller to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions on or prior to the Closing: 
 (a) Representations and
Warranties. The representations and warranties of Buyer set forth in §5 above (A) if subject to any limitations as to “material” shall be true and correct in all respects on the date of this Agreement and at and as of the
Closing as if made at and as of such time (except to the extent expressly by its terms made as of an earlier date, in which case as of such earlier date), and (B) if not subject to any limitations as to “material” shall be true and
correct in all material respects on the date of this Agreement and at and as of the Closing as if made at and as of such time (except to the extent expressly by its terms made as of an earlier date, in which case as of such earlier date);

 (b) Performance by Buyer. Buyer shall have performed and complied in all material respects with all of its covenants
hereunder through the Closing; 
 (c) Consents. Buyer shall have procured all of the governmental approvals, consents
or authorizations and third party consents specified in Schedule 7.2(c); 
  

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 (d) Absence of Litigation. No Action shall be pending or threatened wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement or (ii) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect), and no Legal Requirement shall be in effect that would prohibit or make illegal the transactions contemplated by this
Agreement; 
 (e) Certificate. Buyer shall have delivered to Seller a certificate of an executive officer of Buyer to
the effect that each of the conditions specified above in §7.2(a) and (b) is satisfied in all respects; 
 (f)
Ancillary Agreements. Buyer shall have executed and delivered the Ancillary Agreements to which it is a party as of the Closing Date; and 
 (g) All Necessary Actions. All actions to be taken by Buyer in connection with the consummation of the transactions contemplated hereby and all certificates, opinions, instruments and other documents required
to effect the transactions contemplated hereby shall be reasonably satisfactory in form and substance to Seller. 
 8. Post-Closing Covenants.

 8.1. Noncompetition and Nonsolicitation. 
 (a) Seller. For a period of five (5) years from and after the Closing Date, neither Seller, Stanadyne, nor any of the
Stanadyne Affiliates shall engage directly or indirectly in any portion of, or own, manage, join, operate or control, or participate in the ownership, management, operation or control of, or permit their respective names to be used by or in
connection with, any Person that engages directly or indirectly in any portion of, the Business as conducted by Seller as of the Closing Date; provided, however, that (i) no owner of less than 5% of the outstanding stock of any
publicly-traded corporation shall be deemed to be so engaged solely by reason thereof and (ii) this §8.1 shall not in any manner limit, restrict or otherwise preclude Seller, Stanadyne and their Affiliates from continuing after the Closing
to operate their respective businesses as currently conducted (excluding, subject to the following sentence, the Business). Buyer acknowledges and agrees that (i) Stanadyne and certain of Stanadyne’s and Seller’s Affiliates are in the
engine components business and (ii) nothing in this §8.1 shall be deemed to restrict or otherwise impair Stanadyne, Seller and such Affiliates from engaging in such businesses as currently conducted following the Closing. For a period of
two (2) years from and after the Closing Date, neither Seller nor Stanadyne shall recruit, offer employment to, employ, engage as a consultant, lure or entice away, or in any other manner persuade any Person who was an employee of Seller with
respect to the Business immediately prior to the Closing to leave the employ of Buyer, excluding (i) general solicitations by newspaper or other public media or non-directed third-party search firm and (ii) the employees listed on Schedule
2.7(f)(vi). 
  

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 (b) Buyer. Except as provided in §6.9(a), for a period of two (2) years
from and after the Closing Date, neither Buyer nor any of its Affiliates shall recruit, offer employment to, employ, engage as a consultant, lure or entice away, or in any other manner persuade any Person who is an employee of Stanadyne to leave the
employ of Stanadyne, excluding general solicitations by newspaper or other public media or non-directed third-party search firm. 
 (c) If any provision contained in this §8.1 is for any reason held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provisions of this §8.1, and this
§8.1 will be construed as if such invalid, illegal or unenforceable provision had never been contained herein. It is the intention of the Parties that if any of the restrictions or covenants contained in this §8.1 is held to cover a
geographic area or to be of a length of time that is not permitted by applicable Legal Requirements, or in any way construed to be too broad or to any extent invalid, such provision will not be construed to be null, void and of no effect. Instead,
the Parties agree that a court of competent jurisdiction will construe, interpret, reform or judicially modify this §8.1 to provide for a covenant having the maximum enforceable geographic area, time period and other provisions (not greater
than those contained herein) as will be valid and enforceable under such applicable Legal Requirements. 
 (d) The Parties
agree that a violation of this §8.1 by Seller or Stanadyne will cause irreparable injury to Buyer, and a violation of this §8.1 by Buyer will cause irreparable injury to Seller and Stanadyne, and that such injured Party will be entitled,
in addition to any other rights and remedies it may have at law or in equity to apply for an injunction enjoining and restraining the other Party or Parties from doing or continuing to do any such act and any other violations or threatened
violations of this §8.1, and such Party or Parties consent to the entry thereof. In the event that any Party is found to have breached any covenant in this §8.1, the time period provided for in that covenant shall be tolled (i.e., it shall
not run) for so long as such Party was in violation of that covenant. 
 8.2. Accounts Receivable and Correspondence. At the Closing,
Buyer will acquire hereunder, and thereafter Buyer or its designee shall have the right and authority to collect for Buyer’s or its designee’s account, all receivables, letters of credit and other items which constitute a part of the
Acquired Assets, and Seller shall, within forty-eight (48) hours after receipt of any payment in respect of any of the foregoing, properly endorse and deliver to Buyer any letters of credit, documents, cash or checks received on account of or
otherwise relating to any such receivables, letters of credit or other items. Seller shall promptly transfer or deliver to Buyer or its designee any cash or other property that Seller may receive in respect of any deposit, prepaid expense, claim,
contract, license, lease, commitment, sales order, purchase order, letter of credit or receivable of any character, or any other item, constituting a part of the Acquired Assets. After the Closing, Seller shall promptly deliver to Buyer any mail
(physical, electronic or otherwise), facsimile or other correspondence or communication received by Seller to the extent related to the Business or any of the Acquired Assets, including any such correspondence or communication from any customer,
supplier or Governmental Authority. 
  

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 8.3. Warranty Claims. Buyer agrees that, at Seller’s request, it shall supply Seller with any
Products necessary to satisfy Warranty Claims for which Seller is responsible following the Closing at a price no higher than that then being charged to any of Buyer’s customers for such Products. Any such claims satisfied by Buyer at
Seller’s request shall be reimbursed to Buyer by Seller within fifteen (15) days of the receipt of an invoice from Buyer requesting such reimbursement. 
 9. Indemnification. 
 9.1. Indemnity by Seller. 
 (a) Seller and Stanadyne hereby agree, jointly and severally, to indemnify, defend and hold harmless each of Buyer, its subsidiaries and
its Affiliates, and each of their respective directors, officers, shareholders, owners, agents and Affiliates (collectively, the “Buyer Indemnified Parties”) against and in respect of all liabilities, damages, losses, fines,
penalties, expenses, fees, costs (including reasonable attorneys’ fees and disbursements in connection with investigating, defending or settling any action or threatened action), and amounts paid in settlement (collectively, the
“Losses”), whether or not involving any third party claims, that arise out of or result from: 
 (i) the
inaccuracy or breach of any representation or warranty made by Seller or Stanadyne herein for which Buyer provides notice to Seller (setting forth in such detail as is available facts necessary to evaluate such inaccuracy and to substantiate the
Losses claimed) on or prior to the date that is eighteen (18) months after the Closing Date, except with respect to (i) any representation or warranty contained in §§ 3.1 (Seller Organization), 3.2 (Seller Authorization of
Transaction), 3.4 (Seller Brokers’ Fees), 3.5 (Seller Ownership of PEPL Quotas), 3.7 (Title to Assets), 4.1 (Stanadyne Organization), 4.2 (Stanadyne Authorization of Transaction), 4.4 (Stanadyne Brokers’ Fees) and 4.5 (Stanadyne Ownership
of PEPL Quotas), which shall survive the Closing indefinitely; and any representation or warranty with respect to Taxes or § 3.16 (Labor Matters) with respect to any matter related to PEPL, which shall survive until 60 days after the end of the
applicable statutory limitations period (other than representations or warranties set forth in the first sentence of § 3.9(k) for which the general eighteen (18) month survival period described above applies); 
 (ii) the breach by Seller or Stanadyne of any of its respective covenants contained herein to be performed prior to the Closing;

 (iii) the breach by Seller or Stanadyne of any of its respective covenants contained herein or in any agreement or
instrument required to be entered into in connection herewith to be performed after to the Closing; 
 (iv) any Liability of
Seller or PEPL which is not an Assumed Liability or which is an Excluded Liability; 
 (v) any Pre-Closing Environmental
Matters; 
  

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 (vi) Taxes of PEPL, or Taxes of any other person imposed on PEPL as transferee or
successor, by any contract primarily related to Taxes or otherwise, for any Pre-Closing Tax Period, except to the extent such Taxes are (1) Transfer Taxes for which the Buyer is liable pursuant to § 11.12 hereof or (2) accrued as a
reserve or liability on the Final Closing Balance Sheet and included in the calculation of Closing Working Capital (other than any reserve for deferred Taxes established to reflect timing differences between book and Tax income); or 
 (vii) any Brazilian Withholding Taxes. 
 (b) The aggregate liability for Seller and Stanadyne under §9.1 shall in no event exceed the Purchase Price. With respect to any indemnification obligation arising under §9.1(a)(i) and §9.1(a)(ii),
(i) Seller and Stanadyne shall not be liable for Losses with respect to any claim unless such claim (together with other claims that arise out of the same set of facts or circumstances and are so reasonably related as to effectively constitute
one claim) exceeds $5,000, and (ii) Seller and Stanadyne shall be liable in respect of Losses only if the aggregate of such Losses exceeds $300,000 (the “Basket”), in which case Seller and Stanadyne shall be liable, jointly and
severally, for all such Losses (including those incurred prior to exceeding the Basket). In no event shall Seller or Stanadyne (collectively) be obligated to indemnify Buyer Indemnified Parties in respect of aggregate Losses arising under
§9.1(a)(i) and §9.1(a)(ii) in excess of $3,000,000 (the “Cap”), except that the Basket and the Cap shall not apply to obligations of Seller and Stanadyne herein to indemnify Buyer Indemnified Parties in connection with a
breach of a representation or warranty contained in §§3.1 (Seller Organization), 3.2 (Seller Authorization of Transaction), 3.4 (Seller Brokers’ Fees), 3.5 (Seller Ownership of PEPL Quotas), 3.7 (Title to Assets), 3.9 (Taxes), 4.1
(Stanadyne Organization), 4.2 (Stanadyne Authorization of Transaction), 4.4 (Stanadyne Brokers’ Fees) and 4.5 (Stanadyne Ownership of PEPL Quotas); provided, further, that in the case of any representation or warranty that is
limited by “material,” “Material Adverse Effect” or by any similar term or limitation, the occurrence of a breach or inaccuracy of such representation or warranty, as the case may be, and the amount of losses subject to
indemnification hereunder shall be determined as if “material,” “Material Adverse Effect” or by any similar term or limitation were not included therein. 
 9.2. Indemnity by Buyer. 
 (a) Buyer hereby agrees to indemnify, defend and hold harmless Seller, Stanadyne, their subsidiaries and Affiliates, and each of their respective directors, officers, shareholders, owners, agents and Affiliates (collectively, the
“Seller Indemnified Parties”) against and in respect of all Losses that arise out of or result from: 
 (i)
the inaccuracy or breach of any representation or warranty made by Buyer herein for which Seller provides notice to Buyer (setting forth in such detail as is available facts necessary to evaluate such inaccuracy and to substantiate the Losses
claimed) on or prior to the date that is eighteen (18) months after the Closing Date (except, with respect to any representation or 
  

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 warranty contained in §§5.1 (Organization of Buyer), 5.2 (Authority for Agreement) and 5.5
(Brokers’ Fees), which shall survive the Closing indefinitely; provided, however, that in the case of any representation or warranty that is limited by “material,” “Material Adverse Effect” or by any similar
term or limitation, the occurrence of a breach or inaccuracy of such representation or warranty, as the case may be, and the amount of losses subject to indemnification hereunder shall be determined as if “material,” “Material Adverse
Effect” or by any similar term or limitation were not included therein; 
 (ii) any breach of a covenant of Buyer
contained herein or in any agreement or instrument required to be entered into in connection herewith to be performed prior to the Closing; 
 (iii) any breach of a covenant of Buyer contained herein or in any agreement or instrument required to be entered into in connection herewith to be performed after to the Closing; or 
 (iv) any Assumed Liability. 
 (b) The aggregate liability for Buyer under this §9.2 shall in no event exceed the Purchase Price. With respect to any indemnification obligation arising under §9.2(a)(i) or §9.2(a)(ii), (i) Buyer
shall not be liable for Losses with respect to any claim unless such claim (together with other claims that arise out of the same set of facts or circumstances and are so reasonably related as to effectively constitute one claim) exceeds $5,000, and
(ii) Buyer shall be liable in respect of Losses only if the aggregate of such Losses exceeds the Basket, in which case Buyer shall be liable for all such Losses (including those incurred prior to exceeding the Basket). In no event shall Buyer
be obligated to indemnify Seller Indemnified Parties in respect of aggregate Losses arising under §9.2(a)(i) or §9.2(a)(ii) in excess of the Cap (except that the Basket and the Cap shall not apply to obligations of Buyer herein to
indemnify Seller Indemnified Parties in connection with a breach of a representation or warranty contained in §§5.1 (Organization of Buyer), 5.2 (Authority for Agreement) and 5.5 (Brokers’ Fees); provided, further, that
in the case of any representation or warranty that is limited by “material,” “Material Adverse Effect” or by any similar term or limitation, the occurrence of a breach or inaccuracy of such representation or warranty, as the case
may be, and the amount of losses subject to indemnification hereunder shall be determined as if “material,” “Material Adverse Effect” or by any similar term or limitation were not included therein. 
 9.3. Tax Treatment of Indemnity Payments. Seller and Buyer agree to treat any indemnity payments made pursuant to §§9.1 and 9.2 as an
adjustment to the Purchase Price for all Tax purposes. 
 9.4. Matters Involving Third Parties. 
 (a) If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third
Party Claim”) that may give rise to a claim for 
  

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 indemnification against another Party (the “Indemnifying Party”) under this §9,
then the Indemnified Party shall promptly notify the Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party
from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party is thereby prejudiced. 
 (b) The
Indemnifying Party shall have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying Party notifies the Indemnified
Party in writing within 20 days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party shall indemnify the Indemnified Party in connection with such Third Party Claim, (ii) settlement of, or an adverse
judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedential custom or practice adverse to the continuing business interests of the Indemnified Party, (iii) the
Indemnifying Party conducts the defense of the Third Party Claim actively and diligently, and (iv) the Indemnifying Party pays the fees and disbursements of such counsel with regards thereto. Prior to the time which the Indemnifying Party may
assume the defense hereunder, the Indemnified Party may take such actions as are necessary to preserve the ability to defend such Third Party Claim. 
 (c) Subject to the provisions of §9.4(b) above, (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim; provided,
that the reasonable costs and expenses of one counsel (in addition to local counsel) to the Indemnified Party will be paid by the Indemnifying Party if (A) in the opinion of counsel to the Indemnified Party, a conflict of interest exists
between the Indemnifying Party and any Indemnified Party or (B) the Third Party Claim seeks nonmonetary relief, (ii) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnifying Party (which consent shall not unreasonably be withheld), and (iii) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect
to the Third Party Claim unless such settlement is for monetary payments only and a written agreement is obtained releasing the Indemnified Party from all liability thereunder. 
 9.5. Survival of Indemnification Claims. The indemnification obligations set forth in this §9 shall survive the Closing as set forth in
§9.1. Any rights with respect to a claimed breach of a representation or warranty shall expire at the date of termination of the representation or warranty claimed to be breached as set forth in §9.1 hereof (the “Termination
Date”), unless on or prior to the Termination Date written notice asserting such claimed breach has been given to Seller; provided, that if any such notice is timely given, the claim to which such notice relates may continue to be
asserted beyond the Termination Date. 
 9.6. Fraud; Intentional Misrepresentation. Notwithstanding anything contained in this
Agreement to the contrary, in the case of fraud, the limitations on indemnification (including as to duration and amount) contained in §9.1 or elsewhere in this §9 shall not apply to any claim for indemnification under this §9 by an
Indemnified Party. 
  

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 9.7. Determination of Loss Amount. 
 (a) The amount of any Loss subject to indemnification under §9.1(a) shall be calculated net of (i) any Tax benefit realized in
the form of a reduction in cash Tax payments by the Buyer Indemnified Parties for income tax purposes in the year in which the Loss was incurred as a result of such Loss and the present value of any Tax benefits likely to be received in the form of
a reduction in cash Tax Payments by the Buyer Indemnified Parties for income tax purposes in future years as a result of such Loss, (ii) any reserves or accruals with respect to any Loss solely to the extent of the amount of such reserve or
accrual that is included in the calculation of Closing Working Capital, and (iii) any insurance proceeds or other amounts under indemnification agreements with any third party as and when received by the Buyer Indemnified Parties on account of
such Loss, net of any costs or expenses incurred or suffered by the Buyer Indemnified Parties in recovering such proceeds. The amount of any Losses subject to indemnification under §9.1 relating to Taxes shall include amounts that would have
constituted Losses but for the set off or other utilization of any loss, deduction or credit arising in a Post-Closing Tax Period. 
 (b) The amount of any Loss subject to indemnification under §9.2 shall be calculated net of (i) any Tax benefit realized in the form of a reduction in cash Tax payments by the Seller Indemnified Parties for income tax purposes in
the year in which the Loss was incurred as a result of such Loss and the present value of any Tax benefits likely to be received in the form of a reduction in cash Tax Payments by the Seller Indemnified Parties for income tax purposes in future
years as a result of such Loss and (ii) any insurance proceeds or other amounts under indemnification agreements with any third party as and when received by the Seller Indemnified Parties on account of such Loss, net of any costs or expenses
incurred or suffered by the Seller Indemnified Parties in recovering such proceeds. In the event that an insurance or other recovery is made by any Seller Indemnified Parties with respect to any Loss for which any such Person has been indemnified
hereunder, then a refund equal to the aggregate amount of the recovery (not to exceed the amount of the indemnification payment, and net of any related costs or expenses as provided above) shall be made promptly to the Buyer. 
 (c) Notwithstanding anything contained in this Agreement to the contrary, neither Seller nor Stanadyne shall be liable to, or indemnify,
the Buyer Indemnified Parties, and Buyer shall not be liable to or indemnify the Seller Indemnified Parties, for any Losses that are punitive (except to the extent constituting third party punitive claims). 
 9.8. Exclusive Remedy. Buyer agrees that the indemnification provided in §9.1 is the exclusive remedy for a breach by Seller of any
representation or warranty contained in §3 of this Agreement and for a breach by Stanadyne of any representation or warranty contained in §4 of this Agreement. Seller and Stanadyne agree that the indemnification provided in §9.2 is
the exclusive remedy for a breach by Buyer of any representation or warranty contained in §5 of this Agreement. 
  

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 10. Termination. 
 10.1. Termination of Agreement. Any of the Parties may terminate this Agreement as provided below: 
 (a) the Parties may terminate this Agreement by mutual written consent at any time prior to the Closing; 
 (b) Buyer may terminate this Agreement by giving written notice to Seller at any time prior to the Closing (i) in the event Seller has breached any representation, warranty, or covenant contained in this
Agreement in any material respect, Buyer has notified Seller of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (ii) if the Closing shall not have occurred on or before 31 days after
the date of this Agreement by reason of the failure of any condition precedent under §7.1 hereof, or upon the satisfaction of any such condition becoming impossible or impracticable with the use of commercially reasonable efforts (unless the
failure results primarily from Buyer itself breaching any representation, warranty, or covenant contained in this Agreement); and 
 (c) Seller may terminate this Agreement by giving written notice to Buyer at any time prior to the Closing (i) in the event Buyer has breached any representation, warranty, or covenant contained in this Agreement in any material
respect, Seller has notified Buyer of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (ii) if the Closing shall not have occurred on or before 31 days after the date of this Agreement
by reason of the failure of any condition precedent under §7.2 hereof, or upon the satisfaction of any such condition becoming impossible or impracticable with the use of commercially reasonable efforts (unless the failure results primarily
from Seller itself breaching any representation, warranty, or covenant contained in this Agreement). 
 10.2. Effect of Termination.
If any Party terminates this Agreement pursuant to §10.1 above, all rights and obligations of the Parties hereunder shall terminate without any Liability of any Party to any other Parties (except for any Liability of any Party then in breach);
provided, however, that the confidentiality provisions contained in §6.6, the noncompetition and nonsolicitation provisions contained in §8.1, the indemnification provisions contained in §9, and the miscellaneous
provisions set forth in §11 shall survive termination. 
 11. Miscellaneous. 
 11.1. Press Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject
matter of this Agreement prior to or following the Closing without the prior approval of the other Parties; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable Legal
Requirements, in which case the disclosing Party shall consult with the other party prior to making such disclosure, and the parties shall use commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosure which is
satisfactory to both parties. 
  

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 11.2. No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon
any Person other than the Parties and their respective successors and permitted assigns. 
 11.3. Entire Agreement. This Agreement
(including the documents referred to herein) constitutes the entire agreement among the Parties with respect to its subject matter and supersedes any prior understandings, agreements, term sheets, letter agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the subject matter hereof. 
 11.4. Succession and Assignment.
This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder
without the prior written approval of the other Parties; provided, that without such prior consent, the Parties shall have the right to assign all or any part of its right, title, interest or obligations in and to this Agreement to any person
or entity acquiring all or substantially all of either of the Party’s assets or equity interests; provided, further, that without such prior consent, Buyer shall have the right to assign its right, title, interest and obligations
with respect to the PEPL Quotas to an Affiliate of Buyer so long as Buyer is not relieved of any liability hereunder. 
 11.5.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 
 11.6. Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement. 
 11.7. Notices. All notices, requests, demands, claims, and other communications hereunder shall
be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) upon confirmation of facsimile or email, (ii) one Business Day following the date sent when sent by overnight delivery by
recognized overnight courier service for delivery on the next Business Day and (iii) five Business Days following the date mailed when mailed by registered or certified mail return receipt requested and postage prepaid at the following address:

 If to Seller or Stanadyne: 
 Precision Engine Products Corp. 
 c/o Stanadyne Corporation 
 92 Deerfield Road 
 Windsor, CT 06095 
 Phone: (860) 525-0821 
 Fax No.: (860) 683-4500 
 Attention: Stephen Langin 
 Email: slangin@stanadyne.com 
  

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 Copy to: 
 Kohlberg & Company, L.L.C. 
 111 Radio Circle 
 Mt. Kisco, New York 10549 
 Attention: Gordon Woodward 
 Fax No.: (914) 241-1143 
 Email: woodward@kohlberg.com 
 Copy to: 
 Ropes & Gray LLP 
 One International Place 
 Boston, Massachusetts 02110 
 Phone: (617) 951-7000 
 Fax: (617) 951-7050 
 Attention: Daniel S. Evans, Esq. 
 Email: daniel.evans@ropegray.com 
 If to Buyer: 
 c/o GenTek
Inc. 
 90 East Halsey Road 
 Parsippany, NJ 07054 
 Phone: 
 Fax No: (973) 515-3244 
 Attention: James Imbriaco 
 Email: jimbriaco@gentek-global.com 
 Copy to: 
 Latham &
Watkins LLP 
 555 Eleventh Street, NW 
 Suite 1000 
 Washington, DC 20004 
 Phone: (202) 637-2200 
 Fax No.: (202) 637-2201 
 Attention: Raymond B. Grochowski, Esq. 
 Email: ray.grochowski@lw.com 
 Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), 
  

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 but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set
forth. 
 11.8. No Additional Representations; Disclaimer. Buyer acknowledges and agrees that none of Seller, Stanadyne and any other
Person acting on behalf of the Seller, Stanadyne or any of their respective Affiliates has made any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding the Business or the Acquired Assets,
except as expressly set forth in this Agreement or as and to the extent required by this Agreement to be set forth in the Disclosure Schedule. Without limitation of the representations and warranties set forth in §§3 and 4, Buyer further
agrees that neither Seller nor any of its Affiliates will have or be subject to any liability to the Buyer or any other Person resulting from the distribution to Buyer, or Buyer’s use of, any such information, and any information, document or
material made available to Buyer or its Affiliates in certain “data rooms,” management presentations or any other form in expectation of the transactions contemplated by this Agreement. 
 11.9. Governing Law. This Agreement, the rights of the parties and all Actions arising in whole or in part under or in connection herewith, shall
be governed by and construed in accordance with the internal Laws, and not the Laws governing conflicts of Laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law), of the State of New York. 
 11.10. Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by
Buyer, Seller and Stanadyne. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 
 11.11. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. 
 11.12. Expenses. Notwithstanding anything to the contrary in Sections 2.3 or 2.4, (i) Buyer agrees to bear the burden of any sales taxes, use taxes, transfer taxes, documentary charges, recording or registration fees, stamp
taxes or similar taxes (excluding, for the avoidance of doubt, any Brazilian Withholding Taxes) (“Transfer Taxes”) payable on the transfer of the Acquired Assets and the PEPL Quotas hereunder, and (ii) Stanadyne and Seller, on the one
hand, and Buyer, on the other hand, each agree to bear 50% of the burden of any filing fees incurred in connection with any filings made pursuant to Brazilian antitrust Legal Requirements by any parties hereto with respect to the transactions
contemplated hereby. Each of Buyer and Seller 
  

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 shall bear its own costs and expenses (including legal and accounting fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. Buyer and Seller shall reasonably cooperate with each other in timely making all filings, returns report an forms as may be required in connection with the payment of all Transfer Taxes, including
but not limited to delivering all instruments and certificates as are necessary to minimize such Transfer Taxes and enable the other to timely comply with the filing of any Tax Return that relates to Transfer Taxes. 
 11.13. Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word
“including” shall mean including without limitation. 
 11.14. Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. 
 11.15. Consent to Jurisdiction;
Venue; Service of Process. 
 (a) Each Party to this Agreement, by its execution hereof, (i) hereby irrevocably
submits to the exclusive jurisdiction of the state courts of the State of New York or the United States District Court for the Southern District of New York for the purpose of any Action among the Parties arising in whole or in part under or in
connection with this Agreement, (ii) hereby waives to the extent not prohibited by applicable Legal Requirements, and agrees not to assert, by way of motion, as a defense or otherwise, in any such Action, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such Action brought in one of the above-named courts should be dismissed on grounds of forum non
conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this
Agreement or the subject matter hereof may not be enforced in or by such court, and (iii) hereby agrees not to commence any such Action other than before one of the above-named courts. Notwithstanding the previous sentence a Party may commence
any Action in a court other than the above-named courts solely for the purpose of enforcing an order or judgment issued by one of the above-named courts. 
 (b) Each Party agrees that for any Action among the Parties arising in whole or in part under or in connection with this Agreement, such Party shall bring Actions only in the City of New York. Each Party further
waives any claim and shall not assert that venue should properly lie in any other location within the selected jurisdiction. 
 (c) Each Party hereby (x) consents to service of process in any Action among the Parties arising in whole or in part under or in connection with this Agreement in 
  

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 any manner permitted by New York law; (y) agrees that service of process made in accordance with
clause (x) or made by registered or certified mail, return receipt requested, at its address specified pursuant to §11.7 shall constitute good and valid service of process in any such Action; and (z) waives and agrees not to assert
(by way of motion, as a defense, or otherwise) in any such Action any claim that service of process made in accordance with clause (x) or (y) does not constitute good and valid service of process. 
 11.16. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LEGAL REQUIREMENTS THAT CANNOT BE WAIVED, THE PARTIES HEREBY
WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS,
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE PARTIES AGREE THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR
AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY. ANY PROCEEDING WHATSOEVER AMONG THEM RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY. 
 11.17. Specific Performance. The Parties hereby acknowledge and agree that the failure of any
party to perform its agreements and covenants hereunder, including its failure to take all actions as are necessary on its part to the consummation of the transactions contemplated hereby, will cause irreparable injury to the other parties, for
which damages, even if available, will not be an adequate remedy. Accordingly, each Party hereby consents to the issuance of injunctive relief by any court of competent jurisdiction to compel performance of such Party’s obligations and to the
granting by any court of the remedy of specific performance of its obligations hereunder without proof of actual damages and without any requirement for the securing or posting of any bond. Such remedy shall not be deemed to be the exclusive remedy
for a Party’s breach of its obligations but shall be in addition to all other remedies available at law or equity. 
 11.18. Bulk
Sales Laws. Buyer hereby waives compliance with the “bulk sales” provisions of Article 6 of the Uniform Commercial Code as it is in effect in the states where Seller owns assets to be conveyed to Buyer hereunder and Seller shall
indemnify Buyer with respect to any noncompliance by Seller with such bulk sales provisions. 
 [The remainder of this page is
intentionally left blank.] 
  

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 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date first above written. 
  

			
	 DEFIANCE, INC.

		
	By:	 	 /s/ William E. Redmond, Jr.

	Name:	 	William E. Redmond, Jr.
	Title:	 	President/CEO
	
	 PRECISION ENGINE PRODUCTS CORP.

		
	By:	 	 /s/ Stephen S. Langin

	Name:	 	Stephen S. Langin
	Title:	 	Chief Financial Officer
	
	 STANADYNE CORPORATION

		
	By:	 	 /s/ Stephen S. Langin

	Name:	 	Stephen S. Langin
	Title:	 	Chief Financial Officer

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