Engine & Equipment Development Lead Time Requirements are Significant Due to: The Non-Integrated Nature of the Industry Number of Applications Proposed Technologies are Not “Add On” Technology solutions need to be developed

Market Specification Development Criteria 15 Standard Engine Development Criteria Marketability, Aesthetics Durability Requirements Cost, Size, Weight Constraints Required Horsepower, Torque, PTO Loads Engine Controls, Governoring, Speed Fuel Systems and Carburetion Exhaust Systems Engine Configuration, Space Limitations Parasitic Starting Loads, Inertia Requirements Cycle Time of Operation, Charging Systems Operating Environment Cooling Management Vibration Systems Maintenance Related Accessories Safety of Operation

Requirements from Proposed Emission Controls Addition of Catalysts –Will require new muffler guards or relocation of muffler. –May require redesign of plastic guards, plenums and hoods. Addition of Evaporative Controls –Will require new fuel tank design –Will require addition of carbon canister and mounting hardware

Typical Product Development Cycle Develop hardware Engine manufacturer tests hardware Engine manufacturer works with OEM to apply hardware to application Engine manufacturer revised hardware to meet OEM specifications/application Engine manufacturer provides test samples to OEM OEM does development testing on sample hardware OEM and retailers develop distribution plans to segregate California products Upon approval of OEM, engine manufacturer provides production modified engine Engine manufacturer certifies product for sale in California OEM tests and approves production engine Engine manufacturer start to ship engines

The engineering review for one engine model would be required on over 100 pieces of equipment. One of our large customers has 65 models of which would require testing.

Metal Versus Plastic Tanks Square or Rectangular tanks common in horizontal engine applications can be closely approximated in metal with a heavy cost penalty -- $6 increase. 4 quart tanks metalplastic

Application Constraints on Walk Mower Fuel Tank Design The integrated nature of walk mower fuel tanks prevents metal tanks from being duplicated. Limitations on walk mowers: Loss of Geometry Definition/Detail –Fuel Volume/Run time –Increased package size  Reduce number of engines in pallet –Increased cost –Additional mounting hardware required –Changes required to major components –Replacement of all fuel tank and shroud molds

Walk Mower Tank Geometry

Investment -- One Example Gas Tanks for Intek Engines Three different fuel tank configurations to accommodate OEMs/applications 10 molds Millions of dollars of tooling Shrouds 4 Shroud/Styling Packages for one engine –4 $110,000 per Tool Fuel caps Five Different Fuel Caps Used in Production for one engine Total of 32 Cavities