S-1

As filed with the Securities and Exchange Commission on August 29, 2014

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

ENOVATION CONTROLS, INC.

(Exact name of registrant as specified in its charter)

Delaware	3823	47-1251427
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

5311 South 122^nd East Avenue

Tulsa, Oklahoma 74146

(918) 317-4100

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Patrick W. Cavanagh

President and Chief Executive Officer

Enovation Controls, Inc.

5311 South 122^nd East Avenue

Tulsa, Oklahoma 74146

(918) 317-4241

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

(Copies of all communications, including communications sent to agent for service)

Daryl L. Lansdale, Jr. Gary H. McDaniel Fulbright & Jaworski LLP (a member of Norton Rose Fulbright) 300 Convent Street, Suite 2100 San Antonio, Texas 78205-3792 (210) 224-5575 Richard D. Truesdell, Jr. Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 (212) 450-4674

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee
Class A Common Stock, par value $0.00001 per share	$100,000,000	$12,880

(1) Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

(2) Includes offering price of shares of Class A common stock that the underwriters have the option to purchase to cover overallotments.

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

PROSPECTUS (Subject to Completion)

Issued August 29, 2014

Class A Shares

CLASS A COMMON STOCK

Enovation Controls, Inc. is offering              shares of its Class A common stock. This is our initial public offering and no public market exists for our shares. We anticipate that the initial public offering price will be between $         and $         per share.

Immediately following the offering, the holders of our Class A common stock will collectively own 100% of the economic interests in Enovation Controls, Inc. and will have     % of the voting power of Enovation Controls, Inc. The current owners of Enovation Controls, LLC will have the remaining     % of the voting power of Enovation Controls, Inc. through ownership of 100% of the outstanding shares of our Class B common stock. We will be a holding company and our sole asset will be approximately     % of the common units of Enovation Controls, LLC. The current owners of Enovation Controls, LLC will own the remaining     % of the common units of Enovation Controls, LLC.

We will apply to list our Class A common stock on the New York Stock Exchange under the symbol “ENOV.”

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and, as such, may elect to comply with certain reduced reporting requirements after this offering. See “Prospectus Summary—Emerging Growth Company Status.”

Investing in our Class A common stock involves risks. See “Risk Factors” beginning on page 23.

PRICE $            A SHARE

	Price to Public		Underwriting Discounts and Commissions		Proceeds, Before Expenses, to Us(1)
Per share		$		$		$
Total		$		$		$

(1) We have agreed to reimburse the underwriters for certain FINRA-related expenses. See “Underwriters.”

We have granted the underwriters the right to purchase up to an additional              shares of Class A common stock to cover overallotments at the initial public offering price less the underwriting discount.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of Class A common stock to purchasers on                     , 2014.

MORGAN STANLEY UBS INVESTMENT BANK

PIPER JAFFRAY BAIRD BLAIR RAYMOND JAMES

                    , 2014

TABLE OF CONTENTS

	Page
ABOUT THIS PROSPECTUS		i
PROSPECTUS SUMMARY		1
RISK FACTORS		23
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		51
THE TRANSACTIONS		53
USE OF PROCEEDS		65
DIVIDEND POLICY		66
CAPITALIZATION		67
DILUTION		68
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION		70
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA		77
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		81
BUSINESS		105
MANAGEMENT		130

	Page
EXECUTIVE COMPENSATION		136
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		148
PRINCIPAL STOCKHOLDERS		157
DESCRIPTION OF CERTAIN INDEBTEDNESS		159
DESCRIPTION OF CAPITAL STOCK		161
SHARES ELIGIBLE FOR FUTURE SALE		168
MATERIAL U.S. FEDERAL TAX CONSEQUENCES FOR NON-UNITED STATES HOLDERS OF CLASS A SHARES		170
UNDERWRITERS		174
LEGAL MATTERS		178
EXPERTS		179
WHERE YOU CAN FIND MORE INFORMATION		180
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		F-1

We are responsible for the information contained in this prospectus and in any related free-writing prospectus we may prepare or authorize to be delivered to you. We and the underwriters have not authorized anyone to give you any other information, and we and the underwriters take no responsibility for any other information that others may give you. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

Until                     , 2014, all dealers that buy, sell, or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

ABOUT THIS PROSPECTUS

Non-GAAP Financial Measures

The SEC has adopted rules to regulate the use in filings with the SEC and in public disclosures of “non-GAAP financial measures,” such as Adjusted EBITDA. These measures are derived on the basis of methodologies other than in accordance with GAAP.

We have included one non-GAAP financial measure in this prospectus, Adjusted EBITDA. See “Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial Data” for a description of the calculation of Adjusted EBITDA, as well as a reconciliation of our Adjusted EBITDA to net income (loss).

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Industry and Market Data and Forecasts

This prospectus includes industry and market data and forecasts that we obtained from industry publications and surveys, public filings, and internal company sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of such information. We have not independently verified any of the data from third-party sources, nor have we ascertained the underlying economic assumptions relied upon therein. In other cases, such as statements as to our market position and ranking, such information is based on estimates made by our management, based on their industry and market knowledge and information from third-party sources. In addition, projections, assumptions, and estimates of the future performance of the industry in which we operate and our future performance are subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” Those and other factors could cause results to differ materially from those expressed in the estimates made in third-party sources and by us.

Trademarks and Service Marks

We own or have rights to trademarks, service marks, or trade names that we use in connection with the operation of our business, including the Enovation Controls logo, “EControls^®,” “Murphy^®,” and “EICS^™.” Solely for convenience, trademarks, and trade names referred to in this prospectus may appear without the ^® or ^™ symbols. Other trademarks, service marks, and trade names appearing in this prospectus are the property of their respective owners. We do not intend our use or display of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

Financial Statement Presentation

This prospectus includes certain selected historical consolidated financial data for Enovation Controls, LLC and its subsidiaries. Enovation Controls, LLC is our predecessor for financial reporting purposes. Enovation Controls, Inc. will be the financial reporting entity following this offering. The consolidated statement of operations data for each of the years in the three-year period ended December 31, 2013 and the consolidated balance sheet data as of December 31, 2013 and 2012 included in this prospectus are derived from the audited consolidated financial statements of Enovation Controls, LLC and its subsidiaries contained herein. The consolidated statement of operations data for the years ended December 31, 2010 and 2009 and the consolidated balance sheet data as of December 31, 2011, 2010, and 2009, have been derived from Enovation Controls, LLC’s audited consolidated financial statements not included in this prospectus. The consolidated statement of operations data for the six months ended June 30, 2014 and 2013 and the consolidated balance sheet data as of June 30, 2014 are derived from the unaudited consolidated financial statements of Enovation Controls, LLC and its subsidiaries contained herein. In the opinion of our management, such unaudited financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial position and results of operations as of those dates and for those periods. Historical results are not necessarily indicative of results that may be expected for any future period, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

This prospectus also includes an unaudited pro forma condensed consolidated balance sheet as of June 30, 2014 and unaudited pro forma condensed consolidated statements of income for the six month period ended June 30, 2014 and the year ended December 31, 2013, which present our consolidated financial position and results of operations to give pro forma effect to (i) the Transactions as described in “The Transactions,” which includes the reorganization transactions and the sale of shares in this offering (excluding shares issuable upon exercise of the underwriters’ option to purchase additional shares) and the application of the net proceeds from this offering as described in “Use of Proceeds,” (ii) the tax receivable agreement we will enter into with the existing Common Unitholders, (iii) a one-time special distribution of $60.0 million to Murphy Group and EControls Group and borrowings of $85.5 million under our senior credit facility to pay this distribution and

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repay existing debt, which occurred on June 30, 2014, and (iv) the purchase of our San Antonio facility on July 25, 2014, from a third-party entity by a company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, in each case as if they had been completed as of January 1, 2013, with respect to the unaudited pro forma condensed consolidated statements of income, and June 30, 2014, with respect to the unaudited pro forma condensed consolidated balance sheet. As a result of the purchase described in the foregoing item (iv), the company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, must be accounted for as a variable interest entity which will result in the cost of the San Antonio facility, accumulated depreciation, mortgage debt and related depreciation and interest expense being consolidated (and the related rent expense being eliminated) in our financial statements. The unaudited pro forma condensed consolidated financial information reflects pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions we believe are reasonable, but which are subject to change. We have made, in our opinion, all adjustments that are necessary to fairly present the unaudited pro forma condensed consolidated financial information. The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the transactions set forth above been consummated on the dates indicated, and do not purport to be indicative of the financial condition or results of operations as of any future date or for any future period.

You should read our selected historical consolidated financial data and unaudited pro forma condensed consolidated financial information and the accompanying notes in conjunction with, and each is qualified in their entirety by reference to, the consolidated historical financial statements and related notes included elsewhere in this prospectus and the financial and other information appearing elsewhere in this prospectus, including information contained in “Risk Factors,” “Use of Proceeds,” “Capitalization,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Other than the inception balance sheet, the financial statements of Enovation Controls, Inc. have not been included in this prospectus as it is a newly incorporated entity, has no business transactions or activities to date, has nominal capitalization, and had no assets or liabilities during the periods presented in this prospectus.

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PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. This summary may not contain all of the information that is important to you. Before investing in our Class A Shares, you should carefully read this prospectus in its entirety, especially the risks of investing in our Class A Shares that we discuss in the “Risk Factors” section of this prospectus beginning on page 23 of this prospectus and the financial statements and related notes. The following summary is qualified in its entirety by the more detailed information and financial statements and related notes included elsewhere in this prospectus.

In this prospectus, unless otherwise stated or the context otherwise requires, references to “we,” “us,” “our” and similar references refer: (i) following the consummation of this offering and the Transactions, collectively, to Enovation Controls, Inc., and unless otherwise stated, all of its subsidiaries, and (ii) prior to the completion of this offering and the Transactions, collectively, to Enovation Controls, LLC, and unless otherwise stated, all of its subsidiaries.

In this prospectus, we refer to Murphy Group, Inc., an Oklahoma corporation, and to EControls Group, Inc., a Texas corporation, which are currently members of Enovation Controls, LLC, together as the Founder Entities. Murphy Group, Inc. is owned and controlled by Frank W. Murphy, III, our Executive Chairman, and certain trusts for the benefit of his children. EControls Group, Inc. is majority owned and controlled by Kennon Guglielmo, our Chief Technology Officer, his wife, and certain trusts for the benefit of their children. Certain officers and employees of Enovation Controls, LLC hold Class B, C, and D Membership Interests of Enovation Controls, LLC which will be converted into Common Units in Enovation Controls, LLC in connection with this offering. See “Prospectus Summary—Our Structure—Enovation Controls, LLC.”

Company Overview

We are a leading global provider of sophisticated digital control systems for gaseous fuel engines and engine-driven equipment focused on the vehicle and energy markets. With a global installed base of over one million engine control systems, our EControls^® and Murphy^® brands are recognized for providing innovative, ruggedized, integrated turnkey solutions that combine proprietary software platforms and customized hardware. We develop high technology, mission-critical systems that are utilized in commercial CNG/LNG trucks and buses, natural gas production, distributed power generation, and a variety of industrial and off-highway applications. We provide critical solutions across the entire natural gas value chain based on our comprehensive understanding of engines and their applications in both the supply and demand sides of the natural gas market. This allows our customers to meet the most stringent global emissions standards while enabling the efficient, economical, and reliable operation of their equipment in extreme environments.

Due to our proprietary technology and strong engineering expertise, we believe we have developed many highly entrenched customer relationships, including several Fortune Global 500 corporations, based on deep technical collaboration. Our solutions represent a small portion of the overall cost of the end-use application, but are essential and integral to system functionality and operating performance. Many customers seek our assistance in engineering and designing complete engine control systems which creates high switching costs and results in us having a proprietary position for these engine platforms. In 2013, we generated $256 million in revenue and $41 million in operating income by leveraging the technology of our over 70 product families across more than 4,000 customers globally. We are geographically diverse, generating approximately 30% of our revenues in 2013 from international markets, including more than $60 million from the rapidly growing Asian market.

We believe we are well positioned to benefit from a number of significant trends driving demand in the industries in which we compete:

• Expected significant global increase in the production of and demand for natural gas supported by attractive cost, environmental, and geopolitical benefits relative to other hydrocarbon fuels;

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• Anticipated growth in demand for advanced natural gas compression system controls in oil and gas applications driven by increased shale and tight formation production in the U.S. and globally;

• Global adoption of natural gas vehicles (NGVs) due to significant economic and environmental advantages:

^¡  According to ACT Research, natural gas could power 50% of Class 8 trucks, which are heavy duty trucks that are designed to carry more than 33,000 pounds, produced for the U.S. market by 2025, up from 6% in 2013;

^¡  China is one of the largest and fastest growing NGV markets globally—the number of NGVs in China across all classes has grown from 36,000 in 2002 to approximately 1.6 million in 2012, at a compound annual growth rate (CAGR) of 45.9%, according to NGV Global;

• Increasingly stringent global emissions regulations driving demand for advanced engine technologies that enable lower emissions, greater fuel economy, and regulatory compliance; and

• Widespread adoption of advanced digital control solutions which integrate technologies such as high-resolution displays, highly configurable software, GPS navigation, telematics, vehicle management systems, and diagnostics to improve engine safety, energy efficiency, performance, and reliability with less dependence on operator skill.

Our technological expertise and operating history with engine controls form the basis for all of our hardware and software product offerings. Our solutions include a variety of engine control and monitoring systems, sensors, displays, and panels that are used in gaseous fuel engines across several industries. Through our EControls^® and Murphy^® brands, we target two primary end markets: Vehicles and Energy.

In the Vehicle market, we design, engineer, and manufacture control and fuel injection systems for engines utilizing gaseous fuels such as compressed natural gas (CNG), liquefied natural gas (LNG), and liquefied petroleum gas (LPG or propane) as well as liquid fuels such as gasoline or diesel fuel. We are a leading provider of electronic engine control systems for commercial natural gas powered trucks and buses with approximately 200,000 systems deployed. We have deep technical relationships with several of the largest commercial NGV engine manufacturers in China, and we believe that we will continue to benefit from government regulations in this market including increasingly stringent emissions standards as China strives to improve its air quality. We provide complete engine management systems for natural gas, LPG, diesel, and gasoline engines used in off-highway, forklift and mobile, and stationary applications. We integrate products and technologies into our solutions that connect operators to vehicles through graphical displays, telematics, mobile device integration, and electro-hydraulic controls. We are often positioned as the sole-source provider to many of our top customers and develop proprietary engine control solutions for their new engine platforms.

In the Energy market, we design, engineer, and manufacture a range of sophisticated products for the monitoring and control of mission-critical equipment including natural gas compressors, generators, pumps, and other engine-driven systems used in the extraction, transmission, and storage of natural gas. We are one of the leading providers of advanced controls for the natural gas compression market. Our Murphy^® branded products include integrated engine management systems, custom-engineered and programmable compressor controls, control end-devices (including valves and sensors), and advanced ruggedized displays. Our Engine Integrated Control System (EICS^TM) is a ground-breaking, turnkey control system primarily designed for natural gas compressor engines which integrates multiple critical functions (including ignition system, air-fuel ratio control, speed control, sensors, diagnostics, and an advanced graphical user interface) into a single pre-configured system. Due to its unique level of integration and ease of installation and operation, EICS^TM is being adopted by large engine OEMs and system integrators. Our marketing team leverages our technology and products to

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provide solutions to adjacent engine-driven markets with similar requirements, such as oil and gas drilling services equipment and distributed power generation.

Target Markets	Target Applications	Our Hardware and Software Solutions
Vehicle	• Natural Gas Commercial Trucks and Buses • Forklift and Mobile Equipment • Off-Highway Equipment • Off-Highway Recreational Vehicles • Marine • Distributed Power Generation and Industrial	• Engine Control Modules • Fuel Injection Devices • Electro-Hydraulic Control Modules • Fuel Pressure and Flow Control Devices • Engine Aftertreatment Systems • Power Distribution Modules • Advanced Ruggedized Displays • Engine Sensors • Cruise and Speed Control Systems • Telematics
Energy	• Natural Gas Compression Equipment • Natural Gas Engine-Driven Equipment • Oil & Gas Production Equipment • Distributed Power Generation • Industrial Pumping Equipment	• Integrated Engine Control Systems • Supervisory Control Systems • Engine Aftertreatment Systems • Monitoring Equipment • Ignition Systems & Accessories • Level Transmitters and Maintainers • Instrumentation • Pressure Control Valves • Advanced Ruggedized Displays • Vibration, Pressure, and Temperature Sensors • Wireless Sensor Solutions • Telematics

We generally seek to localize our product manufacturing and support to our customer base around the world. We have established manufacturing, sales, and engineering application centers in the U.S., Mexico, the U.K., China, India, and South Korea to serve our key geographies. We currently operate five manufacturing and distribution centers in the U.S., Europe, and Asia. In 2015, we plan to open our state-of-the-art China Enovation Center, co-located with our manufacturing operations in Hangzhou, China. This Center will provide additional technical and support services for our customers in the vehicle market in China, India, South Korea, and Japan and will include sophisticated engine calibration and certification capabilities. We drive operational excellence through advanced manufacturing techniques, leading industry management practices, and global supply chain optimization. We maintain our high standards of quality through disciplined new product design, manufacturing processes, supplier selection, and adherence to global quality certifications along with comprehensive testing and validation laboratories in the U.S. and China. We establish customer intimacy with strong relationships based on ethics, trust, performance, and rapid responsiveness. Our strong track record of consistent revenue growth and cash flow generation is a testament to our ability to continually deliver innovative products in our markets while maintaining a high degree of customer focus.

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Industry Overview

Shale Gas Revolution

The natural gas industry has undergone a dramatic transformation in recent years. According to the U.S. Energy Information Administration (EIA), global reserves of natural gas have increased by 56% from 1992 to 2013. North America has seen the strongest production growth in recent years, benefitting from improved production technologies such as hydraulic fracturing, or fracking, and horizontal drilling techniques resulting in increased extraction from shale and tight formations.

Natural gas is expected to become an even more important component of the global energy mix, accounting for approximately 30% of global energy needs by 2035 as the supply of natural gas increases by nearly 50%.

Gas compression is an essential process used throughout the production cycle to lift oil in tight formations and to transport gas to the end user. According to Frost & Sullivan, increases in shale gas production will increase revenues at an accelerating pace from 2012 to 2018 for total compressors in oil and gas applications.

Relative to traditional fuels, unconventional natural gas resources contained in shale and tight formations have significant initial production decline rates which necessitate increased drilling activity and compression to maintain production levels. This trend in decline rates is driving increased compression demand and will benefit companies, such as ourselves, that provide the critical technologies required to operate these systems. Gas lifts, which are predominantly used to artificially lift oil by introducing high pressure compressed gas into the outlet tube of the well, are also increasing in prevalence and resulting in greater compression demand.

Accelerating Shift to Natural Gas Vehicles

Due to its current and expected long-term benefits, natural gas has become an important and attractive transportation fuel. According to NGV Global, there are approximately 16.7 million NGVs in operation globally. These vehicles include medium- and heavy-duty commercial vehicles, off-highway trucks, buses, light-duty vehicles, locomotives, marine vessels, and recreational vehicles. As natural gas has become increasingly attractive as a low-cost fuel source and government regulators have implemented stringent emissions regulations, the global population of NGVs has increased by more than seven-fold since 2002 according to NGV Global. Commercial NGVs are experiencing adoption rates significantly higher than other vehicle classes due to high annual fuel consumption and the resulting substantial fuel cost per-mile advantages of natural gas. According to Navigant, approximately 170,000 natural gas trucks and buses were sold globally in 2013.

Expanding Natural Gas Refueling Infrastructure

One historical barrier to the adoption of NGVs has been a lack of broad-based refueling infrastructure. This limitation is being addressed through aggressive station buildout in numerous geographies. China is a leader in the buildout of NGV refueling with a network of almost 4,900 refueling stations in 2013, and the number of refueling stations is expected to grow to about 6,000 refueling stations by the end of 2014. In the U.S., natural gas refueling infrastructure has undergone significant growth as well. Since 2010, refueling stations have increased by over 50% to 1,344 nationwide. New public stations were constructed at a rate of approximately 3.4 per week in 2013, compared to a rate of 1.4 in 2010. The refueling station infrastructure continues to be developed across major U.S. shipping corridors to service national fleets of heavy commercial vehicles. While government subsidies exist in some foreign markets, the U.S. NGV refueling station market remains subsidy free and growth is being driven by private companies such as Clean Energy Fuels, Questar Fueling, TruStar Energy, Shell Oil Products U.S., Love’s Travel Stops, Blu LNG, Prometheus Energy, and Kwik Trip.

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Stringent Emissions Regulations

Concerns regarding climate change and other environmental considerations have led to implementation of laws and regulations that restrict, cap or tax emissions in the vehicle market and throughout other industries. While emission standards vary significantly around the world, such standards have become increasingly more stringent. Over the last ten years in particular, there has been a significant increase in regulation of commercial on-highway and off-highway engine emissions. Industrial OEMs have also experienced pressure to redesign their engines to address these emission regulations, as products that are unable to meet new standards cannot be sold in the marketplace. However, we believe few suppliers to commercial NGV OEMs and industrial OEMs have been capable of providing, or are willing to make the investments necessary to provide, engine control system products that economically meet the new U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB) requirements.

Countries outside of the U.S. have historically adopted emission regulations aligned with those of the U.S., and it is anticipated that regulations comparable to current and future EPA and CARB emission regulations will continue to be implemented internationally. For example, policies in Europe, generally referred to as Euro I, II, III, IV, V, and VI regulations, limit tailpipe emissions of commercial vehicles. Similar to various stages of regulations in the U.S., these regulations in Europe call for comparable reductions in emissions of hydrocarbons, nitrogen oxide, and particulate matter. Emissions standards similar to Euro standards have been adopted by India, China, Argentina, and Brazil.

Competitive Strengths

We believe we have a number of competitive strengths that differentiate us, including:

Leading Provider of Mission-Critical Digital Control Solutions for Natural Gas Engines. We are one of the leading providers of digital control systems for gaseous fuel engines and have an installed base of over one million engine control systems globally. In addition, we are a leading provider of electronic engine control systems for commercial natural gas powered trucks and buses with approximately 200,000 systems deployed, and one of the leading providers of advanced controls for the natural gas compression market. Our EControls^® and Murphy^® brands are recognized for providing innovative, ruggedized, integrated turnkey solutions that deliver consistent and reliable performance for engine-driven equipment operating on a variety of gaseous fuels. Our solutions represent a small portion of the overall cost of the end-use application, but are essential and integral to system functionality and operating performance. We are a preferred partner for global OEMs and end users across a wide variety of high-growth markets, applications, and geographies.

Aligned with Global Industry Trends to Drive Growth. We are strategically positioned to benefit from compelling global trends in each of our primary end markets:

• Expected significant global increase in the production of and demand for natural gas supported by attractive cost, environmental, and geopolitical benefits relative to other hydrocarbon fuels;

• Anticipated growth in demand for advanced natural gas compression system controls in oil and gas applications driven by increased shale and tight formation production in the U.S. and globally;

• Global adoption of NGVs due to significant economic and environmental advantages;

• Increasingly stringent global emissions regulations driving demand for advanced engine technologies that enable lower emissions, greater fuel economy, and regulatory compliance; and

• Widespread adoption of advanced digital control solutions which integrate technologies such as high-resolution displays, highly configurable software, GPS navigation, telematics, vehicle management systems, and diagnostics to improve engine safety, energy efficiency, performance, and reliability with less dependence on operator skill.

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We believe each of these trends will continue to create significant demand for our products.

Innovative Product Design Driven by Deep Application Knowledge. We are a recognized leader in designing and developing innovative and sophisticated new products within our markets. Over the past three years, we have developed and launched 55 new products, which had an average gross margin of approximately 50% for the year ended December 31, 2013. Our intellectual property portfolio includes millions of lines of software source code, proprietary manufacturing techniques and, as of June 30, 2014, 46 issued and pending patents and patent applications. Driven by deep application knowledge, we deliver forward-thinking solutions ahead of our customers’ needs to create sustainable competitive advantages. Our application engineering expertise and know-how enables us to deliver optimized solutions combining proprietary software platforms and customized hardware. Our design and engineering efforts are led by an in-house team of 160 full-time engineers across all disciplines with strong product development and application expertise in gaseous fuel engines and engine-driven equipment.

Entrenched Customer Relationships Built on Technical Collaboration. Our commitment to technological innovation, proven product performance, and superior service has enabled us to develop longstanding, collaborative relationships with a broad group of more than 4,000 customers globally. These customers represent a diverse group of OEMs and distributors located across the globe including Exterran, Power Solutions, RES Energy Solutions, Yuchai, John Deere, Caterpillar, Volvo Penta, and Wuxi Faw. As a result of our application and engineering expertise, we have a deep and unique understanding of our customers’ gaseous fuel engines and engine-driven equipment, and we are often positioned as the sole-source solution provider to our customers.

Established Global Footprint. We maintain a manufacturing, sales, and service infrastructure presence on three continents, enabling us to effectively serve our worldwide customer base. In 2013, approximately 71% of our net sales were generated in North and South America, 24% in Asia and 5% in Europe, the Middle East, and Africa. We believe we have developed strong trusting relationships with local customers and suppliers based on our local manufacturing and sales presence, track record of performance, and brand recognition. In 2015, we plan to open our state-of-the-art China Enovation Center, co-located with our manufacturing operations in Hangzhou, China, that will provide additional technical support as well as engine calibration and certification services to our customers in China, India, South Korea, and Japan. We provide natural gas engine control systems to several of the largest commercial NGV engine manufacturers in China—one of the largest and fastest growing commercial NGV markets.

Strong Financial Performance with Attractive Cash Flow. We have demonstrated the strength of our platform through robust growth and cash flow generation. We grew revenues from $148 million in 2010 to $256 million in 2013. This organic growth has been driven by our new product introductions, geographic expansion, acquisition of new customers, and increasing market share, as well as broader market trends such as the proliferation of commercial NGVs and the energy infrastructure buildout. In addition, we estimate that we generate approximately one-third of our revenues from the Energy market from sales of replacement parts and services, which provides an attractive margin and recurring revenue stream. As evidence of our engineering leadership and compelling value proposition, we generated gross margin of 42% in 2013, an increase of more than 477 basis points since 2010, due to disciplined design reuse, modular hardware and software concepts, high-level graphical software configurability, integrated global sourcing, process improvements, strategic value-based pricing, and an intentional focus on a more favorable customer and product sales mix. Our business historically has required low capital expenditures, which have averaged less than 3% of revenue between 2010 and 2013. In 2013, we generated Adjusted EBITDA of $47 million, net income of $40 million, and net cash provided by operations of $37 million before distributions for taxes.

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Growth Strategy

We believe that we are well positioned to extend our market leading position in sophisticated digital engine control systems for gaseous fuel engines and engine-driven equipment and capitalize on positive global trends. The principal elements of our growth strategy are as follows:

Accelerate Product Innovation and Expansion. We distinguish ourselves from our competitors with our proprietary technology and strong engineering expertise. We are committed to driving our level of technological sophistication and the pace of product innovation. For example, since 2002, we have successfully developed four generations of innovative gaseous engine control platforms and fuel metering technology, with each new generation advancing fuel economy, decreasing emissions, and improving reliability. We plan to continue to leverage our core technology platforms across many different products and applications targeting our served markets to maximize the impact of our research, development, and engineering investments.

Increase Product Sales and Services with Existing Customers. Our deep relationships with our existing customers, as well as our strong track record of developing innovative and forward-thinking products and solutions, have enabled us to systematically increase sales and margins. We believe this approach has been a key driver of our 52% aggregate sales growth from our top ten customers from 2011 to 2013. As a trusted incumbent solution provider with a wide range of customers across numerous markets, we have numerous cross-selling opportunities in which we leverage our existing technologies and respective customer relationships for incremental sales growth.

Develop New Customer Relationships in the Fast Growing Vehicle Market. We are expanding our customer base by developing new OEM relationships in our target markets. We are working with leading North American heavy-duty commercial vehicle manufacturers and global engine OEMs to leverage our technological and engineering capabilities on their new engine platforms. We believe that our global manufacturing, sales, service infrastructure, and partnerships with customers position us to capture market share in both mature and high-growth markets.

Drive Continuous Improvement in Manufacturing and Operations. We believe that our strong manufacturing, engineering, and advanced production capabilities, anchored by our focus on efficiency and quality, are core elements of our financial strength. We intend to increase these advantages by leveraging our proprietary Enovation Controls Operating System (ECOS) to enable high flexibility and superior quality in our manufacturing processes. This system allows for the implementation of continuous improvement initiatives that are designed to support significant operating efficiencies and strong profitability.

Selectively Pursue Strategic Acquisitions and Alliances. Our industry leadership makes us an ideal platform to acquire or partner with companies in our target markets. We provide complete engine control system solutions across a wide range of applications and will continue to explore synergistic acquisition opportunities which enhance our position in our served markets. We will seek strategic transactions that extend our presence into new geographies or applications, expand our customer base, and/or add new products or technologies to our existing platform solutions.

Risks Associated with Our Business

There are a number of risks and uncertainties that may affect our financial and operating performance, our competitive position, and our growth prospects. You should carefully consider all of the risks discussed under the caption “Risk Factors,” which begins on page 23, before investing in our Class A Shares. These risks include the following:

• If one or more of the favorable industry trends we have identified fails to occur, or occurs at a slower rate than expected, our business will be adversely affected.

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• If we are unable to continue our technological innovation and successful introduction of new commercial products, our business will be adversely affected.

• The market for natural gas engines may not develop according to our expectations and, as a result, our business may not grow as planned and our business plan may be adversely affected.

• Fuel price differentials among natural gas, diesel, and gasoline fuels are hard to predict and may be less favorable in the future.

• Our growth is partly dependent on global natural gas refueling infrastructure that may not be developed.

• Changes in laws or government regulations regarding hydraulic fracturing could increase the cost of natural gas exploration and production or limit the areas in which such exploration and production may occur, which could adversely impact the demand for our products and solutions.

• We currently face, and will continue to face, significant competition, which could materially and adversely affect us.

• We derive a significant portion of our revenue from a limited number of major customers, and our revenue, profitability, and cash flows could be materially adversely affected if we are unable to maintain relationships with these customers, or if their demand for our products decreases.

• If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

• The inability to protect our intellectual property and know-how could reduce or eliminate any competitive advantage and reduce our sales and profitability, and the cost of protecting our intellectual property may be significant.

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Our Structure

The diagram below depicts our organizational structure immediately prior the consummation of this offering and related transactions. See “—The Transactions.”

(1) The existing members consist of Murphy Group, EControls Group, and Employee Holders. Murphy Group holds an approximately     % economic interest in Enovation Controls, LLC through its ownership of Class A Units. EControls Group holds an approximately     % economic interest in Enovation Controls, LLC through its ownership of Class A Units. Employee Holders hold an approximately     % economic interest in Enovation Controls, LLC through their ownership of Class B, C, and D Management Interests.

(2) Enovation Controls, LLC’s senior credit facility is guaranteed by its U.S. subsidiaries.

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The diagram below depicts our organizational structure immediately after the consummation of this offering and related transactions. See “—The Transactions.”

(1) The existing owners consist of Murphy Group, EControls Group, and Employee Holders. Murphy Group will hold Class B Shares representing     % of the voting power and 0% of the economic interest; Murphy Group also will hold a     % economic interest in Enovation Controls, LLC. EControls Group will hold Class B Shares representing     % of the voting power and 0% of the economic interest; EControls Group also will hold a     % economic interest in Enovation Controls, LLC. Employee Holders will hold Class B Shares representing     % of the voting power and 0% of the economic interest; Employee Holders also will hold a     % economic interest in Enovation Controls, LLC.

(2) Enovation Controls, LLC’s senior credit facility is guaranteed by its U.S. subsidiaries.

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Enovation Controls, LLC. We will operate our business through Enovation Controls, LLC and its consolidated subsidiaries.

The current members of Enovation Controls, LLC are described below.

• Murphy Group, Inc., which we refer to as the Murphy Group, is owned by Frank W. Murphy, III, our Executive Chairman, and certain trusts for the benefit of his children, and holds an approximately     % economic interest in Enovation Controls, LLC through its ownership of          Class A Units, which will be converted into an aggregate of          Common Units (with a corresponding number of Class B Shares) in connection with this offering.

• EControls Group, Inc., which we refer to as the EControls Group, is majority owned by Kennon Guglielmo, our Chief Technology Officer, his wife, and certain trusts for the benefit of their children, and holds an approximately     % economic interest in Enovation Controls, LLC through its ownership of          Class A Units, which will be converted into an aggregate of          Common Units (with a corresponding number of Class B Shares) in connection with this offering. Certain employees of Enovation Controls, LLC hold a minority ownership interest in EControls Group. We collectively refer to the Murphy Group and EControls Group as the Founder Entities.

• Certain of our officers and other employees, whom we collectively refer to as the Employee Holders, hold an approximately     % economic interest in Enovation Controls, LLC through their ownership of Class B, C, and D Management Interests which will be converted into an aggregate of     Common Units (with a corresponding number of Class B Shares) in connection with this offering in a manner that reflects the percentage of Enovation Controls, LLC currently owned by the Class B, C, and D Management Interest holders, taking into account their current distribution entitlement and the fair value of Enovation Controls, LLC based on the offering price. Approximately     % of converted Common Units will be subject to forfeiture at the time of the conversion and will vest only if the holder remains employed by us through the applicable period or upon a change in control. The conversion will have no direct or indirect economic effect on us.

Enovation Controls, Inc. Upon completion of the offering, we will use the net proceeds received to purchase Common Units directly from the Murphy Group, EControls Group, and Employee Holders and, to the extent necessary to pay offering expenses, from Enovation Controls, LLC. Immediately after our acquisition of these Common Units, our only material asset will be our ownership of     % of the total Common Units and our only business will be acting as the sole managing member of Enovation Controls, LLC. You should note, in particular, that:

• We will be the sole managing member of Enovation Controls, LLC.

• Investors in this offering will own 100% of our Class A Shares (and     % of our Class A Shares on a fully diluted basis assuming all Common Units and Class B Shares are exchanged for Class A Shares). The outstanding Class A Shares will represent 100% of the economic interest in us, but initially only     % of our voting power, and we will own     % of the economic interest in Enovation Controls, LLC.

• Our Class A Shares will entitle the holders to receive 100% of any distributions we make. Upon our liquidation, dissolution, or winding up, holders of Class A Shares will be entitled to share ratably in all assets available for distribution after payment of our liabilities.

• Immediately after the completion of this offering, the only outstanding Class A Shares will be the Class A Shares issued pursuant to this offering.

• The Common Unitholders will own 100% of our Class B Shares, which will vote together with the Class A Shares as a single class. Each Class A Share has one (1) vote per share and each Class B Share has one (1) vote per share. The Class B Shares will represent, upon completion of this offering,     % of the combined voting power of our common stock. The Class B Shares do not represent an economic interest in us and are therefore not entitled to any dividends that we may pay. However, each holder of a Class B Share owns an economic interest in Enovation Controls, LLC through a corresponding

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Common Unit. The Common Unitholders will hold substantially more than 50% of the combined voting power of our common stock and they will hold all the Class B Shares.

• We intend to enter into a stockholders agreement, which we refer to as the Stockholders Agreement, with Murphy Group and EControls Group that will become effective upon the completion of this offering. The Stockholders Agreement will contain provisions that will prevent a Founder Entity from transferring its shares without the consent of the other Founder Entity, except in the case of sales to affiliates, sales to any member of its family group (as defined therein), tag-along sales of our common stock by both Founder Entities, or transfers pursuant to the Registration Rights Agreement, until the earlier of the third anniversary of the offering or the time at which the Founder Entities collectively hold less than 10% of our outstanding Class A Shares and Class B Shares. The Stockholders Agreement will also grant each Founder Entity the right, subject to certain ownership thresholds, to nominate a specified number of designees to our board of directors and committees of our board of directors. Each Founder Entity will have the right to designate two members to our board of directors for so long as such Founder Entity owns 10% or more of our outstanding Class A Shares and Class B Shares on a combined basis. The Founder Entities will also have the right to designate one mutually agreed additional member to our board of directors. The Founder Entities will agree to vote all of their shares of our common stock to elect such designees to our board of directors. If, at any time, a Founder Entity owns 5% or more but less than 10% of our outstanding Class A Shares and Class B Shares on a combined basis, such Founder Entity will have the right to designate one nominee for election to our board of directors. If a Founder Entity’s ownership level falls below 5% of our outstanding Class A Shares and Class B Shares on a combined basis, such Founder Entity will no longer have any right to designate a nominee and the right of the Founder Entities to designate a mutually agreed upon designee will also terminate. In addition, for so long as the Founder Entities together hold at least 25% of the outstanding Class A Shares and Class B Shares on a combined basis, certain actions may not be taken without the prior written consent of each Founder Entity owning at least 5% of the outstanding Class A Shares and Class B Shares on a combined basis. See “The Transactions—Stockholders Agreement” for further information.

• Pursuant to the amended and restated operating agreement of Enovation Controls, LLC, in order to provide liquidity to the Common Unitholders, each Common Unit, together with the corresponding number of our Class B Shares, held by a Common Unitholder will be exchangeable for (i) one of our Class A Shares, or (ii) at our option, cash equal to the market value of one of our Class A Shares, at any time and from time to time after the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder. These exchange rights may be exercised with respect to unvested Common Units only with our consent. In addition, the percentage of an Employee Holder’s Common Units that can be exchanged (taken together with any Common Units sold to us in connection with the offering) is limited to the aggregate percentage of Common Units exchanged or sold in connection with or following the offering by Murphy Group or EControls Group (whichever is higher). This percentage limitation will expire three years after the offering or, if sooner, when the Founder Entities together cease to own at least 15% of the outstanding Class A Shares and Class B Shares on a combined basis. The exchange of the Common Units and Class B Shares corresponding to these Common Units for our Class A Shares will increase the number of outstanding Class A Shares and decrease the number of outstanding Class B Shares.

• Following this offering, the members of Enovation Controls, LLC, other than us, will consist of Murphy Group, EControls Group, and the Employee Holders.

Certain Attributes of Our Structure. Our structure following this offering will be designed to accomplish a number of objectives, the most important of which are as follows:

• The structure will allow us to serve as a holding company, with our sole asset being our ownership interest in Enovation Controls, LLC. The Common Unitholders, however, will retain their economic

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investment in the form of direct interests in Enovation Controls, LLC, rather than through our Class A Shares. Following this offering, all of the businesses operated by Enovation Controls, LLC or its subsidiaries prior to this offering, and all of the interests held by Enovation Controls, LLC and its subsidiaries in such businesses prior to this offering, will be operated or held, as the case may be, by Enovation Controls, LLC and its subsidiaries, and our current management will continue to manage these businesses. As a result, we and the Common Unitholders will participate in the net operating results of Enovation Controls, LLC on a pari passu basis, in accordance with our respective ownership of Enovation Controls, LLC.

• In connection with this offering, we will issue to the Common Unitholders non-economic Class B “vote-only” shares that as a percentage of the combined voting power of our common stock will be equal to their economic ownership in Enovation Controls, LLC.

• In the event that a Common Unitholder wishes to exchange Common Units for Class A Shares, the holder must deliver the Common Units to us, together with a corresponding number of Class B Shares, and in exchange therefor we will deliver to the exchanging holder a number of Class A Shares corresponding to the number of Common Units delivered to us. We will cancel any Class B Shares delivered to us.

• Under the terms of the amended and restated operating agreement of Enovation Controls, LLC, Common Unitholders will be able to exchange their Common Units, together with a corresponding number of Class B Shares, for Class A Shares at any time and from time to time after the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, subject to certain limitations.

The Transactions

In connection with this offering:

• The amended and restated operating agreement of Enovation Controls, LLC will be amended and restated to provide, among other things, (i) for us to act as the sole managing member and (ii) that Common Units held by the Common Unitholders together with a corresponding number of Class B Shares will be exchangeable for (a) one of our Class A Shares, or (b) at our option, cash equal to the market value of one of our Class A Shares, as applicable, at any time and from time to time after the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, subject to certain limitations, in order to provide liquidity to these holders.

• We will issue the Class A Shares for net proceeds of approximately $         million, after deducting underwriting discounts (assuming the Class A Shares are sold at $         per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus).

• We intend to use the net proceeds that we receive from this offering to purchase Common Units directly from the Murphy Group, EControls Group, and Employee Holders and Enovation Controls, LLC at a price per Common Unit equal to the public offering price per share of our Class A Shares, less underwriting discounts. The number of Common Units being sold to us by the Murphy Group, EControls Group, and Employee Holders is based upon a pro rata allocation among the Murphy Group, EControls Group, and those Employee Holders (based on the number of vested Common Units held by such Employee Holders) electing to participate in the sale. We will use $         million to purchase     % of the Common Units held by Murphy Group, $         million to purchase     % of the Common Units held by EControls Group and $         million to purchase     % of the Common Units held by the Employee Holders and $         million to purchase     % of the Common Units from Enovation Controls, LLC. Enovation Controls, LLC will use the proceeds from our purchase of Common Units from it to repay offering expenses. Upon completion of the offering, we will have acquired Common Units representing a     % interest in Enovation Controls, LLC.

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• We will enter into a stockholders agreement with Murphy Group and EControls Group immediately prior to this offering. See “The Transactions—Stockholders Agreement.”

• We will enter into a registration rights agreement with all Common Unitholders immediately prior to this offering. See “The Transactions—Registration Rights Agreement.”

• We will enter into a tax receivable agreement with all Common Unitholders immediately prior to this offering. See “The Transactions—Tax Receivable Agreement.”

• We will amend and restate our certificate of incorporation to provide for, among other things, the issuance of our Class A Shares and Class B Shares.

We refer to the foregoing collectively as the “Transactions.” No fairness opinion was sought nor was one obtained for any aspect of the Transactions. If you invest in our Class A Shares, your interest in us will be diluted to the extent of the difference between the initial public offering price per Class A Share and the pro forma net tangible book value per Class A Share after this offering, which is $        . Assuming we sell the Class A Shares in this offering at $         per share, the extent of your dilution will be $         per share. See “Dilution” for further information.

Tax Receivable Agreement. As described in “The Transactions,” we intend to enter into a tax receivable agreement with all Common Unitholders. The tax receivable agreement will require us to pay those Common Unitholders 85% of the amount of cash savings, if any, in U.S. federal, state and local income or franchise tax that we actually realize, or in some circumstances we are deemed to realize, in any tax year beginning with and following 2014 (a “covered tax year”) from increases in tax basis realized as a result of the initial purchase and any future exchanges by Common Unitholders of their Common Units (and Class B Shares) for Class A Shares (or cash), including increases attributable to payments made under the tax receivable agreement and deductions attributable to imputed interest. We expect to benefit from the remaining 15% of cash savings, if any, in income and franchise tax that we actually realize during a covered tax year.

Controlled Company Status

As a result of the significant ownership of our Class B Shares by the Founder Entities and the Stockholders Agreement described above, more than 50% of the combined voting power of our common stock will be held by the Founder Entities. As a result, we will be considered a “controlled company” under the rules of the NYSE. A controlled company may elect not to comply with certain NYSE corporate governance standards, including the requirements that: (i) a majority of our board of directors consist of independent directors; (ii) we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and (iii) we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. Following this offering, in reliance upon the foregoing exemptions, a majority of our board of directors will not consist of independent directors, we will not have a nominating and corporate governance committee, and our compensation committee will not be composed entirely of independent directors, and we may use any of these exemptions for so long as we are a controlled company. Accordingly, you will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of the NYSE. See “Risk Factors—Risks Related to this Offering and Ownership of Our Class A Shares—As a controlled company, we will not be subject to all of the corporate governance rules of the NYSE” and “Management—Director Independence” for further information.

In addition, the Founder Entities will be able to significantly influence, and as long as they together own a majority of our outstanding common stock, control the outcome of all matters requiring a stockholder vote, including: the election of directors; mergers, consolidations and acquisitions; the sale of all or substantially all of our assets and other decisions affecting our capital structure; the amendment of our certificate of incorporation

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and our bylaws; and our winding up and dissolution. This concentration of ownership may delay, deter or prevent acts that would be favored by our other stockholders or deprive holders of Class A Shares of an opportunity to receive a premium for their Class A Shares as part of a sale of our business and it is possible that the interests of the Founder Entities may in some cases conflict with our interests and the interests of our other holders of Class A Shares, including you.

Corporate Information

Our principal executive offices are located at 5311 South 122^nd East Avenue, Tulsa, Oklahoma 74146 and our telephone number at that address is (918) 317-4100. Our website is located at www.enovationcontrols.com. This website and the information contained therein is not part of this prospectus, and you should rely only on the information contained in this prospectus when making a decision as to whether to invest in our Class A Shares.

Emerging Growth Company Status

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements that are applicable to other companies that are not emerging growth companies. Accordingly, we have included detailed compensation information for only our three most highly compensated executive officers and have not included a compensation discussion and analysis (CD&A) of our executive compensation programs in this prospectus. In addition, for so long as we are an “emerging growth company,” we will not be required to:

• engage an auditor to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes–Oxley Act of 2002 (the “Sarbanes–Oxley Act”);

• comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (the “PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

• submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “say-on-golden parachutes;” or

• disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparison of the chief executive officer’s compensation to median employee compensation.

In addition, the JOBS Act provides that an “emerging growth company” can use the extended transition period for complying with new or revised accounting standards. However, we are choosing to “opt out” of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not emerging growth companies. The JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We will remain an “emerging growth company” until the earliest to occur of:

• our reporting $1 billion or more in annual gross revenues;

• our issuance, in a three year period, of more than $1 billion in non-convertible debt;

• the end of the fiscal year in which the market value of our common stock held by non-affiliates exceeds $700 million on the last business day of our second fiscal quarter; and

• December 31, 2019.

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THE OFFERING

Class A Shares being offered by us	Class A Shares
Underwriters’ overallotment option to purchase additional Class A Shares	Class A Shares
Class A Shares to be outstanding immediately after this offering	Class A Shares
Class A Shares to be outstanding immediately after this offering, assuming the exchange of all Common Units	Class A Shares. See “—Exchange Rights” below.
Class B Shares to be held by the holders of Common Units immediately after this offering	Class B Shares
Voting	Each of our Class A Shares will entitle its holder to one (1) vote on all matters to be voted on by stockholders generally. Each of our Class B Shares will entitle its holder to one (1) vote on all matters to be voted on by stockholders generally. Except as required by law, our Class A Shares and Class B Shares will vote together on all matters submitted to a vote of our stockholders.
Use of proceeds	We estimate that the net proceeds from this offering will be approximately $         million, after deducting underwriting discounts (assuming the Class A Shares are sold at $         per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus), or $         million if the underwriters exercise in full their option to purchase additional shares to cover overallotments. We intend to use $         million of the net proceeds of this offering to purchase Common Units of Enovation Controls, LLC directly from the EControls Group, Murphy Group and Employee Holders at a price per Common Unit equal to the public offering price per share of our Class A Shares, less underwriting discounts. The number of Common Units being sold to us by the Murphy Group, EControls Group, and Employee Holders is based upon a pro rata allocation among the Murphy Group, EControls Group, and those Employee Holders (based on the number of vested Common Units held by such Employee Holders) electing to participate in the sale. We intend to use the remaining $         million of the proceeds of this offering to purchase newly issued Common Units of Enovation Controls, LLC from Enovation Controls, LLC at a price per Common Unit equal to the public offering price per share of our Class A Shares, less underwriting discounts. These proceeds will be used by Enovation Controls, LLC to pay estimated offering

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	expenses. Upon completion of the offering, we will have acquired Common Units representing a     % economic interest in Enovation Controls, LLC (or Common Units representing a     % economic interest if the underwriters exercise in full their option to purchase additional shares to cover overallotments). We will not retain any of the proceeds used to purchase the Common Units from the Common Unitholders. The net proceeds from any exercise of the underwriters’ overallotment option will be used to purchase a corresponding additional number of Common Units directly from the EControls Group, Murphy Group, and Employee Holders at a price per Common Unit equal to the public offering price per share of our Class A Shares, less underwriting discounts. See “Use of Proceeds.”
Exchange rights	Subject to the terms and conditions of the amended and restated operating agreement of Enovation Controls, LLC, each Common Unitholder will have the right to exchange Common Units together with the corresponding number of our Class B Shares, for (i) our Class A Shares, or (ii) at our option, cash equal to the market value of the Class A Shares issuable upon exchange. See “The Transactions—Operating Agreement of Enovation Controls, LLC—Exchange Rights.” To effect an exchange, a Common Unitholder must simultaneously deliver to us its Common Units and a corresponding number of Class B Shares. Unless we exercise our option to pay cash in lieu of Class A Shares, we will deliver an equivalent number of Class A Shares to the exchanging holder. The Class B Shares surrendered by the exchanging holder will be cancelled. As a holder exchanges its Common Units, our percentage of economic ownership of Enovation Controls, LLC will be correspondingly increased.
Dividend policy	We currently anticipate that we will retain all of our future earnings for use in the expansion and operation of our business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends to holders of Class A Shares will be at the discretion of our board of directors and will depend on many factors, including our financial condition, earnings, legal requirements, restrictions under our senior credit facility and any other debt agreements we are then parties to, and other factors our board of directors deems relevant. See “Risk Factors—Risks Related to this Offering and Ownership of Our Class A Shares—We are a holding company and depend upon our subsidiaries for our cash flow.”

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Proposed NYSE symbol	“ENOV.”
Risk factors	You should read the “Risk Factors” section of this prospectus beginning on page 23 for a discussion of the factors to consider carefully before deciding to purchase any of our Class A Shares.

The number of shares outstanding after this offering and other information based thereon in this prospectus excludes:

• up to              Class A Shares expected to be available for future grant under the Enovation Controls, Inc. 2014 Long-Term Incentive Plan after the consummation of this offering;

• up to              Class A Shares issuable upon exchange of Common Units by the current holders thereof; and

• up to              Class A Shares that the underwriters may purchase from us to the extent that they exercise their overallotment option.

Except as otherwise indicated, the number of shares outstanding after this offering and other information based thereon in this prospectus includes all of our outstanding Class B Shares.

Except as otherwise indicated, all information in this prospectus assumes an initial public offering price of $             per Class A Share, the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus.

In the event the initial public offering price in this offering is less than $             per share, the aggregate number of Common Units issuable in exchange for the Class B, C, and D Management Interests will decrease and the aggregate number of Common Units issuable to the Murphy Group and the EControls Group will commensurately increase. The exact amount of any such adjustments, if any, will be based on the actual per share initial public offering price. However, any such adjustments will not result in any change to the aggregate number of Class A Shares issuable in exchange for the Common Units, nor any change in the aggregate number of Class A Shares outstanding after this offering (other than any increase or decrease resulting from the elimination of fractional shares).

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SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

The following table presents the summary historical consolidated financial data of Enovation Controls, LLC, our accounting predecessor, and summary unaudited pro forma financial data of Enovation Controls, Inc., for the periods and as of the dates indicated. The summary financial data presented below should be read in conjunction with “Capitalization,” “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and accompanying notes thereto included elsewhere in this prospectus. Historical results are not necessarily indicative of results that may be expected for any future period, nor should the results for any interim period be considered indicative of the expected results for a full fiscal year.

The consolidated statement of operations data for the years ended December 31, 2013, 2012, and 2011 have been derived from Enovation Controls, LLC’s audited consolidated financial statements included elsewhere in this prospectus. The consolidated statement of operations data for the six months ended June 30, 2014 and 2013 and the consolidated balance sheet data as of June 30, 2014 are derived from the unaudited consolidated financial statements of Enovation Controls, LLC included elsewhere in this prospectus. In the opinion of management, such unaudited financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial position and results of operations as of the dates and for the periods indicated.

The summary unaudited pro forma condensed consolidated financial data as of June 30, 2014 and for the year ended December 31, 2013 and the six months ended June 30, 2014 have been prepared to give pro forma effect to (i) the Transactions as described in “The Transactions,” which includes the reorganization transactions and the sale of shares in this offering (excluding shares issuable upon exercise of the underwriters’ option to purchase additional shares) and the application of the net proceeds from this offering as described in “Use of Proceeds,” (ii) the tax receivable agreement we will enter into with the existing Common Unitholders, (iii) one-time special distribution of $60.0 million to Murphy Group and EControls Group and borrowings of $85.5 million under our senior credit facility to pay this distribution and repay existing debt, which occurred on June 30, 2014, and (iv) the purchase of our San Antonio facility on July 25, 2014 from a third-party entity by a company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, in each case as if they had been completed as of January 1, 2013, with respect to the unaudited pro forma condensed consolidated statements of income, and June 30, 2014, with respect to the unaudited pro forma condensed consolidated balance sheet. As a result of the purchase described in the foregoing item (iv), the company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, must be accounted for as a variable interest entity which will result in the cost of the San Antonio facility, accumulated depreciation, mortgage debt and related depreciation and interest expense being consolidated (and the related rent expense being eliminated) in our financial statements. This data is subject, and gives effect, to the assumptions and adjustments described in the notes accompanying the unaudited pro forma condensed consolidated financial information included under “Unaudited Pro Forma Condensed Consolidated Financial Information.” The summary unaudited pro forma condensed consolidated financial data is presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the foregoing transactions been consummated on the dates indicated, and do not purport to be indicative of statements of financial condition or results of operations as of any future date or for any future period.

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The financial statements of Enovation Controls, Inc. have not been presented below as it is a newly incorporated entity, has nominal capitalization, had no business transactions or activities to date, and had no assets or liabilities during the periods presented below. Enovation Controls, LLC will be considered the predecessor of Enovation Controls, Inc. for accounting purposes and the consolidated financial statements of Enovation Controls, LLC will be the historical financial statements of Enovation Controls, Inc. following this offering.

	Pro Forma(2)	Six Months Ended June 30,						Pro Forma(2)
	Six Months Ended June 30, 2014							Year Ended December 31, 2013	Year ended December 31,
		2014			2013				2013			2012			2011
(in thousands)
Consolidated Statement of Operations Data:
Net sales		$	142,484		$	128,303			$	255,582		$	218,556		$	193,739
Cost of goods sold			83,533			73,242				147,323			137,078			122,069
Gross profit			58,951			55,061				108,259			81,478			71,670
Operating expense:
Selling, general and administrative expenses			55,403			20,999				43,566			36,568			34,708
Research and development expenses			26,327			11,443				23,628			20,429			17,349
Goodwill impairment			—			—				—			6,462			—
Operating expense			81,730			32,442				67,194			63,459			52,057
(Loss) income from operations			(22,779	)		22,619				41,065			18,019			19,613
Other income (expenses)
Interest, net			(313	)		(177	)			(440	)		(482	)		(587	)
Gain on early extinguishment of debt			—			—				—			—			379
Other			(230	)		160				88			251			(387	)
Total other expenses			(543	)		(17	)			(352	)		(231	)		(595	)
(Loss) income before provision for income taxes			(23,322	)		22,602				40,713			17,788			19,018
Provision for income taxes			(827	)		(279	)			(793	)		(204	)		(383	)
Net (loss) income		$	(24,149	)	$	22,323			$	39,920		$	17,584		$	18,635
Other comprehensive (loss) income
Foreign currency translation adjustments			28			(216	)			379			468			131
Reclassification of goodwill translation adjustment to income			—			—				—			1,143			—
Other comprehensive (loss) income			28			(216	)			379			1,611			131
Comprehensive (loss) income		$	(24,121	)	$	22,107			$	40,299		$	19,195		$	18,766
Net income attributable to noncontrolling interests
Net income attributable to controlling interest
Net income per share:
Basic
Diluted
Weighted average shares outstanding
Basic
Diluted
Other Data:
Adjusted EBITDA(1)	$	$	27,527		$	25,657		$	$	47,226		$	30,091		$	24,519

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	As of June 30, 2014
	Historical			Pro Forma(2)
	(in thousands)
Condensed Balance Sheet Data:
Cash		10,049
Accounts receivable, net		38,264
Inventories, net		34,727
Property, plant and equipment, net		20,179
Total assets		115,663
Long-term debt (including current portion)		86,549
Total members’/stockholders’ equity attributable to Enovation Controls, Inc.
Non-controlling interest
Total members’/stockholders’ equity		(38,664	)

(1) We define Adjusted EBITDA as consolidated net income (loss) before depreciation and amortization, interest expense and provision for income tax adjusted for the impact of certain items that we do not consider representative of our ongoing operating performance. Adjusted EBITDA includes adjustments to consolidated net income (loss) before depreciation and amortization, interest expense and provision for income taxes, for impairment of goodwill charges, non-cash compensation and Transactions expenses. Because Adjusted EBITDA omits certain non-cash items and other infrequent cash charges, we believe that it is less susceptible to variances in actual performance resulting from depreciation, amortization, other non-cash charges and other infrequent cash charges and is more reflective of our operating performance.

We use Adjusted EBITDA to evaluate and control our cash operating costs and to measure our operating profitability. We believe the presentation of Adjusted EBITDA enhances our investors’ overall understanding of the financial performance and cash flow of our business. We present Adjusted EBITDA because we believe it is useful as a supplemental measure in evaluating the performance of our operating businesses and providing greater transparency into our results of operations. You should not consider Adjusted EBITDA in isolation, nor as an alternative to net income (loss), determined in accordance with GAAP, as an indicator of operating performance, or as an alternative to net cash provided by operating activities, determined in accordance with GAAP, as an indicator of our cash flow. A directly comparable GAAP measure to Adjusted EBITDA is net income (loss). The following is a reconciliation of net income (loss) to Adjusted EBITDA:

	Pro Forma						Pro Forma
	Six Months Ended June 30, 2014	Six Months Ended June 30,					Year Ended December 31, 2013	Year ended December 31,
		2014			2013			2013		2012		2011
(in thousands)
Net (loss) income		$	(24,149	)	$	22,323		$	39,920	$	17,584	$	18,635
Plus:
Interest, net			313			177			440		482		587
Provision for income taxes			827			279			793		204		383
Depreciation expense			1,981			1,463			3,245		2,441		2,172
Amortization of intangibles			1,425			1,415			2,828		2,918		2,742
Goodwill impairment			—			—			—		6,462		—
Non-cash compensation			45,859			—			—		—		—
Transactions expenses			1,271			—			—		—		—
Adjusted EBITDA	$	$	27,527		$	25,657		$	47,226	$	30,091	$	24,519

Adjusted EBITDA has limitations as an analytical tool, and you should not consider Adjusted EBITDA either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations are:

• this measure does not reflect changes in, or cash requirement for, our working capital needs;

• this measure does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

• this measure does not reflect our income tax expense or the cash requirements to pay our taxes;

• this measure does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;

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• this measure does not reflect the impact of equity based compensation upon our operations;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and this measure does not reflect any cash requirements for such replacements; and

• other companies may calculate this measure differently so our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.

(2) Pro forma amounts give effect to: (i) the Transactions as described in “The Transactions,” which includes the reorganization transactions and the sale of shares in this offering (excluding shares issuable upon exercise of the underwriters’ option to purchase additional shares) and the application of the net proceeds from this offering as described in “Use of Proceeds,” (ii) the tax receivable agreement we will enter into with the existing Common Unitholders, (iii) a one-time special distribution of $60.0 million to Murphy Group and EControls Group and borrowings of $85.5 million under our senior credit facility to pay this distribution and repay existing debt, which occurred on June 30, 2014, and (iv) the purchase of our San Antonio facility on July 25, 2014 from a third-party entity by a company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, in each case as if they had been completed as of January 1, 2013, with respect to the unaudited pro forma condensed consolidated statements of income, and June 30, 2014, with respect to the unaudited pro forma condensed consolidated balance sheet. As a result of the purchase described in the foregoing item (iv), the company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, must be accounted for as a variable interest entity which will result in the cost of the San Antonio facility, accumulated depreciation, mortgage debt and related depreciation and interest expense being consolidated (and the related rent expense being eliminated) in our financial statements.

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RISK FACTORS

Any investment in our Class A Shares involves a high degree of risk. You should carefully consider the risks described below and all of the information contained in this prospectus, including the consolidated financial statements and the related notes thereto appearing at the end of this prospectus, before deciding whether to invest in our Class A Shares. If any of the following risks actually occur, our business, financial condition and results of operations may be adversely affected. In such an event, the value of our Class A Shares could decline and you could lose some or all of your investment.

Risks Related to Our Business Operations

If one or more of the favorable industry trends we have identified fails to occur, or occurs at a slower rate than expected, our business will be adversely affected.

Our operational strategy is premised on a number of favorable industry trends, including: (i) expected significant global increase in the production of and demand for natural gas supported by attractive cost, environmental, and geopolitical benefits relative to other hydrocarbon fuels, (ii) anticipated growth in demand for advanced natural gas compression system controls in oil and gas applications driven by increased shale and tight formation production in the U.S. and globally, (iii) global adoption of commercial NGVs, due to significant economic and environmental advantages, (iv) increasingly stringent global emissions regulations driving demand for advanced engine technologies that enable lower emissions, greater fuel economy, and regulatory compliance and (v) widespread adoption of advanced digital control solutions which integrate technologies such as high resolution displays, configurable software GPS navigation telematics, vehicle management systems, and diagnostics to improve engine safety, energy efficiency, performance, and reliability with less dependence on operator skill. If one or more of these expected industry trends fails to occur, or occurs at a slower rate than expected, our sales growth will be negatively impacted and our business will be adversely affected.

If we are unable to continue our technological innovation and successful introduction of new commercial products, our business will be adversely affected.

The industries we serve experience ongoing technological change and product improvement. Manufacturers periodically introduce new generations of products or require new technological capacity to develop customized products or to respond to industry developments or needs. Our future growth will depend on our ability to gauge the direction of the commercial and technological progress in our markets, as well as our ability to acquire new product technologies or to fund and successfully develop, manufacture and market products in this constantly changing environment. We must continue to identify, develop, manufacture and market innovative products on a timely basis to replace existing products in order to maintain our profit margins and competitive position. We may not be successful in acquiring and developing new products or technologies and any of our new products may not be accepted by our customers. If we fail to keep pace with evolving technological innovations in the markets we serve, our business will be adversely affected.

The market for natural gas engines may not develop according to our expectations and, as a result, our business may not grow as planned and our business plan may be adversely affected.

Our future growth depends in part upon the market for engines using natural gas. However, we cannot assure you that we have accurately predicted the likelihood that emission regulations will be implemented, the potential impact of any new emission regulations, which we believe will increase the desirability of natural gas engines, or the likelihood that our customers or potential customers would increase the adoption of natural gas engines in response to any such regulations. In addition, to the extent that engine manufacturers are able to design and produce emission-compliant engines that use gasoline or diesel fuel at a lower price than we currently expect, engines using traditional fuels will be more competitive with natural gas engines, and customers and potential customers may be less likely to adopt engines using natural gas. Furthermore, even if natural gas

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engines are increasingly adopted, we cannot assure you that engines actually using our products would capture any portion of this potential market size increase. If the commercial truck and bus market fails to adopt natural gas engines as we anticipate, or adopts them more slowly than we anticipate, the sales of our products used in connection with such engines, and therefore our business, could be materially adversely affected.

Fuel price differentials among natural gas, diesel and gasoline fuels are hard to predict and may be less favorable in the future.

As a provider of engine control systems specializing in natural gas, we depend on our customers and potential customers choosing natural gas systems. The acceptance of natural gas driven engines by our customers and potential customers depends in part on the price differential among natural gas, diesel, and gasoline fuels. A change in the price differential among these fuels could make natural gas less attractive to our customers and potential customers, which could harm our results. The relative price of natural gas is affected by many factors, including changes in the resource base for natural gas compared with crude oil, availability of shale gas, pipeline transportation capacity for natural gas, refining capacity for crude oil, and government excise and fuel tax policies. There can be no assurance that natural gas will remain less expensive than diesel and gasoline fuels. Moreover, the recent significant volatility in oil and gasoline prices demonstrates that it is difficult to predict future transportation fuel costs. In addition, any new regulations imposed on natural gas extraction in the United States, particularly on extraction of natural gas from shale formations, could increase the costs of domestic gas production, which could lead to substantial increases in the price of natural gas. Reduced prices for gasoline and diesel fuel may cause potential customers to delay or reject converting their fleets to run on natural gas. If the relative price of natural gas increases, this could impact potential customers’ decisions to adopt natural gas as an energy solution, which in turn could materially impact our profitability and results of operations.

Our growth is partly dependent on global natural gas refueling infrastructure that may not be developed.

Our target markets currently have relatively limited infrastructure to deliver natural gas to vehicle-based consumers in compressed (CNG) or liquefied (LNG) form. By contrast, gasoline and diesel fueling stations and service infrastructure are widely available in our target markets. For NGV fuels to achieve more widespread use in our target markets, they will require a promotional and educational effort and the development and supply of more NGVs and fueling stations. This will require significant continued effort by us, our peers in the natural gas industry, the government, and clean air groups. We cannot assure you that the availability of natural gas as a vehicle fuel will expand or that refueling stations will be built to meet projected demand. Companies may not be willing to invest capital to develop refueling stations and distribution facilities unless they believe there will be demand for such stations, and such demand will depend on such stations being available. If customers are unable to obtain natural gas fuel conveniently and affordably, a mass market for vehicles powered by our technology is unlikely to develop, which could have a material adverse effect on our results of operations.

Changes in laws or government regulations regarding hydraulic fracturing could increase the cost of natural gas exploration and production, limit the areas in which such exploration and production may occur, which could adversely impact the demand for our products and solutions.

Demand for our products and solutions is driven in part by the increased natural gas production resulting from hydraulic fracturing. Presently, hydraulic fracturing is regulated primarily at the state level, typically by state oil and natural gas commissions and similar agencies. However, hydraulic fracturing is currently under public and governmental scrutiny due to potential environmental and physical impacts, including possible contamination of groundwater and drinking water and possible links to earthquakes, and proposals have been made to enact foreign, federal, state and local legislation and regulations that would increase the regulatory burden imposed on hydraulic fracturing. For example, the U.S. Environmental Protection Agency, or the EPA, has asserted federal regulatory authority over certain hydraulic fracturing activities involving diesel under the Safe Drinking Water Act, issued new air emission controls for oil and natural gas production and natural gas processing operations, initiated a study to examine the potential impacts of hydraulic fracturing on drinking water

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resources, and intends to propose standards for wastewater discharges from oil and gas extraction activities and regulations that would require companies to disclose information regarding hydraulic fracturing. The U.S. Congress continues to consider amending the Safe Drinking Water Act such that all hydraulic fracturing activities would become subject to it. The U.S. Department of the Interior has proposed a rule that would regulate hydraulic fracturing activities on federal lands. Moreover, many foreign, state and local governments have enacted requirements relating to hydraulic fracturing, including imposing operational restrictions, disclosure requirements and moratoria on hydraulic fracturing activity.

If new foreign, federal, state or local laws or regulations that significantly regulate or restrict hydraulic fracturing are adopted, such legal requirements could result in delays, eliminate certain drilling and injection activities and make natural gas exploration and production more difficult or costly. Any such regulations limiting or prohibiting hydraulic fracturing could reduce natural gas exploration and production activities and, therefore, materially and adversely affect the demand for our products and solutions.

We currently face, and will continue to face, significant competition, which could materially and adversely affect us.

Our products face, and will continue to face, significant competition, including from incumbent technologies, and in particular increased competition from alternative products supplied by our competitors to natural gas engine OEMs. As the market for natural gas engine products continues to grow, this competition may increase. New developments in technology may negatively affect the development or sale of some or all of our products or make our products uncompetitive or obsolete. Other companies, many of which have substantially longer operating histories and larger customer bases, name recognition, and financial and marketing resources than we do, are currently engaged in the development of products and technologies that are similar to, or may compete with, certain of our products and technologies.

We sell products into competitive markets. In the Vehicle market, our gaseous engine control solutions compete in markets worldwide based on technology, emissions capability, durability, quality, cost, manufacturing capabilities, and the technical expertise of our engineering support team. In this market, our primary competitors are Woodward and Fuel System Solutions, and we also compete to a lesser extent with Westport Innovations. In the Energy market, we are a key supplier of integrated engine and application controls for engine-driven natural gas compressors, power units, pumps, and generators. In this market, our primary competitor is Hoerbiger Engine Solutions (Altronic). Within our primary markets, we compete with a range of companies that offer certain individual components of our full system solutions. The components of our overall systems most commonly include displays, panels, sensors, valves, and other end-devices. These competitors include Wachendorff, LOFA, Controls Inc., EMIT, and Kenco.

We also face competition from customers developing products internally. Customers for our products generally have substantial technological capabilities and financial resources. Some customers have traditionally used these resources to develop their own products internally. The future prospects for our products are dependent upon our customers’ acceptance of our products as an alternative to their internally developed products. Future sales prospects also are dependent upon acceptance of third-party sourcing for products as an alternative to in-house development. Customers may in the future continue to use internally developed components. They also may decide to develop or acquire products that are similar to, or that may be substituted for, our products. If our customers fail to accept our products as an alternative, if they develop or acquire the technology to develop such products internally rather than purchase our products, or if we are otherwise unable to develop or maintain strong relationships with them, our business, financial condition and results of operations would be materially and adversely affected.

Competition for our products may come also from new alternative power technologies or improvements to current power technologies. Each of our target markets is currently serviced by existing manufacturers with existing customers and suppliers using proven and widely accepted technologies. Many existing manufacturers have or had natural gas engine development programs and could develop new engines without our help or

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components, using more conventional technologies or technologies from competitive companies. Additionally, there are competitors working on developing technologies such as cleaner diesel engines, bio-diesel, fuel cells, advanced batteries and hybrid battery/internal combustion engines, and new fuels in each of our targeted markets. Each of these competitors has the potential to capture market share in various markets, which could have a material adverse effect on our position in the industry and our financial results. For our products to be successful against competing technologies, especially diesel engines, they must offer advantages in one or more of these areas: regulated or un-regulated emissions performance, including CO₂ reduction; fuel economy; fuel cost; engine performance; power density; engine and fuel system weight; and engine and fuel system price. There can be no assurance that our products will be able to offer advantages in all or any of these areas.

Competitive actions, such as price reductions, consolidation in the industry, improved delivery and other actions, could adversely affect our revenue and earnings. We could experience a material adverse effect to the extent that our competitors are successful in reducing our customers’ purchases of products and services from us. Competition could also cause us to lower our prices, which could reduce our margins and profitability.

We derive a significant portion of our revenue from a limited number of major customers, and our revenue, profitability and cash flows could be materially adversely affected if we are unable to maintain relationships with these customers, or if their demand for our products decreases.

Historically, we have derived a significant portion of our revenue from a limited number of major customers. For the years ended December 31, 2013, 2012, and 2011, sales to our top ten customers accounted for approximately 49%, 47%, and 46%, respectively, of our revenue, and in 2013, 2012 and 2011, one customer, Guangxi Yuchai Machinery Group Co., Ltd., accounted for 12%, 13%, and 11%, respectively, of our revenue. It is likely that one or more customers will continue to contribute a significant portion of our revenue in any given year for the foreseeable future. If any of our significant customers were to change suppliers, in-source production, institute significant restructuring or cost-cutting measures, or experience financial distress, these significant customers may substantially reduce purchases from us. Accordingly, our revenue could decrease significantly, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

We rely significantly on trade secrets, including unpatented software algorithms, know-how, technology, and other proprietary information, to maintain our competitive position. We seek to protect software algorithms through encryption mechanisms in the distribution of our binary files used in programming our engine control products. However, we cannot guarantee that these encryption techniques can protect all or any portion of these binary files. In practice, we seek to protect our trade secrets by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract manufacturers, consultants, advisors and other third parties. In practice, we also enter into confidentiality and noncompetition agreements with certain of our employees and consultants that obligate them to assign to us any inventions developed in the course of their work for us. However, we cannot guarantee that we have executed these agreements with each party that may have or have had access to our trade secrets or that the agreements we have executed will provide adequate protection. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. As a result, we may be forced to bring claims against third parties, or defend claims that they bring against us, to determine ownership of what we regard as our intellectual property. Monitoring unauthorized disclosure is difficult and we do not know whether the procedures we have followed to prevent such disclosure are, or will be, adequate. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the U.S. may be less willing or unwilling to protect trade secrets. If any of our trade secrets were to be disclosed to, or independently developed by, a competitor, our competitive position would be harmed.

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The inability to protect our intellectual property and know-how could reduce or eliminate any competitive advantage and reduce our sales and profitability, and the cost of protecting our intellectual property may be significant.

We have obtained and applied for some U.S. and foreign trademark and patent registrations and will continue to evaluate the registration of additional trademarks and patents, as appropriate. The key issued patents in our patent portfolio are scheduled to expire between 2015 and 2030. We cannot guarantee that any of our pending patent and trademark applications will be approved. Moreover, even if the applications are approved, third parties may seek to oppose or otherwise challenge them. An inability to obtain registrations in the United States or elsewhere could limit our ability to protect our trademarks and technologies and could impede our business. Further, the protection of our intellectual property rights may require expensive investment in protracted litigation and substantial management time, and there is no assurance we ultimately would prevail or that a successful outcome would lead to an economic benefit that is greater than the investment in the litigation. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted and may also affect patent litigation. The USPTO recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.

We may also face difficulties protecting our intellectual property rights in foreign countries. The laws of foreign countries in which our products are sold or manufactured may not protect our intellectual property rights to the same extent as the laws of the U.S. For example, we are increasing our manufacturing capabilities and sales in China, where laws may not afford the same intellectual property protections.

Our use of open source software may expose us to additional risks.

We use open source software in our business, including in some of our products. While we try to monitor all use of open source software in our business to ensure that no open source software is used in such a way as to require us to disclose the source code to critical or fundamental elements of our software or technology, we cannot be certain that such use may not have inadvertently occurred in deploying our solutions. Furthermore, the terms of many open source licenses have not been interpreted by U.S. courts. As a result, there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our products. The risks associated with usage of open source software cannot be eliminated and could potentially have a material adverse effect on our business, financial condition, and results of operations.

If we are alleged to have infringed upon the intellectual property rights owned by others, our business and results of operations could be materially adversely affected.

Competitors or other third parties may allege that we, or consultants or other third parties retained or indemnified by us, infringe on their intellectual property rights. We also may face allegations that our employees have misappropriated intellectual property rights of their former employers or other third parties. From time to time, we receive notices from other companies that allege we may be infringing certain of their patents or other rights. If we are unable to resolve these matters satisfactorily, or to obtain licenses on acceptable terms, we may face litigation. Given the potential risks and uncertainties of intellectual property-related litigation, an assertion of an infringement claim against us may cause us to spend significant amounts to defend the claim (even if we ultimately prevail), pay significant money damages, lose significant revenues, be prohibited from using the

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relevant technologies or other intellectual property rights, cease offering certain products or services, or incur significant license, royalty, or technology development expenses. Even in instances where we believe that claims and allegations of intellectual property infringement against us are without merit, defending against such claims is time consuming and expensive and could result in the diversion of time and attention of our management and employees. In addition, although in some cases a third party may have agreed to indemnify us for such costs, such indemnifying party may refuse or be unable to uphold its contractual obligations.

Increased IT security threats and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, solutions and services.

We are dependent on various information technologies throughout our company to administer, store and support multiple business activities. Increased global IT security threats and more sophisticated and targeted computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. While we attempt to mitigate these risks by employing a number of measures, including employee training, comprehensive monitoring of our networks and systems, and maintenance of backup and protective systems, our systems, networks, products, solutions, and services remain potentially vulnerable to advanced persistent threats. Depending on their nature and scope, such threats could potentially lead to the compromising of confidential information, improper use of our systems and networks, manipulation and destruction of data, defective products, production downtimes, and operational disruptions, which in turn could adversely affect our reputation, competitiveness, and results of operations.

Due to the nature of our business and products, we may be liable for damages based on product liability, other tort, and warranty claims.

We face an inherent risk of exposure to claims in the event that the failure, use or misuse of our products results, or is alleged to result, in death, bodily injury, property damage, or economic loss. In the past we have been subject to product liability claims relating to our products, and we may be subject to additional product liability claims in the future for both past and current products.

Although we currently maintain product liability coverage, which we believe to be adequate for the continued operation of our business, such insurance may become difficult or impossible to obtain in the future on terms acceptable to us. Moreover, our insurance coverage includes customary exclusions and conditions, may not cover certain specialized applications, and generally does not cover warranty claims. A successful product liability claim or series of claims against us, including one or more consumer claims purporting to constitute class actions or claims resulting from extraordinary loss events, in excess of or outside our insurance coverage, or a significant warranty claim or series of claims against us, could materially decrease our liquidity, impair our financial condition and adversely affect our results of operations. Furthermore, regardless of the outcome, product liability claims can be expensive to defend, can divert the attention of management and other personnel for significant periods of time, and can cause reputational damage.

Our profitability may suffer if we experience changes in product mix as a result of sales increases or decreases.

We sell products that have varying profit margins, and increases or decreases in sales of our various products may change the mix of products that we sell during any period. While we have experienced high profit margins in the past, if our products and solutions with lower profit margins drive a greater proportion of our revenue in the future, our profitability would be reduced and our financial condition, results of operations, and cash flows may be negatively affected.

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We do not have contracts with most of our suppliers. The loss of a significant supplier would require us to rely more heavily on our other existing suppliers or to develop relationships with new suppliers. Such a loss may have an adverse effect on our product offerings and our business.

Given the nature of our business, and consistent with industry practice, we do not have contracts with most of our suppliers. We generally make our purchases through purchase orders. Therefore, most of our suppliers have the ability to terminate their relationships with us at any time. Approximately 51%, 40%, 40%, and 45% of our total purchases for the six months ended June 30, 2014 and for the years ended December 31, 2013, 2012, and 2011, respectively, were from our top ten suppliers. Although we believe there are numerous manufacturers with the capacity to supply the products we distribute, the loss of one or more of our major suppliers could adversely affect our ability to timely obtain the supplies we need to meet our production needs or have an adverse effect on our product offerings and our business. Such a loss would require us to rely more heavily on our other existing suppliers or develop relationships with new suppliers, which may cause us to pay higher prices for products due to, among other things, a loss of volume discount benefits currently obtained from our major suppliers.

Some of our products contain magnets that use rare earth metals, and unavailability or limited supply of these metals could delay production of our products or increase our production costs.

Some of our products contain magnets that use rare earth metals sourced from China. Although such rare earth metals are available from other sources, these alternative sources may be more costly. Reduced availability of such rare earth metals from China through additional export regulations or restrictions, export quotas, tariffs, or for other reasons could impact our ability to obtain magnets that use the required rare earth metals in sufficient quantities, in a timely manner, or at a commercially reasonable cost. In the event that China’s actions cause our suppliers to seek alternate sources of supply for rare earth metals, it could cause a delay in the production of our products that contain magnets using rare earth metals and increase the cost to us of such magnets, thereby reducing or eliminating our profit margin on certain of our products if we are unable to pass the increase in our production costs on to our customers. Increasing prices to our customers due to escalating costs of rare earth metals may reduce demand for our products.

Suppliers may be unable to provide us with materials of sufficient quality or quantity required to meet our production needs at favorable prices or at all.

We are dependent upon suppliers for parts and raw materials used in the manufacture of components that we sell to our customers, and our raw material costs are subject to commodity market fluctuations. We may experience an increase in costs for parts or raw materials that we source from our suppliers, or we may experience a shortage of parts or raw materials for various reasons, such as the loss of a significant supplier, high overall demand creating shortages in parts and supplies we use, financial distress, work stoppages, natural disasters, fluctuations in commodity prices, or production difficulties that may affect one or more of our suppliers. In particular, current or future global economic uncertainty may affect our key suppliers in terms of their operating cash flow and access to financing. This may in turn affect their ability to perform their obligations to us. In addition, quality and sourcing issues that our suppliers may experience can also adversely affect the quality and effectiveness of our products and services and may result in liability or reputational harm to us. Our customers rely on us to provide on-time delivery and have certain rights if our delivery standards are not maintained. A significant increase in our supply costs, including for raw materials that are subject to commodity price fluctuations, or a protracted interruption of supplies for any reason, could result in the delay of one or more of our customer contracts, or could damage our reputation and relationships with our customers. Any of these events could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws and regulations.

The U.S. Foreign Corrupt Practices Act, or the FCPA, and similar anti-bribery laws and regulations in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S.

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government officials for the purpose of obtaining or retaining business or securing an improper business advantage. Our policies mandate compliance with these anti-bribery laws. We operate in certain countries that have experienced corruption to some degree. If we are found to be liable for FCPA or other similar anti-bribery law or regulatory violations, whether due to our or others’ actions or inadvertence, we could be subject to civil and criminal penalties or other sanctions that could have a material adverse impact on our business, financial condition, results of operations, and cash flows.

Governmental energy policies could change, or expected changes could fail to materialize, which could adversely affect our business or prospects.

Energy policy can develop rapidly in the markets we serve, including North America, Asia, and Europe. Within the last few years, significant developments have taken place, primarily in international markets that we serve with respect to energy policy and related regulations. We anticipate that energy policy will continue to be an important regulatory priority globally as well as on a national, state and local level. As energy policy continues to evolve, the existing rules and incentives that impact the energy-related segments of our business may change. It is difficult, if not impossible, to predict whether changes in energy policy might occur in the future and the timing of potential changes and their impact on our business.

We sell components and systems that have been designed to meet strict emission standards, including standards that have not yet been implemented but are expected to be implemented soon. We also benefit from certain environmental regulations including those that restrict the sale of engines that do not meet emission standards, fine the sellers of non-compliant engines, tax the operators of diesel engines and require the use of more expensive ultra-low sulphur diesel fuel. Incumbent industry participants with a vested interest in gasoline and diesel, many of which have substantially greater resources and political influence than we do, may invest significant time and money in an effort to influence environmental regulations in ways that delay or repeal requirements for clean vehicle emissions. If these emission standards or other regulations are eased, our products may become unnecessary and/or our future sales could be lower as potential customers select alternative products or delay adoption of our products. The elimination or reduction of favorable policies for our energy-related business, or the failure of governments to adopt expected policies that would benefit our business, could therefore negatively impact our business, financial condition, results of operations, and cash flows. In addition, demand for our products and services may be adversely affected by the perception that emission regulations will be suspended or delayed. Accordingly, we rely on stricter emissions regulations, the adoption of which are out of our control and cannot be assured, to stimulate our growth.

Our business depends in part on environmental regulations and programs in China that promote the use of cleaner burning fuels, including natural gas, for vehicles. In order to meet the demand for natural gas, the Chinese government has encouraged private investment in the necessary transportation, distribution and sales infrastructure for natural gas. Any delay, repeal, or modification of these regulations or programs that encourage the use of natural gas for vehicles could have a detrimental effect on the Chinese natural gas industry, which, in turn, could slow our growth and materially and adversely affect our business.

We face risks associated with conducting business in markets outside of North America.

Since we manufacture and sell our products worldwide, our business is subject to risks associated with doing business internationally. For the six months ended June 30, 2014 and the years ended December 31, 2013, 2012, and 2011, 26%, 30%, 30%, and 30%, respectively, of our sales were made in markets outside of North America. Our future results could be harmed by a variety of factors, including:

• changes in the political and economic conditions in the countries in which we operate, including civil uprisings and terrorist acts;

• unexpected changes in regulatory requirements;

• the imposition of duties and tariffs and other trade barriers;

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• import and export controls;

• potentially negative consequences from changes in U.S. and international tax laws;

• fluctuations in currency exchange rates and the value of the U.S. dollar;

• exchange controls and currency restrictions;

• expropriation of property without fair compensation;

• governmental actions that result in the deprivation of contract or proprietary rights;

• the acceptance of business practices which are not consistent with or are antithetical to prevailing business practices we are accustomed to in the United States, including export compliance and anti-bribery practices and governmental sanctions;

• difficulty in staffing and managing geographically widespread operations;

• the unionization of, or increased union activity, such as strikes or work stoppages, with respect to, our workforce outside the U.S.;

• differing labor regulations;

• requirements relating to withholding taxes on remittances and other payments by subsidiaries;

• different regulatory regimes controlling the protection of our intellectual property;

• difficulty in enforcement of contractual obligations under non-U.S. law;

• refusal or inability of foreign banks to make payment on letters of credit in connection with foreign sales, and our inability to collect from our foreign customers in such circumstances;

• restrictions on our ability to own or operate subsidiaries, repatriate dividends or earnings from our foreign subsidiaries, or to make investments or acquire new businesses in these jurisdictions; and

• the burden of complying with multiple and potentially conflicting laws.

Our international operations and sales also expose us to different local political, regulatory, and business risks and challenges. For example, we are faced with potential difficulties in staffing and managing local operations and we have to design local solutions to manage credit and legal risks of local customers and distributors, which may not be effective. In addition, because some of our international sales are to suppliers that perform work for foreign governments, we are subject to the political risks associated with foreign government projects. For example, certain foreign governments may require suppliers for a project to obtain products solely from local manufacturers or may prohibit the use of products manufactured in certain countries. Moreover, we plan to open our China Enovation Center in 2015, co-located with our manufacturing operations in Hangzhou, China. The opening of this facility is subject to various risks and uncertainties, including delays in securing necessary permits and/or licenses, which in turn could result in higher than expected costs.

International growth and expansion into markets such as Europe, Asia, and Latin America may cause us difficulty due to greater regulatory barriers than in the United States, the necessity of adapting to new regulatory systems, problems related to entering new markets with different economic, social and political systems and conditions, and significant competition from the primary participants in these markets, some of which may have substantially greater resources and political influence than we do. For example, unstable political conditions or civil unrest could negatively impact our order levels and sales in a region or our ability to collect receivables from customers or operate or execute projects in a region.

Our international operations and transactions also depend upon favorable trade relations between the United States and those foreign countries in which our customers and suppliers have operations. A protectionist trade environment in either the United States or those foreign countries in which we do business or sell products, such as a change in the current tariff structures, export compliance, government subsidies, or other trade policies, may

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adversely affect our ability to sell our products or do business in foreign markets. Our overall success as a global business depends, in part, upon our ability to succeed in differing economic, social, and political conditions. We may not succeed in developing and implementing policies and strategies to counter the foregoing factors effectively in each location where we do business and the foregoing factors may cause a reduction in our sales, profitability, or cash flows, or cause an increase in our liabilities.

Successful execution of our marketing strategy in China depends in part on our relationship with AMICO.

We depend in part on our partner AMICO to help us execute our current strategy in China. AMICO assists us with marketing our products in China by introducing us to potential customers, providing technical service support to our existing customers with respect to our engine control systems and advising us on local rules and regulations. We have operated with AMICO in the past under several successive contractual agreements and currently operate under a contractual agreement which expires in September 2018. Any change in our relationship with AMICO, whether as a result of economic or competitive pressures or otherwise, including any decision by AMICO to reduce their commitment to our products and technology in favor of competing products or technologies, or to change or seek to change the terms of our contractual relationship, could have a material adverse effect on our business and financial results.

Fluctuations in exchange and interest rates may affect our operating results and impact our financial condition.

Fluctuations in the value of the U.S. dollar may increase or decrease our sales or earnings. Because our consolidated financial results are reported in U.S. dollars, if we generate sales or earnings in other currencies, or if we pay expenses in other currencies, the translation of those results into U.S. dollars can result in a significant increase or decrease in the amount of those sales or earnings. We also bid for certain foreign projects in U.S. dollars. If the U.S. dollar strengthens relative to the value of the local currency, we may be less competitive on those projects. In addition, our debt service requirements are primarily in U.S. dollars and a portion of our cash flow is generated in yuan, euros or other foreign currencies. Significant changes in the value of the foreign currencies relative to the U.S. dollar could impair our cash flow, results of operations, and financial condition.

In addition, fluctuations in currencies relative to the U.S. dollar may make it more difficult to perform period-to-period comparisons of our reported results of operations. For purposes of accounting, the assets and liabilities of our foreign operations, where the local currency is the functional currency, are translated using period-end exchange rates, and the revenues and expenses of our foreign operations are translated using average exchange rates during each period. For example, we have material yuan-denominated net monetary assets and liabilities. If economic circumstances result in a significant devaluation of the yuan, the value of our yuan-denominated net monetary assets and liabilities would be correspondingly reduced when translated into U.S. dollars for inclusion in our financial statements. In such a case, our business, results of operations, financial condition, and liquidity could be materially adversely affected.

In addition to currency translation risks, we incur currency transaction risk whenever we enter into either a purchase or a sales transaction using a currency other than U.S. dollars. Given the volatility of exchange rates, we may not be able to effectively manage our currency and/or translation risks. Volatility in currency exchange rates may decrease our sales and profitability and impair our financial condition. Though we periodically evaluate our need to hedge our exposures to foreign currencies, we have not hedged any such exposures to date.

Customer credit risks could result in losses.

The concentration of our customers in the energy industry and trucking industry may impact our overall exposure to credit risk as customers may be similarly affected by prolonged changes in economic and industry conditions. Further, laws in some jurisdictions in which we operate could make collection difficult or time

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consuming. We perform ongoing credit evaluations of our customers and do not generally require collateral in support of our trade receivables. While we maintain reserves for expected credit losses, we cannot assure you that these reserves will be sufficient to meet write-offs of uncollectible receivables or that our losses from such receivables will be consistent with our expectations.

In addition, a significant portion of our sales in China are supported by notes receivable issued by Chinese banks. These notes receivable are banker’s acceptance drafts drawn on reputable Chinese banks which we endorse as commercial paper and use to pay our suppliers in lieu of paying with cash. Should one or more of these banks refuse or be unable to make payment on such notes receivable, our supplier would have recourse against us. While we would have recourse against our customers in such an event, we may not be successful in collecting any amounts owed from our customers.

Unionization of employees, or the creation of works councils or similar arrangements, at our domestic and foreign facilities could result in increased risk of work stoppages and high labor costs.

With the exception of certain employees located in China that are members of a union in accordance with national and local law, our employees are not members of any union. Moreover, we are not currently party to any collective bargaining agreement. However, there may be efforts in the future to unionize our employees or create works councils or similar arrangements at our domestic and foreign manufacturing and distribution facilities. This possibility is heightened in certain foreign countries where unionization (or the formation of works councils or similar arrangements permitted by applicable foreign laws and regulations) is more common than in the U.S. If employees at our domestic or foreign manufacturing or distribution facilities were to unionize, or if a works council or similar arrangement with respect to such employees were to be formed, our relationship with our employees could be adversely affected. We would also face an increased risk of work stoppages and higher labor costs. Accordingly, unionization of our employees (or the formation of works councils or similar arrangements with respect to our employees) could have a material adverse impact on our operating costs and financial condition and could force us to raise prices on our products, curtail operations, or relocate all or a portion of our operations.

Industry consolidation trends could reduce our sales opportunities, decrease sales prices, and drive down demand for our products.

There has been consolidation and there may be further consolidation in the gas compressor, heavy truck and engine industries. The consolidation in these industries could result in fewer customers with increased buying power that may result in downward pressure on the prices we are able to charge for our products and solutions, and fewer customers may also result in decreased sales opportunities and demand for our products and solutions. Furthermore, consolidation among our peers could heighten the impacts of the competition on our business and results of operations discussed above, particularly if consolidation results in competitors with stronger financial and strategic resources and could also result in increases to the prices we are required to pay for acquisitions we may make in the future. Accordingly, consolidation in the gas compressor, heavy truck, and engine industries, or among our competitors, could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our consolidated affiliated entities in China are audited by auditors who are not inspected by the Public Company Accounting Oversight Board and, as such, you are deprived of the benefits of such inspection.

Publicly traded companies in the United States are audited by independent registered public accounting firms registered with the U.S. Public Company Accounting Oversight Board, or the PCAOB, and are required by the laws of the United States to undergo regular inspections by the PCAOB to assess its compliance with the laws of the United States and professional standards. Because the auditors of our consolidated affiliated entities in China are located in China, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the Chinese authorities, such auditors are not currently inspected by the PCAOB. On May 24,

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2013, the PCAOB announced that it had entered into a memorandum of understanding on enforcement cooperation with the China Securities Regulatory Commission and the Ministry of Finance of China that establishes a cooperative framework between the parties for the production and exchange of audit documents relevant to investigations in the United States and China. However, direct PCAOB inspections of independent registered accounting firms in China are still not permitted by Chinese authorities. This lack of PCAOB inspections in China prevents the PCAOB from regularly evaluating Chinese auditors’ audits and quality control procedures. As a result, investors may be deprived of the benefits of PCAOB inspections.

Our product development activities may not be successful or may be more costly than currently anticipated, or we may not be able to produce newly developed products at a cost that meets the anticipated product cost structure.

Our business involves a significant level of product development activities, generally in connection with our customers’ development activities. Industry standards, customer expectations, or other products may emerge that could render one or more of our products or services less desirable or obsolete. Maintaining our market position requires continued investment in research and development. During an economic downturn or a subsequent recovery, we may need to maintain our investment in research and development, which may limit our ability to reduce these expenses in proportion to a sales shortfall. In addition, increased investments in research and development may divert resources from other potential investments in our business, such as acquisitions or investments in our facilities, processes and operations. If these activities are not as successful as currently anticipated, are not completed on a timely basis, or are more costly than currently anticipated, or if we are not able to produce newly developed products at a cost that meets the anticipated product cost structure, then our future sales, margins and/or earnings could be lower than expected, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

The unpredictability of customer orders, long sales cycle, customer evaluation process and implementation period of our products and services may increase the costs of obtaining orders and reduce the predictability of sales cycles and our inventory requirements.

Generally, our product sales are made on a purchase order basis, which allows our customers to reduce or discontinue their purchases from us. Accordingly, we cannot predict the timing, frequency, or size of our future customer orders. Our ability to accurately forecast our sales is further complicated by the current global economic and financial uncertainty. If we fail to anticipate the changing needs of our customers and accurately forecast our customer demands, our existing and potential customers may not place orders with us, which would decrease our revenue, and we may accumulate significant inventories of products that we will be unable to sell, which may result in a significant decline in the value of our inventory. As a result, our revenue, gross profit and other operating results and cash flows may be materially and adversely affected. We may continue to make significant investments in our business without any guarantees or long-term commitments from our customers that they will continue to purchase our components and systems with the same timing, frequency and size as we expect. As a result, if there is insufficient demand for our components and systems, we may not recover the costs of any increased investment in our operations, which could have a material, adverse effect on our financial position, liquidity, and results of operations.

Our products and services are technologically complex. Prospective customers generally must commit significant resources to test and evaluate our products and to install and integrate them into larger systems. Orders expected in one quarter may shift to another quarter or be cancelled with little advance notice as a result of customers’ budgetary constraints, internal acceptance reviews and other factors affecting the timing of customers’ purchase decisions. In addition, customers often require a significant number of product presentations and demonstrations before reaching a sufficient level of confidence in the product’s performance and compatibility to secure the approvals that typically accompany our customers’ capital expenditure approval processes. The difficulty in forecasting demand increases the challenge in anticipating sales cycles and our inventory requirements, which may cause us to over-produce finished goods and could result in inventory write-

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offs, or could cause us to under-produce finished goods, which may cause us to miss delivery deadlines and result in monetary penalties or cancellations of orders. Any such over-production or under-production could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Due to the nature of our sales cycle, in periods of sales increases it may be difficult to rapidly increase our production of finished goods, particularly if such sales increases are unanticipated. An increase in the production of our finished goods requires increases in both the purchases of raw materials and components and in the size of our workforce. If a sudden, unanticipated need for raw materials, components and labor should arise in order to meet unexpected sales demand, we could experience difficulties in sourcing raw materials, components, and labor at a favorable cost or to meet our production needs. These factors could result in delays in fulfilling customer sales contracts, damage to our reputation and relationships with our customers, an inability to meet the demands of the markets that we serve, which in turn could prevent us from taking advantage of business opportunities or responding to competitive pressures, and result in an increase in variable and fixed costs leading to a decrease in net earnings or even net losses. In addition, a sudden decrease in sales orders could require us to lay off some of our workforce, which could increase our costs in the short term due to severance payments, and our having to write-off excess inventory, leading to a decrease in net earnings or even losses.

Our business is subject to a variety of governmental regulations that may restrict our business and may result in costs and penalties.

We are subject to a variety of federal, state, and local laws and regulations relating to foreign business practices, labor and employment, construction, land use, and taxation, among others. These laws and regulations are complex, change frequently and have tended to become more stringent over time. Failure to comply with these laws and regulations may result in a variety of administrative, civil and criminal enforcement measures, including assessment of monetary penalties and the imposition of corrective requirements. From time to time, as part of the regular overall evaluation of our operations, including newly acquired operations, we may be subject to compliance audits by regulatory authorities. In addition, any failure to comply with regulations related to the government procurement process at the federal, state, or local level or restrictions on political activities and lobbying may result in administrative or financial penalties including being barred from providing services to governmental entities.

Our business is subject to environmental, health, and safety laws, regulations, and permit requirements, which may result in significant costs and liabilities.

We are subject to various foreign, federal, state and local environmental, health, and safety laws and regulations governing, among other things the generation, storage, handling, use and transportation of hazardous materials; the emission and discharge of hazardous materials into the ground, air or water; and employee health and safety. We are also required to obtain permits from regulators for certain operations. If we violate or fail to comply with these laws, regulations, or permits, we could be fined or otherwise sanctioned by regulators. Under certain environmental laws, we could be held responsible for all of the costs relating to any contamination at our past or present facilities and at third-party waste disposal sites, even if we did not know of or cause such contamination. Environmental laws are complex, change frequently and have tended to become more stringent over time. We cannot assure you that our costs of complying with current and future environmental, health, and safety laws, and our liabilities arising from past or future releases of, or exposure to, hazardous substances will not materially adversely affect our results of operations.

Our operations expose us to risks of non-compliance with numerous countries’ import and export laws and regulations.

Due to our significant foreign sales, we are subject to trade and import and export regulations in multiple jurisdictions, including the U.S. Treasury Department’s Office of Foreign Assets Control’s regulations. As a result, compliance with multiple trade sanctions and embargoes and import and export laws and regulations pose

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a constant challenge and risk to us. Furthermore, the laws and regulations concerning import activity, export recordkeeping and reporting, export control and economic sanctions are complex and constantly changing. Any failure to comply with applicable legal and regulatory trading obligations could result in criminal and civil penalties and sanctions, such as fines, imprisonment, debarment from governmental contracts, seizure of shipments, loss of import and export privileges, reputational damage, and a reduction in the value of our common stock.

If we lose key personnel, we may be unable to effectively manage our business or continue our growth.

Our future performance depends to a significant degree upon the continued contributions of and our ability to attract, hire, train and retain qualified managerial, marketing, engineering, and operations personnel. The loss or unavailability to us of managerial, marketing, engineering, or operations personnel could have a material adverse effect on us to the extent we are unable to timely find adequate replacements. We compete for these professionals with our customers and other companies operating in our industry, and we may incur significant costs to attract and retain them. If we are unsuccessful in attracting, hiring, training and retaining qualified managerial, marketing, engineering, and operations personnel, this could have a material adverse effect on our business, results of operations, and profitability.

Our existing indebtedness could adversely affect our business and growth prospects.

As of June 30, 2014, we had total indebtedness (including the current portion) of approximately $86.5 million. We will not use any of the proceeds of this offering to repay outstanding debt and therefore will continue to have significant debt service obligations following the completion of this offering. Our indebtedness, or any additional indebtedness we may incur, could require us to divert funds identified for other purposes for debt service and impair our liquidity position. If we cannot generate sufficient cash flow from operations to service our debt, we may need to refinance our debt, dispose of assets or issue equity to obtain necessary funds. We do not know whether we will be able to take any of such actions on a timely basis, on terms satisfactory to us or at all.

Our indebtedness, the cash flow needed to satisfy our debt and the covenants contained in our senior credit facility have important consequences, including:

• limiting funds otherwise available for financing our capital expenditures by requiring us to dedicate a portion of our cash flows from operations to the repayment of debt and the interest on this debt;

• limiting our ability to incur additional indebtedness;

• limiting our ability to capitalize on significant business opportunities;

• placing us at a competitive disadvantage to those of our competitors that are less indebted than we are;

• making us more vulnerable to rising interest rates; and

• making us more vulnerable in the event of a downturn in our business.

More specifically, under the terms of our senior credit facility, we have agreed to certain financial covenants. In addition, our senior credit facility places limitations on our ability to make capital expenditures and to acquire other companies. Any failure by us to comply with the financial or other covenants set forth in our senior credit facility in the future, if not cured or waived, could result in our senior lender accelerating the maturity of our indebtedness or preventing us from accessing availability under our senior credit facility. See “Description of Certain Indebtedness.” If the maturity of our indebtedness is accelerated, we may not have sufficient cash resources to satisfy our debt obligations and we may not be able to continue our operations as planned.

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We may need additional capital in the future, and it may not be available on acceptable terms, or at all.

We may require additional capital in the future to:

• fund our operations;

• finance investments in equipment and infrastructure needed to maintain and expand our manufacturing and distribution capabilities;

• enhance and expand the range of products we offer; and

• respond to potential strategic opportunities, such as investments, acquisitions, and international expansion.

We can give no assurance that additional financing will be available on terms favorable to us, or at all. The terms of available financing may place limits on our financial and operating flexibility. If adequate funds are not available on acceptable terms, we may be forced to reduce our operations or to delay, limit or abandon expansion opportunities. Moreover, even if we are able to continue our operations, the failure to obtain additional financing could reduce our competitiveness. Our senior credit facility limits our ability to incur additional debt and therefore we likely would have to issue additional equity to raise additional capital. If we issue additional equity, your interest in us will be diluted.

Regulations related to “conflict minerals” may force us to incur additional expenses and may result in damage to our reputation.

Following this offering, we will be subject to SEC regulations applicable to companies that use certain minerals and metals, known as conflict minerals, in their products or in the production of their products, whether or not these products are manufactured by third parties. These requirements will require us to conduct an inquiry into the country of origin of the conflict minerals used, and if it is determined that the conflict minerals used may have originated in the Democratic Republic of Congo or other covered countries, conduct due diligence on the source and chain of custody of the conflict minerals. These requirements could adversely affect the sourcing, availability and pricing of minerals used in the manufacture of our products. In addition, we will incur additional costs to comply with the disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in our products or in the manufacturing process. Since our supply chain is complex, we may not be able to sufficiently verify the origins for these minerals and metals used in our products through the due diligence procedures that we implement, which may harm our reputation. In such event, we may also face difficulties in satisfying customers who require that all of the components of our products be conflict mineral free.

We may fail to successfully acquire or integrate companies that provide complementary products or technologies.

In the future we may seek to acquire businesses that complement our existing products and services. Such a strategy involves the potential risks inherent in assessing the value, strengths, weaknesses, contingent or other liabilities, and potential profitability of acquisition candidates and in integrating the operations of acquired companies. In addition, any acquisitions of businesses with foreign operations or sales may increase our exposure to risks inherent in doing business outside the United States. From time to time, we may have acquisition discussions with potential target companies both domestically and internationally. If a large acquisition opportunity arises and we proceed, a substantial portion of our cash and surplus borrowing capacity could be used for the acquisition or we may seek additional debt or equity financing. Any acquisition may or may not occur and, if an acquisition does occur, it may not be successful in enhancing our business for one or more of the following reasons:

• Any business acquired may not be integrated successfully and may not prove profitable;

• The price we pay for any business acquired may overstate the value of that business or otherwise be too high;

• Liabilities we take on through the acquisition may prove to be higher than we expected;

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• We may fail to achieve acquisition synergies; or

• The focus on the integration of operations of acquired entities may divert management’s attention from the day-to-day operation of our businesses.

Inherent in any future acquisition is the risk of transitioning company cultures and facilities. The failure to efficiently and effectively achieve such transitions could increase our costs and decrease our profitability.

Risks Related to Our Organizational Structure

We will be required to pay Common Unitholders for most of the benefits relating to any additional tax depreciation or amortization deductions we may claim as a result of any tax basis step-up and certain interest deductions we receive in connection with the purchase of Common Units with the proceeds of this offering and in connection with any future exchanges of Common Units for Class A Shares (or cash).

We intend to use approximately $         of the net proceeds of this offering to purchase Common Units from the existing members of Enovation Controls, LLC. In addition, as described under “The Transactions—Operating Agreement of Enovation Controls, LLC—Exchange Rights,” Common Unitholders may in the future exchange Common Units (and Class B Shares) for Class A Shares on a one-for-one basis (or, at our option, cash). Enovation Controls, LLC will have in effect an election under Section 754 of the Code, which will result in an adjustment to our share of the tax basis of the assets owned by Enovation Controls, LLC at the time of such initial purchase of and subsequent exchanges of Common Units. It is expected that the purchase and exchanges will result in increases in our share of the tax basis of the tangible and intangible assets of Enovation Controls, LLC that otherwise would not have been available. Any such increases in tax basis are, in turn, anticipated to create incremental tax deductions that would reduce the amount of tax that we would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

We intend to enter into a tax receivable agreement with all Common Unitholders that will require us to pay them 85% of the amount of cash savings, if any, in U.S. federal, state and local income and franchise tax that we actually realize in any tax year beginning with 2014 from increases in tax basis realized as a result of the initial purchase and any future exchanges by Common Unitholders of their Common Units (and Class B Shares) for Class A Shares (or cash), including increases attributable to payments made under the tax receivable agreement and deductions attributable to imputed interest. We expect to benefit from the remaining 15% of cash savings, if any, in income and franchise tax that we actually realize during a covered tax year. The cash savings in income and franchise tax paid to any such Common Unitholders will reduce the cash that may otherwise be available to us for working capital, capital expenditures, acquisitions, and other general corporate purposes, as well as to make future distributions to holders of Class A Shares, including the investors in this offering.

For purposes of the tax receivable agreement, cash savings in income and franchise tax will be computed by comparing our actual income and franchise tax liability for a covered tax year to the amount of such taxes that we would have been required to pay for such covered tax year had there been (i) no increase to our share of the tax basis of the tangible and intangible assets of Enovation Controls, LLC as a result of the initial purchase and any future exchanges and (ii) no deductions or imputed interest with respect to payments under the tax receivable agreement, and had we not entered into the tax receivable agreement. The tax receivable agreement continues until all such tax benefits have been utilized or expired, unless we exercise our right to terminate the tax receivable agreement upon a change in control for an amount based on the remaining payments expected to be made under the tax receivable agreement or we breach any of our material obligations under the tax receivable agreement in which case all obligations will generally be accelerated and due. Estimating the amount of payments that may be made under the tax receivable agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors.

While the actual amount and timing of any payments under this agreement will vary depending upon a number of factors (including the timing of exchanges, the amount of gain recognized by an exchanging Common

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Unitholder, the amount and timing of our income and the tax laws and tax rates in effect at the time any incremental tax deductions resulting from the increase in tax basis are utilized), we expect that the payments that we may make to the Common Unitholders pursuant to the tax receivable agreement could be substantial during the expected term of the tax receivable agreement. After giving effect to the sale of             Class A Shares at an assumed offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, and subject to various assumptions, including that no changes occur in the current relevant tax law over the term of the tax receivable agreement and that we earn sufficient taxable income to realize the full tax benefits subject to the tax receivable agreement, we currently expect aggregate future payments to the Common Unitholders under the tax receivable agreement to be between approximately $        million and $        million. Any future exchanges by the Common Unitholders of their Common Units (and Class B Shares) for our Class A Shares (or cash) would create additional liability under the tax receivable agreement that is not possible to estimate at this time due to the number of factors impacting the calculation. We will bear the costs of implementing the provisions of the tax receivable agreement.

In certain cases, payments under the tax receivable agreement to the Common Unitholders may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement, and if the tax reporting positions we determine are not respected, our tax attributes could be adversely affected and the amount of our tax liabilities could materially increase.

The tax receivable agreement provides that upon certain changes in control, we will be required to pay the Common Unitholders amounts based on assumptions regarding the remaining payments expected to be made under the tax receivable agreement (at our option, these payments can be accelerated into a single payment at the time of the change in control). As a result, we could be required to make payments under the tax receivable agreement that are greater than or less than the specified percentage of the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement, and the upfront payment may be made years in advance of any actual realization of such future benefits. In these situations, our obligations under the tax receivable agreement could have a substantial negative impact on our liquidity, and there can be no assurance that we will be able to finance our obligations under the tax receivable agreement.

A tax authority may challenge all or part of the tax basis increases or the amount or availability of any tax attributes discussed above, as well as other related tax positions we take, and a court could sustain such a challenge. The Common Unitholders will not reimburse us for any payments previously made to them pursuant to the tax receivable agreement in the event that, due to a successful challenge by the IRS or any other tax authority of the amount of any tax basis increase or the amount or availability of any tax attributes, our actual cash tax savings are less than the cash tax savings previously calculated and upon which prior payments under the tax receivable agreement were based. Instead, any excess cash payments made by us to a Common Unitholder will be netted against any future cash payments that we might otherwise be required to make under the terms of the tax receivable agreement. However, we might not determine that we have effectively made an excess cash payment to the Common Unitholders for a number of years following the initial time of such payment. As a result, in certain circumstances we could make payments under the tax receivable agreement to the Common Unitholders in excess of our cash tax savings. A successful challenge to our tax reporting positions could also adversely affect our other tax attributes and could materially increase our tax liabilities.

Enovation Controls, LLC is currently taxed as a partnership for U.S. federal income tax purposes. As an organization that is classified as a partnership for U.S. federal income tax purposes, Enovation Controls, LLC is not subject to U.S. federal income tax itself. Rather, each member of Enovation Controls, LLC will be required to report on its income tax return and will be taxed upon its distributive share of each item of Enovation Controls, LLC’s income, gain, loss, deduction, and credit for each taxable year. As a result, each member of Enovation Controls, LLC, including the Common Unitholders and Enovation Controls, Inc., may have a cash income tax obligation with respect to its share of the earnings of Enovation Controls, LLC. Enovation Controls, LLC thus intends to make cash distributions (referred to as tax distributions) to facilitate the payment by the Common

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Unitholders and Enovation Controls, Inc. in satisfaction of such cash tax obligations. The amended and restated operating agreement of Enovation Controls, LLC requires Enovation Controls, LLC to make pro rata tax distributions to all of its members, including Enovation Controls, Inc., on a quarterly basis by the tenth day of each March, June, September, and December of each taxable year. This tax distribution is distinct from the payment obligations created by the tax receivable agreement. Tax distributions are subject to the availability of sufficient funds and to restrictions or limitations imposed by applicable law or by any agreement by which Enovation Controls, LLC is bound. The tax distributions to the Common Unitholders and Enovation Controls, Inc. will be made at the highest combined marginal federal, state, and local tax rate then applicable (including any Medicare Contribution tax on net investment income) to an individual (or if higher, to a corporation) resident in Tulsa, Oklahoma (assuming the maximum limitations on the use of deductions for state and local taxes), which may require cash to be distributed to the Common Unitholders in excess of the amount that would be paid for taxes if all the earnings were taxed at the Enovation Controls, Inc. effective rate. This could reduce liquidity and the cash available to reinvest in the business.

Control by the Founder Entities of     % of the combined voting power of our common stock and the fact that they are holding their economic interest through Enovation Controls, LLC may give rise to conflicts of interest.

Upon consummation of this offering, the Founder Entities will control     % of the combined voting power of our common stock. As a result, the Founder Entities will be able to significantly influence and control the outcome of all matters requiring a stockholder vote, including: the election of directors; mergers, consolidations and acquisitions; the sale of all or substantially all of our assets and other decisions affecting our capital structure; the amendment of our certificate of incorporation and our bylaws; and our winding up and dissolution. This concentration of ownership may delay, deter or prevent acts that would be favored by our other stockholders or deprive holders of Class A Shares of an opportunity to receive a premium for their Class A Shares as part of a sale of our business.

As long as the Founder Entities and their affiliates control at least a majority of the voting power of our common stock, the Founder Entities and their affiliates will be able to approve all voting matters by written consent and without soliciting the votes of the other Class A Shareholders. Consequently, if the Founder Entities elect to approve matters requiring a stockholder vote by written consent, the Class A Shareholders will only receive information statements setting forth the actions previously taken by the Founder Entities and their affiliates by written consent rather than a proxy statement soliciting their vote on the voting matters.

The interests of the Founder Entities may not always coincide with our interests or the interests of our other stockholders. The Founder Entities have significant relationships which they have developed over the years or may develop in the future and these relationships may affect who we work with to implement our strategy and could be influenced by motivations that may not directly benefit us, subject to applicable fiduciary or contractual duties. Also, the Founder Entities may seek to cause us to take courses of action that, in their judgment, could enhance their investment in us, but which might involve risks to our other stockholders or adversely affect us or our other stockholders, including investors in this offering. This concentration of ownership may adversely affect the trading price of our common stock because investors may perceive disadvantages in owning shares in a company with significant stockholders. See “Principal Stockholders” and “Description of Capital Stock—Common Stock—Voting Rights.”

In addition, because the Founder Entities hold economic interests in Enovation Controls, LLC directly, rather than through us, the Founder Entities may have conflicting interests with holders of Class A Shares. For example, the Founder Entities will have different tax positions from the holders of Class A Shares which could influence their decisions regarding whether and when to dispose of assets, when to make distributions for the purpose of allowing us to pay dividends, and whether and when to incur new or refinance existing indebtedness, especially in light of the existence of the tax receivable agreement. In addition, the structuring of future transactions may take into consideration the Founder Entities’ tax considerations even where no similar benefit would accrue to us. Also, Enovation Controls, LLC may sell additional Common Units to its current equity

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holders or to third parties, which could dilute the indirect aggregate economic interest of the holders of the Class A Shares in Enovation Controls, LLC. Any such issuance would be subject to our approval as the managing member of Enovation Controls, LLC, although the Founder Entities control our board of directors and their principal owners consist of our senior management.

The influence of the Founder Entities over our policies is further enhanced by the terms of the Stockholders Agreement that we intend to enter into with the Founder Entities upon completion of this offering and by the provisions of our amended and restated certificate of incorporation. Under the terms of the Stockholders Agreement, the Founder Entities have the right, subject to certain ownership thresholds, to nominate their respective designees to our board of directors and committees of our board of directors. Each Founder Entity will have the right to designate two members to our board of directors for so long as such Founder Entity owns 10% or more of our outstanding Class A Shares and Class B Shares on a combined basis. The Founder Entities will also have the right to designate one mutually agreed upon additional member to our board of directors. We anticipate that our board of directors will initially have      members and, therefore, the designees of the Founder Entities will constitute the majority of our board of directors. The Founder Entities will agree to vote all of their shares of our common stock to elect such designees to our board of directors. If, at any time, a Founder Entity owns 5% or more but less than 10% of our outstanding Class A Shares and Class B Shares on a combined basis, such Founder Entity will have the right to designate one nominee for election to our board of directors. If a Founder Entity’s ownership level falls below 5% of our outstanding Class A Shares and Class B Shares on a combined basis, such Founder Entity will no longer have any right to designate a nominee and the right of the Founder Entities to mutually designate a mutually agreed upon designee will also terminate. In addition, for so long as the Founder Entities together hold at least 25% of the outstanding Class A Shares and Class B Shares on a combined basis, certain actions may not be taken without the prior written consent of each Founder Entity owning at least 5% of the outstanding Class A Shares and Class B Shares on a combined basis.

Due to the nature and complexity of our organizational structure, our Class A Shares may be less attractive to investors than securities of public companies with typical organizational structures, which may result in a less active and liquid trading market for our Class A Shares and greater volatility of our stock price.

Due to the nature and complexity of our organizational structure, some investors may find investing in our Class A Shares less attractive than investing in other public companies having a more typical organizational structure, which may result in an active public market for our Class A common stock never developing or not being sustained after the offering. If an active public market does not develop or is not sustained, the liquidity of our Class A Shares, your ability to sell your Class A Shares when desired and the prices that you may obtain for your Class A Shares will be adversely affected. In addition, in a less active trading market the market price of our Class A Shares may be highly volatile and could be subject to wide fluctuations. See “—Risks Related to this Offering and Ownership of Our Class A Shares—An active, liquid trading market for our Class A Shares may never develop or be sustained, which could limit your ability to sell your Class A Shares at an attractive price, or at all” and “—The market price and trading volume of our Class A Shares may be volatile, which could result in rapid and substantial losses for our stockholders.”

Risks Related to this Offering and Ownership of Our Class A Shares

As a controlled company, we will not be subject to all of the corporate governance rules of the         .

We expect to be a “controlled company” under the rules of the NYSE. Controlled companies are exempt from the NYSE corporate governance rules requiring that listed companies (i) have a majority of their board of directors consists of “independent directors,” as defined under the NYSE rules; (ii) have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and (iii) have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and

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responsibilities. Following this offering, in reliance upon the foregoing exemptions, a majority of our board of directors will not consist of independent directors, we will not have a nominating and corporate governance committee, and our compensation committee will not be composed entirely of independent directors, and we may use any of these exemptions for so long as we are a controlled company. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. See “Management—Director Independence” for further information.

We are a holding company and depend upon our subsidiaries for our cash flow.

We will be a holding company and will have no material assets other than our ownership of Common Units. Our subsidiaries, including Enovation Controls, LLC, will conduct all of our operations and own substantially all of our assets, and we will have no independent means of generating revenue. Consequently, our cash flow and our ability to meet our obligations or to pay expenses, taxes and dividends (if and when declared by our board of directors) or make other distributions in the future will depend upon the ability of our subsidiaries to make payments to us in the form of dividends, tax distributions or otherwise, which will in turn depend upon our subsidiaries’ cash flow, earnings, the terms of their current and future indebtedness, tax considerations, and legal and contractual restrictions on their ability to make distributions. For example, while our senior credit facility allows us to make tax distributions to the members of Enovation Controls, LLC, including us, it currently imposes significant limitations on the ability of Enovation Controls, LLC to make non-tax distributions to its members, including us, and consequently limits our ability to pay dividends. Subject to limitations in our senior credit facility, our subsidiaries may also enter into additional agreements that contain covenants prohibiting them from distributing or advancing funds or transferring assets to us under certain circumstances, including to pay dividends. To the extent that we need funds and our subsidiaries are restricted from making such distributions under applicable law or regulation or under any present or future debt or other covenants or is otherwise unable to provide such funds, it could materially adversely affect our business, financial condition, results of operations, and cash flows.

Our subsidiaries are separate and distinct legal entities. Any right that we have to receive any assets of or distributions from any of our subsidiaries upon the bankruptcy, dissolution, liquidation, or reorganization, or to realize proceeds from the sale of their assets, will be junior to the claims of that subsidiary’s creditors, including trade creditors and holders of debt that the subsidiary issued.

We do not currently intend to pay dividends in the foreseeable future.

We do not currently intend to pay dividends for the foreseeable future. As a result, you may receive a return on your investment in our Class A Shares only if the market price of our Class A Shares increases. Our ability to pay dividends is constrained by our holding company structure under which we are dependent on our subsidiaries for payments. Additionally, our subsidiaries are parties to our senior credit facility that restricts their ability to pay dividends to us. See “Dividend Policy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facilities.”

The obligations associated with being a public company will require significant resources and management attention, which may divert us from our business operations.

As a result of this offering, we will become subject to the reporting requirements of the Exchange Act and the Sarbanes–Oxley Act. The Exchange Act requires that we file annual, quarterly, and current reports with respect to our business and financial condition. The Sarbanes–Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. As a result, we will incur significant legal, accounting and other expenses that we did not previously incur.

Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management’s attention from implementing our business strategy, which could prevent us from improving our

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business, results of operations and financial condition. We have made, and will continue to make, changes to our internal controls, including information technology controls, and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. If we do not continue to develop and implement the right processes and tools to manage our changing enterprise and maintain our culture, our ability to compete successfully and achieve our business objectives could be impaired, which could negatively impact our business, financial condition and results of operations. In addition, we cannot predict or estimate the amount of additional costs we may incur to comply with these requirements. We anticipate that these costs will materially increase our general and administrative expenses.

For as long as we are an “emerging growth company,” we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

We are an “emerging growth company,” as defined in the Securities Act. As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes–Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy and information statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and of shareholder approval of any golden parachute payments not previously approved. Because we intend to take advantage of these exemptions, some investors may find our Class A Shares less attractive, which may result in a less active trading market for our Class A Shares and our stock price may be more volatile.

In addition, the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period for complying with new or revised accounting standards. We intend to “opt out” of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We could remain an “emerging growth company” until December 31, 2019 or, if earlier, (a) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (b) if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of the second fiscal quarter of any fiscal year, the last day of such fiscal year, or (c) the date on which we have issued more than $1 billion in non-convertible debt securities during the preceding three-year period.

We have not previously been required to assess the effectiveness of our internal controls over financial reporting and we may identify deficiencies when we are required to do so.

We are not currently required to comply with Section 404(a) of the Sarbanes–Oxley Act and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Upon becoming a public company, we will be required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes–Oxley Act, which will require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Although we will be required to disclose changes made in our internal controls and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal control over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC. However, as an “emerging growth company,” as defined in the JOBS Act, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an “emerging

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growth company.” At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

To comply with the requirements of being a public company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring additional accounting or internal audit staff. Testing and maintaining internal control can divert our management’s attention from other matters that are important to the operation of our business. In addition, when evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we identify material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A Shares could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

An active, liquid trading market for our Class A Shares may never develop or be sustained, which could limit your ability to sell your Class A Shares at an attractive price, or at all.

Prior to this offering, there has been no public market for our Class A Shares. Although we intend to apply to list our Class A Shares for trading on the NYSE, an active trading market for our Class A Shares may not develop on that exchange or elsewhere or, if developed, that market may not be sustained. Accordingly, if an active trading market for our Class A Shares does not develop or is not maintained, the liquidity of our Class A Shares, your ability to sell your Class A Shares when desired and the prices that you may obtain for your Class A Shares will be adversely affected. See “—Risks Related to Our Organizational Structure—Due to the nature and complexity of our organizational structure, our Class A Shares may be less attractive to investors than securities of public companies with typical organizational structures, which may result in a less active and liquid trading market for our Class A Shares and greater volatility of our stock price.”

The market price and trading volume of our Class A Shares may be volatile, which could result in rapid and substantial losses for our stockholders.

Even if an active trading market develops, the market price of our Class A Shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our Class A Shares may fluctuate and cause significant price variations to occur. The initial public offering price of our Class A Shares will be determined by negotiation between us, the Founder Entities, and the representatives of the underwriters based on a number of factors and may not be indicative of prices that will prevail in the open market following the completion of this offering. If the market price of our Class A Shares declines significantly, you may be unable to resell your shares at or above your purchase price, if at all. The market price of our Class A Shares may fluctuate or decline significantly in the future. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our Class A Shares include:

• variations in our quarterly or annual operating results;

• changes in our earnings estimates (if provided) or differences between our actual financial and operating results and those expected by investors and analysts;

• the contents of published research reports about us or our industry or the failure of securities analysts to cover our Class A Shares after this offering;

• additions or departures of key management personnel;

• any increase in indebtedness we may incur in the future;

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• announcements by us or others and developments affecting us;

• actions by institutional stockholders;

• litigation and governmental investigations;

• legislative or regulatory changes;

• changes in government programs and policies;

• changes in market valuations of similar companies (including changes in market valuations of similar companies that are driven by underlying factors inapplicable to us);

• speculation or reports by the press or investment community or in online investor forums with respect to us or our industry in general;

• announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments; and

• general market, political and economic conditions, including any such conditions and local conditions in the markets in which we conduct our operations.

These broad market and industry factors may decrease the market price of our Class A Shares, regardless of our actual operating performance. The stock market in general has from time to time experienced extreme price and volume fluctuations. In addition, in the past, following periods of volatility in the overall market and decreases in the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Future offerings of debt or equity securities by us may adversely affect the market price of our Class A Shares.

In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional Class A Shares or offering debt or other equity securities. In particular, future acquisitions could require substantial additional capital in excess of cash from operations. We would expect to finance the capital required for acquisitions through a combination of additional issuances of equity, corporate indebtedness, asset-based acquisition financing and/or cash from operations.

Issuing additional Class A Shares or other equity securities or securities convertible into equity may dilute the economic benefit and voting power of our existing stockholders or reduce the market price of our Class A Shares or both. Upon liquidation, holders of debt securities and preferred shares, if issued, and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our Class A Shares. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings. Thus, holders of our Class A Shares bear the risk that our future offerings may reduce the market price of our Class A Shares and dilute their stockholdings in us. See “Description of Capital Stock.”

Although we have no current plans to cause Enovation Controls, LLC to issue additional Common Units, our board of directors may in the future determine that it is in our best interests to issue additional Common Units of Enovation Controls, LLC rather than additional Class A Shares. If we elect to have Enovation Controls, LLC issue additional Common Units, we will issue one Class B Share to each person that receives a newly issued Common Unit, which will dilute the economic benefit and voting power of the existing holders of our Class A Shares.

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The market price of our Class A Shares could be negatively affected by sales of substantial amounts of our Class A Shares in the public markets, or the perception in the public markets that these sales may occur.

After this offering, there will be          Class A Shares outstanding, or          Class A Shares outstanding if the underwriters exercise their option to purchase additional shares in full. Of our issued and outstanding shares, all the Class A Shares sold in this offering will be freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act. Following completion of this offering, the Common Unitholders will own          Common Units in the aggregate, which are exchangeable, subject to certain limitations, at any time by the Common Unitholders for an equal number of Class A Shares. We have agreed to register the exchange of all these interests upon the expiration or earlier termination (if any) of their lock-up agreements with the underwriters of this offering, which expire 180 days after the date of this prospectus. The Class A Shares received upon exchange may be freely resold into the public market unless held by a Common Unitholder which is an affiliate of us. Certain of these holders (as well as other Common Unitholders) will have the right to demand that we register the resale of their Class A Shares received upon exchange and certain “piggyback” registration rights. See “Shares Eligible For Future Sale.”

We, Enovation Controls, LLC and all of our directors and officers and the holders of Common Units and all of our outstanding stock and stock options have agreed with Morgan Stanley on behalf of the underwriters that, subject to certain exceptions, for a period of 180 days after the date of this prospectus, without the prior written consent of Morgan Stanley on behalf of the underwriters, to not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock; file any registration statement with the SEC relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock; or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock whether any such transaction described above is to be settled by delivery of Class A Shares or such other securities, in cash or otherwise. In addition, we, Enovation Controls, LLC and all of our directors and officers and the holders of Common Units and all of our outstanding stock and stock options have agreed that, without the prior written consent of Morgan Stanley on behalf of the underwriters, we or such other person will not, during the restricted period, make any demand for, or exercise any right with respect to, the registration of any shares of common stock or any security convertible into or exercisable or exchangeable for common stock. Morgan Stanley may waive these restrictions at its discretion. See “Underwriters.”

The market price of our Class A Shares may decline significantly when the restrictions on resale by our existing stockholders lapse. A decline in the price of our Class A Shares might impede our ability to raise capital through the issuance of additional Class A Shares or other equity securities.

In connection with the completion of this offering, we intend to enter into a registration rights agreement with all of the Common Unitholders pursuant to which we will be required to register the exchange under the federal securities laws of the Common Units held by them for Class A Shares. We will also be required to allow the Common Unitholders to “piggyback” on future offerings by us in certain circumstances. Any such sales, or the prospect of any such sales, could materially impact the market price of our Class A Shares. For a further description of our registration rights agreement, see “Certain Relationships and Related Party Transactions—Registration Rights Agreement.”

The future issuance of additional Class A Shares in connection with our incentive plans, acquisitions, or otherwise will dilute all other stockholdings.

After this offering, assuming the underwriters exercise their option to purchase additional shares in full, we will have an aggregate of          Class A Shares authorized but unissued. We may issue all of these Class A Shares

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without any action or approval by our stockholders, subject to certain exceptions. Any Class A Shares issued in connection with our incentive plans, the exercise of outstanding stock options or otherwise would dilute the percentage ownership held by the investors who purchase Class A Shares in this offering.

To the extent Enovation Controls, LLC issues additional Common Units and an equivalent number of Class B Shares, the economic interest we hold in Enovation Controls, LLC will be diluted and the fully-diluted percentage ownership of Enovation Controls, Inc. held by the investors who purchase Class A Shares in this offering would be diluted.

Our future operating results may fluctuate significantly and our current operating results may not be a good indication of our future performance. Fluctuations in our quarterly financial results could affect our stock price in the future.

Our operating results have historically varied from period-to-period, and we expect that they will continue to do so as a result of a number of factors, many of which are outside of our control. If our quarterly financial results or our forecasts of future financial results fail to meet the expectations of securities analysts and investors, our Class A Share price could be negatively affected. Any volatility in our quarterly financial results may make it more difficult for us to raise capital in the future or pursue acquisitions that involve issuances of our stock. Our operating results for prior periods may not be effective predictors of our future performance.

Our business and stock price may suffer as a result of our lack of public company operating experience. In addition, if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

We have been a privately-held company, and our lack of public company operating experience may make it difficult to forecast and evaluate our future prospects. If we are unable to execute our business strategy, either as a result of our inability to effectively manage our business in a public company environment or for any other reason, our business, prospects, financial condition and results of operations may be harmed.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business or our industry. As a new public company, we do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or industry analysts commence coverage of our company, the trading price for our stock could be negatively impacted. If we obtain securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

You will incur immediate dilution as a result of this offering.

If you purchase Class A Shares in this offering, you will pay more for your shares than the amounts paid by existing stockholders for their shares (assuming all Common Unitholders exchanged their Common Units for Class A Shares). As a result, you will incur immediate dilution of $         per share, representing the difference between the initial public offering price of $         per share and our pro forma net tangible book value per Class A Share after giving effect to this offering. See “Dilution.”

Delaware law and our organizational documents, as well as our existing and future debt agreements, may impede or discourage a takeover, which could deprive our investors of the opportunity to receive a premium for their shares.

We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial

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to our existing stockholders. In addition, provisions of our amended and restated certificate of incorporation and amended and restated bylaws that will be effective upon completion of this offering may make it more difficult for, or prevent a third party from, acquiring control of us without the approval of our board of directors. Among other things, these provisions:

• provide for a classified board of directors with staggered three-year terms so that not all members of our board of directors are elected at one time and directors will be able to be removed from office only for cause;

• do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;

• delegate the sole power to a majority of the board of directors to fix the number of directors;

• provide the power to our board of directors to fill any vacancy on our board of directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise;

• authorize the issuance of “blank check” preferred stock without any need for action by stockholders, the terms of which may be established, and shares of which may be issued, without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;

• limit the ability of certain stockholders owning 15% or more of our outstanding voting stock to merge or enter into other business combinations with us;

• eliminate the ability of stockholders to call special meetings of stockholders after the Founder Entities no longer beneficially own at least a majority of the voting power of our common stock;

• eliminate the ability of stockholders to take action by written consent without a meeting of the stockholders after the Founder Entities no longer beneficially own at least a majority of the voting power of our common stock; and

• establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings.

Under the terms of the Stockholders Agreement, for so long as the Founder Entities together hold at least 25% of the outstanding Class A Shares and Class B Shares on a combined basis, certain actions may not be taken without the approval of each Founder Entity that continues to hold at least 5% of the outstanding Class A Shares and Class B Shares on a combined basis, including:

• any merger, recapitalization, issuance of voting securities or other adjustment in voting rights if, following such event, Murphy Group and EControls Group would not together have sufficient voting power or otherwise be entitled to elect a majority of our board of directors;

• any sale of all or substantially all of our assets or the assets of Enovation Controls, LLC;

• the issuance of any debt securities or equity securities by us or by any of our subsidiaries, other than certain issuances in accordance with employee benefit programs;

• the creation of any new class or series of shares of equity securities that are senior to or on a parity with our Class A Shares and Class B Shares; and

• any amendment of our certificate of incorporation or bylaws or the equivalent organization documents of us or of any of our subsidiaries in a manner that could reasonably be expected to adversely affect the rights of Murphy Group or EControls Group.

In addition, under our senior credit facility, the acquisition by any person prior to June 30, 2015 of more than 35% of our outstanding voting securities (or, if the Founder Entities own more than 35% of our voting

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securities, a higher percentage than the percentage owned by the Founder Entities), would constitute an event of default permitting acceleration of the indebtedness. There can be no assurance that we would have sufficient cash to repay our outstanding debt if it were accelerated.

The foregoing factors, as well as the significant common stock ownership by the Founder Entities, could impede a merger, takeover or other business combination or discourage a potential investor from making a tender offer for our Class A Shares, which, under certain circumstances, could reduce the market value of our Class A Shares. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire. See “Description of Capital Stock.”

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or with our directors, officers, employees, or agents.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the exclusive forum for any stockholder (including a beneficial owner) to bring: any derivative action or proceeding brought on our behalf; any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees, or agents to us or our stockholders, creditors, or other constituents; any action asserting a claim against us or any of our directors, officers, employees, or agents arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; or any action asserting a claim against us or any of our directors, officers, employees, or agents governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and to have consented to the foregoing provisions of our amended and restated certificate of incorporation. These provisions may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, employees, or agents, which may discourage such lawsuits against us and our directors, officers, employees, and agents. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, or results of operations.

The historical and pro forma financial information in this prospectus may make it difficult to accurately predict our costs of operations in the future.

The historical financial information in this prospectus does not reflect the added costs we expect to incur as a public company or the resulting changes that will occur in our capital structure and operations. In preparing our pro forma financial information we have given effect to, among other items, (i) the Transactions as described in “The Transactions,” which includes the reorganization transaction and the sale of          Class A Shares in this offering at an assumed initial public offering price of $         per share (the midpoint of the price range set forth on the cover of this prospectus), and the application of the net proceeds from this offering as described in “Use of Proceeds,” (ii) the tax receivable agreement we will enter into with the existing Common Unitholders, (iii) one-time special distribution of $60.0 million to Murphy Group and EControls Group and borrowings of $85.5 million under our senior credit facility to pay this distribution and repay existing debt, which occurred on June 30, 2014, and (iv) the purchase of our San Antonio facility on July 25, 2014, from a third-party entity by a company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, in each case as if they had been completed as of January 1, 2013, with respect to the unaudited pro forma condensed consolidated statements of income, and June 30, 2014, with respect to the unaudited pro forma condensed consolidated balance sheet. As a result of the purchase described in the foregoing item (iv), the company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, must be accounted for as a variable interest entity which will result in the cost

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of the San Antonio facility, accumulated depreciation, mortgage debt and related depreciation and interest expense being consolidated (and the related rent expense being eliminated) in our financial statements. The estimates we used in our pro forma financial information may not be similar to our actual experience as a public company. The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the transactions set forth above been consummated on the dates indicated, and do not purport to be indicative of the financial condition or results of operations as of any future date or for any future period. For more information on our historical financial information and pro forma financial information, see “Unaudited Pro Forma Condensed Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements included elsewhere in this prospectus.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements which reflect management’s expectations regarding our future growth, results of operations, operational and financial performance and business prospects and opportunities. All statements, other than statements of historical fact, are forward-looking statements. You can identify such statements because they contain words such as “plans,” “expects” or “does expect,” “budget,” “forecasts,” “anticipates” or “does not anticipate,” “believes,” “intends” and similar expressions or statements that certain actions, events, or results “may,” “could,” “would,” “might,” or “will” be taken, occur, or be achieved. Although the forward-looking statements contained in this prospectus reflect management’s current beliefs based upon information currently available to management and upon assumptions which management believes to be reasonable, actual results may differ materially from those stated in or implied by these forward-looking statements.

A number of factors could cause actual results, performance or achievements to differ materially from the results expressed or implied in the forward-looking statements, including those listed in the “Risk Factors” section of this prospectus. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Forward-looking statements necessarily involve significant known and unknown risks, assumptions, and uncertainties that may cause our actual results, performance, and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things:

• the failure of one or more favorable industry trends to occur, or to occur at the expected pace;

• our ability to continue technological innovation and successful introduction of new and higher margin products;

• the failure of the market for natural gas engines to develop according to our expectations;

• future fuel price differentials among natural gas, diesel, and gasoline fuels;

• the failure of natural gas refueling infrastructure to develop according to our expectations;

• changes in laws or government regulations unfavorable to hydraulic fracturing;

• the impact of competition, including from incumbent technologies and alternative products;

• our ability to maintain relationships with major customers;

• our ability to protect our trade secrets and our intellectual property and know-how, the inability to commercialize one or more of our products due to use of open source technology, or the alleged infringement of intellectual property rights owned by others;

• IT security threats and sophisticated and targeted computer crime;

• material product liability, tort, and warranty claims;

• adverse changes in environmental regulations and programs in China promoting the use of cleaner burning fuels, including natural gas, for vehicles;

• any negative change in our relationship with AMICO, our strategic partner in China;

• loss of one or more significant suppliers;

• the availability of rare earth metals used in our products;

• the ability of our suppliers to provide materials sufficient for our production needs;

• violation of the U.S. Foreign Corrupt Practices Act or similar anti-bribery laws or regulations;

• the failure of favorable government energy policies to materialize;

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• risks associated with conducting business outside of the U.S.;

• fluctuations in exchange and interest rates;

• our ability to collect amounts owed to us by our customers;

• work stoppages and increased labor costs due to unionization or the creation of works councils or similar arrangements;

• reduced sales opportunities and demand for our products due to industry consolidation;

• uncertainties related to limitations on PCAOB accounting firm inspections in China;

• costly or unsuccessful product development activities;

• uncertainties relating to the long sales cycle, the unpredictability of customer orders, the customer evaluation process, and the implementation period of our products and services;

• failure to comply with applicable government regulations, including environmental, health, and safety regulations;

• violation of laws and regulations governing business activities with countries subject to sanctions or embargoes or governing the import and export of our products;

• the loss or unavailability of managerial, marketing, engineering, or operations personnel;

• the impact of current or future indebtedness on our business;

• failure to raise additional capital or to generate the significant capital necessary to continue to grow our business;

• the impact of regulations related to “conflict minerals”;

• failure to successfully acquire or integrate companies that provide complementary products or technologies;

• the amount of payments required under the tax receivable agreement;

• conflicts of interest between us or our stockholders and the Founder Entities;

• the nature and complexity of our organizational structure;

• the impact of reduced NYSE corporate governance rules applicable to us due to our status as a controlled company;

• our dependence on our subsidiaries for our cash flow due to our status as a holding company;

• the impact of exemptions available to us as an “emerging growth company”;

• unfavorable changes in the market price of our capital stock; and

• our lack of public company operating experience.

Although we have attempted to identify important risks and uncertainties that could cause actual actions, events or results to differ materially from those described in or implied by our forward-looking statements, other risks and uncertainties may cause actions, events or results to differ materially from those anticipated, estimated or intended. We cannot assure you that forward-looking statements will prove to be accurate, as actual actions, results and future events could differ materially from those anticipated or implied by such statements. Accordingly, as noted above, readers should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date of this prospectus and, except as required by law, we assume no obligation to update or revise them to reflect new events or circumstances.

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THE TRANSACTIONS

The diagram below depicts our organizational structure immediately prior the consummation of this offering and related transactions. See “—The Transactions.”

(1) The existing members consist of Murphy Group, EControls Group, and Employee Holders. Murphy Group holds an approximately     % economic interest in Enovation Controls, LLC through its ownership of Class A Units. EControls Group holds an approximately     % economic interest in Enovation Controls, LLC through its ownership of Class A Units. Employee Holders hold an approximately     % economic interest in Enovation Controls, LLC through their ownership of Class B, C, and D Management Interests.

(2) Enovation Controls, LLC’s senior credit facility is guaranteed by its U.S. subsidiaries.

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The diagram below depicts our organizational structure immediately after the consummation of this offering and related transactions.

(1) The existing owners consist of Murphy Group, EControls Group, and Employee Holders. Murphy Group will hold Class B Shares representing     % of the voting power and 0% of the economic interest; Murphy Group also will hold a     % economic interest in Enovation Controls, LLC. EControls Group will hold Class B Shares representing     % of the voting power and 0% of the economic interest; EControls Group also will hold a     % economic interest in Enovation Controls, LLC. Employee Holders will hold Class B Shares representing     % of the voting power and 0% of the economic interest; Employee Holders also will hold a     % economic interest in Enovation Controls, LLC.

(2) Enovation Controls, LLC’s senior credit facility is guaranteed by its U.S. subsidiaries.

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Enovation Controls, LLC. We will operate our business through Enovation Controls, LLC and its consolidated subsidiaries.

The current members of Enovation Controls, LLC are as follows:

• Murphy Group, which is owned by Frank W. Murphy, III, our Executive Chairman, and certain trusts for the benefit of his children, holds an approximately     % economic interest in Enovation Controls, LLC through its ownership of              Class A Units, which will be converted into an aggregate of              Common Units (with a corresponding number of Class B Shares) in connection with this offering.

• EControls Group, which is majority owned by Kennon Guglielmo, our Chief Technology Officer, his wife, and certain trusts for the benefit of their children, holds an approximately     % economic interest in Enovation Controls, LLC through its ownership of              Class A Units, which will be converted into an aggregate of              Common Units (with a corresponding number of Class B Shares) in connection with this offering. Certain employees of Enovation Controls, LLC hold minority ownership interests in EControls Group.

• Certain of our officers and other employees, whom we collectively refer to as the Employee Holders, hold an approximately     % economic interest in Enovation Controls, LLC through their ownership of Class B, C, and D Management Interests which will be converted into an aggregate of              Common Units (with a corresponding number of Class B Shares) in connection with this offering in a manner that reflects the percentage of Enovation Controls, LLC currently owned by the Class B, C, and D Management Interest holders, taking into account their current distribution entitlement and the fair value of Enovation Controls, LLC based on the offering price. Approximately     % of the converted Common Units will be subject to forfeiture at the time of the conversion and will vest only if the holder remains employed by us through the applicable period or upon a change in control. The conversion will have no direct or indirect economic effect on us.

Enovation Controls, Inc. Upon completion of the offering, we will use the net proceeds received to purchase Common Units directly from the Murphy Group, EControls Group, and Employee Holders and, to the extent necessary to pay offering expenses, from Enovation Controls, LLC. Immediately after our acquisition of these Common Units, our only material asset will be our ownership of     % of the total Common Units and our only business will be acting as the sole managing member of Enovation Controls, LLC. You should note, in particular, that:

• We will be the sole managing member of Enovation Controls, LLC.

• Investors in this offering will own 100% of our Class A Shares (and     % of our Class A Shares on a fully diluted basis assuming all Common Units and Class B Shares are exchanged for Class A Shares). The outstanding Class A Shares will represent 100% of the economic interest in us, but initially only     % of our voting power, and we will own     % of the economic interest in Enovation Controls, LLC.

• Our Class A Shares will entitle the holders to receive 100% of any distributions we make. Upon our liquidation, dissolution, or winding up, holders of Class A Shares will be entitled to share ratably in all assets available for distribution after payment of our liabilities.

• Immediately after the completion of this offering, the only outstanding Class A Shares will be the Class A Shares issued pursuant to this offering.

• The Common Unitholders will own 100% of our Class B Shares, which will vote together with the Class A Shares as a single class. Each Class A Share has one (1) vote per share and each Class B Share has one (1) vote per share. The Class B Shares will represent, upon completion of this offering,     % of the combined voting power of our common stock. The Class B Shares do not represent an economic interest in us and are therefore not entitled to any dividends that we may pay. However, each holder of a Class B Share owns an economic interest in Enovation Controls, LLC through a corresponding

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Common Unit. The Common Unitholders will hold substantially more than 50% of the combined voting power of our common stock and they will hold all the Class B Shares.

• We intend to enter into a stockholders agreement, which we refer to as the Stockholders Agreement, with Murphy Group and EControls Group that will become effective upon the completion of this offering. The Stockholders Agreement will contain provisions that will prevent a Founder Entity from transferring its shares without the consent of the other Founder Entity, except in the case of sales to affiliates, sales to any member of its family group (as defined therein), tag-along sales of our common stock by both Founder Entities, or transfers pursuant to the Registration Rights Agreement, until the earlier of the third anniversary of the offering or the time at which the Founder Entities collectively hold less than 10% of our outstanding Class A Shares and Class B Shares. The Stockholders Agreement will also grant each Founder Entity the right, subject to certain ownership thresholds, to nominate a specified number of designees to our board of directors and committees of our board of directors. Each Founder Entity will have the right to designate two members to our board of directors for so long as such Founder Entity owns 10% or more of our outstanding Class A Shares and Class B Shares on a combined basis. The Founder Entities will also have the right to designate one mutually agreed additional member to our board of directors. The Founder Entities will agree to vote all of their shares of our common stock to elect such designees to our board of directors. If, at any time, a Founder Entity owns 5% or more but less than 10% of our outstanding Class A Shares and Class B Shares on a combined basis, such Founder Entity will have the right to designate one nominee for election to our board of directors. If a Founder Entity’s ownership level falls below 5% of our outstanding Class A Shares and Class B Shares on a combined basis, such Founder Entity will no longer have any right to designate a nominee and the right of the Founder Entities to mutually designate a designee will also terminate. In addition, for so long as the Founder Entities together hold at least 25% of the outstanding Class A Shares and Class B Shares on a combined basis, certain actions may not be taken without the prior written consent of each Founder Entity owning at least 5% of the outstanding Class A Shares and Class B Shares on a combined basis, including:

• any merger, recapitalization, issuance of voting securities or other adjustment in voting rights if, following such event, Murphy Group and EControls Group would not together have sufficient voting power or otherwise be entitled to elect a majority of our board of directors;

• any sale of all or substantially all of our assets or the assets of Enovation Controls, LLC;

• the issuance of any debt securities or equity securities by us or by any of our subsidiaries, other than certain issuances in accordance with employee benefit programs;

• the creation of any new class or series of shares of equity securities that are senior to or on a parity with our Class A Shares and Class B Shares; and

• any amendment of our certificate of incorporation or bylaws or the equivalent organization documents of us or of any of our subsidiaries in a manner that could reasonably be expected to adversely affect the rights of Murphy Group or EControls Group.

• Pursuant to the amended and restated operating agreement of Enovation Controls, LLC, in order to provide liquidity to the Common Unitholders, each Common Unit, together with the corresponding number of our Class B Shares, held by a Common Unitholder, will be exchangeable for (i) one of our Class A Shares, or (ii) at our option, cash equal to the market value of one of our Class A Shares, at any time and from time to time after the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder. These exchange rights may be exercised with respect to unvested Common Units only with our consent. In addition, the percentage of an Employee Holder’s Common Units that can be exchanged (taken together with any Common Units sold to us in connection with the offering) is limited to the aggregate percentage of Common Units exchanged or sold in connection with or following the offering by Murphy Group or EControls Group (whichever is higher). This percentage limitation will expire three years after the offering or, if sooner, when the Founder Entities together cease to own at least 15% of the outstanding Class A Shares and Class B Shares

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on a combined basis. The exchange of the Common Units and Class B Shares corresponding to these Common Units for our Class A Shares will increase the number of outstanding Class A Shares and decrease the number of outstanding Class B Shares.

• Following this offering, the members of Enovation Controls, LLC, other than us, will consist of Murphy Group, EControls Group and the Employee Holders.

Certain Attributes of Our Structure. Our structure following this offering will be designed to accomplish a number of objectives, the most important of which are as follows:

• The structure will allow us to serve as a holding company, with our sole material asset being our ownership interest in Enovation Controls, LLC. The Common Unitholders, however, will retain their economic investment in the form of direct interests in Enovation Controls, LLC, rather than through our Class A Shares. Following this offering, all of the businesses operated by Enovation Controls, LLC or its subsidiaries prior to this offering, and all of the interests held by Enovation Controls, LLC and its subsidiaries in such businesses prior to this offering, will be operated or held, as the case may be, by Enovation Controls, LLC and its subsidiaries, and our current management will continue to manage these businesses. As a result, we and the Common Unitholders will participate in the net operating results of Enovation Controls, LLC on a pari passu basis, in accordance with our respective ownership of Enovation Controls, LLC.

• In connection with this offering, we will issue to the Common Unitholders non-economic Class B “vote-only” shares that as a percentage of the combined voting power of our common stock will be equal to their economic ownership in Enovation Controls, LLC.

• In the event that a Common Unitholder wishes to exchange Common Units for Class A Shares, the holder must deliver the Common Units to us, together with a corresponding number of Class B Shares, and in exchange therefor we will deliver to the exchanging holder a number of Class A Shares corresponding to the number of Common Units delivered to us. We will cancel any Class B Shares delivered to us.

• Under the terms of the amended and restated operating agreement of Enovation Controls, LLC, Common Unitholders will be able to exchange their Common Units, together with a corresponding number of Class B Shares, for Class A Shares at any time and from time to time after the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, subject to certain limitations.

The Transactions

In connection with this offering:

• The amended and restated operating agreement of Enovation Controls, LLC will be amended and restated to provide, among other things, (i) for us to act as the sole managing member and (ii) that Common Units held by the Common Unitholders together with a corresponding number of Class B Shares will be exchangeable for (a) one of our Class A Shares, or (b) at our option, cash equal to the market value of one of our Class A Shares, as applicable, at any time and from time to time after the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, subject to certain limitations, in order to provide liquidity to these holders.

• We will issue the Class A Shares for net proceeds of approximately $         million, after deducting underwriting discounts (assuming the Class A Shares are sold at $         per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus).

• We intend to use the net proceeds that we receive from this offering to purchase Common Units directly from the Murphy Group, EControls Group, and Employee Holders and Enovation Controls,

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LLC at a price per Common Unit equal to the public offering price per share of our Class A Shares, less underwriting discounts. The number of Common Units being sold to us by the Murphy Group, EControls Group, and Employee Holders is based upon a pro rata allocation among the Murphy Group, EControls Group, and those Employee Holders (based on the number of vested Common Units held by such Employee Holders) electing to participate in the sale. We will use $         million to purchase     % of the Common Units held by Murphy Group, $         million to purchase     % of the Common Units held by EControls Group and $         million to purchase     % of the Common Units held by the Employee Holders and $         million to purchase     % of the Common Units from Enovation Controls, LLC. Enovation Controls, LLC will use the proceeds from our purchase of Common Units from it to repay offering expenses. Upon completion of the offering, we will have acquired Common Units representing a     % interest in Enovation Controls, LLC.

• We will enter into a stockholders agreement with Murphy Group and EControls Group immediately prior to this offering. See “The Transactions—Stockholders Agreement.”

• We will enter into a registration rights agreement with all Common Unitholders immediately prior to this offering. See “The Transactions—Registration Rights Agreement.”

• We will enter into a tax receivable agreement with all Common Unitholders immediately prior to this offering. See “The Transactions—Tax Receivable Agreement.”

• We will amend and restate our certificate of incorporation to provide for, among other things, the issuance of our Class A Shares and Class B Shares.

We refer to the foregoing collectively as the “Transactions.” No fairness opinion was sought nor was one obtained for any aspect of the Transactions. If you invest in our Class A Shares, your interest in us will be diluted to the extent of the difference between the initial public offering price per Class A Share and the pro forma net tangible book value per Class A Share after this offering, which is $        . Assuming we sell the Class A Shares in this offering at $         per share, the extent of your dilution will be $         per share. See “Dilution” for further information.

The primary purposes of this offering are to create a public market for our Class A Shares; allow us easier and quicker access to the public markets should we need additional capital in the future; increase our profile and prestige with existing and potential customers, suppliers, and strategic partners; facilitate the use of our Class A Shares as consideration for future acquisitions; provide liquidity to existing members of Enovation Controls, LLC; and make our securities more valuable and attractive to our employees and potential employees for compensation purposes. In addition, we believe the structure of this offering, as described in “Transactions,” provides certain economic and tax benefits to us and the investors in this offering. These benefits are derived in part from our purchase of Common Units from the Common Unitholders, as well as future exchanges of Common Units for Class A Shares (or cash), each of which are expected to result in increases in our share of the tax basis of the tangible and intangible assets of Enovation Controls, LLC that otherwise would not have been available had we simply converted Enovation Controls, LLC into a Delaware corporation and had such entity conducted an initial public offering. Any such increases in tax basis are, in turn, anticipated to create incremental tax deductions that would reduce the amount of tax that we would otherwise be required to pay in the future. We expect to receive 15% of the realized cash savings resulting from this arrangement, thus increasing our operating cash flow by that amount. We can use this additional cash flow for working capital, capital expenditures, acquisitions, and other general corporate purposes, which we expect will increase stockholder value. The Common Unitholders will receive 85% of the realized tax savings associated with the step-up in tax basis of Enovation Controls, LLC’s assets. See “Risk Factors—Risks Related to Our Organizational Structure—Due to the nature and complexity of our organizational structure, our Class A Shares may be less attractive to investors than securities of public companies with typical organizational structures, which may result in a less active and liquid trading market for our Class A Shares and greater volatility of our stock price.”

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Operating Agreement of Enovation Controls, LLC

We will operate our business through Enovation Controls, LLC and its consolidated subsidiaries. The operations of Enovation Controls, LLC, and the rights and obligations of the Common Unitholders, will be set forth in the amended and restated operating agreement of Enovation Controls, LLC. The following description of the Enovation Controls, LLC amended and restated operating agreement is not complete and is qualified by reference to the full text of the agreement, which is filed as an exhibit to the registration statement of which this prospectus is a part.

Reorganization. Immediately prior to this offering, all of the currently outstanding Class B, C, and D Management Interests will be converted into Common Units that are subject to existing vesting requirements. In addition, each holder of a Class B, C, and D Management Interest will receive one Class B Share for each Common Unit it receives in the reorganization, with such Class B Shares subject to the same vesting requirements as the Common Units. We refer to such Common Units that have not yet vested as the Restricted Common Units. As a result of this conversion of membership interests, all of the Common Unitholders will hold the same class of Common Units, except that certain Common Units held by Employee Holders will remain subject to vesting. If any Common Units do not vest and are forfeited, an equal number of Class B Shares will be forfeited.

Governance. We will serve as the sole managing member of Enovation Controls, LLC. As such, we will control its business and affairs and be responsible for the management of its business. No members of Enovation Controls, LLC, in their capacity as such, will have any authority or right to control the management of Enovation Controls, LLC or to bind it in connection with any matter. As noted above, however, the Founder Entities will have the ability to exercise majority voting control over us by virtue of their ownership of Class B Shares and the Stockholders Agreement, which will give them the ability to elect a majority of our board of directors and therefore control us in our capacity as managing member of Enovation Controls, LLC. Our board of directors will initially be composed of a total of              directors, including five directors appointed by the Founder Entities who will exercise a majority of the director voting power on all matters presented to the board of directors.

Rights of Members. Each Common Unit will entitle the holder to equal economic rights. Common Unitholders will have no voting rights by virtue of their ownership of Common Units, except for the right to approve certain amendments to the operating agreement of Enovation Controls, LLC. See “—Amendments.” Common Unitholders will hold Class B Shares, enabling them to exert a significant percentage of our voting power. See “Risk Factors—Risks Related to Our Organizational Structure—Control by the Founder Entities of     % of the combined voting power of our common stock and the fact that they are holding their economic interest through Enovation Controls, LLC may give rise to conflicts of interest.”

As noted above, Enovation Controls, LLC currently has outstanding Class B, C and D Management Interests that were issued to certain of its employees. These interests are subject to forfeiture under some circumstances in connection with a termination of the employee member’s employment. Although these interests will be converted into Restricted Common Units of Enovation Controls, LLC immediately prior to this offering, to the extent that the previously outstanding Class B, C and D Management Interests were subject to forfeiture at the time of conversion, then the Restricted Common Units issued upon conversion generally also will be subject to forfeiture on the same terms, except that the definition of a change in control that results in a lapse of such forfeiture restrictions will be amended to be consistent with the Enovation Controls, Inc. 2014 Long-Term Incentive Plan, which we refer to as the 2014 Incentive Plan. We do not intend to cause Enovation Controls, LLC to issue profits interests in the future.

Net profits and net losses and distributions of Enovation Controls, LLC generally will be allocated and made to its members pro rata in accordance with the number of Common Units they hold, whether or not vested.

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Coordination of Enovation Controls, Inc. and Enovation Controls, LLC. At any time we issue a Class A Share for cash, the net proceeds received by us will be promptly transferred to Enovation Controls, LLC, and Enovation Controls, LLC will issue to us one of its Common Units. At any time we issue a Class A Share pursuant to the 2014 Incentive Plan, we will contribute to Enovation Controls, LLC all of the proceeds that we receive (if any) and Enovation Controls, LLC will issue to us one Common Unit having the same restrictions, if any, attached to the Class A Shares issued under the 2014 Incentive Plan. Conversely, if we redeem or repurchase any of our Class A Shares, Enovation Controls, LLC will, immediately prior to our redemption or repurchase, redeem or repurchase an equal number of Common Units held by us, upon the same terms and for the same price, as the Class A Shares are redeemed or repurchased. We can redeem or repurchase Class A Shares only if Enovation Controls, LLC first redeems or repurchases Common Units we hold.

Under the terms of the Enovation Controls, LLC amended and restated operating agreement, we may in the future cause Enovation Controls, LLC to issue Common Units or other, newly created classes of Enovation Controls, LLC securities to one or more investors having such rights, preferences and other terms as we determine, and in such amount as we may determine. In addition, we may in the future elect to compensate our employees by granting them Common Units, whether or not subject to forfeiture, or profits interests or other securities. Any such issuance would have a dilutive effect on the economic interest we hold in Enovation Controls, LLC. In addition, we will issue our Class B Shares having one (1) vote per share on a one-for-one basis in connection with any future issuances of Common Units, which would have a dilutive effect on the voting power of our then current holders of Class A Shares. The tax receivable agreement would cover any exchanges of Common Units issued to the current parties to that agreement after the offering, and it is possible that new investors in the Common Units issued after the offering may become parties to the tax receivable agreement as well.

Although we have no current plans to cause Enovation Controls, LLC to issue additional Common Units, our board may determine that it is our best interests to issue additional Common Units of Enovation Controls, LLC rather than additional Class A Shares. If we elect to have Enovation Controls, LLC issue additional Common Units, we will issue one Class B Share to each person that receives a Common Unit. See “Risk Factors—Risks Related to this Offering and Ownership of Our Class A Shares—The future issuance of additional Class A Shares in connection with our incentive plans, acquisitions, or otherwise will dilute all other stockholdings.”

Issuances and Transfer of Common Units. Membership interests in Enovation Controls, LLC may be issued only to persons or entities to which we agree to permit the issuance of such interests in exchange for cash or other consideration, including, if applicable, the services of employees of Enovation Controls, LLC or its affiliates. The Common Units held by the other Common Unitholders may be transferred without our consent only under limited circumstances, including to certain permitted transferees (i.e., an affiliate, family member or estate planning vehicle), and upon exchange for Class A Shares following this offering. A holder of Common Units may not transfer any Common Units to any person unless he transfers an equal number of our Class B Shares to the same transferee.

Exchange Rights. We have reserved for issuance              Class A Shares, representing the number of Common Units that will be owned by the Murphy Group, EControls Group and Employee Holders immediately following this offering, in respect of the aggregate number of Class A Shares expected to be issued over time upon the exchanges by the Common Unitholders of Common Units, unless we exercise our option to pay cash in lieu of Class A Shares for some or all of such exchanged Common Units. As noted above, we may in the future cause Enovation Controls, LLC to issue additional Common Units that would also be exchangeable for Class A Shares.

Common Unitholders may exchange their Common Units at any time and from time to time after the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, subject to certain limitations. A Common Unitholder may revoke or modify their exchange election at any time prior to the consummation of the exchange, including at any such time after we exercise our option to pay cash in lieu of Class A Shares for some or all of such exchanged Common Units.

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Delivery and Cancellation of Class B Shares. Any holder seeking to exchange Common Units for Class A Shares must also deliver a corresponding number of Class B Shares for cancellation by us.

Indemnification and Exculpation. To the extent permitted by applicable law, Enovation Controls, LLC will indemnify us, as its managing member, its other members, its authorized officers, its other employees and agents from and against any losses, damages or expenses actually or reasonably incurred as a result of any acts or omissions performed or omitted by such person in good faith and in a manner that such person reasonably believed to be in or not opposed to the best interests of Enovation Controls, LLC (and, with respect to a criminal proceeding, having had no reasonable cause to believe such person’s conduct was unlawful) either on behalf of or in furtherance of the interests of Enovation Controls, LLC, and performed or omitted in a manner reasonably believed by such person to be within the scope of his or her authority and so long as such person was not guilty of gross negligence or willful misconduct with respect to such act or omission.

We, as the managing member, the other members and the authorized officers and other employees and agents of Enovation Controls, LLC, will not be liable to Enovation Controls, LLC, its members or their affiliates for damages incurred by any acts or omissions of these persons, provided that the acts or omissions were performed or omitted by such person in good faith and in a manner that such person reasonably believed to be in or not opposed to the best interests of Enovation Controls, LLC (and, with respect to a criminal proceeding, having had no reasonable cause to believe such person’s conduct was unlawful) either on behalf of or in furtherance of the interests of Enovation Controls, LLC, and performed or omitted in a manner reasonably believed by such person to be within the scope of his or her authority and so long as such person was not guilty of gross negligence or willful misconduct with respect to such act or omission.

Amendments. The amended and restated operating agreement of Enovation Controls, LLC may be amended with the written consent of the managing member in its sole discretion; provided, however, that no amendment, subject to certain limited exceptions, may materially and adversely affect the rights of a Common Unitholder, as such, other than on a pro rata basis with other Common Unitholders of the same class, without the consent of such Common Unitholder (or, if there is more than one such Common Unitholder that is so affected, without the consent of a majority of such affected Common Unitholders in accordance with their holdings of Common Units).

Additionally, the consent of each Founder Entity that holds a number of Common Units that is five percent (5%) or more of the number of Common Units outstanding immediately following the closing of this offering is required for any amendment to the amended and restated operating agreement of Enovation Controls, LLC that:

• reduces the right of any member to receive tax distributions other than on a pro rata basis with a reduction in taxable income allocable to such member and other holders of Common Units of the same class;

• precludes or limits the rights of any member to exercise its exchange rights under the terms of the amended and restated operating agreement of Enovation Controls, LLC;

• requires any member to make a capital contribution;

• materially increases the obligations of any member under the amended and restated operating agreement of Enovation Controls, LLC; or

• results in Enovation Controls, LLC being treated as a corporation for tax purposes.

Registration Rights Agreement

In connection with the completion of this offering, we intend to enter into a registration rights agreement with all of the Common Unitholders pursuant to which we will be required to register the exchange under the federal securities laws of the Common Units (and Class B Shares) held by them for Class A Shares. We have agreed, at our expense, to use our reasonable best efforts to file with the SEC a shelf registration statement

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providing for the exchange of the Common Units (and Class B Shares) for Class A Shares and the resale of such shares thereafter upon the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, and to cause and maintain the effectiveness of this shelf registration statement until such time as all Class A Shares covered by this shelf registration statement have been exchanged. Further, each of the Founder Entities will be entitled to cause us, at our expense, to register the resale of the Class A Shares they will receive upon exchange of their Common Units (and Class B Shares), which we refer to as their “demand” registration rights.

All Common Unitholders (as well as their permitted transferees) will be entitled to exercise “piggyback” rights in connection with any future public underwritten offerings we engage in for our account or for the account of others to whom we have granted registration rights after the expiration or earlier termination (if any) of the lock-up agreements referred to above, subject to pro rata reduction if it is determined that the sale of additional shares would be harmful to the success of the offering. All fees, costs and expenses of underwritten registrations will be borne by us, other than underwriting discounts and selling commissions, which will be borne by each stockholder selling its shares. Our registration obligations will be subject to certain restrictions on, among other things, the frequency of requested registrations, the number of shares to be registered and the duration of these rights.

Tax Receivable Agreement

As described above in “The Transactions,” we intend to use approximately $         of the net proceeds of this offering to purchase Common Units from the existing members of Enovation Controls, LLC. In addition, as described under “The Transactions—Operating Agreement of Enovation Controls, LLC—Exchange Rights,” Common Unitholders may in the future exchange Common Units (and Class B Shares) for Class A Shares on a one-for-one basis (or, at our option, cash). Enovation Controls, LLC will have in effect an election under Section 754 of the Code, which will result in an adjustment to our share of the tax basis of the assets owned by Enovation Controls, LLC at the time of such initial purchase of and subsequent exchanges of Common Units. In general, in the case of a transfer of an interest in a partnership (including a limited liability company taxable as a partnership for U.S. federal income tax purposes), Section 754 of the Code allows the partnership to elect to adjust the tax basis of partnership assets to equal the price paid for the partnership interest. Any such basis adjustment is specific to the transferee of the partnership interest. It is expected that the purchase and exchanges will result in increases in our share of the tax basis of the tangible and intangible assets of Enovation Controls, LLC that otherwise would not have been available. Any such increases in tax basis are, in turn, anticipated to create incremental tax deductions in the form of additional depreciation and/or amortization deductions that would be available to us to offset our share of the taxable income of Enovation Controls, LLC, and which in turn will reduce the amount of tax that we would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) that would otherwise be allocated to us from Enovation Controls, LLC on future dispositions of certain capital assets to the extent tax basis generated from the basis adjustments is allocated to those capital assets.

We intend to enter into a tax receivable agreement with all Common Unitholders. The tax receivable agreement will require us to pay those Common Unitholders 85% of the amount of cash savings, if any, in U.S. federal, state and local income or franchise tax that we actually realize, or in some circumstances we are deemed to realize, in any tax year beginning with and following 2014 (a “covered tax year”) from increases in tax basis realized as a result of the initial purchase and any future exchanges by Common Unitholders of their Common Units (and Class B Shares) for Class A Shares (or cash), including increases attributable to payments made under the tax receivable agreement and deductions attributable to imputed interest. We expect to benefit from the remaining 15% of cash savings, if any, in income and franchise tax that we actually realize during a covered tax year.

For purposes of the tax receivable agreement, cash savings in income tax and franchise tax will be computed by comparing our actual income and franchise tax liability (and of Enovation Controls, LLC and its subsidiaries, but only with respect to taxes imposed on Enovation Controls, LLC or its subsidiaries and allocable to us) for a

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covered tax year to the amount of such taxes that we would have been required to pay (and Enovation Controls, LLC and its subsidiaries would have been required to pay, but only with respect to such taxes imposed on Enovation Controls, LLC or its subsidiaries and allocable to us) for such covered tax year had there been (i) no increase to our share of the tax basis of the tangible and intangible assets of Enovation Controls, LLC as a result of the initial purchase and any future exchanges and (ii) no deductions for imputed interest with respect to payments under the tax receivable agreement, and had we not entered into the tax receivable agreement. The tax receivable agreement continues until all such tax benefits have been utilized or expired, unless we exercise our right to terminate the tax receivable agreement upon a change in control for an amount based on the remaining payments expected to be made under the tax receivable agreement or we breach any of our material obligations under the tax receivable agreement in which case all obligations will generally be accelerated and due. Estimating the amount of payments that may be made under the tax receivable agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors.

While the actual amount and timing of any payments that may be made under the tax receivable agreement will vary depending upon a number of factors (including the timing of exchanges, the amount of gain recognized by an exchanging Common Unitholder, the amount and timing of our income and the tax rates in effect at the time any incremental tax deductions resulting from the increase in tax basis are utilized), we expect that the payments that we may make to the Common Unitholders pursuant to the tax receivable agreement could be substantial during the expected term of the tax receivable agreement. In addition, to the extent that we are unable to make payments under the tax receivable agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid by us. The cash savings in income and franchise tax paid to any such Common Unitholders under the tax receivable agreement and any interest costs will reduce the cash that may otherwise be available to us for working capital, capital expenditures, acquisitions, and other general corporate purposes, as well as to make future distributions to holders of Class A Shares, including the investors in this offering. The payments under the tax receivable agreement are not conditioned upon the Common Unitholders’ continued ownership of interests in Enovation Controls, LLC.

Payments under the tax receivable agreement will be based on the tax reporting positions that we determine. A tax authority may challenge all or part of the tax basis increases or the amount or availability of any tax attributes discussed above, as well as other related tax positions we take, and a court could sustain such a challenge. The Common Unitholders will not reimburse us for any payments previously made to them pursuant to the tax receivable agreement in the event that, due to a successful challenge by the IRS or any other tax authority of the amount of any tax basis increase or the amount or availability of any tax attributes, our actual cash tax savings are less than the cash tax savings previously calculated and upon which prior payments under the tax receivable agreement were based. Instead, any excess cash payments made by us to a Common Unitholder will be netted against any future cash payments that we might otherwise be required to make under the terms of the tax receivable agreement. However, we might not determine that we have effectively made an excess cash payment to the Common Unitholders for a number of years following the initial time of such payment. As a result, in certain circumstances we could make cash payments under the tax receivable agreement to the Common Unitholders in excess of our cash tax savings. A successful challenge to our tax reporting positions could also adversely affect our other tax attributes and could materially increase our tax liabilities.

We will bear the costs of implementing the provisions of the tax receivable agreement. In addition, we will have full responsibility for, and sole discretion over, our tax matters, including the filing and amendment of all tax returns and claims for refund and defense of all tax contests, subject to certain participation and approval rights held by the Founder Entities.

The tax receivable agreement provides that upon certain mergers, asset sales, other forms of business combinations and other changes in control, we will be required to pay the Common Unitholders amounts based on assumptions (including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the tax receivable agreement) regarding the remaining payments expected to be made under the tax receivable agreement (at our option, these payments can be accelerated into a single payment at the time of the change in control). As a result, we could be required to make cash payments

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under the tax receivable agreement that are greater than or less than the specified percentage of the actual cash tax savings we realize in respect of the tax attributes subject to the tax receivable agreement, and any upfront payment may be made years in advance of any actual realization of such future tax savings. In these situations, our obligations under the tax receivable agreement could have a substantial negative impact on our liquidity, and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes in control. There can be no assurance that we will be able to finance our obligations under the tax receivable agreement.

Payments are generally due under the tax receivable agreement within a specified period of time following the filing of our tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of LIBOR plus 200 basis points from the due date (without extensions) of such tax return. Any late payments that may be made under the tax receivable agreement will continue to accrue interest at LIBOR plus 400 basis points until such payments are made, including any late payments that we may subsequently make because we did not have enough available cash to satisfy our payment obligations at the time at which they originally arose.

Stockholders Agreement

We expect to enter into the Stockholders Agreement, with Murphy Group and EControls Group that will become effective upon the completion of this offering. The Stockholders Agreement will contain agreements with respect to restrictions on the sale, issuance or transfer of our shares of our common stock that will prevent a Founder Entity from transferring its shares without the consent of the other Founder Entity, except in the case of sales to affiliates, sales to any member of its family group (as defined therein), in connection with a tag-along sale of our common stock by both Founder Entities or pursuant to the Registration Rights Agreement, until the earlier of the third anniversary of the offering and the time at which the Founder Entities collectively hold less than 10% of our outstanding Class A Shares and Class B Shares. The Stockholders Agreement will also grant each Founder Entity the right, subject to certain conditions, to nominate a specified number of designees to our board of directors and committees of our board of directors. Each Founder Entity will have the right to designate two members to our board of directors for so long as such Founder Entity owns 10% or more of our outstanding Class A Shares and Class B Shares. The Founder Entities will also have the right to designate one mutually agreed additional member to our board of directors. The Founder Entities will also agree to vote all of their shares of our common stock to elect such designees to our board of directors. If, at any time, a Founder Entity owns 5% or more but less than 10% of our outstanding Class A Shares and Class B Shares, such Founder Entity will have the right to designate one nominee for election to our board of directors. If a Founder Entity’s ownership level falls below 5% of our outstanding Class A Shares and Class B Shares, such Founder Entity will no longer have any right to designate a nominee and the right of the Founder Entities to mutually designate a designee will also terminate. In addition, for so long as the Founder Entities together hold at least 25% of the voting power of our outstanding common stock, certain actions may not be taken without the prior written consent of each Founder Entity owning at least 5% of the outstanding Class A Shares and Class B Shares on a combined basis, including:

• any merger, recapitalization, issuance of voting securities or other adjustment in voting rights if, following such event, Murphy Group and EControls Group would not together have sufficient voting power or otherwise be entitled to elect a majority of our board of directors;

• any sale of all or substantially all of our assets or the assets of Enovation Controls, LLC;

• the issuance of any debt securities or equity securities by us or by any of our subsidiaries, other than certain issuances in accordance with employee benefit programs;

• the creation of any new class or series of shares of equity securities that are senior to or on a parity with our Class A Shares and Class B Shares; and

• any amendment of our certificate of incorporation or bylaws or the equivalent organization documents of us or of any of our subsidiaries in a manner that could reasonably be expected to adversely affect the rights of Murphy Group or EControls Group.

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USE OF PROCEEDS

We estimate that the net proceeds from this offering will be approximately $         million, after deducting underwriting discounts (assuming the Class A Shares are sold at $         per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus), or $         million if the underwriters exercise in full their option to purchase additional shares to cover overallotments. We intend to use $         million of the net proceeds of this offering to purchase Common Units of Enovation Controls, LLC directly from the EControls Group, Murphy Group, and Employee Holders at a price per Common Unit equal to the public offering price per share of our Class A Shares, less underwriting discounts. The number of Common Units being sold to us by the Murphy Group, EControls Group, and Employee Holders is based upon a pro rata allocation among the Murphy Group, EControls Group, and those Employee Holders (based on the number of vested Common Units held by such Employee Holders) electing to participate in the sale. We intend to use the remaining $         million of the proceeds of this offering to purchase newly issued Common Units of Enovation Controls, LLC from Enovation Controls, LLC at a price per Common Unit equal to the public offering price per share of our Class A Shares, less underwriting discounts. These proceeds will be used by Enovation Controls, LLC to pay estimated offering expenses. Upon completion of the offering, we will have acquired Common Units representing a     % economic interest in Enovation Controls, LLC (or Common Units representing a     % economic interest if the underwriters exercise in full their option to purchase additional shares to cover overallotments).

We will use the net proceeds of this offering to purchase Common Units of Enovation Controls, LLC as described above and will not be retaining any of the net proceeds for reinvestment in our business. The primary purposes of this offering are to create a public market for our Class A Shares; facilitate our future access to the capital markets; increase our profile and prestige with existing and potential customers, suppliers, and strategic partners; facilitate the use of our Class A Shares as consideration for future acquisitions; provide liquidity to existing members of Enovation Controls, LLC; and make our securities more valuable and attractive to our employees and potential employees for compensation purposes.

The net proceeds from any exercise of the underwriters’ overallotment option will be used to purchase a corresponding additional number of Common Units directly from the EControls Group, Murphy Group, and Employee Holders at a price per Common Unit equal to the public offering price per share of our Class A Shares, less underwriting discounts.

A $         increase (decrease) in the assumed initial public offering price of $         per Class A Share (the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus) would increase (decrease) the net proceeds by $         million and increase (decrease) the number of Common Units purchased by us from the Common Unitholders by              Common Units, and increase (decrease) the percentage interest in Enovation Controls, LLC represented by the Common Units we will have acquired upon completing this offering by     % (or     %), assuming the number of Class A Shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts.

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DIVIDEND POLICY

We currently anticipate that we will retain all of our future earnings for use in the expansion and operation of our business and do not anticipate paying any cash dividends in the foreseeable future. The declaration and payment of future dividends to holders of Class A Shares will be at the discretion of our board of directors and will depend on many factors, including our financial condition, earnings, legal requirements, restrictions under our senior credit facility and any other debt agreements we are then party to, and other factors our board of directors deems relevant. See “Risk Factors—Risks Related to this Offering and Ownership of Our Class A Shares—We are a holding company and depend upon our subsidiaries for our cash flow.”

On June 30, 2014, Enovation Controls, LLC made a one-time special distribution of $60.0 million to Murphy Group and EControls Group. Enovation Controls, LLC financed the one-time special distribution with borrowings under our senior credit facility. As we were not a member of Enovation Controls, LLC at the time of this distribution, investors in this offering will not be entitled to receive any dividend from us as a result of these prior distributions. See Note 11—“Subsequent Events” to our consolidated financial statements included elsewhere in this prospectus for further information on the one-time special distribution and our senior credit facility.

Enovation Controls, LLC paid tax-related distributions and other cash distributions to members of Enovation Controls, LLC during the six months ended June 30, 2014 and the years ended December 31, 2013, 2012, and 2011. Tax-related distributions paid, in the aggregate, were $14.8 million, $8.7 million, $7.4 million, and $5.6 million for the six months ended June 30, 2014 and the years ended December 31, 2013, 2012, and 2011, respectively. Other cash distributions paid, in the aggregate, were $67.6 million, $20.3 million, $17.3 million and $8.1 million during the six month period ended June 30, 2014 and the years ended December 31, 2013, 2012, and 2011, respectively.

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CAPITALIZATION

The following table sets forth our cash and capitalization as of June 30, 2014 for:

• Enovation Controls, LLC, on an unaudited historical basis;

• Enovation Controls, Inc., on a pro forma basis to give effect to (i) the Transactions as described in “The Transactions,” which include the reorganization transactions and the sale by us of Class A Shares in this offering (excluding shares issuable upon exercise of the underwriters’ option to purchase additional shares to cover overallotments) at an assumed initial public offering price of $             per share (the midpoint of the price range set forth on the cover of this prospectus), and the application of the net proceeds from this offering as described in “Use of Proceeds,” (ii) the tax receivable agreement we will enter into with the existing Common Unitholders, and (iii) the purchase of our San Antonio facility on July 25, 2014 from a third-party entity by a company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, in each case as if they had been completed as of June 30, 2014. As a result of the purchase described in the foregoing item (iii), the company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, must be accounted for as a variable interest entity which will result in the cost of the San Antonio facility, accumulated depreciation, mortgage debt and related depreciation and interest expense being consolidated (and the related rent expense being eliminated) in our financial statements.

You should read this table together with, and it is qualified in its entirety by reference to, “The Transactions,” “Selected Historical Consolidated Financial Data,” “Unaudited Pro Forma Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Use of Proceeds,” and our consolidated financial statements and the related notes and other financial information appearing elsewhere in this prospectus.

	As of June 30, 2014 (in thousands)
	Historical Enovation Controls, LLC			Pro Forma Enovation Controls, Inc.
Cash	$	10,049
Long-term debt (including current portion)	$	86,549
Members’ equity
Members’ equity		(39,101	)
Class A common stock, par value $0.00001 per share, none authorized, issued or outstanding, actual or pro forma;          shares to be authorized, and          shares to be issued and outstanding, on a pro forma as adjusted basis
Class B common stock, par value $0.00001 per share, none authorized, issued or outstanding, actual or pro forma;          shares to be authorized, and          shares to be issued and outstanding, on a pro forma as adjusted basis
Accumulated other comprehensive income		437
Total members’/stockholders’ equity attributable to the company		(38,664	)
Non-controlling interest		—
Total equity		(38,664	)
Total capitalization	$	47,885

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DILUTION

If you invest in our Class A Shares, your interest will be diluted to the extent of the difference between the offering price per Class A Share and the pro forma net tangible book value per Class A Share after this offering. Dilution results from the fact that the per share offering price of the Class A Shares is substantially in excess of the net tangible book value per share attributable to the Common Unitholders. Net tangible book value represents net book equity excluding intangible assets, if any.

Our net tangible book value (deficit) as of                     , 2014 was $         million, or $         per Class A Share, assuming that the Common Unitholders exchange all of their Common Units (and Class B Shares) for an equivalent number of our Class A Shares on such date.

After giving effect to the sale of              Class A Shares at an assumed offering price of $         per share, the mid-point of the price range set forth on the cover page of this prospectus in this offering, after deducting the underwriting discounts and estimated offering expenses payable by Enovation Controls, LLC, our pro forma net tangible book value as of                     , 2014 was $         million, or $         per Class A Share, assuming that the Common Unitholders exchange all of their Common Units (and Class B Shares) for an equivalent number of our Class A Shares on such date.

The following table illustrates the pro forma immediate increase in book value of $         per Class A Share for the Common Unitholders and the immediate dilution of $         per share to purchasers of Class A Shares in this offering, assuming the underwriters do not exercise their option to purchase up to              additional Class A Shares to cover overallotments.

Assumed initial public offering price per share of Class A Shares	$
Pro forma net tangible book value (deficit) per Class A Share as of                     , 2014
Increase in pro forma net tangible book value per Class A Share attributable to investors in this offering
Pro forma as adjusted net tangible book value per Class A Share after this offering
Dilution to investors in this offering per Class A Share	$

A $         increase (decrease) in the assumed offering price of $         per Class A Share would increase (decrease) our net tangible book value after this offering by $         million, our pro forma as adjusted net tangible book value per share after this offering by $         per share, and the dilution to investors in this offering by $         per Class A Share, assuming the number of Class A Shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and estimated offering expenses payable by Enovation Controls, LLC.

The following table summarizes, on the same pro forma basis as of                     , 2014, the differences between the Common Unitholders, assuming that each of them exchanges all of their Common Units (and Class B Shares) for an equivalent number of Class A Shares on such date, and the purchasers of Class A Shares in this offering with respect to the number of Class A Shares purchased from us, the total consideration paid by the Common Unitholders and the investors in this offering, and the average price per Class A Share paid by investors in this offering and the average price per Common Unit paid by the Common Unitholders before deducting the underwriting discount and estimated offering expenses.

		Total Consideration
		(in thousands)		Average Price per Share
	Shares Purchased	$	Percent
Existing equity holders
Investors in this offering(1)

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(1) A $         increase (decrease) in the assumed offering price of $         per Class A Share would increase (decrease) total consideration paid by investors in this offering by $         million, assuming the number of Class A Shares offered by us, as set forth on the cover page of this prospectus, remains the same.

If the underwriters’ option to purchase up to              additional Class A Shares to cover overallotments is exercised in full, the pro forma as adjusted net tangible book value per Class A Share after this offering as of                     , 2014 would be $         per Class A Share and the dilution to investors in this offering would be $         per Class A Share. Furthermore, the percentage of our common stock owned (on a fully-diluted basis) by the Common Unitholders would decrease to     % and the percentage of our common stock owned (on a fully-diluted basis) by the investors in this offering would increase to     %.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following table shows our unaudited pro forma condensed consolidated financial information for the periods and as of the dates indicated. We derived the unaudited pro forma condensed consolidated financial information set forth below by the application of pro forma adjustments to Enovation Controls, LLC’s audited and unaudited condensed consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma condensed consolidated financial information reflects pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions we believe are reasonable, but are subject to change. We have made, in our opinion, all adjustments that are necessary to present fairly the unaudited pro forma condensed consolidated financial information.

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2014, and the unaudited pro forma condensed consolidated statements of income for six month period ended June 30, 2014 and the year ended December 31, 2013 present our consolidated financial position and results of operations to give pro forma effect to (i) the Transactions as described in “The Transactions,” which include the reorganization transactions and the sale of              Class A Shares in this offering (excluding shares issuable upon exercise of the underwriters’ option to purchase additional shares) at an assumed initial public offering price of $         per share (the midpoint of the price range set forth on the cover of this prospectus), and the application of the net proceeds from this offering as described in “Use of Proceeds,” (ii) the tax receivable agreement we will enter into with the existing Common Unitholders, (iii) one-time special distribution of $60.0 million to Murphy Group and EControls Group and borrowings of $85.5 million under our senior credit facility to pay this distribution and repay existing debt, which occurred on June 30, 2014, and (iv) the purchase of our San Antonio facility on July 25, 2014 from a third-party entity by a company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, in each case as if they had been completed as of January 1, 2013, with respect to the unaudited pro forma condensed consolidated statements of income, and June 30, 2014, with respect to the unaudited pro forma condensed consolidated balance sheet. As a result of the purchase described in the foregoing item (iv), the company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, must be accounted for as a variable interest entity which will result in the cost of the San Antonio facility, accumulated depreciation, mortgage debt and related depreciation and interest expense being consolidated (and the related rent expense being eliminated) in our financial statements.

The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and should not be considered indicative of actual results of operations that would have been achieved had the transaction set forth above been consummated on the dates indicated, and do not purport to be indicative of the financial condition or results of operations as of any future date or for any future period. You should read our unaudited pro forma condensed consolidated financial information and the accompanying notes in conjunction with the consolidated historical financial statements and related notes included elsewhere in this prospectus and the financial and other information appearing elsewhere in this prospectus, including information contained in “Risk Factors,” “Use of Proceeds,” “Capitalization,” “Selected Historical Consolidated Financial Data,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

70

Enovation Controls, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of June 30, 2014

(Amounts in thousands, except per share data)

	Historical Enovation Controls, LLC			Pro Forma Adjustments	Notes	Pro Forma Enovation Controls, Inc.
Assets
Current assets:
Cash	$	10,049
Accounts receivable, net		38,264
Notes receivable		8,115
Inventories, net		34,727
Prepaid expenses, deposits and other current assets		1,299			(d)
Total current assets		92,454
Property, plant and equipment, net		20,179			(e)
Goodwill		605
Intangible assets		1,887
Deferred tax assets		—			(a)
Other assets		538
Total assets	$	115,663
Liabilities and members’/stockholders’ equity
Current liabilities:
Accounts payable	$	10,669
Accrued liabilities		10,714
Current portion of long-term liabilities		2,549
Total current liabilities		23,932
Long-term debt		84,000			(e)
Accrued stock compensation		45,859
Other long-term liabilities, net of current portion		536
Payable to related parties pursuant to tax receivable agreement		—			(a)
Deferred tax liabilities		—			(a)
Total liabilities		154,327
Members’/stockholders’ equity		(39,101	)		(c)
Members’ accumulated other comprehensive income		437
Class A common stock		—
Class B common stock
Additional paid-in capital		—			(b)(c)(d)
Retained earnings		—
Total members’/stockholders’ equity attributable to Enovation Controls, Inc.		(38,664	)
Non-controlling interest		—			(b)(c)
Total members’/stockholders’ equity		(38,664	)
Total liabilities and members’/stockholders’ equity	$	115,663

The accompanying notes are an integral part of, and should be read together with, this unaudited pro forma condensed consolidated financial information.

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Notes to the Unaudited Pro Forma Condensed Consolidated Balance Sheet

(a) Reflects adjustments to give effect to the tax receivable agreement (as described in “Certain Relationships and Related Transactions—Tax Receivable Agreement”) based on the following assumptions:

• we will record an increase of $         million in deferred tax assets for estimated income tax effects of the increase in the tax basis of the purchased interests, based on an effective income tax rate of     % (which includes a provision for U.S. federal, state, and local income taxes and franchise taxes);

• we will record $         million, representing 85% of the estimated realizable tax benefit resulting from (i) the increase in the tax basis of the purchased interests as noted above and (ii) certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement as an increase to the liability under the tax receivable agreement;

• we will record an increase of $         million in deferred tax              reflecting the expected future tax consequences of the differences between the carrying amounts of existing assets and liabilities and their respective tax basis. The deferred tax              arise from taxable temporary differences primarily related to depreciation on property, plant and equipment;

• we will record an              of $         million to additional paid-in-capital, which is an amount equal to the difference between the increase in deferred tax assets and liabilities and the increase in the liability due to Common Unitholders under the tax receivable agreement; and

• there are no material changes in the relevant tax law and that we earn sufficient taxable income in each year to realize the full tax benefit of the amortization of our assets.

The step up in basis for the tax receivable agreement will depend on the fair value of the Class A Shares at the time of the exchange, whether the step up is at the time the Transactions are effected or at any future exchange of the Common Units. There is no way to predict the timing or value of the step up of any future exchanges. If the tax receivable agreement were terminated immediately after the offering, we estimate it would require an early termination payment of approximately $         to the Common Unitholders.

(b) Represents adjustments to stockholders’ equity reflecting (i) par value for Class A and Class B Shares to be outstanding following this offering, (ii) an increase of $         million of additional paid-in-capital due to the deferred tax asset, tax receivable agreement and deferred tax liabilities as described in Note (b) above and (iii) a decrease of $ million in retained earnings to allocate a portion of              equity to non-controlling interest.

(c) As described in “The Transactions,” we will become the sole managing member of Enovation Controls, LLC. We will initially own less than 100% of the economic interest in Enovation Controls, LLC, but will have 100% of the voting power and control the management of Enovation Controls, LLC. As a result, we will consolidate the financial results of Enovation Controls, LLC and will record a non-controlling interest. Immediately following this offering, the non-controlling interest, based on the assumptions used to develop the pro forma, will be     % of the sum of the stockholders’ equity attributable to pro forma Enovation Controls, Inc. and non-controlling interest. Pro forma non-controlling interest represents     % of the pro forma equity of Enovation Controls, LLC of $         million, which differs from our pro forma equity as the former is not affected by the adjustments related to the tax receivable agreement described in Note (b).

(d) Offering expenses are expected to be approximately $        . At June 30, 2014, $         had been paid or accrued

(e) Reflects the cost, accumulated depreciation, and mortgage debt with respect to the San Antonio facility purchased on July 25, 2014 by a company jointly owned by our Chief Technology Officer and Executive Chairman, which company is accounted for as the consolidation of a variable interest entity.

72

Enovation Controls, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Loss

For the Six Months Ended June 30, 2014

(Amounts in thousands, except per share data)

	Historical Enovation Controls, LLC			Pro Forma Adjustments	Notes	Pro Forma Enovation Controls, Inc.
Net sales	$	142,484
Costs of goods sold		83,533
Gross profit		58,951
Operating expenses
Selling, general and administrative expenses		55,403			(g)(k)
Research and development expenses		26,327			(k)
Operating expenses		81,730
Loss from operations		(22,779	)
Other expense
Interest, net		(313	)		(f)(k)
Other		(230	)
Total other expenses		(543	)
Loss before provision for income taxes		(23,322	)
Provision for income taxes		(827	)		(h)
Net loss	$	(24,149	)
Less: Net income attributable to non-controlling interest					(i)
Net income attributable to Enovation Controls, Inc.
Net income attributable to Enovation Controls, Inc. per Class A common share
Basic					(j)
Diluted					(j)
Weighted average shares of Enovation Controls Class A common stock outstanding
Basic					(j)
Diluted					(j)

The accompanying notes are an integral part of, and should be read together with, this unaudited pro forma condensed consolidated financial information.

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Notes to the Unaudited Pro Forma Condensed Consolidated Statements of Loss

For the Six Months Ended June 30, 2014

(f) Additional interest expense related to the $60.0 million increase in long-term debt associated with the one-time distribution to Murphy Group and EControls Group as if the transaction took place January 1, 2013. Interest expense was calculated using a blended interest rate of 50% of one month LIBOR and 50% of one year LIBOR plus applicable margin rate and includes the amortized loan origination fees of $0.6 million that are being amortized over the debt agreement term of 5 years. We considered whether to make adjustments to the pro forma interest expense on our credit facility with Prosperity Bank due to the decrease in interest rates that occurred when we refinanced our credit agreement, but it was determined that the net effect was not significant.

(g) Upon closing the Transactions, we expect to incur direct, incremental general and administrative expenses as a result of being a publicly traded company, including, but not limited to, costs associated with the preparation of annual and quarterly reports we will be required to file with the SEC, tax return preparation, independent auditor fees, investor relations activities, registrar and transfer agent fees, incremental director and officer liability insurance costs, independent director compensation, and exchange listing expenses. We estimate these incremental general administrative expenses will initially total approximately $2.5 million annually. These incremental expenses are not reflected in the historical consolidated and combined financial statements or in the unaudited pro forma financial statements.

(h) Following the Transactions, we will be subject to U.S. federal income taxes, in addition to state and local taxes, with respect to our allocable share of any taxable income of Enovation Controls, LLC. As a result, the pro forma consolidated statement of loss reflects an adjustment to our provision for corporate income taxes to reflect an effective rate of     %, which includes provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state and local jurisdictions.

(i) As described in “The Transactions,” we will become the sole managing member of Enovation Controls, LLC. We will initially own less than 100% of the economic interest in Enovation Controls, LLC, but will have 100% of the voting power and control the management of Enovation Controls, LLC. Immediately following this offering, the non-controlling interest will be     %. Net income attributable to the non-controlling interest represents     %, or $         of income before income taxes of $         for the six months ended June 30, 2014.

(j) Class B Shares convert to Class A Shares on a one-for-one basis and increase Enovation Controls, Inc.’s ownership of Enovation Controls, LLC proportionately. The Class B Shares do not share in our earnings and are therefore not included in the weighted average shares outstanding or net income available per share.

(k) Reflects the additional depreciation and interest expense and elimination of rent expense associated with the purchase of the San Antonio facility and related mortgage debt on July 25, 2014 by a company jointly owned by our Chief Technology Officer and Executive Chairman, which is accounted for as the consolidation of a variable interest entity.

74

Enovation Controls, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Income

Year Ended December 31, 2013

(Amounts in thousands, except per share data)

	Historical Enovation Controls, LLC			Pro Forma Adjustments	Notes			Pro Forma Enovation Controls, Inc.
Net sales	$	255,582
Costs of goods sold		147,323
Gross profit		108,259
Operating expenses
Selling, general and administrative expenses		43,566				(p	)
Research and development expenses		23,628				(p	)
Operating expenses		67,194
Income from operations		41,065
Other expense
Interest, net		(440	)			(l)(p)
Other		88
Total other expenses		(352	)
Income before provision for income taxes		40,713
Provision for income taxes		(793	)			(m)
Net income	$	39,920
Less: Net income attributable to non-controlling interest						(n)
Net income attributable to Enovation Controls, Inc.
Net income attributable to Enovation Controls, Inc. per Class A common share
Basic						(o)
Diluted						(o)
Weighted average shares of Enovation Controls, Inc. Class A common stock outstanding
Basic						(o)		$
Diluted						(o)		$

The accompanying notes are an integral part of, and should be read together with, this unaudited pro forma condensed consolidated financial information.

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Notes to the Unaudited Pro Forma Condensed Consolidated Statements of Income

Year Ended December 31, 2013

(l) Additional interest expense related to the $60.0 million increase in long-term debt associated with the one-time distribution to Murphy Group and EControls Group as if the transaction took place January 1, 2013. Interest expense was calculated using a blended interest rate of 50% of one-month LIBOR and 50% of one year LIBOR plus applicable margin rate and includes the amortized loan origination fees of $0.6 million that are being amortized over the debt agreement term of 5 years. We considered whether to make adjustments to the pro forma interest expense on our credit facility with Prosperity Bank due to the decrease in interest rates that occurred when we refinanced our credit agreement, but it was determined that the net effect was not significant.

(m) Following the Transactions, we will be subject to U.S. federal income taxes, in addition to state and local taxes, with respect to our allocable share of any taxable income of Enovation Controls, LLC. As a result, the pro forma consolidated statement of income reflects an adjustment to our provision for corporate income taxes to reflect an effective rate of     %, which includes provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state and local jurisdictions.

(n) As described in “The Transactions,” we will become the sole managing member of Enovation Controls, LLC. We will initially own less than 100% of the economic interest in Enovation Controls, LLC, but will have 100% of the voting power and control the management of Enovation Controls, LLC. Immediately following this offering, the non-controlling interest will be     %. Net income attributable to the non-controlling interest represents     %, or $         of income before income taxes of $         for the year ended.

(o) Class B Shares convert to Class A Shares on a one-for-one basis and increase Enovation Controls, Inc.’s ownership of Enovation Controls, LLC proportionately. The Class B Shares do not share in our earnings and are therefore not included in the weighted average shares outstanding or net income available per share.

(p) Reflects the additional depreciation and interest expense and elimination of rent expense associated with the purchase of our San Antonio facility and related mortgage debt on July 25, 2014 by a company jointly owned by Kennon Guglielmo, our Chief Technology Officer, and Frank W. Murphy, our Executive Chairman, which is accounted for as the consolidation of a variable interest entity.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following table presents the selected historical consolidated financial data of Enovation Controls, LLC, our accounting predecessor. The consolidated statement of operations data for the years ended December 31, 2013, 2012, and 2011, and the consolidated balance sheet data as of December 31, 2013 and 2012, have been derived from Enovation Controls, LLC’s audited consolidated financial statements included elsewhere in this prospectus. The consolidated statement of operations data for the years ended December 31, 2010 and 2009 and the consolidated balance sheet data as of December 31, 2011, 2010, and 2009, have been derived from Enovation Controls, LLC’s audited consolidated financial statements not included in this prospectus.

The consolidated statement of operations data for the six months ended June 30, 2014 and 2013 and the consolidated balance sheet data as of June 30, 2014, have been derived from Enovation Controls, LLC’s unaudited consolidated financial statements included elsewhere in this prospectus and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the financial position and results of operations as of the dates and for the periods indicated.

The selected historical consolidated financial data presented below should be read in conjunction with, and are qualified in their entirety by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and accompanying notes thereto included elsewhere in this prospectus. Historical results are not necessarily indicative of results that may be expected for any future period, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

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The financial statements of Enovation Controls, Inc. have not been presented below as it is a newly incorporated entity, has nominal capitalization, had no business transactions or activities to date and had no assets or liabilities during the periods presented below. Enovation Controls, LLC will be considered the predecessor of Enovation Controls, Inc. for accounting purposes and the consolidated financial statements of Enovation Controls, LLC will be the historical financial statements of Enovation Controls, Inc. following this offering.

	Six Months Ended June 30,						Year Ended December 31,
	2014			2013			2013			2012			2011			2010			2009(1)
(in thousands)
Consolidated Statement of Operations Data:
Net sales	$	142,484		$	128,303		$	255,582		$	218,556		$	193,739		$	147,999		$	79,227
Cost of goods sold(2)		83,533			73,242			147,323			137,078			122,069			92,365			51,471
Gross profit		58,951			55,061			108,259			81,478			71,670			55,634			27,756
Operating expenses
Selling, general and administrative expenses(2)		55,403			20,999			43,566			36,568			34,708			25,730			16,395
Research and development expenses(2)		26,327			11,443			23,628			20,429			17,349			15,384			8,391
Goodwill impairment		—			—			—			6,462			—			—			—
Operating expenses		81,730			32,442			67,194			63,459			52,057			41,114			24,786
(Loss) income from operations		(22,779	)		22,619			41,065			18,019			19,613			14,520			2,970
Other income (expenses)
Interest, net		(313	)		(177	)		(440	)		(482	)		(587	)		(547	)		(592	)
Gain on early extinguishment of debt		—						—			—			379			—			—
Other		(230	)		160			88			251			(387	)		(657	)		459
Total other expenses		(543	)		(17	)		(352	)		(231	)		(595	)		(1,204	)		(133	)
(Loss) income before provision for income taxes		(23,322	)		22,602			40,713			17,788			19,018			13,316			2,837
Provision for income taxes		(827	)		(279	)		(793	)		(204	)		(383	)		(460	)		(462	)
Net (loss) income	$	(24,149	)	$	22,323		$	39,920		$	17,584		$	18,635		$	12,856		$	2,375
Less income attributable to noncontrolling interest		—			—			—			—			—			—			143
Net income attributable to Enovation Controls, LLC		—			—			—			—			—		$	12,856		$	2,232
Other comprehensive (loss) income
Foreign currency translation adjustments		28			(216	)		379			468			131			—			—
Reclassification of goodwill translation adjustment to income		—			—			—			1,143			—			—			—
Other comprehensive (loss) income		28			(216	)		379			1,611			131			—			—
Comprehensive (loss) income	$	(24,121	)	$	22,107		$	40,299		$	19,195		$	18,766		$	12,856		$	2,232
Other Data:
Adjusted EBITDA(3)	$	27,527		$	25,657		$	47,226		$	30,091		$	24,519		$	18,931		$	5,699

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	As of June 30, 2014			As of December 31,
				2013		2012		2011		2010		2009
(in thousands)
Balance Sheet Data:
Cash	$	10,049		$	5,985	$	5,266	$	3,509	$	2,918	$	7,230
Working capital		68,522			60,197		48,254		52,537		36,202		30,095
Total assets		115,663			104,735		92,908		101,214		80,434		69,392
Total long-term debt (including current portion)		86,549			17,079		18,032		20,336		10,016		13,890
Members’ equity		(38,664	)		67,863		56,502		61,958		57,051		47,692

(1) Enovation Controls, LLC’s consolidated financial statements for the year ended December 31, 2009, include full year results for Murphy Industries, LLC and three months results (from October 1, 2009 through December 31, 2009) for EControls, LLC.

(2) Enovation Controls, LLC’s consolidated statement of operations data for the six month period ended June 30, 2014 includes non-cash compensation expense related to the Profits Interest Plan. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Components of Results of Operations—Non-Cash Compensation” for further discussion. The amount of non-cash expense recorded within the statement of operations data for the six month period ended June 30, 2014 by statement line item are as follows: cost of goods sold of $1.9 million, selling, general and administrative expenses of $29.6 million, and research and development expenses of $14.4 million.

(3) We define Adjusted EBITDA as consolidated net income (loss) before depreciation and amortization, interest expense and provision for income tax adjusted for the impact of certain items that we do not consider representative of our ongoing operating performance. Adjusted EBITDA includes adjustments to consolidated net income (loss) before depreciation and amortization, interest expense and provision for income taxes, for impairment of goodwill charges, non-cash compensation and Transactions expenses. Because Adjusted EBITDA omits certain non-cash items and other infrequent cash charges, we believe that it is less susceptible to variances in actual performance resulting from depreciation, amortization, other non-cash charges and other infrequent cash charges and is more reflective of our operating performance.

We use Adjusted EBITDA to evaluate and control our cash operating costs and to measure our operating profitability. We believe the presentation of Adjusted EBITDA enhances our investors’ overall understanding of the financial performance and cash flow of our business. We present Adjusted EBITDA because we believe it is useful as a supplemental measure in evaluating the performance of our operating businesses and provides greater transparency into our results of operations. You should not consider Adjusted EBITDA in isolation, nor as an alternative to net income (loss), determined in accordance with GAAP, as an indicator of operating performance, or as an alternative to net cash provided by operating activities, determined in accordance with GAAP, as an indicator of our cash flow. A directly comparable GAAP measure to Adjusted EBITDA is net income (loss). The following is a reconciliation of net income (loss) to Adjusted EBITDA:

	Six Months Ended June 30,					Year ended December 31,
	2014			2013		2013		2012		2011		2010		2009
(in thousands)
Net (loss) income	$	(24,149	)	$	22,323	$	39,920	$	17,584	$	18,635	$	12,856	$	2,375
Plus:
Interest, net		313			177		440		482		587		547		592
Provision for income taxes		827			279		793		204		383		460		462
Depreciation expense		1,981			1,463		3,245		2,441		2,172		1,943		1,549
Amortization of intangibles		1,425			1,415		2,828		2,918		2,742		3,125		721
Goodwill impairment		—			—		—		6,462		—		—		—
Non-cash compensation		45,859			—		—		—		—		—		—
Transactions expenses		1,271			—		—		—		—		—		—
Adjusted EBITDA	$	27,527		$	25,657	$	47,226	$	30,091	$	24,519	$	18,931	$	5,699

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Adjusted EBITDA has limitations as an analytical tool, and you should not consider Adjusted EBITDA either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations are:

• this measure does not reflect changes in, or cash requirements for, our working capital needs;

• this measure does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

• this measure does not reflect our income tax expense or the cash requirements to pay our taxes;

• this measure does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;

• this measure does not reflect the impact of equity based compensation upon our operations;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often require replacement in the future, and this measure does not reflect any cash requirements for such replacements; and

• other companies may calculate this measure differently so our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial statements and accompanying notes thereto included elsewhere in this prospectus.

The historical financial data discussed below reflects the historical results of operations and financial condition of Enovation Controls, LLC and its consolidated subsidiaries and does not give effect to the Transactions. See “The Transactions” and “Unaudited Pro Forma Condensed Consolidated Financial Information” included elsewhere in this prospectus for a description of the Transactions and their effect on our historical results of operations.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See “Special Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results may differ materially from those contained in any forward-looking statements.

Overview

We are a global provider of digital control systems for gaseous fuel engines and engine-driven equipment focused on the vehicle and energy markets. We develop systems that are utilized in commercial CNG/LNG trucks and buses, natural gas production, power generation, and a wide variety of industrial and off-highway applications. Our products provide control, protection, and monitoring solutions to our customers, and enable them to meet global emissions standards while allowing operation of their equipment in extreme environments. Our EControls^® and Murphy^® brands provide integrated turnkey solutions that combine proprietary software platforms and customized hardware.

Our solutions represent a small portion of the overall cost of the end-use application, but are integral to system functionality and operating performance. We have developed numerous customer relationships, including several Fortune Global 500 corporations, based on technical collaboration. In 2013, we generated $256 million in revenue and $41 million in operating income from our 70 product families across more than 4,000 customers globally. We are geographically diverse, generating approximately 30% of our revenues in 2013 from international markets, including more than $60 million from the rapidly growing Asian market.

Our solutions include a variety of engine control and monitoring systems, sensors, displays, and supervisory panels that are used across several industries. Through our EControls^® and Murphy^® brands, we target two primary markets: Vehicles and Energy.

We generally seek to localize our product manufacturing and support to our customer base around the world. We have established manufacturing, sales, and engineering application centers in the U.S., Mexico, the U.K., China, India, and South Korea to serve our key geographies. We currently operate five manufacturing and distribution centers in the U.S., Europe, and Asia. In 2015, we plan to open the China Enovation Center, co-located with our manufacturing operations in Hangzhou, China. This Center will provide additional technical and support services for our customers in the Vehicle market in China, India, South Korea, and Japan and will include sophisticated engine calibration and certification capabilities.

Trends Impacting Our Business

We believe we are positioned to benefit from a number of significant trends driving demand in the industries in which we compete:

• Expected significant global increase in the production of and demand for natural gas supported by attractive cost, environmental, and geopolitical benefits relative to other hydrocarbon fuels;

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• Anticipated growth in demand for advanced natural gas compression system controls in oil and gas applications driven by increased shale and tight formation production in the U.S. and globally;

• Global adoption of NGVs due to significant economic and environmental advantages:

^¡  According to ACT Research, natural gas could power 50% of Class 8 trucks produced for the U.S. market by 2025, up from 6% in 2013;

^¡  China is one of the largest and fastest growing NGV markets globally—the number of NGVs in China across all classes has grown from 36,000 in 2002 to approximately 1.6 million in 2012, at a CAGR of 45.9% according to NGV Global;

• Increasingly stringent global emissions regulations driving demand for advanced engine technologies that enable lower emissions, greater fuel economy, and regulatory compliance; and

• Widespread adoption of advanced digital control solutions which integrate technologies such as high-resolution displays, highly configurable software, GPS navigation, telematics, vehicle management systems, and diagnostics to improve engine safety, energy efficiency, performance, and reliability with less dependence on operator skill.

Key Factors Impacting Operations

Since the merger of EControls and Murphy in 2009, a number of key factors have had, and will continue to have, a significant impact on our results of operations and cash flows, including:

• Our revenues have grown 16.9%, 12.8%, and 30.9% for the years ended 2013, 2012, and 2011, respectively. Core market growth significantly contributed to that growth but new product introductions were also instrumental in creating additional revenue.

• Our business has low capital intensity. We make significant investments in research and development and in headcount as we grow around the world. We require additional working capital for inventory and accounts receivable to support our sales growth. Historically, capital expenditures of less than 3% of revenue have been adequate to support our growth.

• In 2010, we merged the general and administrative function and the research and development function of EControls and Murphy, which resulted in improved processes, significant product development velocity, and several new products. Those new products began producing revenue in late 2011 and subsequent years.

• In 2011, we moved the historical EControls operations into a newly leased 130,000 square foot facility in San Antonio, Texas with significant additional office and manufacturing space. In connection with this move, we increased our engine calibration capacity, and our circuit board production capacity, and added a variety of new research and development test equipment. These increases in production and research and development capacity improved our product testing capability resulting in increased research and development costs but are expected to lead to eventual manufacturing production cost savings.

• In early 2013, we implemented a number of additional lean productivity initiatives including shorter supplier lead times, visual factory management, and targeted performance metrics. These lean productivity initiatives were fully implemented in 2013 and resulted in a reduction in inventory, manufacturing lead-time improvements, and improved manufacturing execution which reduced production and overhead costs and significantly improved margins in 2013.

• In the second quarter of 2013, we moved certain manufacturing operations for the support of the commercial NGV market from the U.S. into our facility in Hangzhou, China, to be closer to our customers which reduced lead times but also increased our working capital requirements for accounts and notes receivables.

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Key Operating and Financial Performance Metric

In addition to measures of financial performance presented in our consolidated financial statements, we monitor the key metric set forth below to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts, and assess operational efficiencies.

Adjusted EBITDA

We monitor Adjusted EBITDA, a non-GAAP financial measure, to analyze our financial results and we believe that it is useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance and understanding our past financial performance. We believe that Adjusted EBITDA helps illustrate underlying trends in our business that could otherwise be masked by the effect of the income or expense items that we exclude from Adjusted EBITDA. Furthermore, we also use Adjusted EBITDA to establish budgets and operational goals for managing our business and evaluating our performance. We also believe that Adjusted EBITDA provides an additional tool for investors to use in comparing our recurring core business operating results over multiple periods with other companies in our industry.

Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP, and our calculation of Adjusted EBITDA may differ from that of other companies in our industry. We have calculated Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation, amortization, impairment of goodwill, non-cash compensation, and the Transactions expenses.

The following table reconciles Adjusted EBITDA with our net income (loss), as derived from our financial statements, for the indicated periods (in thousands):

	Six Months Ended June 30,					Fiscal Year Ended December 31,
	2014			2013		2013		2012		2011
Net (loss) income	$	(24,149	)	$	22,323	$	39,920	$	17,584	$	18,635
Interest, net		313			177		440		482		587
Provision for income taxes		827			279		793		204		383
Depreciation expense		1,981			1,463		3,245		2,441		2,172
Amortization of intangibles		1,425			1,415		2,828		2,918		2,742
Goodwill impairment		—			—		—		6,462		—
Non-cash compensation		45,859			—		—		—		—
Transactions expenses		1,271			—		—		—		—
Adjusted EBITDA	$	27,527		$	25,657	$	47,226	$	30,091	$	24,519

Components of Results of Operations

Net Sales

We generate revenue from the sale of control and monitoring systems for engines and engine-driven equipment for commercial CNG/LNG trucks and buses, natural gas compressors, natural gas production, distributed power generation and a wide variety of industrial and off-highway applications including industrial mobile and stationary engines and their associated equipment. We also generate revenue from replacement parts and services in the same applications. Net sales are derived from gross sales less sales discounts.

Cost of Goods Sold

Our cost of goods sold includes all of the costs to manufacture our products, such as raw materials, electronic components, direct labor and benefits, indirect labor and benefits, and other factory overhead and

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supplies. For raw materials, components, accessories and products manufactured by third-party vendors, such costs represent the amounts invoiced by vendors. Shipping costs and depreciation expenses related to manufacturing equipment and facilities are also included in cost of goods sold.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses include salaries, benefits, and other personnel expenses; non-manufacturing overhead; travel expenses; third-party professional fees; and costs of advertising and various marketing programs. Our growth in headcount and operations has resulted in increased employee compensation and benefits as well as additional expenses relating to the acquisition of employee talent including recruiting fees and relocation expenses. We expect this trend to continue as we invest in the business. Warranty reserves and costs associated with the repair and or replacement of our products under warranty are also included in selling costs.

As a result of this offering, we will become subject to the reporting requirements of the Exchange Act and the Sarbanes–Oxley Act. The Exchange Act requires that we file annual, quarterly, and current reports with respect to our business and financial condition. The Sarbanes–Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. As a result, we will incur significant legal, accounting and other expenses that we did not previously incur.

Research and Development Expenses

Research and development expenses include compensation costs and benefits for employees with technical software and hardware engineering expertise, direct materials and expense items incurred in research and development projects, and test equipment operating costs. Testing costs include operating costs, depreciation, and overhead on the test equipment and facilities used for prototyping, testing, and development activities.

Goodwill Impairment and other Intangibles and Long Lived Assets

We hold amortizing and non-amortizing intangible assets and long-lived assets. We evaluate these assets for impairment as further discussed in “—Critical Accounting Policies and Estimates—Goodwill–Impairment Assessments.” These evaluations have in the past resulted in impairment losses for certain of these assets based on the specific facts and circumstances and our estimates of those assets’ fair value. Based on economic conditions or other factors, we may be required to take additional impairment losses to reflect further declines in our asset values.

Interest, net

Interest expense includes the interest charged on our outstanding debt by financing institutions plus the loan origination fees and expenses charged by the lending institutions amortized over the life of the loan. Interest income includes interest earned on short term cash investments.

Income Taxes

Enovation Controls, LLC is currently taxed as a partnership for U.S. federal and state income tax purposes. Therefore, Enovation Controls, LLC is a “flow-through” entity for U.S. tax purposes and as such taxes are paid at the Common Unitholder level and taxes are not recorded on the books of Enovation Controls, LLC for U.S. tax purposes. However, our international subsidiaries are taxable entities and all provisions for income taxes for Enovation Controls, LLC are solely related to its subsidiaries’ international operations. Following the Transactions, Enovation Controls, Inc. will be subject to U.S. federal income taxation and its consolidated income tax expense and deferred tax assets and liabilities will reflect its allocable share of the taxable earnings of Enovation Controls, LLC. Since the members of Enovation Controls, LLC pay taxes on the earnings of Enovation Controls, LLC, each member, including the Common Unitholders and Enovation Controls, Inc.,

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may have a cash tax obligation with respect to its share of those earnings. Enovation Controls, LLC thus intends to make cash distributions (referred to as tax distributions) to facilitate the payment by the Common Unitholders and Enovation Controls, Inc. in satisfaction of such cash tax obligations. The amended and restated operating agreement of Enovation Controls, LLC requires Enovation Controls, LLC to make pro rata tax distributions to all of its members, including Enovation Controls, Inc, on a quarterly basis by the tenth day of each March, June, September, and December of each taxable year for the purpose of providing cash to its members to allow them to make their quarterly estimated tax payments. This tax distribution is distinct from the payment obligations created by the tax receivable agreement. Tax distributions are subject to the availability of sufficient funds and to restrictions or limitations imposed by applicable law or any agreement to which Enovation Controls, LLC is bound.

We will be subject to U.S. federal and state income tax in multiple jurisdictions. Some of these jurisdictions have higher statutory tax rates than others. Accordingly, our effective tax rates will vary depending on the relative proportion of income in various states or jurisdictions, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws.

The tax receivable agreement executed in conjunction with the Transactions will result in a deferred tax asset or a reduction in a deferred tax liability and a payable to the Common Unitholders. See the Unaudited Condensed Pro Forma Consolidated Financial Information for further discussion on taxes after the Transactions.

Non-Cash Compensation

In July 2011, the Class A Unitholders of Enovation Controls, LLC approved a Profits Interest Plan, which we refer to as the Plan, which provides for the issuance of profits interest units to key employees and advisory board directors, which we refer to as Management Interests, of Enovation Controls, LLC. Class B, C, and D profits interest units were issued under the Plan in 2011, 2013 and 2014, respectively. The profits interest units generally vest over four or five years subject to continued service and only provide the participants with benefits (in the form of distributions) if the distributions from Enovation Controls, LLC exceed specified threshold values. Distributions to date have not reached the minimum thresholds, nor are they expected to reach the minimum thresholds prior to Enovation Controls, Inc.’s anticipated initial public offering, for any of the Management Interests.

The profits interest units do not require the payment of an exercise price, but because they are similar economically to stock options, they are classified as options under the definition in Item 402(a)(6)(i) of Regulation S-K as instruments with option-like features. The profits interest units vest as the required service periods are met but are not exercisable. We accounted for these profits interest units as liability awards. Under the award agreements, the units were intended to be settled in cash after seven years or in cash at our option if an employee terminated employment at a valuation to be determined by us. Accounting Standards Codification (ASC) 718, Compensation—Stock Compensation, states that liability awards issued by nonpublic entities have an accounting policy choice when it comes to determining the fair value of the award units. We elected to value these profits interest units utilizing the intrinsic value method. The Plan made it unlikely any payout would occur prior to an event such as a significant investment in Enovation Controls, LLC, a sale of all or part of Enovation Controls, LLC, or an initial public offering. At each of the prior reporting periods, the intrinsic value of the awards was less than the threshold given the valuation methodology used and the fact that no event was anticipated. ASC 718 requires a fair value calculation for liability awards for publicly traded entities. The June 30, 2014 unaudited consolidated financial statements reflect the award units at estimated fair value using a probability weighted expected return method (PWERM). As of June 30, 2014 there have been no cash payments for these awards. Therefore, they have been treated as “noncash” compensation. See Note 8—“Stock Compensation” to our consolidated financial statements and “—Critical Accounting Policies and Estimates—Change in Accounting Principle” included in this prospectus for further discussion.

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As a result of the change in accounting principle, compensation expense equal to the fair market value of the profit interest units has been recorded in the expense classification in the consolidated statements of operations and comprehensive income where the compensation of the plan participant is normally recorded, as shown below, for the six months ended June 30, 2014 (in thousands):

	Six Months Ended June 30, 2014
	(Unaudited)
Cost of goods sold	$	1,894
Selling, general and administrative expenses		29,570
Research and development expenses		14,395
Total	$	45,859

For the years ended December 31, 2013, 2012 and 2011, respectively, there was no compensation expense recorded.

At the effective date of the offering the fair value of the profit interest units will be adjusted to the market value based on the offering price per share of $                 (assuming the Class A Shares are sold at $             per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus). The additional compensation expenses recorded due to the adjustment to market value would be $                . This expense will be recorded in costs of goods sold, selling, general, and administrative expenses, and research and development expenses in the quarter in which the offering closes. The profit interest units will be converted into Common Units in connection with the Transactions.

As there are inherent uncertainties related to the factors and management’s judgment in applying them to the fair value determinations, there is a risk that the recorded non-cash compensation may not accurately reflect the amount ultimately earned.

Results of Operations

	Six Months Ended June 30,						Fiscal Year Ended December 31,
	2014			2013			2013			2012			2011
	(in thousands)
Net sales	$	142,484		$	128,303		$	255,582		$	218,556		$	193,739
Cost of goods sold		83,533			73,242			147,323			137,078			122,069
Gross profit		58,951			55,061			108,259			81,478			71,670
Operating expenses:
Selling, general and administrative expenses		55,403			20,999			43,566			36,568			34,708
Research and development expenses		26,327			11,443			23,628			20,429			17,349
Goodwill impairment		—			—			—			6,462			—
(Loss) income from operations		(22,779	)		22,619			41,065			18,019			19,613
Interest, net		(313	)		(177	)		(440	)		(482	)		(587	)
Other		(230	)		160			88			251			(8	)
Provision for income taxes		(827	)		(279	)		(793	)		(204	)		(383	)
Net (loss) income	$	(24,149	)	$	22,323		$	39,920		$	17,584		$	18,635

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Six Months Ended June 30, 2014, compared to the Six Months Ended June 30, 2013

Net Sales. Our net sales for the six months ended June 30, 2014 were $142.5 million reflecting an increase of $14.2 million, or 11.1%, as compared to the same period in 2013. The revenue increase was due to an increase in sales into the Energy market of $14.2 million, or 20.1%, for the six months ended June 30, 2014 as compared to the same period in 2013 due primarily to increased sales of control systems for natural gas compressors. Sales into the Vehicle market remained substantially the same for the six months ended June 30, 2014 as compared to the same period in 2013.

Gross Profit. Our gross profit increased $3.9 million for the six months ended June 30, 2014 as compared to the same period in 2013 primarily due to the increase in sales volumes as discussed above. Gross profit as a percent of sales decreased from 42.9% of revenue to 41.4% of revenue primarily due to a $1.9 million charge for non-cash compensation expense related to stock compensation, as described under “—Non-Cash Compensation.”

Selling, General and Administrative Expenses. Our selling, general and administrative expenses increased $34.4 million, or 163.8%, for the six months ended June 30, 2014 as compared to the same period in 2013. The increase resulted primarily from a $29.6 million charge for non-cash compensation expense related to stock compensation, as described under “—Non-Cash Compensation,” as well as increased compensation and benefit expenses of $2.2 million related to an increase in headcount, professional fees of $1.8 million, depreciation expense of $0.3 million, and warranty expenses of $0.2 million.

Research and Development Expenses. Our research and development expenses increased $14.9 million, or 130.1%, for the six months ended June 30, 2014 as compared to the same period in 2013. The increase was due to a $14.4 million charge for non-cash compensation expense related to stock compensation, as described under “—Non-Cash Compensation.”

(Loss) income from Operations. We incurred a net loss from operations of $22.8 million in the six months ended June 30, 2014 as compared to income from operations of $22.6 million in the same period in 2013. The net income (loss) from operations decreased $45.4 million, or 200.7%, due to a $45.8 million charge for non-cash compensation expense related to stock compensation, as described under “—Non-Cash Compensation,” which was partially offset by an increase in sales as described above.

Interest Expense. Our interest expense increased $0.1 million in the six months ended June 30, 2014 as compared to the same period in 2013. The increase was due to an increase in the average outstanding borrowings under our credit facility with Prosperity Bank.

Other. Our other expenses increased $0.4 million in the six months ended June 30, 2014 as compared to the same period in 2013. The increase was primarily related to a one-time loss on disposal of property of $0.1 million and the loss of rental income of a tenant in our Hangzhou facility of $0.1 million due to our operational expansion in 2013.

Provision for Income Taxes. The provision for income taxes increased $0.5 million for the six months ended June 30, 2014 as compared to the same period in 2013 as a result of our transfer of certain manufacturing operations to China from the U.S. during the second quarter of 2013. Consequently, the transfer increased our taxable income in China.

Net (Loss) Income. We incurred a net loss of $24.1 million in the six months ended June 30, 2014 as compared to net income of $22.3 million in the same period in 2013. The change in net (loss) income in the six months ended June 30, 2014 compared to the six months ended June 30, 2013 was primarily due to non-cash compensation expense related to stock compensation of $45.8 million, as described under “—Components of

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Results of Operations—Non-Cash Compensation,” as well as increased compensation and benefit expenses of $2.2 million related to an increase in selling, general, and administrative headcount, and professional fees of $1.8 million. The decreases in income were partially offset by an increase in sales volume that produced an additional $3.9 million of gross profit.

Fiscal Year Ended December 31, 2013 compared to the Fiscal Year Ended December 31, 2012

Net Sales. Our net sales for fiscal year 2013 were $255.6 million reflecting an increase of $37.0 million, or 16.9%, as compared to fiscal year 2012. Sales into the Vehicle market increased $17.3 million, or 18.0%, compared to fiscal year 2012 while sales into the Energy market increased $19.7 million, or 16.1%, compared to fiscal year 2012. The increase in sales into the Vehicle market was due to revenue growth from control and fuel systems for commercial natural gas trucks and buses in Asia. The increase in sales into the Energy market was primarily driven by a combination of the demand for improved fuel efficiency, more stringent emissions regulations, and growth in natural gas production in the U.S.

Gross Profit. Our gross profit increased $26.8 million, or 32.9%, for fiscal year 2013 as compared to fiscal year 2012 due primarily to increased sales as discussed above which accounted for $13.8 million of the increase in gross profit. Additionally, gross profit as a percent of sales increased from 37.3% of revenue to 42.4% of revenue primarily due to $5.8 million from a shift in mix towards higher margin, advanced technology products, production labor and overhead efficiencies of $3.6 million, increased pricing on certain products of $2.4 million, and reduced raw material costs of $1.2 million.

Selling, General and Administrative Expenses. Our selling, general and administrative expenses increased $7.0 million, or 19.1%, for fiscal year 2013 as compared to fiscal year 2012. The increase resulted primarily from increased compensation, benefit, and equipment expenses of $5.8 million related to the increase in headcount driven by increase in sales, and an increase in professional fees of $0.5 million.

Research and Development Expenses. Our research and development expenses increased $3.2 million, or 15.7%, for fiscal year 2013 as compared to fiscal year 2012. The increase was primarily due to increased compensation and benefit expenses of $2.0 million for additional software and hardware engineers, $0.6 million of additional project expenses for a large project in 2013 and $0.6 million of additional operating expenses for our new facility and test equipment.

Goodwill Impairment. No impairments of goodwill were recorded in fiscal year 2013. In connection with our annual long-lived asset impairment testing in fiscal year 2012, we recorded an impairment of goodwill of $6.5 million relating to our battery charger products, which we produce and sell primarily in the European markets. The impairment occurred in 2012 as a result of these products’ flat sales volume and weakness in the European markets. See “—Critical Accounting Policies and Estimates—Goodwill–Impairment Assessments” for further information on the 2012 impairment.

Income from Operations. Our income from operations increased $23.0 million, or 127.9%, for fiscal year 2013 as compared to fiscal year 2012. This increase was driven by an 18.0% increase in sales into the Vehicle market and a 16.1% increase in sales into the Energy market. In addition, we had increased margins due to the sale of newly released, advanced technology products, certain price increases and reduced manufacturing and raw material costs partly offset by an increase in selling, general and administrative expenses and research and development expenses as described above.

Interest Expense. Our interest expense decreased $0.1 million for fiscal year 2013 as compared to fiscal year 2012. This decrease was due to a 0.25% decrease in the interest rate under our credit facility with Prosperity Bank in the third quarter of fiscal year 2013.

Other. Our other income decreased $0.2 million for fiscal year 2013 as compared to fiscal year 2012. The decrease was primarily due to foreign currency fluctuations, specifically a weakening of the U.S. dollar with respect to the Chinese yuan.

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Provision for Income Taxes. Our income taxes increased $0.6 million for fiscal year 2013 as compared to fiscal year 2012 as a result of our transfer of certain manufacturing operations to China from the U.S. during the second quarter of 2013.

Net income. Our net income increased $22.3 million, or 127.0%, for fiscal year 2013 as compared to fiscal year 2012. This increase was primarily due to a $26.8 million increase in gross profit. Increased sales resulted in $13.8 million of the increase in gross profit and the improvement in gross margin percent from 37.3% to 42.4% accounted for the remaining $13.0 million increase in gross profit. Gross profit as a percent of sales increased due to (1) a shift in mix towards higher margin, advanced technology products, (2) production labor and overhead efficiencies, (3) increased pricing on products, and (4) reduced raw material costs. In addition, we recorded a $6.5 million goodwill impairment charge in 2012 and there was no similar impairment charges in 2013 (see “— Goodwill Impairment”). Improvements in fiscal 2013 net income were partially offset by increased compensation, benefit, and equipment expenses related to selling, general, and administrative headcount of $5.8 million and research and development headcount of $3.2 million.

Fiscal Year Ended December 31, 2012 Compared to the Fiscal Year Ended December 31, 2011

Net Sales. Our net sales for fiscal year 2012 were $218.6 million reflecting an increase of $24.8 million, or 12.8%, as compared to fiscal year 2011. The increase in sales was due primarily to an increase in sales into the Vehicle market of $14.1 million, or 17.2%, compared to fiscal year 2011. This increase was due primarily to increased sales of control and fuel systems for commercial natural gas trucks and buses in Asia. Sales into the Energy market increased approximately $10.7 million, or 9.6%, in fiscal year 2012 compared to fiscal year 2011. The increase in sales was primarily due to increased sales of control systems for natural gas compressors, EICS^TM and monitoring instrumentation for natural gas production. Sales into the Energy market were primarily driven by a combination of the demand for improved fuel efficiency, more stringent emissions regulations, and growth in natural gas production in the U.S.

Gross Profit. Our gross profit increased $9.8 million, or 13.7%, for fiscal year 2012 as compared to fiscal year 2011 due primarily to increased sales which accounted for $9.1 million of gross profit. Gross profit as a percent of sales grew slightly from 37.0% of revenue in fiscal year 2011 to 37.3% of revenue in fiscal year 2012, with the slight increase attributable to higher margins on newly released, advanced technology products of $3.6 million along with a reduction in freight costs of $1.6 million. The increase in gross profit was partially offset by disposal costs of obsolete inventory of $2.4 million created by the standardization of certain product components resulting from the merger of EControls and Murphy and an increase in raw material costs of $2.1 million.

Selling, General and Administrative Expenses. Our selling, general and administrative expenses increased $1.9 million, or 5.4%, for fiscal year 2012 as compared to fiscal year 2011. The increase resulted primarily from increased compensation and benefit expenses of $2.6 million and commission and technical service fees of $1.3 million for sales and service support, which were partly offset by reductions in warranty expense of approximately $1.8 million and professional fees of $0.2 million.

Research and Development Expenses. Our research and development expenses increased $3.1 million, or 17.8%, for fiscal year 2012 as compared to fiscal year 2011. The increase was primarily due to increased compensation and benefit expenses of $2.9 million for additional software and hardware engineers and an increase in operating expenses of $0.2 million for our new research and development equipment and facility in San Antonio, Texas.

Goodwill Impairment. In connection with our annual long-lived asset impairment testing in fiscal year 2012, we recorded an impairment of goodwill of $6.5 million relating to our battery charger products, which we produce and sell primarily in the European markets. The impairment occurred in 2012 as a result of these products’ flat sales volume and weakness in the European markets. No impairments of goodwill were recorded in fiscal year 2011. See “—Critical Accounting Policies and Estimates—Goodwill–Impairment Assessment” for further information on the 2012 impairment.

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Income from Operations. Our income from operations decreased $1.6 million, or 8.1%, for fiscal year 2012 as compared to fiscal year 2011. The decrease was primarily due to the $6.5 million goodwill impairment charge discussed above, which was partly offset by the increase in sales and gross profit discussed above.

Interest Expense. Our interest expense decreased $0.1 million for fiscal year 2012 as compared to fiscal year 2011. This decrease was due primarily to a 0.6% decrease in the average interest rate on our credit facility with Prosperity Bank in 2012.

Other. Our other income increased $0.3 million for fiscal year 2012 as compared to fiscal year 2011. The increase was primarily the result of losses incurred in 2011 that did not recur in 2012 related to the abandonment of certain leasehold improvements in connection with the move of our San Antonio, Texas operations to a new facility in 2011.

Provision for Income Taxes. Our income taxes decreased $0.2 million, or 46.7%, for fiscal year 2012 as compared to fiscal year 2011 as a result of a decrease in the profitability of our U.K. subsidiary.

Net income. Our net income decreased $1.1 million or 5.6% for fiscal year 2012 compared to fiscal year 2011. The decrease was primarily due to a $6.5 million goodwill impairment charge in fiscal year 2012 with no similar impairment charge in fiscal year 2011 (see “—Goodwill Impairment”). In addition, we had increases in compensation, benefit, and equipment expenses related to selling, general, and administrative and research and development headcount of $2.6 million and $2.9 million, respectively. The decrease in net income was partially offset by a $9.8 million increase in gross profit largely related to an increase in sales volume.

Liquidity and Capital Resources

General Overview

Our primary source of liquidity is our cash flows from operations of Enovation Controls, LLC and borrowing availability under our credit facilities, as more fully described below.

In June 2014, we and our wholly-owned subsidiaries entered into a $110 million credit agreement with BOKF, NA, d/b/a Bank of Oklahoma (Bank of Oklahoma), consisting of a $30 million term loan and an $80 million revolving credit facility, which includes a $10 million letter of credit subfacility. On the closing date of the credit agreement, we borrowed an aggregate of $85.5 million, consisting of the $30 million term loan and $55.5 million of loans under the revolving credit facility. The proceeds of these term loans were used to pay off existing debt of $24.4 million under the existing credit facility with Prosperity Bancshares, Inc. (Prosperity Bank), to pay a $60.0 million distribution to Murphy Group and EControls Group, and to pay $0.6 million of financing expenses. The remainder is available for general working capital requirements.

We also have a $7.0 million credit facility with HSBC Bank (China) Company Limited, Hangzhou Branch (HSBC Bank). As of June 30, 2014, we had borrowings availability of $6.0 million under the credit facility with HSBC Bank.

See “—Credit Facilities” for further information on our senior credit facility with Bank of Oklahoma and our credit facilities with Prosperity Bank and HSBC Bank.

As of June 30, 2014 and December 31, 2013, we had cash of $10.0 million and $6.0 million, respectively. As of June 30, 2014 and December 31, 2013, $4.0 million and $5.4 million, respectively, of our cash was maintained in the accounts of our various foreign subsidiaries and, if such amounts were transferred among countries or repatriated to the U.S., such amounts may be subject to additional tax liabilities, which would be recognized in our financial statements in the period during which such transfer was made. We currently have the intent and ability to reinvest the cash held by our foreign subsidiaries and there are currently no plans that would require the repatriation of such amounts.

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Current notes receivable are from certain customers located in China who remit banker’s acceptance drafts drawn on reputable Chinese banks payable based upon agreed terms. These notes can be held to maturity, ranging from 90 to 180 days, discounted for early payment or used as commercial paper to pay suppliers. We intend to hold these notes until maturity or pay suppliers who will accept the notes without discount. We believe the full balance of the notes receivable is realizable and have not provided any reserve for losses on these notes. However, if the financial condition of the issuing banks should deteriorate a reserve might be needed in the future. These notes are recourse notes and if the issuing bank should default we would have recourse against the customer for collection. Likewise, if we had endorsed the notes and used them to pay a supplier, and if the issuing bank should default, the supplier would also have recourse against us. See Note 10—“Commitments and Contingencies” to our consolidated financial statements included elsewhere in this prospectus for a discussion of this potential liability.

We believe our cash on hand, cash generated from operations, and ability to access credit through our credit facilities with Bank of Oklahoma and HSBC Bank will satisfy our liquidity requirements for at least the next twelve months, including our working capital needs, capital expenditures, principal and interest payments on debt, and other liquidity requirements associated with our operations.

As of June 30, 2014, we had working capital of $68.5 million compared to $55.1 million as of June 30, 2013. Our working capital increase of $13.4 million was primarily attributable to a $6.1 million increase in cash and a $3.5 million increase in our accounts receivable, net, both due to higher sales in the first half of fiscal 2014 compared to the same period in fiscal 2013, partially offset by increases in the current portion of long-term debt (due to increased long-term debt to fund the $60.0 million distribution) of $2.4 million and accounts payable decrease of $1.8 million.

Tax Receivable Agreement Obligations

It is expected that the initial purchase and future exchanges by Common Unitholders of their Common Units (and Class B Shares) for Class A Shares (or cash) will increase our tax basis in our assets. This increase in tax basis will reduce the amount of future income and franchise tax payments to the extent we have future taxable income. We are obligated pursuant to our tax receivable agreement with all Common Unitholders to pay to such Common Unitholders 85% of the amount of tax we save for each tax period as a result of the tax benefits generated from any exchange of Common Units (and Class B Shares) for our Class A Shares (or cash). Required payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the tax receivable agreement. See “Risk Factors—Risks Related to our Organizational Structure.”

We expect to fund these long-term requirements with distributions received from Enovation Controls, LLC. The total liability for the tax receivable agreement, assuming current tax laws remain unchanged and assuming adequate income to offset the additional deductions, is estimated to be $             (assuming the Class A Shares are sold at $             per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus).

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Cash Flows

The following table sets forth our cash flows for the periods indicated below (in thousands):

	Six Months Ended June 30,						Fiscal Year Ended December 31,
	2014			2013			2013			2012			2011
Net cash provided by (used in):
Operating activities	$	21,431		$	16,909		$	36,926		$	34,251		$	9,084
Investing activities		(3,885	)		(3,338	)		(6,501	)		(5,516	)		(5,532	)
Financing activities		(13,493	)		(14,860	)		(29,890	)		(26,956	)		(2,968	)
Effect of foreign exchange rate on cash(1)		11			3			184			(22	)		7
Net (decrease) increase in cash	$	4,064		$	(1,286	)	$	719		$	1,757		$	591

(1) The effect of foreign exchange rate on cash is the result of the impact of the fluctuations between the U.S. dollar and the Chinese yuan and the British pound sterling on the assets and liabilities of Enovation Controls, LLC and its China and U.K. subsidiaries, respectively.

Cash flows for the Six Months Ended June 30, 2014

Operating Activities

Net cash provided by operating activities was $21.4 million for the six months ended June 30, 2014, and consisted of cash used by a net loss of $24.1 million increased by the add-back of non-cash charges of $49.8 million resulting in cash being generated of $25.7 million partially offset by a net use of cash for operating assets and liabilities of $4.3 million.

Non-cash charges consisted of $45.8 million of non-cash compensation expense related to stock compensation, $3.4 million for depreciation and amortization, $0.5 million for a provision for disposal costs of obsolete inventory and $0.1 million for gain on sale of assets.

Cash used by operating assets and liabilities included a $8.5 million increase in accounts receivables related to increased sales and a $3.3 million increase in notes receivable from customers in China. Cash used by operating assets and liabilities was partially offset by a $2.8 million decrease in inventory due to the transfer of certain manufacturing operations from the U.S. to China, a $2.6 million decrease in other assets due to the payment of a promissory note by a related party, a $1.8 million increase in accounts payable, and a $0.3 million increase in accrued and other liabilities. These changes resulted in $4.3 million of cash being used to fund operating assets and liabilities.

Investing Activities

Net cash used in investing activities was $3.9 million for the six months ended June 30, 2014, which was primarily due to capital expenditures of $3.6 million. In addition, $0.5 million was used to fund the acquisition of land use rights in China. These uses of cash were partially offset by $0.2 million in proceeds from the sale of capital assets.

Financing Activities

During the six month period ended June 30, 2014, we paid $82.4 million of distributions to our Class A Unitholders and $0.6 million of financing issue costs, which was partially offset by $69.8 million of net borrowings on our credit facilities resulting in net cash used in financing activities of $13.5 million during the period. Gross borrowing during the first six months of 2014 under our Prosperity Bank credit facility was $52.7 million of which $45.0 million was repaid during the six month period resulting in net borrowing of $7.7 million during the period on the Prosperity Bank credit facility. During the same period, an additional $1.0 million was

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borrowed on the HSBC Bank facility bringing the total net borrowings during the period to $8.7 million. On June 30, 2014, the total Prosperity Bank credit facility balance outstanding of $24.4 million was repaid from our new $110.0 million senior credit facility with Bank of Oklahoma (see “Credit Facilities—Credit Agreement with Bank of Oklahoma”), which included a $30.0 million term loan and an $80.0 million revolving credit facility of which $55.5 million was outstanding as of June 30, 2014. The new senior credit facility was used to fund a $60.0 million distribution to our Class A Unitholders as well as $1.1 million to cover financing and general purpose business costs. Of the $82.4 million of distributions to our Class A Unitholders, $14.8 million was for payment of United States federal and state income taxes and $67.6 million for distributions other than for taxes.

Cash flows for the Six Months Ended June 30, 2013

Operating Activities

Net cash provided by operating activities was $16.9 million for the six months ended June 30, 2013 and consisted of cash provided by net income of $22.3 million increased by the add-back of non-cash charges of $3.5 million resulting in cash being generated of $25.8 million partially offset by a net use of cash for operating assets and liabilities of $8.9 million.

Non-cash charges consisted of $2.9 million for depreciation and amortization and $0.6 million for a provision for disposal costs of obsolete inventory.

Cash used by operating assets and liabilities included a $9.3 million increase in accounts receivable due to increased sales, a $5.1 million increase in inventory, and a $0.8 million increase in other assets related to the increase in sales. Cash used by operating assets and liabilities was offset by a $5.2 million increase in accounts payable and a $1.0 million increase in accrued and other liabilities. These changes resulted in $8.9 million of cash being used to fund operating assets and liabilities.

Investing Activities

Our net cash used for investing activities was $3.3 million in the six months ended June 30, 2013. This cash was used for purchases of manufacturing equipment for a new product, San Antonio facility improvements, and general manufacturing tooling for new products.

Financing Activities

Net cash used in financing activities was $14.9 million for the six months ended June 30, 2013. We used $5.8 million of cash to reduce the outstanding balance, net of borrowings, on our credit facility with Prosperity Bank. In addition, we paid $9.1 million of distributions to our Class A Unitholders of which $5.9 million was for the payment of U.S. federal and state income taxes and $3.2 million was for distributions other than for taxes.

Cash flows for the Fiscal Year Ended December 31, 2013

Operating Activities

Net cash provided by operating activities was $36.9 million for fiscal year 2013 and consisted of cash provided by net income of $39.9 million increased by the add-back of non-cash charges of $8.0 million resulting in cash being generated of $47.9 million partially offset by a net use of cash for operating assets and liabilities of $11.0 million.

Non-cash charges consisted of $6.1 million for depreciation and amortization and $1.9 million for a provision for excess and obsolete inventory.

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Cash used by operating assets and liabilities included a $4.2 million increase in accounts receivable from sales growth, an increase in notes receivable of $4.8 million from customers in China, a $5.1 million increase in inventory from revenue growth as well as holding redundant inventory as we transferred certain manufacturing operations from the U.S. to China, and a $0.2 million decrease in accrued and other liabilities. Cash used by operating assets and liabilities was offset by a $1.7 million increase in accounts payable and $1.6 million decrease in other assets related to the receipt of proceeds from a life insurance premium advance on a split dollar policy held on a former executive. These changes resulted in $11.0 million of cash being used to fund operating assets and liabilities.

Investing Activities

Net cash used for investing activities was $6.5 million for fiscal year 2013. This cash was used for facility improvements at our San Antonio, Tulsa, and Rosenberg facilities, manufacturing equipment for a new product, and general manufacturing tooling for new products.

Financing Activities

Net cash used in financing activities was $29.9 million for fiscal year 2013. A significant portion of the cash used in financing operations was due to $28.9 million of distributions to our Class A Unitholders of which $8.7 million was for the payment of U.S. federal and state income taxes and $20.2 million was for distributions other than for taxes. Additionally, $1.0 million of cash was used to reduce the outstanding balance, net of borrowings, of our credit facility with Prosperity Bank.

Cash flows for the Fiscal Year Ended December 31, 2012

Operating Activities

Net cash provided by operating activities was $34.2 million for fiscal year 2012 and consisted of cash provided by net income of $17.6 million increased by the add-back of non-cash charges of $13.3 million resulting in cash being generated of $30.9 million increased by net cash provided by operating assets and liabilities of $3.3 million.

Non-cash charges consisted of $5.3 million for depreciation and amortization and $6.5 million for goodwill impairment partially offset by a $1.5 million decrease in the provision for obsolete inventory.

Cash provided by operating assets and liabilities included a $6.6 million decrease in inventory from a company-wide initiative to reduce our investment in inventory and a $2.3 million increase in accrued and other liabilities as a result of an increase in commission expense related to the sale of systems into the Vehicle market. The inventory was reduced through standardizing product development components, reducing the number of vendors, reducing supplier lead times, installing vendor managed inventory and setting performance measurements around inventory balances. The cash provided by operating assets and liabilities was partially offset by a $2.2 million increase in accounts receivable from the increase in sales, a $2.8 million decrease in accounts payable caused by the decrease in inventory, and a $0.6 million increase in other assets related to the prepayment of the purchase price for certain raw materials. These changes resulted in $3.3 million of cash being provided by operating assets and liabilities.

Investing Activities

Net cash used for investing activities was $5.5 million for fiscal year 2012, which was comprised of cash used for facility improvements related to the relocation of our San Antonio operations, facility improvements at our Rosenberg operations, enhanced manufacturing equipment, and manufacturing tooling equipment.

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Financing Activities

Net cash used in financing activities was $27.0 million for fiscal year 2012. For fiscal year 2012, we paid $24.7 million of distributions to our Class A Unitholders of which $7.4 million was for the payment of U.S. federal and state income taxes and $17.3 million were dividends other than for taxes. Additionally, $2.3 million of cash was used to reduce the outstanding balance, net of borrowings, on our credit facility with Prosperity Bank.

Cash flows for the Fiscal Year Ended December 31, 2011

Operating Activities

Net cash provided by operating activities was $9.1 million for fiscal year 2011 and consisted of cash provided by net income of $18.6 million increased by the add-back of non-cash charges of $6.7 million resulting in cash being generated of $25.3 million decreased by a net use of cash for operating assets and liabilities of $16.2 million.

Non-cash charges primarily consisted of $4.9 million for depreciation and amortization and a $1.8 million increase in the provision for obsolete inventory.

Cash used by operating assets and liabilities included a $16.2 million increase in inventory, a $4.8 million increase in accounts receivable from the increase in sales, and a $0.8 million increase in other assets. Cash used by operating assets and liabilities were partially offset by a $2.1 million increase in accounts payable and a $3.5 million increase in accrued and other liabilities. These changes resulted in $16.2 million of cash being used to fund operating assets and liabilities.

Investing Activities

Net cash used for investing activities was $5.5 million for fiscal year 2011 comprised of $4.3 million used for the purchases of manufacturing equipment, manufacturing tooling equipment, and facility improvements related to the relocation of the San Antonio facility and $1.2 million related to intellectual property.

Financing Activities

Net cash used in financing activities was $3.0 million for fiscal year 2011. We paid $13.7 million of distributions to our Class A Unitholders, of which $5.6 million was for the payment of U.S. federal and state income taxes and $8.1 million were distributions other than for taxes. In addition, we entered into an amended credit facility with Prosperity Bank in 2011, and we used $8.8 million of the proceeds from the amended credit facility to repay other long-term debt for no net change in cash. Additional net borrowings under the amended credit facility with Prosperity Bank provided $10.7 million of cash.

Credit Facilities

Credit Agreement with Bank of Oklahoma

On June 30, 2014, we and our wholly-owned subsidiaries entered into a $110 million credit agreement with Bank of Oklahoma, as administrative agent, and various lenders party thereto, consisting of a $30 million term loan and an $80 million revolving credit facility, which includes a $10 million letter of credit subfacility. On the closing date of the credit agreement, we borrowed an aggregate of $85.5 million, consisting of the $30.0 million term loan and $55.5 million of loans under the revolving credit facility. The proceeds of these term loans were used to pay off existing debt of $24.4 million under the existing credit facility with Prosperity Bank, a $60 million distribution to EControls Group and Murphy Group and $0.6 million of financing expenses. The remainder is available for general working capital requirements.

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Borrowings under the term loans and revolving loans accrue interest, at our option, at either an alternate base rate or LIBOR plus in each case an applicable margin rate. The applicable margin is currently 0.75% for alternate base rate loans and 1.75% for LIBOR rate loans. A non-use fee between 0.15% and 0.35% per annum, based upon our total leverage ratio, accrues on the amount of unutilized revolving line of credit.

Our senior credit facility with Bank of Oklahoma contains customary negative and affirmative covenants and events of default. For a further description of the terms of our senior credit facility see “Description of Certain Indebtedness.”

Loan Agreement with Prosperity Bank

In September 2013, we entered into a Second Amended and Restated Loan Agreement, which we refer to as the loan agreement, with Prosperity Bank (f/k/a F&M Bank & Trust Company), as administrative and syndication agent, and the other lenders party thereto. As further discussed above, in connection with entering into the senior credit facility with Bank of Oklahoma, the credit facility with Prosperity Bank was paid off and terminated in June 2014. See Note 6—“Long-Term Debt” to our consolidated financial statements included in this prospectus for further discussion of our loan agreement with Prosperity Bank.

Loan Facilities with HSBC Bank

In July 2013, our foreign subsidiary, Murphy EControls Technologies (Hangzhou) Co., Ltd., obtained a dual currency fixed assets loan facility of up to $2.5 million (or equivalent) to fund our Chinese plant expansion and a dual currency revolving loan facility of up to $4.5 million (or equivalent) to finance working capital requirements through HSBC Bank. The loan facilities with HSBC Bank contain customary negative covenants, affirmative covenants and events of default. See Note 6—“Long-Term Debt” to our consolidated financial statements included in this prospectus for further discussion of our credit facilities with HSBC Bank.

Contractual Obligations, Commitments and Contingencies

The following table summarizes our continuing contractual obligations as of June 30, 2014 (in thousands):

			Payments Due by Period
	Total		Less Than One Year		1-3 Years		3-5 Years		More Than 5 Years
Long-term debt(1)	$	86,548	$	2,548	$	3,000	$	81,000		—
Interest payments(2)		2,461		559		1,033		869		—
Operating leases(3)		12,495		1,832		3,264		3,196		4,203
Total	$	101,504	$	4,939	$	7,297	$	85,065	$	4,203

(1) Long-term debt is based on debt outstanding as of June 30, 2014 under the credit facility with Bank of Oklahoma, as administrative agent, and various lenders party thereto, consisting of a $30 million term loan and an $80 million revolving credit facility, which includes a $10 million letter of credit subfacility.

(2) Interest payments are for the $30 million term loan and are based on the LIBOR 30 day rate plus 1.75%, which was 1.90% as of June 30, 2014.

(3) Operating leases are primarily for facility commitments in the U.S. and China.

In the normal course of business with customers, vendors and others, we are contingently liable for performance under standby letters of credit and bid, performance and surety bonds. We were not contingently liable for any standby letters of credit, trade guarantees given by bankers and bid, performance and surety bonds at June 30, 2014. We do not expect any material amounts to be drawn on these instruments. We guarantee our China subsidiary’s debt with HSBC Bank.

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Off-Balance Sheet Arrangements

We pay certain Chinese suppliers with notes receivables we receive from certain customers drawn on Chinese banks which we endorse a percentage of the notes over to our suppliers. We have current notes receivable from certain customers located in China who remit banker’s acceptance drafts drawn on reputable Chinese banks and which are payable based upon agreed terms. These notes can be held to maturity, ranging from 90 to 180 days, discounted for early payment or used as commercial paper to pay suppliers. We intend to hold these notes until maturity or pay suppliers who will accept the notes without discount. These notes are recourse notes and if the issuing bank should default we would have recourse against the customer for collection. Likewise, if we endorsed the notes and used them to pay a supplier and then if the issuing bank should default the supplier would also have recourse against us. We believe the full balance of the notes receivable are realizable and we have not provided any reserve for losses on these notes nor have we recorded a contingent liability. However, if the financial condition of the issuing banks should deteriorate a reserve might be needed in the future. We estimate that we have endorsed approximately $0.5 million as of June 30, 2014 and $1.5 million as of December 31, 2013 of notes which had not met their maturity date and could possibly still be outstanding. See “Risk Factors—Risks Related to Our Business Operations” and Note 10—“Commitments and Contingencies” to our consolidated financial statements included elsewhere herein for a discussion of this potential liability.

We do not have any other material “off-balance sheet arrangements” as such term is defined within the rules and regulations of the SEC.

Impact of Inflation

Our results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our results of operations and financial condition have been immaterial.

Critical Accounting Policies and Estimates

In presenting our financial statements in conformity with generally accepted accounting principles, we are required to make estimates and assumptions that affect the amounts reported therein. Critical estimates include determining the fair value of acquired assets; the collectability of accounts and notes receivable; the recoverability of inventories; the cost of warranty repairs; useful lives and recoverability of property, equipment and amortized intangible assets; the impairment of goodwill; the amount of sales allowances and rebates and accruals for commitments and contingencies, among others. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. We base estimates on historical experience and other assumptions believed to be reasonable under the circumstances and evaluate these estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies and estimates discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

Revenue Recognition

We recognize revenue when the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery of the product has occurred or services have been rendered, (3) price is fixed or determinable, and (4) collectability is reasonably assured. Revenue is recognized at the time product is shipped to the customer, which is when title and risk of ownership pass to the customer. Final sales prices are fixed and primarily based on purchase orders. We are not subject to post-shipment obligations or customer acceptance requirements and, other than the two-year warranty we provide on certain products, we have no other return policies or practices. Sales allowances and rebates are treated as reductions to sales and are provided for based on historical experience and current

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estimates. A portion of our consolidated net sales is transacted through third-party distributors. Sales terms applicable to third-party distributors are similar to terms applicable to customer sales. Sales to customers and third-party distributors are subject to the revenue recognition criteria described above.

Accounts and Notes Receivable

Receivables are recorded at amounts billed to customers, less an allowance for doubtful accounts. The allowance for doubtful accounts is based on historical experience and any specific customer collection issues that have been identified through management’s review of outstanding accounts receivable. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. We generally require no collateral from our customers. The allowance for doubtful accounts was approximately $51,000, $42,000, and $123,000 at June 30, 2014, and December 31, 2013 and 2012, respectively. Recoveries of previously written-off accounts were approximately $81,000 and $42,000 for the years ended December 31, 2013 and 2012, respectively. There were no recoveries of previously written-off accounts in the six months ended June 30, 2014.

Current notes receivable are from certain customers located in China who remit banker’s acceptance drafts drawn on reputable Chinese banks payable based upon agreed terms. These notes can be held to maturity, ranging from 90 to 180 days, discounted for early payment or used as commercial paper to pay suppliers. We intend to hold these notes until maturity or pay suppliers who will accept the notes without discount. We believe the full balance of the notes receivable are realizable and have not provided any reserve for losses on these notes. However, if the financial condition of the issuing banks should deteriorate a reserve might be needed in the future. These notes are recourse notes and if the issuing bank should default we would have recourse against the customer for collection. Likewise, if we endorsed the notes and used them to pay a supplier, and then if the issuing bank should default, the supplier would also have recourse against us. See “—Off-Balance Sheet Arrangements” and Note 10—“Commitments and Contingencies” in our consolidated financial statements included elsewhere herein for a discussion of this potential liability.

Inventory

Inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Cost in inventory includes product costs, labor, and related fixed and variable overhead. We establish an inventory reserve for excess and obsolete inventories based on an analysis of historical and future demand in relation to the inventory on hand. Based upon the evaluation, provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Inventory consisted of the following (in thousands):

	June 30,			December 31,
	2014			2013			2012
	(unaudited)
Raw material	$	29,724		$	29,651		$	29,612
Work-in-process		1,145			1,006			1,568
Finished goods		5,523			8,778			4,971
		36,392			39,435			36,151
Less—inventory reserve		(1,665	)		(1,343	)		(1,267	)
Total inventories, net	$	34,727		$	38,092		$	34,884

Inventory market values are determined by giving substantial consideration to the expected product selling price. We estimate expected selling prices based on our historical recovery rates, general economic and market conditions, the expected channel of disposition, and current customer contracts and preferences. Actual results may differ from our estimates due to changes in resale or market value and the mix of these factors. Management monitors inventory for events or circumstances, such as negative margins, recent sales history suggesting lower

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sales value, or changes in customer preferences, which would indicate the market value of inventory is less than the carrying value of inventory, and management records adjustments as necessary. When inventory is written down below cost, such reduced amount is considered the cost for subsequent accounting purposes. Our recording of inventory at the lower of cost or market value has not historically required material adjustments to inventory values once these have been initially established.

	For the six months ended June 30,			For the year ended December 31,
	2014			2013			2012
(in thousands)	(unaudited)
Inventory reserve, beginning of period	$	1,343		$	1,267		$	2,273
Provision for excess and obsolete inventory		540			1,909			1,516
Write-offs		(218	)		(1,833	)		(2,522	)
Inventory reserve, end of period	$	1,665		$	1,343		$	1,267

Long-Lived Assets

Property, plant and equipment are carried at cost, or fair value if acquired. For financial statement purposes depreciation on property, plant and equipment is calculated using the straight-line method over the estimated useful lives of the respective assets; accelerated depreciation and cost recovery methods are used for income tax purposes. Maintenance and repairs are charged to operating expenses as they are incurred. Improvements and betterments, which extend the useful lives of assets, are capitalized.

The estimated useful lives of long-lived assets are as follows:

	Range in Years
Buildings and leasehold improvements		7 - 50
Furniture and office equipment		3 - 10
Computer equipment		3 - 10
Shop machinery and equipment		5 - 10
Tools and dies		3 - 10
Autos, trucks and airplanes		4 - 15

Depreciation expense recognized for long-lived assets was approximately $2.0 million, $1.5 million, $3.2 million, $2.4 million and $2.2 million for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012, and 2011, respectively.

In accordance with GAAP, we review our long-lived assets for indicators of impairment which would require reevaluation of the carrying value of an asset using an estimate of future cash flows. We found no indications of impairment at June 30, 2014 and December 31, 2013, 2012, or 2011, and accordingly, did not reduce the carrying values of our long-lived assets.

Warranty

We warrant, under certain circumstances, that our products will be free from defects for two years. In addition, from time to time, we may get involved in a specific field action program. We provide reserves for costs associated with warranty claims at the time the products are sold. The warranty reserve is provided for by adjusting selling, general and administrative expenses by an amount based on our current and historical warranty claims paid and associated repair costs. These estimates are established using historical information including the nature, frequency, and average cost of warranty claims and are adjusted as actual information becomes available as well as the estimated costs of specific field action programs.

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Impairment of Long-Lived Assets, Goodwill, and Intangible Assets

We recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of the consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed (including any contingent consideration) at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to its consolidated statements of operations and comprehensive income.

Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets, support obligations assumed, estimated restructuring liabilities and pre-acquisition contingencies. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and they are inherently uncertain.

Examples of critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to:

• future expected cash flows from acquired developed technologies and patents and other customer contracts;

• the life of the acquired developed technologies and patents;

• the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s product portfolio;

• risk associated with uncertainty, achievement and payment of any milestones;

• the life of the acquired developed technologies and patents; and

• discount rates.

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

Goodwill—Impairment Assessments

We perform an annual assessment of our goodwill. We also assess whether or not an indicator of impairment is present that would necessitate a goodwill impairment analysis be performed in an interim period.

The goodwill impairment test compares the carrying value of certain acquired components to their estimated fair value. If the carrying value is more than the estimated fair value, a second step is performed, whereby we calculate the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the component from the estimated fair value of the reporting unit. Impairment losses are recognized to the extent that recorded goodwill exceeds implied goodwill. Our impairment methodology uses discounted cash flows and multiples of cash earnings valuation techniques, plus valuation comparisons to similar businesses. These valuation methods require us to make certain assumptions and estimates regarding future operating results, the extent and timing of future cash flows, working capital, sales prices, profitability, discount rates and growth trends. As a result of its impairment test, we recognized a $6.5 million pre-tax impairment relating to goodwill at Enovation Controls, Ltd. (“MEL”) during the year ended December 31, 2012. No such impairment charges were required at EControls or for other periods presented as the estimated fair value substantially exceeded their carrying values. While we believe that such assumptions and estimates are reasonable, the actual results may differ materially from the projected results.

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Change in Accounting Principle

During the quarter ended March 31, 2014, we elected a change in accounting principle related to measuring our profits interests units. The profits interest units are accounted for as liability awards and our management had previously elected to measure these liability awards using the intrinsic value in accordance with Accounting Standards Codification (ASC) 718, Compensation—Stock Compensation. We elected to measure these liability awards using fair value in accordance with ASC 718 during the quarter ended March 31, 2014 in anticipation of an initial public offering.

Our management evaluated this change in accounting principle in accordance with ASC 250, Accounting Changes and Error Corrections. A retrospective application of this change in accounting principle is impractical as it would require our management to make assumptions in the fair value which are not contemporaneous. Our management determined the incremental cost in accordance with ASC 718 and recorded this difference between the fair value and intrinsic value during the reporting period ended March 31, 2014. This change in accounting principle will be applied prospectively.

Fair Value of Financial Instruments

Cash, accounts receivable, notes receivable, accounts payable and accrued liabilities are reflected in the financial statements at carrying value, which management believes approximates fair value because of the short-term nature of those instruments.

The fair value of the long-term debt approximates the carrying value as the debt was negotiated in the past 12 months, there have not been significant changes to our overall risk or lending profile, and the interest rates associated with the debt are variable. The interest rates approximate market rates.

We have a profits interest plan which management has determined is a liability award plan in accordance with ASC 718, Compensation—Stock Compensation. Therefore, the June 30, 2014 statements reflect the award units at estimated fair value, using a pricing model. See Note 7—“Stock Compensation” to our consolidated financial statements for a discussion of how the fair market value was determined. As there are inherent uncertainties related to the factors and our judgment in applying them to the fair value determinations, there is a risk that the recorded profits interest compensation may not accurately reflect the amount ultimately earned.

Income Taxes

Enovation Controls, LLC is taxed as a partnership for U.S. federal and state income tax purposes and as a result is a “flow-through” entity for U.S. tax purposes. As such, U.S. federal and state income taxes on net domestic taxable earnings are the obligation of Enovation Controls, LLC’s members. Accordingly, no provision for U.S. income taxes has been made in the accompanying consolidated financial statements. Enovation Controls, LLC’s domestic entities and Enovation Controls, LLC’s subsidiaries that operate in foreign jurisdictions are taxable entities. Income taxes incurred by the subsidiaries that operate in foreign jurisdictions are recorded in the “Provision for income taxes” line item in the accompanying consolidated statements of operations and comprehensive income. Pre-tax income from subsidiaries that operate in foreign jurisdictions was $3.2 million, $1.3 million, $4.1 million, $(4.1) million, and $3.9 million for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012, and 2011, respectively. Deferred income taxes of Enovation Controls, LLC’s consolidated subsidiaries that operate in foreign jurisdictions are determined under the asset and liability method, under which deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statement carrying amounts and income tax bases of the foreign subsidiaries’ assets and liabilities using currently enacted tax rates. Enovation Controls, LLC’s deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that all or some portion of the recorded deferred tax assets will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to Enovation Controls, LLC’s provision for income taxes and increases to

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the valuation allowance result in additional provision for income taxes. As of June 30, 2014, and December 31, 2013 and 2012, Enovation Controls, LLC has deferred long-term tax liabilities related to its foreign jurisdictions of $44,000, $43,000, and $51,000, respectively.

Enovation Controls, LLC evaluates uncertain tax positions for recognition and measurement in the consolidated financial statements. To recognize a tax position, Enovation Controls, LLC determines whether it is more likely than not that the tax positions will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more likely than not threshold is measured to determine the amount of benefit to be recognized in the consolidated financial statements. The amount of tax benefit recognized with respect to any tax position is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Enovation Controls, LLC had no uncertain tax positions that required recognition in the financial statements at June 30, 2014 or December 31, 2013 or 2012. Any interest or penalties would be recognized as a component of income tax expense.

In future periods, our income will be taxable at both the U.S. federal and state level. Following the Transactions, we will be subject to U.S. federal income taxation and our consolidated income tax expense and deferred tax assets and liabilities will reflect our allocable share of the taxable earnings of Enovation Controls, LLC. In addition, deferred taxes will be provided for the differences between the financial reporting and tax bases of assets and liabilities using the tax rate expected to be in effect when the taxes will actually be paid or refunds received. We will be subject to U.S. federal and state income tax in multiple jurisdictions. Some of these jurisdictions have higher statutory tax rates than others. Accordingly, our effective tax rates will vary depending on the relative proportion of income in various states or jurisdictions, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws.

The tax receivable agreement executed in conjunction with the Transactions will result in a deferred tax asset or a reduction in a deferred tax liability and a payable to the Common Unitholders. See “Unaudited Condensed Pro Forma Consolidated Financial Information” for further discussion on taxes after the Transactions.

Recent Accounting Pronouncements

In June 2011, the FASB issued an update related to the presentation of comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of members’ equity and also requires presentation of reclassification adjustments from other comprehensive income to net income on the face of the financial statements. The update is effective for the year ended December 31, 2012, with early adoption permitted. In December 2011, the FASB issued a deferral of the effective date for certain requirements of the update, which defers certain aspects of the update related to the presentation of reclassification adjustments. We adopted this change retroactively effective from January 1, 2012. This update did not have a material impact on our financial condition, results of operations, or cash flow.

In September 2011, the FASB issued an update relating to testing goodwill for impairment that permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If an entity concludes it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it need not perform the two-step impairment test. We adopted this update on January 1, 2012. The adoption of this update did not have a material impact on our financial condition, results of operations, or cash flows.

In February 2013, the FASB issued an update related to reporting of amounts reclassified out of accumulated other comprehensive income. The update requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present either on the face of the statement of operations or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required to be reclassified to net income

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in its entirety in the same reporting period. For amounts not reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. This update is effective prospectively for us for annual periods beginning after December 15, 2013. The adoption of the revised guidance is not expected to have a material effect on our financial condition, results of operations, or cash flow.

In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. The standard will eliminate the transaction and industry specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific aspects of revenue recognition and expands disclosures about revenue. ASU 2014-09 is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods therein. We are evaluating the impact ASU 2014-09 will have on our consolidated financial statements.

Jumpstart Our Business Startups Act of 2012

On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. We intend to “opt out” of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks in the ordinary course of our business. These market risks are principally limited to interest rate fluctuations and foreign currency exchange rate fluctuations.

Interest Rate Risks

Borrowings under our credit facilities with Bank of Oklahoma and HSBC Bank bear floating interest rates that are tied to, in the case of the senior credit facility with Bank of Oklahoma, an alternative base rate or LIBOR plus in each case an applicable margin rate, and in the case of the credit facilities with HSBC Bank, the benchmark lending rate effective on the “rate adjustment date” for that interest period promulgated by the People’s Bank of China for RMB lending with a tenor corresponding to the term of the facility with a 10% mark-up, and for U.S. dollar loans at a rate equal to HSBC Bank’s cost of funds (determined by HSBC Bank) plus 2% per annum. Therefore, our statements of income and our cash flows will be exposed to changes in interest rates.

We estimate that a 1% change in our interest rates on our outstanding borrowings under our credit facilities with Prosperity Bank would have increased our interest expense approximately $0.1 million as of December 31, 2013.

Additionally, we had cash in bank operating accounts of $10.0 million at June 30, 2014. We maintain significant amounts of cash at one or more financial institutions that are in excess of federally insured limits. We cannot be assured that we will not experience losses on these deposits.

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Foreign Currency Risks

We operate on a global basis and are exposed to foreign currency risks related to our revenues and operating expenses denominated in currencies other than the U.S. dollar, principally the Chinese yuan and the British pound sterling. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Movements in currency exchange rates may affect the translated value of our earnings and cash flow associated with our foreign operations as well as the translation of the net asset or liability positions that are denominated in foreign currencies. Approximately 10.5% of our sales in fiscal year 2013 and 1.8% of our sales in fiscal year 2012 were in Chinese yuan. Approximately 4.7% of our sales in fiscal year 2013 and 5.2% of our sales in fiscal year 2012 were in British pound sterling.

We estimate that a 1% change in the exchange rate between the U.S. dollar and Chinese yuan would impact net sales by approximately $0.3 million based on fiscal year 2013 results.

At this time we do not, but we may in the future, enter into derivatives or other financial instruments in an attempt to hedge our interest rate and foreign currency exchange rate risks. It is difficult to predict the impact hedging activities would have on our results of operations.

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BUSINESS

Company Overview

We are a leading global provider of sophisticated digital control systems for gaseous fuel engines and engine-driven equipment focused on the vehicle and energy markets. With a global installed base of over one million engine control systems, our EControls^® and Murphy^® brands are recognized for providing innovative, ruggedized, integrated turnkey solutions that combine proprietary software platforms and customized hardware. We develop high technology, mission-critical systems that are utilized in commercial CNG/LNG trucks and buses, natural gas production, distributed power generation, and a variety of industrial and off-highway applications. We provide critical solutions across the entire natural gas value chain based on our comprehensive understanding of engines and their applications in both the supply and demand sides of the natural gas market. This allows our customers to meet the most stringent global emissions standards while enabling the efficient, economical, and reliable operation of their equipment in extreme environments.

Due to our proprietary technology and strong engineering expertise, we believe we have developed many highly entrenched customer relationships, including several Fortune Global 500 corporations, based on deep technical collaboration. Our solutions represent a small portion of the overall cost of the end-use application, but are essential and integral to system functionality and operating performance. Many customers seek our assistance in engineering and designing complete engine control systems which creates high switching costs and results in us having a proprietary position for these engine platforms. In 2013, we generated $256 million in revenue and $41 million in operating income by leveraging the technology of our over 70 product families across more than 4,000 customers globally. We are geographically diverse, generating approximately 30% of our revenues in 2013 from international markets, including more than $60 million from the rapidly growing Asian market.

We believe we are well positioned to benefit from a number of significant trends driving demand in the industries in which we compete:

• Expected significant global increase in the production of and demand for natural gas supported by attractive cost, environmental, and geopolitical benefits relative to other hydrocarbon fuels;

• Anticipated growth in demand for advanced natural gas compression system controls in oil and gas applications driven by increased shale and tight formation production in the U.S. and globally;

• Global adoption of NGVs due to significant economic and environmental advantages:

^¡  According to ACT Research, natural gas could power 50% of Class 8 trucks produced for the U.S. market by 2025, up from 6% in 2013;

^¡  China is one of the largest and fastest growing NGV markets globally—the number of NGVs in China across all classes has grown from 36,000 in 2002 to approximately 1.6 million in 2012, at a CAGR of 45.9%, according to NGV Global;

• Increasingly stringent global emissions regulations driving demand for advanced engine technologies that enable lower emissions, greater fuel economy, and regulatory compliance; and

• Widespread adoption of advanced digital control solutions which integrate technologies such as high-resolution displays, highly configurable software, GPS navigation, telematics, vehicle management systems, and diagnostics to improve engine safety, energy efficiency, performance, and reliability with less dependence on operator skill.

Our technological expertise and operating history with engine controls form the basis for all of our hardware and software product offerings. Our solutions include a variety of engine control and monitoring systems, sensors, displays, and panels that are used in gaseous fuel engines across several industries. Through our EControls^® and Murphy^® brands, we target two primary end markets: Vehicles and Energy.

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In the Vehicle market, we design, engineer, and manufacture control and fuel injection systems for engines utilizing gaseous fuels such as CNG, LNG, and LPG or propane as well as liquid fuels such as gasoline or diesel fuel. We are a leading provider of electronic engine control systems for commercial natural gas powered trucks and buses with approximately 200,000 systems deployed. We have deep technical relationships with several of the largest commercial NGV engine manufacturers in China, and we believe that we will continue to benefit from government regulations in this market including increasingly stringent emissions standards as China strives to improve its air quality. We provide complete engine management systems for natural gas, LPG, diesel, and gasoline engines used in off-highway, forklift and mobile, and stationary applications. We integrate products and technologies into our solutions that connect operators to vehicles through graphical displays, telematics, mobile device integration, and electro-hydraulic controls. We are often positioned as the sole-source provider to many of our top customers and develop proprietary engine control solutions for their new engine platforms.

In the Energy market, we design, engineer, and manufacture a range of sophisticated products for the monitoring and control of mission-critical equipment including natural gas compressors, generators, pumps, and other engine-driven systems used in the extraction, transmission, and storage of natural gas. We are one of the leading providers of advanced controls for the natural gas compression market. Our Murphy^® branded products include integrated engine management systems, custom-engineered and programmable compressor controls, control end-devices (including valves and sensors), and advanced ruggedized displays. Our Engine Integrated Control System (EICS^TM) is a ground-breaking, turnkey control system primarily designed for natural gas compressor engines which integrates multiple critical functions (including ignition system, air-fuel ratio control, speed control, sensors, diagnostics, and an advanced graphical user interface) into a single pre-configured system. Due to its unique level of integration and ease of installation and operation, EICS^TM is being adopted by large engine OEMs and system integrators. Our marketing team leverages our technology and products to provide solutions to adjacent engine-driven markets with similar requirements, such as oil and gas drilling services equipment and distributed power generation.

Target Markets	Target Applications	Our Hardware and Software Solutions
Vehicle	•     Natural Gas Commercial Trucks and Buses •     Forklift and Mobile Equipment •     Off-Highway Equipment •     Off-Highway Recreational Vehicles •     Marine •     Distributed Power Generation and Industrial	•     Engine Control Modules •     Fuel Injection Devices •     Electro-Hydraulic Control Modules •     Fuel Pressure and Flow Control Devices •     Engine Aftertreatment Systems •     Power Distribution Modules •     Advanced Ruggedized Displays •     Engine Sensors •     Cruise and Speed Control Systems •     Telematics

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Target Markets	Target Applications	Our Hardware and Software Solutions
Energy	•     Natural Gas Compression Equipment •     Natural Gas Engine-Driven Equipment •     Oil & Gas Production Equipment •     Distributed Power Generation •     Industrial Pumping Equipment	•     Integrated Engine Control Systems •     Supervisory Control Systems •     Engine Aftertreatment Systems •     Monitoring Equipment •     Ignition Systems & Accessories •     Level Transmitters and Maintainers •     Instrumentation •     Pressure Control Valves •     Advanced Ruggedized Displays •     Vibration, Pressure, and Temperature Sensors •     Wireless Sensor Solutions •     Telematics

We generally seek to localize our product manufacturing and support to our customer base around the world. We have established manufacturing, sales, and engineering application centers in the U.S., Mexico, U.K., China, India, and South Korea to serve our key geographies. We currently operate five manufacturing and distribution centers in the U.S., Europe, and Asia. In 2015, we plan to open our state-of-the-art China Enovation Center, co-located with our manufacturing operations in Hangzhou, China. This Center will provide additional technical and support services for our customers in the vehicle market in China, India, South Korea, and Japan and will include sophisticated engine calibration and certification capabilities. We drive operational excellence through advanced manufacturing techniques, leading industry management practices, and global supply chain optimization. We maintain our high standards of quality through disciplined new product design, manufacturing processes, supplier selection, and adherence to global quality certifications along with comprehensive testing and validation laboratories in the U.S. and China. We establish customer intimacy with strong relationships based on ethics, trust, performance, and rapid responsiveness. Our track record of consistent revenue growth and cash flow generation is a testament to our ability to continually deliver innovative products in our markets while maintaining a high degree of customer focus.

The following table summarizes our sales by product lines that accounted for 10% or more of our consolidated revenue for the last three fiscal years:

	Year Ended December 31,
	2013		2012		2011
Fuel and Engine Management Systems	$	101,349	$	81,502	$	65,498
Application Control Systems		76,297		62,420		57,165
Monitoring Devices		74,106		70,171		65,186

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Our Global Footprint⁽¹⁾

Notes 1. Employee totals as of June 30, 2014.

2. Surface mount technology.

Industry Overview

Shale Gas Revolution

The natural gas industry has undergone a dramatic transformation in recent years. According to EIA, global reserves of natural gas have increased by 56% from 1992 to 2013. North America has seen the strongest production growth in recent years, benefitting from improved production technologies such as hydraulic fracturing, or fracking, and horizontal drilling techniques resulting in increased extraction from shale and tight formations.

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U.S. Natural Gas Production by Source in the EIA Reference Case

Trillion Cubic Feet

Source     EIA

According to the EIA, over the next ten years, natural gas is expected to contribute the largest share of growth to the U.S. energy supply. Natural gas is widely available, versatile and currently more than three times cheaper on an energy equivalent basis than oil. Natural gas continues to be the fuel of choice for the electric power and industrial sectors in many of the world’s regions, in part because of its lower carbon intensity compared with coal and oil. According to the U.S. Department of Energy, natural gas engines reduce greenhouse gases by up to 26% compared to gasoline engines, which makes it an attractive fuel source in countries where governments are implementing policies to reduce greenhouse gas emissions. The location of substantial natural gas reserves within countries such as the U.S., China, and Russia increases the relative attractiveness of natural gas as a fuel source since it reduces national security concerns over foreign energy dependence. As a result, natural gas is expected to become an even more important component of the global energy mix, accounting for approximately 30% of global energy needs by 2035 as the supply of natural gas increases by nearly 50%.

In the U.S. abundant natural gas supplies have resulted in significant price declines and spurred greater usage of the fuel for electricity generation, industrial production, and transportation. Henry Hub natural gas spot prices have declined from an average of $8.69 per mmbtu in 2005 to $3.73 per mmbtu in 2013. Based on EIA forecasts, the energy equivalent cost of natural gas in North America is expected to maintain a cost advantage over crude oil in excess of three times through 2040.

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Historical Oil and Barrel of Oil Equivalent Natural Gas Prices

$ / Barrel of Oil Equivalent (BOE)

Source     EIA, May 2014

Notes    1. 1 BOE assumed to be 5,800 cubic feet of natural gas

    2. Oil price used is annual average West Texas Intermediate price ($/barrel); Natural gas price used is annual average Citygate price ($/tcf)

As natural gas production increases in volume to meet rising global demand, significant investment in production, pipeline, and storage infrastructure will be required. According to the Interstate Natural Gas Association of America, the average annual infrastructure investment for natural gas and crude oil in the U.S. and Canada is expected to total nearly $30 billion per year through 2035 mainly to accommodate new natural gas supplies from shale plays. Gas compression is an essential process used throughout the production cycle to lift oil in tight formations and to transport gas to the end user. According to Frost & Sullivan, increases in shale gas production will increase revenues at an accelerating pace for total compressors in oil and gas applications from 2012 to 2018.

Total Compressors Market in Oil and Gas Applications: Revenue and Growth Forecast, North America

Source     Frost & Sullivan: North American Compressors in Oil and Gas Applications January 2013

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We believe regulators in the oil and gas industry are increasingly focused on product and equipment integrity, particularly in applications or environments in which products are exposed to high pressure, high temperature, and/or corrosive elements. Many industry participants are implementing more rigorous maintenance, retrofit, and recertification programs for equipment with long useful lives, which we believe will increase the reliance upon and demand for our advanced compression system controls.

Relative to traditional fuels, unconventional natural gas resources contained in shale and tight formations have significant initial production decline rates which necessitate increased drilling activity and compression to maintain production levels. The decline rate measures the reduction in production levels of a well over the course of its life. Typically an exponential curve, the steepness of the decline rate varies according to a number of factors, including general reservoir conditions. Historically, unconventional resources have declined at higher rates than conventional resources. Correspondingly, average well-head pressure falls sharply in the first year and continues to decrease over the life of a well. As a result, compression systems are critical to natural gas extraction from unconventional reserves as early as twelve months after these wells are drilled and play an essential role in transporting gas to downstream production and storage facilities. This trend in decline rates is driving increased compression demand and will benefit companies, such as ourselves, that provide the critical technologies required to operate these systems. Gas lifts, which are predominantly used to artificially lift oil by introducing high pressure compressed gas into the outlet tube of the well, are also increasing in prevalence and resulting in greater compression demand.

Shale Play Production Decline Rates

Average Pressure by Year (psi)

Source     Spears and Associates

Accelerating Shift to Natural Gas Vehicles

Due to its current and expected long-term benefits, natural gas has become an important and attractive transportation fuel. According to NGV Global, there are approximately 16.7 million NGVs in operation globally. These vehicles include medium- and heavy-duty commercial vehicles, off-highway trucks, buses, light-duty vehicles, locomotives, marine vessels, and recreational vehicles. As natural gas has become increasingly attractive as a low-cost fuel source and government regulators have implemented stringent emissions regulations, the global population of NGVs has increased by more than seven-fold since 2002 according to NGV Global. Commercial NGVs are experiencing adoption rates significantly higher than other vehicle classes due to high annual fuel consumption and the resulting substantial fuel cost per-mile advantages of natural gas. Furthermore,

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the expansion of the commercial NGV market is simultaneously being supported by a rapidly growing commercial refueling infrastructure in many regions around the world. According to Navigant, approximately 170,000 natural gas trucks and buses were sold globally in 2013.

China and other Asian markets continue to lead the world in commercial NGV adoption. This growth is driven predominantly by the operating cost advantage of natural gas over diesel. We estimate the payback period of a commercial NGV in China to be less than one year based on an $8,000 equipment upcharge cost and other assumptions as outlined in the payback analysis below. Air quality concerns in China are also driving large scale adoption of natural gas trucks and buses in most major cities in order to decrease smog levels and improve visibility. Furthermore, natural gas is strategically advantageous compared to diesel because of China’s and nearby Russia’s large domestic natural gas reserves. The number of NGVs in China across all vehicle classes has grown from 36,000 in 2002 to approximately 1.6 million in 2012, at a CAGR of 45.9%, according to NGV Global.

The primary benefits of commercial NGV adoption are derived from the lifetime cost advantages generated by the differential between natural gas and diesel fuel prices. According to a recent U.S. Department of Energy Alternative Fuel Price Report, during January 2014 the national average pump price of diesel was $3.49 per gasoline gallon equivalent (GGE) compared to $2.09 per GGE for compressed natural gas. A sustained price differential would create significant lifetime fuel savings, especially for high-use engines, which offset the initial incremental costs associated with purchasing vehicles that utilize natural gas fuel. For medium- and heavy-duty commercial vehicles, we estimate the economic payback period for the incremental cost of a natural gas engine system to range from one to three years, depending on the specific vehicle and usage patterns. The annual cost savings for companies operating large commercial fleets could be significant. For instance, we believe that the annual cost savings for a commercial vehicle fleet of 1,000 class-8 trucks in regional haul usage could be several million dollars based on the data set forth in the chart below.

Indicative Commercial Vehicle Fuel Payback Analysis

	U.S.						China
	Diesel			Natural Gas			Diesel			Natural Gas
Average Miles Driven Per Year(1)		100,000						100,000
Average Miles per Gallon Per Year(1)		7.0						7.0
Natural Gas Engine Efficiency(2)					90	%					90	%
Gallons of Diesel Equivalent Consumed Per Year		14,286			15,873			14,286			15,873
Diesel Cost per gallon(1)	$	4.00					$	4.50
Natural Gas Cost ($/mmbtu)(1)				$	2.89
Estimated processing costs and taxes ($/DGE)(2)				$	2.04
Natural Gas “Pump Price” ($/DGE)(3)				$	2.44					$	2.51
Diesel Exhaust Fluid (DEF) as a % of diesel(2)		2.50	%					2.50	%
Annual DEF Gallons		357						357
Annual DEF Cost(2)	$	2.40					$	2.40
Annual Diesel Particulate Filter (DPF) Maintenance Cost(2)	$	275					$	50
Annual Operating Cost	$	58,275		$	38,752		$	65,193		$	39,841
Annual Cost Savings				$	19,523					$	25,352
Net Equipment Upcharge(1)				$	35,000					$	8,000
Payback Period
Years					1.79						0.32
Months					22						4

Notes:    * Analysis based on methodology and payback calculator from Americas Commercial Transportation Research Co., LLC, or ACT Research. This analysis is presented for informational purposes only and does not purport to include all key variables. While we have used assumptions and inputs that we believe are reasonable, any changes in the assumptions and inputs used could materially change the payback analysis.

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              1. Key inputs used are based on assumptions in the ACT Research report dated August 2012, or the ACT report; China diesel cost per gallon is based on publicly available Chinese market information.

              2. Key assumptions used are based on data used in the ACT report; China DPF maintenance cost is based on management estimate.

              3. Natural Gas DGE is obtained by dividing natural gas cost/mmbtu by 7.2, as set out in the ACT report; China natural gas pump price is based on publicly available Chinese market information.

According to ACT Research, natural gas could power up to 50% of Class 8 commercial vehicles produced for the U.S. market by 2025, up from 6% in 2013, representing a new Class 8 commercial vehicle sales CAGR of approximately 19% through 2025. In the U.S., we estimate that approximately 50% of new transit buses and refuse trucks are fueled by natural gas. Examples of fleets utilizing NGVs include UPS, Lowe’s, Kroger, FedEx, Procter & Gamble, Schneider, and Ryder. Waste Management currently operates 50 refueling stations and more than 3,000 heavy-duty natural gas trucks, and is planning to upgrade its entire fleet of 18,000 refuse collection vehicles to natural gas operation. With increased adoption and related volumes, we believe the incremental cost of commercial NGVs will decline due to improved economies of scale further driving reductions in the economic payback period and increases in return on investment (ROI) for commercial vehicle operators.

Expanding Natural Gas Refueling Infrastructure

One historical barrier to the adoption of NGVs has been a lack of broad-based refueling infrastructure. This limitation is being addressed through aggressive station buildout in numerous geographies. China is a leader in the buildout of NGV refueling with a network of almost 4,900 refueling stations in 2013, and the number of refueling stations is expected to grow to about 6,000 refueling stations by the end of 2014. In the U.S., natural gas refueling infrastructure has undergone significant growth as well. Since 2010, refueling stations have increased by over 50% to 1,344 nationwide. New public stations were constructed at a rate of approximately 3.4 per week in 2013, compared to a rate of 1.4 in 2010. The refueling station infrastructure continues to be developed across major U.S. shipping corridors to service national fleets of heavy commercial vehicles. While government subsidies exist in some foreign markets, the U.S. NGV refueling station market remains subsidy free and growth is being driven by private companies such as Clean Energy Fuels, Questar Fueling, TruStar Energy, Shell Oil Products U.S., Love’s Travel Stops, Blu LNG, Prometheus Energy, and Kwik Trip.

U.S. Natural Gas Refueling Infrastructure

Source     U.S. Department of Energy

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Given the patterns of U.S. freight tonnage, we expect the current pace of natural gas refueling infrastructure construction to quickly accommodate higher volumes of commercial NGVs. Several important routes carry the bulk of freight traffic nationwide. Major truck corridors with the heaviest traffic are primarily located along several large interstate highways in the Eastern portion of the country, on the West Coast, and along several large East-West routes. We believe completing refueling infrastructure along these important corridors could capture the majority of the nation’s freight volume.

Stringent Emissions Regulations

In addition to economic and geopolitical considerations, the growth in NGVs has been supported by favorable regulatory trends. Increasingly stringent regulations are driving demand for technologies that make engines more efficient with lower emissions output. Electronic engine management systems are a critical requirement for ensuring compliance with the latest regulations.

Concerns regarding climate change and other environmental considerations have led to implementation of laws and regulations that restrict, cap, or tax emissions in the vehicle market and throughout other industries. While emission standards vary significantly around the world, such standards have become increasingly more stringent. Over the last ten years in particular, there has been a significant increase in regulation of commercial on-highway and off-highway engine emissions. Industrial OEMs have also experienced pressure to redesign their engines to address these emission regulations, as products that are unable to meet new standards cannot be sold in the marketplace. However, we believe few suppliers to commercial NGV OEMs and industrial OEMs have been capable of providing, or are willing to make the investments necessary to provide, engine control system products that economically meet the new EPA and CARB requirements.

Under the Clean Air Act, the EPA regulates exhaust emissions of all new engines that enter commerce in the U.S. In 2004, the EPA approved regulations for the phase-in of Tier 4 emission standards which significantly reduced permitted levels of hydrocarbons, nitrogen oxides, and particulate matter. Just as this Tier 4 phase-in concludes in 2015, the EPA has begun implementing a new wave of standards in 2014 regulating CO₂ emissions. This pattern of increasingly stringent regulations constantly escalates the demands on engine control technology. Our focus on natural gas engines gives us an inherent advantage over more common hydrocarbon fuels in meeting these challenges. For example, natural gas engines reduce greenhouse gases by up to 26% compared to gasoline engines according to the U.S. DOE, and, unlike diesel engines, they generate little particulate matter.

Countries outside of the U.S. have historically adopted emission regulations aligned with those of the U.S., and it is anticipated that regulations comparable to current and future EPA and CARB emission regulations will continue to be implemented internationally. For example, policies in Europe generally referred to as Euro I, II, III, IV, V, and VI regulations limit tailpipe emissions of commercial vehicles. Similar to various stages of regulation in the U.S. over the years, these regulations in Europe call for comparable reductions in emissions of hydrocarbons, nitrogen oxide, and particulate matter.

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Increasingly Stringent Euro Standards

% of Euro I Levels

Source     European Commission

Emissions standards similar to the Euro standards have been adopted by India, China, Argentina, and Brazil. For example, China is implementing regulations similar to Euro IV—referred to as State Standard IV by the Chinese government—for all diesel commercial vehicles. Beijing also currently requires many elements of the Euro V standard for new vehicles and all commercial NGVs. Beijing, Shanghai, and the Pearl River Delta area are all expected to phase-in additional elements of Euro V throughout 2014. Nationwide implementation of the full State Standard V regulation in China for all diesel engines is expected between 2015 and 2017. India has implemented emissions standards similar to European standards in Delhi and its ten largest cities, and nationwide implementation is expected to follow within the next few years. As foreign jurisdictions continue to adopt emission regulations consistent with those of the U.S. and the European Union, it is expected that the international commercial on-highway and industrial engine OEM market will experience similar pressures to use advanced technology engine control systems.

Emission regulations do not just impact vehicles. Natural gas compression and other stationary and industrial engine applications have come under stringent regulations requiring the same level of electronic engine management sophistication as commercial NGVs. Our EICS^™ system was specifically designed to meet these challenges.

Competitive Strengths

We believe we have a number of competitive strengths that differentiate us, including:

Leading Provider of Mission-Critical Digital Control Solutions for Natural Gas Engines. We are a leading provider of digital control systems for gaseous fuel engines and have an installed base of over one million engine control systems globally. In addition, we are a leading provider of electronic engine control systems for commercial natural gas powered trucks and buses with approximately 200,000 systems deployed, and one of the leading providers of advanced controls for the natural gas compression market. Our EControls^® and Murphy^® brands are recognized for providing innovative, ruggedized, integrated turnkey solutions that deliver consistent and reliable performance for engine-driven equipment operating on a variety of gaseous fuels. Our solutions represent a small portion of the overall cost of the end-use application, but are essential and integral to system functionality and operating performance. We are a preferred partner for global OEMs and end users across a wide variety of high-growth markets, applications, and geographies. While ultimately aided by powerful trends

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in the natural gas sector, we believe that our broad product portfolio and global reach reduce our dependence on any particular market or customer.

Aligned with Global Industry Trends to Drive Growth. We are strategically positioned to benefit from compelling global trends in each of our primary end markets:

• Expected significant global increase in the production of and demand for natural gas supported by attractive cost, environmental, and geopolitical benefits relative to other hydrocarbon fuels;

• Anticipated growth in demand for advanced natural gas compression system controls in oil and gas applications driven by increased shale and tight formation production in the U.S. and globally;

• Global adoption of commercial NGVs due to significant economic and environmental advantages:

• Increasingly stringent global emissions regulations driving demand for advanced engine technologies that enable lower emissions, greater fuel economy, and regulatory compliance; and

• Widespread adoption of advanced digital control solutions which integrate technologies such as high-resolution displays, highly configurable software, GPS navigation, telematics, vehicle management systems, and diagnostics to improve engine safety, energy efficiency, performance, and reliability with less dependence on operator skill.

We believe each of these trends will continue to create significant demand for our products.

Innovative Product Design Driven by Deep Application Knowledge. We are a recognized leader in designing and developing innovative and sophisticated new products within our markets. Over the past three years, we have developed and launched 55 new products, which had an average gross margin of approximately 50% for the year ended December 31, 2013. Our intellectual property portfolio includes millions of lines of software source code, proprietary manufacturing techniques and, as of June 30, 2014, 46 issued and pending patents and patent applications. Driven by deep application knowledge, we deliver forward-thinking solutions ahead of our customers’ needs to create sustainable competitive advantages. Our application engineering expertise and know-how enables us to deliver optimized solutions combining proprietary software platforms and customized hardware. Our design and engineering efforts are led by an in-house team of 160 full-time engineers across all disciplines with strong product development and application expertise in gaseous fuel engines and engine-driven equipment. Our product development strategy is focused on risk compression, design for reliability, and development speed. This enables us to shorten time-to-market and maximize return on investment early in the product’s lifecycle. This successful approach is supplemented by our design reuse philosophy in which new products are built within the scaffolding of common platforms composed of well-tested designs and core components. We utilize standard products and designs with high software configurability and modular hardware to enable a solution that can be rapidly customized by us or our customers.

Entrenched Customer Relationships Built on Technical Collaboration. Our commitment to technological innovation, proven product performance, and superior service has enabled us to develop longstanding, collaborative relationships with a broad group of more than 4,000 customers globally. These customers represent a diverse group of OEMs and distributors located across the globe including Exterran, Power Solutions, RES Energy Solutions, Yuchai, John Deere, Caterpillar, Volvo Penta, and Wuxi Faw. As a result of our application and engineering expertise, we have a deep and unique understanding of our customers’ gaseous fuel engines and engine-driven equipment, and we are often positioned as the sole-source solution provider to our customers. Due to the long engine development lead times and embedded nature of many of our products, we collaborate closely throughout the design and development phase of our customers’ products. For example, a typical commercial NGV engine development program with one of our OEM customers may span two or more years resulting in an emissions certified package that is specific to the combination of their engine and our electronic controls. Throughout that process, many of our customers rely on us to solve engineering problems related specifically to their engines. As a result, we often have a proprietary position on the engine platform which creates high switching costs with long replacement lead times. We continually seek to strengthen our relationships by working ahead of and with our

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customers to develop new solutions that meet their dynamic application requirements. We believe this approach has been a key driver of our 52% aggregate sales growth from our top ten customers from 2011 to 2013.

Established Global Footprint. We maintain a manufacturing, sales, and service infrastructure presence on three continents, enabling us to effectively serve our worldwide customer base. In 2013, approximately 71% of our net sales were generated in North and South America, 24% in Asia and 5% in Europe, the Middle East, and Africa. We believe we have developed strong trusting relationships with local customers and suppliers based on our local manufacturing and sales presence, track record of performance, and brand recognition. In 2015, we plan to open our state-of-the-art China Enovation Center, co-located with our manufacturing operations in Hangzhou, China, that will provide additional technical support as well as engine calibration and certification services to our customers in China, India, South Korea, and Japan. We provide natural gas engine control systems to several of the largest commercial NGV engine manufacturers in China—one of the largest and fastest growing commercial NGV markets.

Strong Financial Performance with Attractive Cash Flow. We have demonstrated the strength of our platform through robust growth and cash flow generation. We grew revenues from $148 million in 2010 to $256 million in 2013. This organic growth has been driven by our new product introductions, geographic expansion, acquisition of new customers, and increasing market share, as well as broader market trends such as the proliferation of commercial NGVs and the energy infrastructure buildout. In addition, we estimate that we generate approximately one-third of our revenues from the Energy market from sales of replacement parts and services, which provides an attractive margin and recurring revenue stream. As evidence of our engineering leadership and compelling value proposition, we generated gross margin of 42% in 2013, an increase of more than 477 basis points since 2010, due to disciplined design reuse, modular hardware and software concepts, high-level graphical software configurability, integrated global sourcing, process improvements, strategic value-based pricing, and an intentional focus on a more favorable customer and product sales mix. Our business historically has required low capital expenditures, which have averaged less than 3% of revenue between 2010 and 2013. In 2013, we generated Adjusted EBITDA of $47 million, net income of $40 million, and net cash provided by operations of $37 million before distributions for taxes.

Growth Strategy

We believe that we are well positioned to extend our market leading position in sophisticated digital engine control systems for gaseous fuel engines and engine-driven equipment and capitalize on positive global trends. The principal elements of our growth strategy are as follows:

Accelerate Product Innovation and Expansion. We distinguish ourselves from our competitors with our proprietary technology and strong engineering expertise. We are committed to driving our level of technological sophistication and the pace of product innovation. For example, since 2002, we have successfully developed four generations of innovative gaseous engine control platforms and fuel metering technology, with each new generation advancing fuel economy, decreasing emissions, and improving reliability. Our product development strategy, which is focused on risk compression, design for reliability, and development speed, enables us to shorten time-to-market and maximize return on investment early in a product’s lifecycle. This successful approach is supplemented by our design reuse philosophy in which new products are built within the scaffolding of common platforms composed of well-tested designs and core components. We plan to continue to leverage our core technology platforms across many different products and applications targeting our served markets to maximize the impact of our research, development, and engineering investments.

Increase Product Sales and Services with Existing Customers. Our deep relationships with our existing customers, as well as our strong track record of developing innovative and forward-thinking products and solutions, have enabled us to systematically increase sales and margins. We believe this approach has been a key driver of our 52% aggregate sales growth from our top ten customers from 2011 to 2013. As a trusted incumbent solution provider with a wide range of customers across numerous markets, we have numerous cross-selling opportunities in which we leverage our existing technologies and respective customer relationships for incremental sales growth. For example, we have targeted our customers in the industrial mobile market (e.g., forklifts) and industrial stationary

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market (e.g., generator sets, pumps) for future engine control development programs. We are also executing a series of strategies to grow sales of our highly successful EICS^TM product and its associated replacement parts through wider market penetration. For instance, two leading manufacturers of engines for natural gas compressors are incorporating EICS^™ into some of their products as an OEM or distributor offering.

Develop New Customer Relationships in the Fast Growing Vehicle Market. We are expanding our customer base by developing new OEM relationships in our target markets. We are working with leading North American heavy-duty commercial vehicle manufacturers and global engine OEMs to leverage our technological and engineering capabilities on their new engine platforms. In addition to engine control initiatives, we recently secured multi-year agreements with two significant OEM customers for hydraulic control system products and off-highway recreational vehicle displays. These collaborative product development efforts have deepened our customer intimacy and provided additional long term follow-on opportunities. We believe that our global manufacturing, sales, service infrastructure, and partnerships with customers, position us to capture market share in both mature and high-growth markets.

Drive Continuous Improvement in Manufacturing and Operations. We believe that our strong manufacturing, engineering, and advanced production capabilities, anchored by our focus on efficiency and quality, are core elements of our financial strength. We intend to increase these advantages by leveraging our proprietary Enovation Controls Operating System (ECOS) to enable high flexibility and superior quality in our manufacturing processes. This system allows for the implementation of continuous improvement initiatives that are designed to support significant operating efficiencies and strong profitability. ECOS improvements include a unified, data-driven global strategy to proactively manage cost, standardized manufacturing processes, and labor optimization processes. Our continuous improvement initiatives are evaluated and implemented by cross-functional steering committees that drive Lean Six Sigma projects as well as efforts to continuously improve gross margin.

Selectively Pursue Strategic Acquisitions and Alliances. Our industry leadership makes us an ideal platform to acquire or partner with companies in our target markets. We provide complete engine control system solutions across a wide range of applications and will continue to explore synergistic acquisition opportunities which enhance our position in our served markets. We believe that a number of acquisition opportunities exist where we can extend and further leverage our platforms, strategic competitive advantages, and core competencies. We will seek strategic transactions that extend our presence into new geographies or applications, expand our customer base and/or add new products or technologies to our existing platform solutions.

Our Target Markets and Product Solutions

Our technological expertise and operating history in engine controls forms the basis for all of our hardware and software product offerings. Our solutions include a variety of engine control and monitoring systems, sensors, displays, and panels that are used in natural gas driven engines across several industries. Through our EControls^® and Murphy^® brands, we target two primary end markets: Vehicles and Energy.

Vehicle

In the Vehicle market, we design, engineer, and manufacture control and fuel injection systems for engines utilizing gaseous fuels such as CNG, LNG, and LPG or propane as well as liquid fuels such as gasoline or diesel fuel. We are a leading provider of electronic engine control systems for commercial natural gas powered trucks and buses with approximately 200,000 systems deployed. We are well positioned with significant market share in the rapidly growing Chinese commercial NGV market in addition to a leading global position in industrial emissions certified spark-ignited gaseous engine controls. Engines operating with our advanced EControls^® branded engine control technology meet and exceed the requirements of all current global emissions standards and fuel efficiency regulations. We are strategically positioned to benefit directly from compelling trends that we believe will continue to drive sustainable and profitable growth for our company’s engineered solutions:

• Increasingly stringent emissions standards in many regions;

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• Natural gas market dynamics and growth; and

• Increasing engine complexity driving the need for sophisticated electronic control solutions.

We target the growing Vehicle market through our established EControls^® brand as a leading electronic engine control platform provider for commercial natural gas powered trucks and buses while serving as a qualified calibration and emission certification resource for our products on our customer’s engines. Our key growth initiatives across this market are driven by our strategies for commercial NGVs, gaseous industrial engine control systems, hydraulic controls, and sophisticated vehicle display, diagnostic, navigation, and engine safety systems. We intend to increase our market footprint through the integration of our engine control components into new natural gas engine platforms. We also serve many industrial mobile and stationary applications with our engine control systems. We are often positioned as the sole-source provider to many of our top customers and we develop proprietary engine control solutions for their new engine platforms. We integrate products and technologies into our solutions that connect operators to vehicles through graphical displays, telematics, mobile device integration, and electro-hydraulic controls. Representative customers in the Vehicle market include Caterpillar, CNHTC (Sinotruk), Cummins, Hino, John Deere, Kubota, NACCO, Polaris, Power Solutions, and Yuchai.

Our Vehicle engine controls are used in a variety of applications:

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We provide these engineered products for total system control across the engine and vehicle subsystems. In addition, we are positioned as the primary or sole-source spark-ignited fuel injection control provider to many of our top customers in commercial and industrial vehicle applications. Our products are essential to the functionality of a modern electronically controlled gaseous fuel engine.

During the six months ended June 30, 2014 and the fiscal years ended December 31, 2013, 2012, 2011, 2010, and 2009, revenue of $57 million, $113 million, $95 million, $82 million, $64 million, and $26 million, respectively, related to our sales into the Vehicle market.

Energy

In the Energy market, through our Murphy^® branded products, we design, engineer, and manufacture a range of sophisticated products for the monitoring and control of mission-critical equipment including natural gas compressors, generators, pumps, and other engine-driven systems used in the extraction, transmission, and storage of natural gas. We are one of the leading providers of advanced controls for the natural gas compression market. Our branded products include integrated engine management systems, custom-engineered and programmable compressor controls, control end-devices (including valves and sensors), and advanced ruggedized displays. We believe our solutions lead the industry with superior quality, cutting-edge technology, and dedicated customer support. We are positioned to capitalize on key trends that we believe will drive growth and profitability:

• Natural gas is becoming the preferred hydrocarbon fuel;

• Access to abundant natural gas enabled by modern production technologies;

• Increasingly stringent emissions standards in many regions;

• Electronics and software enabling optimal machine operation; and

• Increasing demand for machine information and advanced diagnostics through a user-friendly display interface.

We build products targeted at the Energy market to provide critical control and protection functionality for gas compression and other engine-driven skid systems. Gas compression skids incorporate a natural gas fueled engine as the prime mover, a compressor, a large cooling package, a supervisory control panel, and various gas processing support equipment such as separators, scrubbers, oil reservoirs, and control valves. We also provide control panel solutions for fracking rigs, dewatering pumps, distributed power generation, and other engine-driven applications with adjacent control technology requirements.

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Engine management solutions are an important part of our offering for the Energy market. Our new EICS^TM product integrates three critical engine functions—ignition control, air-fuel ratio control, and speed governing—into a single pre-configured emissions compliant system that allows for easy installation. Due to the system’s success and broad end-customer adoption, two leading manufacturers of engines for natural gas compressors are incorporating EICS^™ into some of their products as an OEM or distributor offering. Since the launch of the EICS^TM product in 2009, we have sold approximately 3,500 systems, and are currently being used or being evaluated by multiple natural gas engine manufacturers.

Our products are designed to allow our customers to reliably achieve emissions compliance while reducing the total cost of equipment ownership. Our products enable advanced operational advantages such as predictive maintenance and remote compressor trouble-shooting via telematics. Our customer base in the Energy market consists of compression system integrators, distributors of natural gas compressors, and “Murphy Master Distributors” (which are a subset of our authorized independent third-party distributors). Representative customers include Exterran, AG Equipment, MidCon Compression, S&R Compression, and NGSG. For 13 of our top 20 customers in the Energy market, we are the primary integrated control system provider. To stay ahead of our customer’s needs and sustain our growth, we maintain a constant stream of new product launches to enhance the operational effectiveness of compressor skids, complement earlier product launches with next-generation technology, and access growing markets like CNG refueling stations that support the rapidly expanding NGV refueling infrastructure in the U.S.

During the six months ended June 30, 2014 and the fiscal years ended December 31, 2013, 2012, 2011, 2010, and 2009, revenue of $85 million, $143 million, $123 million, $112 million, $84 million, and $53 million, respectively, related to sales into the Energy market.

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Research and Development

Our Technology Advantage

Our current product portfolio is built on successive generations of technology. We believe each generation of our technology has been a commercial success in its own right, and each generation has built upon the success of the previous generation through increased performance, improved durability, lower manufacturing costs, and expanded capability. We believe that the level of refinement achieved over many years through this disciplined process of technology development and deployment provides a sustainable competitive advantage that cannot easily be duplicated.

Our experience with volume production and wide customer deployment of each generation of engine technologies has given us deep application knowledge and expertise. This application knowledge is the basis for what we call our “customer-leading” innovation strategy, which drives our technology advantage forward. By continuing to leverage our experience and expertise to build successive generations of engine technology products and solutions, we reinforce our leadership in the industry and our relationship with our customers. Our leadership is further augmented by our ability to stay ahead of increasingly stringent emissions regulations, higher fuel efficiency standards, and increasing product life cycles. Our strategy is to stay multiple years ahead of these industry trends and our customer’s demand for products that can meet these challenges. This “customer-leading” innovation cycle is at the core of our technology strategy.

For example, all three of our core technologies in our Vehicle market (our engine control modules, our gaseous fuel-injection hardware, and our advanced displays) are in their fourth generation of evolution. We are actively engineering our fifth generation of these technologies to meet future industry requirements. Since each generation is built on the success of the previous one, our high engineering velocity is a competitive advantage over a potential competitor attempting to enter our market. This disciplined engineering approach has resulted in our successful track record to date, and is at the heart of our growth strategy.

Our R&D Capabilities

Our approach to new product development is based on a structured system of design reuse, modular hardware and software, and high-level software configurability. We begin with core design elements that can be quickly reused to create new products. Through the disciplined use of these well-established and proven design elements, we create new products with a low risk of encountering unexpected results that force unplanned iterations. Once we have created a new platform product based on these reusable elements, we can rapidly release a wide array of variations of the base platform that meet many different customers’ needs. While our competitors often attempt to drive customers to “standard offerings,” we can use our flexibility to quickly release a variation of a platform product that specifically targets the customer’s needs and provides them with a customized solution. We are also able to leverage these platforms of design to quickly enter new areas of adjacent technology by rapidly developing products for new markets and applications as opportunities arise.

Our disciplined development process allows us to rapidly develop products while enabling high reliability and quality. Each of our product development efforts follow a disciplined phase-gate process based on leading industry standards. The emphasis of the process is to study and rapidly prototype the new and unknown elements of the design as early in the development cycle as possible. We intentionally identify and study the risk of new or unknown design elements before committing large amounts of time and development cost to the overall program. We often identify and eliminate high risk challenges in a new product design within the first month of a program. By eliminating a majority of the risk early, the later and more costly phases of the development program can proceed smoothly and on-schedule.

We have invested in the equipment and facilities necessary to rapidly develop products. To support our process of eliminating risk early in a project, we have the in-house tools and equipment necessary to rapidly prototype working samples of new product designs. It is common for us to fabricate a working sample of a new

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product concept within days. We also have the in-house equipment to perform the majority of product design validation testing needed to ensure high quality products in a harsh operating environment. These facilities include eight in-house engine dynamometers and advanced emissions analysis equipment, which we use for both new product testing and overall engine performance calibration and testing with our products.

Our product development teams are structured to nurture the creation of industry leading experts within a defined application and technology space. We have built multi-disciplined teams with high focus on their product areas while maintaining close relationships with our customers and the industry in general in order to deepen our application knowledge and industry leading expertise. Our customers often rely upon these teams as their trusted experts and lean on them for leadership and advice in their applications.

We have 5 multi-disciplined product design teams, 4 application engineering teams, and 3 engineering support teams for a total of 160 engineering staff. Our application and product engineering teams are primarily located in the U.S. and China.

Our research and development expenditures for fiscal years 2013, 2012, and 2011 were $24 million, $20 million, and $17 million, respectively.

Manufacturing

We generally seek to localize our product manufacturing and support to our customer base around the world. We currently operate five manufacturing and distribution centers in the U.S., Europe, and Asia. In 2015, we plan to open our state-of-the-art China Enovation Center, co-located with our manufacturing operations in Hangzhou, China, that will provide additional technical and support services for our market customers in China, India, South Korea, and Japan and will include sophisticated engine calibration and certification capabilities. This facility will also contain six engine dynamometers and advanced emissions calibration equipment. We drive operational excellence through advanced manufacturing techniques, leading industry management practices, and global supply chain optimization.

Our operational strategy is to implement redundancy and flexibility in the manufacturing of our products for the global Energy and Vehicle markets. Our primary manufacturing facilities are located in Tulsa, Oklahoma and San Antonio, Texas, and consist of approximately 295,000 square feet of usable manufacturing space in two plants. We also have established manufacturing and engineering facilities in Rosenberg, Texas; Birmingham, U.K.; and Hangzhou, China. Our facilities are designed and located globally to respond to customer orders within competitive lead times and to minimize market entry costs, while taking full advantage of our global supply chain.

Suppliers

We aggregate our product sourcing efforts across our large and diverse customer base and across industry categories, capitalizing on volume, economies of scale and global supply opportunities. We have established strong, long-term relationships with our suppliers. During 2013, we purchased approximately $108 million of materials and components from outside suppliers. Our primary purchases from outside vendors include metal stampings, electronic components, magnets, and die castings, among others. Most of our raw materials are available from multiple sources of supply. We carefully screen each of our suppliers and maintain high standards for quality, technical capabilities, and on-time delivery. We source products from a global base of vendors, ensuring that we have the most cost-effective mix of domestic and internationally-sourced products, and enabling us to enhance profitability through supply chain management. We have limited our exposure to increases in input costs through mechanisms such as flexible sourcing, contractual raw material cost variance allowances, and the ability to pass through costs to our customers. During 2013, no single supplier accounted for more than 5% of total cost of goods sold and the top ten suppliers accounted for less than 30% of cost of goods sold.

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Sales and Marketing

We deliver our solutions directly to global engine and vehicle manufacturers, engine and equipment distributors, natural gas compressor packagers, Murphy Master Distributors, as well as independent distributors globally. We market these solutions throughout the world primarily through direct sales personnel and independent sales representatives.

Our professional, highly trained sales force is well equipped to solve the technical and complex challenges facing our customers through the application of our products. Our sales representatives are assigned to customers and products within our primary end markets, Vehicles and Energy, and have developed a highly specialized knowledge of our solution set for customers within their respective markets. Our sales team works closely with our customers in each market to provide highly technical and customized solutions, in coordination with our engineering and product development teams.

We have a direct sales force in the U.S., Europe, China, South Korea, India, and Mexico and we utilize select independent sales representatives and distributors to market our products and services in certain other foreign countries that we serve. In addition, we have a value-added exclusive partnership with AMICO, our marketing and support consultant in China. We believe that our experience and growing presence in China along with our partner’s relationships and knowledge of local customs is a competitive benefit for us. Over the last twelve months, we have expanded our in-country management, engineering, sales, and technical support teams in China.

For the years ended December 31, 2013, 2012, and 2011, sales to our top ten customers accounted for approximately 49%, 47%, and 46%, respectively, of our revenue, and in 2013, 2012, and 2011, one customer, Guangxi Yuchai Machinery Group Co., Ltd., accounted for 12%, 13%, and 11%, respectively, of our revenue.

Competition

We believe we are a leading provider of sophisticated digital control systems for gaseous fuel engines and engine-driven equipment. The market for our solutions and certain components to our solutions is intensely competitive, subject to rapid change, and sensitive to new product introductions and changes in technical requirements. Competition in our markets may become more intense as additional companies enter them and as new technologies are adopted.

In the Vehicle market, our gaseous engine control solutions compete in markets worldwide based on technology, emissions capability, durability, quality, cost, manufacturing capabilities, and the technical expertise of our engineering support team. We believe that we have a strong position in each of these categories, and we continue to invest in strengthening these key elements. In this market, our primary competitors are Woodward and Fuel System Solutions, and we also compete to a lesser extent with Westport Innovations. The overall Vehicle market is fragmented due to the variation in content among our various system offerings and product solutions.

We design our proprietary gaseous fuel engine control solution using spark-ignited engine technology. Spark-ignited engines are the dominant technology used in the marketplace today. Third-party engine control competitors, such as Woodward, and in-house engine designs, such as those offered by Cummins, are also based on spark-ignited engine technology. An alternative to spark-ignited technology is micro-pilot diesel ignition. This type of system is available from Westport Innovations (distinct from the Cummins-Westport JV) and is commercially referred to as HPDI. However, gaseous fuel engine control solutions based on HPDI technology have had limited penetration as an alternative technology. According to Westport Innovation’s most recent public information, there have only been approximately 1,000 gaseous fuel commercial vehicle engines sold by Westport Innovation based on HPDI technology.

In the Energy market, we are a key supplier of integrated engine and application controls for engine-driven natural gas compressors, power units, pumps, and generators. We believe we have a strong position supported by

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our comprehensive suite of integrated products, deep application knowledge and reputation. In this market, our primary competitor is Hoerbiger Engine Solutions (Altronic). We know of no competitor that offers a complete integrated solution with respect to these controls in this market that is similar to ours. The Energy market is relatively concentrated in terms of customer base, engine control options, and geography.

Within our primary markets, we compete with a range of companies that offer certain individual components of our full system solutions. The components of our overall systems most commonly include displays, panels, sensors, valves, and other end-devices. These competitors include Wachendorff, LOFA, Controls Inc, EMIT and Kenco.

Many of our customers are global manufacturers with in-house design and development capability. For certain applications in the Vehicle and Energy markets, such as engine control system components, engine control software, and natural gas compression control systems, we do compete, or potentially could compete, with our current and potential customers’ internal design capability. In these applications our challenge is substantially the same as when we are compared against any other outside competitor in that we compete based on the overall value of our products and solutions.

Our History and Values

Company History

Enovation Controls was created through the merger of FW Murphy and EControls in 2009. Our company combines FW Murphy’s wide-ranging application control capabilities with EControls’ extensive engine control expertise. We believe this uniquely positions us to provide a complete solution approach for engine control, protection, and monitoring across our served markets. The Murphy^® brand has 75 years of application expertise and solution innovation with an established global infrastructure. The EControls^® brand has 20 years of proven engineering expertise and delivers leading-edge technologies for gaseous engine control systems.

Our primary motivations for the merger were similar underlying technologies in our products and solutions, a high number of common customers, uniform manufacturing processes, and almost no product overlap. The merger created an opportunity for us to offer our common customers a broader integrated solution for engine control, protection and monitoring while simultaneously combining resources across the engineering, manufacturing, and sales functions. Capitalizing upon the combined companies’ engineering and innovation expertise, ability to deliver complete system solutions, and manufacturing efficiency, We have successfully grown our business across each of our markets and believe we are well positioned for future success.

FW Murphy, founded in 1939, was created when Frank W. “Pat” Murphy developed innovative mechanical solutions to protect engines from various failure modes. FW Murphy grew to become a global provider of electronic systems for visible, high-touch digital application control and display solutions with an emphasis on compression controls used in the production of natural gas. EControls was founded in 1994 with a focus on providing advanced control solutions for spark-ignited engines and a core philosophy of partnering with its customers.

Our Core Values

Enovation Controls takes great pride in providing employees with a challenging and enjoyable work experience. We rely on five core values as building blocks for our success:

• Customer Focus: We are driven by customer satisfaction and service. Our responsibility is to understand our external and internal customers’ needs, provide timely solutions, and fulfill our commitments. We embrace a culture of humility, which we believe in turn ensures the highest level of customer satisfaction.

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• Ethics: We are honest and fair with employees, customers, and suppliers. This creates an environment of mutual respect and trust.

• Enovation: We encourage creativity in an environment in which new ideas build on successful platforms and continue the evolution of integrated product offerings. We believe this is how we truly delight our customers.

• Fanatical Excellence: We strive to achieve the best in all we do. Our responsibility to customers and ourselves is to adopt a sense of healthy paranoia in which quality must be proven and never assumed. We hold each other accountable to the highest standards of performance.

• Fun: We want employees, customers, and suppliers to enjoy working with our company.

Mission and Vision

Enovation Controls is focused on long-term sustainable and profitable growth and is guided by our common values, vision, mission, and competencies. Our mission is to “Climb to Prime”—the point at which the company is the strongest, most profitable and has clarity of vision. We seek to maintain an even balance between control and flexibility.

Our vision is to provide innovative and state-of-the-art products and services for comprehensive equipment management and digital control systems. We encourage and support our employees as they achieve bold and inspiring common goals in a positive and fun atmosphere. At all times, we strive to exceed the expectations of our employees, customers, and vendors to become their “Preferred Partner.”

Intellectual Property

Our business depends, in part, upon protecting our intellectual property in the technology that we develop. We rely on patents, copyrights, and a combination of software encryption, internal procedures, and nondisclosure agreements for this purpose. We apply for patent protection where we believe it will give us a competitive advantage. As of June 30, 2014 we held 25 issued U.S. patents, with an additional 19 U.S. patent applications pending as well as 2 pending international patent applications. We also have licenses to use technology owned by third parties. In addition, we own a number of trademarks that we believe are well known in our markets and represent a considerable amount of goodwill captured over many years of serving those markets.

Our U.S. patents are expected to expire at various dates between October 27, 2015 and December 8, 2030. The expiration dates of our pending U.S. patent applications, if those applications are issued as patents, are expected to be between February 2024 and May 2034. The expiration dates of our pending non-U.S. patent applications, if those applications are issued as patents, are expected to be as late as June 2032.

Although we believe that our portfolio of patents and trademarks and our licenses provide us with a competitive advantage, we do not consider the expiration or termination of any one or any group of these assets to be of such importance as to have any material or adverse effect on our business. We believe that our primary competitive advantage is based upon our collection of trade secrets, know-how, proprietary manufacturing techniques, and deep customer relationships and application knowledge. Our core products contain a large number of complex algorithms, software, electronics, and mechanical components that have been refined over many years in a confidential customer driven development process. Our processes for manufacturing these products are often similarly complex and well refined, and we believe that those processes represent a significant barrier for competitors attempting to offer a similar product. We believe our customers rely on the inherent advantage that comes from this continuous improvement in our products and processes over time. We believe that our customers also rely on us for our experience and expertise in the application of our products to meet their needs, and in many cases our expertise of a customer’s application exceeds that of the customer.

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Environmental, Health and Safety Regulation

Our operations are subject to numerous stringent and complex foreign, federal, state and local laws and regulations governing, among other things, the generation, storage, handling, use, and transportation of hazardous substances, the discharge of hazardous substances into the ground, air, or water, human health and safety and environmental protection. Failure to comply with these laws or regulations or to obtain or comply with permits may result in the assessment of administrative, civil, and criminal penalties, imposition of remedial or corrective action requirements, and the imposition of injunctions to prohibit certain activities or force future compliance. We could also be held liable for any and all consequences arising out of human exposure to hazardous substances or other environmental damage. Under certain environmental laws, we could be held responsible for all of the costs relating to any contamination at our or our predecessors’ past or present facilities and at third party waste disposal sites, even if we did not cause such contamination. We cannot assure you that our costs of complying with current and future environmental and health and safety laws, and our liabilities arising from past or future releases of, or exposure to, hazardous substances will not adversely affect our business, capital expenditures, results of operations, or financial condition.

The trend in environmental regulation has been to impose increasingly stringent restrictions and limitations on activities that may impact the environment, and thus, any changes in environmental laws and regulations or in enforcement policies that result in more stringent and costly waste handling, storage, transport, or disposal remediation requirements could have a material adverse effect on our business, operations and financial position. Moreover, accidental releases or spills of hazardous or regulated substances may occur in the course of our operations, and we cannot assure you that we will not incur significant costs and liabilities as a result of such releases or spills, including any third party claims for damage to property, natural resources, or persons.

The following is a summary of the more significant existing environmental, health and safety laws and regulations in the United States to which our business operations are subject and for which compliance may have a material adverse impact on our business capital expenditures, results of operations, or financial position.

Hazardous Substances and Waste

The Resource Conservation and Recovery Act (RCRA) and comparable state statutes, regulate the generation, transportation, treatment, storage, disposal, and cleanup of hazardous and non-hazardous wastes. In many states, the EPA delegates the administration of some or all of the provisions of RCRA to the individual states, some of which also have their own, more stringent requirements. We are required to manage the generation, transportation, storage and disposal of hazardous and non-hazardous wastes in compliance with RCRA.

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law, imposes joint and several liability, without regard to fault or legality of conduct, on classes of persons who are considered to be responsible for the release of a hazardous substance into the environment. These persons include current and former owners, lessors, and operators of the site where the release occurred, and anyone who disposed or arranged for the disposal of a hazardous substance released at the site. We currently own, lease, or operate numerous properties that have been used for manufacturing and other operations for many years. We also contract with waste removal services and landfills. These properties and the substances disposed or released on them may be subject to CERCLA, RCRA and analogous foreign, state and local laws. Under such laws, we could be required to conduct or incur significant costs in connection with the removal of previously disposed substances and wastes, remediation of contaminated property, or remedial operations to prevent future contamination. In addition, we could be subject to claims by neighboring landowners and other third-parties for personal injury and property damage allegedly caused by hazardous substances released into the environment.

Water Discharges

The Federal Water Pollution Control Act (the Clean Water Act) and analogous foreign, state and local laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil

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and other substances, into waters of the U.S. Such laws provide for administrative, civil and criminal penalties for unauthorized discharges and, together with the federal Oil Pollution Act of 1990, impose rigorous requirements for spill prevention and response planning, as well as substantial potential liability for the costs of removal, remediation, and damages in connection with any unauthorized discharges.

Air Emissions

The federal Clean Air Act and comparable foreign, state, and local laws regulate emissions of various air pollutants through air emissions permitting programs and the imposition of other emission control requirements. In addition, the EPA has developed, and continues to develop, stringent regulations governing emissions of toxic air pollutants at specified sources. Non-compliance with air permits or other requirements of the federal Clean Air Act and comparable laws and regulations can result in the imposition of administrative, civil, and criminal penalties, as well as the issuance of orders or injunctions limiting or prohibiting non-compliant operations. We are subject to the EPA’s Toxics Release Inventory (TRI) reporting requirements and to annual and semi-annual site level reporting to state departments of environmental quality (DEQ). We are dedicated to compliance with applicable laws and regulations relating to air emissions.

Climate Change

In December 2009, the EPA determined that emissions of carbon dioxide, methane and other greenhouse gases present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to warming of the earth’s atmosphere and other climatic changes. Based on these findings, the EPA has adopted regulations to restrict emissions of greenhouse gases under existing provisions of the federal Clean Air Act including rules regulating emissions of greenhouse gases from motor vehicles and certain large stationary sources. The EPA has also adopted rules requiring the annual reporting of greenhouse gas emissions from specified large greenhouse gas emission sources in the U.S., including petroleum refineries and onshore oil and natural gas production facilities.

In addition, Congress has from time to time considered adopting legislation to reduce emissions of greenhouse gases and almost one-half of the states have already taken legal measures to reduce emissions of greenhouse gases primarily through the planned development of greenhouse gas emission inventories and/or regional greenhouse gas cap and trade programs.

The adoption of legislation or regulatory programs to reduce emissions of greenhouse gases could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, to acquire emissions allowances or comply with new regulatory or reporting requirements. Any such legislation or regulatory programs could also increase the cost of consuming, and thereby reduce demand for, the oil and natural gas produced by our customers. Consequently, legislation and regulatory programs to reduce emissions of greenhouse gases could have a direct and indirect adverse effect on our business, financial condition, and results of operations. Finally, it should be noted that some scientists have concluded that increasing concentrations of greenhouse gases in the earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other climatic events. If any such effects were to occur, they could have an adverse effect on our business, financial condition, results of operations, and cash flow.

Employee Health and Safety

We are subject to a number of foreign, federal, state, and local laws and regulations, including the federal Occupational Safety and Health Act (OSHA) and comparable state statutes, establishing requirements to protect the health and safety of workers. In addition, the OSHA hazard communication standard, the EPA community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act and comparable state statutes require that information be maintained concerning hazardous materials used or produced in our operations and that this information be provided to employees, state and local government

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authorities, and the public. Substantial fines and penalties can be imposed and orders or injunctions limiting or prohibiting certain operations may be issued in connection with any failure to comply with laws and regulations relating to worker health and safety.

We also operate in non-U.S. jurisdictions, which may impose similar obligations and liabilities against us.

Employees

As of June 30, 2014, we have 1,004 employees worldwide, including 679 in operations, 160 in engineering, and 101 in sales and marketing.

Legal Proceedings

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. Such litigation may include product liability, tort, warranty, contract, workers’ compensation, and other claims. As of the date of this prospectus, we are not involved in any material legal proceedings.

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MANAGEMENT

Our Directors and Executive Officers

The following table sets forth certain information as of the date of this prospectus concerning our directors and executive officers, upon consummation of the Transactions.

Name	Age	Principal Position(s)
Frank W. Murphy III	47	Executive Chairman, Director
Patrick W. Cavanagh	61	President and Chief Executive Officer, Director
Dennis E. Bunday	63	Chief Financial Officer
Kennon Guglielmo, Ph.D.	47	Chief Technology Officer, Director
Eugene J. Bazemore Jr.	43	Vice President, Corporate Development and Investor Relations

There are no family relationships between or among any of our executive officers or directors. Set forth below is additional information concerning our executive officers and directors.

Frank W. Murphy III has served as our Executive Chairman since October 2011 and has served on the board of directors of Enovation Controls, Inc. since its inception. Mr. Murphy served as our President and Chief Executive Officer from September 2009 to October 2011. From 1998 through September 2009, Mr. Murphy served as President and Chief Executive Officer of FW Murphy, a global manufacturing company specializing in oil and gas and industrial markets worldwide. During his 23-year tenure with FW Murphy, he assisted FW Murphy with several important achievements, including the founding and management of FW Murphy Instruments (Hangzhou) Co., Ltd. while living in Shanghai, China from 2005 to 2007. Mr. Murphy currently serves on the board of directors of Fiberglass Engineering, Inc. (d/b/a Cobalt Boats) and Chesapeake Holding Company, and was previously a member of the board of directors of The F&M Bank and Trust Company. Additionally, he serves on the board of trustees at the University of Tulsa. Mr. Murphy holds a Bachelor’s degree in Personnel Administration from the University of Kansas and an M.B.A. from Southern Methodist University.

We believe Mr. Murphy is qualified to serve as a member of our board of directors due to his experience serving on other boards, the perspective and experience from his long history with us, including his extensive international business exposure, and his broad knowledge of our products and the markets we serve.

Patrick W. Cavanagh has served as our President and Chief Executive Officer since January 2013 and has served on the board of directors of Enovation Controls, Inc. since its inception. Mr. Cavanagh served as President and Chief Executive Officer of Williams Controls (NYSE: WMCO), a global manufacturer of electronic throttle controls and sensors based in Portland, Oregon that was sold to Curtiss Wright (NYSE: CW) in December 2012, from October 2004 to December 2012. Prior to joining Williams Controls, Mr. Cavanagh served as General Manager of Woodward Controls, Inc., a subsidiary of Woodward Governor Company, an independent manufacturer of engine control systems for industrial engines and turbines. From 1992 to 2003, Mr. Cavanagh served as Corporate Vice President of Knowles Electronics and General Manager of its Automotive Components Group, a producer of engine control systems, actuators and sensors for the automotive, heavy truck and off highway markets. Mr. Cavanagh has served on the board of advisors of Enovation Controls, LLC since February 2010. He served as Chairman of the Heavy Duty Manufacturers Association, the leading industry organization for commercial vehicle and off-highway equipment suppliers, and on the board of its parent organization, the Motor Equipment Manufacturers Association. He also serves on the board of directors of Defiance Metal Products, a supplier of fabricated metal components to the commercial vehicle and off-highway equipment manufacturers. Mr. Cavanagh holds a B.S. in Mechanical Engineering Technology from the Milwaukee School of Engineering.

We believe that Mr. Cavanagh is qualified to serve as a member of our board of directors due to his significant leadership, financial, and manufacturing experience.

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Dennis E. Bunday has served as our Chief Financial Officer since July 2014. Mr. Bunday served as President and Chief Financial Officer of Pacific Power Products Holdings, Inc. from March 2013 to July 2014. Prior to joining Pacific Power Products Holdings, he served as Executive Vice President, Chief Financial Officer, and Secretary of Williams Controls (NYSE: WMCO) from July 2002 to December 2012. Prior to joining Williams Controls, he served as Vice President-Finance and Chief Financial Officer from 1998 to 2001, for Babler Bros., Inc., a manufacturer of pre-cast concrete products. From 1996 until 1998, he held the same positions with Quality Veneer & Lumber, Inc., and its predecessor, the Morgan Company, a producer of forest products. Prior to 1996, he was Financial Controller and Treasurer of Pope & Talbot, Inc., which at the time was listed on the New York Stock Exchange. Mr. Bunday received a Bachelor’s degree in Accounting from Washington State University. Mr. Bunday was a member of the board of directors and the compensation committee of the board of directors of Southwall Technologies until the sale of that company in November 2011.

Dr. Kennon Guglielmo has served as our Chief Technology Officer since September 2009 and has served on the board of directors of Enovation Controls, Inc. since its inception. As Chief Technology Officer, Dr. Guglielmo provides technical leadership to Enovation Controls. In 1994, Dr. Guglielmo formed EControls and began developing engine management systems for the industrial, marine, and heavy-duty engine markets. Dr. Guglielmo began his career in 1992 at the Engine Research department at Southwest Research Institute in San Antonio, Texas. Dr. Guglielmo holds a B.S. in Mechanical Engineering from Texas A&M University, and an M.S. and Ph.D. in Mechanical Engineering from Georgia Institute of Technology. Throughout his academic career, Dr. Guglielmo focused on advanced control theory in the areas of engine controls, robotics, and other thermodynamic and mechanical systems.

We believe that Dr. Guglielmo is qualified to serve as a member of our board of directors due to his extensive experience with our products and their history and his deep technical expertise.

Eugene J. Bazemore Jr. has served as our Vice President, Corporate Development and Investor Relations since May 2014. From May 2013 to May 2014, Mr. Bazemore served as Vice President, Corporate Development, at AZZ incorporated (NYSE: AZZ), a diversified industrial company based in Fort Worth, Texas. From October 2006 to May 2013, Mr. Bazemore was a senior investment banker in the Industrial Technologies practice of Houlihan Lokey in New York, New York. He also previously worked as Director, Corporate Development at Cooper Industries Ltd., a global electrical products manufacturer, from 2004 to 2006, and in investment banking with UBS Investment Bank from 2000 to 2004. Mr. Bazemore holds a B.S. in Chemical Engineering from Auburn University and an M.B.A. from New York University’s Leonard N. Stern School of Business.

Board of Directors

Our board of directors is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Effective upon the closing of this offering, our directors will divided among the three classes as follows:

• The Class I directors are Messrs.             ,             , and             , and their terms will expire at the annual meeting of stockholders to be held in 2015;

• The Class II directors are Messrs.             ,             , and             , and their terms will expire at the annual meeting of stockholders to be held in 2016; and

• The Class III directors are Messrs.             ,             , and             , and their terms will expire at the annual meeting of stockholders to be held in 2017.

We anticipate that              two additional directors who are independent under the NYSE rules will be appointed to the board of directors subject to and effective upon the listing of our Class A Shares on the NYSE.

We intend to enter into the Stockholders Agreement with Murphy Group and EControls Group that will become effective upon the completion of this offering. Pursuant to the Stockholders Agreement, each Founder

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Entity will have the right to designate two members to our board of directors for so long as such Founder Entity owns 10% or more of our outstanding Class A Shares and Class B Shares, and each will have the right to designate one member to our board of directors if their ownership of our outstanding Class A Shares and Class B Shares is between 5% and 10%. In addition, as long as each Founder Entity owns 10% or more of our outstanding Class A Shares and Class B Shares, they will have the right to designate one mutually agreed additional member to our board of directors. If a Founder Entity’s ownership level falls below 5% of our outstanding Class A Shares and Class B Shares, such Founder Entity will no longer have any right to designate a nominee. If a vacancy on the Board occurs as a result of the death, disability, retirement, resignation, or removal of a designee of the Founder Entities, or the joint designee, the Founder Entity that designated such person, or the Founder Entities jointly in the case of the mutually agreed designee, shall nominate a replacement to fill the vacancy. Each of the Founder Entities has agreed to vote all its shares for the designees of the Founder Entities. Pursuant to the terms of the Stockholders Agreement, Murphy Group nominated Messrs.             and              to our board of directors, EControls Group nominated Messrs.             and              to our board of directors and Murphy Group and EControls Group mutually agreed to nominate              to our board of directors. For more information, see “Certain Relationships and Related Party Transactions—Stockholders Agreement.”

Pursuant to the Stockholders Agreement, the Founder Entities will agree that until the earlier of the third anniversary of the closing of the offering being made hereby and the time at which the Founder Entities collectively hold less than 10% of our outstanding Class A Shares and Class B Shares, neither will transfer any shares of our common stock without the consent of the other Founder Entity, other than pursuant to certain permitted transfers, transfers in which the other Founder Entity has a right to participate, and sales pursuant to a registration statement.

Our amended and restated certificate of incorporation will provide that directors may be removed only for cause and only by the affirmative vote of the holders of at least two-thirds of the voting power of our then outstanding stock voting as a single class at a meeting of stockholders called for that purpose. The certificate will also provide that, if a director is removed or if a vacancy occurs due to either an increase in the size of the board or the death, resignation or other cause, the vacancy will be filled solely by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum remain.

Director Independence

Upon the completion of this offering, we expect that our Class A Shares will be listed on the NYSE. We expect to be a “controlled company” under the NYSE corporate governance standards because more than 50% of the voting power of our common stock following the completion of this offering will be held by the Founder Entities, each of which has agreed to vote their shares together for the election of directors pursuant to the Stockholders Agreement. A “controlled company” may elect not to comply with certain NYSE corporate governance standards, including the requirements that: (i) we have a majority of our board of directors consists of “independent directors,” as defined under the NYSE rules; (ii) we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and (iii) we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities. Following this offering, in reliance upon the foregoing exemptions, a majority of our board of directors will not consist of independent directors, we will not have a nominating and corporate governance committee, and our compensation committee will not be composed entirely of independent directors, and we may use any of these exemptions for so long as we are a controlled company. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. The “controlled company” exception does not modify the independence requirements for the audit committee, and we intend to comply with the requirements of Sarbanes—Oxley and the NYSE. The rules of the NYSE permit the composition of our audit committee to be phased-in as follows: (i) one independent committee member at the time our shares are listed on the NYSE; (ii) a majority of independent committee members within ninety (90) days of the date of this prospectus; and (iii) all independent

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committee members within one (1) year of the date of this prospectus. Thereafter, we will be required to have an audit committee comprised entirely of independent directors. We expect to appoint two independent directors to our board subject to and effective upon the listing of the Class A Shares on the NYSE. See “Management—Our Directors and Executive Officers.” If at any time we cease to be a “controlled company” under the NYSE rules, our board of directors will take all action necessary to comply with the applicable NYSE rules, including appointing a majority of independent directors to our board of directors and establishing certain committees composed entirely of independent directors, subject to a permitted “phase-in” period.

The board of directors has reviewed the independence of our directors, as well as our director nominees who will join the board of directors upon the closing of the offering, based on the listing standards of the NYSE. Based on this review, the board of directors determined that each of Messrs.              and              are independent within the meaning of the NYSE rules. In making this determination, our board of directors considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our board of directors deemed relevant in determining their independence, including             . As required under applicable NYSE rules, we anticipate that our independent directors will meet in regularly scheduled executive sessions at which only independent directors are present.

Board Committees

Our board of directors has established standing committees in connection with the discharge of its responsibilities. These committees include an Audit Committee and a Compensation Committee. Our board of directors has adopted written charters for each of these committees. Upon completion of this offering, copies of the charters will be available on our website. Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

Audit Committee

The Audit Committee will be responsible for, among other matters:

• appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm;

• discussing with our independent registered public accounting firm the independence of its members from its management;

• reviewing with our independent registered public accounting firm the scope and results of their audit;

• approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;

• overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC;

• reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements;

• coordinating the oversight by our board of directors of our code of business conduct and our disclosure controls and procedures

• establishing procedures for the confidential and/or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and

• reviewing and approving related-person transactions.

Upon completion of this offering, our audit committee will consist of              and             . The NYSE rules require us to have one independent Audit Committee member upon the listing of our Class A Shares, a majority of independent directors within 90 days of the date of this prospectus and all independent Audit Committee

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members within one year of the date of this prospectus. Our board of directors has affirmatively determined that              and              meet the definition of “independent director” for purposes of serving on an Audit Committee under Rule 10A-3 and NYSE rules. In addition, our board of directors has determined that              will qualify as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K.

Compensation Committee

The Compensation Committee will be responsible for, among other matters:

• reviewing key employee compensation goals, policies, plans and programs;

• reviewing and approving the compensation of our directors and executive officers;

• reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and

• appointing and overseeing any compensation consultants or advisors.

Upon completion of this offering, our Compensation Committee will consist of             . As a controlled company, we will rely upon the exemption from the requirement that our Compensation Committee be composed entirely of independent directors.

Risk Oversight

Our board of directors will oversee a company-wide approach to risk management. Our board of directors will determine the appropriate risk level for us generally, assess the specific risks faced by us and review the steps taken by management to manage those risks. While our board of directors will have ultimate oversight responsibility for the risk management process, its committees will oversee risk in certain specified areas.

Specifically, our Compensation Committee will be responsible for overseeing the management of risks relating to our executive compensation plans and arrangements, and the incentives created by the compensation awards it administers. Our Audit Committee will oversee management of enterprise risks and financial risks, as well as potential conflicts of interests. Our board of directors will be responsible for overseeing the management of risks associated with the independence of our board of directors.

Compensation Committee Interlocks and Insider Participation

All compensation and related matters after this offering will be reviewed by our compensation committee.

Code of Business Conduct and Ethics

Upon or prior to completion of this offering, our board of directors will adopt a code of business conduct and ethics that applies to our directors, officers and employees. Upon completion of this offering, a copy of this code will be available on our website. We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions.

Indemnification Agreements

We intend to enter into indemnification agreements with each of our directors pursuant to which we will agree to indemnify each director against: (i) expenses, judgments, and settlements paid in connection with third-party claims; and (ii) expenses and settlements paid in connection with claims in our right, in each case provided that the director acted in good faith. In addition, we will agree to indemnify each director to the fullest extent

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permitted by law against all expenses, judgments, and amounts paid in settlement if the director acted in good faith and in a manner reasonably believed to be in, and not opposed to, our best interests. Subject to the director’s obligation to repay us in the event that he or she is not entitled to such indemnification, we will advance the expenses of the director prior to a final determination as to whether the director is entitled to indemnification.

Director Compensation

In 2013, Enovation Controls, LLC did not have a board of directors or a board of managers, as Enovation Controls, LLC is member-managed. In connection with the organization of Enovation Controls, Inc. in 2014, we appointed three employee directors. Following this offering, we expect to appoint one or more independent directors who will receive compensation that is commensurate with arrangements offered to directors of newly public companies. We have not compensated, nor do we expect to compensate, our employee directors for their service on our board of directors. We expect to reimburse all directors for reasonable out-of-pocket expenses incurred in connection with their service as directors. Our independent directors will also be eligible to receive equity awards when, as and if determined by our Compensation Committee.

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EXECUTIVE COMPENSATION

Introduction

Our named executive officers for the year ended December 31, 2013, which consists of our President and Chief Executive Officer, our former President and Chief Executive Officer, and our two other most highly compensated executive officers who were serving as executive officers as of December 31, 2013, are as follows:

• Patrick W. Cavanagh, our President and Chief Executive Officer;

• Gary Riley, our former President and Chief Executive Officer;

• Frank W. Murphy III, our Executive Chairman; and

• Kennon Guglielmo, our Chief Technology Officer.

2013 Summary Compensation Table

The following table summarizes the total compensation paid to or earned by each of our named executive officers in 2013 and 2012.

Name and Principal Position	Year		Salary ($)		Bonus ($)		Option Awards ($)(1)		Non-Equity Incentive Plan Compensation ($)(2)		All Other Compensation ($)(3)		Total ($)
Patrick W. Cavanagh President and Chief Executive Officer(4)		2013		433,133		—		—		315,042		129,037		877,212
Gary Riley		2013		144,978		—		—		44,003		529,877		718,858
Former President and Chief Executive Officer(5)		2012		500,000		—		—		200,051		48,093		748,144
Frank W. Murphy III		2013		428,087		—		—		128,105		30,100		586,292
Executive Chairman		2012		420,560		—		—		83,790		54,662		559,012
Kennon Guglielmo		2013		412,000		—		—		125,832		7,650		545,482
Chief Technology Officer		2012		407,778		—		—		84,581		10,287		502,646

(1) Mr. Cavanagh was the only named executive officer that received an option award. In 2013, Mr. Cavanagh received Class C Management Interests of Enovation Controls, LLC. The aggregate intrinsic value of Mr. Cavanagh’s Class C Management Interests was zero, calculated in accordance with FASB ASC Topic 718. See Note 7—“Stock Compensation” to our consolidated financial statements included in this prospectus for further discussion of the valuation methodology. Using the fair market valuation method at June 30, 2014, the value of Mr. Cavanagh’s Class C Management Interests was $5,312,290. For more information relating to the 2013 awards, see the section entitled “Overview of Our 2013 Executive Compensation Program—Elements of Compensation—Annual Equity Incentive Awards” below.

(2) Amounts represent the annual cash incentive awards earned by the named executive officers. Messrs. Cavanagh and Riley participated in our Senior Management Incentive Plan and our Incentive Compensation Plan (OVERDRIVE), which in each case was based on our performance in 2012 and 2013, as applicable. Messrs. Murphy and Guglielmo only participated in our Incentive Compensation Plan (OVERDRIVE). For more information relating to the 2013 annual cash incentive awards, see the section entitled “Overview of Our 2013 Executive Compensation Program—Elements of Compensation—Annual Cash Incentive Awards” below.

(3) For 2013, amounts represent: (i) for Mr. Cavanagh, a relocation allowance of $80,805, which included a tax gross up on his relocation allowance of $35,441, a club allowance, an automobile allowance, an allowance to purchase life insurance of $12,570, and a 401(k) plan matching contribution of $7,650; (ii) for Mr. Riley, $513,023 in severance in connection with his resignation from Enovation Controls, LLC, an automobile allowance, a relocation allowance, and a 401(k) plan matching contribution of $9,767 (iii) for Mr. Murphy, personal use of fractionally owned Company aircraft, a club allowance, and a 401(k) plan matching contribution of $7,650; and (iv) for Mr. Guglielmo, a 401(k) plan matching contribution of $7,650.

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For 2012, amounts represent: (i) for Mr. Riley, an automobile allowance, a relocation allowance of $31,883, and a 401(k) plan matching contribution of $7,500; (ii) for Mr. Murphy, personal use of fractionally owned Company aircraft of $33,662, a club allowance, and a 401(k) plan matching contribution of $7,500; and (iii) for Mr. Guglielmo, a 401(k) plan matching contribution of $7,414 and personal use of fractionally owned company aircraft.

The value of personal use of fractionally owned company aircraft is based on our incremental costs, including the cost of fuel, pilot costs, trip-related maintenance, crew travel expenses, on-board catering, landing fees, and trip-related parking/hangar costs. Since our fractionally owned aircraft is used primarily for business travel, we do not include the fixed costs that do not change based on the usage, such as purchase costs and maintenance costs not related to trips. All other dollar amounts reflected in the “All Other Compensation” column are based on our direct costs of providing such perquisites or personal benefits to the named executive officers.

(4) Mr. Cavanagh’s employment with Enovation Controls, LLC commenced on January 28, 2013.

(5) Mr. Riley resigned from Enovation Controls, LLC on March 31, 2013.

Overview of Our 2013 Executive Compensation Program

Elements of Compensation

Our executive compensation program consisted of the following components of compensation in 2013:

Base Salary. Each named executive officer receives a base salary for the expertise, skills, knowledge and experience they offer to our management team. Base salaries are periodically adjusted to reflect:

• The nature, responsibilities, and duties of the officer’s position;

• The officer’s expertise, demonstrated leadership ability, and prior performance;

• The officer’s salary history and total compensation, including annual cash incentive awards and annual equity incentive awards; and

• The competitiveness of the officer’s base salary.

Each named executive officer’s base salary for 2013 is listed in the 2013 Summary Compensation Table.

Annual Cash Incentive Awards. As part of our executive compensation program, the members of Enovation Controls, LLC provide annual cash incentive awards to our named executive officers and other key employees. Each year the members determine the performance goals they believe best align the named executive officers’ annual cash incentive awards with our strategic goals and objectives for the respective year. The annual cash incentive awards are intended to motivate and reward the named executive officers for their contributions in achieving our strategic goals and objectives.

For 2013, there were two separate cash incentive programs, our Senior Management Incentive Plan and our Incentive Compensation Plan (OVERDRIVE). Messrs. Cavanagh and Riley participated in both of these cash incentive programs, but Messrs. Murphy and Guglielmo only participated in our Incentive Compensation Plan (OVERDRIVE).

Under the Senior Management Incentive Plan, in 2013 Messrs. Cavanagh and Riley were provided an opportunity to earn a cash bonus in the event we achieved net sales of $228 million and Adjusted EBITDA as a percentage of revenue of 16.5% for 2013. “Adjusted EBITDA” was defined as net income plus interest, income taxes, depreciation and amortization, and other non-recurring, non-cash charges such as gains/losses on the early extinguishment of debt, goodwill impairment, and equity-based compensation. For 2013, our actual revenue was $256 million and our actual Adjusted EBITDA as a percentage of revenue was 18.5%. Accordingly,

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Mr. Cavanagh earned a cash bonus under the Senior Management Incentive Plan of $219,560. As a result of Mr. Riley’s resignation from Enovation Controls, LLC in March 2013, he was not eligible to receive a cash bonus under the Senior Management Incentive Plan.

In addition, the named executive officers participated in the Incentive Compensation Plan (OVERDRIVE) which was a company-wide bonus pool for all regular full-time employees. The aggregate amount of the company-wide bonus pool was approximately $7,446,000, which represented approximately 15% of our 2013 net operating income before deducting the Incentive Compensation Plan (OVERDRIVE) expense. Payments under the Incentive Compensation Plan (OVERDRIVE) are paid monthly, if earned. Actual awards under the Incentive Compensation Plan (OVERDRIVE) are based upon us achieving pre-determined performance goals regarding our productivity, safety, delivery, quality, continuous improvement, new product introductions, and sales and margin objectives; provided that no monthly awards are paid unless a threshold level of monthly operating income is achieved which is 70% of the planned operating income of the respective month. In 2013, Messrs. Cavanagh, Riley, Murphy and Guglielmo earned a cash bonus under the Incentive Compensation Plan (OVERDRIVE) of $95,482, $44,003, $128,105, and $125,832, respectively.

See the above 2013 Summary Compensation Table for further information on the payout of the named executive officers’ 2013 annual cash incentive awards.

Annual Equity Incentive Awards. Historically, we have granted Class B, C, and D Management Interests of Enovation Controls, LLC (commonly referred to as a profits interest) under our Profits Interest Plan to our officers, including Mr. Cavanagh, but excluding Messrs. Murphy and Guglielmo. Due to their substantial ownership in us, Messrs. Murphy and Guglielmo have not generally been awarded annual equity incentive awards. Mr. Riley did not receive an annual equity incentive award in 2013.

The Class B, C, and D Management Interests do not have any intrinsic value when granted, generally vest over four years and provide the officers with benefits (in the form of distributions) only if the distributions from Enovation Controls, LLC after the grant date exceed a specified amount, which we refer to as the “threshold value.” The threshold value is increased for each of the Class B, C, and D Management Interests, such that a lower-lettered tranche may become entitled to receive distributions before a higher-lettered tranche.

On February 18, 2013, Mr. Cavanagh was granted Class C Management Interests of Enovation Controls, LLC and the Class C Management Interests have a threshold value of $210 million. Mr. Cavanagh will not receive any distributions with respect to vested Class C Management Interests until Enovation Controls LLC’s total distributions after January 1, 2013 exceed the threshold value of $210 million. The Class C Management Interests are subject to forfeiture restrictions that lapse in equal one-fourth increments beginning on the first anniversary of the date of grant, subject to Mr. Cavanagh’s continued employment.

See the 2013 Summary Compensation Table for further information on the named executive officers’ 2013 annual equity incentive awards.

Other Benefits. We provide one or more of the named executive officers with certain perquisites and other personal benefits, including an annual automobile allowance, club membership dues and payment of certain life insurance premiums, as set forth in more detail in the 2013 Summary Compensation Table.

From time to time, we also provide relocation assistance to move certain of our current employees and new hires, including our named executive officers, covering most of the reasonable costs and expenses incurred during the move. Reasonable costs and expenses include items such as two “house-hunting” trips between their prior home and the relocation city, costs associated with purchasing a new home, assistance with sale of their current residence, loss on sale protection (if necessary), tax assistance for certain relocation benefits, and/or other approved reasonable expenses. In connection with Mr. Cavanagh’s relocation to Tulsa, Oklahoma, he received (i) a company loan of $650,000 for the purchase of a new home, which he paid back to us in November 2013,

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(ii) loss on sale protection in the event his former home sold for less than $565,000, which he did not use because his former home sold for more than $565,000, (iii) house-hunting expenses, (iv) reimbursement of the closing costs on his new home of $36,844, (v) a tax gross up on his relocation allowance of $35,441 and (vi) other approved reasonable expenses. During 2013, Mr. Cavanagh received aggregate relocation assistance of $80,805.

Messrs. Murphy and Guglielmo are permitted to use fractionally owned company aircraft for personal air travel to the extent it is not otherwise being used for company business. From time to time, they may be accompanied by their family members.

All U.S. employees, including our named executive officers, are eligible to participate in our U.S. benefit programs, including medical, dental, vision, life, and disability insurance and a 401(k) plan with matching contributions.

The Enovation Controls 401(k) Plan provides substantially all U.S. employees with the ability to make pre-tax retirement contributions in accordance with applicable IRS limits. Matching contributions are discretionary based on Company performance. In 2013 matching was equal to 50% of an employee’s contributions up to the first 6% contributed by the employee.

We do not sponsor or maintain any deferred compensation or supplemental retirement plans in addition to our 401(k) plan.

The health, welfare, and other personal perquisites and benefits described above are intended to be part of a competitive overall executive compensation program and help attract and retain employee talent.

The amounts paid to the named executive officers in 2013 in respect of these benefits are reflected above in the 2013 Summary Compensation Table under the “All Other Compensation” column.

In connection with Mr. Riley’s resignation from Enovation Controls, LLC in March 2013, he was entitled to receive (i) twelve months severance, payable bi-weekly and (ii) continuation of health and life insurance benefits for twelve months or until he accepts a position with another company offering comparable benefits, which benefits we valued at $13,023.

Employment Arrangements with Named Executive Officers

Each of our existing named executive officers is a party to a written employment arrangement. The material terms of each of those arrangements is described below. Mr. Riley was also a party to a written employment arrangement, the terms of which are described below. For a description of the compensation actually paid to the named executive officers for 2013, please refer to the 2013 Summary Compensation Table.

Employment Arrangement with Patrick W. Cavanagh

Mr. Cavanagh entered into an amended and restated offer letter with us on July 11, 2014, in connection with his appointment as our President and Chief Executive Officer. Pursuant to the terms of the amended and restated offer letter, Mr. Cavanagh’s employment is “at-will” and he is entitled to the following compensation and benefits:

• An initial base salary of $440,000, subject to annual review;

• Participation in our Incentive Compensation Plan (OVERDRIVE) at a target bonus opportunity of 15% of his annual base salary;

• Participation in our Senior Management Incentive Plan with an annual performance bonus opportunity in the amount of 40% of his annual base salary;

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• An award of 110,320 restricted Class C Management Interests of Enovation Controls, LLC, 25% of which vested on February 18, 2014, 25% of which will vest on February 18, 2015, and the remainder of which will vest 25% on each of February 18, 2016 and February 18, 2017, subject to his continued employment with us through such dates;

• Participation in our employee benefit programs, including medical, dental, vision, and 401(k) plan; and

• An annual automobile allowance of $15,000, induction fees and advance payment of one-year’s dues at a local country club and the first year club dues in advance to offset the termination of his membership at his former club, an annual physical, paid business class seats on international flights, and company-paid life insurance policies covering his life in the amount of $700,000 and covering his wife’s life in the amount of $25,000.

Under the amended and restated offer letter we also agreed to provide Mr. Cavanagh certain relocation benefits, including reimbursement of up to $80,000 for any losses he would incur if his former home sold for less than $585,000, and a company loan of up to $650,000 for the purchase of a home in Tulsa, Oklahoma. The loan accrued interest at a rate of 0.27% per annum, which was the IRS Applicable Federal Rate at the time for a loan with a duration of less than three years. Mr. Cavanagh repaid the loan in November 2013 upon the sale of his former home. No payments were made by us to Mr. Cavanagh to reimburse him for his losses on the sale of his former home because the home did not sell for less than $585,000.

If we breach our obligations to Mr. Cavanagh under the amended and restated offer letter, his employment is terminated by us other than for cause, or, within 24 months of a change in control he voluntarily terminates his employment for good reason, he is entitled to (i) continuation of full base pay for 12 months in bi-weekly installments, and (ii) continuation of all company-paid insurance benefits for 12 months or until Mr. Cavanagh accepts a position with another company offering comparable benefits. The terms “cause,” “good reason,” and “change in control” are defined in Mr. Cavanagh’s amended and restated offer letter. The following briefly summarizes the meaning of each of these terms as they are defined in Mr. Cavanagh’s offer letter:

• “Cause” generally means: (i) demonstrated and material neglect or continued failure or refusal to perform his material duties; (ii) conviction of a felony or a crime involving moral turpitude, other than a traffic offense that is not punished by a sentence of incarceration or a felony related to hunting live game; (iii) proven or admitted fraud that is not de minimis and that has caused, is causing, or reasonably is likely to cause harm to us; (iv) misappropriation, theft, or embezzlement, in each case that is not de minimis, that has caused, is causing, or reasonably is likely to cause harm to us; (v) willfully, recklessly, or grossly negligently engaging in misconduct that is materially injurious, monetarily or otherwise, to us, or (vi) use of illegal drugs in the course of, related to or connected with our business.

• “Good reason” generally means the occurrence of any of the following events without Mr. Cavanagh’s express written consent: (i) a material adverse change in his title, the nature or scope of his authority, powers, functions, duties, responsibilities, or reporting relationship; (ii) a material reduction in his rate of annual base salary; (iii) a change in his primary employment location to a location that is more than 50 miles from its location immediately prior to such relocation; or (iv) the company’s failure to obtain from any successor an express written and unconditional assumption of the Company’s obligations under the offer letter. We have a 30-day period to cure the circumstances giving rise to Mr. Cavanagh’s claim of “good reason.”

• “Change in control” generally means the occurrence of any of the following events: (i) a transaction pursuant to which a third party acquires beneficial ownership of 50% or more of the combined voting power of our then-outstanding securities; (ii) during any 24-month period, the individuals who, at the beginning of such period, constitute our board of directors (“incumbent directors”) cease to constitute at least a majority of our board of directors (for this purpose an individual who becomes a member of the board of directors subsequent to the beginning of the 24-month period will be deemed to have satisfied the 24-month requirement if he or she was approved by at least two-thirds of the directors who

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then qualified as incumbent directors); (iii) the sale of all or substantially all of our assets; (iv) a merger or consolidation of us or a subsidiary with any other corporation or other entity, other than certain mergers or consolidations following which the combined voting power of our securities continue to represent more than 50% of the combined voting power of the resulting entity; or (v) our stockholders approve a plan of complete liquidation or dissolution of the company.

In connection with his employment, Mr. Cavanagh entered into our standard Confidentiality and Noncompetition Agreement, which includes customary terms, conditions, and covenants.

Employment Agreement with Kennon Guglielmo

In connection with Mr. Guglielmo’s appointment as Chief Technical Officer, he entered into an employment agreement on September 30, 2009. Pursuant to the terms of Mr. Guglielmo’s employment agreement, he is (i) an at-will employee, (ii) entitled to an initial base salary of $400,000, and (iii) entitled to the payment of premiums on certain term life insurance policies through January 2, 2016. His current base salary for 2014 is $412,000.

Pursuant to the terms of his employment agreement, Mr. Guglielmo is subject to noncompetition and nonsolicitation provisions for the three years immediately following his voluntary termination of employment without Good Reason (as defined below) or his involuntary termination with Cause (as defined below). Mr. Guglielmo’s employment agreement also contains customary confidentiality and invention assignment provisions.

Employment Agreement with Frank W. Murphy III

In connection with Mr. Murphy’s employment with us, he entered into an employment agreement on September 30, 2009. Pursuant to the terms of Mr. Murphy’s employment agreement, he is (i) an at-will employee and (ii) entitled to an initial base salary of $420,000. His current base salary for 2014 is $420,000.

Pursuant to the terms of his employment agreement, Mr. Murphy is subject to noncompetition and nonsolicitation provisions for the three years immediately following his voluntary termination of employment without Good Reason (as defined below) or his involuntary termination with Cause (as defined below). Mr. Murphy’s employment agreement also contains customary confidentiality and invention assignment provisions.

Under the terms of Messrs. Guglielmo’s and Murphy’s employment agreements, “Cause” is defined as (i) a demonstrated and material neglect or continued failure or refusal to perform the material duties of his position (other than any such failure resulting from his incapacity due to a disability), (ii) a conviction of a felony or a crime involving moral turpitude, other than a traffic offense that is not punished by a sentence of incarceration or a felony related to hunting live game, (iii) proven or admitted fraud that is not de minimis and that has caused, is causing, or reasonably is likely to cause harm to us, (iv) misappropriation, theft, or embezzlement, in each case that is not de minimis that has caused, is causing, or reasonably is likely to cause harm to us, (v) willfully, recklessly, or grossly negligently engaging in misconduct that is materially injurious to us, monetarily or otherwise, or (vi) use of illegal drugs in the course of, related to, or connected with our business. For this purpose, no act or failure to act on the part of the employee shall be considered “willful” unless done or omitted by the employee not in good faith and without reasonable belief that his or her action or omission was in our best interest.

Under the terms of the employment agreements of Messrs. Guglielmo and Murphy, “Good Reason” is defined as the occurrence of any one of the following events: (i) any diminution in salary, bonus or benefits as set forth in the respective employment agreement, (ii) a change in the main work location of the respective employee to a location for Mr. Guglielmo, outside of the greater San Antonio, Texas, metropolitan area and for Mr. Murphy, outside of the greater Tulsa, Oklahoma, metropolitan area, or (iii) the failure of the company to pay any compensation in accordance with the terms in his respective employment agreement.

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Employment Arrangement with Gary Riley

In connection with Mr. Riley’s appointment as Chief Executive Officer, he entered into an offer letter on August 23, 2011. Mr. Riley resigned from Enovation Controls, LLC on March 31, 2013.

Pursuant to the terms of the offer letter, Mr. Riley’s employment was “at-will” and he was entitled to the following compensation and benefits:

• An initial annual salary of $500,000;

• A monthly bonus of $20,833, beginning September 1, 2011 and for the remainder of 2011;

• Starting in 2012, participation in the Incentive Compensation Plan (OVERDRIVE) at a target bonus opportunity of 15% of his annual base salary;

• Participation in the Senior Management Incentive Plan with an annual performance bonus opportunity in the amount of 35% of his annual base salary;

• Participation in the Profits Interest Plan, specifically, an award of 170,000 of Class B Management Interests, subject to the terms and conditions outlined in his individual award agreement;

• Participation in our employee benefit programs, including medical, dental, vision, and 401(k) plans;

• An annual automobile allowance of $8,700, an annual physical, a commute allowance for either Mr. Riley or his wife to or from Ft. Wayne, Indiana once per month, and a company-paid house, condominium, or apartment; and

• $150,000 for relocation assistance.

If we terminated Mr. Riley from the position of Chief Executive Officer other than for “cause,” as defined below, or as a result of a transaction which triggered payout of his Class B Management Interests, he was entitled to (i) continuation of full base pay for 12 months, and (ii) continuation of all company-paid insurance benefits for 12 months or until Mr. Riley accepted a position with another company offering comparable benefits. The term “cause” was defined in Mr. Riley’s offer letter as (i) fraud or misappropriation with respect to our property or business or intentional material damage to our property or business, (ii) willful failure to perform his duties and responsibilities and to carry out his authority, (iii) willful malfeasance or misfeasance or breach of fiduciary duty or representation to us or our stockholders, (iv) willful failure to act in accordance with any specific lawful instructions of Enovation Controls, LLC’s advisory board, or (v) conviction of a felony.

In connection with his employment, Mr. Riley entered into our standard confidentiality and noncompetition agreement, which included customary terms, conditions, and covenants.

Outstanding Equity Awards at Fiscal Year End for 2013

The following table sets forth certain information regarding outstanding equity awards held by each of our named executive officers as of December 31, 2013:

Name	Number of shares or units of stock that have not vested			Market value of shares or units of stock that have not vested(3)
Patrick W. Cavanagh		8,274	(1)(4)	$
		110,320	(2)(5)	$
Gary Riley		—	(6)		—
Frank W. Murphy III		—			—
Kennon Guglielmo		—			—

(1) These stock awards reflect Class B Management Interests, which have a threshold value of $160 million. Mr. Cavanagh received these Class B Management Interests when he served on the advisory board of Enovation Controls, LLC in 2011.

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(2) These stock awards reflect Class C Management Interests, which have a threshold value of $210 million.

(3) Based on an initial public offering price of $         per share, which is the midpoint of the price range set forth on the cover page of this prospectus.

(4) Of the indicated unvested Class B Management Interests, 2,757 are scheduled to vest on each of the dates of December 30, 2014, December 30, 2015, and December 31, 2016.

(5) Of the indicated unvested Class C Management Interests, 27,580 vested on January 1, 2014, and the remaining unvested Class C Management Interests are scheduled to vest in installments of 27,580 on each of January 1, 2015, 2016, and 2017.

(6) In connection with Mr. Riley’s resignation from the company in March 2013, all of his unvested Class B Management Interests were forfeited.

The number of Class B and C Management Interests listed in the Outstanding Equity Awards at Fiscal Year End for 2013 table does not reflect the conversions occurring as part of the Transactions. As described in “The Transactions,” each Class B, C, and D Management Interest, including any of those held by the named executive officers, will be converted into Common Units (with a corresponding equal number of Class B Shares) in connection with this offering in a manner that reflects the percentage of Enovation Controls, LLC currently owned by the Class B, C, and D Management Interest holders, taking into account their current distribution entitlement and the fair market value of Enovation Controls, LLC based on the offering price. A substantial amount of these converted Common Units will be subject to forfeiture at the time of conversion and will vest only if the holder remains employed by us through the applicable period or upon a change in control. The following table lists the number of Common Units into which Mr. Cavanagh’s unvested Class B and C Management Interests will be converted in connection with the Transactions.

Name	Number of Common Units Following Conversion
Patrick W. Cavanagh		(1)

(1) Of the reported amount,              Common Units will be vested and              Common Units will be unvested.

Following the Transactions, each of the named executive officer’s Common Units will be exchangeable (together with a corresponding number of Class B Shares) for one of our Class A Shares or, at our option, cash equal to the market value of one of our Class A Shares.

Enovation Controls, Inc. 2014 Long-Term Incentive Plan

Introduction

To incentivize management members following the completion of this offering, we anticipate that our board of directors will adopt an omnibus long-term incentive plan for employees, consultants, and directors, which we refer to as the LTIP. Once adopted, our named executive officers will be eligible to participate in the LTIP, which we expect will become effective upon the consummation of this offering. We anticipate that the LTIP will provide for the grant of bonus stock, restricted stock, restricted stock units, stock options, stock appreciation rights, dividend equivalent rights, performance awards, annual incentive awards and other stock-based awards intended to align the interests of key employees (including the named executive officers) with those of our stockholders.

Set forth below is a summary of our current expectations of the material features of the LTIP that we anticipate our board of directors will adopt. The terms and conditions described below remain subject to change unless and until our board of directors adopts the LTIP.

The LTIP – Generally

The LTIP will provide us with the flexibility to make grants of stock options (both incentive stock options or options that do not constitute incentive stock options), restricted stock, restricted stock units, stock appreciation rights, dividend equivalents, performance awards, annual incentive awards, bonus stock awards, or

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other stock-based awards. Officers and employees of us or our subsidiaries, as well as other individuals who provide services to us or our subsidiaries (including directors), will be eligible to receive awards under the LTIP. The LTIP will expire upon the earliest of (i) its termination by our board of directors, or (ii) the tenth anniversary of the effective date of the LTIP. Shares that may be granted under the LTIP are subject to the availability of shares in the share pool.

Administration of the LTIP

The LTIP will initially be administered by our board of directors or a subcommittee thereof (the “Administrator”). The Administrator will have the authority in its sole discretion, subject to and not inconsistent with the express provisions of the LTIP, to administer the LTIP and to exercise all the powers and authorities either specifically granted to it under the LTIP or necessary or advisable in the administration of the LTIP, including, without limitation, the authority (i) to the extent not inconsistent with the LTIP, prescribe, amend and rescind rules and regulations relating to the LTIP including rules governing its own operations, (ii) make all determinations necessary or advisable in administering the LTIP, (iii) correct any defect, supply any omission and reconcile any inconsistency in the LTIP, (iv) grant awards and determine who will receive awards, when such awards will be granted and the terms of such awards, including setting forth provisions with regard to the termination of a recipient’s employment or service, (v) accelerate the time or times at which an award becomes vested, unrestricted or may be exercised, and (vi) waive or amend any goals, restrictions, or conditions set forth in an award agreement, unless otherwise provided in the award agreement. The determinations of the Administrator will be final, binding and conclusive.

Shares Available for Awards Under the LTIP

We expect the aggregate maximum number of Class A Shares that may be issued under the LTIP will not exceed                 . Class A Shares that are cancelled, settled in cash, forfeited, withheld, or tendered by the participant to satisfy exercise prices or tax withholding obligations will be available for delivery pursuant to other awards. The Class A Shares delivered pursuant to such awards may be Class A Shares authorized but unissued, authorized and issued and held in our treasury, or otherwise acquired for purposes of the LTIP.

We expect the LTIP to provide that in any single calendar year during the term of the LTIP an employee may not be granted stock options or stock appreciation rights relating to more than                  Class A Shares. The LTIP also includes limits on the number of Class A Shares and the dollar amount that may be granted to any non-employee director during any calendar year. Further, we expect that the following limitations will apply with respect to performance awards granted under the LTIP to the extent the performance awards are intended to qualify as “performance-based compensation” under section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and granted to a “covered employee” as defined under section 162(m) of the Code:

• The maximum number of Class A Shares that may be subject to performance awards granted to any covered employee during any one calendar year in the term of the LTIP (excluding awards granted in connection with this offering) may not exceed                  shares; and

• The maximum payment under any performance award denominated in dollars that may be granted to a covered employee during any calendar year will be $                 for each 12-month period contained in the performance period for such performance award.

We expect that the LTIP will provide that in the event that we declare a special or extraordinary dividend or other extraordinary distribution (whether in the form of cash, Class A Shares, or other property), or we undergo a recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange, or other similar corporate transaction or event, the Administrator will adjust, as it deems necessary or appropriate, (i) the number and kind of shares of stock which may thereafter be issued in connection with awards, (ii) the number and kind of shares of stock or other property, including cash, issued or issuable in respect of outstanding awards, (iii) the exercise price, grant price, or purchase price relating to any award, and (iv) the total shares available for issuance under the LTIP and individual award limitations. With

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respect to awards that are incentive stock options, the foregoing adjustments will be made in accordance with Section 424 of the Code. No such adjustment may cause any award under the LTIP which is or becomes subject to Section 409A of the Code to fail to comply with the requirements of Section 409A of the Code.

Types of LTIP Awards

At the discretion of the Administrator, we expect that awards under the LTIP may be granted in the forms described below. Each award will be evidenced by an award agreement setting forth the specific terms and conditions applicable to the award.

Options. The LTIP will provide for the granting of incentive stock options or options that do not constitute incentive stock options. The Administrator will determine the terms of any stock options granted under the LTIP, including the purchase price and when such options become vested and exercisable. The Administrator will also determine the term of each option (up to a maximum term of 10 years), the time at which an option may be exercised, and the method by which payment of the purchase price may be made.

Stock Appreciation Rights. Stock appreciation rights allow the recipient to receive the appreciation in the fair market value of our Class A Shares between the date of grant and the exercise date. The Administrator will determine the terms of any stock appreciation rights, including when such rights become vested and exercisable and whether to pay the appreciation in cash, in Class A Shares, or a combination thereof. The term of each stock appreciation right may not exceed 10 years from the date of grant.

Restricted Stock. Pursuant to a grant of restricted stock, Class A Shares may be issued or delivered to participants, subject to certain restrictions on the disposition thereof and certain obligations to forfeit the shares to us as may be determined in the discretion of the Administrator. The restrictions on disposition and the forfeiture restriction for restricted stock may lapse at such times and under such circumstances (including based on achievement of performance goals and/or future service requirements) or in such installments as the Administrator may determine. The recipient may not transfer, assign, or otherwise dispose of the shares until the expiration of the restriction period. However, upon the issuance of Class A Shares pursuant to a restricted stock award, except as otherwise determined by the Administrator, the holder will have all the rights of a holder of our Class A Shares with respect to the shares, including the right to vote the shares and to receive all dividends and other distributions paid with respect to the shares. At the discretion of the Administrator, dividends made on restricted stock may or may not be subjected to the same vesting provisions as the restricted stock, depending on the terms of the award agreement pursuant to which the restricted stock award is granted.

Restricted Stock Units. A restricted stock unit is a notional Class A Share that entitles the grantee to receive a Class A Share upon the vesting of the restricted stock unit or, in the discretion of the Administrator, the cash equivalent to the value of a Class A Share. The Administrator may determine to make grants of restricted stock units under the LTIP to participants containing such terms as it determines. The Administrator will determine the period over which restricted stock units granted to participants will vest. Like restricted stock, restricted stock units may vest over time, pursuant to performance criteria, or based on a combination of service and performance.

Performance and Annual Incentive Awards. For awards granted under the LTIP that are based upon performance criteria specified by the Administrator, the Administrator will establish the maximum number of Class A Shares subject to, or the maximum value of, each performance award and the performance period over which the performance applicable to the award will be measured. As determined by the Administrator, the performance goals applicable to an award may provide for a targeted level or levels of achievement relating to (i) earnings, including one or more of operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, adjusted EBITDA, economic earnings, or extraordinary or special items or book value per share (which may exclude nonrecurring items); (ii) earnings (as defined in (i), above) as a percentage of revenues; (iii) pre-tax income, after-tax income or adjusted net income; (iv) earnings per share

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(basic or diluted); (v) operating profit; (vi) revenue, revenue growth or rate of revenue growth; (vii) return on assets (gross or net), return on investment, return on capital, or return on equity; (viii) returns on sales or revenues; (ix) operating expenses; (x) stock price appreciation; (xi) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (xii) implementation or completion of critical projects or processes; (xiii) total stockholder return; (xiv) cumulative earnings per share growth; (xv) operating margin or profit margin; (xvi) cost targets, reductions and savings, productivity and efficiencies; (xvii) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, goals relating to acquisitions, divestitures, joint ventures and/or similar transactions and/or goals relating to budget comparisons; and (xviii) any combination of, or a specified increase or decrease in, any of the foregoing. Such performance goals may be measured on a generally accepted accounting principles (GAAP) or non-GAAP basis, and be based solely by reference to the performance of the company as a whole or any subsidiary, division, business segment or business unit of the company, or any combination thereof or based upon the relative performance of other companies or upon comparisons of any of the indicators of performance relative to a peer group of other comparable companies, or as compared to the performance of a published or special index deemed applicable by the Administrator, including but not limited to, the Standard & Poor’s 500 Stock Index. Performance goals may differ from participant to participant and from award to award. Any of these metrics may be subject to adjustment as provided in the LTIP. Payment of a performance award may be made in cash, Class A Shares, or a combination thereof, as determined by the Administrator. The Administrator may establish a performance pool, which will be an unfunded pool, for purposes of measuring the achievement of a performance goal or goals based on one or more criteria set forth above during the given performance period. The Administrator may specify the amount of a performance pool as a percentage of any of such criteria, a percentage in the excess of a threshold amount, or as another amount which need not be linearly related to such criteria.

Bonus Stock Awards. Bonus stock awards are unrestricted Class A Shares that are subject to such terms and conditions as the Administrator may determine. They need not be subject to performance criteria or objectives or to forfeiture.

Other Stock-Based Awards. The Administrator, in its discretion, may also grant to participants an award denominated or payable in, referenced to, or otherwise based on or related to the value of our Class A Shares. The Administrator, in its discretion, may grant dividend equivalent rights (either tandem to other awards or on a stand-alone basis) that entitle the holder to receive cash, stock, or other awards equal to any dividends made on a specified number of Class A Shares.

Clawback. Any award that is subject to recovery under any law, government regulation, or stock exchange listing requirement will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation, or stock exchange listing requirement (or any policy adopted by us pursuant to any such law, government regulation, or stock exchange listing requirement).

Change in Control

The LTIP will provide that, unless otherwise provided in an award agreement, upon a “change in control” (as defined in the LTIP), each award that is not assumed or substituted in connection with such change in control will (i) become fully vested and exercisable, (ii) the restrictions, payment conditions, and forfeiture conditions applicable to such award will lapse, and (iii) any performance conditions imposed with respect to such award will be deemed to be achieved at target. In addition, upon a change in control the Administrator may, in its discretion, provide that any award be cancelled in exchange for a payment in cash or securities in an amount equal to the (x) excess of the consideration paid per Class A Share in the change in control over the exercise or purchase price (if any) per Class A Share subject to the award, multiplied by (y) the number of Class A Shares covered under the award.

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Amendment and Termination of the LTIP

Our board of directors will be permitted to terminate the LTIP at any time with respect to any Class A Shares for which awards have not been granted. Our board of directors will also be permitted to alter or amend the LTIP or any part thereof or award thereunder from time to time; provided that no change to the LTIP or such award may be made that would materially impair the rights of a participant without consent of the participant. To the extent any amendment to the LTIP requires stockholder approval pursuant to any applicable federal or state law or regulation or the rule of any stock exchange or automated quotation system on which our Class A Shares may then be listed or quoted, including any increase in any share limitation, such amendment will be subject to the approval of our stockholders.

Form S-8

We intend to file with the SEC a registration statement on Form S-8 covering the Class A Shares issuable under the LTIP.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

We or Enovation Controls, LLC have engaged in the following transactions with our directors, executive officers and holders of more than 5% of our voting securities on an as-exchanged to Class A Share basis, and affiliates of our directors, executive officers and holders of more than 5% of our voting securities on such basis.

Prior to or concurrently with the completion of this offering, we will engage in certain transactions related to this offering. The Common Unitholders, including certain of our other officers and directors, will be party to certain of those transactions. Please see the section entitled “The Transactions” for a more detailed description of such transactions.

Operating Agreement of Enovation Controls, LLC

We will operate our business through Enovation Controls, LLC and its consolidated subsidiaries. The operations of Enovation Controls, LLC, and the rights and obligations of the Common Unitholders, will be set forth in the amended and restated operating agreement of Enovation Controls, LLC. The following description of the Enovation Controls, LLC amended and restated operating agreement is not complete and is qualified by reference to the full text of the agreement.

Reorganization. Immediately prior to this offering, all of the currently outstanding Class A Units and Class B, C, and D Management Interests will be converted into Common Units that are subject to existing vesting requirements. In addition, each holder of a Class B, C, and D Management Interest will receive one Class B Share for each Common Unit it receives in the reorganization, with such Class B Shares subject to the same vesting requirements as the Common Units. We refer to such Common Units that have not yet vested as the Restricted Common Units. As a result of this conversion of membership interests, all of the Common Unitholders will hold the same class of Common Units, except that certain Common Units held by Employee Holders will remain subject to vesting. If any Common Units do not vest and are forfeited, an equal number of Class B Shares will be forfeited.

Governance. We will serve as the sole managing member of Enovation Controls, LLC. As such, we will control its business and affairs and be responsible for the management of its business. No members of Enovation Controls, LLC, in their capacity as such, will have any authority or right to control the management of Enovation Controls, LLC or to bind it in connection with any matter. As noted above, however, the Founder Entities will have the ability to exercise majority voting control over us by virtue of their ownership of Class B Shares and the Stockholders Agreement, which will give them the ability to elect a majority of our board of directors and therefore control us in our capacity as managing member of Enovation Controls, LLC. Our board of directors will initially be composed of a total of              directors, including five directors appointed by the Founder Entities who will exercise a majority of the director voting power on all matters presented to the board of directors.

Rights of Members. Each Common Unit will entitle the holder to equal economic rights. Common Unitholders will have no voting rights by virtue of their ownership of Common Units, except for the right to approve certain amendments to the operating agreement of Enovation Controls, LLC. See “—Amendments.” Common Unitholders will hold Class B Shares, enabling them to exert a significant percentage of our voting power. See “Risk Factors—Risks Related to Our Organizational Structure—Control by the Founder Entities of     % of the combined voting power of our common stock and the fact that they are holding their economic interest through Enovation Controls, LLC may give rise to conflicts of interest.”

As noted above, Enovation Controls, LLC currently has outstanding Class B, C and D Management Interests that were issued to certain of its employees. These interests are subject to forfeiture under some circumstances in connection with a termination of the employee member’s employment. Although these interests will be converted into Restricted Common Units of Enovation Controls, LLC immediately prior to this offering, to

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the extent that the previously outstanding Class B, C and D Management Interests were subject to forfeiture at the time of conversion, then the Restricted Common Units issued upon conversion generally also will be subject to forfeiture on the same terms, except that the definition of a change in control that results in a lapse of such forfeiture restrictions will be amended to be consistent with the Enovation Controls, Inc. 2014 Long-Term Incentive Plan, which we refer to as the 2014 Incentive Plan. We do not intend to cause Enovation Controls, LLC to issue profits interests in the future.

Net profits and net losses and distributions of Enovation Controls, LLC generally will be allocated and made to its members pro rata in accordance with the number of Common Units they hold, whether or not vested.

Coordination of Enovation Controls, Inc. and Enovation Controls, LLC. At any time we issue a Class A Share for cash, the net proceeds received by us will be promptly transferred to Enovation Controls, LLC, and Enovation Controls, LLC will issue to us one of its Common Units. At any time we issue a Class A Share pursuant to the 2014 Incentive Plan, we will contribute to Enovation Controls, LLC all of the proceeds that we receive (if any) and Enovation Controls, LLC will issue to us one Common Unit having the same restrictions, if any, attached to the Class A Shares issued under the 2014 Incentive Plan. Conversely, if we redeem or repurchase any of our Class A Shares, Enovation Controls, LLC will, immediately prior to our redemption or repurchase, redeem or repurchase an equal number of Common Units held by us, upon the same terms and for the same price, as the Class A Shares are redeemed or repurchased. We can redeem or repurchase Class A Shares only if Enovation Controls, LLC first redeems or repurchases Common Units we hold.

Under the terms of the Enovation Controls, LLC amended and restated operating agreement, we may in the future cause Enovation Controls, LLC to issue Common Units or other, newly created classes of Enovation Controls, LLC securities to one or more investors having such rights, preferences and other terms as we determine, and in such amount as we may determine. In addition, we may in the future elect to compensate our employees by granting them Common Units, whether or not subject to forfeiture, or profits interests or other securities. Any such issuance would have a dilutive effect on the economic interest we hold in Enovation Controls, LLC. In addition, we will issue our Class B Shares having one (1) vote per share on a one-for-one basis in connection with any future issuances of Common Units, which would have a dilutive effect on the voting power of our then current holders of Class A Shares. The tax receivable agreement would cover any exchanges of Common Units issued to the current parties to that agreement after the offering, and it is possible that new investors in the Common Units issued after the offering may become parties to the tax receivable agreement as well.

Although we have no current plans to cause Enovation Controls, LLC to issue additional Common Units, our board may determine that it is in our best interests to issue additional Common Units of Enovation Controls, LLC rather than additional Class A Shares. If we elect to have Enovation Controls, LLC issue additional Common Units, we will issue one Class B Share to each person that receives a Common Unit. See “Risk Factors—Risks Related to this Offering and Ownership of Our Class A Shares—The future issuance of additional Class A Shares in connection with our incentive plans, acquisitions, or otherwise will dilute all other stockholdings.”

Issuances and Transfer of Common Units. Membership interests in Enovation Controls, LLC may be issued only to persons or entities to which we agree to permit the issuance of such interests in exchange for cash or other consideration, including, if applicable, the services of employees of Enovation Controls, LLC or its affiliates. The Common Units held by the other Common Unitholders may be transferred without our consent only under limited circumstances, including to certain permitted transferees (i.e., an affiliate, family member or estate planning vehicle), and upon exchange for Class A Shares following this offering. A holder of Common Units may not transfer any Common Units to any person unless he transfers an equal number of our Class B Shares to the same transferee.

Exchange Rights. We have reserved for issuance          Class A Shares, representing the number of Common Units that will be owned by the Murphy Group, EControls Group and Employee Holders immediately

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following this offering, in respect of the aggregate number of Class A Shares expected to be issued over time upon the exchanges by the Common Unitholders of Common Units, unless we exercise our option to pay cash in lieu of Class A Shares for some or all of such exchanged Common Units. As noted above, we may in the future cause Enovation Controls, LLC to issue additional Common Units that would also be exchangeable for Class A Shares.

Common Unitholders may exchange their Common Units at any time and from time to time after the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, subject to certain limitations. A Common Unitholder may revoke or modify their exchange election at any time prior to the consummation of the exchange, including at any such time after we exercise our option to pay cash in lieu of Class A Shares for some or all of such exchanged Common Units.

Delivery and Cancellation of Class B Shares. Any holder seeking to exchange Common Units for Class A Shares must also deliver a corresponding number of Class B Shares for cancellation by us.

Indemnification and Exculpation. To the extent permitted by applicable law, Enovation Controls, LLC will indemnify us, as its managing member, its other members, its authorized officers, its other employees and agents from and against any losses, damages or expenses actually or reasonably incurred as a result of any acts or omissions performed or omitted by such person in good faith and in a manner that such person reasonably believed to be in or not opposed to the best interests of Enovation Controls, LLC (and, with respect to a criminal proceeding, having had no reasonable cause to believe such person’s conduct was unlawful) either on behalf of or in furtherance of the interests of Enovation Controls, LLC, and performed or omitted in a manner reasonably believed by such person to be within the scope of his or her authority and so long as such person was not guilty of gross negligence or willful misconduct with respect to such act or omission.

We, as the managing member, the other members and the authorized officers and other employees and agents of Enovation Controls, LLC, will not be liable to Enovation Controls, LLC, its members or their affiliates for damages incurred by any acts or omissions of these persons, provided that the acts or omissions were performed or omitted by such person in good faith and in a manner that such person reasonably believed to be in or not opposed to the best interests of Enovation Controls, LLC (and, with respect to a criminal proceeding, having had no reasonable cause to believe such person’s conduct was unlawful) either on behalf of or in furtherance of the interests of Enovation Controls, LLC, and performed or omitted in a manner reasonably believed by such person to be within the scope of his or her authority and so long as such person was not guilty of gross negligence or willful misconduct with respect to such act or omission.

Amendments. The amended and restated operating agreement of Enovation Controls, LLC may be amended with the written consent of the managing member in its sole discretion; provided, however, that no amendment, subject to certain limited exceptions, may materially and adversely affect the rights of a Common Unitholder, as such, other than on a pro rata basis with other Common Unitholders of the same class, without the consent of such Common Unitholder (or, if there is more than one such Common Unitholder that is so affected, without the consent of a majority of such affected Common Unitholders in accordance with their holdings of Common Units).

Additionally, the consent of each Founder Entity that holds a number of Common Units that is five percent (5%) or more of the number of Common Units outstanding immediately following the closing of this offering is required for any amendment to the amended and restated operating agreement of Enovation Controls, LLC that:

• reduces the right of any member to receive tax distributions other than on a pro rata basis with a reduction in taxable income allocable to such member and other holders of Common Units of the same class;

• precludes or limits the rights of any member to exercise its exchange rights under the terms of the amended and restated operating agreement of Enovation Controls, LLC;

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• requires any member to make a capital contribution;

• materially increases the obligations of any member under the amended and restated operating agreement of Enovation Controls, LLC; or

• results in Enovation Controls, LLC being treated as a corporation for tax purposes.

Registration Rights Agreement

In connection with the completion of this offering, we intend to enter into a registration rights agreement with all of the Common Unitholders pursuant to which we will be required to register the exchange under the federal securities laws of the Common Units (and Class B Shares) held by them for Class A Shares. We have agreed, at our expense, to use our reasonable best efforts to file with the SEC a shelf registration statement providing for the exchange of the Common Units (and Class B Shares) for Class A Shares and the resale of such shares thereafter upon the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, and to cause and maintain the effectiveness of this shelf registration statement until such time as all Class A Shares covered by this shelf registration statement have been exchanged. Further, each of the Founder Entities will be entitled to cause us, at our expense, to register the resale of the Class A Shares they will receive upon exchange of their Common Units (and Class B Shares), which we refer to as their “demand” registration rights.

All Common Unitholders (as well as their permitted transferees) will be entitled to exercise “piggyback” rights in connection with any future public underwritten offerings we engage in for our account or for the account of others to whom we have granted registration rights after the expiration or earlier termination (if any) of the lock-up agreements referred to above, subject to pro rata reduction if it is determined that the sale of additional shares would be harmful to the success of the offering. All fees, costs and expenses of underwritten registrations will be borne by us, other than underwriting discounts and selling commissions, which will be borne by each stockholder selling its shares. Our registration obligations will be subject to certain restrictions on, among other things, the frequency of requested registrations, the number of shares to be registered and the duration of these rights.

Tax Receivable Agreement

As described above in “The Transactions,” we intend to use approximately $         of the net proceeds of this offering to purchase Common Units from the existing members of Enovation Controls, LLC. In addition, as described under “The Transactions—Operating Agreement of Enovation Controls, LLC—Exchange Rights,” Common Unitholders may in the future exchange Common Units (and Class B Shares) for Class A Shares on a one-for-one basis (or, at our option, cash). Enovation Controls, LLC will have in effect an election under Section 754 of the Code, which will result in an adjustment to our share of the tax basis of the assets owned by Enovation Controls, LLC at the time of such initial purchase of and subsequent exchanges of Common Units. In general, in the case of a transfer of an interest in a partnership (including a limited liability company taxable as a partnership for U.S. federal income tax purposes), Section 754 of the Code allows the partnership to elect to adjust the tax basis of partnership assets to equal the price paid for the partnership interest. Any such basis adjustment is specific to the transferee of the partnership interest. It is expected that the purchase and exchanges will result in increases in our share of the tax basis of the tangible and intangible assets of Enovation Controls, LLC that otherwise would not have been available. Any such increases in tax basis are, in turn, anticipated to create incremental tax deductions in the form of additional depreciation and/or amortization deductions that would be available to us to offset our share of the taxable income of Enovation Controls, LLC, and which in turn will reduce the amount of tax that we would otherwise be required to pay in the future. These increases in tax basis may also decrease gains (or increase losses) that would otherwise be allocated to us from Enovation Controls, LLC on future dispositions of certain capital assets to the extent tax basis generated from the basis adjustments is allocated to those capital assets.

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We intend to enter into a tax receivable agreement with all Common Unitholders. The tax receivable agreement will require us to pay those Common Unitholders 85% of the amount of cash savings, if any, in U.S. federal, state and local income or franchise tax that we actually realize, or in some circumstances we are deemed to realize, in any tax year beginning with and following 2014 (a “covered tax year”) from increases in tax basis realized as a result of the initial purchase and any future exchanges by Common Unitholders of their Common Units (and Class B Shares) for Class A Shares (or cash), including increases attributable to payments made under the tax receivable agreement and deductions attributable to imputed interest. We expect to benefit from the remaining 15% of cash savings, if any, in income and franchise tax that we actually realize during a covered tax year.

For purposes of the tax receivable agreement, cash savings in income tax and franchise tax will be computed by comparing our actual income and franchise tax liability (and of Enovation Controls, LLC and its subsidiaries, but only with respect to taxes imposed on Enovation Controls, LLC or its subsidiaries and allocable to us) for a covered tax year to the amount of such taxes that we would have been required to pay (and Enovation Controls, LLC and its subsidiaries would have been required to pay, but only with respect to such taxes imposed on Enovation Controls, LLC or its subsidiaries and allocable to us) for such covered tax year had there been (i) no increase to our share of the tax basis of the tangible and intangible assets of Enovation Controls, LLC as a result of the initial purchase and any future exchanges and (ii) no deductions for imputed interest with respect to payments under the tax receivable agreement, and had we not entered into the tax receivable agreement. The tax receivable agreement continues until all such tax benefits have been utilized or expired, unless we exercise our right to terminate the tax receivable agreement upon a change in control for an amount based on the remaining payments expected to be made under the tax receivable agreement or we breach any of our material obligations under the tax receivable agreement in which case all obligations will generally be accelerated and due. Estimating the amount of payments that may be made under the tax receivable agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors.

While the actual amount and timing of any payments that may be made under the tax receivable agreement will vary depending upon a number of factors (including the timing of exchanges, the amount of gain recognized by an exchanging Common Unitholder, the amount and timing of our income and the tax rates in effect at the time any incremental tax deductions resulting from the increase in tax basis are utilized), we expect that the payments that we may make to the Common Unitholders pursuant to the tax receivable agreement could be substantial during the expected term of the tax receivable agreement. In addition, to the extent that we are unable to make payments under the tax receivable agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid by us. The cash savings in income and franchise tax paid to any such Common Unitholders under the tax receivable agreement and any interest costs will reduce the cash that may otherwise be available to us for working capital, capital expenditures, acquisitions, and other general corporate purposes, as well as to make future distributions to holders of Class A Shares, including the investors in this offering. The payments under the tax receivable agreement are not conditioned upon the Common Unitholders’ continued ownership of interests in Enovation Controls, LLC.

Payments under the tax receivable agreement will be based on the tax reporting positions that we determine. A tax authority may challenge all or part of the tax basis increases or the amount or availability of any tax attributes discussed above, as well as other related tax positions we take, and a court could sustain such a challenge. The Common Unitholders will not reimburse us for any payments previously made to them pursuant to the tax receivable agreement in the event that, due to a successful challenge by the IRS or any other tax authority of the amount of any tax basis increase or the amount or availability of any tax attributes, our actual cash tax savings are less than the cash tax savings previously calculated and upon which prior payments under the tax receivable agreement were based. Instead, any excess cash payments made by us to a Common Unitholder will be netted against any future cash payments that we might otherwise be required to make under the terms of the tax receivable agreement. However, we might not determine that we have effectively made an excess cash payment to the Common Unitholders for a number of years following the initial time of such payment. As a result, in certain circumstances we could make cash payments under the tax receivable agreement to the Common Unitholders in excess of our cash tax savings. A successful challenge to our tax reporting positions could also adversely affect our other tax attributes and could materially increase our tax liabilities.

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We will bear the costs of implementing the provisions of the tax receivable agreement. In addition, we will have full responsibility for, and sole discretion over, our tax matters, including the filing and amendment of all tax returns and claims for refund and defense of all tax contests, subject to certain participation and approval rights held by the Founder Entities.

The tax receivable agreement provides that upon certain mergers, asset sales, other forms of business combinations and other changes in control, we will be required to pay the Common Unitholders amounts based on assumptions (including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the tax receivable agreement) regarding the remaining payments expected to be made under the tax receivable agreement (at our option, these payments can be accelerated into a single payment at the time of the change in control). As a result, we could be required to make cash payments under the tax receivable agreement that are greater than or less than the specified percentage of the actual cash tax savings we realize in respect of the tax attributes subject to the tax receivable agreement, and any upfront payment may be made years in advance of any actual realization of such future tax savings. In these situations, our obligations under the tax receivable agreement could have a substantial negative impact on our liquidity, and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combination, or other changes in control. There can be no assurance that we will be able to finance our obligations under the tax receivable agreement.

Payments are generally due under the tax receivable agreement within a specified period of time following the filing of our tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of LIBOR plus 200 basis points from the due date (without extensions) of such tax return. Any late payments that may be made under the tax receivable agreement will continue to accrue interest at LIBOR plus 400 basis points until such payments are made, including any late payments that we may subsequently make because we did not have enough available cash to satisfy our payment obligations at the time at which they originally arose.

Stockholders Agreement

We expect to enter into the Stockholders Agreement, with Murphy Group and EControls Group that will become effective upon the completion of this offering. The Stockholders Agreement will contain agreements with respect to restrictions on the sale, issuance or transfer of our shares of our common stock that will prevent a Founder Entity from transferring its shares without the consent of the other Founder Entity, except in the case of sales to affiliates, sales to any member of its family group (as defined therein), in connection with a tag-along sale of our common stock by both Founder Entities or pursuant to the Registration Rights Agreement, until the earlier of the third anniversary of the offering and the time at which the Founder Entities collectively hold less than 10% of our outstanding Class A Shares and Class B Shares. The Stockholders Agreement will also grant each Founder Entity the right, subject to certain conditions, to nominate a specified number of designees to our board of directors and committees of our board of directors. Each Founder Entity will have the right to designate two members to our board of directors for so long as such Founder Entity owns 10% or more of our outstanding Class A Shares and Class B Shares. The Founder Entities will also have the right to designate one mutually agreed additional member to our board of directors. The Founder Entities will also agree to vote all of their shares of our common stock to elect such designees to our board of directors. If, at any time, a Founder Entity owns 5% or more but less than 10% of our outstanding Class A Shares and Class B Shares, such Founder Entity will have the right to designate one nominee for election to our board of directors. If a Founder Entity’s ownership level falls below 5% of our outstanding Class A Shares and Class B Shares, such Founder Entity will no longer have any right to designate a nominee and the right of the Founder Entities to mutually designate a designee will also terminate. In addition, for so long as the Founder Entities together hold at least 25% of the

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voting power of our outstanding common stock, certain actions may not be taken without the prior written consent of each Founder Entity owning at least 5% of the outstanding Class A Shares and Class B Shares on a combined basis, including:

• any merger, recapitalization, issuance of voting securities or other adjustment in voting rights if, following such event, Murphy Group and EControls Group would not together have sufficient voting power or otherwise be entitled to elect a majority of our board of directors;

• any sale of all or substantially all of the assets of Enovation Controls, LLC or the Company;

• the issuance of any debt securities or equity securities by us or by any of our subsidiaries, other than certain issuances in accordance with employee benefit programs;

• the creation of any new class or series of shares of equity securities that are senior to or on a parity with our Class A Shares and Class B Shares; and

• any amendment of our certificate of incorporation or bylaws or the equivalent organization documents of us or of any of our subsidiaries in a manner that could reasonably be expected to adversely affect the rights of Murphy Group or EControls Group.

Real Estate Leases

Affiliates of Frank W. Murphy III, our Executive Chairman, own property located in Afton, Oklahoma, or the Afton Property, our facilities located in Tulsa, Oklahoma, or the Tulsa Facilities, and our facilities in Rosenberg, Texas, or the Houston Facilities, and lease the Afton Property, Tulsa Facilities, and Houston Facilities to us. We currently pay rent of approximately $4,000 per month for the Afton Property, approximately $60,000 per month for the Tulsa Facilities, and approximately $9,000 per month for the Houston Facilities. During the six months ended June 30, 2014 and during the fiscal years ended December 31, 2013, 2012 and 2011, we paid aggregate rent in the amount of $437,000, $827,000, $827,000 and $827,000, respectively. The lessor of the Afton Property pays for utilities and property taxes with respect to the Afton Property, and we pay insurance with respect to personal property and fixtures and generally pay maintenance expenses. We pay liability and casualty insurance, real property taxes, utilities, and repair and maintenance expenses with respect to the Tulsa Facilities and the Houston Facilities. The leases for the Tulsa Facilities and the Houston Facilities also provide that base rent will increase every two years to an amount equal to the fair market value of rental amounts of comparable properties in the area of the facilities. The leases provide that if we and the lessors cannot agree on fair market value, the fair market value will be determined by real estate brokers licensed in the state in which the facilities are located. We cannot predict the amount by which the base rent with respect to the Tulsa Facilities and the Houston Facilities will increase in the future, and a substantial increase in the base rent of these facilities could have an adverse effect on our financial condition and results of operations.

We lease two facilities located in San Antonio, Texas, which we refer to as the Crosspoint Facilities and the Farinon Facilities. We lease the Crosspoint Facilities from an affiliate of Kennon Guglielmo, our Chief Technology Officer. We lease the Farinon Facilities from a company jointly owned by Frank W. Murphy III, our Executive Chairman, and Kennon Guglielmo. We currently pay rent of approximately $18,000 per month for the Crosspoint Facilities and approximately $60,000 per month for the Farinon Facilities. During the six months ended June 30, 2014 and during the fiscal years ended December 31, 2013, 2012 and 2011, aggregate rent for the Crosspoint Facilities was approximately $110,000, $220,000, $294,000 and $328,000, respectively. The lease for the Farinon Facilities commenced July 24, 2014. We pay for utilities and real property taxes, and are required to maintain certain insurance coverage under the leases. The lease for the Crosspoint Facilities provides that base rent will increase every two years to an amount equal to the fair market value of rental amounts of comparable properties in the area of the facilities. The Crosspoint Facilities lease provides that if we and the lessors cannot agree on fair market value, the fair market value will be determined by real estate brokers licensed in the state in which the facilities are located. The lease for the Farinon Facilities provides that base rent will increase annually by fixed amounts. One of the Crosspoint Facilities we leased was sold during 2012 and our lease of that building terminated.

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Executive Loan Agreement

On September 30, 2009, Enovation Controls, LLC entered into a loan agreement with Kennon Guglielmo, our Chief Technology Officer. Pursuant to the loan agreement, Mr. Guglielmo had the right to request advances in an aggregate amount of up to $2,000,000. The loans were to be repaid in connection with cash distributions from Enovation Controls, LLC to EControls Group (in which Mr. Guglielmo has a significant ownership interest), were secured by Mr. Guglielmo’s ownership interests in EControls Group, bore interest at a rate of 2.8% per annum, and were able to be prepaid without penalty. The largest aggregate amount of principal outstanding from January 1, 2011 to June 30, 2014 was $2,000,000. Mr. Guglielmo paid all the outstanding principal of $2,000,000 and interest incurred since inception of $133,403 on March 31, 2014. All principal and interest for the loans were fully repaid and the loan agreement has been terminated with these payments.

Royalty Agreement

Murphy Group, Inc. is party to a royalty agreement with Frank W. Murphy III, our Executive Chairman, under which Mr. Murphy is entitled to certain royalty payments relating to patented improvements to an adjustable hall effect switch gauge of which he was co-inventor. Royalty payments are calculated based on purchases of certain products using the patented technology and the agreement terminated on March 31, 2014. During the six month period ended June 30, 2014 and during the fiscal years ended December 31, 2013, 2012 and 2011, royalty expense of approximately $54,000, $24,000, $18,000, and $36,000, respectively, was incurred.

Real Property Appreciation Right

Murphy Industries, LLC, a wholly owned subsidiary of Enovation Controls, LLC, is party to a property appreciation agreement with Murphy Group, an entity controlled by Frank W. Murphy III, our Executive Chairman, and in which Mr. Murphy has significant indirect ownership. Pursuant to the agreement, Murphy Industries, LLC has agreed to pay Murphy Group the fair market value of the real property interests upon certain direct and indirect dispositions of the real property interests. This appreciation right obligation was paid on March 31, 2014 in the amount of $1,368,980 and is no longer our obligation.

Transactions with Ningbo Global Sourcing Co., Ltd.

Ningbo Global Sourcing Co., Ltd, which we refer to as Ningbo, provides consulting services to Enovation Controls, LLC and assists in its global sourcing efforts. In addition, Enovation Controls, LLC purchases magnets from Ningbo. Gary Riley, an advisory board member of Enovation Controls, LLC and the former Chief Executive Officer of Enovation Controls, LLC until March 2013, owns Ningbo. For the six months ended June 30, 2014, and the years ended December 31, 2012 and 2011, Enovation Controls, LLC incurred approximately $6,000, $342,000, and $214,000, respectively, in professional consulting expenses with respect to Ningbo. No similar purchases occurred during the year ended December 31, 2013. During the six months ended June 30, 2014 and during the years ended December 31, 2013, 2012 and 2011, Enovation Controls, LLC purchased approximately $459,000, $1,677,000, $1,856,000 and $0, respectively, of magnets from Ningbo.

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Procedures for the Approval of Related Party Transactions

Prior to the completion of this offering, we have not maintained a written policy for the approval of “related person transactions” (as defined below). Our board of directors will adopt a policy regarding the approval of any “related person transaction,” which is any transaction or series of transactions in which we are or are to be a participant, the amount involved exceeds $120,000, and a “related person” (as defined under SEC rules) has a direct or indirect material interest. Under the policy, a related person will need to promptly disclose to our Chief Financial Officer any proposed related person transaction and all material facts about the transaction. Our Chief Financial Officer will then assess and promptly communicate that information to the audit committee of our board of directors. Based on its consideration of all of the relevant facts and circumstances, the audit committee will decide using its business judgment whether or not to approve such transaction and will generally approve only those transactions that do not create a conflict of interest. If we become aware of an existing related person transaction that has not been pre-approved under this policy, the transaction will be referred to the audit committee which will evaluate using its business judgment all options available, including ratification, revision, or termination of such transaction. Our policy will require any director who may be interested in a related person transaction to recuse himself or herself from any consideration of such related person transaction.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information as of                     , 2014 regarding the beneficial ownership of our Class A Shares and Class B Shares and the Common Units of Enovation Controls, LLC for:

• each person known to us to be the beneficial owner of more than 5% of our voting securities;

• each of our named executive officers;

• each of our directors and director nominees; and

• all of our executive officers and directors as a group.

Unless otherwise noted below, the address for each beneficial owner listed on the table is 5311 South 122^nd East Avenue, Tulsa, Oklahoma 74146. We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the notes below, we believe, based on the information furnished to us, that the persons and entities named in the tables below have sole voting and investment power with respect to all voting securities that they beneficially own, subject to applicable community property laws.

As described in “The Transactions,” concurrently with this offering, we will issue to each Common Unitholder one Class B Share for each Common Unit they own. The number of Common Units held by each of our executive officers consists of the Common Units that they will receive immediately prior to this offering upon the conversion of the Class B, C, and D Management Interests they currently own. The ratio of these conversions will depend in part on the price at which Class A Shares are sold in this offering. For purposes of the presentation of the total number of Class B Shares beneficially owned by each stockholder who currently owns any such Class B, C, and D Management Interests, we have assumed that the Class A Shares will be sold at $         per share, which is the midpoint of the range set forth on the cover page of this prospectus.

The number of shares and Common Units outstanding and percentage of beneficial ownership before this offering set forth below are based on the number of shares and Common Units to be issued and outstanding prior to this offering after giving effect to the other elements of the Transactions as described in “The Transactions.”

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The number of shares and Common Units outstanding and percentage of beneficial ownership after this offering set forth below are based on the number of shares and Common Units to be issued and outstanding immediately after this offering, and assumes that we will use $         million (or $         million if the underwriters exercise in full their option to purchase additional shares of Class A Shares) of the proceeds it receives from this offering to purchase Common Units in Enovation Controls, LLC held by the Common Unitholders. Each Common Unit, together with the corresponding number of our Class B Shares, held by a Common Unitholder will be exchangeable for (i) one of our Class A Shares, or (ii) at our option, cash equal to the market value of one of our Class A Shares, at any time and from time to time after the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, subject to certain limitations.

Class A Common Stock Beneficially Owned(1)(2)

Class B Common Stock Beneficially Owned(3)

Common Units of Enovation Controls, LLC Beneficially Owned(2)

Combined Voting Power(4)

Prior to This Offering

After This Offering Assuming No Exercise of Option to Purchase Additional Shares

After This Offering Assuming Full Exercise of Option to Purchase Additional Shares

Prior to This Offering

After This Offering Assuming No Exercise of Option to Purchase Additional Shares

After This Offering Assuming Full Exercise of Option to Purchase Additional Shares

Prior to This Offering

After This Offering Assuming No Exercise of Option to Purchase Additional Shares

After This Offering Assuming Full Exercise of Option to Purchase Additional Shares

Prior to This Offering

After This Offering Assuming No Exercise of Option to Purchase Additional Shares

After This Offering Assuming Full Exercise of Option to Purchase Additional Shares

No.    %

No.    %

No.    %

No.    %

No.    %

No.    %

No.    %

No.    %

No.    %

No.    %

No.    %

No.    %

5% Stockholders

Murphy Group, Inc. (5)

EControls Group, Inc. (6)

Directors and Named Executive Officers

Frank W. Murphy III

Kennon Guglielmo

Patrick W. Cavanagh

Gary Riley (7)

All directors and executive officers as a group (    persons)

* Represents less than 1%.

(1) Does not include Class A Shares issuable in exchange for Common Units.

(2) Subject to the terms of the amended and restated operating agreement of Enovation Controls, LLC, each Common Unit is exchangeable, together with one Class B Share, at any time and from time to time for one Class A Share. See “The Transactions” and “The Transactions—Operating Agreement of Enovation Controls, LLC—Exchange Rights.”

(3) Murphy Group, EControls Group and the Employee Holders, all of whom are our existing owners, will hold all of our Class B Shares. Each holder of Class B Shares shall be entitled to one vote for each Class B Share held by it. Accordingly, each Common Unitholder will have a number of votes in respect of our capital stock that is equal to the aggregate number of Common Units that it holds. See “Description of Capital Stock—Common Stock.”

(4) Represents percentage of voting power of the Class A Shares and Class B Shares voting together as a single class. See “Description of Capital Stock—Common Stock.”

(5) Murphy Group is owned by the Frank W. Murphy III Revocable Trust U/A/D December 12, 2012, the Frank W. Murphy IV Irrevocable Trust U/A/D April 14, 2009, the Michael C. Murphy Irrevocable Trust U/A/D April 14, 2009, and the Emily C. Murphy Irrevocable Trust U/A/D April 14, 2009 (collectively, the “Murphy Children’s Trusts”) and Frank W. Murphy III, our Executive Chairman, as trustee of each of the Murphy Children’s Trusts, exercises voting control and investment power over the Class B Shares and Common Units held by Murphy Group.

(6) EControls Group is majority owned and controlled by Kennon Guglielmo, our Chief Technology Officer, and his wife, Laura Guglielmo. As such, Mr. and Mrs. Kennon Guglielmo have voting and investment control over the Class B Shares and Common Units held by EControls Group. Mr. and Mrs. Kennon Guglielmo own approximately 56.834% of EControls Group either directly or indirectly as a trustee of the KLG 2014 GRAT #1 and KLG 2014 GRAT #2.

(7) Mr. Riley resigned from Enovation Controls, LLC in March 2013.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

The following is a summary of the material terms of the Enovation Controls, LLC revolving line of credit and term loan facility, which we refer to collectively as our senior credit facility. This summary is qualified in its entirety by reference to the agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part.

On June 30, 2014, Enovation Controls, LLC and its wholly-owned U.S. subsidiaries entered into a credit agreement with Bank of Oklahoma, as administrative agent, and various lenders party thereto, consisting of a $30 million term loan and an $80 million revolving credit facility, which includes a $10 million letter of credit subfacility. On the closing date of the credit agreement, Enovation Controls, LLC borrowed an aggregate of $85.5 million, consisting of the $30 million term loan and $55.5 million of loans under the revolving credit facility. The proceeds of these loans were used to pay off existing debt of $24.4 million, for a $60 million distribution to Murphy Group and EControls Group, and to pay $0.6 million of financing costs. The remainder is available for general working capital requirements.

Term loans are required to be repaid in quarterly installments of $375,000 beginning on September 30, 2014 and ending June 30, 2017 and $750,000 beginning September 30, 2017 and ending on March 31, 2019, with the balance of the term loan and the outstanding borrowings under the revolving facility due on the maturity date of June 30, 2019. Term loans may be optionally prepaid by Enovation Controls, LLC at any time without penalty.

The senior credit facility requires Enovation Controls, LLC to repay term loans and reduce revolving commitments with (i) 100% of the proceeds of any incurrence of additional debt not permitted by the credit agreement and (ii) 100% of the proceeds from asset sales and 100% of amounts recovered under insurance policies, subject to certain exceptions and a reinvestment right.

The senior credit facility is guaranteed by all of Enovation Controls, LLC’s U.S. subsidiaries and is secured by a lien on substantially all of the assets of Enovation Controls, LLC and each guarantor.

Borrowings under the term loans and revolving loans accrue interest at either, at Enovation Controls, LLC’s option, an alternate base rate or LIBOR plus in each case an applicable margin rate. The applicable margin will be determined based on Enovation Controls, LLC’s total leverage ratio. For alternate base rate loans the applicable margin will range from 0.25% if Enovation Controls, LLC’s total leverage ratio is less than 1:00 to 1:00 to 1.50% if Enovation Controls, LLC’s total leverage ratio is equal to or greater than 2.50 to 1:00. For LIBOR rate loans the applicable margin will range from 1.25% if Enovation Controls, LLC’s total leverage ratio is less than 1:00 to 1:00 to 2.50% if Enovation Controls, LLC’s total leverage ratio is equal to or greater than 2.50 to 1:00. The applicable margin is currently 0.75% for alternate base rate loans and 1.75% for LIBOR rate loans. A non-use fee between 0.15% and 0.35% per annum, based upon Enovation Controls, LLC’s total leverage ratio, accrues on the amount of unutilized revolving line of credit.

The senior credit facility contains customary affirmative covenants, including: (i) maintenance of legal existence and compliance with laws, regulations and contractual obligations; (ii) delivery of consolidated financial statements and other information; (iii) maintenance of properties in good working order; (iv) payment of taxes; (v) delivery of notices of defaults, litigation, ERISA events and material adverse changes; (vi) maintenance of adequate insurance; (vii) provision for security interests in additional collateral; (viii) limitations on the use of proceeds; (ix) maintenance of deposit accounts with the lender; and (x) inspection of books and records. The senior credit facility also contains customary negative covenants, including customary restrictions on, among other things, (i) additional indebtedness; (ii) liens; (iii) dispositions of property; (iv) dividends and distributions; (v) investments and acquisitions; (vi) transactions with affiliates; and (vii) fundamental changes such as mergers, consolidations and liquidations. Enovation Controls, LLC is also required to comply with the following financial covenants: (i) a maximum total leverage ratio and (ii) a minimum fixed charge coverage ratio. The senior credit facility permits Enovation Controls, LLC to make tax distributions

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to its members, including us, as well as other distributions as long as there is no event of default (or event that, with the giving of notice, passage of time, or both, would result in an event of default) and, after making such dividend or distribution, Enovation Controls, LLC is in compliance with the financial covenants.

Events of default under the senior credit facility include:

• failure to pay principal, interest, fees or other amounts under the senior credit facility when due, taking into account any applicable grace period;

• any representation or warranty proving to have been inaccurate in any material respect when made;

• failure to perform or observe covenants or other terms of the senior credit facility subject to certain grace periods;

• a cross-default and cross-acceleration with other debt;

• bankruptcy events;

• at any time prior to one year following this offering, any person other than Murphy Group and EControls Group beneficially owning more than 35% of our outstanding voting common stock (or if Murphy Group and EControls beneficially own more than 35% of our outstanding voting common stock, such person acquires a greater percentage);

• certain defaults under ERISA;

• certain judgments or decrees not covered by insurance; and

• the invalidity or impairment of any security interest.

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DESCRIPTION OF CAPITAL STOCK

The following description of our capital stock and provisions of our amended and restated certificate of incorporation, and our amended and restated bylaws, each of which will be in effect prior to the completion of this offering, are summaries and are qualified by reference to the amended and restated certificate of incorporation and the amended and restated bylaws.

As of the consummation of this offering, our authorized capital stock will consist of         Class A Shares, par value $0.00001 per share,          Class B Shares, par value $0.00001 per share, and         shares of preferred stock, par value $0.00001 per share.

Common Stock

As of the consummation of this offering, there will be         Class A Shares issued and outstanding, and         Class B Shares issued and outstanding.

Voting Rights

Our Class A stockholders and Class B stockholders will vote together as a single class and will be entitled to cast one (1) vote per share. Our stockholders will not be entitled to cumulate their votes in the election of directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all holders of Class A Shares and Class B Shares present in person or represented by proxy, voting together as a single class. Amendments to the amended and restated certificate of incorporation must be approved by the holders of a majority of the combined voting power of all Class A Shares and Class B Shares, voting together as a single class, except that, after the Founder Entities no longer beneficially own at least a majority of the voting power of our common stock, certain amendments to the amended and restated certificate of incorporation must be approved by a super-majority of the combined voting power of all Class A Shares and Class B Shares, voting together as a single class. The type of amendments requiring such super-majority approval include amendments to provisions relating to the exchange, redemption, and transfer of the Class B Shares, the reclassification of the Class A Shares or Class B Shares, the board of directors, the calling of special stockholders meetings, stockholder action by written consent, indemnification, bylaw amendments and forum selection (all of which must be approved by the holders of at least two-thirds of the combined voting power of all Class A Shares and Class B Shares, voting together as a single class) and amendments to the business combination and amendment provisions (all of which must be approved by the holders of at least 85% of the combined voting power of all Class A Shares and Class B Shares, voting together as a single class). Amendments to the amended and restated bylaws may be approved by a majority of the entire board of directors or by the holders of a majority of the combined voting power of all Class A Shares and Class B Shares, voting together as a single class, except that, after the Founder Entities no longer beneficially own at least a majority of the voting power of our common stock, stockholder amendments to the amended and restated bylaws must be approved by at least 75% of the combined voting power of all Class A Shares and Class B Shares, voting together as a single class.

Because the Founder Entities will control     % of the combined voting power of our common stock immediately following this offering, the Founder Entities will be able to exercise significant control over all matters requiring the approval of our stockholders, including the approval of significant corporate transactions and the declaration and payment of dividends. Our board of directors will initially be composed of a total of              directors, of which five of the directors will be appointed by the Founder Entities and who will exercise a majority of the director voting power on all matters presented to the board of directors. The Founder Entities intend to enter into a Stockholders Agreement pursuant to which (i) each Founder Entity will have the right to designate two members to our board of directors for so long as such Founder Entity owns 10% or more of our outstanding Class A Shares and Class B Shares, (ii) the Founder Entities will also have the right to designate one mutually agreed additional member to our board of directors. Under the terms of the Stockholders Agreement,

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each Founder Entity will agree to vote all of their Class A Shares (if any) and Class B Shares (if any) in favor of the election to our board of directors of the five director designees. If, at any time, a Founder Entity owns 5% or more but less than 10% of our outstanding Class A Shares and Class B Shares, such Founder Entity will have the right to designate one nominee for election to our board of directors. If a Founder Entity’s ownership level falls below 5% of our outstanding Class A Shares and Class B Shares, such Founder Entity will no longer have any right to designate a nominee and the right of the Founder Entities to mutually designate a designee will also terminate. In addition, under the terms of the Stockholders Agreement, for so long as the Founder Entities together hold at least 25% of the voting power of our outstanding common stock, certain actions may not be taken without the approval of each of the Founder Entities including:

• any merger, recapitalization, issuance of voting securities or other adjustment in voting rights if, following such event, Murphy Group and EControls Group would not together have sufficient voting power or otherwise be entitled to elect a majority of our board of directors;

• any sale of all or substantially all of the assets of Enovation Controls, LLC or the Company;

• the issuance of any debt securities or equity securities by us or by any of our subsidiaries, other than certain issuances in accordance with employee benefit programs;

• the creation of any new class or series of shares of equity securities that are senior to or on a parity with our Class A Shares and Class B Shares; and

• any amendment of our certificate of incorporation or bylaws or the equivalent organization documents of us or of any of our subsidiaries in a manner that could reasonably be expected to adversely affect the rights of Murphy Group or EControls Group.

Dividend Rights

Class A stockholders will share ratably (based on the number of Class A Shares held) if and when any dividend is declared by the board of directors. We may not subdivide, consolidate, reclassify or otherwise change shares of either class of common stock unless the shares of the other class of common stock and the Common Units are subdivided, consolidated, reclassified and otherwise changed in the same proportion and in the same manner.

Our Class B stockholders will not participate in any cash dividend declared by our board of directors, except that in the event a dividend is paid to the Class A stockholders in the form of Class A Shares (or rights to acquire such shares), then a proportionate dividend in the form of Class B Shares (or rights to acquire such shares) shall be paid on the Class B Shares.

Liquidation Rights

On our liquidation, dissolution or winding up, each Class A stockholder will be entitled to a pro rata distribution of any assets available for distribution to common stockholders. Class B stockholders will not participate in any distribution upon our liquidation, dissolution or winding up.

Other Matters

No Class A Shares will be subject to redemption or have preemptive rights to purchase additional Class A Shares. Upon consummation of this offering, all the outstanding Class A Shares will be validly issued, fully paid and non-assessable.

No Class B Shares will have preemptive rights to purchase additional Class B Shares. Upon consummation of this offering, all outstanding Class B Shares will be validly issued, fully paid and non-assessable.

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Our amended and restated certificate of incorporation will provide that no holder of Class B Shares may transfer any Class B Shares to any person unless the holder transfers an equal number of Common Units to the same person and such transfer is otherwise permitted pursuant to the amended and restated operating agreement of Enovation Controls, LLC. If a holder of Class B Shares transfers any Common Units to any person, the holder must transfer an equal number of Class B Shares to the same person.

Issuance of Class B Shares with Common Units

Class B Shares will be issued in the future only to the extent that additional Common Units are issued by Enovation Controls, LLC, in which case we would contemporaneously issue a corresponding number of Class B Shares. Class B Shares are transferable only together with an equal number of Common Units. If the holder of Common Units exchanges or forfeits its Common Units pursuant to the terms of the amended and restated operating agreement of Enovation Controls, LLC, a corresponding number of Class B Shares will be surrendered to us and cancelled.

Exchanges of Common Units for Class A Shares

Subject to the terms and conditions of the amended and restated operating agreement of Enovation Controls, LLC, each Common Unitholder will have the right to exchange Common Units, together with the corresponding number of our Class B Shares, for our Class A Shares or, at our option, cash equal to the market value of our Class A Shares, after the expiration of the lock-up period, which is 180 days after the date of this prospectus, as more fully described under “The Transactions—Operating Agreement of Enovation Controls, LLC—Exchange Rights.”

Registration Rights Agreement

In connection with the completion of this offering, we intend to enter into a registration rights agreement with all of the Common Unitholders pursuant to which we will be required to register the exchange under the federal securities laws of the Common Units (and Class B Shares) held by them for Class A Shares. We have agreed, at our expense, to use our reasonable best efforts to file with the SEC a shelf registration statement providing for the exchange of the Common Units (and Class B Shares) for Class A Shares and the resale of such shares thereafter upon the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, and to cause and maintain the effectiveness of this shelf registration statement until such time as all Class A Shares covered by this shelf registration statement have been exchanged. Further, each of the Founder Entities will be entitled to cause us, at our expense, to register the resale of the Class A Shares they will receive upon exchange of their Common Units (and Class B Shares), which we refer to as their “demand” registration rights.

All Common Unitholders (as well as their permitted transferees) will be entitled to exercise “piggyback” rights in connection with any future public underwritten offerings we engage in for our account or for the account of others to whom we have granted registration rights after the expiration or earlier termination (if any) of the lock-up agreements referred to above, subject to pro rata reduction if it is determined that the sale of additional shares would be harmful to the success of the offering. All fees, costs and expenses of underwritten registrations will be borne by us, other than underwriting discounts and selling commissions, which will be borne by each stockholder selling its shares. Our registration obligations will be subject to certain restrictions on, among other things, the frequency of requested registrations, the number of shares to be registered and the duration of these rights.

Preferred Stock

Our amended and restated certificate of incorporation provides that our board of directors has the authority, without action by the stockholders, to designate and issue up to             shares of preferred stock in one or more series and to fix the powers, rights, preferences, qualifications, limitations and restrictions of each series of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation

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preferences and the number of shares constituting any class or series, which may be greater than the rights of the holders of the common stock. There will be no shares of preferred stock outstanding immediately after this offering. Any issuance of shares of preferred stock could adversely affect the voting power of holders of common stock, and the likelihood that the holders of preferred stock will receive dividend payments and payments upon liquidation could have the effect of delaying, deferring or preventing a change in control. We have no present plans to issue any shares of preferred stock.

Anti-Takeover Provisions of Delaware Law and Certain Charter and Bylaw Provisions

Our amended and restated certificate of incorporation, which will be filed with the State of Delaware and become effective immediately prior to this offering, and amended and restated bylaws contain provisions that are intended to enhance the likelihood of continuity and stability in the composition of the board of directors and that may have the effect of delaying, deferring or preventing a future takeover or change in control of our company unless the takeover or change in control is approved by our board of directors. These provisions include the following:

Staggered Board of Directors. Our amended and restated certificate of incorporation provides for a staggered board of directors, divided into three classes (with two classes each having one director designated by each of the Founder Entities and the third class having the director designated jointly by the Founder Entities, with our stockholders electing one class each year. Between stockholders’ meetings, the board of directors will be able to appoint new directors to fill vacancies or newly created directorships so that no more than the number of directors in any given class may be replaced each year and therefore it would take three successive annual meetings to replace all directors. As a result, the majority of the votes on the board will be up for election every two years.

Stockholder Action by Written Consent. Our amended and restated certificate of incorporation and amended and restated bylaws provide that stockholder action may be taken by written consent in lieu of a meeting only until such time as the Founder Entities and their affiliates cease to control at least a majority of the voting power of our common stock and, thereafter, stockholder action may be taken only at an annual or special meeting of stockholders.

As long as the Founder Entities and their affiliates control at least a majority of the voting power of our common stock, the Founder Entities and their affiliates will be able to approve all voting matters by written consent and without soliciting the votes of the other Class A Shareholders. Consequently, if the Founder Entities elect to approve matters requiring a stockholder vote by written consent, the Class A Shareholders will only receive information statements setting forth the actions previously taken by the Founder Entities and their affiliates by written consent rather than a proxy statement soliciting their vote on the voting matters. See “Risk Factors—Risks Related to Our Organizational Structure—Control by the Founder Entities of    % of the combined voting power of our common stock and the fact that they are holding their economic interest through Enovation Controls, LLC may give rise to conflicts of interest.”

Elimination of the Ability to Call Special Meetings. Our amended and restated certificate of incorporation and amended and restated bylaws provide that, except as otherwise required by law, special meetings of our stockholders can be called only by or at the direction of a majority of our entire board of directors or a committee of the board of directors that has been duly designated by the board of directors and whose powers and authority include the power to call such meetings, by the chairman of the Board or, prior to the time that the Founder Entities cease to beneficially own at least a majority of the voting power of our common stock, the stockholders owning at least a majority of the voting power of our capital stock. Once the Founder Entities cease to beneficially own a majority of the voting power of our capital stock, stockholders will not be permitted to call a special meeting or to require our board to call a special meeting.

Removal of Directors; Board of Directors Vacancies. Our amended and restated certificate of incorporation and amended and restated bylaws provide that members of our board of directors may not be removed without

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cause and that only our board of directors may fill vacant directorships. These provisions would prevent a stockholder from gaining control of our board of directors by removing incumbent directors and filling the resulting vacancies with such stockholder’s own nominees.

Amendment of Certificate of Incorporation and Bylaws. The General Corporation Law of the State of Delaware, or DGCL, provides generally that the affirmative vote of a majority of the outstanding shares entitled to vote is required to amend or repeal a corporation’s certificate of incorporation or bylaws, unless the certificate of incorporation requires a greater percentage. After the time that the Founder Entities cease to beneficially own at least a majority of the voting power of our common stock, our amended and restated certificate of incorporation generally requires the approval of the holders of at least two-thirds of the voting power of our capital stock to amend any provisions of our amended and restated certificate of incorporation described in this section and the approval of the holders of at least 75% of the voting power of our capital stock to amend or repeal our bylaws. In addition, our amended and restated certificate of incorporation grants our board of directors the authority to amend and repeal our bylaws without a stockholder vote in any manner not inconsistent with the laws of the State of Delaware or our amended and restated certificate of incorporation.

Advance Notice Procedures. Our amended and restated certificate of incorporation and amended and restated bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to the board of directors. Stockholders at an annual meeting will be able to consider only proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors or a committee thereof or by a stockholder who was a stockholder of record at the time of giving notice provided for in the amended and restated bylaws and at the time of the annual meeting, who is entitled to vote at the meeting, and who has given our Secretary timely written notice, in proper form, of the stockholder’s intention to bring that business before the meeting. Although the amended and restated bylaws will not give the board of directors the power to approve or disapprove stockholder nominations of candidates or proposals regarding other business to be conducted at a special or annual meeting, the amended and restated bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of us.

Issuance of Undesignated Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to issue up to                 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by the board of directors. The existence of authorized but unissued shares of preferred stock enables our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.

The foregoing provisions of our amended and restated certificate of incorporation and amended and restated bylaws could discourage potential acquisition proposals and could delay or prevent a change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by our board of directors and to discourage certain types of transactions that may involve an actual or threatened change in control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our Class A Shares that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management or delaying or preventing a transaction that might benefit you or other minority stockholders.

Business Combinations with Interested Stockholders

We have elected in our amended and restated certificate of incorporation not to be subject to Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, Section 203 prohibits a publicly held

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Delaware corporation from engaging in a “business combination,” such as a merger, with a person or group owning 15% or more of the corporation’s voting stock for a period of three years following the date the person became an interested stockholder unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner. Accordingly, we are not subject to any anti-takeover effects of Section 203. However, our amended and restated certificate of incorporation will contain provisions that have the same effect as Section 203, except that they provide that our Founder Entities, certain of their transferees so designated by the transferring Founder Entity, and their affiliates will not be deemed to be “interested stockholders,” regardless of the percentage of our voting stock owned by them, and accordingly will not be subject to such restrictions.

Limitations on Liability and Indemnification of Officers and Directors

As permitted by Delaware law, our amended and restated certificate of incorporation includes provisions that eliminate the personal liability of our directors for monetary damages resulting from breaches of certain fiduciary duties as a director. The effect of this provision is to restrict our rights and the rights of our stockholders in derivative suits to recover monetary damages against a director for breach of fiduciary duties as a director, except that, to the extent required by Delaware law, a director will be personally liable for:

• any breach of his duty of loyalty to us or our stockholders;

• acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

• any transaction from which the director derived an improper personal benefit; or

• improper distributions to stockholders.

These provisions may be held not to be enforceable for violations of the federal securities laws of the United States.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that we are required to indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law. They also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under Delaware law. We intend to enter into agreements to indemnify our directors, executive officers and other employees as determined by our board of directors. With specified exceptions, these agreements will provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these provisions of our amended and restated certificate of incorporation and amended and restated bylaws and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain directors’ and officers’ liability insurance.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors and officers for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and our stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damages.

Exclusive Forum

Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative

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action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employee or agents to us or our stockholders, creditors or other constituencies, (iii) any action asserting a claim against us or any of our directors, officers, employees or agents arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or amended and restated bylaws or (iv) any action asserting a claim against us or any of our directors, officers, employees or agents governed by the internal affairs doctrine, in each such case excluding actions in which the Court of Chancery of the State of Delaware concludes that there is an indispensable party not subject to its jurisdiction (which party does not consent to such jurisdiction within 10 days) or for which it does not have subject matter jurisdiction. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the forum provisions in our amended and restated certificate of incorporation.

Transfer Agent

The registrar and transfer agent for our common stock is American Stock Transfer & Trust Company, LLC.

Listing

We intend to apply to list our Class A Shares on the NYSE under the symbol “ENOV.”

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for our Class A Shares, and a liquid trading market for our Class A Shares may not develop or be sustained after this offering. Future sales of substantial amounts of Class A Shares, including shares issued upon exercise of options, exchange of Common Units (and Class B Shares) or in the public market after this offering, or the anticipation of those sales, could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through sales of our equity securities.

Upon the closing of this offering, we will have outstanding             Class A Shares, all of which were issued in this offering assuming no exercise of the underwriters’ overallotment option.

All of the shares to be sold in this offering will be freely tradable without restriction under the Securities Act unless purchased by our “affiliates,” as that term is defined in Rule 144 under the Securities Act.

Upon consummation of this offering, the Common Unitholders will beneficially own an aggregate of             Common Units assuming we sell the Class A Shares at $         in this offering and the underwriters do not exercise their option to purchase additional shares. Pursuant to the amended and restated operating agreement of Enovation Controls, LLC, a Common Unitholder may from time to time exchange its Common Units (together with a corresponding number of Class B Shares) for an equal number of Class A Shares. We have agreed to register the exchange of all these interests upon the expiration or earlier termination (if any) of their lock-up agreements with the underwriters of this offering which expire 180 days after the date of this prospectus. The Class A Shares received upon exchange may be freely resold into the public market unless held by a Common Unitholder which is an affiliate of us. The Founder Entities will have the right to demand that we register the resale of their Class A Shares received upon such exchange and all Common Unitholders (and their permitted transferees) will have certain “piggyback” registration rights.

Lock-Up Agreements

We, all directors and officers and all holders of our Common Units and all of our outstanding stock and stock options have agreed that, without the prior written consent of Morgan Stanley, subject to certain exceptions, we and they will not, during the period ending 180 days after the date of this prospectus, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for common stock, or (ii) enter into any swap or other arrangement that transfers to another, whole or in part, any of the economic consequences of ownership of the common stock, whether any such transaction described under (i) or (ii) above is to be settled by delivery of common stock or such other securities, in cash or otherwise. See “Underwriters.” Morgan Stanley may waive these restrictions at its discretion.

Rule 144

In general, under Rule 144 under the Securities Act, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those securities, subject only to the availability of current public information about us. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those securities without regard to the provisions of Rule 144.

A person (or persons whose securities are aggregated) who is deemed to be an affiliate of ours and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months would be entitled to sell within any three month period a number of securities that does not exceed the greater of one percent of the

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then outstanding shares of our common stock or the average weekly trading volume of our common stock reported through the NYSE during the four calendar weeks preceding such sale. Such sales are also subject to certain manner of sale provisions, notice requirements and the availability of current public information about us.

Rule 701

In general, under Rule 701 of the Securities Act, most of our employees, consultants or advisors who purchased shares from us in connection with a qualified compensatory stock plan or other written agreement are eligible to resell those shares 90 days after the date of this prospectus in reliance on Rule 144 but without compliance with the holding period or certain other restrictions contained in Rule 144; however, the shares will be subject to the lock-up agreements described under “—Lock-Up Agreements.”

Incentive Plan Shares

We intend to file a registration statement on Form S-8 under the Securities Act to register stock issuable under our 2014 Incentive Plan. This registration statement is expected to be filed following the effective date of the registration statement of which this prospectus forms a part and will automatically become effective upon filing. Accordingly, shares registered under such registration statement will be available for sale in the open market following the effective date, unless such shares are subject to vesting restrictions with us, Rule 144 restrictions applicable to our affiliates, or are otherwise subject to the lock-up restrictions described above.

Registration Rights

In connection with the completion of this offering, we intend to enter into a registration rights agreement with all of the Common Unitholders pursuant to which we will be required to register the exchange under the federal securities laws of the Common Units (and Class B Shares) held by them for Class A Shares. We have agreed, at our expense, to use our reasonable best efforts to file with the SEC a shelf registration statement providing for the exchange of the Common Units (and Class B Shares) for Class A Shares and the resale of such shares thereafter upon the expiration or earlier termination (if any) of the lock-up agreement between the underwriters of this offering and each Common Unitholder, and to cause and maintain the effectiveness of this shelf registration statement until such time as all Class A Shares covered by this shelf registration statement have been exchanged. Further, each of the Founder Entities will be entitled to cause us, at our expense, to register the resale of the Class A Shares they will receive upon exchange of their Common Units (and Class B Shares), which we refer to as their “demand” registration rights.

All Common Unitholders (as well as their permitted transferees) will be entitled to exercise “piggyback” rights in connection with any future public underwritten offerings we engage in for our account or for the account of others to whom we have granted registration rights after the expiration or earlier termination (if any) of the lock-up agreements referred to above, subject to pro rata reduction if it is determined that the sale of additional shares would be harmful to the success of the offering. All fees, costs and expenses of underwritten registrations will be borne by us, other than underwriting discounts and selling commissions, which will be borne by each stockholder selling its shares. Our registration obligations will be subject to certain restrictions on, among other things, the frequency of requested registrations, the number of shares to be registered and the duration of these rights.

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MATERIAL U.S. FEDERAL TAX CONSEQUENCES FOR NON-UNITED STATES

HOLDERS OF CLASS A SHARES

Preliminary Matters

The following discussion is a summary of the material U.S. federal income tax consequences of the purchase, ownership and disposition of Class A Shares generally applicable to “non-U.S. holders” (as defined below) of Class A Shares, but does not propose to be a complete analysis of all potential tax considerations related thereto. This summary is limited to non-U.S. holders that acquire Class A Shares for cash pursuant to this offering and that hold such shares as capital assets (generally, for investment).

For purposes of this discussion, a “non-U.S. holder” is any beneficial owner that for U.S. federal income tax purposes is not an entity classified as a partnership and is not a “U.S. holder,” and the term “U.S. holder” means:

• an individual who is a citizen or resident of the United States;

• a corporation or other entity taxable as a corporation created in or organized under the laws of the United States, any state thereof or the District of Columbia;

• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust (x) if a court within the United States is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of such trust or (y) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a partnership or other pass-through entity holds Class A Shares, the U.S. federal income tax treatment of a partner in the partnership or member in the other entity generally will depend upon the status of the partner or member and the activities of the partnership or other entity. Accordingly, we urge partnerships or other pass-through entities that hold Class A Shares and partners or members in these partnerships or other entities to consult their tax advisors.

This summary does not address all aspects of U.S. federal income taxation that may be relevant to a particular non-U.S. holder in light of such non-U.S. holder’s particular circumstances and does not address any state, local, gift or estate tax considerations or any considerations relating to the Medicare tax on net investment income that may be relevant to an investment in Class A Shares. It also does not apply to non-U.S. holders subject to special tax treatment under the U.S. federal income tax laws (including banks, insurance companies, and other financial institutions, tax-exempt organizations, brokers, traders, or dealers in securities or currency, persons who hold Class A Shares as part of a “straddle,” “hedge,” “conversion transaction,” or other risk-reduction or integrated transaction, controlled foreign corporations, passive foreign investment companies, foreign estates or trusts with U.S. beneficiaries, persons that own, or have owned, actually or constructively, more than 5% of our Class A Shares, companies that accumulate earnings to avoid U.S. federal income tax, foreign governments, and former U.S. citizens or residents). This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury regulations, IRS rulings and pronouncements and judicial decisions in effect, all of which are subject to change, possibly on a retroactive basis, or differing interpretations. There can be no assurance that the IRS will not challenge one or more of the tax consequences described herein, and we have not obtained, nor do we intend to obtain, a ruling from the IRS with respect to the U.S. federal income tax consequences to a non-U.S. holder of the purchase, ownership, or disposition of our Class A Shares.

This summary is for general information only and is not, and is not intended to be, tax advice. Non-U.S. holders of Class A Shares are urged to consult their own tax advisors concerning the tax considerations related to the acquisition, ownership, and disposition of Class A Shares in light of their particular circumstances, as well as any tax considerations relating to gift or estate taxes, the alternative minimum tax or to the Medicare tax on net investment income, and any tax considerations arising under the laws of any other jurisdiction, including any state, local, and non-U.S. income and other tax laws.

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Distributions

Distributions of cash or property (other than certain stock distributions) that we pay in respect of Class A Shares (and certain redemptions treated as distributions with respect to Class A Shares) will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). A non-U.S. holder generally will be subject to U.S. federal withholding tax at a 30% rate, or at a reduced rate prescribed by an applicable income tax treaty, on any dividends received in respect of Class A Shares. Dividends that are effectively connected with a non-U.S. holder’s conduct of a trade or business in the United States (and, if a tax treaty applies, are attributable to a U.S. permanent establishment or fixed base of such holder) will be exempt from the 30% withholding tax (assuming compliance with certain certification requirements described further below). Instead, such dividends generally will be subject to U.S. federal income tax on a net income basis at regular graduated U.S. federal income tax rates in the same manner as if such holder were a resident of the U.S. Such dividends received by a corporate non-U.S. holder also may be subject to an additional “branch profits” tax at a 30% rate (or such lower rate specified by an applicable income tax treaty).

If the amount of a distribution exceeds our current and accumulated earnings and profits, such excess first will be treated as a tax-free return of capital to the extent of the non-U.S. holder’s adjusted tax basis in its Class A Shares, and thereafter will be treated as capital gain, subject to the tax treatment described below under “Dispositions.” A non-U.S. holder’s adjusted tax basis in its shares is generally the purchase price of such shares, reduced by the amount of any tax-free return of capital. If at the time a distribution is made we are not able to determine whether or not it will exceed current and accumulated earnings and profits, we or a financial intermediary may withhold tax on all or a portion of such distribution at the rate applicable to dividends. However, a non-U.S. holder may obtain a refund of any excess withholding by timely filing an appropriate claim for refund with the IRS.

In order to obtain a reduced rate of U.S. federal withholding tax under an applicable income tax treaty, a non-U.S. holder will be required to provide a properly executed IRS Form W-8BEN or other appropriate version of IRS Form W-8 certifying its entitlement to benefits under the treaty. These forms must be periodically updated. A non-U.S. holder of Class A Shares that is eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim for a refund with the IRS. A non-U.S. holder should consult its tax advisor regarding its possible entitlement to benefits under an income tax treaty.

Generally, to claim the benefit of any applicable United States tax treaty or an exemption from withholding because the income is effectively connected with the conduct of a trade or business in the United States, you must provide a properly executed IRS Form W-8BEN for treaty benefits or IRS Form W-8ECI for effectively connected income (or such successor form as the IRS designates), before the distributions are made. These forms must be periodically updated. If you are a non-U.S. holder, you may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. holders should consult their tax advisers regarding their entitlement to benefits under an applicable income tax treaty and the specific manner of claiming the benefits of the treaty.

Dispositions

Subject to the discussion below regarding the Foreign Account Tax Compliance Act and backup withholding, a non-U.S. holder generally will not be subject to U.S. federal income or withholding tax in respect of any gain on a sale, exchange or other taxable disposition of Class A Shares (including a redemption, but only if the redemption would be treated as a sale or exchange rather than as a distribution for U.S. federal income tax purposes) unless:

• the gain is effectively connected with the non-U.S. holder’s conduct of trade or business in the United States and, if an income tax treaty applies, is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States;

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• the non-U.S. holder is an individual who is present in the United States for 183 or more days in the tax year of the disposition and meets certain other conditions; or

• we are or have been a “U.S. real property holding corporation” (which we refer to as a USRPHC) under Section 897 of the Code at any time during the shorter of the five-year period ending on the date of disposition and the non-U.S. Holder’s holding period for its Class A Shares.

If the first exception applies, the non-U.S. holder generally will be subject to U.S. federal income tax on a net basis with respect to such gain in the same manner as if such holder were a resident of the United States. In addition, if the non-U.S. holder is a corporation for U.S. federal income tax purposes, such gains may, under certain circumstances, also be subject to the branch profits tax at a rate of 30% (or at a lower rate prescribed by an applicable income tax treaty).

If the second exception applies, the non-U.S. holder generally will be subject to U.S. federal income tax at a rate of 30% on the gain from a disposition of our common stock (or such lower rate that may be specified by an applicable income tax treaty), which may be offset by capital losses allocable to U.S. sources during the taxable year of disposition (even though the non-U.S. holder is not considered a resident of the United States) but may not be offset by capital loss carryovers.

With regard to the third exception above, in general, a corporation is a USRPHC if the fair market value of its “U.S. real property interests” equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests and its other assets used or held for use in a trade or business. We do not believe that we currently are a USRPHC, and we do not anticipate becoming a USRPHC in the future. However, no assurance can be given that we will not be a USRPHC at or prior to the time a non-U.S. holder sells its Class A Shares. Even if we are treated as a USRPHC, gain realized by a non-U.S. holder on a disposition of Class A Shares will not be subject to U.S. federal income tax so long as (1) the non-U.S. holder does not own, directly, indirectly or constructively, more than 5% of our Class A Shares at all times within the shorter of (i) the five-year period preceding the disposition or (ii) such non-U.S. holder’s holding period and (2) our Class A Shares are regularly traded on an established securities market (as determined under the Code). There can be no assurance that Class A Shares will continue to qualify as regularly traded on an established securities market.

Withholding Rules Pursuant to the Foreign Account Tax Compliance Act (FATCA)

Legislation enacted in 2010 and existing guidance issued thereafter requires withholding at a rate of 30% on dividends in respect of, and after December 31, 2016, gross proceeds from the sale of, Class A Shares held by or through certain foreign financial institutions (including investment funds), unless such institution enters into an agreement with the U.S. Treasury to report, on an annual basis, information with respect to shares in, and accounts maintained by, the institution to the extent such shares or accounts are held by certain U.S. persons or by certain non-U.S. entities that are wholly or partially owned by U.S. persons. An intergovernmental agreement between the United States and an applicable foreign country, or future Treasury regulations or other guidance may modify these requirements. Accordingly, the entity through which Class A Shares are held will affect the determination of whether such withholding is required. Similarly, dividends in respect of, and gross proceeds from the sale of, Class A Shares held by an investor that is a non-financial non-U.S. entity which does not qualify under certain exceptions will be subject to withholding at a rate of 30% beginning after the dates noted above, unless such entity either (i) certifies to us (or another applicable withholding agent) that such entity does not have any “substantial U.S. owners” or (ii) provides certain information regarding the entity’s “substantial U.S. owners,” which we (or another applicable withholding agent) will in turn provide to the U.S. Treasury. Non-U.S. holders are encouraged to consult with their tax advisers regarding the possible implications of these rules on their investment in Class A Shares, including, without limitation, the process and deadlines for meeting the applicable requirements to prevent the imposition of the 30% withholding tax under these rules.

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Information Reporting and Backup Withholding Requirements

We or a financial intermediary must report annually to the IRS and to each non-U.S. holder the gross amount of the distributions on our Class A Shares paid to such holder and the tax withheld, if any, with respect to such distributions, regardless of whether withholding was required. This information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established. A non-U.S. holder will generally be subject to backup withholding at the then applicable rate for dividends paid to such holder unless such holder furnishes a valid IRS Form W-8BEN (or such other applicable form and documentation as required by the Code or the Treasury regulations) certifying under penalties of perjury that it is a non-U.S. holder (and the payor does not have actual knowledge or reason to know that such holder is a U.S. person as defined under the Code), or otherwise establishes an exemption. Dividends paid to non-U.S. holders subject to U.S. federal withholding tax, as described above in “Distributions,” generally will be exempt from U.S. backup withholding.

Information reporting and, depending on the circumstances, backup withholding will apply to the payment of the proceeds of a sale or other disposition of shares of our Class A Shares by a non-U.S. holder effected by or through the U.S. office of any broker, U.S. or non-U.S., unless the holder certifies that it is not a U.S. person (as defined under the Code) and satisfies certain other requirements, or otherwise establishes an exemption. Generally, information reporting and backup withholding will not apply to a payment of disposition proceeds to a non-U.S. holder where the transaction is effected outside the U.S. through a non-U.S. office of a broker. However, for information reporting purposes, dispositions effected through a non-U.S. office of a broker with substantial U.S. ownership or operations generally will be treated in a manner similar to dispositions effected through a U.S. office of a broker. Prospective investors should consult their own tax advisors regarding the application of the information reporting and backup withholding rules to them.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a credit against a non-U.S. holder’s U.S. federal income tax liability, if any, and may entitle such holder to a refund, provided that an appropriate claim is timely filed with the IRS.

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UNDERWRITERS

Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Morgan Stanley & Co. LLC and UBS Securities LLC are acting as representatives, have severally agreed to purchase, and we have agreed to sell to them, severally, the number of Class A Shares indicated below:

Name	Number of Shares
Morgan Stanley & Co. LLC
UBS Securities LLC
Piper Jaffray & Co.
Robert W. Baird & Co. Incorporated
William Blair & Company, L.L.C.
Raymond James & Associates, Inc.
Total:

The underwriters and the representatives are collectively referred to as the “underwriters” and the “representatives,” respectively. The underwriters are offering the Class A Shares subject to their acceptance of the shares from us and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the Class A Shares offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the Class A Shares offered by this prospectus if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters’ overallotment option described below.

The underwriters initially propose to offer part of the Class A Shares directly to the public at the offering price listed on the cover page of this prospectus and part to certain dealers. After the initial offering of the Class A Shares, the offering price and other selling terms may from time to time be varied by the representatives.

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to additional Class A Shares at the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering overallotments, if any, made in connection with the offering of the Class A Shares offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional Class A Shares as the number listed next to the underwriter’s name in the preceding table bears to the total number of Class A Shares listed next to the names of all underwriters in the preceding table.

The following table shows the per share and total public offering price, underwriting discounts and commissions, and proceeds before expenses to us. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase up to an additional             Class A Shares.

		Total
	Per Share	No Exercise	Full Exercise
Public offering price	$	$	$
Underwriting discounts and commissions to be paid by us	$	$	$
Proceeds, before expenses, to us	$	$	$

The estimated offering expenses payable by Enovation Controls, LLC, exclusive of the underwriting discounts and commissions, are approximately $        . Enovation Controls, LLC has agreed to reimburse the underwriters for expenses relating to clearance of this offering with the Financial Industry Regulatory Authority up to $        .

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The underwriters have informed us that they do not intend sales to discretionary accounts to exceed five percent of the total number of Class A Shares offered by them.

We intend to apply to list our Class A Shares on the NYSE under the symbol “ENOV.”

We, Enovation Controls, LLC and all directors and officers and the holders of Common Units and all of our outstanding stock and stock options have agreed that, without the prior written consent of Morgan Stanley on behalf of the underwriters, we and they will not, during the period ending 180 days after the date of this prospectus (the “restricted period”):

• offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for shares of common stock;

• file any registration statement with the SEC relating to the offering of any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock; or

• enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock

whether any such transaction described above is to be settled by delivery of Class A Shares or such other securities, in cash or otherwise. In addition, we and each such person agrees that, without the prior written consent of Morgan Stanley on behalf of the underwriters, we or such other person will not, during the restricted period, make any demand for, or exercise any right with respect to, the registration of any shares of common stock or any security convertible into or exercisable or exchangeable for common stock.

The restrictions described in the immediately preceding paragraph to do not apply to:

• the sale of shares to the underwriters;

• the issuance by us of Class A Shares upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus of which the underwriters have been advised in writing;

• transactions by any person other than us relating to Class A Shares or other securities acquired in open market transactions after the completion of the offering of the shares; provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, is required or voluntarily made in connection with subsequent sales of the common stock or other securities acquired in such open market transactions; or

• the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Class A Shares, provided that (i) such plan does not provide for the transfer of Class A Shares during the restricted period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required or voluntarily made regarding the establishment of such plan, such announcement or filing shall include a statement to the effect that no transfer of Class A Shares may be made under such plan during the restricted period.

Morgan Stanley, in its sole discretion, may release the Class A Shares and other securities subject to the lock-up agreements described above in whole or in part at any time with or without notice.

In order to facilitate the offering of the Class A Shares, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the Class A Shares. Specifically, the underwriters may sell more shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares available for purchase by the underwriters under the overallotment option. The underwriters can close out a covered short sale by exercising

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the overallotment option or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares compared to the price available under the overallotment option. The underwriters may also sell shares in excess of the overallotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Class A Shares in the open market after pricing that could adversely affect investors who purchase in this offering. As an additional means of facilitating this offering, the underwriters may bid for, and purchase, Class A Shares in the open market to stabilize the price of the Class A Shares. These activities may raise or maintain the market price of the Class A Shares above independent market levels or prevent or retard a decline in the market price of the Class A Shares. The underwriters are not required to engage in these activities and may end any of these activities at any time.

We and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

A prospectus in electronic format may be made available on websites maintained by one or more underwriters, or selling group members, if any, participating in this offering. The representative may agree to allocate a number of Class A Shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representative to underwriters that may make Internet distributions on the same basis as other allocations.

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging. financing and brokerage activities. In addition to services related to this offering, certain of the underwriters and their respective affiliates may in the future perform various financial advisory and investment banking services for us, for which they will receive customary fees and expenses.

In addition, in the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments. The underwriters and their respective affiliates may also make investment recommendations or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long or short positions in such securities and instruments.

Pricing of the Offering

Prior to this offering, there has been no public market for our Class A Shares. The initial public offering price will be determined by negotiations between us, the Founder Entities and the representatives. Among the factors that will be considered in determining the initial public offering price will be our future prospects and those of our industry in general, our sales, earnings and certain other financial and operating information in recent periods, and the price-earnings ratios, price-sales ratios, market prices of securities, and certain financial and operating information of companies engaged in activities similar to ours.

Selling Restrictions

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any Class A Shares may not be made in

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that Relevant Member State, except that an offer to the public in that Relevant Member State of any Class A Shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for any such offer; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of shares of our Class A Shares shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any Class A Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Class A Shares to be offered so as to enable an investor to decide to purchase any Class A Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

United Kingdom

Each underwriter has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) received by it in connection with the issue or sale of the Class A Shares in circumstances in which Section 21(1) of the FSMA does not apply to us; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Class A Shares in, from or otherwise involving the United Kingdom.

177

LEGAL MATTERS

The validity of our Class A Shares offered by this prospectus will be passed upon for us by Fulbright & Jaworski LLP (a member of Norton Rose Fulbright), San Antonio, Texas. Certain legal matters relating to this offering will be passed upon for the underwriters by Davis Polk & Wardwell LLP, New York, New York.

178

EXPERTS

The audited balance sheet of Enovation Controls, Inc. as of August 18, 2014 included in this prospectus and elsewhere in this registration statement has been so included in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing.

The audited consolidated financial statements of Enovation Controls, LLC as of December 31, 2013 and 2012, and for each of the years in the three-year period ended December 31, 2013, included in this prospectus and elsewhere in this registration statement have been so included in reliance upon the report of Grant Thornton LLP, independent registered public accountants, upon the authority of said firm as experts in accounting and auditing.

179

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement, of which this prospectus is a part, on Form S-1 with the SEC relating to this offering. This prospectus does not contain all of the information in the registration statement and the exhibits included with the registration statement. References in this prospectus to any of our contracts, agreements or other documents are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contracts, agreements or documents. You may read and copy the registration statement, the related exhibits and other material we file with the SEC at the SEC’s public reference room in Washington, D.C. at 100 F Street N.E., Washington, D.C. 20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file with the SEC. The website address is http://www.sec.gov.

Upon the effectiveness of the registration statement, we will be subject to the informational requirements of the Exchange Act, and, in accordance with the Exchange Act, will file reports, proxy and information statements, and other information with the SEC. Such annual, quarterly and special reports, proxy and information statements, and other information can be inspected and copied at the locations set forth above. We intend to make this information available on the investor relations section of our website. Information on, or accessible through, our website is not part of this prospectus.

180

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
ENOVATION CONTROLS, INC.
Report of Independent Registered Public Accounting Firm		F-2
Balance Sheet as of August 18, 2014		F-3
Notes to Balance Sheet		F-4
ENOVATION CONTROLS, LLC
Report of Independent Registered Public Accounting Firm		F-5
Consolidated Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013 and 2012		F-6
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Six Months Ended June 30, 2014 and 2013 (unaudited) and the Years Ended December 31, 2013, 2012 and 2011		F-7
Consolidated Statements of Members’ Equity for the Six Months Ended June 30, 2014 (unaudited) and the Years Ended December 31, 2013, 2012 and 2011		F-8
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013 (unaudited) and the Years Ended December 31, 2013, 2012 and 2011		F-9
Notes to Consolidated Financial Statements		F-10

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Enovation Controls, Inc.

We have audited the accompanying balance sheet of Enovation Controls, Inc. (a Delaware corporation) (the “Company”) as of August 18, 2014. This financial statement is the responsibility of the Company’s management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of Enovation Controls, Inc. as of August 18, 2014, in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Tulsa, Oklahoma

August 22, 2014

F-2

ENOVATION CONTROLS, INC.

Balance Sheet

As of August 18, 2014

(Amounts in thousands)

ASSETS
Cash	$	1
TOTAL ASSETS	$	1
Commitments and contingencies
STOCKHOLDERS’ EQUITY
Common Stock, par value $0.00001 per share, 1,000 shares authorized, none issued and outstanding		—
Additional paid-in capital		1
TOTAL STOCKHOLDERS’ EQUITY	$	1

The accompanying notes are an integral part of this balance sheet.

F-3

ENOVATION CONTROLS, INC.

Notes to Balance Sheet

NOTE 1—ORGANIZATION

Enovation Controls, Inc. (the “Corporation”) was formed as a Delaware corporation on June 2, 2014. Pursuant to a reorganization into a holding corporation or “Up-C” structure, its sole assets are expected to be a percentage of the common membership units in Enovation Controls, LLC. The Corporation’s only business will be to act as the sole managing member of Enovation Controls, LLC and, in that capacity, the Corporation will operate and control all of the business and affairs of Enovation Controls, LLC. As a result, the Corporation will consolidate the financial results of Enovation Controls, LLC and its subsidiaries.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The Balance Sheet has been prepared in accordance with accounting principles generally accepted in the United States of America. Separate statements of income, changes in stockholders’ equity, and cash flows have not been presented in the financial statements because there have been no activities of this entity.

NOTE 3—STOCKHOLDERS’ EQUITY

The Corporation is authorized to issue 1,000 shares of Common Stock, par value $0.00001 per share, none of which have been issued or are outstanding.

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Members

Enovation Controls, LLC

We have audited the accompanying consolidated balance sheets of Enovation Controls, LLC (an Oklahoma limited liability company) and subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations and comprehensive income (loss), members’ equity, and cash flows for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Enovation Controls, LLC and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

/s/ GRANT THORNTON LLP

Tulsa, Oklahoma

August 22, 2014

F-5

ENOVATION CONTROLS, LLC AND SUBSIDIARIES

Consolidated Balance Sheets

(Amounts in thousands)

	June 30,			December 31,
	2014			2013		2012
	(unaudited)
ASSETS
Current assets
Cash	$	10,049		$	5,985	$	5,266
Accounts receivable, net		38,264			29,697		25,489
Notes receivable		8,115			4,798		—
Inventories, net		34,727			38,092		34,884
Other current assets		1,299			1,081		725
Total current assets		92,454			79,653		66,364
Property, plant and equipment, net		20,179			18,796		15,528
Goodwill		605			605		605
Intangible assets		1,887			2,842		5,665
Notes receivable		—			2,500		2,500
Other assets		538			339		2,246
TOTAL ASSETS	$	115,663		$	104,735	$	92,908
LIABILITIES AND MEMBERS’ EQUITY
Current liabilities
Accounts payable	$	10,669		$	8,878	$	7,196
Accrued liabilities		10,714			10,378		10,681
Current portion of long-term debt		2,549			200		233
Total current liabilities		23,932			19,456		18,110
Long-term debt		84,000			16,879		17,799
Accrued stock compensation		45,859			—		—
Other long-term liabilities, net of current portion		536			537		497
Commitments and contingencies (see Note 10)
Members’ equity		(39,101	)		67,454		56,472
Accumulated other comprehensive income		437			409		30
Total members’ equity		(38,664	)		67,863		56,502
TOTAL LIABILITIES AND MEMBERS’ EQUITY	$	115,663		$	104,735	$	92,908

The accompanying notes are an integral part of these consolidated financial statements.

F-6

ENOVATION CONTROLS, LLC AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Amounts in thousands)

	Six Months Ended June 30,						Year Ended December 31,
	2014			2013			2013			2012			2011
	(unaudited)
Net sales	$	142,484		$	128,303		$	255,582		$	218,556		$	193,739
Cost of goods sold		83,533			73,242			147,323			137,078			122,069
Gross profit		58,951			55,061			108,259			81,478			71,670
Operating expenses:
Selling, general and administrative expenses		55,403			20,999			43,566			36,568			34,708
Research and development expenses		26,327			11,443			23,628			20,429			17,349
Goodwill impairment		—			—			—			6,462			—
Operating expenses		81,730			32,442			67,194			63,459			52,057
(Loss) income from operations		(22,779	)		22,619			41,065			18,019			19,613
Other income (expense)
Interest, net		(313	)		(177	)		(440	)		(482	)		(587	)
Gain on early extinguishment of debt		—			—			—			—			379
Other		(230	)		160			88			251			(387	)
Total other expenses		(543	)		(17	)		(352	)		(231	)		(595	)
(Loss) income before provision for income taxes		(23,322	)		22,602			40,713			17,788			19,018
Provision for income taxes		(827	)		(279	)		(793	)		(204	)		(383	)
Net (loss) income	$	(24,149	)	$	22,323		$	39,920		$	17,584		$	18,635
Other comprehensive (loss) income
Foreign currency translation adjustment		28			(216	)		379			468			131
Reclassification of goodwill translation adjustment to income		—			—			—			1,143			—
Other comprehensive (loss) income		28			(216	)		379			1,611			131
Comprehensive (loss) income	$	(24,121	)	$	22,107		$	40,299		$	19,195		$	18,766

The accompanying notes are an integral part of these consolidated financial statements.

F-7

ENOVATION CONTROLS, LLC AND SUBSIDIARIES

Consolidated Statements of Members’ Equity

(Amounts in thousands)

	Members’ Equity			Accumulated Other Comprehensive Income			Total Members’ Equity
BALANCE, December 31, 2010	$	58,763		$	(1,712	)	$	57,051
Distributions		(13,859	)		—			(13,859	)
Net income		18,635			—			18,635
Other comprehensive income		—			131			131
BALANCE, December 31, 2011		63,539			(1,581	)		61,958
Distributions		(24,651	)		—			(24,651	)
Net income		17,584			—			17,584
Other comprehensive income		—			1,611			1,611
BALANCE, December 31, 2012		56,472			30			56,502
Distributions		(28,938	)		—			(28,938	)
Net income		39,920			—			39,920
Other comprehensive income		—			379			379
BALANCE, December 31, 2013		67,454			409			67,863
Distributions		(82,406	)		—			(82,406	)
Net loss		(24,149	)		—			(24,149	)
Other comprehensive income		—			28			28
BALANCE, June 30, 2014 (unaudited)	$	(39,101	)	$	437		$	(38,664	)

The accompanying notes are an integral part of these consolidated financial statements.

F-8

ENOVATION CONTROLS, LLC AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Amounts in thousands)

	Six Months Ended June 30,						Year Ended December 31,
	2014			2013			2013			2012			2011
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(24,149	)	$	22,323		$	39,920		$	17,584		$	18,635
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		3,406			2,878			6,074			5,358			4,914
Provision for excess and obsolete inventory		540			609			1,909			1,516			1,777
Gain on sale of assets		74			—			—			(24	)		433
Goodwill impairment		—			—			—			6,462			—
Gain on early extinguishment of debt		—			—			—			—			(379	)
Non-cash compensation expenses		45,859			—			—			—			—
Changes in operating assets and liabilities:
Accounts receivable, net		(8,554	)		(9,309	)		(4,173	)		(2,160	)		(4,869	)
Notes receivable		(3,352	)		—			(4,798	)		—			—
Inventories, net		2,824			(5,104	)		(5,037	)		6,590			(16,209	)
Other assets		2,637			(822	)		1,557			(598	)		(788	)
Accounts payable		1,815			5,245			1,719			(2,773	)		2,088
Accrued liabilities and other liabilities		331			1,089			(245	)		2, 296			3,482
Net cash provided by operating activities		21,431			16,909			36,926			34,251			9,084
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of capital assets		(3,641	)		(3,338	)		(6,501	)		(5,605	)		(4,332	)
Proceeds from sale of capital assets		227			—			—			89			—
Purchase of intangible assets		(471	)		—			—			—			(1,200	)
Net cash used in investing activities		(3,885	)		(3,338	)		(6,501	)		(5,516	)		(5,532	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on line of credit		109,284			36,884			88,197			68,979			48,653
Borrowings on term-loan		30,000			—			—			—			—
Payments on line of credit		(69,815	)		(42,676	)		(89,149	)		(71,284	)		(29,117	)
Principal payments on long-term debt		—			—			—			—			(8,845	)
Distributions		(82,406	)		(9,068	)		(28,938	)		(24,651	)		(13,659	)
Financing issue costs		(556	)		—			—			—			—
Net cash used in financing activities		(13,493	)		(14,860	)		(29,890	)		(26,956	)		(2,968	)
EFFECTS OF EXCHANGE RATES ON CASH		11			3			184			(22	)		7
NET INCREASE (DECREASE) IN CASH		4,064			(1,286	)		719			1,757			591
CASH, beginning of period		5,985			5,266			5,266			3,509			2,918
CASH, end of period	$	10,049		$	3,980		$	5,985		$	5,266		$	3,509
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	290		$	184		$	466		$	516		$	608
Cash paid for income taxes	$	608		$	188		$	305		$	297		$	698
Non-cash distribution	$	—		$	—		$	—		$	—		$	200

The accompanying notes are an integral part of these consolidated financial statements.

F-9

ENOVATION CONTROLS, LLC AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Dollars in thousands)

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Enovation Controls, LLC is a global provider of sophisticated digital control systems for gaseous fuel engines and engine-driven equipment with a focus on vehicle and energy markets. Prior to October 17, 2012, Enovation Controls, LLC was known as Global Controls & Instrumentation, LLC. Enovation Controls, LLC’s United States (“U.S.”) operations are located in Tulsa, Oklahoma; San Antonio, Texas; Rosenberg, Texas and Grants Pass, Oregon. Enovation Controls, LLC’s international operations are located in Salisbury, England; Birmingham, England; Hangzhou, China; Shanghai, China and Pune, India.

Company Formation

Enovation Controls, LLC was formed in the state of Oklahoma on August 27, 2009 as Global Controls & Instrumentation, LLC. On September 30, 2009, Murphy Industries, LLC (“Murphy”) and EControls, LLC (“EControls”) contributed 100% of the members’ interest of Murphy and EControls to Enovation Controls, LLC pursuant to the Contribution Agreement (“Agreement”) and became wholly-owned subsidiaries of Enovation Controls, LLC.

Financial Reporting Principles

The consolidated financial statements of Enovation Controls, LLC include the results of Murphy, EControls, GC&I Global, Inc. and Enovation Controls India Private Limited, LP. Murphy’s consolidated financial statements contain its wholly-owned subsidiaries: Murphy EControls Technologies (Hangzhou) Co., Ltd. (“Hangzhou”), FW Murphy International Trading (Shanghai) Co., Ltd. (“Shanghai”), Enovation Controls, Ltd. (“MEL”) and Enovation Controls India Private Limited, GP. All intercompany transactions and balances have been eliminated in consolidation.

Unaudited Interim Consolidated Financial Statements

The accompanying interim consolidated balance sheet as of June 30, 2014, the consolidated statements of operations and comprehensive income (loss), and cash flows for the six months ended June 30, 2014 and 2013, and consolidated statement of members’ equity for the six months ended June 30, 2014, and the related information contained in the notes to the consolidated financial statements are unaudited. These unaudited interim consolidated financial statements and notes have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly Enovation Controls, LLC’s consolidated financial position as of June 30, 2014, and its consolidated results of operations and cash flows for the six months ended June 30, 2014 and 2013. The results of operations for the six months ended June 30, 2014, are not necessarily indicative of the results to be expected for the year ending December 31, 2014, or for any other interim period or for any other future year.

Revisions to Consolidated Financial Statements

The consolidated financial statements have been revised for certain matters that Enovation Controls, LLC management believes are not material to the consolidated financial statements taken as a whole. There have been no changes to the consolidated balance sheets and the related consolidated statements of operations and comprehensive income (loss), members’ equity, and cash flows from these revisions. The disclosure in Note 1—

F-10

Summary of Significant Accounting Policies, Segment Reporting, has been revised to include additional information concerning revenues from certain product lines and geographical areas as well as the geographical location of Enovation Controls, LLC’s long-lived assets. In addition, Note 12 – Subsequent Events, has been revised to consider subsequent events through August 22, 2014.

Use of Estimates

In presenting its financial statements in conformity with generally accepted accounting principles, Enovation Controls, LLC is required to make estimates and assumptions that affect the amounts reported therein. Critical estimates include determining the fair value of acquired assets; the collectability of accounts and notes receivable; the recoverability of inventories; the cost of warranty repairs; useful lives and recoverability of property, equipment and amortized intangible assets; the impairment of goodwill; the amount of sales allowances and rebates; stock compensation; deferred income taxes; and accruals for commitments and contingencies, among others. Several of the estimates and assumptions Enovation Controls, LLC is required to make relate to matters that are inherently uncertain as they pertain to future events. Enovation Controls, LLC bases estimates on historical experience and other assumptions believed to be reasonable under the circumstances and evaluate these estimates on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition

Enovation Controls, LLC recognizes revenue when the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery of the product has occurred or services have been rendered, (3) price is fixed or determinable, and (4) collectability is reasonably assured. Revenue is recognized at the time the product is shipped to the customer, which is when title and risk of ownership pass to the customer. Final sales prices are fixed and primarily based on purchase orders. Enovation Controls, LLC is not subject to post-shipment obligations or customer acceptance requirements and, other than the two-year warranty Enovation Controls, LLC provides on certain of its products, has no other return policies or practices. Sales allowances and rebates are treated as reductions to sales and are provided for based on historical experience and current estimates. A portion of our consolidated net sales is transacted through third party distributors. Sales terms applicable to third party distributors are similar to terms applicable to customer sales. Sales to customers and third party distributors are subject to the revenue recognition criteria described above.

Concentration of Credit Risk

Enovation Controls, LLC maintains cash balances in bank accounts that can exceed Federal Deposit Insurance Corporation insured limits. Cash held in the United States exceeded federally insured limits by approximately $5,269 and $288 at June 30, 2014 and December 31, 2013, respectively. Cash held in the United States did not exceed federally insured limits at December 31, 2012.

Enovation Controls, LLC held cash in high credit quality foreign banks of approximately $4,024, $5,441 and $4,924 as of June 30, 2014, December 31, 2013 and 2012, respectively. Enovation Controls, LLC has not experienced any losses related to this cash concentration.

Besides cash, Enovation Controls, LLC also has concentration of sales and credit risk in its accounts and notes receivable. Enovation Controls, LLC’s sales to Guangxi Yuchai Machinery Group Co., Ltd. were approximately 13%, 12%, 13% and 11% of consolidated sales for the six months ended June 30, 2013 and the years ended December 31, 2013, 2012 and 2011, respectively. No single customer accounted for more than 10% of consolidated sales for the six months ended June 30, 2014. Guangxi Yuchai Machinery Group Co., Ltd. also accounted for approximately 33%, 30%, and 20% of consolidated accounts and notes receivable at June 30, 2014 and December 31, 2013, and 2012, respectively. It is likely that one or more customers will continue to

F-11

contribute a significant portion of our revenue in any given year for the foreseeable future. If any of our significant customers were to change suppliers, in-source production, institute significant restructuring or cost-cutting measures, or experience financial distress, these significant customers may substantially reduce purchases from us. Accordingly, our revenue could decrease significantly, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Enovation Controls, LLC closely reviews the financial position of customers prior to granting them credit and continuously monitors its significant customers’ financial position as well as the general economic situation to limit its credit risk. To date, Enovation Controls, LLC has not experienced any significant losses in its accounts or notes receivable.

Accounts and Notes Receivable

Receivables are recorded at amounts billed to customers, less an allowance for doubtful accounts. The allowance for doubtful accounts is based on historical experience and any specific customer collection issues that have been identified through management’s review of outstanding accounts receivable. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. Enovation Controls, LLC generally requires no collateral from its customers. The allowance for doubtful accounts was approximately $51, $42, and $123 at June 30, 2014, and December 31, 2013 and 2012, respectively. Recoveries of previously written-off accounts were approximately $81 and $42 for the year ended December 31, 2013 and 2012, respectively. There were no recoveries of previously written-off accounts in the six months ended June 30, 2014.

Current notes receivable are from certain customers located in China who remit banker’s acceptance drafts drawn on reputable Chinese banks payable based upon agreed terms. These notes can be held to maturity, ranging from 90 to 180 days, discounted for early payment or used as commercial paper to pay suppliers. Enovation Controls, LLC intends to hold these notes until maturity or pay suppliers who will accept the notes without discount. Enovation Controls, LLC believes the full balance of the notes receivable are realizable and has not provided any reserve for losses on these notes. However, if the financial condition of the issuing banks should deteriorate a reserve might be needed in the future. These notes are recourse notes and if the issuing bank should default Enovation Controls, LLC would have recourse against the customer for collection. Likewise, if Enovation Controls, LLC had endorsed the notes and used them to pay a supplier, and if the issuing bank should default, the supplier would also have recourse against Enovation Controls, LLC. See Note 10—“Commitments and Contingencies” for a discussion of this potential liability.

Inventories

Inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Cost in inventory includes product costs, labor and related fixed and variable overhead. Enovation Controls, LLC establishes an inventory reserve for excess and obsolete inventories based on an analysis of historical and future demand in relation to the inventory on hand. Based upon the evaluation, provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. The components of inventory and the related changes in the inventory reserve are as follows:

	June 30,			December 31,
	2014			2013			2012
	(unaudited)
Raw material	$	29,724		$	29,651		$	29,612
Work-in-process		1,145			1,006			1,568
Finished goods		5,523			8,778			4,971
		36,392			39,435			36,151
Less—inventory reserve		(1,665	)		(1,343	)		(1,267	)
Total inventories, net	$	34,727		$	38,092		$	34,884

F-12

	For the six months ended June 30,			For the year ended December 31,
	2014			2013			2012
	(unaudited)
Inventory reserve, beginning of period	$	1,343		$	1,267		$	2,273
Provision for excess and obsolete inventory		540			1,909			1,516
Write-offs		(218	)		(1,833	)		(2,522	)
Inventory reserve, end of period	$	1,665		$	1,343		$	1,267

Long-Lived Assets

Property, plant and equipment are carried at cost, or fair value if acquired. For financial statement purposes depreciation on property, plant and equipment is calculated using the straight-line method over the estimated useful lives of the respective assets; accelerated depreciation and cost recovery methods are used for income tax purposes. Maintenance and repairs are charged to operating expenses as they are incurred. Improvements and betterments, which extend the useful lives of assets, are capitalized.

The estimated useful lives of long-lived assets are as follows:

	Range in Years
Buildings and leasehold improvements	7 - 50
Furniture and office equipment	3 - 10
Computer equipment	3 - 10
Shop machinery and equipment	5 - 10
Tools and dies	3 - 10
Autos, trucks and airplanes	4 - 15

Depreciation expense recognized for long-lived assets was approximately $1,981, $1,463, $3,245, $2,441 and $2,172 for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011, respectively.

In accordance with GAAP, Enovation Controls, LLC reviews its long-lived assets for indicators of impairment which would require reevaluation of the carrying value of an asset using an estimate of future cash flows. There was a goodwill impairment charge to MEL during 2012. Enovation Controls, LLC reviewed MEL’s long-lived assets at that time for impairment and noted that the primary long-lived asset was a building used for operations that had been appraised and no impairment was identified. Enovation Controls, LLC found no indications of impairment at June 30, 2014 and December 31, 2013, 2012 or 2011, and accordingly, did not reduce the carrying values of its long-lived assets.

Patents

Purchased patents are amortized over their legal or commercial lives, whichever is shorter. The cost and related accumulated amortization at retirement are removed from the accounts.

Foreign Currency Translation

The functional currency of MEL is the British pound sterling and the functional currency of Hangzhou and Shanghai is the Chinese yuan. Generally, assets and liabilities of these subsidiaries are translated at current exchange rates, while income and expenses are translated at average rates during the year. Translation gains and losses are generally reported as a component of accumulated other comprehensive income or loss. Currency transaction gains and losses remeasured to the functional currency are included in determining net income.

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Enovation Controls, LLC is exposed to market risks related to fluctuations in foreign currency exchange rates because sales transactions, and certain of the assets and liabilities of its domestic and foreign subsidiaries, are denominated in foreign currencies.

Accrued Liabilities

Accrued liabilities were comprised of the following:

	June 30, 2014		December 31,
			2013		2012
	(unaudited)
Payroll and other employee related benefits	$	3,859	$	5,261	$	4,346
Warranty		1,282		1,375		1,203
Sales commissions and technical services		1,172		1,125		2,776
Medical self-insurance		1,293		1,111		1,293
All other		3,108		1,506		1,063
Total accrued liabilities	$	10,714	$	10,378	$	10,681

Warranties

Enovation Controls, LLC warrants, under certain circumstances, that its products will be free from defects for two years. In addition, from time to time, Enovation Controls, LLC may get involved in a specific field action program. Enovation Controls, LLC provides reserves for costs associated with warranty claims at the time the products are sold. The warranty reserve is provided for by adjusting selling, general, and administrative expenses by an amount based on current and historical warranty claims paid and associated repair costs. These estimates are established using historical information including the nature, frequency, and average cost of warranty claims, as well as the estimated costs of specific field action programs, and are adjusted as actual information becomes available.

Changes in the warranty accrual are as follows:

	June 30, 2014			December 31,
				2013			2012
	(unaudited)
Warranties, beginning of period	$	1,375		$	1,203		$	2,275
Provision for warranty		435			1,012			336
Reductions for settling warranties		(528	)		(840	)		(1,408	)
Warranties, end of period	$	1,282		$	1,375		$	1,203

Research and Development Expenses

Enovation Controls, LLC conducts research and development to create new products and to make improvements to products currently in use. Research and development costs are charged to expense as incurred. The total amount recorded for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011 were approximately $26,327, $11,443, $23,628, $20,429 and $17,349, respectively.

Advertising Expense

Advertising costs are expensed as incurred and totaled approximately $529, $532, $1,041, $1,126 and $904 for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011, respectively. Advertising expense is included in selling, general and administrative expenses.

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Shipping and Handling Costs

Freight billed to customers is included in net sales in the consolidated statements of operations and comprehensive income, while freight billed by vendors is included in cost of goods sold.

Impairment of Long-Lived Assets, Goodwill and Intangible Assets

Enovation Controls, LLC recognizes separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of the consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While Enovation Controls, LLC uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed (including any contingent consideration) at the acquisition date, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, Enovation Controls, LLC records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to its consolidated statements of operations and comprehensive income.

Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets, support obligations assumed, estimated restructuring liabilities and pre-acquisition contingencies. Although Enovation Controls, LLC believes the assumptions and estimates it has made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and they are inherently uncertain.

Examples of critical estimates in valuing certain of the intangible assets Enovation Controls, LLC has acquired include, but are not limited to:

• future expected cash flows from acquired developed technologies and patents and other customer contracts;

• the life of the acquired developed technologies and patents;

• the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s product portfolio;

• risk associated with uncertainty, achievement, and payment of any milestones;

• the life of the acquired developed technologies and patents; and

• discount rates.

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results.

Goodwill—Impairment Assessments

The goodwill impairment test compares fair value of certain components to the carrying value. Each interim period, management assesses whether or not an indicator of impairment is present that would necessitate that a goodwill impairment analysis be performed in an interim period other than during the fourth quarter.

The goodwill impairment test compares the carrying value of the components in the EControls and MEL subsidiaries which have goodwill, to the estimated fair value. If the carrying value is more than the estimated fair value, a second step is performed, whereby Enovation Controls, LLC calculates the implied fair value of goodwill by deducting the fair value of all tangible and intangible net assets of the component from the estimated fair value of the reporting unit. Impairment losses are recognized to the extent that recorded goodwill exceeds implied goodwill.

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Enovation Controls, LLC’s impairment methodology uses discounted cash flows and multiples of cash earnings valuation techniques, plus valuation comparisons to similar businesses. These valuation methods require us to make certain assumptions and estimates regarding future operating results, the extent and timing of future cash flows, working capital, sales prices, profitability, discount rates, and growth trends. As a result of its impairment test, Enovation Controls, LLC recognized a $6,462 pre-tax impairment relating to goodwill at MEL during the year ended December 31, 2012. No such impairment charges were required at EControls or for other periods presented as the estimated fair value substantially exceeded their carrying values. While Enovation Controls, LLC believes that such assumptions and estimates are reasonable, the actual results may differ materially from the projected results.

Income Taxes

Enovation Controls, LLC is taxed as a partnership for U.S. federal and state income tax purposes and as a result is a “flow-through” entity for U.S. tax purposes. As such, U.S. federal and state income taxes on net domestic taxable earnings are the obligation of Enovation Controls, LLC’s members. Accordingly, no provision for U.S. income taxes has been made in the accompanying consolidated financial statements. Enovation Controls, LLC’s domestic entities, Enovation Controls, LLC’s subsidiaries that operate in foreign jurisdictions are taxable entities. Income taxes incurred by the subsidiaries that operate in foreign jurisdictions are recorded in the “Provision for income taxes” line item in the accompanying consolidated statements of operations and comprehensive income. Pre-tax income from subsidiaries that operate in foreign jurisdictions was $3,234, $1,310, $4,059, $(4,110) and $3,934 for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011, respectively. Deferred income taxes of Enovation Controls, LLC’s consolidated subsidiaries that operate in foreign jurisdictions are determined under the asset and liability method, under which deferred tax assets and liabilities are calculated based upon the temporary differences between the financial statement carrying amounts and income tax bases of the foreign subsidiaries’ assets and liabilities using currently enacted tax rates. Enovation Controls, LLC’s deferred tax assets are recorded net of a valuation allowance when, based on the weight of available evidence, it is more likely than not that all or some portion of the recorded deferred tax assets will not be realized in future periods. Decreases to the valuation allowance are recorded as reductions to Enovation Controls, LLC’s provision for income taxes and increases to the valuation allowance result in additional provision for income taxes. Enovation Controls, LLC has not recorded a valuation allowance in any period presented. Enovation Controls, LLC as of June 30, 2014, December 31, 2013 and 2012, has deferred long-term tax liabilities related to its foreign jurisdictions of $44, $43 and $51, respectively.

Enovation Controls, LLC evaluates uncertain tax positions for recognition and measurement in the consolidated financial statements. To recognize a tax position, Enovation Controls, LLC determines whether it is more likely than not that the tax position will be sustained upon examination, including resolution of any related appeals or litigation, based on the technical merits of the position. A tax position that meets the more likely than not threshold is measured to determine the amount of benefit to be recognized in the consolidated financial statements. The amount of tax benefit recognized with respect to any tax position is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Enovation Controls, LLC had no uncertain tax positions that required recognition in the financial statements at June 30, 2014 or December 31, 2013 and 2012. Any interest or penalties would be recognized as a component of income tax expense.

Change in Accounting Principle

During the quarter ended March 31, 2014, Enovation Controls, LLC elected a change in accounting principle related to measuring its profits interests units. The profits interest units are accounted for as liability awards and Enovation Controls, LLC management had previously elected to measure these liability awards using the intrinsic value in accordance with Accounting Standards Codification (ASC) 718, Compensation—Stock Compensation. Enovation Controls, LLC elected to measure these liability awards using fair value in accordance with ASC 718 during the quarter ended March 31, 2014 in anticipation of an initial public offering. See Note 7 for further information on stock compensation.

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Enovation Controls, LLC’s management evaluated this change in accounting principle in accordance with ASC 250, Accounting Changes and Error Corrections. A retrospective application of this change in accounting principal is impractical as it would require management to make assumptions in the fair value which are not contemporaneous. Enovation Controls, LLC management determined the incremental cost in accordance with ASC 718 and recorded this difference between the fair value and intrinsic value during the reporting period ended June 30, 2014, which resulted in a $45,859 reduction to net income during the period. This change in accounting principle was applied prospectively.

Fair Value of Financial Instruments

Cash, accounts receivable, notes receivable, accounts payable and accrued liabilities are reflected in the financial statements at carrying value, which management believes approximates fair value because of the short-term nature of those instruments.

The fair value of the long-term debt approximates the carrying value as the debt was negotiated in the past 12 months, there have not been significant changes to the overall risk or lending profile of Enovation Controls, LLC, and the interest rates associated with the debt are variable. The interest rates approximate market rates.

Enovation Controls, LLC has a profits interest plan which management has determined is a liability award plan in accordance with ASC 718, Compensation—Stock Compensation. Therefore, the June 30, 2014 statements reflect the award units at estimated fair value using a pricing model. See Note 7—“Stock Compensation” for a discussion of how the fair market value was determined. As there are inherent uncertainties related to the factors and Enovation Controls, LLC’s judgment in applying them to the fair value determinations, there is a risk that the recorded profits interest compensation may not accurately reflect the amount ultimately earned.

Segment Reporting

ASC 280, Segment Reporting, establishes standards for segment reporting in the financial statements. Enovation Controls, LLC’s single reportable segment is based upon its internal organization structure, the manner in which its operations are managed and the financial information reported internally to the chief operating decision maker (“CODM”). The CODM for Enovation Controls, LLC is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

The following table summarizes total sales generated by geographic location of the customer:

	June 30, 2014		June 30, 2013		December 31,
					2013		2012		2011
	(unaudited)
The Americas	$	106,866	$	88,198	$	180,029	$	153,770	$	136,037
Asia		27,618		32,881		61,246		49,758		41,775
Europe, the Middle East, and Africa		8,000		7,224		14,307		15,028		15,927
Total Sales	$	142,484	$	128,303	$	255,582	$	218,556	$	193,739

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The following table summarizes total sales generated by product line:

	June 30, 2014		June 30, 2013		December 31,
					2013		2012		2011
	(unaudited)
Fuel and Engine Management Systems	$	48,570	$	50,351	$	102,125	$	79,244	$	65,526
Application Control Systems		50,763		41,030		80,159		70,281		60,492
Monitoring Devices		41,848		35,350		69,468		64,193		61,830
Other		1,303		1,572		3,830		4,838		5,891
Total Sales	$	142,484	$	128,303	$	255,582	$	218,556	$	193,739

Enovation Controls, LLC’s long-lived assets by geographic location are as follows:

	June 30, 2014		December 31,
			2013		2012
	(unaudited)
The Americas	$	15,185	$	14,663	$	12,802
Asia		4,066		3,203		1,778
Europe, the Middle East, and Africa		928		930		948
Total property, plant and equipment, net	$	20,179	$	18,796	$	15,528

Recent Accounting Pronouncements

In June 2011, the FASB issued an update related to the presentation of comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of members’ equity and also requires presentation of reclassification adjustments from other comprehensive income to net income on the face of the financial statements. The update is effective for the year ended December 31, 2012, with early adoption permitted. In December 2011, the FASB issued a deferral of the effective date for certain requirements of the update, which defers certain aspects of the update related to the presentation of reclassification adjustments. Enovation Controls, LLC adopted this change retroactively effective from January 1, 2012. This update did not have a material impact on Enovation Controls, LLC’s financial condition, results of operations or cash flow.

In September 2011, the FASB issued an update relating to testing goodwill for impairment that permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If an entity concludes it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it need not perform the two-step impairment test. Enovation Controls, LLC adopted this update on January 1, 2012. The adoption of this update did not have a material impact on Enovation Controls, LLC’s financial condition, results of operations or cash flows.

In February 2013, the FASB issued an update related to reporting of amounts reclassified out of accumulated other comprehensive income. The update requires disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present either on the face of the statement of operations or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For amounts not reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. This update is effective prospectively for Enovation Controls, LLC for annual periods beginning after December 15, 2013. Early adoption is permitted. The adoption of the revised guidance is not expected to have a material effect on Enovation Controls, LLC’s financial condition, results of operations or cash flow.

F-18

In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers. The standard will eliminate the transaction and industry specific revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific aspects of revenue recognition and expands disclosures about revenue. ASU 2014-09 is effective for public companies for annual reporting periods beginning after December 15, 2016, including interim periods therein. Enovation Controls, LLC is evaluating the impact ASU 2014-09 will have on its consolidated financial statements.

NOTE 2—PROPERTY, PLANT AND EQUIPMENT

The following is a summary of property, plant and equipment:

	June 30,			December 31,
	2014			2013			2012
	(unaudited)
Land	$	85		$	383		$	382
Building and leasehold improvements		8,775			7,118			5,841
Furniture and office equipment		1,644			1,647			1,597
Computer equipment		4,846			4,366			3,512
Shop machinery and equipment		17,893			16,770			12,668
Tools and dies		5,841			5,498			4,335
Autos, trucks and airplanes		745			658			580
Construction-in-progress		638			658			1,815
		40,467			37,098			30,730
Less—Accumulated depreciation		(20,288	)		(18,302	)		(15,202	)
Total property, plant and equipment, net	$	20,179		$	18,796		$	15,528

NOTE 3—GOODWILL

The changes in the carrying amount of goodwill by period are as follows:

Balances at December 31, 2011	$	5,708
Impairment		(5,319	)
Foreign currency translation		216
Balances at December 31, 2012		605
Impairment		—
Foreign currency translation		—
Balances at December 31, 2013		605
Impairment		—
Foreign currency translation		—
Balances at June 30, 2014 (unaudited)	$	605

During 2012, Enovation Controls, LLC’s earnings progressively decreased in MEL due to an aging product line and a decline in the European economy. These factors resulted in a stable but not growing demand for its product; consequently, Enovation Controls, LLC revised its long-term projections, which, in turn, impacted the fair value of its business. As a result, Enovation Controls, LLC concluded that the carrying value of its goodwill related to the acquisition of a product line exceeded the fair value and thus, for the year ended December 31, 2012, Enovation Controls, LLC recorded a goodwill impairment charge of $5,319 and a reclassification out of

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accumulated other comprehensive income of approximately $1,143 related to foreign currency translation adjustments. No impairment charges were recorded in any of the other periods presented.

NOTE 4—INTANGIBLE ASSETS

Enovation Controls, LLC recorded the following intangible assets in the consolidated balance sheets:

	June 30, 2014 (unaudited)
	Useful Life	Gross		Accumulated Amortization			Net
Product software acquired through acquisition	5	$	10,730	$	(10,149	)	$	581
Customer relationships	5		2,500		(2,375	)		125
Trade names	5		1,000		(550	)		450
Patents	Various		1,026		(954	)		72
Other	Various		839		(180	)		659
Total		$	16,095	$	(14,208	)	$	1,887

	December 31, 2013
	Useful Life	Gross		Accumulated Amortization			Net
Product software acquired through acquisition	5	$	10,642	$	(9,142	)	$	1,500
Customer relationships	5		2,500		(2,125	)		375
Trade names	5		1,000		(450	)		550
Patents	Various		1,026		(918	)		108
Other	Various		460		(151	)		309
Total		$	15,628	$	(12,786	)	$	2,842

	December 31, 2012
	Useful Life	Gross		Accumulated Amortization			Net
Product software acquired through acquisition	5	$	10,642	$	(7,142	)	$	3,500
Customer relationships	5		2,500		(1,625	)		875
Trade names	5		1,000		(250	)		750
Patents	Various		1,043		(861	)		182
Other	Various		440		(82	)		358
Total		$	15,625	$	(9,960	)	$	5,665

Product software acquired through acquisition is software developed by EControls and was acquired by Enovation Controls, LLC through the 2009 acquisition of EControls. The software is embedded into various products manufactured by Enovation Controls, LLC.

Enovation Controls, LLC uses the straight-line amortization method to record amortization expense and recorded approximately $1,425, $1,415, $2,828, $2,918 and $2,742 of amortization expense related to its intangible assets in the consolidated statements of operations and comprehensive income for the six months ended June 30, 2014 and 2013 and for the years ended December 31, 2013, 2012 and 2011, respectively.

NOTE 5—PREMIUM ADVANCE ON INSURANCE POLICIES

Enovation Controls, LLC made premium advance payments to fund the annual premiums on split-dollar life insurance plans for an executive and a retired executive. In 2013, Enovation Controls, LLC was reimbursed for

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the full premium advances of approximately $2,117 and signed a release of collateral assignment on the life insurance proceeds.

NOTE 6—LONG-TERM DEBT

Notes payable consisted of the following:

	June 30,			December 31,
	2014 (unaudited)			2013			2012
Line of credit	$	55,500		$	16,696		$	17,442
Line of credit with Chinese financial institution		1,049			—			—
Term loan		30,000			—			—
Unsecured note payable to a related entity		—			383			589
Total long-term debt		86,549			17,079			18,031
Less: Current maturities of long-term debt		(2,549	)		(200	)		(232	)
Total long-term debt less current portion	$	84,000		$	16,879		$	17,799

Debt maturing for each of the 12 month periods ending June 30:

2015	$	2,549
2016		1,500
2017		1,500
2018		3,000
2019		78,000
Thereafter		—
	$	86,549

Enovation Controls, LLC and its wholly-owned subsidiaries have a $110,000 credit facility with a syndication of financial institutions (which replaced and was used to repay its $35,000 line of credit with Prosperity Bank as of June 30, 2014), consisting of a $30,000 term loan and an $80,000 revolving credit facility, which includes a $10,000 letter of credit sub-facility. The term loan is required to be repaid in quarterly installments of $375 beginning on September 30, 2014 and ending June 30, 2017 and $750 beginning September 30, 2017 and ending on March 31, 2019, with the balance of the term loan and the outstanding borrowings under the revolving facility due on the maturity date of June 30, 2019. The senior credit facility contains customary affirmative and negative covenants, and requires Enovation Controls, LLC to comply with the following financial covenants: (i) a maximum total leverage ratio of 3.00 to one and (ii) a minimum fixed charge coverage ratio of 1.10 to one. The senior credit facility permits Enovation Controls, LLC to make tax distributions to its members, including us, as well as other distributions as long as there is no event of default (or event that, with the giving of notice, passage of time, or both, would result in an event of default) and, after making such dividend or distribution, Enovation Controls, LLC is in compliance with the financial covenants. Borrowings under the term loans and revolving loans accrue interest, at the Company’s option, at either an alternate base rate or LIBOR plus in each case an applicable margin rate. The applicable margin is currently 0.75% for alternate base rate loans and 1.75% for LIBOR rate loans. A non-use fee between 0.15% and 0.35% per annum, based upon the Company’s total leverage ratio, accrues on the amount of unutilized revolving line of credit. The senior credit facility is guaranteed by all of Enovation Controls, LLC’s U.S. subsidiaries and is secured by a lien on substantially all of the assets of Enovation Controls, LLC and each guarantor. The blended effective interest rate under this facility as of June 30, 2014 was 2.0% and under the previous line of credit at December 31, 2013, 2012 and 2011 was 3.00%, 3.25% and 3.25%, respectively.

Enovation Controls, LLC also has an available $7,000 USD line of credit with a financial institution located in China that has an expiration date of two years after the date of the first drawdown. The line of credit has an

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interest rate equal to the benchmark lending rate effective on a loan drawdown date promulgated by the People’s Bank of China for RMB lending with a tenor corresponding to the term of that loan with 10% mark-up which as of June 30, 2014 was approximately 5.75%, and is payable on the maturity date of that loan. Each drawdown is for a period of 6 months or such other period as agreed to by the lender and is not to exceed 12 months. As of June 30, 2014, Enovation Controls, LLC had $1,049 (CNY $6,500) outstanding under this line of credit. This loan is guaranteed by Enovation Controls, LLC.

The unsecured note payable to a related entity is non-interest bearing which was paid off in June of 2014.

At June 30, 2014 and December 31, 2013, 2012 and 2011, Enovation Controls, LLC was in compliance with the financial and all other covenants of both lines of credit.

NOTE 7—MEMBERS’ EQUITY

The operating agreement of Enovation Controls, LLC specifies that members’ equity is comprised of 10,000 Class A Units. The operating agreement sets forth the terms of ownership of the Class A Units and that the profits, losses and gains are allocated to the Class A Units in accordance with and in proportion to the ownership of Class A Units. Each member’s capital account is accounted for separately and the capital account balances equal the sum of capital contributions, net income, and distributions. The operating agreement also has a limitation of liability clause that states that a member shall not be personally liable for any debts, liabilities or obligations of Enovation Controls, LLC.

NOTE 8—STOCK COMPENSATION

In July 2011, the Class A Unitholders of Enovation Controls, LLC approved a Profits Interest Plan (the “Plan”) which provides for the issuance of profits interest units to key employees and advisory board directors, which we refer to as Management Interests, of Enovation Controls, LLC. Class B, C and D profits interest units were issued under the Plan in 2011, 2013 and 2014, respectively. The profits interest units generally vest over four or five years subject to continued service and only provide the participants with benefits (in the form of distributions) if the distributions from Enovation Controls, LLC exceed specified threshold values. Distributions to date have not reached the minimum thresholds, nor are they expected to reach the minimum thresholds prior to Enovation Controls, Inc.’s anticipated initial public offering, for any of the Management Interests.

The profits interest units do not require the payment of an exercise price but since they are similar economically to stock options they are classified as options under the definition in Item 402(a)(6)(i) of Regulation S-K as an instrument with an option like feature. The profits interest units vest as the required service periods are met but are not exercisable. The Company accounted for these profits interest units as liability awards. Under the award agreements, the units were intended to be settled in cash after seven years or in cash at the Company’s option if an employee terminated employment at a valuation to be determined by Enovation Controls, LLC. Accounting Standards Codification (ASC) 718, Compensation—Stock Compensation, states liability awards issued by nonpublic entities have an accounting policy choice when it comes to determining the fair value of the award units. Enovation Controls, LLC elected to value these profits interest units utilizing the intrinsic value method. The Plan made it unlikely any payout would occur prior to an event such as a significant investment in Enovation Controls, LLC, a sale of all or part of Enovation Controls, LLC or an initial public offering. At each of the prior reporting periods, the intrinsic value of the awards was less than the threshold given the valuation methodology used and the fact that no event was anticipated. ASC 718 requires a fair value calculation for liability awards for publicly traded entities. The June 30, 2014 unaudited consolidated financial statements reflect the award units at estimated fair value using the probability weighted expected return method (PWERM). As of June 30, 2014 there have been no cash payments for these awards. Therefore, they have been treated as “non-cash” compensation. See Note 1 for discussion of this change in accounting principle.

The intrinsic value method used in the years prior to 2014 was calculated using a multiple of trailing 2 year EBITDA, less debt and discounted for the lack of control and marketability. The fair market value method used

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at June 30, 2014 was calculated using a PWERM. The key factors used were an assumed 1.1 year term, 0.36% risk free return and an equity volatility of 34.43% with the volatility of the class B, C and D units being 38.5%, 49.43% and 93.91% respectively.

Compensation expense has been recorded where the compensation of the participant is expensed, which for the six months ended June 30, 2014 was allocated as follows:

	Six Months Ended June 30, 2014
	(Unaudited)
Cost of goods sold	$	1,894
Selling, general and administrative expenses		29,570
Research and development expenses		14,395
Total	$	45,859

For the years ended December 31, 2013, 2012 and 2011, respectively, there was no compensation expense recorded.

The following table sets forth summarized information with respect to profits interest units outstanding, vested and exercisable at June 30, 2014:

	Authorized		Issued		Outstanding at June 30, 2014				Vested at June 30, 2014
Unit Class	Number of Units		Number of Units		Number of Units		Average Life (in years)(1)		Number of Units
B		1,113,469		903,150		751,520		1.1		667,743
C		210,319		176,228		176,228		1.1		45,781
D		100,000		19,278		19,728		1.1		—

(1) We used an assumed life of 1.1 years due to the weighted average probability of an event such as the initial public offering that would trigger payment under the profits interest plan. If an event did not occur the remaining life would be 4, 5 and 6 years respectively for the class B, C and D units at which time the unit holder could put the units back to the company for purchase by the company at a valuation to be determined by the company.

As there are inherent uncertainties related to the factors and the Company’s judgment in applying them to the fair value determinations, there is a risk that the recorded profits interest compensation may not accurately reflect the amount ultimately earned.

NOTE 9—EMPLOYEE BENEFIT PLANS

Employee Benefit Plan

Enovation Controls, LLC participates in a self-insured and self-administered, corporate funded insurance plan (the “Plan”). The Plan covers U.S. employees and their dependents who meet eligibility requirements and enroll in the Plan. It provides benefits to cover accident, sickness or disability as covered by the Plan. Benefits under the Plan have an annual cap of $250 per individual. The costs of the Plan are determined by an outside actuarial firm which reviews the plan on an annual basis. The benefit cost components shown in the consolidated statements of operations and comprehensive income are based upon certain data specific to Enovation Controls, LLC, actuarial assumptions and certain allocation methodologies such as population demographics. Enovation Controls, LLC recorded as expense (which was included in selling, general and administrative expenses) $2,676,

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$2,359, $4,345, $4,915 and $3,471 for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011, respectively, to cover benefits under the plan. Enovation Controls, LLC made cash contributions to the plan of $2,652, $2,363, $4,752, $5,010 and $2,373 during the six months ended June 30, 2014 and 2013 and the years December 31, 2013, 2012 and 2011. As of June 30, 2014 and December 31, 2013 and 2012, Enovation Controls, LLC had recorded in accrued liabilities for expenses incurred under the Plan as of the end of that period but not paid $1,293, $1,111 and 1,293, respectively.

Defined-Contribution Savings Plan

Enovation Controls, LLC sponsors an employee retirement plan (401(k) Plan) that covers substantially all of the U.S. employees of Enovation Controls, LLC. Enovation Controls, LLC’s defined-contribution savings plan gives those employees who wish to participate an opportunity to accumulate funds for retirement on a tax deferred basis. Enovation Controls, LLC provides matching contributions on a discretionary basis. During the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011, Enovation Controls, LLC expensed approximately $619, $539, $982, $895 and $749, respectively, for matching contributions to the 401(k) Plan.

Workers’ Compensation Self-Insurance Plans

Enovation Controls, LLC participates in a self-insured workers’ compensation plan. The costs of the workers’ compensation are determined by an outside actuarial firm which reviews the plan on an annual basis. The insurance costs included in the Consolidated Statements of Comprehensive Income are based upon certain data specific to Enovation Controls, LLC and actuarial assumptions. Workers’ compensation is funded as needed to pay claims. Enovation Controls, LLC’s liability is capped at $350 per claim and an aggregate retention on claims of approximately $1,330 by an insurance policy with an independent insurance company which assumes all costs above $350 and $1,330. Enovation Controls, LLC recorded as expense (which was included in selling, general and administrative expenses) $156, $84, $259, $199 and $61 for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011, respectively, to cover benefits under the plan. The amount of claims included in accrued liabilities was approximately $232, $209 and $194 as of June 30, 2014 and December 31, 2013 and 2012, respectively.

NOTE 10—RELATED PARTY TRANSACTIONS

Royalty Agreement

Royalty expense to the Executive Chairman for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011 amounted to approximately $54, $9, $24, $18 and $36, respectively. Enovation Controls, LLC had a royalty payable to the Executive Chairman of approximately $54, $11 and $10 at June 30, 2014 and December 31, 2013 and 2012, respectively.

Leases

Enovation Controls, LLC leases the Tulsa, Oklahoma and Rosenberg, Texas facilities and a property in Afton, Oklahoma from companies controlled by the Executive Chairman at a rental rate of approximately $60, $9, and $4 per month, respectively. Rent charged to expense for the two facilities and property was approximately $437, $413, $827, $827 and $827 for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011, respectively.

Enovation Controls, LLC pays a rental rate of approximately $18 per month on a facility in San Antonio to a company that is controlled by the Chief Technical Officer (CTO) of Enovation Controls, LLC. One of the buildings Enovation Controls, LLC rented was sold during 2012 and the Company’s lease terminated. Rent paid to the CTO and charged to expense for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011 was approximately $110, $110, $220, $294 and $328, respectively.

F-24

Notes Receivable

Enovation Controls, LLC pursuant to the Agreement referenced in Company Formation of Note 1, had advances outstanding to the CTO of $2,000 as of December 31, 2013 and 2012. Enovation Controls, LLC also had advances outstanding to another shareholder of EControls of approximately $500 as of December 31, 2013 and 2012. The advances were interest-bearing and are included in long-term notes receivable. As of June 30, 2014, the notes receivable from both individuals had been repaid.

China Facility

An entity controlled by the Executive Chairman retains appreciation rights attributable to the China building should the facility be sold or should a change in control occur directly or indirectly in the China entity. In the first quarter of 2014, the Company purchased the building appreciation rights from the Executive Chairman for $1,369.

Outside Services

Enovation Controls, LLC utilizes an entity located in China which is owned by an advisory board member of Enovation Controls, LLC to assist in global sourcing efforts. For the six months ended June 30, 2014, and years ended December 31, 2012 and 2011, Enovation Controls, LLC recorded approximately $6, $342 and $214 in professional consulting expenses related to services provided by the entity owned by the advisory board member. No similar expenses were incurred during the year ended December 31, 2013. In addition, Enovation Controls, LLC purchases magnet inventory from the same entity. Total magnets purchased during the six months ended June 30, 2014 and 2013, and the years ended December 31, 2013, 2012, and 2011, equaled approximately $459, $737, $1,677, $1,856 and $0, respectively. Enovation Controls, LLC also recorded a payable of approximately $59, $16 and $33 to this entity at June 30, 2014 December 31, 2013 and 2012, respectively.

NOTE 11—COMMITMENTS AND CONTINGENCIES

Commitments

Enovation Controls, LLC leases buildings and other equipment under long-term operating leases. Future minimum rental payments required under the operating leases for each of the 12 month periods ending June 30 are as follows:

	(Unaudited)
2015	$	1,832
2016		1,659
2017		1,605
2018		1,592
2019		1,604

Rent expense was approximately $1,204, $1,091, $2,187, $2,113 and $1,638, for the six months ended June 30, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011, respectively.

The Oklahoma Workers’ Compensation Commission required Enovation Controls, LLC to post an irrevocable letter of credit in order to continue to self-insure for workers’ compensation. Enovation Controls, LLC met this requirement by posting a $200 letter of credit naming the Oklahoma Workers’ Compensation Commission as the beneficiary. The letter of credit expires on July 1, 2015.

Contingencies

Enovation Controls, LLC is involved in certain litigation arising in the ordinary course of business. After reviewing the litigation with legal counsel, management does not believe these claims have merit. Any resulting liability will be immaterial to the consolidated financial statements taken as a whole.

F-25

As discussed in Accounts and Notes Receivables above, Enovation Controls, LLC’s Hangzhou subsidiary pays certain suppliers located in China with notes receivable given to them by certain customers for payment of accounts receivable. These notes are banker’s acceptance drafts drawn on reputable Chinese banks which Enovation Controls, LLC’s Hangzhou subsidiary endorses as commercial paper and pays its suppliers using the notes in lieu of paying with cash. These notes are either held to maturity by the supplier, ranging from 90 to 180 days, or discounted for early payment at the supplier’s bank or the issuing bank. If the issuing bank should default on payment of these notes, the supplier would have recourse against Enovation Controls, LLC’s Hangzhou subsidiary as well as its customer. Likewise Enovation Controls, LLC’s Hangzhou subsidiary would have recourse against its customer. Enovation Controls, LLC’s Hangzhou subsidiary does not know if its suppliers have discounted any of these notes with the issuing bank. The total outstanding balance of notes Enovation Controls, LLC’s Hangzhou subsidiary has endorsed to its suppliers which have not yet reached their maturity date as of June 30, 2014 is approximately $455. Enovation Controls, LLC believes the risk of loss is remote and has not provided any reserve for losses for notes issued to its suppliers. Should the issuing banks default, Enovation Controls, LLC’s Hangzhou subsidiary supplier could seek recourse from Enovation Controls, LLC.

NOTE 12—SUBSEQUENT EVENTS

On July 25, 2014, Gold Tooth Development, LLC (GTD), a Texas limited liability company jointly owned by Enovation Controls, LLC’s CTO and Executive Chairman, purchased the building where our San Antonio facility is located. The facility was acquired for $9,500. GTD used $2,000 in cash and obtained financing from a financial institution for the remaining $7,500 to acquire the building. GTD then entered into a lease agreement with Enovation Controls, LLC. According to ASC 810-10, Consolidation of Variable Interest Entities, GTD qualifies as a variable interest entity because Enovation Controls, LLC has an implicit guarantee in this related party relationship. ASC 810-10 will require this entity to be consolidated into Enovation Controls, LLC’s consolidated financial statements which will result in the cost of the facility, less accumulated depreciation, the current and long-term portions of the debt obtained to purchase the facility, a capital contribution included in members’ equity for the cash portion of the purchase of the facility and related depreciation and interest expense being consolidated in Enovation Controls, LLC’s consolidated financial statements. The rent expense related to the San Antonio facility that will be paid by Enovation Controls, LLC to GTD will be eliminated in the consolidation.

On July 21, 2014, GTD entered into a $7,500 term note with a financial institution that matures on July 25, 2029. The term note bears interest at a fluctuating rate that is 1.75% above the daily one-month LIBOR rate. Monthly principal payments on the term note are in installments of $25. The first principal and interest payment on this term note are due on September 1, 2014. The San Antonio facility has been pledged as collateral on this term note.

Management has evaluated subsequent events through August 22, 2014, the date the consolidated financial statements were available to be issued. No additional subsequent events, other than those discussed above, were identified requiring additional recognition or disclosure in the accompanying consolidated financial statements.

F-26

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the estimated fees and expenses, other than the underwriting discounts and commissions payable by the registrant in connection with the sale of Class A Shares being registered. All amounts are estimates (except for the SEC registration fee, the Financial Industry Regulatory Authority, Inc., or FINRA, filing fee and the NYSE listing fee).

SEC registration fee	$	12,880
FINRA filing fee		15,500
NYSE listing fee			*
Blue Sky fees and expenses			*
Printing and engraving expenses			*
Legal fees and expenses			*
Accounting fees and expenses			*
Transfer agent and registrar fees and expenses			*
Miscellaneous			*
Total	$		*

* To be furnished by amendment.

We will bear all of the expenses shown above.

Item 14. Indemnification of Directors and Officers.

Section 102 of the Delaware General Corporation Law, or the DGCL, allows a corporation to eliminate the personal liability of directors to a corporation or its stockholders for monetary damages for a breach of a fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase or redemption in violation of Delaware corporate law or obtained an improper personal benefit.

Section 145 of the DGCL provides, among other things, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the corporation’s request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding. The power to indemnify applies if (i) such person is successful on the merits or otherwise in defense of any action, suit or proceeding or (ii) such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The power to indemnify applies to actions brought by or in the right of the corporation as well, but only to the extent of defense expenses (including attorneys’ fees but excluding amounts paid in settlement) actually and reasonably incurred and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be made in the event of any adjudication of negligence or misconduct in the performance of his duties to the corporation, unless a court believes that in light of all the circumstances indemnification should apply.

Section 174 of the DGCL provides, among other things, that a director who willfully and negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption may be held liable

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for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the meetings of the board of directors at the time the action occurred or immediately after the absent director receives notice of the unlawful acts.

Our amended and restated certificate of incorporation states that no director shall be personally liable to us or any of our stockholders for monetary damages for breach of fiduciary duty as a director, except for a breach of the duty of loyalty or acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law. A director is also not exempt from liability for any transaction from which he or she derived an improper personal benefit, or for violations of Section 174 of the DGCL. To the maximum extent permitted under Section 145 of the DGCL, our amended and restated certificate of incorporation authorizes us to indemnify any and all persons whom we have the power to indemnify under the law.

Our amended and restated bylaws provide that we will indemnify, to the fullest extent authorized or permitted by applicable law as now or hereafter in effect, each person who was or is made a party or is threatened to be made a party or is otherwise involved in any proceeding by reason of the fact that he or she is or was our director or officer or, while our director or officer, is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan. However, such indemnification is permitted by applicable law only if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to our best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. Indemnification is authorized on a case-by-case basis by (i) our board of directors by a majority vote of disinterested directors, (ii) a committee of the disinterested directors, (iii) independent legal counsel in a written opinion if (i) and (ii) are not available, or if disinterested directors so direct, or (iv) the stockholders. Indemnification of former directors or officers shall be determined by any person authorized to act on the matter on our behalf. Expenses incurred by a director or officer in defending against such legal proceedings are payable before the final disposition of the action, provided that the director or officer undertakes to repay us if it is later determined that he or she is not entitled to indemnification.

Prior to completion of this offering, we intend to enter into separate indemnification agreements with our directors and certain officers. Each indemnification agreement will provide, among other things, for indemnification to the fullest extent permitted by law and our amended and restated certificate of incorporation and amended and restated bylaws against any and all expenses, judgments, fines, penalties and amounts paid in settlement of any claim. The indemnification agreements will provide for the advancement or payment of all expenses to the indemnitee and for reimbursement to us if it is found that such indemnitee is not entitled to such indemnification under applicable law and our amended and restated certificate of incorporation and amended and restated bylaws.

We maintain standard policies of insurance under which coverage is provided (a) to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act, and (b) to us with respect to payments which may be made by us to such officers and directors pursuant to the above indemnification provision or otherwise as a matter of law.

Item 15. Recent Sales of Unregistered Securities.

In the three years preceding the filing of this registration statement, we have not sold unregistered securities in a transaction that was exempt from the registration requirements of the Securities Act.

Class B Management Interests

We have granted 751,520 Class B Management Interests of Enovation Controls, LLC to our directors, officers, and employees without the exchange of consideration.

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These Class B Management Interests were issued in transactions exempt from registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act.

Class C Management Interests

We have granted 176,228 Class C Management Interests of Enovation Controls, LLC to our directors, officers and employees without the exchange of consideration.

These Class C Management Interests were issued in transactions exempt from registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act.

Class D Management Interests

We have granted 19,728 Class D Management Interests of Enovation Controls, LLC to our directors and employees without the exchange of consideration.

These Class D Management Interests were issued in transactions exempt from registration under the Securities Act pursuant to Section 4(a)(2) of the Securities Act.

In connection with and immediately prior to this offering, the Class B, C, and D Management Interests will be converted into Common Units.

Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits: The list of exhibits is set forth in the EXHIBIT INDEX of this Registration Statement and is incorporated herein by reference.

(b) Financial Statement Schedules: No financial statement schedules are provided because the information called for is not applicable or is shown in the financial statements or notes thereto.

Item 17. Undertakings.

* (f) The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

* (h) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

* (i) The undersigned registrant hereby undertakes that:

• For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by us pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

II-3

• For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

* Paragraph references correspond to those of Regulation S-K, Item 512.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Tulsa, State of Oklahoma, on August 29, 2014.

ENOVATION CONTROLS, INC.
By:	/s/ Patrick W. Cavanagh
Name:	Patrick W. Cavanagh
Title:	President and Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below appoints Patrick W. Cavanagh and Dennis E. Bunday, and each of them, any of whom may act without the joinder of the other, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including any pre-effective and post-effective amendments) to this registration statement and any registration statement for this offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or would do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

Name	Title	Date
/s/ Patrick W. Cavanagh		August 29, 2014
Patrick W. Cavanagh	President and Chief Executive Officer (Principal Executive Officer) and Director
/s/ Dennis E. Bunday		August 29, 2014
Dennis E. Bunday	Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ Frank W. Murphy III		August 29, 2014
Frank W. Murphy III	Executive Chairman and Director
/s/ Kennon Guglielmo		August 29, 2014
Kennon Guglielmo	Chief Technology Officer and Director

II-5

EXHIBIT INDEX

Exhibit	Description
1.1	Form of Underwriting Agreement*
2.1	Contribution Agreement, dated September 23, 2009, among EControls Group, Inc., EControls, LLC, Murphy Group, Inc., Murphy Industries, LLC and Global Controls & Instrumentation, LLC**
3.1	Form of Amended and Restated Certificate of Incorporation of Enovation Controls, Inc. (to be effective prior to the closing of the offering)
3.2	Form of Amended and Restated Bylaws of Enovation Controls, Inc. (to be effective prior to the closing of the offering)
4.1	Specimen Class A Common Stock Certificate of Enovation Controls, Inc.*
4.2	Form of Registration Rights Agreement
4.3	Form of Stockholders Agreement
5.1	Form of Opinion of Fulbright & Jaworski LLP (a member of Norton Rose Fulbright) as to the legality of the securities being registered
10.1	Form of Second Amended and Restated Operating Agreement of Enovation Controls, LLC
10.2	Form of Tax Receivable Agreement
10.3	Form of Enovation Controls, Inc. 2014 Long-Term Incentive Plan#
10.4	Form of Enovation Controls, Inc. 2014 Long-Term Incentive Plan Stock Option Agreement*#
10.5	Form of Enovation Controls, Inc. 2014 Long-Term Incentive Plan Restricted Stock Agreement*#
10.6	Form of Director and Officer Indemnification Agreement#
10.7	Credit Agreement, dated as of June 30, 2014, among Enovation Controls, LLC, BOKF, NA d/b/a Bank of Oklahoma, as administrative agent, and the other lenders and guarantors named as a party thereto
10.8	Lease Agreement, dated as of September 30, 2009, by and between Legacy Capital Group A Limited Partnership, as lessor, and Murphy Industries, LLC, as lessee
10.9	First Amendment to Lease Agreement, dated as of March 19, 2013, by and between Legacy Capital Group A Limited Partnership, as lessor, and Enovation Controls, LLC, as lessee
10.10	Second Amendment to Lease Agreement, dated as of September 1, 2013, by and between Legacy Capital Group A Limited Partnership, as lessor, and Enovation Controls, LLC, as lessee
10.11	Lease Agreement, dated as of August 1, 2013, by and between Goose Island LLC, as lessor, and Enovation Controls, LLC, as lessee
10.12	Lease Agreement, dated as of September 30, 2009, by and between Chesapeake Capital Group LP, as lessor, and Murphy Industries, LLC, as lessee
10.13	First Amendment to Lease Agreement, dated as of September 1, 2013, by and between Chesapeake Capital Group LP, as lessor, and Enovation Controls, LLC, as lessee
10.14	Lease Agreement, dated as of September 30, 2009, by and between Control and Instrumentation Holding Company, Ltd., as lessor, and EControls, LLC, as lessee
10.15	Industrial Lease, dated as of July 24, 2014, by and between Gold Tooth Development, LLC, as lessor, and Enovation Controls, LLC, as lessee
10.16	Employment Agreement, dated as of September 30, 2009, by and between Frank W. Murphy, III and Global Controls & Instrumentation, LLC#
10.17	Employment Agreement, dated as of September 30, 2009, by and between Kennon Guglielmo and Global Controls & Instrumentation, LLC#

Exhibit	Description
10.18	Offer Letter, dated August 16, 2011, by and between Gary Riley and Global Controls & Instrumentation, LLC#
10.19	Amended and Restated Offer Letter, dated July 11, 2014, by and between Patrick W. Cavanagh and Enovation Controls, LLC#
10.20	Sales Agreement Regarding Sale of Heavy Duty Alternate Fuel Management Systems, dated as of August 29, 2013, by and between Murphy EControls Technologies (Hangzhou) Co., Ltd. and Chengdu Amico Technologies Co., Ltd.†
10.21	Technical Services Agreement, dated as of August 29, 2013, by and between Murphy EControls Technologies (Hangzhou) Co., Ltd. and Chengdu Amico Technologies Co., Ltd.†
10.22	Revolving Loan Facility, dated as of July 26, 2013, by and between Murphy EControls Technologies (Hangzhou) Co., Ltd. and HSBC Bank (China) Company Limited, Hangzhou Branch
10.23	Dual Currency Loan Facility, dated as of July 26, 2013, by and between Murphy EControls Technologies (Hangzhou) Co., Ltd. and HSBC Bank (China) Company Limited, Hangzhou Branch
21.1	List of Subsidiaries of Enovation Controls, Inc.
23.1	Consent of Grant Thornton LLP (Enovation Controls, Inc.)
23.2	Consent of Grant Thornton LLP (Enovation Controls, LLC)
23.3	Form of Consent of Fulbright & Jaworski LLP (a member of Norton Rose Fulbright) (included as part of Exhibit 5.1)
24.1	Powers of Attorney (included on the signature page hereto)

* To be filed by amendment

** Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however, that Enovation Controls, Inc. may request confidential treatment pursuant to Rule 406 under the Securities Act of 1933, as amended, for any schedule or exhibit so furnished.

# Indicates management contract or compensatory plan or arrangement

† Registrant has requested confidential treatment for certain portions of this exhibit. This exhibit omits information subject to the confidential treatment request. Omitted portions have been separately provided to the SEC.

EX-2.1

Exhibit 2.1

CONTRIBUTION AGREEMENT

BY AND AMONG

ECONTROLS GROUP, INC.,

ECONTROLS, LLC,

MURPHY GROUP, INC.,

MURPHY INDUSTRIES, LLC

AND

GLOBAL CONTROLS & INSTRUMENTATION, LLC

SEPTEMBER 23, 2009

Article I
DEFINITIONS		2
1.1	Definitions	2
Article II
CONTRIBUTIONS AND ISSUANCE OF INTEREST		2
2.1	Contributions	2
2.2	Issuance of Interest	2
Article III
CLOSING		2
3.1	Closing Date	2
Article IV
REPRESENTATIONS AND WARRANTIES OF MURPHY		2
4.1	Existence and Good Standing	2
4.2	Power	3
4.3	Enforceability	3
4.4	Title to Murphy Contributed Interest	3
4.5	Murphy Contributed Assets	3
4.6	Assumed and Retained Liabilities	4
4.7	Title to Properties; Encumbrances; Condition and Sufficiency of Assets	4
4.8	Financial Statements	5
4.9	No Material Effect	5
4.10	Books and Records	5
4.11	Inventory	5
4.12	Murphy Real Property and Leases	6
4.13	Murphy Material Contracts	8
4.14	Conflict	8
4.15	Consents	9
4.16	Litigation	9
4.17	Taxes	9
4.18	No Undisclosed Liabilities	10
4.19	Insurance	10
4.20	Intellectual Property	11
4.21	Compliance with Laws	13
4.22	Accounts Receivable	13
4.23	Employees	13
4.24	Murphy Employee Benefit Plans	15
4.25	Broker’s or Finder’s Fees	17
4.26	Environmental and Health and Safety Matters	17
4.27	Relationships with Related Persons	18
4.28	Customer and Supplier Relations	18
4.29	Sales Representatives and Distributors	19
4.30	Warranties, Orders, Commitments and Returns	19
4.31	Absence of Certain Business Practices	19
4.32	FCPA	19
4.33	Export Compliance	20
4.34	Breach of Representations	21

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4.35	Disclosure	21
Article V
REPRESENTATIONS AND WARRANTIES OF ECONTROLS		21
5.1	Existence and Good Standing	21
5.2	Power	21
5.3	Enforceability	21
5.4	Title to EControls Contributed Interest	21
5.5	EControls Contributed Assets	21
5.6	Assumed and Retained Liabilities	23
5.7	Title to Properties; Encumbrances; Condition and Sufficiency of Assets	23
5.8	Financial Statements	23
5.9	No Material Effect	24
5.10	Books and Records	24
5.11	Inventory	24
5.12	EControls Real Property and Leases	24
5.13	EControls Material Contracts	26
5.14	No Conflict	27
5.15	Consents	27
5.16	Litigation	27
5.17	Taxes	28
5.18	No Undisclosed Liabilities	28
5.19	Insurance	29
5.20	Intellectual Property	29
5.21	Compliance with Laws	31
5.22	Accounts Receivable	31
5.23	Employees	32
5.24	EControls Employee Benefit Plans	33
5.25	Broker’s or Finder’s Fees	36
5.26	Environmental and Health and Safety Matters	36
5.27	Relationships with Related Persons	37
5.28	Customer and Supplier Relations	37
5.29	Sales Representatives and Distributors	37
5.30	Warranties, Orders, Commitments and Returns	38
5.31	Absence of Certain Business Practices	38
5.32	FCPA	38
5.33	Export Compliance	39
5.34	Breach of Representations	39
5.35	Disclosure	40
Article VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY		40
6.1	Existence and Good Standing	40
6.2	Power	40
6.3	Capitalization	40
6.4	Enforceability	40
6.5	No Conflict	40
6.6	Consents	40

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6.7	Brokers	41
6.8	Investments; Subsidiaries	41
Article VII
COVENANTS		41
7.1	Required Approvals	41
7.2	Cooperation; Audits	42
7.3	Cooperation	42
7.4	Labor and Employee Benefit Matters	42
7.5	Conduct of Business by the Murphy Parties	43
7.6	Conduct of Business by the EControls Parties	44
7.7	Exclusive Dealing	45
7.8	Covenant of Murphy-Inc	45
7.9	Covenant of EControls-Inc	45
7.10	Murphy-LLC Note	45
Article VIII
CONDITIONS TO CLOSING		45
8.1	Conditions Precedent to Obligations of the Murphy Parties and the Company	45
8.2	Conditions Precedent to Obligations of the EControls Parties	47
Article IX
TERMINATION		50
9.1	Termination	50
Article X
INDEMNIFICATION; REMEDIES		51
10.1	Survival; Risk Allocation	51
10.2	Indemnification Obligation of Murphy-Inc	51
10.3	Indemnification Obligation of EControls-Inc	51
10.4	Indemnification Obligation with respect to Company	52
10.5	Notice and Opportunity to Defend	52
10.6	Survivability; Limitations	53
10.7	Satisfaction of Liability Claims	55
10.8	Right of Setoff	55
10.9	Specific Performance	56
10.10	Exclusive Remedy	56
Article XI
MISCELLANEOUS		56
11.1	Expenses	56
11.2	Severability	56
11.3	Binding Effect and Assignment	56
11.4	Amendment and Modification	56
11.5	Specific Performance: Injunctive Relief	56
11.6	Notices	57
11.7	Governing Law	58
11.8	Entire Agreement	58
11.9	Counterparts	58
11.10	Remedies Cumulative	59
11.11	Interpretation and Construction	59

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11.12	Delivery by Facsimile	59
11.13	Joint Preparation	59

EXHIBITS

A	Definitions
B	Operating Agreement
C	Murphy Transition Services Agreement
D	EControls Transition Services Agreement
E	Murphy-LLC Note
F	EControls-LLC Contribution Agreement
G	EControls-LLC Operating Agreement
H	Murphy-LLC Contribution Agreement
I	Murphy-LLC Operating Agreement
J	Executive Loan Agreement-Kennon Guglielmo
K	Executive Loan Agreement-Michael Walser
L	Employment Agreement; Terms of Employment
SCHEDULES
4.5	Murphy-Inc. Retained Assets
4.5(b)	Murphy Ownership Interests Contributed
4.6(b)	Murphy-Inc. Retained Liabilities
4.7	Murphy Title to Properties; Encumbrances; Condition and Sufficiency of Assets
4.8	Murphy Financial Statements
4.12	Murphy Real Property & Leases
4.14	Murphy Conflict
4.15	Murphy Consents
4.17(a)	Murphy Taxes
4.18	Murphy No Undisclosed Liabilities
4.19	Murphy Insurance
4.20	Murphy Intellectual Property
4.21	Murphy Compliance with Laws
4.23	Murphy Employees
4.24	Murphy Employee Benefit Plans
4.26(a)	Murphy Environmental and Health and Safety Matters
4.27	Murphy Relationships with Related Persons
4.28	Murphy Customer and Supplier Returns
4.29	Murphy Sales Representatives and Distributors
4.30	Murphy Warranties, Orders, Commitments and Returns
4.32	Murphy FCPA
4.33	Murphy Export Compliance
5.5	EControls Contributed Assets
5.6(b)	EControls-Inc. Retained Liabilities
5.7	EControls Title to Properties; Encumbrances; Condition and Sufficiency of Assets
5.8	EControls Financial Statements

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5.12	EControls Real Property and Leases
5.14	EControls No Conflict
5.15	EControls Consents
5.17(a)	EControls Taxes
5.18	EControls No Undisclosed Liabilities
5.19	EControls Insurance
5.20	EControls Intellectual Property
5.21	EControls Compliance with Laws
5.23	EControls Employees
5.24	EControls Employee Benefit Plans
5.26(a)	EControls Environmental and Health and Safety Matters
5.27	EControls Relationships with Related Persons
5.28	EControls Customer and Supplier Relations
5.29	EControls Sales Representatives and Distributors
5.30	EControls Warranties, Orders, Commitments and Returns
5.32	EControls FCPA
5.33	EControls Export Compliance
8.1(d)(xii)	EControls Real Property Leases
8.2(e)(xiii)	Murphy Real Property Leases

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CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (this “Agreement”), dated as of this 23rd day of September, 2009, is by and among EControls Group, Inc., a Texas corporation formerly known as EControls, Inc. (“EControls-Inc.”), EControls, LLC, a Texas limited liability company (“EControls-LLC” and, together with EControls-Inc., the “EControls Parties”), Murphy Group, Inc., an Oklahoma corporation formerly known as Murphy Industries, Inc. (“Murphy-Inc”), Murphy Industries, LLC, an Oklahoma limited liability company (“Murphy-LLC” and, together with Murphy-Inc., the “Murphy Parties”) (each of EControls-Inc. and Murphy-Inc. is a “Contributor” and collectively they are the “Contributors”) and Global Controls & Instrumentation, LLC, an Oklahoma limited liability company (the “Company”). The EControls Parties, the Murphy Parties and the Company are collectively referred to herein as the “Parties.”

W I T N E S S E T H:

WHEREAS, the Murphy Parties and their Affiliates and subsidiaries are engaged in the business of manufacturing and providing equipment management, monitoring and control solutions, including engine and engine-driven equipment controls and monitoring systems for the industrial and oil and gas markets (the “Murphy Business”);

WHEREAS, on or before the Effective Time, Murphy-Inc. will contribute all of its assets related to the Murphy Business, other than its interests in the Murphy-Inc. Retained Assets, and shall assign all of its liabilities, other than the Murphy-Inc. Retained Liabilities, to Murphy-LLC (the “Murphy Asset Contribution”);

WHEREAS, the EControls Parties and certain of their subsidiaries and Affiliates are engaged in the business of manufacturing and providing engine control solutions, industrial control and consumer products (the “EControls Business”);

WHEREAS, on or before the Effective Time, EControls-Inc. will contribute all of its assets related to the EControls Business, other than its interest in the EControls Retained Assets, and shall assign all of its liabilities, other than the EControls-Inc. Retained Liabilities, to EControls-LLC (the “EControls Asset Contribution” and, together with the Murphy Asset Contribution, the “Asset Contributions”);

WHEREAS, the affairs of the Company will be governed by the terms and conditions of that certain Operating Agreement dated as of September 30, 2009, by and between EControls- Inc. and Murphy-Inc. (the “Operating Agreement”) attached hereto as Exhibit B;

WHEREAS, subject to the terms and conditions of the Operating Agreement, Murphy- Inc. desires to contribute its entire membership interest in Murphy-LLC (the “Murphy Contributed Interest”) to the Company in exchange for 6,500 Units, and the Company desires to accept such contribution in exchange for such Units (the “Murphy Interest Contribution”); and

WHEREAS, subject to the terms and conditions of the Operating Agreement, EControls- Inc. desires to contribute its entire membership interest in EControls-LLC (the “EControls Contributed Interest” and, together with the Murphy Contributed Interest, the “Contributed Interests”) to the Company in exchange for 3,500 Units, and the Company desires to accept such contribution in exchange for such Units (the “EControls Interest Contribution” and, together with the Murphy Interest Contribution, the “Interest Contributions”);

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NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements of the Parties hereinafter contained, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. For purposes of this Agreement, capitalized terms shall have the meanings specified or referred to in Exhibit A.

ARTICLE II

CONTRIBUTIONS AND ISSUANCE OF INTEREST

2.1 Contributions.

(a) Murphy Interest Contribution. Subject to the terms and conditions of this Agreement, at Closing, Murphy-Inc. shall contribute the Murphy Contributed Interest to the Company.

(b) EControls Interest Contribution. Subject to the terms and conditions of this Agreement, at Closing, EControls-Inc. shall contribute the EControls Contributed Interest to the Company.

2.2 Issuance of Interest. On the terms and subject to the conditions set forth in this Agreement, at the Closing, the Company shall issue 3,500 Units to EControls-Inc. and 6,500 Units to Murphy-Inc. in accordance with the Operating Agreement.

ARTICLE III

CLOSING

3.1 Closing Date. Subject to the satisfaction or waiver of the conditions to Closing set forth in Article VIII, the closing of the transactions contemplated hereby (the “Closing”) will be effective as of 11:59 p.m. on September 30, 2009 (the “Effective Time”).

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF MURPHY

Murphy-Inc. makes the following representations and warranties as of the date hereof to each of the Company and EControls-Inc.:

4.1 Existence and Good Standing. Murphy-Inc. is a corporation, duly incorporated, validly existing and in good standing under the laws of the State of Oklahoma. Murphy-LLC is a limited liability company, duly formed, validly existing and in good standing under the laws of the State of Oklahoma. Murphy-Inc. has provided to the Company and the EControls Parties true and complete copies of all of the organizational documents for each Murphy Party. Each of the Murphy Parties is duly qualified to do business in all jurisdiction(s) in which the character or

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location of the properties owned or leased by it or the nature of the businesses conducted by it makes such qualification necessary, except for such failures to be so authorized, qualified, licensed or in good standing as could not reasonably be expected to have a Material Adverse Effect.

4.2 Power. Each Murphy Party has the entity power and authority to execute, deliver and perform fully its obligations under this Agreement and the Transaction Documents.

4.3 Enforceability. The execution, delivery and performance of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of each Murphy Party and constitute the valid and legally binding obligations of such Murphy Party enforceable against such Murphy Party in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance and other similar laws and principles of equity affecting creditors’ rights and remedies generally (the “General Enforceability Limitations”).

4.4 Title to Murphy Contributed Interest. Murphy-Inc. has good title to the Murphy Contributed Interest, free and clear of any Encumbrance.

4.5 Murphy Contributed Assets. At the Closing, except for the assets set forth on Schedule 4.5 (the “Murphy-Inc. Retained Assets”), Murphy-Inc. will have contributed to Murphy-LLC, free and clear of any Encumbrance, all right, title and interest in and to all assets, rights and properties of every nature, kind and description, whether tangible or intangible, owned, leased or licensed, real, personal or mixed, used in or held for use in the Murphy Business immediately prior to the Closing, including the following (collectively, the “Murphy Contributed Assets”):

(a) all furniture, fixtures, machinery and equipment used in the Murphy Business, including office equipment, supplies and other tangible personal property wherever located and any and all technology, machinery and equipment located at the corporate headquarters of the Murphy Business in Tulsa, Oklahoma, its facilities in Rosenberg, Texas, and Grants Pass, Oregon;

(b) the ownership interests in certain other companies set forth on Schedule 4.5(b);

(c) all inventory held for sale in the Murphy Business, wherever located as of the Effective Time, as well as Murphy-Inc.’s right to receive inventory ordered by Murphy-Inc. for the Murphy Business from suppliers prior to and not received by Murphy-Inc. as of the Effective Time;

(d) all unfilled customer orders relating to the Murphy Business and all deposits and other payments relating thereto;

(e) all contracts, purchase orders, instruments and other agreements (whether written or oral) relating to the Murphy Business to which Murphy-Inc. is a party or by which its assets or properties are bound, including the Murphy Material Contracts;

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(f) all prepaid expenses, advance payments, deposits, surety accounts and other similar deposits, including deposits with suppliers, in each case, relating to the Murphy Business;

(g) all trade, supplier accounts and notes receivable, unbilled revenues, reimbursable costs and expenses and other claims for money due to Murphy-Inc. relating to the Murphy Business;

(h) all Intellectual Property Rights owned or licensed by Murphy-Inc. relating to the Murphy Business (collectively, the “Murphy Intellectual Property”);

(i) all Governmental Authorizations or any waiver of any of the foregoing related to the Murphy Business and issued to Murphy-Inc. by any Governmental Body;

(j) all business and employment records of Murphy-Inc. related to the Murphy Business, including all books, records, ledgers, files, documents, correspondence, lists (including customer lists, in whatever form or medium), customer surveys, customer service records, advertising and promotional materials, studies, reports and other materials (in whatever form or medium), owned or maintained in connection with the Murphy Business;

(k) all of the goodwill related to the Murphy Contributed Assets and the Murphy Business; and

(l) the following items to the extent related to the Murphy Business or the Murphy Contributed Assets or any of the Murphy-LLC Assumed Liabilities: warranties, indemnities, allowances, rights of set-off, rights of recovery, rights to reimbursement or contribution, rights to receive grants, rights to receive performance, rights to assert claims, rights to pursue remedies, rights to sue for past infringement, rights to insurance proceeds and other claims, rights and causes of action.

4.6 Assumed and Retained Liabilities.

(a) At the Closing, Murphy-LLC will have assumed and will be responsible for paying, performing and discharging as and when due all obligations and liabilities of: (i) Murphy-Inc. relating to the Murphy Contributed Assets; (ii) all liabilities and obligations arising under the Murphy Material Contracts; and (iii) all other liabilities of Murphy and its Affiliates related to or arising in connection with the Murphy Business, which are not Murphy-Inc. Retained Liabilities (collectively, the “Murphy-LLC Assumed Liabilities”).

(b) Murphy-LLC has not assumed the liabilities or obligations set forth on Schedule 4.6(b) and Murphy-LLC has not assumed any liabilities or obligations not related to the Murphy Business (collectively, the “Murphy-Inc. Retained Liabilities”).

4.7 Title to Properties; Encumbrances; Condition and Sufficiency of Assets. Murphy- Inc. has, as of the date hereof, and Murphy-LLC will have, at the Closing, good, valid and marketable title to the Murphy Contributed Assets, free and clear of any Encumbrance except as otherwise set forth on Schedule 4.7. Except as otherwise set forth on Schedule 4.7, all of the assets owned, leased or used by the Murphy Business included in the Murphy Contributed Assets

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are in good operating condition and repair (wear and tear excepted and taking into account their age), are suitable for the purpose used, are adequate and sufficient for all current operations of the Murphy Business. Except as set forth on Schedule 4.7, the Murphy Contributed Assets are adequate and sufficient to permit Murphy-LLC to conduct the Murphy Business as conducted by Murphy-Inc. immediately prior to the Closing. Except as set forth on Schedule 4.7, immediately prior to the Closing, Murphy-Inc. did not own, lease, or use any assets related to the Murphy Business, other than the Murphy Contributed Assets.

4.8 Financial Statements. The Murphy Parties have heretofore furnished EControls- Inc. and the Company with internal financial statements of Murphy-Inc. dated as of June 30, 2008, internal financial statements of Murphy-Inc. dated as of December 31, 2008, and internal financial statements of Murphy-Inc. as of June 30, 2009, and the related statements of income, retained earnings and cash flows for each of the periods then ended (collectively, the “Murphy Financial Statements”). The balance sheet of Murphy-Inc. dated as of June 30, 2009, is hereinafter referred to as the “Murphy Balance Sheet.” Except as otherwise set forth on Schedule 4.8, the Murphy Financial Statements have been prepared from the books and records of Murphy-Inc. in accordance with GAAP consistently applied throughout the periods indicated and fairly present the financial condition and the results of operations and cash flows of Murphy- Inc. and the changes in its financial position for the periods indicated. Except as set forth on Schedule 4.8, the statements of income included in the Murphy Financial Statements do not contain any items of special or non-recurring income or any other income not earned in the Ordinary Course of Business except as expressly specified in the notes to the Murphy Financial Statements. The balance sheets included in the Murphy Financial Statements reflect all claims against and all Indebtedness and liabilities of Murphy-Inc., which are required to be reflected on the Murphy Financial Statements as at their respective dates.

4.9 No Material Effect. Since June 30, 2009 (the “Murphy Balance Sheet Date”), there has been no Material Adverse Effect on the Murphy Business, and no fact or condition exists or is contemplated, or, to the Knowledge of Murphy-Inc., threatened which, individually or in the aggregate with other facts or conditions, may result in a Material Adverse Effect on the Murphy Business.

4.10 Books and Records. Murphy-Inc. maintains books and records reasonably reflecting its assets and liabilities and maintains internal accounting controls which provide reasonable assurances that (i) transactions are executed with management’s authorization; (ii) transactions are recorded as necessary to permit preparation of the financial statements of Murphy-Inc. and to maintain accountability for Murphy-Inc.’s assets; (iii) access to Murphy- Inc.’s assets is permitted only in accordance with management’s authorization; (iv) the reporting of Murphy-Inc.’s assets is compared with existing assets at regular intervals; (v) accounts, notes and other receivables and inventory, if any, are recorded accurately, and commercially reasonable procedures are implemented to effect the collection of the accounts, notes and other receivables on a current and timely basis; and (vi) material events related to the business of Murphy-Inc. are timely communicated to executive management.

4.11 Inventory. All items of inventory and related supplies (including raw materials, work-in-process and finished goods) reflected on the Murphy Balance Sheet or thereafter acquired (and not subsequently disposed of in the Ordinary Course of Business) are

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merchantable and are held for sale in the Ordinary Course of Business as first quality goods, none of such items is obsolete or below standard quality and each item of such inventory reflected in the Murphy Balance Sheet and the books and records of Murphy-Inc. is so reflected on the basis of a complete physical count and is valued at the lower of cost (on a first in, first out basis) or market in accordance with GAAP, except where such non-conformity is not material.

4.12 Murphy Real Property and Leases.

(a) The real property set forth on Schedule 4.12(a) (the “Murphy Real Property”) comprises all of the real property used or intended to be used in connection with the Murphy Business. Murphy-LLC and/or its predecessors in interest have, up to the Effective Time, enjoyed peaceful possession of each parcel of Murphy Real Property, and neither Murphy- LLC nor, to the Knowledge of any Murphy Party, any other party to the leases for the Murphy Real Property (the “Murphy Leases”) was at the time of termination of such Murphy Lease, in material default thereunder. True and correct copies of the Murphy Leases have been made available to EControls-Inc. As the Company and the applicable Murphy Party lessor have entered into new lease(s) for the Murphy Real Property, the Murphy Leases have been terminated by mutual agreement of the lessor(s) and lessee(s) thereunder, effective as of the Effective Time, and no party to the Murphy Leases has any remaining obligations thereunder, except for Murphy-Inc. Retained Liabilities. The entity set forth on Schedule 4.12(a) as the fee-title owner of each parcel of Murphy Real Property has good and indefeasible title to same, free and clear of any Encumbrance.

(b) Except as set forth on Schedule 4.12(b), Murphy-LLC does not own or have any interest (other than a leasehold interest) in any real property. Except as set forth on Schedule 4.12(b), Murphy-LLC has never owned or had any interest (other than a leasehold interest) in any real property.

(c) Except as set forth on Schedule 4.12(c), all buildings, structures, fixtures, building systems and equipment, and all components thereof, included in the Murphy Real Property (the “Murphy Improvements”) are in good condition and repair, ordinary wear and tear excepted, and sufficient for the operation of the Murphy Business. Except as set forth on Schedule 4.12(c), there are no facts or conditions affecting any of the Murphy Improvements that would, individually or in the aggregate, interfere in any material respect with the use or occupancy of the Murphy Improvements or any portion thereof in the operation of the Murphy Business as currently conducted thereon.

(d) None of the Murphy Parties has received written notice of any condemnation, expropriation or other Proceeding in eminent domain affecting any parcel of Murphy Real Property or any portion thereof or interest therein. There is no Order, Proceeding or claim of any kind, pending or, to the Knowledge of the Murphy Parties, threatened, relating to the ownership, lease, use or occupancy of the Murphy Real Property or any portion thereof, or the operation of the Murphy Business as currently conducted thereon.

(e) The Murphy Real Property is in material compliance with all Legal Requirements, and all insurance requirements affecting such Murphy Real Property. None of the Murphy Parties has received any notice of violation of any Legal Requirements or insurance

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requirements pertaining to the Murphy Real Property and there is no basis for the issuance of any such notice or the taking of any action for such violation. Without limiting the foregoing: (i) no solid waste, petroleum product, hazardous substance or any other substance which causes pollution has been disposed of, migrated to, or released on, under, or onto the Murphy Real Property; (ii) there are no underground storage tanks or other underground improvements on the Murphy Real Property; and (iii) there is no pending or, to the Knowledge of the Murphy Parties, threatened litigation or administrative actions or orders relating to the Murphy Parties, the Murphy Real Property or Murphy-Inc.’s use of the Murphy Real Property which concern Environmental and Safety Requirements. Murphy and its Affiliates have no knowledge of, and have not been contacted about, any investigation of the Murphy Real Property by any Governmental Body whose jurisdiction concerns Environmental and Safety Requirements. The terms “release,” “solid waste,” “hazardous substance,” and “pollution” are defined according to the most inclusive meanings given those terms in the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended 42 U.S.C. §9601 et seq.; in the State Solid Waste Disposal Act, TEXAS HEALTH AND SAFETY CODE, Chapter 361; and in the Oklahoma Environmental Quality Act, Oklahoma Statutes, Title 27A.

(f) Each parcel of Murphy Real Property has direct access to a public street adjoining such Murphy Real Property or has access to a public street via insurable easements benefiting such parcel of Murphy Real Property, and such access is not dependent on any land or other real property interest that is not included in the Murphy Real Property. None of the Murphy Improvements or any portion thereof is dependent for its access, use or operation on any land, building, improvement or other real property interest that is not included in the Murphy Real Property.

(g) All water, oil, gas, electrical, steam, compressed air, telecommunications, sewer, storm and waste water systems and other utility services or systems for the Murphy Real Property have been installed and are operational and sufficient for the operation of the Murphy Business as currently conducted thereon. No fact, condition, or proceeding exists which would result in the termination or impairment of the furnishing of services to the Murphy Real Property of the foregoing utility services.

(h) All certificates of occupancy, permits, licenses, approvals and authorizations (collectively, the “Murphy Real Property Permits”) of all Governmental Bodies having jurisdiction over the Murphy Real Property that are required or appropriate to use or occupy the Murphy Real Property as currently conducted thereon, have been issued and are in full force and effect. None of the Murphy Parties has received notice from any Governmental Body having jurisdiction over the Murphy Real Property threatening a suspension, revocation, modification or cancellation of any Murphy Real Property Permit. Except as set forth on Schedule 4.12(h): (i) the Murphy Real Property Permits are validly held, as of the date hereof, by Murphy-Inc. and will, at the Closing, be held by Murphy-LLC; (ii) no disclosure, filing or other action by any Murphy Party is required in connection with the Murphy Interest Contribution; and (iii) neither the Company nor Murphy-LLC shall be required to assume any additional liabilities or obligations under the Murphy Real Property Permits as a result of such contributions.

(i) No Murphy Party’s use or occupancy of the Murphy Real Property or any portion thereof and the operation of the Murphy Business as currently conducted is not dependent on a “permitted non-conforming use” or “permitted non-conforming structure” or similar variance, exemption or approval from any Governmental Body.

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(j) The current use and occupancy of the Murphy Real Property and the operation of the Murphy Business as currently conducted thereon do not violate in any material respect any easement, covenant, condition, restriction or similar provision in any instrument of record or other unrecorded agreement affecting such Murphy Real Property.

(k) There are no Taxes with respect to any Murphy Real Property or portion thereof that are delinquent. There is no pending or, to the Knowledge of the Murphy Parties, threatened increase or special assessment or reassessment of any Taxes relating to the Murphy Real Property.

(l) No portion of the Murphy Real Property is located within an area of special risk with respect to earth movement, flood, earth subsidence, rising water or other unusual natural hazards, nor does any Murphy Party know of any adverse geological or soil conditions affecting the Murphy Real Property.

4.13 Murphy Material Contracts. Each Murphy Material Contract is, as of the date hereof, a valid and binding agreement of Murphy-Inc. and at the Closing, will be a valid and binding obligation of Murphy-LLC. and is in full force and effect and enforceable in accordance with its terms. The enforceability of the Murphy Material Contracts shall not be affected in any manner by the execution and delivery of this Agreement and the consummation of the Subject Transactions. No Murphy Party has violated any of the terms or conditions of any of the Murphy Material Contracts nor is any Murphy Party otherwise in default thereof, and, to the Knowledge of the Murphy Parties, all of the terms and conditions to be performed by any party thereto other than any Murphy Party have been performed in all material respects and such Murphy Material Contract is free from any right of termination on the part of any party thereto. There exists no default or event of default or event, occurrence, condition or act (including the Murphy Interest Contribution) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a material default or event of default thereunder. None of the parties to any of the Murphy Material Contracts has given notice (written or oral) to any Murphy Party of its intent to terminate such Murphy Material Contract, and no Murphy Party has reason to believe that any party intends to terminate any Murphy Material Contract prior to or following the consummation of the Subject Transactions. There have been no amendments or modifications to any of the Murphy Material Contracts which would make any of the information disclosed herein inaccurate or incomplete. Copies of all such Murphy Material Contracts, including any modifications and amendments thereto, have been made available to EControls-Inc.

4.14 Conflict. Except as set forth on Schedule 4.14, neither the execution of this Agreement or the Transaction Documents, nor the performance by any Murphy Party of its obligations hereunder or thereunder, will (a) violate or conflict with any Murphy Party’s organizational documents or any Legal Requirement or Order applicable to such entity, (b) violate, conflict with or result in a breach or termination of, or otherwise give any Person additional rights or compensation under, or the right to terminate or accelerate, or constitute (with notice or lapse of time, or both) a default under the terms of any Murphy Material

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Contract, or (c) result in the creation or imposition of any Encumbrance with respect to, or otherwise have an adverse effect upon, any of the Murphy Contributed Assets or the Murphy Contributed Interest as of the date hereof.

4.15 Consents. Any consent, approval or authorization of, or any notice to, any third party or Governmental Body that is required in connection with this Agreement or the Transaction Documents or the consummation of the transactions contemplated hereby or thereby, including the Murphy Asset Contribution and the Murphy Interest Contribution, is set forth on Schedule 4.15 and has been obtained. Except as set forth on Schedule 4.15, no third party has, either orally or in writing (a) modified or, to the Knowledge of the Murphy Parties, threatened to modify the terms of its relationship with any Murphy Party as a result of the transactions contemplated by this Agreement, including the Murphy Asset Contribution and the Murphy Interest Contribution, (b) withheld its Consent to the transfer of the underlying Murphy Contributed Asset to Murphy-LLC in connection with the transactions contemplated by this Agreement, or (c) conditioned its Consent to the transfer of the underlying Murphy Contributed Asset to Murphy-LLC in connection with the transactions contemplated by this Agreement on the payment of additional money.

4.16 Litigation. There is no Proceeding by any Person, or by or before (or any investigation by) any Governmental Body, pending or, to the Knowledge of the Murphy Parties threatened against or affecting (i) any Murphy Party or any of its properties or rights which could materially and adversely affect the right or ability of any Murphy Party and the Company to carry on the Murphy Business as now conducted, or which could have a Material Adverse Effect upon any Murphy Party and the Company, or (ii) any Murphy Employee Benefit Plan or any fiduciary or administrator thereof; and there is no valid basis for any such Proceeding. No Murphy Party is subject to any Order entered in any Proceeding which may have a Material Adverse Effect on the Murphy Business or its ability to acquire any property or conduct business in any area. Neither Murphy Party is subject to any Order entered in any Proceeding relating to the execution, delivery or performance of this Agreement or the Subject Transactions or any other agreement entered into by the Murphy Parties or the Company in connection with the Subject Transactions.

4.17 Taxes.

(a) Each Murphy Party has filed or caused to be filed since inception all Tax Returns that are or were required to be filed by or with respect to it, either separately or as a member of a group of corporations, pursuant to applicable Legal Requirements. Each Murphy Party has delivered or made available to EControls-Inc. copies of all such Tax Returns relating to income or franchise Taxes filed by such Murphy Party for the most recent five taxable years. Each Murphy Party has paid, or made provision for the payment of, all Taxes that have or may have become due pursuant to all Tax Returns or otherwise, except such Taxes, if any, as are listed on Schedule 4.17(a) and are being contested in good faith (or is otherwise noted on such Schedule) and as to which adequate reserves (determined in accordance with GAAP) have been provided in the Murphy Financial Statements. In addition, each Murphy Party has made proper reserves for Taxes not yet due on the Murphy Financial Statements with respect to its operations through the respective dates thereof.

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(b) Each Murphy Party’s Tax Returns for years ended June 30, 2005, and before have been audited by the IRS or other relevant national, provincial or state tax authorities or are closed by the applicable statute of limitations for all taxable years. All deficiencies proposed as a result of such audits have been paid, reserved against, settled, or, as described on Schedule 4.17(b), are being contested in good faith by appropriate proceedings. No Murphy Party has given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of the Murphy Parties or for which the Murphy Parties may be liable.

(c) The charges, accruals, and reserves with respect to Taxes on the books of each Murphy Party are adequate (determined in accordance with GAAP) and are at least equal to such Murphy Party’s liability for Taxes. There exists no proposed tax assessment against any Murphy Party. No consent to the application of Section 341(f)(2) of the Code has been filed with respect to any property or assets held, acquired, or to be acquired by any Murphy Party. All Taxes that each Murphy Party is or was required by Legal Requirements to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person.

(d) All Tax Returns filed by (or that include on a consolidated basis) each Murphy Party are true, correct, and complete in all material respects. There is no tax sharing agreement that will require any payment by any Murphy Party after the date of this Agreement.

4.18 No Undisclosed Liabilities. None of the Murphy Contributed Assets or properties is subject to any outstanding material claims, liabilities or indebtedness, accrued, contingent or otherwise, and whether due or to become due, except as set forth in the Murphy Financial Statements or referred to in the footnotes thereto, other than liabilities incurred subsequent to the Murphy Balance Sheet Date in the Ordinary Course of Business not involving borrowings by the Murphy Parties. Except as set forth in Schedule 4.18 or otherwise reflected on the Murphy Balance Sheet, the Murphy Parties have no Indebtedness as of the Effective Time. No Murphy Party is in default in respect of the terms or conditions of any Indebtedness, nor does any Murphy Party have Knowledge of any facts which, with the passage of time, would result in any such default. The reserves reflected in the Murphy Balance Sheet are adequate, appropriate and reasonable in accordance with GAAP. There is no basis for the assertion against any Murphy Party or the Company of any such liability not fully reflected or accrued for in the Murphy Balance Sheet.

4.19 Insurance. As of the date hereof, Murphy-Inc. has and at the Closing, Murphy- LLC will have in effect such policies of motor vehicle, property, casualty, workers’ compensation, general liability and other insurance, including group insurance and other life health, disability or other insurance for the benefit of employees or their dependents or both as are required by law and are adequate and appropriate with respect to its business. All insurance policies which any Murphy Party maintains with respect to its business, properties or employees (“Murphy Insurance Policies”) are in full force and effect. No Murphy Party has materially violated any of the terms or conditions of the Murphy Insurance Policies, nor is it otherwise in default thereof, and all of the terms and conditions to be performed by the issuers of the Murphy Insurance Policies have been performed in all material respects and the Murphy Insurance Policies are free from any right of termination on the part of the issuers thereof. Except as set forth on Schedule 4.19, the Murphy Insurance Policies are “occurrence” policies and not “claims made” policies.

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4.20 Intellectual Property.

(a) Except as set forth on Schedule 4.20(a): (i) neither any Murphy Party nor the Murphy Business as presently conducted has or will interfere with, infringe upon, misappropriate, or otherwise come into conflict with, any Intellectual Property Rights of third parties; (ii) there are no facts indicating a likelihood of the foregoing; and (iii) none of the Murphy Parties has ever received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or conflict (including any claim that any of the Murphy Parties must license or refrain from using any Intellectual Property Rights of any third party). There is no proceeding or action before any court or tribunal related to any Murphy Intellectual Property, other than prosecution proceedings with the applicable issuing or granting governmental authorities for Intellectual Property Rights requiring registration. To the Murphy Parties’ Knowledge, no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with, any Murphy Intellectual Property.

(b) Schedule 4.20(b) identifies each domestic and foreign patent, trademark, copyright, and domain name registration owned by any Murphy Party with respect to any of the Murphy Intellectual Property, identifies each domestic and foreign pending patent, trademark, copyright, and domain name application or application for registration that has been made with respect to any of the Murphy Intellectual Property, and identifies each material license, sublicense, agreement, or other permission that any Murphy Party has granted to any third party with respect to any of the Murphy Intellectual Property (together with any exceptions). Murphy- Inc. has made available to the Company and the EControls Parties correct and complete copies of all such patents, registrations, applications, licenses, sublicenses, agreements, and permissions (as amended to date). Schedule 4.20(b) also identifies each material trade name or unregistered trademark, service mark, corporate name, internet domain name, copyright and material computer software item used in connection with the Murphy Business, except for commercial off-the-shelf software. With respect to each Intellectual Property identified in Schedule 4.20(b), and except as noted therein:

(i) As of the date hereof, Murphy-Inc. possesses, and at the Closing Murphy-LLC will possess all right, title, and interest in and to such Intellectual Property Right, free and clear of any Encumbrance, license, or other restriction;

(ii) such Intellectual Property Right is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;

(iii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to any Murphy Party’s Knowledge, is threatened that challenges the legality, validity, enforceability, use, or ownership thereof; and

(iv) no Murphy Party has ever agreed to indemnify any Person for or against any interference, infringement, misappropriation, or other conflict with respect to

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the Intellectual Property Right (except for indemnities given to customers of a Murphy Party in the Ordinary Course of Business with respect to claims by third parties against such customers for using such Intellectual Property Right).

(c) Schedule 4.20(c) identifies each material Intellectual Property Right that any third party owns and that any Murphy Party uses pursuant to license, sublicense, agreement, or permission. Murphy-Inc. has made available to the Company and the EControls Parties correct and complete copies of all such licenses, sublicenses, agreements, and permissions (as amended to date). With respect to each Intellectual Property Right identified in Schedule 4.20(c), and except as noted therein, to the Murphy Parties’ Knowledge:

(i) the license, sublicense, agreement, or permission covering such Intellectual Property Right is legal, valid, binding, enforceable, and in full force and effect in all material respects;

(ii) no party to the license, sublicense, agreement, or permission is in material breach or default, and no event has occurred that with notice or lapse of time would constitute a material breach or default or permit termination, modification, or acceleration thereunder;

(iii) no party to the license, sublicense, agreement, or permission has repudiated any material provision thereof;

(iv) no Murphy Party has granted any sublicense or similar right with respect to the license, sublicense, agreement, or permission; and

(v) no loss or expiration of such Intellectual Property Right is pending or reasonably foreseeable or, to the Knowledge of the Murphy Parties, threatened, except for patents and copyrights expiring at the end of their statutory terms.

(d) The Murphy Parties have taken all actions reasonably necessary to maintain and protect each Murphy Party’s registered Intellectual Property Rights, including (i) paying all application, examination, registration, issue, renewal and maintenance fees that have become due, and (ii) filing all necessary documents and certificates including statements of use with the relevant patent, copyright, trademark or other authorities.

(e) The Murphy Parties have secured valid written assignments from all consultants and employees who contributed to the creation or development of Intellectual Property Rights used by any Murphy Party in the conduct of its business of the rights to such contributions to the extent that such Murphy Party did not already own such Intellectual Property Rights by operation of law.

(f) The Murphy Parties have taken all reasonable and necessary steps to protect and preserve the confidentiality of all trade secrets, know-how, and software that is material to the Murphy Business. Except as set forth on Schedule 4.20(f), to the Murphy Parties’ Knowledge, there has not been any unauthorized disclosure of any third party Intellectual Property Rights by any Murphy Party, or by any employees or officers of any Murphy Party.

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(g) All software material to the Murphy Business: (i) is, as of the date hereof, in the possession, custody and control of Murphy-Inc. and at the Closing will be in the possession, custody and control of Murphy-LLC; and (ii) is stored in electronic form, with up-to- date appropriately catalogued versions. None of any Murphy Party’s software in source code form has been provided to any Murphy Party’s personnel except on a need-to-know basis and has not been presented or disclosed in source code form to any third party (including employees and officers of such Murphy Party) except under written confidentiality agreements or written source code escrow agreements listed in Schedule 4.20(g).

4.21 Compliance with Laws. Except as set forth on Schedule 4.21, Each Murphy Party is in material compliance with all Legal Requirements of any Governmental Body including, the Federal Occupational Safety and Health Act, ERISA and all Legal Requirements relating to the safe conduct of business and all Environmental and Safety Requirements. Except as set forth on Schedule 4.21, no Murphy Party has received any notice of any asserted present or any notice in the last five years of any past failure of any aspect of the Murphy Business to materially comply with any of such Legal Requirements.

4.22 Accounts Receivable. All accounts and notes receivable of each Murphy Party represent sales actually made in the Ordinary Course of Business or valid claims as to which full performance has been rendered by such Murphy Party (or its predecessor in interest). The reserve on the Murphy Financial Statements against the accounts receivable for returns and bad debts has been calculated in a manner consistent with GAAP and past practice. All of the accounts and notes receivable of each Murphy Party are and as of the Effective Time will be, in the aggregate, collectible in full, net of the reserve therefor, in the Ordinary Course of Business. No counterclaims, defenses or offsetting claims with respect to the accounts or notes receivable of each Murphy Party are pending or, to the Knowledge of any Murphy Party, threatened. All of the accounts and notes receivable of each Murphy Party relate solely to sales of goods or services to customers of such Murphy Party (or its predecessor in interest), none of which are Affiliates of any Murphy Party (or its predecessor in interest).

4.23 Employees.

(a) Schedule 4.23(a) contains a complete and accurate list of the following information for each employee or manager of each Murphy Party, including each employee on leave of absence or layoff status: employer (and country in which such employee is employed); name; job title; current compensation paid or payable, including any entitlements and any change in compensation since the last day of the calendar year immediately preceding the Effective Time; bonus and commission arrangements; vacation accrued; and service credited for purposes of vesting and eligibility to participate under any Murphy Party’s pension, retirement, profit-sharing, thrift-savings, deferred compensation, stock bonus, stock option, cash bonus, employee stock ownership (including investment credit or payroll stock ownership), entitlement to severance pay (whether formal or informal, in writing or otherwise), insurance, medical, welfare, or vacation plan, any other employee benefit plan or other benefits provided or which any Murphy Party is bound to provide (whether now or in the future) to such employees. No Murphy Party is involved in negotiations (whether with employees or any trade union or other employees’ representatives) to vary the terms and conditions of employment or engagement of any of its employees, directors or consultants, nor has it made any representations, promises,

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offers or proposals to any of its employees, directors or consultants or to any trade union or other employees’ representatives concerning or affecting the terms and conditions of employment or engagement of any of its employees, directors or consultants.

(b) To the Knowledge of the Murphy Parties, no employee or manager of any Murphy Party is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, noncompetition, or proprietary rights agreement, between such employee or director and any other Person (“Proprietary Rights Agreement”) that in any way adversely affects or will affect (i) the performance of such employee’s or director’s duties as an employee or manager of any Murphy Party, or (ii) the ability of any Murphy Party to conduct its business. To the Knowledge of the Murphy Parties, no manager, officer, or other key employee of any Murphy Party intends to terminate his employment with any Murphy Party.

(c) There are no retired employees or managers of any Murphy Party or dependents of retired employees or managers of any Murphy Party receiving benefits or scheduled to receive benefits in the future.

(d) Each Murphy Party has materially complied with all applicable Legal Requirements with respect to the Persons engaged by such Murphy Party as independent contractors, consultants or similar positions (or treated as such on the books and records of such Murphy Party as such), including proper withholding and payment of all applicable Taxes under the Code, and none of such Persons could be deemed employees of any Murphy Party under any applicable Legal Requirement. No Murphy Party is under a contractual or other obligation to change the terms of service of any director, executive or employee. Except as set forth on Schedule 4.23(d), no Murphy Party has given notice of any layoffs or terminations nor started consultations with any independent trade union or employees’ representatives within the last twelve (12) months in relation to any employee of any Murphy Party. The consummation of the Subject Transactions will not give rise to the payment of any remuneration, payments or benefits or any enhancements or accelerations thereof to an employee of any Murphy Party whether in accordance with the standard terms and conditions of employment of such employee or otherwise.

(e) Labor Relations; Compliance. No Murphy Party has been or is a party to any collective bargaining or other labor agreement with any trade union or other employees’ representatives or organization and no Murphy Party recognizes any trade union or other body representing its employees (or any of them) for the purpose of collective bargaining or other negotiating purposes, nor has any Murphy Party received a request for recognition or certification of any such agent or body and, to the Knowledge of the Murphy Parties, no such request is pending. There has not been, there is not presently pending or existing, and, to the Knowledge of the Murphy Parties, there is not threatened: (a) any strike, slowdown, picketing, work stoppage, or employee grievance process, or (b) any Proceeding against or affecting any Murphy Party relating to the alleged violation of any Legal Requirement pertaining to labor relations or employment matters, including any charge or complaint filed by an employee or union with the National Labor Relations Board, the Equal Employment Opportunity Commission, or any comparable Governmental Body, organizational activity, or other labor or employment dispute against or affecting any Murphy Party or its respective premises. No event has occurred and, to the Knowledge of the Murphy Parties, no circumstance exists that could

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provide the basis for any work stoppage or other labor dispute. There is no lockout of any employees by any Murphy Party and no such action is contemplated by any Murphy Party. Each Murphy Party has materially complied, and is in material compliance with, all Legal Requirements and agreements in connection with its employees, directors and consultants and any trade unions and employees’ representatives, including in respect of equal employment opportunity, nondiscrimination, immigration, wages and all other payment benefits and emoluments due, hours, benefits, collective bargaining, the payment of social security and similar taxes, occupational safety and health, and plant closing. No Murphy Party is liable for the payment of any compensation, damages, taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing Legal Requirements. There are no current, pending or, to the Knowledge of the Murphy Parties, threatened claims of any type against any Murphy Party by any existing or former employees or directors of any Murphy Party or by any existing or former consultants to any Murphy Party.

4.24 Murphy Employee Benefit Plans.

(a) Set forth on Schedule 4.24(a) is a complete and accurate list of all employee benefit plans within the meaning of Section 3(3) of ERISA of Murphy-Inc. and its ERISA Affiliates, whether or not any such employee benefit plans are exempt from the provisions of ERISA, as well as any plan, program, agreement, arrangement or commitment which has been introduced or which of any Murphy Party or any of its ERISA Affiliates is proposing to introduce for the benefit of any of its current or former employees, directors or officers, sponsors, has sponsored, maintains, has maintained, contributes to, has contributed to, or has any obligation under or with respect to or relating to severance pay, deferred compensation, bonuses, stock options, employee stock purchases, restricted stock, excess benefits, incentive compensation, stock bonuses, cash bonuses, golden parachutes, life insurance, rabbi trusts, cafeteria plans, dependent care, unfunded plans or any other employee-related plans, programs, agreements, arrangements or commitments, established, maintained, participated in, or contributed to by any Murphy Party or any of its ERISA Affiliates (“Murphy Employee Benefit Plans”).

(b) Each Murphy Employee Benefit Plan (and each related trust, insurance contract, or fund) at all times has materially complied in form and operation with ERISA, the Code and any other applicable law and has been administered and operated in accordance with its controlling documents. With respect to each Murphy Employee Benefit Plan (and each related trust, insurance contract, or fund), no event has occurred and there exists no condition or set of circumstances in connection with which ay Murphy Party or any of its ERISA Affiliates would be subject to any liability under ERISA, the Code, or any other applicable law.

(c) No Murphy Party or any of its ERISA Affiliates has ever sponsored, maintained, contributed to, participated in, been a party to, or had any liability under any employee benefit plan program or arrangement that (i) is subject to Section 412 of the Code or Title IV of ERISA, (ii) is multiple employer plan or a multiemployer plan within the meaning of Section 3(37) of ERISA, or (iii) is not listed on Schedule 4.24(a).

(d) Except as set forth on Schedule 4.24(d), no Murphy Employee Benefit Plan has ever provided for continuing benefits or coverage for any participant, beneficiary or

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former employee after such participant’s or former employee’s termination of employment, including with respect to retiree health and life benefits, except as may be required by Section 4980B of the Code and Sections 601-608 of ERISA.

(e) Each Murphy Employee Benefit Plan intended to be qualified under Section 401(a) of the Code has been determined to be so qualified by the IRS or any opinion letter has been issued to the prototype sponsor of the Murphy Employee Benefit Plan and nothing has occurred since the date of the last such determination or issuance of such opinion letter which resulted or may result in the revocation of such determination. All reports, descriptions and disclosures required by ERISA, the Code and any other applicable laws with respect to each Murphy Employee Benefit Plan have been timely filed and provided.

(f) Other than fully insured health plans, the assets of the Murphy Employee Benefit Plans are adequate to pay all debts, liabilities and claims with respect to such plans to the extent that claims have been made or have accrued on or prior to the Effective Time. Full payment has been made of all amounts which any Murphy Party or any of its ERISA Affiliates is required, under applicable law or under any Murphy Employee Benefit Plan or any agreement relating to any Murphy Employee Benefit Plan to which any Murphy Party or any of its ERISA Affiliates is a party, to have paid as contributions (including all employer contributions and employee salary reduction contributions) or premiums thereto as of the Effective Time, except for any such contributions with respect to the final payroll period immediately prior to the Effective Time, which have been withheld and accrued and will be timely contributed after the Effective Time. The Murphy Parties or one of its ERISA Affiliates has made adequate provision for reserves, including a provision for reserves for incurred but not reported costs, to meet contributions or premiums that have not been made because they are not yet due, or will not become due on or prior to the Effective Time, under the terms of any Murphy Employee Benefit Plan or related agreements. Benefits under all Murphy Employee Benefit Plans are as represented and have not been increased subsequent to the date as of which documents have been provided.

(g) No Murphy Party or any of its ERISA Affiliates has engaged in any transaction with respect to the Murphy Employee Benefit Plans which would subject Murphy- Inc. or its ERISA Affiliates to a tax, penalty or liability for prohibited transactions under ERISA or the Code, and none of its respective directors, officers or employees, to the extent they or any of them are fiduciaries with respect to such plans, or any other fiduciary has materially breached any of their responsibilities or obligations imposed upon fiduciaries under Title I of ERISA or has taken or failed to take any action that would result in any claim being made under, by or on behalf of any such plans by any party with standing to make such claim. There are no pending audits, examinations or investigations by any Governmental Body relating to any Murphy Employee Benefit Plan, and no pending or, to the Knowledge of the Murphy Parties, threatened claims (other than routine claims for benefits), suits or proceedings involving any Murphy Employee Benefit Plan or any fiduciary thereof or service provider thereto. A Murphy Party or one of its ERISA Affiliates has the right to modify, amend, or terminate each Murphy Employee Benefit Plan at any time. The termination of any Murphy Employee Benefit Plan would not accelerate or increase any benefits payable under such plan. In the event of termination of any Murphy Employee Benefit Plan, no Murphy Party or any of its ERISA Affiliates would have any liability with respect to such plan, other than the payment of benefits pursuant to such plan.

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(h) Murphy-Inc. has delivered to EControls-Inc. true and complete copies of (A) all Murphy Employee Benefit Plans as in effect for any Murphy Party or any of its ERISA Affiliates, together with all amendments thereto, the summary plan description for each Murphy Employee Benefit Plan, and the latest IRS determination letter or opinion letter, as the case may be, obtained with respect to any such Murphy Employee Benefit Plan qualified under Section 401 or 501 of the Code, (B) Form 5500 for the three most recent completed fiscal years for each Murphy Employee Benefit Plan required to file such form, (C) the summary annual report provided to participants with respect to each Murphy Employee Benefit Plan for the three most recent plan years, and (D) all related trust agreements, insurance contracts and other funding agreements associated with each such Murphy Employee Benefit Plan.

(i) The requirements of Section 4980B of the Code, Sections 601-608 of ERISA, and any other continuation of coverage requirements under any applicable law have been satisfied in all material respects with respect to each Murphy Employee Benefit Plan to which such requirements are applicable.

4.25 Broker’s or Finder’s Fees. No Person has acted directly or indirectly as a broker, finder or financial advisor for any Murphy Party in connection with the negotiations relating to the transactions contemplated by this Agreement, and no Person is entitled to any fee or commission or like payment in respect thereof based in any way on any agreement, arrangement or understanding made by or on behalf of any Murphy Party.

4.26 Environmental and Health and Safety Matters.

(a) Except as set forth on Schedule 4.26(a):

(i) Each Murphy Party is and has been in material compliance at all times with all applicable Environmental and Safety Requirements, and no Murphy Party has received any notice, report or information regarding any material liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), or any corrective, investigatory or remedial obligations, arising under Environmental and Safety Requirements with respect to the past or present operations or properties of the Murphy Business.

(ii) Each Murphy Party has obtained, and is and has been in material compliance at all times with all terms and conditions of, all permits, licenses and other authorizations required pursuant to Environmental and Safety Requirements for the occupation of the properties of the Murphy Business and the conduct of its operations.

(iii) None of the following exists at any property owned, operated or occupied by any Murphy Party: asbestos-containing material in any form or condition in any material quantity; polychlorinated biphenyl-containing materials; or equipment in any material quantity, or underground storage tanks.

(iv) The transactions contemplated by this Agreement do not impose any obligations under Environmental and Safety Requirements for site investigation or cleanup or notification to or consent of any Governmental Body or third parties.

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(v) No facts, events or conditions relating to the past or present properties or operations of the Murphy Business or properties contiguous thereto will (A) materially prevent, hinder or limit continued compliance by any Murphy Party or the Company with Environmental and Safety Requirements, (B) give rise to any corrective, investigatory or remedial obligations on the part of any Murphy Party or the Company pursuant to Environmental and Safety Requirements, or (C) give rise to any material liabilities on the part of any Murphy Party or the Company (whether accrued, absolute, contingent, unliquidated or otherwise) pursuant to Environmental and Safety Requirements, including those liabilities relating to on site or off site hazardous substance releases, personal injury, property damage or natural resources damage.

(vi) No Murphy Party has assumed any material liabilities or obligations of any third party under Environmental and Safety Requirements.

(b) Each Murphy Party has provided to the Company and the EControls Parties (i) true, complete and correct copies of all material environmental reports, analyses, tests or monitoring in the possession of such Murphy Party pertaining to any property owned, operated or occupied in connection with the Murphy Business, and (ii) a true, complete and correct list identifying all third party facilities at which contaminants generated in connection with the Murphy Business (whether by a Murphy Party or any prior owner or occupant) have been transported, treated, stored, handled or disposed within the past five years.

4.27 Relationships with Related Persons. Except as set forth on Schedule 4.27: (a) no Murphy Party, any Related Person of a Murphy Party or the Company has any interest in any property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the Murphy Business; (b) no Murphy Party, any Related Person of a Murphy Party or the Company owns, or has owned (of record or as a beneficial owner) an equity interest or any other financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with a Murphy Party other than business dealings or transactions conducted in the Ordinary Course of Business with a Murphy Party at substantially prevailing market prices and on substantially prevailing market terms, or (ii) engaged in competition with a Murphy Party with respect to any line of the products or services of a Murphy Party (a “Murphy Competing Business”) in any market presently served by a Murphy Party except for the ownership of less than one percent (1%) of the outstanding capital stock of any Murphy Competing Business that is publicly traded on any recognized exchange or in the over- the-counter market; and (c) no Murphy Party, any Related Person of a Murphy Party or the Company is a party to any Contract with, or has any claim or right against, a Murphy Party.

4.28 Customer and Supplier Relations. Except as set forth on Schedule 4.28, since the Murphy Balance Sheet Date: (a) there has not been any material adverse change in the relationships between the Murphy Parties and any of its material suppliers or customers; and (b) no material customer or supplier of any Murphy Party has terminated or materially reduced its business with the Murphy Parties and no oral or written notice of termination or cancellation or indication of an intention to terminate or cancel any such relationship with such customer or suppliers has been given or received.

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4.29 Sales Representatives and Distributors. Except as set forth in Schedule 4.29, no Murphy Party is a party to any contract or agreement with any Person under which such Person is a sales representative or distributor of any of the products or services offered by a Murphy Party, which by its terms cannot be terminated at will or on not more than 60 days prior notice without requiring a payment as a result of termination, and there has been no change in the rate of compensation paid or payable to any such Person in the last two years.

4.30 Warranties, Orders, Commitments and Returns. Schedule 4.30 attached hereto sets forth a general description of the warranties given by any Murphy Party in connection with product sales. No other or additional warranty has been given in connection with any such sale. Except as set forth in Schedule 4.30, all accepted and unfilled orders for the sale of products and the performance of services entered into by any Murphy Party and all outstanding contracts or commitments for the purchase of supplies, materials and services were made in bona fide transactions in the Ordinary Course of Business. Except as set forth in Schedule 4.30, to the Knowledge of the Murphy Parties, there are no claims against any Murphy Party with respect to the return of any products by reason of alleged over-shipments, defective products or otherwise, or of products in the hands of customers, retailers or distributors under an understanding that such products would be returnable. No Murphy Party has ever sold any product that contained asbestos.

4.31 Absence of Certain Business Practices. No Murphy Party has and none of its officers, directors, managers, employees or, to Knowledge of the Murphy Parties, any other person acting on the behalf of either, has, directly or indirectly, given or agreed to give any gift or similar benefit (other than incurring reasonable meal expenses, and other than with respect to bona fide payments for which adequate consideration has been given) to any customer, supplier, governmental employee or other person who is or may be in a position to help or hinder the Murphy Business (or assist any Murphy Party in connection with any actual or proposed transaction) (a) which might subject any Murphy Party to any damage or penalty in any civil, criminal or governmental litigation or proceeding; (b) which, if not continued in the future, would have a Material Adverse Effect or which might subject any Murphy Party to suit or penalty in any private or governmental litigation or proceeding; or (c) for establishment or maintenance of any concealed fund or concealed bank account.

4.32 FCPA. Except as set forth in Schedule 4.32: (a) no Murphy Party has any employees or, to their knowledge, any representatives or distributors who hold any foreign government positions or serve on any boards of directors of foreign government-owned entities; (b) no Murphy Party has been the subject of any bribery, money laundering or anti-kickback investigation by any governmental authority; (c) no Murphy Party has conducted an internal investigation involving allegations of impropriety involving bribery, money laundering or anti-kickback laws; (d) no Murphy Party has provided or promised anything of value, including hospitality, entertainment, gifts or trinkets to any foreign government official, any official of a political party in a foreign country or any candidate for political office in a foreign country, or any employee of a company which is owned directly or indirectly in whole or in part by a foreign government (“Foreign Official”); (e) no Murphy Party has paid or promised to pay a Foreign Official’s travel expenses; (f) no Murphy Party has engaged or attempted to engage a Foreign Official to provide services to or for any Murphy Party; (g) no Murphy Party has made or promised to make any charitable, social or political contributions in any of the foreign countries

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in which any Murphy Party operates; and (h) no Murphy Party has received from any foreign governmental authority any grants, tax benefits, rulings or orders relating to the Murphy Business.

4.33 Export Compliance. Except as set forth in Schedule 4.33:

(a) no Murphy Party holds any export control, strategic or dual-use goods or embargo license, agreement, permit, approval or other authorization issued by the U.S. Government or any foreign governmental authority;

(b) during the past five years, no Murphy Party has engaged in any action which they have reason to believe may have been in violation of any applicable U.S. or foreign export control law, regulation, license, executive or other order, approval, permit, license exception or exemption, including the Export Administration Act, as amended, the Export Administration Regulations, the Arms Export Control Act, as amended, the International Traffic in Arms Regulations (“ITAR”) or the embargo and asset control regulations administered by the Office of Foreign Assets Control (OFAC);

(c) no Murphy Party is registered or is required to be registered under any munitions, defense or export-related government regime, including the ITAR;

(d) no Murphy Party has any facility that has been granted a security permit or other clearance for the protection of classified, secret or other sensitive data either in the United States or any other country and none of the employees of any Murphy Party holds such a security permit or other clearance;

(e) no Murphy Party holds any U.S. or foreign government contract or subcontract, or otherwise sell product that has been designed, produced or modified for military end-uses or end-users, for nuclear power or weapons, for chemical or biological weapons, or for missile or unmanned air vehicles;

(f) no Murphy Party has engaged in any transaction, direct or indirect, during the last five years with any country that is subject to a United States, United Nations or other embargo or trade sanctions regime;

(g) no Murphy Party has been notified of any potential violation of any United States, foreign or United Nations export control, strategic goods, asset control, embargo or antiboycott laws during the past five years;

(h) to the Knowledge of the Murphy Parties, no Murphy Party has ever been the subject of any investigation or inquiry by any governmental authority relating to the export control, strategic goods, defense security, asset control, embargo or antiboycott laws of the United States or any foreign country or the United Nations; and

(i) no Murphy Party has ever conducted an internal investigation involving allegations of violations of export control, strategic goods, defense security, asset control, embargo or antiboycott laws of the United States or any foreign country or the United Nations.

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4.34 Breach of Representations. No Murphy Party is aware of any breach of any of the representations or warranties of EControls-Inc. contained in this Agreement. Each of Murphy Party shall be deemed to have waived in full any breach of EControls-Inc.’s representations and warranties contained herein of which any Murphy Party is aware at the date hereof or, if the Closing occurs, at the Closing.

4.35 Disclosure. None of this Agreement, the Financial Statements (including the footnotes thereto), or any schedule, exhibit or certificate delivered in accordance with the terms hereof or referenced herein contains any untrue statement of a material fact or to the knowledge of any Murphy Party omits any statement of a material fact necessary in order to make the statements contained herein or therein not misleading.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF ECONTROLS

EControls-Inc. makes the following representations and warranties as of the date hereof to each of the Company and Murphy-Inc.:

5.1 Existence and Good Standing. EControls-Inc. is a corporation, duly incorporated, validly existing and in good standing under the laws of the State of Texas. EControls-LLC is a limited liability company, duly formed, validly existing and in good standing under the laws of the State of Texas. EControls-Inc. has provided to the Company and the Murphy Parties true and complete copies of all of the organizational documents for each EControls Party. Each of the EControls Parties is duly qualified to do business in all jurisdiction(s) in which the character or location of the properties owned or leased by it or the nature of the businesses conducted by it makes such qualification necessary, except for such failures to be so authorized, qualified, licensed or in good standing as could not reasonably be expected to have a Material Adverse Effect.

5.2 Power. Each EControls Party has the entity power and authority to execute, deliver and perform fully its obligations under this Agreement and the Transaction Documents.

5.3 Enforceability. The execution, delivery and performance of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of each EControls Party and constitute the valid and legally binding obligations of such EControls Party enforceable against such EControls Party in accordance with their terms, subject to the General Enforceability Limitations.

5.4 Title to EControls Contributed Interest. EControls-Inc. has good title to the EControls Contributed Interest, free and clear of any Encumbrance.

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5.5 EControls Contributed Assets. At the Closing, except as set forth on Schedule 5.5 (the “EControls-Inc. Retained Assets”), EControls-Inc. will have contributed to EControls-LLC, free and clear of any Encumbrance, all right, title and interest in and to all assets, rights and properties of every nature, kind and description, whether tangible or intangible, owned, leased or licensed, real, personal or mixed, used in or held for use in the EControls Business immediately prior to the Closing, including the following (collectively, the “EControls Contributed Assets”):

(a) all furniture, fixtures, machinery and equipment used in the EControls Business, including office equipment, supplies and other tangible personal property wherever located and any and all technology, machinery and equipment located at the corporate headquarters of the EControls Business in San Antonio, Texas;

(b) the ownership interests in certain other companies set forth on Schedule 5.5(b);

(c) all inventory held for sale in the EControls Business, wherever located as of the Effective Time, as well as EControls-Inc.’s right to receive inventory ordered by EControls-Inc. for the EControls Business from suppliers prior to and not received by EControls- Inc. as of the Effective Time;

(d) all unfilled customer orders relating to the EControls Business and all deposits and other payments relating thereto;

(e) all contracts, purchase orders, instruments and other agreements (whether written or oral) relating to the EControls Business to which EControls-Inc. is a party or by which its assets or properties are bound, including, the EControls Material Contracts;

(f) all prepaid expenses, advance payments, deposits, surety accounts and other similar deposits, including deposits with suppliers, in each case, relating to the EControls Business;

(g) all trade, supplier accounts and notes receivable, unbilled revenues, reimbursable costs and expenses and other claims for money due to EControls-Inc. relating to the EControls Business;

(h) all Intellectual Property Rights owned or licensed by EControls-Inc. relating to the EControls Business (collectively, the “EControls Intellectual Property”);

(i) all Governmental Authorizations or any waiver of any of the foregoing related to the EControls Business and issued to EControls-Inc. by any Governmental Body;

(j) all business and employment records of EControls-Inc. related to the EControls Business, including all books, records, ledgers, files, documents, correspondence, lists (including customer lists, in whatever form or medium), customer surveys, customer service records, advertising and promotional materials, studies, reports and other materials (in whatever form or medium), owned or maintained in connection with the EControls Business;

(k) all of the goodwill related to the EControls Contributed Assets and the EControls Business; and

(l) the following items to the extent related to the EControls Business or the EControls Contributed Assets or any of the EControls-LLC Assumed Liabilities: warranties, indemnities, allowances, rights of set-off, rights of recovery, rights to reimbursement or contribution, rights to receive grants, rights to receive performance, rights to assert claims, rights to pursue remedies, rights to sue for past infringement, rights to insurance proceeds and other claims, rights and causes of action.

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5.6 Assumed and Retained Liabilities.

(a) At the Closing, EControls-LLC will have assumed and will be responsible for paying, performing and discharging as and when due all obligations and liabilities of: (i) EControls-Inc. relating to the EControls Contributed Assets; (ii) all liabilities and obligations arising under the EControls Material Contracts; and (iii) all other liabilities of EControls and its Affiliates related to or arising in connection with the EControls Business, which are not EControls-Inc. Retained Liabilities (collectively, the “EControls-LLC Assumed Liabilities”).

(b) EControls-LLC has not assumed the liabilities or obligations set forth on Schedule 5.6(b) and EControls-LLC has not assumed any liabilities or obligations not related to the EControls Business (collectively, the “EControls-Inc. Retained Liabilities”).

5.7 Title to Properties; Encumbrances; Condition and Sufficiency of Assets. EControls-Inc. has, as of the date hereof, and EControls-LLC will have, at the Closing, good, valid and marketable title to the EControls Contributed Assets, free and clear of any Encumbrance, except as otherwise set forth on Schedule 5.7. Except as otherwise set forth on Schedule 5.7, all of the assets owned, leased or used by the EControls Business included in the EControls Contributed Assets are in good operating condition and repair (wear and tear excepted and taking into account their age), are suitable for the purpose used, are adequate and sufficient for all current operations of the EControls Business. Except as set forth on Schedule 5.7, the EControls Contributed Assets are adequate and sufficient to permit EControls-LLC to conduct the EControls Business as conducted by EControls-Inc. immediately prior to Closing. Except as set forth on Schedule 5.7, immediately prior to the Closing, EControls-Inc. did not own, lease, or use any assets related to the EControls Business, other than the EControls Contributed Assets.

5.8 Financial Statements. The EControls Parties have heretofore furnished the Murphy Parties and the Company with the audited balance sheets of EControls-Inc. dated as of December 31, 2007 and December 31, 2008, internal financial statements of EControls-Inc. dated as of December 31, 2006 and June 30, 2009, and the related statements of income, retained earnings and cash flows for each of the periods then ended (collectively, the “EControls Financial Statements”).The balance sheet of EControls-Inc. dated as of June 30, 2009 is hereinafter referred to as the “EControls Balance Sheet.” Except as otherwise set forth on Schedule 5.8, the EControls Financial Statements have been prepared from the books and records of EControls-Inc. in accordance with GAAP consistently applied throughout the periods indicated and fairly present the financial condition and the results of operations and cash flows of EControls-Inc. and the changes in its financial position for the periods indicated. Except as set forth on Schedule 5.8, the statements of income included in the EControls Financial Statements do not contain any items of special or non-recurring income or any other income not earned in the Ordinary Course of Business except as expressly specified in the notes to the EControls Financial Statements. The balance sheets included in the EControls Financial Statements reflect all claims against and all Indebtedness and liabilities of EControls-Inc., which are required to be reflected on the EControls Financial Statements as at their respective dates.

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5.9 No Material Effect. Since June 30, 2009 (the “EControls Balance Sheet Date”), there has been no Material Adverse Effect on the EControls Business, and no fact or condition exists or is contemplated, or, to the Knowledge of EControls-Inc., threatened which, individually or in the aggregate with other facts or conditions, may result in a Material Adverse Effect on the EControls Business.

5.10 Books and Records. EControls-Inc. maintains books and records reasonably reflecting its assets and liabilities and maintains internal accounting controls which provide reasonable assurances that (i) transactions are executed with management’s authorization; (ii) transactions are recorded as necessary to permit preparation of the financial statements of EControls-Inc. and to maintain accountability for EControls-Inc.’s assets; (iii) access to EControls-Inc.’s assets is permitted only in accordance with management’s authorization; (iv) the reporting of EControls-Inc.’s assets is compared with existing assets at regular intervals; (v) accounts, notes and other receivables and inventory, if any, are recorded accurately, and commercially reasonable procedures are implemented to effect the collection of the accounts, notes and other receivables on a current and timely basis; and (vi) material events related to the business of EControls-Inc. are timely communicated to executive management.

5.11 Inventory. All items of inventory and related supplies (including raw materials, work-in-process and finished goods) reflected on the EControls Balance Sheet or thereafter acquired (and not subsequently disposed of in the Ordinary Course of Business) are merchantable and are held for sale in the Ordinary Course of Business as first quality goods, none of such items is obsolete or below standard quality and each item of such inventory reflected in the EControls Balance Sheet and the books and records of EControls-Inc. is so reflected on the basis of a complete physical count and is valued at the lower of cost (on a first in, first out basis) or market in accordance with GAAP, except where such non-conformity is not material.

5.12 EControls Real Property and Leases.

(a) The real property set forth on Schedule 5.12(a) (the “EControls Real Property”) comprises all of the real property used or intended to be used in connection with the EControls Business. EControls-LLC and/or its predecessors interest have, up to the Effective Time, enjoyed peaceful possession of each parcel of EControls Real Property, and neither EControls-LLC nor, to the Knowledge of any EControls Party, any other party to the leases for the EControls Real Property (the “EControls Leases”) was at the time of termination of such EControls Lease, in material default thereunder. True and correct copies of the EControls Leases have been made available to Murphy-Inc. As the Company and the applicable EControls Party lessor have entered into new lease(s) for the EControls Real Property, the EControls Leases have been terminated by mutual agreement of the lessor(s) and lessee(s) thereunder, effective as of the Effective Time, and no party to the EControls Leases has any remaining obligations thereunder, except for EControls-Inc. Retained Liabilities. The entity set forth on Schedule 5.12(a) as the fee title owner of each parcel of E-Controls Real Property has good and indefeasible title to same, free and clear of any Encumbrance.

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(b) EControls-LLC does not own or have any interest (other than a leasehold interest) in any real property. EControls-LLC has never owned or had any interest (other than a leasehold interest) in any real property.

(c) All buildings, structures, fixtures, building systems and equipment, and all components thereof, included in the EControls Real Property (the “EControls Improvements”) are in good condition and repair, ordinary wear and tear excepted, and sufficient for the operation of the EControls Business. There are no facts or conditions affecting any of the EControls Improvements that would, individually or in the aggregate, interfere in any material respect with the use or occupancy of the EControls Improvements or any portion thereof in the operation of the EControls Business as currently conducted thereon.

(d) None of the EControls Parties has received written notice of any condemnation, expropriation or other Proceeding in eminent domain affecting any parcel of EControls Real Property or any portion thereof or interest therein. There is no Order, Proceeding or claim of any kind, pending or, to the Knowledge of the EControls Parties, threatened, relating to the ownership, lease, use or occupancy of the EControls Real Property or any portion thereof, or the operation of the EControls Business as currently conducted thereon.

(e) The EControls Real Property is in material compliance with all Legal Requirements, and all insurance requirements affecting such EControls Real Property. None of the EControls Parties has received any notice of violation of any Legal Requirements or insurance requirements pertaining to the EControls Real Property and there is no basis for the issuance of any such notice or the taking of any action for such violation. Without limiting the foregoing: (i) no solid waste, petroleum product, hazardous substance or any other substance which causes pollution has been disposed of, migrated to, or released on, under, or onto the EControls Real Property; (ii) there are no underground storage tanks or other underground improvements on the EControls Real Property; and (iii) there is no pending or, to the Knowledge of the EControls Parties, threatened litigation or administrative actions or orders relating to the EControls Parties, the EControls Real Property or EControls-Inc.’s use of the EControls Real Property which concern Environmental and Safety Requirements. EControls and its Affiliates have no knowledge of, and have not been contacted about, any investigation of the EControls Real Property by any Governmental Body whose jurisdiction concerns Environmental and Safety Requirements. The terms “release,” “solid waste,” “hazardous substance,” and “pollution” are defined according to the most inclusive meanings given those terms in the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended 42 U.S.C. §9601 et seq.; and in the State Solid Waste Disposal Act, TEXAS HEALTH AND SAFETY CODE, Chapter 361.

(f) Each parcel of EControls Real Property has direct access to a public street adjoining such EControls Real Property or has access to a public street via insurable easements benefiting such parcel of EControls Real Property, and such access is not dependent on any land or other real property interest that is not included in the EControls Real Property. None of the EControls Improvements or any portion thereof is dependent for its access, use or operation on any land, building, improvement or other real property interest that is not included in the EControls Real Property.

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(g) All water, oil, gas, electrical, steam, compressed air, telecommunications, sewer, storm and waste water systems and other utility services or systems for the EControls Real Property have been installed and are operational and sufficient for the operation of the EControls Business as currently conducted thereon. No fact, condition, or proceeding exists which would result in the termination or impairment of the furnishing of services to the EControls Real Property of the foregoing utility services.

(h) All certificates of occupancy, permits, licenses, approvals and authorizations (collectively, the “EControls Real Property Permits”) of all Governmental Bodies having jurisdiction over the EControls Real Property that are required or appropriate to use or occupy the EControls Real Property as currently conducted thereon, have been issued and are in full force and effect. None of the EControls Parties has received notice from any Governmental Body having jurisdiction over the EControls Real Property threatening a suspension, revocation, modification or cancellation of any EControls Real Property Permit. Except as set forth on Schedule 5.12(h): (i) the EControls Real Property Permits are validly held, as of the date hereof by EControls-Inc. and, at the Closing, will be held by Murphy-LLC; (ii) no disclosure, filing or other action by any EControls Party is required in connection with the EControls Interest Contribution; and (iii) neither the Company nor EControls-LLC shall be required to assume any additional liabilities or obligations under the EControls Real Property Permits as a result of such contributions.

(i) No Murphy Party’s use or occupancy of the EControls Real Property or any portion thereof and the operation of the EControls Business as currently conducted is not dependent on a “permitted non-conforming use” or “permitted non-conforming structure” or similar variance, exemption or approval from any Governmental Body.

(j) The current use and occupancy of the EControls Real Property and the operation of the EControls Business as currently conducted thereon does not violate in any material respect any easement, covenant, condition, restriction or similar provision in any instrument of record or other unrecorded agreement affecting such EControls Real Property.

(k) There are no Taxes with respect to any EControls Real Property or portion thereof that are delinquent. There is no pending or, to the Knowledge of the EControls Parties, threatened increase or special assessment or reassessment of any Taxes relating to the EControls Real Property.

(l) No portion of the EControls Real Property is located within an area of special risk with respect to earth movement, flood, earth subsidence, rising water or other unusual natural hazards, nor does any EControls Party know of any adverse geological or soil conditions affecting the EControls Real Property.

5.13 EControls Material Contracts. Each EControls Material Contract is, as of the date hereof, a valid and binding agreement of EControls-Inc. and, at the Closing, will be a valid and binding obligation of EControls-LLC and is in full force and effect and enforceable in accordance with its terms. The enforceability of the EControls Material Contracts shall not be affected in any manner by the execution and delivery of this Agreement and the consummation of the Subject Transactions. No EControls Party has violated any of the terms or conditions of

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any of the EControls Material Contracts nor is any EControls Party otherwise in default thereof, and, to the Knowledge of the EControls Parties, all of the terms and conditions to be performed by any party thereto other than any EControls Party have been performed in all material respects and such EControls Material Contract is free from any right of termination on the part of any party thereto. There exists no default or event of default or event, occurrence, condition or act (including the EControls Interest Contribution) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a material default or event of default thereunder. None of the parties to any of the EControls Material Contracts has given notice (written or oral) to any EControls Party of its intent to terminate such EControls Material Contract and no EControls Party has reason to believe that any party intends to terminate any EControls Material Contract prior to or following the consummation of the Subject Transactions. There have been no amendments or modifications to any of the EControls Material Contracts which would make any of the information disclosed herein inaccurate or incomplete. Copies of all such EControls Material Contracts, including any modifications and amendments thereto, have been made available to Murphy-Inc.

5.14 No Conflict. Except as set forth on Schedule 5.14, neither the execution of this Agreement or the Transaction Documents, nor the performance by any EControls Party of its obligations hereunder or thereunder will (a) violate or conflict with any EControls Party’s organizational documents or any Legal Requirement or Order applicable to such entity, (b) violate, conflict with or result in a breach or termination of, or otherwise give any Person additional rights or compensation under, or the right to terminate or accelerate, or constitute (with notice or lapse of time, or both) a default under the terms of any EControls Material Contract, or (c) result in the creation or imposition of any Encumbrance with respect to, or otherwise have an adverse effect upon, any of the EControls Contributed Assets or EControls Contributed Interest as of the date hereof.

5.15 Consents. Certain consents, approvals or authorizations of, or notices to, any third party or Governmental Body that any EControls Party is aware are required in connection with this Agreement or the Transaction Documents or the consummation of the transactions contemplated hereby or thereby, including the EControls Asset Contribution and the EControls Interest Contribution, are set forth on Schedule 5.15. Except as set forth on Schedule 5.15, no third party has, either orally or in writing (a) modified or, to the Knowledge of the EControls Parties, threatened to modify the terms of its relationship with any EControls Party as a result of the transactions contemplated by this Agreement, including the EControls Asset Contribution and the EControls Interest Contribution, (b) withheld its Consent to the transfer of the underlying EControls Contributed Asset to EControls-LLC in connection with the transactions contemplated by this Agreement, or (c) conditioned its Consent to the transfer of the underlying EControls Contributed Asset to EControls-LLC in connection with the transactions contemplated by this Agreement on the payment of additional money.

5.16 Litigation. There is no Proceeding by any Person, or by or before (or any investigation by) any Governmental Body, pending or, to the Knowledge of the EControls Parties, threatened against or affecting (i) any EControls Party or any of its properties or rights which could materially and adversely affect the right or ability of any EControls Party and the Company to carry on the EControls Business as now conducted, or which could have a Material Adverse Effect upon any EControls Party and the Company, or (ii) any EControls Employee

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Benefit Plan or any fiduciary or administrator thereof; and there is no valid basis for any such Proceeding. No EControls Party is subject to any Order entered in any Proceeding which may have a Material Adverse Effect on the EControls Business or its ability to acquire any property or conduct business in any area. Neither EControls Party is subject to any Order entered in any Proceeding relating to the execution, delivery or performance of this Agreement or the Subject Transactions or any other agreement entered into by the EControls Parties or the Company in connection with the Subject Transactions.

5.17 Taxes.

(a) Each EControls Party has filed or caused to be filed since inception all Tax Returns that are or were required to be filed by or with respect to it, either separately or as a member of a group of corporations, pursuant to applicable Legal Requirements. Each EControls Party has delivered or made available to Murphy-Inc. copies of all such Tax Returns relating to income or franchise Taxes filed by such EControls Party for the most recent five taxable years. Each EControls Party has paid, or made provision for the payment of, all Taxes that have or may have become due pursuant to all Tax Returns or otherwise except such Taxes, if any, as are listed on Schedule 5.17(a) and are being contested in good faith (or is otherwise noted on such Schedule) and as to which adequate reserves (determined in accordance with GAAP) have been provided in the EControls Financial Statements. In addition, each EControls Party has made proper reserves for Taxes not yet due on the EControls Financial Statements with respect to its operations through the respective dates thereof.

(b) Each EControls Party’s Tax Returns for years ended June 30, 2005, and before have been audited by the IRS or other relevant national, provincial or state tax authorities or are closed by the applicable statute of limitations for all taxable years. All deficiencies proposed as a result of such audits have been paid, reserved against, settled, or, as described on Schedule 5.17(b), are being contested in good faith by appropriate proceedings. No EControls Party has given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of the EControls Parties or for which the EControls Parties may be liable.

(c) The charges, accruals, and reserves with respect to Taxes on the books of each EControls Party are adequate (determined in accordance with GAAP) and are at least equal to such EControls Party’s liability for Taxes. There exists no proposed tax assessment against any EControls Party. No consent to the application of Section 341(f)(2) of the Code has been filed with respect to any property or assets held, acquired, or to be acquired by any EControls Party. All Taxes that each EControls Party is or was required by Legal Requirements to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person.

(d) All Tax Returns filed by (or that include on a consolidated basis) each EControls Party are true, correct, and complete in all material respects. There is no tax sharing agreement that will require any payment by any EControls Party after the date of this Agreement.

5.18 No Undisclosed Liabilities. None of the EControls Contributed Assets or properties is subject to any outstanding material claims, liabilities or indebtedness, accrued,

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contingent or otherwise, and whether due or to become due, except as set forth in the EControls Financial Statements or referred to in the footnotes thereto, other than liabilities incurred subsequent to the EControls Balance Sheet Date in the Ordinary Course of Business not involving borrowings by the EControls Parties. Except as set forth in Schedule 5.18 or otherwise reflected on the EControls Balance Sheet, the EControls Parties have no Indebtedness as of the Effective Time. No EControls Party is in default in respect of the terms or conditions of any Indebtedness, nor does any EControls Party have Knowledge of any facts which, with the passage of time, would result in any such default. The reserves reflected in the EControls Balance Sheet are adequate, appropriate and reasonable in accordance with GAAP. There is no basis for the assertion against any EControls Party or the Company of any such liability not fully reflected or accrued for in the EControls Balance Sheet.

5.19 Insurance. As of the date hereof, EControls-Inc. has, and at the Closing, EControls-LLC will have in effect such policies of motor vehicle, property, casualty, workers’ compensation, general liability and other insurance, including, group insurance and other life health, disability or other insurance for the benefit of employees or their dependents or both as are required by law and are adequate and appropriate with respect to its business. All insurance policies which any EControls Party maintains with respect to its business, properties or employees (“EControls Insurance Policies”) are in full force and effect. No EControls Party has materially violated any of the terms or conditions of the EControls Insurance Policies, nor is it otherwise in default thereof, and all of the terms and conditions to be performed by the issuers of the EControls Insurance Policies have been performed in all material respects and the EControls Insurance Policies are free from any right of termination on the part of the issuers thereof. Except as set forth on Schedule 5.19, the EControls Insurance Policies are “occurrence” policies and not “claims made” policies.

5.20 Intellectual Property.

(a) Except as set forth on Schedule 5.20, neither any EControls Party nor the EControls Business as presently conducted has or will interfere with, infringe upon, misappropriate, or otherwise come into conflict with, any Intellectual Property Rights of third parties; (ii) there are no facts indicating a likelihood of the foregoing; and (iii) none of the EControls Parties has ever received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or conflict (including any claim that any of the EControls Parties must license or refrain from using any Intellectual Property Rights of any third party). There is no proceeding or action before any court or tribunal related to EControls Intellectual Property, other than prosecution proceedings with the applicable issuing or granting governmental authorities for Intellectual Property Rights requiring registration. To the EControls Parties’ Knowledge, no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with, any EControls Intellectual Property.

(b) Schedule 5.20(b) identifies each domestic and foreign patent, trademark, copyright, and domain name registration owned by any EControls Party with respect to any of the EControls Intellectual Property, identifies each domestic and foreign pending patent, trademark, copyright, and domain name application or application for registration that any EControls Party has been made with respect to any of the EControls Intellectual Property, and identifies each material license, sublicense, agreement, or other permission that any EControls

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Party has granted to any third party with respect to any of the EControls Intellectual Property (together with any exceptions). EControls-Inc. has made available to the Company and the Murphy Parties correct and complete copies of all such patents, registrations, applications, licenses, sublicenses, agreements, and permissions (as amended to date). Schedule 5.20(b) also identifies each material trade name or unregistered trademark, service mark, corporate name, internet domain name, copyright and material computer software item used in connection with the EControls Business, except for commercial off-the-shelf software. With respect to each Intellectual Property identified in Schedule 5.20(b), and except as noted therein:

(i) As of the date hereof, EControls-Inc. possesses, and at the Closing EControls-LLC will possess all right, title, and interest in and to such Intellectual Property Right, free and clear of any Encumbrance, license, or other restriction;

(ii) such Intellectual Property Right is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge;

(iii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to any EControls Party’s Knowledge, is threatened that challenges the legality, validity, enforceability, use, or ownership thereof; and

(iv) no EControls Party has ever agreed to indemnify any Person for or against any interference, infringement, misappropriation, or other conflict with respect to the Intellectual Property Right (except for indemnities given to customers of a EControls Party in the Ordinary Course of Business with respect to claims by third parties against such customers for using such Intellectual Property Right).

(c) Schedule 5.20(c) identifies each material Intellectual Property Right that any third party owns and that any EControls Party uses pursuant to license, sublicense, agreement, or permission. EControls-Inc. has made available to the Company and the Murphy Parties correct and complete copies of all such licenses, sublicenses, agreements, and permissions (as amended to date). With respect to each Intellectual Property Right identified in Schedule 5.20(c), and except as noted therein, to the EControls Parties’ Knowledge:

(i) the license, sublicense, agreement, or permission covering such Intellectual Property Right is legal, valid, binding, enforceable, and in full force and effect in all material respects;

(ii) no party to the license, sublicense, agreement, or permission is in material breach or default, and no event has occurred that with notice or lapse of time would constitute a material breach or default or permit termination, modification, or acceleration thereunder;

(iii) no party to the license, sublicense, agreement, or permission has repudiated any material provision thereof;

(iv) no EControls Party has granted any sublicense or similar right with respect to the license, sublicense, agreement, or permission; and

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(v) no loss or expiration of such Intellectual Property Right is pending, or reasonably foreseeable or, to the Knowledge of the EControls Parties, threatened, except for patents and copyrights expiring at the end of their statutory terms.

(d) The EControls Parties have taken all actions reasonably necessary to maintain and protect each EControls Party’s registered Intellectual Property Rights, including paying all application, examination, registration, issue, renewal and maintenance fees that have become due, and (ii) filing all necessary documents and certificates including statements of use with the relevant patent, copyright, trademark or other authorities.

(e) Except as set forth on Schedule 5.20(e), the EControls Parties have secured valid written assignments from all consultants and employees who contributed to the creation or development of Intellectual Property Rights used by any EControls Party in the conduct of its business of the rights to such contributions to the extent that such EControls Party did not already own such Intellectual Property Rights by operation of law.

(f) The EControls Parties have taken all reasonable and necessary steps to protect and preserve the confidentiality of all trade secrets, know-how, and software that is material to the EControls Business. Except as set forth on Schedule 5.20(f), to the EControls Parties’ Knowledge, there has not been any unauthorized disclosure of any third party Intellectual Property Rights by any EControls Party, or by any employees or officers of any EControls Party.

(g) Except as set forth on Schedule 5.20(g), all software material to the EControls Business: (i) is, as of the date hereof, in the possession, custody and control of EControls-Inc. and, at the Closing, will be in the possession, custody and control of EControls- LLC; and (ii) is stored in electronic form with up-to-date appropriately catalogued versions. None of any EControls Party’s software in source code form has been provided to any EControls Party’s personnel except on a need-to-know basis and has not been presented or disclosed in source code form to any third party (including employees and officers of such EControls Party) except under written confidentiality agreements or written source code escrow agreements.

5.21 Compliance with Laws. Except as set forth on Schedule 5.21, each EControls Party is in material compliance with all Legal Requirements of any Governmental Body, including the Federal Occupational Safety and Health Act, ERISA and all Legal Requirements relating to the safe conduct of business and all Environmental and Safety Requirements. Except as set forth on Schedule 5.21, no EControls Party has received any notice of any asserted present or any notice in the last five years of any past failure of any aspect of the EControls Business to materially comply with any of such Legal Requirements.

5.22 Accounts Receivable. All accounts and notes receivable of each EControls Party represent sales actually made in the Ordinary Course of Business or valid claims as to which full performance has been rendered by such EControls Party (or its predecessor in interest). The reserve on the EControls Financial Statements against the accounts receivable for returns and bad debts has been calculated in a manner consistent with GAAP and past practice. All of the accounts and notes receivable of each EControls Party are and as of the Effective Time will be, in the aggregate, collectible in full, net of the reserve therefor, in the Ordinary Course of

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Business. No counterclaims, defenses or offsetting claims with respect to the accounts or notes receivable of each EControls Party are pending or, to the Knowledge of any EControls Party, threatened. All of the accounts and notes receivable of each EControls Party relate solely to sales of goods or services to customers of such EControls Party (or its predecessor in interest), none of which are Affiliates of each EControls Party (or its predecessor in interest).

5.23 Employees.

(a) Schedule 5.23(a) contains a complete and accurate list of the following information for each employee or manager of any EControls Party, including each employee on leave of absence or layoff status: employer (and country in which such employee is employed); name; job title; current compensation paid or payable, including any entitlements and any change in compensation since the last day of the calendar year immediately preceding the Effective Time; bonus and commission arrangements; vacation accrued; and service credited for purposes of vesting and eligibility to participate under any EControls Party’s pension, retirement, profit-sharing, thrift-savings, deferred compensation, stock bonus, stock option, cash bonus, employee stock ownership (including investment credit or payroll stock ownership), entitlement to severance pay (whether formal or informal, in writing or otherwise), insurance, medical, welfare, or vacation plan, any other employee benefit plan or other benefits provided or which any EControls Party is bound to provide (whether now or in the future) to such employees. Except as set forth on Schedule 5.23(a), no EControls Party is involved in negotiations (whether with employees or any trade union or other employees’ representatives) to vary the terms and conditions of employment or engagement of any of its employees, directors or consultants, nor has it made any representations, promises, offers or proposals to any of its employees, directors or consultants or to any trade union or other employees’ representatives concerning or affecting the terms and conditions of employment or engagement of any of its employees, directors or consultants.

(b) To the Knowledge of the EControls Parties, no employee or manager of any EControls Party is a party to, or is otherwise bound by, any Proprietary Rights Agreement that in any way adversely affects or will affect (i) the performance of such employee’s or director’s duties as an employee or manager of any EControls Party, or (ii) the ability of any EControls Party to conduct its business. To the Knowledge of the EControls Parties, no manager, officer, or other key employee of any EControls Party intends to terminate his employment with any EControls Party.

(c) There are no retired employees or managers of any EControls Party, or dependents of retired employees or managers of any EControls Party, receiving benefits or scheduled to receive benefits in the future.

(d) Each EControls Party has materially complied with all applicable Legal Requirements with respect to the Persons engaged by such EControls Party as independent contractors, consultants or similar positions (or treated as such on the books and records of such EControls Party as such), including proper withholding and payment of all applicable Taxes under the Code, and none of such Persons could be deemed employees of such EControls Party under any applicable Legal Requirement, no EControls Party is under a contractual or other obligation to change the terms of service of any director, executive or employee. Except as set

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forth on Schedule 5.23(d), no EControls Party has given notice of any layoffs or terminations nor started consultations with any independent trade union or employees’ representatives within the last twelve (12) months in relation to any employee of any EControls Party. The consummation of the Subject Transactions will not give rise to the payment of any remuneration, payments or benefits or any enhancements or accelerations thereof to an employee of any EControls Party, whether in accordance with the standard terms and conditions of employment of such employee or otherwise.

(e) Labor Relations; Compliance. No EControls Party has been or is a party to any collective bargaining or other labor agreement with any trade union or other employees’ representatives or organization and no EControls Party recognizes any trade union or other body representing its employees (or any of them) for the purpose of collective bargaining or other negotiating purposes, nor has any EControls Party received a request for recognition or certification of any such agent or body and, to the Knowledge of the EControls Parties, no such request is pending. There has not been, there is not presently pending or existing, and, to the Knowledge of the EControls Parties, there is not threatened, (a) any strike, slowdown, picketing, work stoppage, or employee grievance process, or (b) any Proceeding against or affecting any EControls Party relating to the alleged violation of any Legal Requirement pertaining to labor relations or employment matters, including any charge or complaint filed by an employee or union with the National Labor Relations Board, the Equal Employment Opportunity Commission, or any comparable Governmental Body, organizational activity, or other labor or employment dispute against or affecting any EControls Party or its premises. No event has occurred and, to the Knowledge of the EControls Parties, no circumstance exists that could provide the basis for any work stoppage or other labor dispute. There is no lockout of any employees by each EControls Party, and no such action is contemplated by any EControls Party. Each EControls Party has materially complied, and is in material compliance with, all Legal Requirements and agreements in connection with its employees, directors and consultants and any trade unions and employees’ representatives including in respect of equal employment opportunity, nondiscrimination, immigration, wages and all other payment benefits and emoluments due, hours, benefits, collective bargaining, the payment of social security and similar taxes, occupational safety and health, and plant closing. No EControls Party is liable for the payment of any compensation, damages, taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing Legal Requirements. There are no current, pending or, to the Knowledge of the EControls Parties, threatened claims of any type against any EControls Party by any existing or former employees or directors of any EControls Party or by any existing or former consultants to any EControls Party.

5.24 EControls Employee Benefit Plans.

(a) Set forth on Schedule 5.24(a) is a complete and accurate list of all employee benefit plans within the meaning of Section 3(3) of ERISA of EControls-Inc. and its ERISA Affiliates, whether or not any such employee benefit plans are exempt from the provisions of ERISA, as well as any plan, program, agreement, arrangement or commitment which has been introduced or which any EControls Party or any of its ERISA Affiliates is proposing to introduce for the benefit of any of its current or former employees, directors or officers, sponsors, has sponsored, maintains, has maintained, contributes to, has contributed to, or has any obligation under or with respect to or relating to severance pay, deferred

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compensation, bonuses, stock options, employee stock purchases, restricted stock, excess benefits, incentive compensation, stock bonuses, cash bonuses, golden parachutes, life insurance, rabbi trusts, cafeteria plans, dependent care, unfunded plans or any other employee-related plans, programs, agreements, arrangements or commitments, established, maintained, participated in, or contributed to by any EControls Party or any of its ERISA Affiliates (“EControls Employee Benefit Plans”).

(b) Each EControls Employee Benefit Plan (and each related trust, insurance contract, or fund) at all times has materially complied in form and operation with ERISA, the Code and any other applicable law and has been administered and operated in accordance with its controlling documents. With respect to each EControls Employee Benefit Plan (and each related trust, insurance contract, or fund), no event has occurred and there exists no condition or set of circumstances in connection with which any EControls Party or any of its ERISA Affiliates would be subject to any liability under ERISA, the Code, or any other applicable law.

(c) No EControls Party or any of its ERISA Affiliates have sponsored, maintained, contributed to, participated in, been a party to, or had any liability under any employee benefit plan program or arrangement that (i) is subject to Section 412 of the Code or Title IV of ERISA, (ii) is a multiple employer plan or a multiemployer plan within the meaning of Section 3(37) of ERISA, or (iii) is not listed on Schedule 5.24(a).

(d) No EControls Employee Benefit Plan has ever provided for continuing benefits or coverage for any participant, beneficiary or former employee after such participant’s or former employee’s termination of employment, including with respect to retiree health and life benefits, except as may be required by Section 4980B of the Code and Sections 601-608 of ERISA.

(e) Each EControls Employee Benefit Plan intended to be qualified under Section 401(a) of the Code has been determined to be so qualified by the IRS or any opinion letter has been issued to the prototype sponsor of the EControls Employee Benefit Plan and nothing has occurred since the date of the last such determination or issuance of such opinion letter which resulted or may result in the revocation of such determination. All reports, descriptions and disclosures required by ERISA, the Code and any other applicable laws with respect to each EControls Employee Benefit Plan have been timely filed and provided.

(f) Any EControls Employee Benefit Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A(d)(1) of the Code and Treasury Regulations §1.409A-1(a)(1) complies with, and has been operated in compliance with, the requirements of Code Section 409A as to all deferred amounts as to which such requirements are effective pursuant to Treasury Regulations §1.409A-6.

(g) Other than fully insured health plans, the assets of the EControls Employee Benefit Plans are adequate to pay all debts, liabilities and claims with respect to such plans to the extent that claims have been made or have accrued on or prior to the Effective Time. Full payment has been made of all amounts which any EControls Party or any of its ERISA Affiliates is required, under applicable law or under any EControls Employee Benefit Plan or any agreement relating to any EControls Employee Benefit Plan to which any EControls Party or

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any of its ERISA Affiliates is a party, to have paid as contributions (including all employer contributions and employee salary reduction contributions) or premiums thereto as of the Effective Time, except for any such contributions with respect to the final payroll period immediately prior to the Effective Time, which have been withheld and accrued and will be timely contributed after the Effective Time. The EControls Parties or one of its ERISA Affiliates has made adequate provision for reserves, including a provision for reserves for incurred but not reported costs, to meet contributions or premiums that have not been made because they are not yet due, or will not become due on or prior to the Effective Time, under the terms of any EControls Employee Benefit Plan or related agreements. Benefits under all EControls Employee Benefit Plans are as represented and have not been increased subsequent to the date as of which documents have been provided.

(h) No EControls Party or any of its ERISA Affiliates has engaged in any transaction with respect to the EControls Employee Benefit Plans which would subject any EControls Party or its ERISA Affiliates to a tax, penalty or liability for prohibited transactions under ERISA or the Code, and none of its respective directors, officers or employees, to the extent they or any of them are fiduciaries with respect to such plans, or any other fiduciary has materially breached any of their responsibilities or obligations imposed upon fiduciaries under Title I of ERISA or has taken or failed to take any action that would result in any claim being made under, by or on behalf of any such plans by any party with standing to make such claim. There are no pending audits, examinations or investigations by any Governmental Body relating to any EControls Employee Benefit Plan, and no pending, or to the Knowledge of the EControls Parties, threatened claims (other than routine claims for benefits), suits or proceedings involving any EControls Employee Benefit Plan or any fiduciary thereof or service provider thereto. An EControls Party or one of its ERISA Affiliates has the right to modify, amend, or terminate each EControls Employee Benefit Plan at any time. The termination of any EControls Employee Benefit Plan would not accelerate or increase any benefits payable under such plan. In the event of termination of any EControls Employee Benefit Plan, no EControls Party or any of its ERISA Affiliates would have any liability with respect to such plan, other than the payment of benefits pursuant to such plan.

(i) EControls-Inc. has delivered to Murphy-Inc. true and complete copies of (A) all EControls Employee Benefit Plans as in effect for any EControls Party or any of its ERISA Affiliates, together with all amendments thereto, the summary plan description for each EControls Employee Benefit Plan, and the latest IRS determination letter or opinion letter, as the case may, obtained with respect to any such EControls Employee Benefit Plan qualified under Section 401 or 501 of the Code, (B) Form 5500 for the three most recent completed fiscal years for each EControls Employee Benefit Plan required to file such form, (C) the summary annual report provided to participants with respect to each EControls Employee Benefit Plan for the three most recent plan years, and (D) all related trust agreements, insurance contracts and other funding agreements associated with each such EControls Employee Benefit Plan.

(j) requirements of Section 4980B of the Code, Sections 601-608 of ERISA, and any other continuation of coverage requirements under any applicable law have been satisfied in all material respects with respect to each EControls Employee Benefit Plan to which such requirements are applicable.

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(k) Neither the execution and delivery of this Agreement nor the consummation of the Subject Transactions (either alone or upon the occurrence of any additional or subsequent events) will (i) result in any payment to be made by EControls-Inc. or any of its ERISA Affiliates (including severance, unemployment compensation, golden parachute (as defined in Section 280G of the Code), or otherwise) becoming due to any employee, director or consultant, (ii) increase any benefits otherwise payable under any EControls Employee Benefit Plan, or (iii) result in the acceleration of the time of payment or vesting of any such benefits. There is no contract, agreement, plan, or arrangement with an employee to which EControls-Inc. or any of its ERISA Affiliates is a party that, individually or collectively and as a result of the transactions contemplated by this Agreement (whether alone or upon the occurrence of any additional or subsequent events) would reasonably be expected to give rise to the payment of any amount that would not be deductible pursuant to Section 280G of the Code.

5.25 Broker’s or Finder’s Fees. No Person has acted directly or indirectly as a broker, finder or financial advisor for any EControls Party in connection with the negotiations relating to the transactions contemplated by this Agreement, and no Person is entitled to any fee or commission or like payment in respect thereof based in any way on any agreement, arrangement or understanding made by or on behalf of any EControls Party.

5.26 Environmental and Health and Safety Matters.

(a) Except as set forth on Schedule 5.26(a):

(i) Each EControls Party is and has been in material compliance at all times with all applicable Environmental and Safety Requirements, and no EControls Party has received any notice, report or information regarding any material liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), or any corrective, investigatory or remedial obligations, arising under Environmental and Safety Requirements with respect to the past or present operations or properties of the EControls Business.

(ii) Each EControls Party has obtained, and is and has been in material compliance at all times with all terms and conditions of, all permits, licenses and other authorizations required pursuant to Environmental and Safety Requirements for the occupation of the properties of the EControls Business and the conduct of its operations.

(iii) None of the following exists at any property owned, operated or occupied by any EControls Party: asbestos-containing material in any form or condition in any material quantity; polychlorinated biphenyl-containing materials or equipment in any material quantity; or underground storage tanks.

(iv) The transactions contemplated by this Agreement do not impose any obligations under Environmental and Safety Requirements for site investigation or cleanup or notification to or consent of any Governmental Body or third parties.

(v) No facts, events or conditions relating to the past or present properties or operations of the EControls Business or properties contiguous thereto will (A) materially prevent, hinder or limit continued compliance by any EControls Party or

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the Company with Environmental and Safety Requirements, (B) give rise to any corrective, investigatory or remedial obligations on the part of any EControls Party or the Company pursuant to Environmental and Safety Requirements, or (C) give rise to any material liabilities on the part of any EControls Party or the Company (whether accrued, absolute, contingent, unliquidated or otherwise) pursuant to Environmental and Safety Requirements, including those liabilities relating to on site or off site hazardous substance releases, personal injury, property damage or natural resources damage.

(vi) No EControls Party has assumed any material liabilities or obligations of any third party under Environmental and Safety Requirements.

(b) Each EControls Party has provided to the Company and the Murphy Parties (i) true, complete and correct copies of all material environmental reports, analyses, tests or monitoring in the possession of such EControls Party pertaining to any property owned, operated or occupied in connection with the EControls Business, and (ii) a true, complete and correct list identifying all third party facilities at which contaminants generated in connection with the EControls Business (whether by a EControls Party or any prior owner or occupant) have been transported, treated, stored, handled or disposed within the past five years.

5.27 Relationships with Related Persons. Except as set forth on Schedule 5.27, (a) no EControls Party, any Related Person of an EControls Party or the Company has any interest in any property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the EControls Business; (b) no EControls Party, any Related Person of an EControls Party or the Company owns, or has owned (of record or as a beneficial owner) an equity interest or any other financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with an EControls Party other than business dealings or transactions conducted in the Ordinary Course of Business with an EControls Party at substantially prevailing market prices and on substantially prevailing market terms, or (ii) engaged in competition with an EControls Party with respect to any line of the products or services of an EControls Party (a “EControls Competing Business”) in any market presently served by an EControls Party except for the ownership of less than one percent (1%) of the outstanding capital stock of any EControls Competing Business that is publicly traded on any recognized exchange or in the over-the-counter market; and (c) no EControls Party, any Related Person of an EControls Party or the Company is a party to any Contract with, or has any claim or right against, an EControls Party.

5.28 Customer and Supplier Relations. Except as set forth on Schedule 5.28, since the EControls Balance Sheet Date: (a) there has not been any material adverse change in the relationships between the EControls Parties and any of its material suppliers or customers; and (b) no material customer or supplier of any EControls Party has terminated or materially reduced its business with the EControls Parties and no oral or written notice of termination or cancellation or indication of an intention to terminate or cancel any such relationship with such customer or suppliers has been given or received.

5.29 Sales Representatives and Distributors. Except as set forth in Schedule 5.29, no EControls Party is a party to any contract or agreement with any Person under which such Person is a sales representative or distributor of any of the products or services offered by an EControls

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Party, which by its terms cannot be terminated at will or on not more than 60 days prior notice without requiring a payment as a result of termination, and there has been no change in the rate of compensation paid or payable to any such Person in the last two years.

5.30 Warranties, Orders, Commitments and Returns. Schedule 5.30 attached hereto sets forth a general description of the warranties given by any EControls Party in connection with product sales. No other or additional warranty has been given in connection with any such sale. Except as set forth in Schedule 5.30, all accepted and unfilled orders for the sale of products and the performance of services entered into by any EControls Party and all outstanding contracts or commitments for the purchase of supplies, materials and services were made in bona fide transactions in the Ordinary Course of Business. Except as set forth in Schedule 5.30, to the Knowledge of the EControls Parties, there are no claims against any EControls Party with respect to the return of any products by reason of alleged over-shipments, defective products or otherwise, or of products in the hands of customers, retailers or distributors under an understanding that such products would be returnable. No EControls Party has ever sold any product that contained asbestos.

5.31 Absence of Certain Business Practices. No EControls Party has and none of its officers, directors, managers, employees or, to Knowledge of the EControls Parties, any other person acting on the behalf of either, has, directly or indirectly, given or agreed to give any gift or similar benefit (other than incurring reasonable meal expenses, and other than with respect to bona fide payments for which adequate consideration has been given) to any customer, supplier, governmental employee or other person who is or may be in a position to help or hinder the EControls Business (or assist any EControls Party in connection with any actual or proposed transaction) (a) which might subject any EControls Party to any damage or penalty in any civil, criminal or governmental litigation or proceeding; (b) which, if not continued in the future, would have a Material Adverse Effect or which might subject any EControls Party to suit or penalty in any private or governmental litigation or proceeding; or (c) for establishment or maintenance of any concealed fund or concealed bank account.

5.32 FCPA. Except as set forth in Schedule 5.32: (a) no EControls Party has any employees or, to their knowledge, any representatives or distributors who hold any foreign government positions or serve on any boards of directors of foreign government-owned entities; (b) no EControls Party has been the subject of any bribery, money laundering or anti-kickback investigation by any governmental authority; (c) no EControls Party has conducted an internal investigation involving allegations of impropriety involving bribery, money laundering or anti-kickback laws; (d) no EControls Party has provided or promised anything of value, including hospitality, entertainment, gifts or trinkets to any Foreign Official; (e) no EControls Party has paid or promised to pay a Foreign Official’s travel expenses; (f) no EControls Party has engaged or attempted to engage a Foreign Official to provide services to or for any EControls Party; (g) no EControls Party has made or promised to make any charitable, social or political contributions in any of the foreign countries in which any EControls Party operates; and (h) no EControls Party has received from any foreign governmental authority any grants, tax benefits, rulings or orders relating to the EControls Business.

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5.33 Export Compliance. Except as set forth in Schedule 5.33:

(a) no EControls Party holds any export control, strategic or dual-use goods or embargo license, agreement, permit, approval or other authorization issued by the U.S. Government or any foreign governmental authority;

(b) during the past five years, no EControls Party has engaged in any action which they have reason to believe may have been in violation of any applicable U.S. or foreign export control law, regulation, license, executive or other order, approval, permit, license exception or exemption, including the Export Administration Act, as amended, the Export Administration Regulations, the Arms Export Control Act, as amended, the ITAR or the embargo and asset control regulations administered by the Office of Foreign Assets Control (OFAC);

(c) no EControls Party is registered or is required to be registered under any munitions, defense or export-related government regime, including the ITAR;

(d) no EControls Party has any facility that has been granted a security permit or other clearance for the protection of classified, secret or other sensitive data either in the United States or any other country and none of the employees of any EControls Party holds such a security permit or other clearance;

(e) no EControls Party holds any U.S. or foreign government contract or subcontract, or otherwise sell product that has been designed, produced or modified for military end-uses or end-users, for nuclear power or weapons, for chemical or biological weapons, or for missile or unmanned air vehicles;

(f) no EControls Party has engaged in any transaction, direct or indirect, during the last five years with any country that is subject to a United States, United Nations or other embargo or trade sanctions regime;

(g) no EControls Party has been notified of any potential violation of any United States, foreign or United Nations export control, strategic goods, asset control, embargo or antiboycott laws during the past five years;

(h) to the Knowledge of the EControls Parties, no EControls Party has ever been the subject of any investigation or inquiry by any governmental authority relating to the export control, strategic goods, defense security, asset control, embargo or antiboycott laws of the United States or any foreign country or the United Nations; and

(i) no EControls Party has ever conducted an internal investigation involving allegations of violations of export control, strategic goods, defense security, asset control, embargo or antiboycott laws of the United States or any foreign country or the United Nations.

5.34 Breach of Representations. No EControls Party is aware of any breach of any of the representations or warranties of Murphy-Inc. contained in this Agreement. Each EControls Party shall be deemed to have waived in full any breach of Murphy-Inc.’s representations and warranties contained herein of which any EControls Party is aware at the date hereof or, if the Closing occurs, at the Closing.

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5.35 Disclosure. None of this Agreement, the Financial Statements (including the footnotes thereto), or any schedule, exhibit or certificate delivered in accordance with the terms hereof or referenced herein contains any untrue statement of a material fact or to the knowledge of any EControls Party omits any statement of a material fact necessary in order to make the statements contained herein or therein not misleading.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company makes the following representations and warranties as of the date hereof to each of the EControls Parties and the Murphy Parties:

6.1 Existence and Good Standing. The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Oklahoma.

6.2 Power. The Company has the entity power and authority to execute, deliver and perform fully its obligations under this Agreement and the Transaction Documents.

6.3 Capitalization. Upon issuance of the Units of the Company as set forth in Section 2.2 above, such Units shall be the only outstanding Units of the Company. Such Units have been duly authorized and validly issued and are fully paid and nonassessable. Except as set forth in the Operating Agreement, none of such Units is subject to restrictions, and there are no preemptive rights nor any outstanding options, warrants, rights, calls, commitments, conversion rights, rights of exchange, plans or other agreements of any character providing for the purchase, issuance or sale of any Units, other than as contemplated by this Agreement and the Operating Agreement.

6.4 Enforceability. The execution, delivery and performance of this Agreement and the Transaction Documents and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary action on the part of the Company and constitute the valid and legally binding obligations of the Company enforceable against the Company in accordance with their term, subject to the General Enforceability Exceptions.

6.5 No Conflict. Neither the execution of this Agreement or the Transaction Documents, nor the performance by the Company of its obligations hereunder or thereunder will violate or conflict with the Company’s Certificate of Organization or Operating Agreement or any Legal Requirements of any Governmental Body.

6.6 Consents. No consent, approval or authorization of, or notice to, any third party or Governmental Body is required in connection with the execution and delivery by the Company of this Agreement or the Transaction Documents or the consummation of the transactions contemplated hereby or thereby.

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6.7 Brokers. No person has acted directly or indirectly as a broker, finder or financial advisor for the Company in connection with the negotiations relating to the transactions contemplated by this Agreement, and no Person is entitled to any fee or commission or like payment in respect thereof based in any way on any agreement, arrangement or understanding made by or on behalf of the Company.

6.8 Investments; Subsidiaries. The Company does not own, directly or indirectly, any capital stock or other equity or ownership or proprietary interest in any other corporation, limited liability company, partnership, association, trust, joint venture or other entity.

ARTICLE VII

COVENANTS

7.1 Required Approvals.

(a) As promptly as practicable after the Effective Time of this Agreement, the Contributors shall use Best Efforts to obtain all necessary consents, novations, approvals, authorizations, requirements (including filing and registration requirements), transfers, waivers and agreements (“Consents”) from any Persons necessary to authorize, approve or permit the full and complete sale, conveyance, assignment, sublease or transfer of the Murphy Contributed Assets and the EControls Contributed Assets and to make effective the transactions contemplated by this Agreement as may be required that are not obtained prior to the Effective Time.

(b) Notwithstanding anything in this Agreement to the contrary, this Agreement will not constitute an agreement to sell, convey, assign, sublease or transfer the Murphy Contributed Assets or the EControls Contributed Assets, if and to the extent any attempted sale, conveyance, assignment, sublease or transfer of such assets, without the Consent of another Person to such transfer, would constitute a breach by a Contributor, or the Company with respect to the underlying Contributed Asset. For the avoidance of doubt, a Contributor’s failure to contribute a Murphy Contributed Asset or EControls Contributed Asset, as applicable, shall not constitute a breach of any representation in Article IV or V, as applicable. If any required Consent is not obtained on or prior to the Effective Time, Murphy-Inc. or EControls- Inc., as applicable, shall cooperate with the Company and Murphy-LLC or EControls-LLC, as applicable, at the cost and expense of the Contributor of the underlying Contributed Asset, in any reasonable arrangement designed to provide the Company with the benefits intended to be assigned to the Company with respect to the underlying Contributed Asset, including enforcement of any and all rights of either Murphy-Inc. or EControls-Inc., as applicable, against the other party thereto arising out of the breach or cancellation thereof by such other party or otherwise. If and only if such reasonable arrangement can be made, and except as otherwise provided herein, the Company agrees to accept the burdens and perform the obligations underlying such party’s Contributed Asset. Furthermore, if the other party’s Consent is subsequently obtained, Murphy-LLC or EControls-LLC, as applicable shall at such time agree to assume all liabilities and obligations thereunder. If and to the extent that such arrangement cannot be made, the Company shall have no obligation with respect to any such party’s Contributed Asset.

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7.2 Cooperation; Audits. In connection with the preparation of Tax Returns, audit examinations, and any other Proceedings relating to Taxes, the Company, the Murphy Parties and the EControls Parties shall cooperate fully with each other, including the furnishing or making available during normal business hours of records, personnel (as reasonably required), books of account, powers of attorney or other materials necessary or helpful for the preparation of such Tax Returns, the conduct of audit examinations or the defense of claims by Taxing Authorities as to the imposition of Taxes (in each case to the extent permitted by applicable law).

7.3 Cooperation. Subject to the terms and conditions herein provided, each Party will use such Party’s Best Efforts to take, or cause to be taken, such actions, to execute and deliver, or cause to be executed and delivered, such additional documents and instruments and to do, or cause to be done, all things necessary, proper or advisable under the provisions of this Agreement and applicable law to consummate and make effective all of the Subject Transactions.

7.4 Labor and Employee Benefit Matters.

(a) During the period from the Effective Time until 11:59 pm on December 31, 2009, each of Murphy-Inc. and EControls-Inc. shall use commercially reasonable efforts to keep available the services of its present executives, employees and agents for the benefit of Murphy-LLC and EControls-LLC, respectively, in accordance with the Transition Service Agreements attached hereto as Exhibit C (the “Murphy Transition Services Agreement”) and Exhibit D (the “EControls Transition Services Agreement”), respectively.

(b) Each of Murphy-LLC and EControls-LLC shall be responsible for offering COBRA continuation coverage under Code Section 4980B to its own qualified beneficiaries and M&A qualified beneficiaries as of December 31, 2009, within the meaning of Q&A 4 of Treas. Reg. § 54.4980B-9.

(c) Murphy-Inc. shall take all necessary action so that, as of 12:01 a.m. on January 1, 2010: (i) sponsorship of all of the Murphy Employee Benefit Plans shall have been transferred to Murphy-LLC, except with respect to the FW Murphy Deferred Compensation Plan, as restated (the “Deferred Compensation Plan”); and (ii) the Murphy Group 401(k) Profit Sharing Plan (the “401(k) Plan”) shall have been amended to (A) include EControls-LLC, as a participating employer of the 401(k) Plan and (B) add EControls-Inc., as a predecessor employer for the purposes of eligibility to participate, vesting, and contribution allocation.

(d) EControls-Inc. shall take all necessary action so that, as of 12:01 a.m. on January 1, 2010: (i) its Simplified Employee Pension Plan shall have been terminated; (ii) all agreements of any kind with respect to conditions of employment for current employees of E- Controls-Inc. shall have been terminated, except as set forth on Schedule 7.4(c); (iii) sponsorship of its welfare and fringe benefit agreement(s) with ADP shall have been assumed by EControls- LLC and all necessary consents in connection with same shall have been obtained.

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7.5 Conduct of Business by the Murphy Parties. During the period from the date hereof until the earlier to occur of the date of termination of this Agreement or the Effective Time, the Murphy Parties shall conduct the Murphy Business in the Ordinary Course of Business and shall not, except with the prior written consent of EControls-Inc., or as expressly contemplated by this Agreement or the Exhibits hereto, with respect to the Murphy Business:

(a) borrow any amount or incur or become subject to any liability except (i) current liabilities incurred in the Ordinary Course of Business, (ii) liabilities under Murphy Material Contracts entered into in the Ordinary Course of Business, and (iii) borrowings under lines of credit existing as of the date hereof;

(b) mortgage, pledge or subject to any Encumbrance any of the Murphy Contributed Assets;

(c) sell, assign or transfer (including transfers to any shareholders or Affiliates) any Murphy Contributed Assets except in the Ordinary Course of Business, or cancel any debts or claims;

(d) take any other action or enter into any other transaction (including any transactions with employees, shareholders or Affiliates) other than in the Ordinary Course of Business or other than the transactions contemplated by this Agreement;

(e) suffer any material theft, damage, destruction or loss of or to any Murphy Contributed Assets (unless fully covered by insurance);

(f) except as required by applicable Law or in the Ordinary Course of Business and consistent with past practice, (i) increase the salary, wages or other compensation rates of any officer, director, partner, employee or consultant of the Murphy Parties; (ii) make or grant any increase in any Murphy Employee Benefit Plan, (iii) amend or terminate any existing Murphy Employee Benefit Plan, or adopt any new Murphy Employee Benefit Plan or (iv) make any commitment or incur any liability to any labor organization;

(g) make any capital expenditures or commitments therefor, except those made in the Ordinary Course of Business consistent with past practices;

(h) make any change in accounting or Tax principles, practices or policies from those utilized in the preparation of the Murphy Financial Statements;

(i) make any write-off or write-down of or make any determination to writeoff or write-down any of the Murphy Contributed Assets except for obsolete items or other items written off in the Ordinary Course of Business consistent with past practices;

(j) make any change in the general pricing practices or policies or any change in the credit or allowance practices or policies of the Murphy Parties except those made in the Ordinary Course of Business consistent with past practices;

(k) enter into any amendment, modification, termination (partial or complete) or grant any waiver under or give any consent with respect to any agreement that is required (or had it been in effect on the date hereof would have been required) to be disclosed in the Schedules to this Agreement except those entered into or granted in the Ordinary Course of Business consistent with past practices or contemplated by this Agreement;

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(l) commence or terminate any line of business or supplier; or

(m) agree to do any of the foregoing.

7.6 Conduct of Business by the EControls Parties. During the period from the date hereof until the earlier to occur of the date of termination of this Agreement or the Effective Time, the EControls Parties shall conduct the EControls Business in the Ordinary Course of Business and shall not, except with the prior written consent of Murphy-Inc., or as expressly contemplated by this Agreement and the Exhibits hereto with respect to the EControls Business:

(a) borrow any amount or incur or become subject to any liability except (i) current liabilities incurred in the Ordinary Course of Business, (ii) liabilities under EControls Material Contracts entered into in the Ordinary Course of Business, and (iii) borrowings under lines of credit existing as of the date hereof;

(b) mortgage, pledge or subject to any Encumbrance any of the EControls Contributed Assets;

(c) sell, assign or transfer (including transfers to any shareholders or Affiliates) any EControls Contributed Assets except in the Ordinary Course of Business, or cancel any debts or claims;

(d) take any other action or enter into any other transaction (including any transactions with employees, shareholders or Affiliates) other than in the Ordinary Course of Business or other than the transactions contemplated by this Agreement;

(e) suffer any material theft, damage, destruction or loss of or to any EControls Contributed Assets (unless fully covered by insurance);

(f) except as required by applicable Law or in the Ordinary Course of Business and consistent with past practice, (i) increase the salary, wages or other compensation rates of any officer, director, partner, employee or consultant of the EControls Parties; (ii) make or grant any increase in any EControls Employee Benefit Plan, (iii) amend or terminate any existing EControls Employee Benefit Plan, or adopt any new EControls Employee Benefit Plan or (iv) make any commitment or incur any liability to any labor organization;

(g) make any capital expenditures or commitments therefor, except those made in the Ordinary Course of Business consistent with past practices;

(h) make any change in accounting or Tax principles, practices or policies from those utilized in the preparation of the EControls Financial Statements;

(i) make any write-off or write-down of or make any determination to writeoff or write-down any of the EControls Contributed Assets except for obsolete items or other items written off in the Ordinary Course of Business consistent with past practices;

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(j) make any change in the general pricing practices or policies or any change in the credit or allowance practices or policies of the EControls Parties except those made in the Ordinary Course of Business consistent with past practices;

(k) enter into any amendment, modification, termination (partial or complete) or grant any waiver under or give any consent with respect to any agreement that is required (or had it been in effect on the date hereof would have been required) to be disclosed in the Schedules to this Agreement except those entered into or granted in the Ordinary Course of Business consistent with past practices or contemplated by this Agreement;

(l) commence or terminate any line of business or supplier; or

(m) agree to do any of the foregoing.

7.7 Exclusive Dealing. During the period from the date hereof until the earlier to occur of the date of termination of this Agreement or the Effective Time, neither the Murphy Parties or their affiliates nor the EControls Parties or their affiliates shall take any action to directly or indirectly encourage, initiate or engage in discussions or negotiations with, or provide any information to, any corporation, partnership, person, or other entity or group, other than the EControls Parties or the Murphy Parties, as applicable, concerning the merger or combination of any of the Murphy Parties or EControls Parties with any other entity, the purchase and sale of all or substantially all of the assets and properties of any of the Murphy Parties or the EControls Parties, the purchase and sale of the capital stock of the Murphy Parties or the EControls Parties or any transaction similar to the foregoing involving any of the Murphy Parties or the EControls Parties except for the transactions specifically contemplated by this Agreement.

7.8 Covenant of Murphy-Inc. Subject to the satisfaction or waiver of the conditions to Closing set forth in Article VIII, Murphy-Inc. hereby covenants and agrees that on or before the Effective Time it shall (a) convey or cause to be conveyed to Murphy-LLC all of the Murphy Contributed Assets and (b) cause Murphy-LLC to assume all Murphy-LLC Assumed Liabilities.

7.9 Covenant of EControls-Inc. Subject to the satisfaction or waiver of the conditions to Closing set forth in Article VIII, EControls-Inc. hereby covenants and agrees that on or before the Effective Time it shall (a) convey or cause to be conveyed to EControls-LLC all of the EControls Contributed Assets and (b) cause EControls-LLC to assume all EControls-LLC Assumed Liabilities.

7.10 Murphy-LLC Note. Subject to the satisfaction or waiver of the conditions to Closing set forth in Article VIII, on or before the Effective Time, Murphy-LLC shall deliver to Murphy-Inc. the Promissory Note attached hereto as Exhibit E.

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ARTICLE VIII

CONDITIONS TO CLOSING

8.1 Conditions Precedent to Obligations of the Murphy Parties and the Company. The obligations of the Murphy Parties and the Company to enter into and complete the transactions contemplated hereby are subject, at the option of the Murphy Parties and the Company, to the fulfillment on or prior to the Effective Time of the following conditions, any one or more of which may be waived by the Murphy Parties and the Company, as applicable, only in writing:

(a) The representations and warranties of the EControls Parties contained in this Agreement shall be true and correct in all material respects (unless such representation and warranty contains a materiality standard) on and as of the Effective Time with the same force and effect as though made on and as of the Effective Time (unless such representation is made as of a specific time other than the Closing).

(b) The EControls Parties shall have performed and complied with all covenants and agreements required by this Agreement to be performed or complied with by the EControls Parties on or prior to the Effective Time.

(c) No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body, or instituted or threatened by any governmental or regulatory body, to restrain, modify or prevent the carrying out of the transactions contemplated by this Agreement or to seek damages or a discovery order in connection with such transactions.

(d) The EControls Parties shall have delivered to the Company each of the following items:

(i) a copy of the Contribution Agreement, Bill of Sale, Assignment and Assumption Agreement with respect to the EControls Contributed Assets and EControls-LLC Assumed Liabilities, in the form of Exhibit F attached hereto (the “EControls-LLC Contribution Agreement”), duly executed by the EControls Parties, and such other bills of sale, lease assignments, contract assignments and other documents and instruments of sale, assignment, conveyance and transfer as the Company and/or Murphy-Inc. may deem necessary or desirable, each as duly executed by the EControls Parties;

(ii) possession of the EControls Contributed Assets;

(iii) a reasonably current certificate of good standing of each of the EControls Parties issued by the relevant Governmental Body;

(iv) a fully executed copy of the Operating Agreement of EControls- LLC (the “EControls-LLC Operating Agreement”) attached hereto as Exhibit G;

(v) a fully executed copy of a license agreement (the “Perfect Pass License Agreement”) between the EControls Parties cross licensing U.S. Patent No. 7,229,330 entitled “Watercraft Speed Control Device” issued June 12, 2007, and continuation-in-part patent applications claiming priority thereto including, without limitation, 11/811,604; 11/811,605; 11/811,606; 11/811,616; and 11/811,617, in form and substance satisfactory to the Murphy Parties.

(vi) a certificate executed by the Secretary or an Assistant Secretary of each of the EControls Parties certifying to: (i) the organizational documents of such EControls Party, (ii) resolutions of the board of directors or managers and shareholders or

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members of such EControls Party authorizing and approving the execution, delivery and performance of this Agreement and the Operating Agreement, and the consummation of the transactions contemplated hereby, and (iii) incumbency and signatures of the officers of each EControls Party executing this Agreement, the Operating Agreement and any other certificate or document delivered in connection herewith;

(vii) a counterpart original of the Operating Agreement, duly executed on behalf of EControls-Inc.;

(viii) all contracts, files and other data and documents relating to the EControls Business;

(ix) closing certificates signed by an executive officer of each of the EControls Parties confirming the matters referred to in Sections 8.1(a)-(c);

(x) payoff letters and appropriate termination statements under the Uniform Commercial Code and other instruments as may be requested by the Company to extinguish all Indebtedness of the EControls Parties related to the EControls Contributed Assets and all security interests related thereto to the extent directed by the Company;

(xi) Tax clearance certificates (or similar certificates) for each of the EControls Parties dated not more than ten business days prior to the Effective Time, stating that none of the EControls Parties owes any Tax related to the EControls Contributed Assets to the particular jurisdiction for which the Company may be held liable;

(xii) the real property leases set forth on Schedule 8.1(d)(xii) in form and substance satisfactory to Company (the “EControls Real Property Leases”), duly executed by the EControls Parties and/or their Affiliates, as applicable;

(xiii) the EControls Transition Services Agreement, duly executed by each EControls Party; and

(xiv) such other documents and instruments as the Company reasonably requests to consummate the transactions contemplated hereby.

8.2 Conditions Precedent to Obligations of the EControls Parties. The obligations of the EControls Parties to enter into and complete the transactions contemplated hereby are subject, at the option of the EControls Parties, to the fulfillment on or prior to the Effective Time of the following conditions, any one or more of which may be waived by the EControls Parties, as applicable, only in writing:

(a) The representations and warranties of the Murphy Parties and the Company contained in this Agreement shall be true and correct in all material respects (unless such representation and warranty contains a materiality standard) on and as of the Effective Time with the same force and effect as though made on and as of the Effective Time (unless such representation is made as of a specific time other than the Closing).

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(b) The Murphy Parties and the Company shall have performed and complied with all covenants and agreements required by this Agreement to be performed or complied with by the Murphy Parties and the Company on or prior to the Effective Time.

(c) No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body, or instituted or threatened by any governmental or regulatory body, to restrain, modify or prevent the carrying out of the transactions contemplated by this Agreement or to seek damages or a discovery order in connection with such transactions.

(d) The Murphy Parties and the EControls Parties shall have agreed on the form of Perfect Pass License Agreement;

(e) The Murphy Parties shall have delivered to the Company each of the following items:

(i) a copy of the Contribution Agreement, Bill of Sale, Assignment and Assumption Agreement with respect to the Murphy Contributed Assets and Murphy- LLC Assumed Liabilities, in the form of Exhibit H attached hereto (the “Murphy-LLC Contribution Agreement”), duly executed by the Murphy Parties, and such other bills of sale, lease assignments, contract assignments and other documents and instruments of sale, assignment, conveyance and transfer as the Company and/or EControls-Inc. may deem necessary or desirable, each as duly executed by the Murphy Parties;

(ii) possession of the Murphy Contributed Assets;

(iii) a reasonably current certificate of good standing of each of the Murphy Parties issued by the relevant Governmental Body;

(iv) a fully executed copy of the Operating Agreement of Murphy-LLC (the “Murphy-LLC Operating Agreement”) attached hereto as Exhibit I;

(v) a certificate executed by the Secretary or an Assistant Secretary of each of the Murphy Parties certifying to: (i) the organizational documents of such Murphy Party, (ii) resolutions of the board of directors or managers and shareholders or members of such Murphy Party authorizing and approving the execution, delivery and performance of this Agreement and the Operating Agreement, and the consummation of the transactions contemplated hereby, and (iii) incumbency and signatures of the officers of each Murphy Party executing this Agreement, the Operating Agreement and any other certificate or document delivered in connection herewith;

(vi) a counterpart original of the Operating Agreement, duly executed on behalf of Murphy-Inc.;

(vii) evidence, in form and substance, satisfactory to EControls-Inc., that all Indebtedness of the EControls Parties held by Texas Capital Bank and all security interests related thereto have been extinguished;

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(viii) all contracts, files and other data and documents relating to the Murphy Business;

(ix) closing certificates signed by an executive officer of each of the Murphy Parties confirming the matters referred to in Sections 8.1(a)-(c);

(x) Tax clearance certificates (or similar certificates) for each of the Murphy Parties dated not more than ten business days prior to the Effective Time, stating that none of the Murphy Parties owes any Tax related to the Murphy Contributed Assets to the particular jurisdiction for which the Company may be held liable;

(xi) the consents set forth on Schedule 4.15;

(xii) a written consent, in form and substance acceptable to EControls- Inc., of F&M Bank consenting to the loans contemplated by the Executive Loan Agreements attached hereto as Exhibits J (the “Guglielmo Executive Loan Agreement”) and K (the “Walser Executive Loan Agreement”) hereto;

(xiii) the real property leases set forth on Schedule 8.2(e)(xiii) in form and substance satisfactory to EControls-Inc. (the “Murphy Real Property Leases”), duly executed by the Murphy Parties and/or their Affiliates, as applicable;

(xiv) the Murphy Transition Services Agreement, duly executed by each Murphy Party; and

(xv) such other documents and instruments as the Company and/or EControls-Inc. reasonably requests to consummate the transactions contemplated hereby.

(f) The Company shall have delivered to the EControls Parties or the Murphy Parties, as applicable:

(i) the Guglielmo Executive Loan Agreement;

(ii) the Walser Executive Loan Agreement;

(iii) the EControls Real Property Leases and the Murphy Real Property Leases, duly executed by the Company;

(iv) a reasonably current certificate of good standing of the Company issued by the relevant Governmental Body;

(v) a copy of the EControls-LLC Operating Agreement, duly executed by the Company;

(vi) a certificate executed by the Secretary or an Assistant Secretary of the Company certifying to: (i) the organizational documents of the Company, (ii) resolutions of managers or members of the Company authorizing and approving the execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby, and (iii) incumbency and signatures of the officers of the Company;

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(vii) the Employment Agreement of Michael Walser and Terms of Employment of Frank W. Murphy III and Kennon Guglielmo attached hereto as Exhibit L;

(viii) a counterpart original of the Operating Agreement, duly executed on behalf of the Company.

ARTICLE IX

TERMINATION

9.1 Termination. This Agreement may be terminated as follows:

(a) at the election of the Murphy Parties and the Company, if any one or more of the conditions to the Murphy Parties’ and the Company’s obligations to close, as set forth in Section 8.1, has not been fulfilled as of the Effective Time; provided that neither the Murphy Parties nor the Company is in default under this Agreement;

(b) at the election of the EControls Parties, if any one or more of the conditions to the EControls Parties’ obligations to close, as set forth in Section 8.2, has not been fulfilled as of the Effective Time; provided that no EControls Party is in default under this Agreement;

(c) at the election of the Murphy Parties, the EControls Parties or the Company if any legal proceeding is commenced or threatened by any Governmental Body directed against the consummation of the Closing or any other transaction contemplated under this Agreement and the Murphy Parties, the EControls Parties or the Company, as the case may be, reasonably and in good faith deem it impractical or inadvisable to proceed in view of such legal proceeding or threat thereof;

(d) at any time prior to the Closing, at the election of the Murphy Parties, upon a Material Adverse Effect on (i) the EControls Business, (ii) the condition of the EControls Contributed Assets, or (iii) the EControls-LLC Assumed Liabilities;

(e) at any time prior to the Closing, at the election of the EControls Parties, upon a Material Adverse Effect on (i) the Murphy Business, (ii) the condition of the Murphy Contributed Assets, or (iii) the Murphy-LLC Assumed Liabilities;

(f) at any time, by mutual written consent of the parties hereto; or

(g) at any time after October 2, 2009 if for any reason the Closing has not yet occurred, at the election of any of the Murphy Parties, the EControls Parties or the Company, provided that, as for a termination after October 2, 2009 because the Closing has not yet occurred, the party so terminating has not by its default under this Agreement or by wrongful refusal to deliver documents required for Closing caused the Closing not to occur.

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ARTICLE X

INDEMNIFICATION; REMEDIES

10.1 Survival; Risk Allocation.

(a) Regardless of any investigation at any time made by or on behalf of any Party or of any information any Party may have in respect thereof, all representations, warranties, covenants, and obligations in this Agreement and the schedules attached hereto, and any Transaction Document delivered pursuant to this Agreement, shall survive the Closing; provided, however, none of the Company, Murphy-LLC and EControls-LLC shall have any liabilities to the Contributors with respect to its covenants, obligations representations or warranties after the Closing.

(b) The representations, warranties, covenants and agreements made herein are intended, among other things, to allocate the risks in the Subject Transactions among the Parties. No Party shall have any duty to inquire or investigate with respect to the validity or truthfulness of any other Party’s representations and warranties.

10.2 Indemnification Obligation of Murphy-Inc. Murphy-Inc. shall indemnify and hold harmless the Company and its officers, directors, employees, agents and Affiliates (the “Company Indemnified Persons”) from and against any and all losses, liabilities, claims, damages of any nature, penalties, fines, judgments, awards, settlements, taxes, costs, fees, expenses (including reasonable attorneys’ fees) and disbursements (collectively “Losses”) based upon, arising out of or otherwise in respect of:

(a) any inaccuracies in or any breach of any representation or warranty of the Murphy Parties contained in this Agreement (including any schedule or exhibit attached hereto) or any Transaction Document (determined in each case without regard to any qualification with respect to materiality, Material Adverse Effect or other similar qualification);

(b) any breach of any covenant or agreement of the Murphy Parties contained in this Agreement (including any schedule or exhibit attached hereto) or any Transaction Document;

(c) any of the Murphy-Inc. Retained Liabilities; and

(d) any event arising from the operation and ownership of, or conditions occurring with respect to, the Murphy Business prior to the Effective Time, including any product shipped or manufactured or service provided by any Murphy Party prior to the Closing Date.

10.3 Indemnification Obligation of EControls-Inc. EControls-Inc. shall indemnify and hold harmless the Company Indemnified Persons from and against any and all Losses based upon, arising out of or otherwise in respect of:

(a) any inaccuracies in or any breach of any representation or warranty of the EControls Parties contained in this Agreement (including any schedule or exhibit attached hereto) or any Transaction Document (determined in each case without regard to any qualification with respect to materiality, Material Adverse Effect or other similar qualification);

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(b) any breach of any covenant or agreement of the EControls Parties contained in this Agreement (including any schedule or exhibit attached hereto) or any Transaction Document;

(c) any of the EControls-Inc. Retained Liabilities; and

(d) any event arising from the operation and ownership of, or conditions occurring with respect to, the EControls Business prior to the Effective Time, including any product shipped or manufactured or service provided by any EControls Party prior to the Closing Date.

10.4 Indemnification Obligation with respect to Company. Murphy-Inc. shall indemnify and hold harmless EControls-Inc. and its officers, directors, employees, agents and Affiliates (the “EControls Indemnified Persons”) from and against any and all Losses based upon, arising out of or otherwise in respect of:

(a) any inaccuracies in or any breach of any representation or warranty of the Company contained in this Agreement (including any schedule or exhibit attached hereto) or any Transaction Document (determined in each case without regard to any qualification with respect to materiality, Material Adverse Effect or other similar qualification); and

(b) any breach of any covenant or agreement of the Company contained in this Agreement (including any schedule or exhibit attached hereto) or any Transaction Document.

10.5 Notice and Opportunity to Defend.

(a) Notice of Asserted Liability. As soon as is reasonably practicable after any Murphy Party, EControls Party or the Company, as applicable, becomes aware of any claim that it or they has or have under Section 10.2, Section 10.3 or Section 10.4, as applicable, that may result in Losses (a “Liability Claim”), such party (the “Indemnified Party”) shall give notice thereof (a “Claims Notice”) to the party responsible for indemnifying for such Losses (the “Indemnifying Party”) and each other Party to this Agreement. A Claims Notice must describe the Liability Claim in reasonable detail and indicate the amount (estimated, if necessary and to the extent feasible) of the Losses that have been or may be suffered by the Indemnified Party. No delay in or failure to give a Claims Notice by the Indemnified Party to the Indemnifying Party pursuant to this Section 10.5(a) will adversely affect any of the other rights or remedies (with respect to indemnification) that the Indemnified Party has under this Agreement, or alter or relieve the Indemnifying Party of its obligation to indemnify the Indemnified Party to the extent that such delay or failure has not materially prejudiced the Indemnifying Party.

(b) Opportunity to Defend. The Indemnifying Party has the right, exercisable by written notice to the Indemnified Party within 30 days of receipt of a Claims Notice from the Indemnified Party of the commencement or assertion of any Liability Claim in respect of which indemnity may be sought hereunder, to assume and conduct the defense of such Liability Claim

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in accordance with the limits set forth in this Agreement with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnified Party; provided, however, that (i) joint representation of the Indemnified Party and the Indemnifying Party would not in the good faith judgment of the Indemnifying Party’s counsel be inappropriate due to actual or potential differing interests between such Indemnified Party and the Indemnifying Party; (ii) the Indemnifying Party has sufficient financial resources, in the reasonable judgment of the Indemnifying Party, to satisfy the amount of any adverse monetary judgment that is reasonably likely to result; (iii) the Liability Claim solely seeks (and continues to seek) monetary damages; and (iv) the Indemnifying Party expressly agrees in writing that as between the Indemnifying Party and the Indemnified Party, the Indemnifying Party will be solely obligated to satisfy and discharge the Liability Claim in accordance with the limits set forth in this Agreement (the conditions set forth in clauses (i) through (iv) are collectively referred to as the “Litigation Conditions”). If the Indemnifying Party does not assume the defense of a Liability Claim in accordance with this Section 10.5(b), the Indemnified Party may continue to defend the Liability Claim. If the Indemnifying Party has timely assumed the defense of a Liability Claim as provided in this Section 10.5(b), the Indemnifying Party will not be liable for any legal expenses incurred by the Indemnified Party in connection with the defense thereof; provided, however, that if any of the Litigation Conditions cease to be met, or the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Liability Claim, the Indemnified Party may assume its own defense, and the Indemnifying Party shall be liable for all reasonable costs or expenses paid or incurred in connection therewith. The Indemnifying Party or the Indemnified Party, as the case may be, will have the right to participate in (but not control), at its own expense, the defense of any Liability Claim that the other is defending as provided in this Agreement. The Indemnifying Party, if it has assumed the defense of any Liability Claim as provided in this Agreement, shall not, without the prior written consent of the Indemnified Party, consent to a settlement of, or the entry of any judgment arising from, any such Liability Claim that does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the Indemnified Party a complete release from all liability in respect of such Liability Claim, grants any injunctive or equitable relief, or may reasonably be expected to have a Material Adverse Effect on the affected business of the Indemnified Party. The Indemnified Party has the right to settle any Liability Claim, the defense of which has not been assumed by the Indemnifying Party.

10.6 Survivability; Limitations.

(a) The representations and warranties of the Murphy Parties contained in this Agreement or in any Transaction Document will survive for a period ending on the second anniversary of the Effective Time (the “Expiration Date”); provided, however, that (i) the Expiration Date for any Liability Claim relating to a breach of or inaccuracy in the representations and warranties set forth in Section 4.1 (Existence and Good Standing), Section 4.2 (Power), Section 4.3 (Enforceability), Section 4.4 (Title to Murphy Contributed Interest), Section 4.5 (Murphy Contributed Assets), Section 4.14 (No Conflict), Section 4.24 (Employee Benefit Plans) and Section 4.25 (Broker’s or Finder’s Fees) (collectively, the “Murphy Excluded Representations”) will be the expiration of the applicable statute of limitations as the same may be extended plus 30 days, and (ii) any Liability Claim pending on any Expiration Date for which a Claims Notice has been given in accordance with Section 10.5 on or before such Expiration Date may continue to be asserted and indemnified against until finally resolved. All of the covenants and agreements of the Murphy Parties contained in this Agreement will survive after the Effective Time in accordance with their terms.

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(b) The representations and warranties of the EControls Parties contained in this Agreement or in any Transaction Document will survive for a period ending on the Expiration Date; provided, however, that (i) the Expiration Date for any Liability Claim relating to a breach of or inaccuracy in the representations and warranties set forth in Section 5.1 (Existence and Good Standing), Section 5.2 (Power), Section 5.3 (Enforceability), Section 5.4 (Title to EControls Contributed Interest), Section 5.5 (EControls Contributed Assets), Section 5.14 (No Conflict), Section 5.24 (Employee Benefit Plans) and Section 5.25 (Broker’s or Finder’s Fees) (collectively, the “EControls Excluded Representations”) will be the expiration of the applicable statute of limitations as the same may be extended plus 30 days, and (ii) any Liability Claim pending on any Expiration Date for which a Claims Notice has been given in accordance with Section 10.5 on or before such Expiration Date may continue to be asserted and indemnified against until finally resolved. All of the covenants and agreements of the EControls Parties contained in this Agreement will survive after the Effective Time in accordance with their terms.

(c) The representations and warranties of the Company contained in this Agreement or in any Transaction Document will survive for a period ending on the Expiration Date; provided, however, that (i) the Expiration Date for any Liability Claim relating to a breach of or inaccuracy in the representations and warranties set forth in Section 6.1 (Existence and Good Standing), Section 6.2 (Power), Section 6.3 (Capitalization), Section 6.4 (Enforceability), Section 6.5 (No Conflict), Section 6.6 (Consents) and Section 6.7 (Brokers) (collectively, the “Company Excluded Representations” and, together with the Murphy Excluded Representations and the EControls Excluded Representations, the “Excluded Representations”) will be the expiration of the applicable statute of limitations as the same may be extended plus 30 days, and (ii) any Liability Claim pending on any Expiration Date for which a Claims Notice has been given in accordance with Section 10.5 on or before such Expiration Date may continue to be asserted and indemnified against until finally resolved. All of the covenants and agreements of the Company contained in this Agreement will survive after the Effective Time in accordance with their terms.

(d) Notwithstanding anything to the contrary contained in this Agreement, neither Murphy-Inc. nor EControls-Inc. will have any liability pursuant to Section 10.2, Section 10.3 or Section 10.4, as applicable (other than with respect to such party’s Excluded Representations, for which the following limitations will not apply): with respect to Murphy- Inc., until the aggregate amount of all such Losses sustained by the Company Indemnified Persons and the EControls Indemnified Persons exceeds $1,000,000 and, with respect to EControls-Inc., until the aggregate amount of all such Losses sustained by the Company Indemnified Persons exceeds $500,000 (each such threshold being referred to herein as the “Deductible Amount”), in which case the applicable Indemnifying Party shall be obligated to indemnify such Indemnified Party only for the amount by which such Losses incurred by the Indemnified Party exceed the Deductible Amount.

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10.7 Satisfaction of Liability Claims.

(a) Payment. Except for third party claims being defended in good faith by the Indemnifying Party in accordance with Section 10.5, the Indemnifying Party shall satisfy its obligations hereunder within fifteen (15) days after receipt of a Claims Notice, or, in the case of a Claims Notice that has been disputed in accordance with Sections 10.7(b)-10.7(d), within fifteen (15) days after the ultimate resolution of such dispute. Any amount not paid to the Indemnified Party by such date shall bear interest at a rate equal to ten percent (10.0%) per annum from the date due until the date paid; provided, however, that in the event such interest rate should ever exceed the maximum interest rate permissible under applicable state or federal law, then such interest rate shall be adjusted to the maximum interest rate then permitted by such laws. Amounts payable by the Indemnifying Party to any Indemnified Party in respect of any Losses for which any party is entitled to indemnification hereunder shall be payable by the Indemnifying Party as incurred by the Indemnified Party.

(b) Objections to Liability Claims. If, at any time within the initial fifteen (15) day period for payment of claims set forth in Section 10.7(a), the Indemnifying Party shall object in a written statement to the Liability Claim set forth in the Claims Notice, specifying in reasonable detail the basis for such objection and such statement shall have been delivered to the Indemnified Party prior to the expiration of such fifteen (15) day period, the payment obligations of the Indemnifying Party shall be suspended until the ultimate resolution of such dispute in accordance with the procedures set forth in Sections 10.7(c) and 10.7(d).

(c) Grounds for Objections. The Indemnifying Party shall not object to any Liability Claim unless: (i) the Indemnifying Party believes in good faith that the Indemnified Party is not entitled to be indemnified with respect to all or any portion of the Liability Claim specified in the Claims Notice; or (ii) the Indemnifying Party lacks sufficient information to assess the validity or amount of the Liability Claim. If the Indemnifying Party objects to a claim on the basis that the Indemnifying Party lacks sufficient information, the Indemnifying Party shall include in the notice of objection a request that the Indemnified Party provide any additional information reasonably necessary in order to assess such Liability Claim and the Indemnified Party shall, to the extent the Indemnified Party reasonably can, provide the additional information reasonably requested. Upon receipt of such additional information, the Indemnifying Party shall review it as soon as reasonably practicable and notify the Indemnified Party of any withdrawal or modification of the objection.

(d) Resolution of Conflicts. In case the Indemnifying Party shall object in writing to any Liability Claim made in any Claims Notice in accordance with Section 10.7(b), the Indemnifying Party and the Indemnified Party shall attempt in good faith to agree upon the rights of the respective parties with respect to each of such Liability Claim. If the Indemnifying Party and the Indemnified Party should so agree, the Liability Claim shall be satisfied in accordance with such agreement.

10.8 Right of Setoff. In the event that any Indemnifying Party (other than the Company) fails to make the payments required under Section 10.7(a) and the Indemnified Party provides the Company with notice of such failure, the Company shall set off any amount to which the Indemnified Party may be entitled under this Article X against distributions otherwise

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payable by the Company to the Indemnifying Party under the terms of the Operating Agreement and shall pay such off set amounts directly to the Indemnified Party. Neither the exercise of nor the failure to exercise such right of setoff will constitute an election of remedies or limit the Indemnified Party in any manner in the enforcement of any other remedies that may be available to it.

10.9 Specific Performance. Each Party’s obligation under this Agreement is unique. If any Party should breach its covenants under this Agreement, the Parties each acknowledge that it would be extremely impracticable to measure the resulting damages; accordingly, the nonbreaching Party or Parties, in addition to any other available rights or remedies, may sue in equity for specific performance, and each Party expressly waives the defense that a remedy in damages will be adequate.

10.10 Exclusive Remedy. Except in the event of fraud or intentional misrepresentation, the remedies provided in this Article X shall be the sole and exclusive remedies of each of the Murphy Parties, the EControls Parties and the Company from and after the Effective Time in connection with any breach of representation or warranty or non-performance, partial or total, of any covenant or agreement contained in this Agreement or any Transaction Document; provided, that, nothing contained herein shall prevent any party from seeking equitable remedies (including specific performance or injunctive relief) in connection therewith.

ARTICLE XI

MISCELLANEOUS

11.1 Expenses. Each of the Parties shall bear its respective expenses incurred or to be incurred in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

11.2 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, then the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

11.3 Binding Effect and Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns, but, except as set forth specifically provided herein, neither this Agreement nor any of the rights, interests or obligations of the Parties may be assigned without the prior written consent of all the Parties.

11.4 Amendment and Modification. This Agreement may not be terminated, modified, amended, altered or supplemented except by the execution and delivery of a written agreement executed by all the Parties. Each Party intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the Parties.

11.5 Specific Performance: Injunctive Relief. The Parties acknowledge that there will be no adequate remedy at law for a violation of any of the covenants or agreements set forth herein. Therefore, it is agreed that, in addition to any other remedies that may be available to a Party upon any such violation, such Party shall have the right to enforce such covenants and

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agreements by specific performance, injunctive relief or by any other means available to such Party at law or in equity and each Party hereby waives any and all defenses which could exist in its favor in connection with such enforcement.

11.6 Notices. All notices, requests, demands or other communications that are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with confirmation of receipt) to the Parties at the following address (or at such other address for a Party as shall be specified by like notice):

If to the Company:

Global Controls & Instrumentation, LLC PO

Box 470248

Tulsa, Oklahoma 74147

Attention: Dave Crowell, Vice President, Finance

Facsimile: (918) 317-4265

Telephone: (918) 317-4241

With copies (which shall not constitute notice) to:

EControls Group, Inc.

3523 Crosspoint

San Antonio, Texas 78217

Attention: Kennon Guglielmo

Facsimile: (210) 590-7593

Telephone: (210) 495-9772

and:

Cox Smith Matthews Incorporated

112 E. Pecan St. Ste 1800

San Antonio, Texas 78205

Attention: Will Liebmann

Facsimile: (210) 554-5414

Telephone: (210) 226-8395

and:

Conner & Winters, LLP

4000 One Williams Center

Tulsa, Oklahoma 74172

Attention: Robert A. Curry

Facsimile: (918) 586-8625

Telephone: (918) 586-5725

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If to the Murphy Parties:

Murphy Group, Inc.

PO Box 470248

Tulsa, Oklahoma 74147

Attention: Dave Crowell, Vice President, Finance

Facsimile: (918) 317-4265

Telephone: (918) 317-4241

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

Conner & Winters, LLP

4000 One Williams Center

Tulsa, Oklahoma 74172

Attention: Robert A. Curry

Facsimile: (918) 586-8625

Telephone: (918) 586-5725

If to the EControls Parties:

EControls, Inc.

3523 Crosspoint

San Antonio, Texas 78217

Attention: Kennon Guglielmo

Facsimile: (210) 590-7593

Telephone: (210) 495-9772

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

Cox Smith Matthews Incorporated

112 E. Pecan St. Ste 1800

San Antonio, Texas 78205

Attention: Will Liebmann

Facsimile: (210) 554-5414

Telephone: (210) 226-8395

11.7 Governing Law. This Amendment shall be governed by, construed and enforced in accordance with the laws of the State of Oklahoma, without regard to its choice of law provisions.

11.8 Entire Agreement. This Agreement, including the exhibits and schedules attached hereto, contains the entire understanding of the Parties in respect of the subject matter hereof and thereof, and supersedes all prior negotiations and understandings among the Parties, whether written or oral, with respect to such subject matter.

11.9 Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement.

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11.10 Remedies Cumulative. Unless otherwise provided herein, any and all remedies herein expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby or by law or equity upon such Party, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy.

11.11 Interpretation and Construction. When a reference is made in this Agreement to an Article, a Section, Exhibit or Schedule, such reference shall be to an Article of, a Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. All Exhibits and Schedules referred to herein and attached hereto are incorporated herein by reference. The Article and Section captions used herein are for reference purposes only, and shall not in any way affect the meaning or interpretation of this Agreement. References to a “Section” or “Subsection” when used without further attribution shall refer to the particular sections or subsections of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Unless the context otherwise required, “neither,” “nor,” “any,” “either” and “or” shall not be exclusive. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a person are also to its permitted successors and assigns.

11.12 Delivery by Facsimile. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or other electronic transmission (i.e., e-mail), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any Party or any party to any such agreement or instrument, each other Party or party thereto shall re-execute original forms thereof and deliver them to all other parties. No Party or party to any such agreement or instrument shall raise the use of a facsimile machine other electronic transmission (i.e., e-mail) to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine other electronic transmission (i.e., e-mail) as a defense to the formation of a Contract and each such Party forever waives any such defense, except to the extent such defense related to lack of authenticity.

11.13 Joint Preparation. This Agreement has been prepared by the joint efforts of the respective attorneys to each of the Parties. 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.

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of day and year first above written.

COMPANY:
	GLOBAL CONTROLS & INSTRUMENTATION, LLC
	By:	/s/ Frank W. Murphy III
	Name:	Frank W. Murphy III
	Title:	Chief Executive Officer
MURPHY-INC.:
	MURPHY GROUP, INC.
	By:	/s/ Frank W. Murphy III
	Name:	Frank W. Murphy III
	Title:	President
MURPHY-LLC:
	MURPHY INDUSTRIES, LLC
	By:	/s/ Frank W. Murphy III
	Name:	Frank W. Murphy III
	Title:	Chief Executive Officer
ECONTROLS-INC.:
	ECONTROLS GROUP, INC.:
	By:	/s/ Kennon Guglielmo
	Name:	Kennon Guglielmo
	Title:	President
ECONTROLS-LLC:
	ECONTROLS, LLC
	By:	/s/ Kennon Guglielmo
	Name:	Kennon Guglielmo
	Title:	President

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EXHIBIT A

DEFINITIONS

For purposes of this Agreement, the following terms have the meanings specified or referred to in this Exhibit A:

“401(k) Plan” has the meaning set forth in Section 7.4(c).

“Affiliate” means, when used with respect to a specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with the specified Person. For purposes of this definition “control,” when used with respect to any specified Person, means the power to direct the management and policies of the Person, directly or indirectly, whether through the ownership of voting securities or other equity interests, by contract, by family relationship or otherwise; and the terms “controlling” and “controlled” have the meanings correlative to the foregoing.

“Agreement” has the meaning specified in the introduction.

“Asset Contributions” has the meaning specified in the recitals.

“Best Efforts” means the efforts that a prudent Person desirous of achieving a commercially reasonable result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible.

“Claims Notice” has the meaning specified in Section 10.5(a).

“Closing” has the meaning set forth in Section 3.1.

“Code” means the Internal Revenue Code of 1986 or any successor law, and regulations issued by the IRS pursuant to the Internal Revenue Code or any successor law.

“Company” has the meaning set forth in the Introduction.

“Company Excluded Representations” has the meaning specified in Section 10.6(c).

“Company Indemnified Persons” has the meaning specified in Section 10.2.

“Consent” has the meaning specified in Section 7.1(a).

“Contract” means any agreement, contract, instrument, obligation, promise, commitment or undertaking (whether written or oral and whether express or implied) that is legally binding.

“Contributed Interests” has the meaning specified in the recitals.

“Contributor” has the meaning specified in the introduction.

“Copyrights” means all copyrights, whether registered or unregistered, in both published works and unpublished works, and pending applications to register the same.

A-1

“EControls Business” has the meaning set forth in the Recitals.

“EControls Asset Contribution” has the meaning specified in the recitals.

“EControls Balance Sheet” has the meaning specified in Section 5.8.

“EControls Balance Sheet Date” has the meaning specified in Section 5.9.

“EControls Competing Business” has the meaning specified in Section 5.27.

“EControls Contributed Assets” has the meaning specified in Section 5.5.

“EControls-LLC Contribution Agreement” has the meaning specified in Section 8.1(d)(i).

“EControls Contributed Interest” has the meaning specified in the recitals.

“EControls Excluded Representations” has the meaning specified in Section 10.6(b).

“EControls Employee Benefit Plans” has the meaning specified in Section 5.23(a).

“EControls Financial Statements” has the meaning specified in Section 5.8.

“EControls Improvements” has the meaning specified in Section 5.12(c).

“EControls-Inc.” has the meaning specified in the introduction.

“EControls-Inc. Retained Liabilities” has the meaning specified in Section 5.6(b).

“EControls Indemnified Persons” has the meaning specified in Section 10.4.

“EControls Insurance Policies” has the meaning specified in Section 5.19.

“EControls Intellectual Property” has the meaning specified in Section 5.5(h).

“EControls Interest Contribution” has the meaning specified in the recitals.

“EControls-LLC” has the meaning specified in the introduction.

“EControls-LLC Assumed Liabilities” has the meaning specified in Section 5.6(a).

“EControls Leases” has the meaning specified in Section 5.12(c).

“EControls Material Contract” means

a. any Contract relating to the EControls Business and the employment of any person, and all bonus, deferred compensation, pension, profit sharing, stock option, employee stock purchase, phantom stock, retirement and other employee benefit plans relating to the EControls Business,

A-2

b. any Contract relating to the EControls Business which contains restrictions with respect to payment of dividends or any other distribution in respect of its capital stock,

c. any Contract relating to the EControls Business and capital expenditures in excess of $100,000.00,

d. any loan, advance to, and investment in, any other Person relating to the EControls Business, and any Contract relating to the making of any such loan, advance or investment,

e. any guarantee and other contingent liability with respect to any indebtedness or obligation of any other Person relating to the EControls Business (other than the endorsement of negotiable instruments for collection in the Ordinary Course of Business),

f. any management services, consulting and any other similar type Contract relating to the EControls Business,

g. any Lease and any lease of personal property relating to the EControls Business,

h. any Contract limiting the freedom of EControls-Inc., EControls-LLC or the Company to engage in any line of business or to compete with any other Person ,

i. any Contract not entered into in the Ordinary Course of Business of the EControls Business,

j. any Contract which involves the expenditure by EControls-Inc., EControls- LLC or the Company of more than $100,000.00,

k. any Contract with any director, officer or employee of any EControls Party or Contract with any Related Person of Kennon Guglielmo,

l. any Contract which might reasonably be expected to have a potential adverse impact on the EControls Business, individually or in conjunction with other Contracts, in the aggregate,

m. any Contract relating to any EControls Intellectual Property (including a description of royalties required to be paid or received thereunder),

n. any EControls Employee Benefit Plans and related or associated Contract, and

o. any EControls Insurance Policy.

“EControls Parties” has the meaning specified in the introduction.

“EControls Retained Assets’” has the meaning specified in Section 5.5.

“EControls Real Property” has the meaning specified in Section 5.12(a).

A-3

“EControls Real Property Leases’” has the meaning specified in Section 8.1(d)(xii).

“EControls Real Property Permits’” has the meaning specified in Section 5.12(h).

“EControls Transition Services Agreement” has the meaning specified in Section 7.4(a).

“Effective Time’” has the meaning set forth in Section 3.1.

“Encumbrance” means any charge, claim, community property interest, condition, covenant, equitable interest, including any equitable servitude, lien, option, pledge, security interest, right of first offer, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

“Environmental and Safety Requirements” means all federal, state and municipal statutes, regulations, common law and similar provisions having force or effect of law, all orders, permits, licenses and approvals with respect to environmental, public health and safety, occupational health and safety, product liability and transportation, including all such standards of conduct or bases of obligations relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, control or cleanup of any contaminant, waste, hazardous materials, substances, chemical substances or mixtures, pesticides, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation.

“ERISA” means the Employee Retirement Income Security Act of 1974 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

“ERISA Affiliate” means any Person that, together with Murphy-Inc. or EControls-Inc., as the case may be, or any of its Affiliates, as of the relevant measuring date, is (or was) required to be treated as a single employer under Section 414 of the Code; and (ii) any Person who is or was controlled by or under common control with the Person in question. For purposes of this definition, a Person shall be presumed to control any corporation (or similar entity) of which he, she or it owns more than fifty percent (50%) of the voting securities or any partnership of which he, she or it is a general partner.

“Excluded Representations’” has the meaning specified in Section 10.6(c).

“Expiration Date’” has the meaning specified in Section 10.6(a).

“Foreign Official” has the meaning specified in Section 4.32.

“General Enforceability Limitations’” has the meaning set forth in Section 4.3.

“GAAP” means generally accepted United States accounting principles, applied on a basis consistent with the basis on which the Financial Statements were prepared.

A-4

“Governmental Authorization” means any approval, consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

“Governmental Body” means any:

(a) nation, state, county, city, town, village, district, or other jurisdiction of any nature;

(b) federal, state, local, municipal, foreign, or other government;

(c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal);

(d) multi-national organization or body; or

(e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

“Guglielmo Executive Loan Agreement” has the meaning set forth in Section 8.2(e)(xii).

“Indebtedness” means, with respect to a Person: (i) any indebtedness for borrowed money or interest-bearing debt, (ii) letters of credit, (iii) any guarantees or other liabilities (contingent or otherwise) with respect to any Indebtedness or obligation of any other Person.

“Indemnified Party” has the meaning specified in Section 10.5(a).

“Intellectual Property Rights” means any and all intellectual and industrial proprietary rights and rights in confidential information of every kind and description anywhere in the world, including (i) patents, patent disclosures and patent applications, (ii) internet domain names, trademarks, service marks, trade dress, trade names, slogans, logos and corporate names (and all translations, adaptations, derivations and combinations of the foregoing), and registrations and applications for registration thereof together with all of the goodwill associated therewith, (iii) copyrights (registered or unregistered) and copyrightable works, and registrations and applications for registration thereof, (iv) art and mask works and registrations and applications for registration thereof, (v) computer software (including source code and executable code), programs, data, databases and all documentation related to any of the foregoing, (vi) trade secrets and other confidential information (including ideas, formulas, recipes, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice), know-how, manufacturing and production processes and techniques, methods of doing business, research and development information, software development methodologies, drawings, specifications, software architectures, designs, plans, proposals, technical data, copyrightable works, non-public data and databases, financial and marketing plans and customer and supplier lists and information, (vii) all other intellectual property rights, and (viii) copies and tangible embodiments of any of the foregoing (in whatever form of medium).

“Interest Contributions’” has the meaning specified in the recitals.

A-5

“ITAR” shall mean the International Traffic in Arms Regulations.

“IRS’” shall mean the Internal Revenue Service.

“Knowledge” means an individual will be deemed to have “Knowledge” of a particular fact or other matter only if such individual is actually aware of, or has received notice of, such fact or other matter. A Person (other than an individual) will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, Knowledge of such fact or other matter.

“Legal Requirement” means any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, directive, ordinance, principle of common law, regulation, statute, treaty, judgment decree or order.

“Liabilities” means any liability, debt obligation, deficiency, Tax, penalty, fine, claim, cause of action or other loss, cost or expense of any kind or nature whatsoever, whether asserted or unasserted, absolute or contingent, known or unknown, accrued or unaccrued, liquidated or unliquidated, and whether due or to become due and regardless of when asserted.

“Liability Claim’” has the meaning specified in Section 10.5(a).

“Litigation Conditions’” has the meaning specified in Section 10.5(b).

“Losses’” has the meaning specified in Section 10.2.

“Material Adverse Effect” means, with respect to any company or entity, any event, condition or change which materially and adversely affects or may materially and adversely affect the business, financial condition, assets or results of operations of such company and its Subsidiaries, on a consolidated basis.

“Murphy Asset Contribution’” has the meaning specified in the recitals.

“Murphy Balance Sheet” has the meaning specified in Section 4.8.

“Murphy Balance Sheet Date’” has the meaning specified in Section 4.9.

“Murphy Business” has the meaning set forth in the recitals.

“Murphy Competing Business’” has the meaning set forth in Section 4.27.

“Murphy Contributed Assets’” has the meaning specified in the Section 4.5.

“Murphy Contributed Interest” has the meaning specified in the recitals.

“Murphy Excluded Representations’” has the meaning specified in Section 10.6(a).

“Murphy Employee Benefit Plans” has the meaning specified in Section 4.24(a).

A-6

“Murphy Financial Statements” has the meaning specified in Section 4.8.

“Murphy-Inc.” has the meaning specified in the introduction.

“Murphy-Inc. Retained Assets” has the meaning specified in Section 4.5.

“Murphy-Inc. Retained Liabilities’” has the meaning specified in Section 4.6(b).

“Murphy Improvements’” has the meaning specified in Section 4.12(c).

“Murphy Insurance Policies’” has the meaning specified in Section 4.19.

“Murphy Interest Contribution’” has the meaning specified in the recitals.

“Murphy Intellectual Property’” has the meaning specified in Section 4.5(h).

“Murphy Leases’” has the meaning specified in Section 4.12(g).

“Murphy-LLC” has the meaning specified in the introduction.

“Murphy-LLC Assumed Liabilities’” has the meaning specified in Section 4.6(a).

“Murphy-LLC Contribution Agreement” has the meaning specified in Section 8.2(e)(i).

“Murphy Material Contract” means

a. any Contract relating the Murphy Business to the employment of any person, and all bonus, deferred compensation, pension, profit sharing, stock option, employee stock purchase, phantom stock, retirement and other employee benefit plans relating to the Murphy Business,

b. any Contract relating to the Murphy Business which contains restrictions with respect to payment of dividends or any other distribution in respect of its capital stock,

c. any Contract relating to the Murphy Business and capital expenditures in excess of $100,000.00,

d. any loan, advance to, and investment in, any other Person relating to the Murphy Business, and any Contract relating to the Murphy Business and the making of any such loan, advance or investment,

e. any guarantee and other contingent liability with respect to any indebtedness or obligation of any other Person relating to the Murphy Business (other than the endorsement of negotiable instruments for collection in the Ordinary Course of Business),

f. any management services, consulting and any other similar type Contract relating to the Murphy Business,

A-7

g. any Lease and any lease of personal property relating to the Murphy Business,

h. any Contract limiting the freedom of Murphy-Inc., Murphy-LLC or the Company to engage in any line of business or to compete with any other Person,

i. any Contract not entered into in the Ordinary Course of Business of Murphy- Inc. or Murphy-LLC,

j. any Contract which involves the expenditure by Murphy-Inc., Murphy-LLC or the Company of more than $100,000.00,

k. any Contract with any director, officer or employee of any Murphy Party or Contract with any Related Person of Frank W. Murphy III,

l. any Contract which might reasonably be expected to have a potential adverse impact on the Murphy Business, individually or in conjunction with other Contracts, in the aggregate,

m. any Contract relating to the Murphy Intellectual Property (including a description of royalties required to be paid or received thereunder),

n. any Murphy Employee Benefit Plans and related or associated Contract, and

o. any Murphy Insurance Policy.

“Murphy Parties” has the meaning specified in the introduction.

“Murphy Real Property” has the meaning specified in Section 4.12(a).

“Murphy Real Property Leases’” has the meaning specified in Section 8.2(e)(xiii).

“Murphy Real Property Permits” has the meaning specified in Section 4.12(h).

“Murphy Transition Services Agreement” has the meaning specified in Section 7.4(a).

“Operating Agreement” has the meaning specified in the recitals.

“Order” means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.

“Ordinary Course of Business” means an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if:

(a) such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;

A-8

(b) such action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority); and

(c) such action is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

“Organizational Documents” means (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; (e) the articles or certificate of organization and operating agreement of a limited liability company; and (f) any amendment to any of the foregoing.

“Parties” has the meaning specified in the introduction.

“Perfect Pass License Agreement’ has the meaning specified in Section 8.1(d)(v).

“Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or Governmental Body.

“Proceeding” means any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal, at law or in equity) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

“Proprietary Rights Agreement” has the meaning set forth in Section 4.23(b).

“RelatedPerson” means, with respect to a particular individual:

(a) each other member of such individual’s Family;

(b) any Person that is directly or indirectly controlled by such individual or one or more members of such individual’s Family;

(c) any Person in which such individual or members of such individual’s Family hold (individually or in the aggregate) a Material Interest; and

(d) any Person with respect to which such individual or one or more members of such individual’s Family serves as a director, officer, partner, executor, or trustee (or in a similar capacity).

A-9

Related Person also means, with respect to a specified Person other than an individual:

(e) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person;

(f) any Person that holds a Material Interest in such specified Person;

(g) each Person that serves as a director, officer, partner, executor, or trustee of such specified Person (or in a similar capacity);

(h) any Person in which such specified Person holds a Material Interest;

(i) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity); and

(j) any Related Person of any individual described in clause (b) or (c).

For purposes of this definition: (a) the “Family” of an individual includes (i) the individual, (ii) the individual’s spouse and former spouses, (iii) any other natural person who is related to the individual or the individual’s spouse within the second degree, and (iv) any other natural person who resides with such individual, and (b) “Material Interest” means direct or indirect beneficial ownership (as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of voting securities or other voting interests representing at least ten percent (10%) of the outstanding voting power of a Person or equity securities or other equity interests representing at least ten percent (10%) of the outstanding equity securities or equity interests in a Person.

“Representative” means, with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

“Securities Act” means the Securities Act of 1933, as amended, or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

“Subject Transactions” means all of the transactions contemplated by the Transaction Documents, including:

(a) the contribution of the Contributed Interests hereunder;

(b) the Asset Contributions;

(c) the performance by the Parties of their respective covenants and obligations under this Agreement; and

(d) the Company’s acquisition, ownership and exercise of control over Murphy-LLC and EControls-LLC and the Murphy Business and the EControls Business.

“Subsidiary” means, with respect to any Person (the “Owner”), any corporation or other Person of which securities or other interests having the power to elect a majority of that corporation’s or other Person’s board of directors or similar governing body, or otherwise having

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the power to direct the business and policies of that corporation or other Person (other than securities or other interests having such power only upon the happening of a contingency that has not occurred) are held by the Owner or one or more of its Subsidiaries; when used without reference to a particular Person, “Subsidiary” means a Subsidiary of the Company.

“Tax” means any tax (including any tax on gross income, net income, franchise, margin, gross receipts, royalty, notorial, capital gains, value added, sales, property, ad valorem, transfer, license, use, profits, windfall profits, withholding on amounts paid to or by a Person, payroll, employment, excise, severance, stamp, occupation, premium, gift, or estate), levy, assessment, tariff, duty (including customs duty), deficiency, or other fee, and any related charge or amount (including any fine, penalty, interest, or addition to tax), imposed, assessed, or collected by or under the authority of any Governmental Body or payable pursuant to any tax-sharing agreement or any other Contract relating to the sharing or payment of any such tax, levy, assessment, tariff, duty, deficiency, or fee, including, any such tax, levy, assessment, tariff, duty, deficiency, or fee resulting from any transfer pricing requirements (or changes thereto) imposed by any foreign, federal, provincial, state or local authority or the maintenance of a permanent establishment in a jurisdiction other than that in which such Person was formed, incorporated or registered.

“Tax Return” means any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any Tax or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.

“Transaction Documents” means this Agreement and any other agreement, instrument, certificate and document that are contemplated by this Agreement.

“Units” has the meaning set forth in the Operating Agreement.

“Walser Executive Loan Agreement” has the meaning set forth in Section 8.2(e)(xii).

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EX-3.1

Exhibit 3.1

FORM OF

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

ENOVATION CONTROLS, INC.

Pursuant to Sections 242 and 245 of the

General Corporation Law of the State of Delaware

ENOVATION CONTROLS, INC. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify as follows:

1. The name of the Corporation is Enovation Controls, Inc. The original certificate of incorporation of the Corporation was filed with the Office of the Secretary of State of the State of Delaware on June 2, 2014.

2. This Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation in accordance with Section 141(f) and Section 242 of the DGCL and by the stockholders of the Corporation in accordance with Section 228 and Section 242 of the DGCL.

3. This Amended and Restated Certificate of Incorporation, which amends and restates and integrates the original certificate of incorporation of the Corporation, has been duly adopted in accordance with Sections 242 and 245 of the DGCL.

4. The original certificate of incorporation of the Corporation is hereby amended and restated to read in its entirety as follows:

ARTICLE I

NAME

The name of the Corporation is Enovation Controls, Inc. (hereinafter the “Corporation”).

ARTICLE II

REGISTERED OFFICE AND AGENT

The address of the registered office of the Corporation in the State of Delaware is 1675 South State Street, Suite B, in the City of Dover, County of Kent, 19901. The name of the registered agent of the Corporation at that address is Capitol Services, Inc.

ARTICLE III

PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).

ARTICLE IV

CAPITAL STOCK

At the effective time of this Amended and Restated Certificate of Incorporation, (1) each share of the Common Stock, par value $0.00001 per share, of the Corporation authorized by the original certificate of incorporation of the Corporation and issued and outstanding immediately prior to the effective time of this Amended and Restated Certificate of Incorporation (the “Prior Shares”) shall be redeemed in consideration of the payment to the registered holder thereof of an amount in cash equal to $0.01 per Prior Share and (2) all such redeemed Prior Shares shall be cancelled and retired and shall cease to exist.

Part A: Authorized Capital Stock. The total number of shares of capital stock that the Corporation is authorized to issue is [                ] shares, consisting of (1) [                ] shares of Class A Common Stock, each having a par value of $0.00001 per share (the “Class A Common Stock”), (2) [                ] shares of Class B Common Stock, each having a par value of $0.00001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), and (3) [                ] shares of Preferred Stock, each having a par value of $0.00001 per share (the “Preferred Stock”).

The number of authorized shares of any of the Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the outstanding shares of capital stock of the Corporation entitled to vote thereon, without a separate vote of any holders of the Class A Common Stock, Class B Common Stock or Preferred Stock, or of any series thereof (unless a separate vote of any such holders is required pursuant to the terms of any certificate of designations relating to any such series of Preferred Stock), irrespective of the provisions of Section 242(b)(2) of the DGCL.

Part B: Common Stock. The powers, preferences, and rights and the qualifications, limitations, and restrictions of the Class A Common Stock and the Class B Common Stock are as follows:

Section 1. Voting Rights. Except as otherwise required by the DGCL or as provided by or pursuant to the provisions of this Amended and Restated Certificate of Incorporation:

(a) Each holder of Class A Common Stock, as such, shall be entitled to one (1) vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders are generally entitled to vote.

(b) Each holder of Class B Common Stock, as such, shall be entitled to one (1) vote for each share of Class B Common Stock held of record by such holder on all matters on which stockholders are generally entitled to vote.

(c) The holders of Class A Common Stock and Class B Common Stock shall vote together as a single class on all matters on which stockholders are generally entitled to vote (and, if any holders of Preferred Stock are entitled to vote together with the holders of Common Stock on any matter, as a single class with such holders of Preferred Stock on such matter).

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Section 2. Dividends.

(a) Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock having a preference over or a right to participate with the Class A Common Stock with respect to the payment of dividends and other distributions, holders of outstanding shares of Class A Common Stock shall be entitled to receive, ratably in proportion to the number of shares held by them, dividends and other distributions (whether payable in cash, in shares of capital stock or other securities of the Corporation or other property of the Corporation) as, if and when such dividends are declared on the Class A Common Stock by the Board of Directors of the Corporation (the “Board of Directors”) out of the assets or funds of the Corporation legally available therefor.

(b) Dividends and other distributions shall not be declared or paid on the shares of Class B Common Stock, except that in the event a dividend is paid on the Class A Common Stock in the form of shares of Class A Common Stock (or rights to acquire such shares), then a proportionate dividend in the form of shares of Class B Common Stock (or rights to acquire such shares) shall be paid on the Class B Common Stock.

Section 3. Liquidation, Dissolution, etc. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation (whether voluntary or involuntary), after payment or provision for payment of the debts and other liabilities of the Corporation and of the preferential and other amounts, if any, to which the holders of Preferred Stock shall be entitled, the holders of outstanding shares of Class A Common Stock shall be entitled to receive all remaining assets of the Corporation available for distribution, ratably in proportion to the number of shares held by each such holder. The holders of outstanding shares of Class B Common Stock, as such, shall not be entitled to receive any distribution of assets of the Corporation in the event of any such liquidation, dissolution or winding up of the affairs of the Corporation. A merger or consolidation of the Corporation with or into any other entity or a sale or transfer of all or any part of the assets of the Corporation, in any such case that does not in fact result in the liquidation of the Corporation and the distribution of its assets to its stockholders, shall not be deemed to be a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 3.

Section 4. No Conversion Rights. The shares of any class of Common Stock shall not be convertible into, or exchangeable for, shares of any other class of Common Stock, or shares of Preferred Stock (or any series of Preferred Stock) or any other shares of the Corporation’s capital stock.

Section 5. No Preemptive Rights. No holder of shares of Common Stock shall have any preemptive right to subscribe for any shares of any class of capital stock of the Corporation, whether now or hereafter authorized.

Section 6. Exchange Rights. Each holder of a limited liability company interest of Enovation Controls, LLC, an Oklahoma limited liability company (“Enovation LLC”), that is

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designated as a “Common Unit” (each, an “LLC Unit”) other than the Corporation (each, a “Rightholder”) shall have the right (the “Exchange Right”) to exchange a number of LLC Units together with an equivalent number of shares of Class B Common Stock, as such number may be adjusted equitably for any stock split, stock dividend or reverse stock split of the Class B Common Stock, for a like number of fully paid and non-assessable shares of Class A Common Stock, on the terms and subject to the conditions set forth in this Section 6 and in the Second Amended and Restated Operating Agreement of Enovation Controls, LLC, dated as of                  , 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “LLC Operating Agreement”).

(a) Each share of Class B Common Stock exchanged pursuant to the Exchange Right shall be cancelled by the Corporation effective as of the applicable Closing (as defined in the LLC Operating Agreement) and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall thereupon cease and terminate. All such cancelled shares of Class B Common Stock shall be deemed to be retired and may be reissued only in connection with future issuances, if any, of LLC Units.

(b) If fewer than all of the shares of Class B Common Stock represented by any certificate surrendered by a Rightholder in connection with an exercise of the Exchange Right are to be exchanged and cancelled, the Corporation shall deliver to or upon the written order of such Rightholder, a certificate or certificates for the number of shares of Class B Common Stock represented by such surrendered certificate that are not being exchanged and cancelled.

(c) At each Closing, the Corporation shall issue to the exchanging Rightholder the number of shares of Class A Common Stock issuable to such Rightholder in connection with such exchange (except to the extent that the Corporation has elected to pay cash in lieu of any such shares of Class A Common Stock in accordance with the terms and provisions of the LLC Operating Agreement) and shall deliver to or upon the written order of such Rightholder a certificate or certificates for such number of shares of Class A Common Stock. The Corporation covenants that all shares of Class A Common Stock issued upon any such exchange will, upon issuance, be validly issued, fully paid and non-assessable.

(d) The Corporation shall at all times reserve and keep available out of its authorized but unissued shares (or shares held in the treasury of the Corporation) the number of shares of Class A Common Stock as may from time to time be required for the exchange of all of the outstanding LLC Units pursuant to the terms of the LLC Operating Agreement.

Section 7. Redemption of Class B Common Stock. If one or more Unvested Common Units (as defined in the LLC Operating Agreement) are forfeited and cancelled pursuant to the LLC Operating Agreement, an equivalent number of shares of Class B Common Stock, as such number may be adjusted equitably for any stock split, stock dividend or reverse stock split of the Class B Common Stock, held by such holder of forfeited and cancelled Unvested Common Units shall automatically, and without further action on the part of the Corporation, Enovation LLC or such holder, be cancelled by the Corporation and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall thereupon cease and terminate. All such cancelled shares of Class B Common Stock shall be deemed to be retired and may be reissued only in connection with future issuances, if any, of LLC Units.

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Section 8. Transfers of Class B Common Stock.

(a) No holder of shares of Class B Common Stock may transfer shares of Class B Common Stock to any Person (as defined below) unless such holder transfers an equal number of LLC Units to the same Person and such transfer is otherwise permitted pursuant to the LLC Operating Agreement. If a holder of shares of Class B Common Stock transfers LLC Units to any Person, such holder must transfer an equal number of shares of Class B Common Stock to the same Person. The term “Person” means an individual, general partnership, limited partnership, limited liability company, corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of any such entity.

(b) The Corporation may, as a condition to the transfer or the registration of transfer of shares of Class B Common Stock, require the furnishing of such affidavits or other proof as it deems necessary to establish that the transferee is permitted to hold such shares of Class B Common Stock under the terms hereof and under the LLC Operating Agreement.

(c) Any purported transfer of shares of Class B Common Stock in violation of the restrictions described in paragraph (a) of this Section 8 (the “Restrictions”) shall be null and void. If, notwithstanding the foregoing prohibition, a Person shall, voluntarily or involuntarily, purportedly become or attempt to become the purported owner (the “Purported Owner”) of any shares of Class B Common Stock in violation of the Restrictions, the Purported Owner shall not obtain any rights in and to such shares of Class B Common Stock (the “Restricted Shares”), and the purported transfer of the Restricted Shares to the Purported Owner shall not be recognized by the Corporation or its transfer agent. The Board of Directors shall have all powers necessary to implement the Restrictions, including without limitation the power to prohibit the transfer of any shares of Class B Common Stock in violation thereof. Upon a determination by the Board of Directors that a person has attempted or may attempt to transfer or to acquire Restricted Shares in violation of the Restrictions, the Board of Directors may take such action as it deems advisable to refuse to give effect to such transfer or acquisition on the books and records of the Corporation, including without limitation to cause the Corporation’s transfer agent to record the Purported Owner’s transferor as the record owner of the Restricted Shares, and to institute proceedings to enjoin or rescind any such transfer or acquisition. The Board of Directors may, to the extent permitted by law, from time to time establish, modify, amend or rescind, by bylaw or otherwise, regulations and procedures not inconsistent with the provisions of this Section 8 for determining whether any transfer or acquisition of shares of Class B Common Stock would violate the Restrictions and for the orderly application, administration and implementation of the provisions of this Section 8. Any such procedures and regulations shall be kept on file with the Secretary of the Corporation and with the Corporation’s transfer agent and shall be made available for inspection by any prospective transferee and, upon written request, shall be mailed to any holder of shares of Class B Common Stock.

(d) All certificates or book entries representing shares of Class B Common Stock shall bear a legend substantially in the following form (or in such other form as the Board of Directors may determine):

THE SECURITIES REPRESENTED BY THIS [CERTIFICATE / BOOK ENTRY] ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE CERTIFICATE OF INCORPORATION OF THE CORPORATION (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION AND SHALL BE PROVIDED FREE OF CHARGE TO ANY STOCKHOLDER MAKING A REQUEST THEREFOR).

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Section 9. Reclassification. Neither the Class A Common Stock nor the Class B Common Stock may be subdivided, consolidated, reclassified or otherwise changed unless, contemporaneously therewith, the other class of Common Stock and the LLC Units are subdivided, consolidated, reclassified or otherwise changed in the same proportion and in the same manner. Pursuant to the LLC Operating Agreement, the LLC Units may not be subdivided, consolidated, reclassified or otherwise changed unless, contemporaneously therewith, the Class A Common Stock and the Class B Common Stock are subdivided, consolidated, reclassified or otherwise changed in the same proportion and in the same manner.

Part C: Preferred Stock. The Board of Directors is expressly authorized, subject to any limitations prescribed by law, to provide for the issuance of all or any shares of the Preferred Stock, in one or more series, to establish the number of shares to be included in each such series and to fix for each such series such voting powers, full or limited, or no voting powers, and such distinctive designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such series and as may be permitted by the DGCL, including, without limitation, the authority to provide that any such series may be (1) subject to redemption at such time or times and at such price or prices, (2) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other series of Preferred Stock or any other class or classes of capital stock of the Corporation, (3) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation or (4) convertible into, or exchangeable for, shares of any other series of Preferred Stock or any other class or classes of capital stock of the Corporation at such price or prices, or at such rates of exchange, and with such adjustments, in each case as may be stated in such resolution or resolutions. There shall be no limitation or restriction on any variation between any of the different series of Preferred Stock as to voting powers or the designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, and the several series of Preferred Stock may vary in any and all respects as fixed and determined by the resolution or resolutions adopted by the Board of Directors providing for the issuance of the various series. Different series of Preferred Stock shall not be construed to constitute different classes of shares for the purposes of voting by separate classes unless expressly provided in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series. The Board of Directors is expressly authorized to increase or decrease the number of shares of any series of Preferred Stock so established, whether before or subsequent to the issue of any shares of such series, but not below the number of shares of such series then outstanding. If the number of shares of any series of Preferred Stock shall be so decreased, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution or resolutions of the Board of Directors originally fixing the number of shares of such series.

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Except as otherwise expressly provided in any certificate of designations designating any series of Preferred Stock pursuant to the foregoing provisions of this PART C, any new series of Preferred Stock may be designated, fixed and determined as provided herein by the Board of Directors without approval of the holders of Common Stock or the holders of Preferred Stock, or any series thereof, and any such new series may have powers, preferences and rights, including, without limitation, voting powers, dividend rights, liquidation rights, redemption rights and conversion rights, senior to, junior to or pari passu with the rights of the Common Stock, the Preferred Stock or any future class or series of Preferred Stock or Common Stock.

Part D: Power to Sell and Purchase Shares.

Section 1. Sale of Shares. Subject to the requirements of applicable law, the Corporation shall have the power to issue and sell all or any part of the shares of any class or series of capital stock herein or hereafter authorized to such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not greater consideration could be received upon the issue or sale of the same number of shares of another class, and as otherwise permitted by law; provided, however, that the Corporation shall issue and sell shares of (a) Class A Common Stock only to the extent such issuance and sale complies with the LLC Operating Agreement and (b) Class B Common Stock only in connection with the issuance by Enovation LLC of an equivalent number of LLC Units, as such number may be adjusted equitably for any stock split, stock dividend or reverse stock split of the Class B Common Stock, in connection with any new capital raises, reclassifications, interest splits or exchanges, distributions, mergers or other business combinations, or recapitalizations. In furtherance of the foregoing, each time Enovation LLC issues LLC Units in connection with any new capital raises, reclassifications, interest splits or exchanges, distributions, mergers or other business combinations, or recapitalizations, the Corporation shall issue and sell to the holder of such LLC Units an equal number of shares of Class B Common Stock at a purchase price equal to the par value of such shares, subject only to the payment of the applicable purchase price therefor by the holder thereof.

Section 2. Purchase of Shares. Subject to the requirements of applicable law, the Corporation shall have the power to purchase or redeem all or any part of the shares of any class or series of capital stock herein or hereafter authorized from such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not lesser consideration could be paid upon the purchase of the same number of shares of another class, and as otherwise permitted by law. In the event that the Corporation determines to repurchase any shares of Class A Common Stock, the Corporation shall, as the managing member of Enovation LLC, cause Enovation LLC to repurchase from the Corporation an equal number of LLC Units, and the proceeds received by the Corporation from Enovation LLC in such repurchase shall be used by the Corporation to fund the Corporation’s repurchase of shares of Class A Common Stock.

ARTICLE V

BOARD OF DIRECTORS

Section 1. General Authority. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. In addition to the powers and

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authority herein or by statute expressly conferred, the Board of Directors is hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject to the provisions of the DGCL, this Amended and Restated Certificate of Incorporation and any Bylaws of the Corporation (the “Bylaws”) adopted by the stockholders; provided, however, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the directors that would have been valid if such Bylaws had not been adopted. The Board of Directors shall have concurrent power with the stockholders to make, alter, amend, change, add to or repeal the Bylaws.

Section 2. Number of Directors. The number of directors constituting the Board of Directors shall be fixed from time to time by resolution adopted by the affirmative vote of a majority of the Board of Directors. Each director shall be a natural person.

Section 3. Classification of Directors. The directors shall be divided into three (3) classes, designated Class I, Class II, and Class III. Each class shall consist, as nearly as may be possible, of one third of the total number of directors constituting the entire Board of Directors. The initial division of the Board of Directors into the three classes shall be determined by a majority of the Board of Directors. The initial Class I directors shall serve for a term expiring at the first annual meeting of stockholders of the Corporation following the effective time of this Amended and Restated Certificate of Incorporation; the initial Class II directors shall serve for a term expiring at the second annual meeting of stockholders following the effective time of this Amended and Restated Certificate of Incorporation; and the initial Class III directors shall serve for a term expiring at the third annual meeting of stockholders following the effective time of this Amended and Restated Certificate of Incorporation. At each annual meeting of stockholders beginning with the first annual meeting of stockholders following the effective time of this Amended and Restated Certificate of Incorporation, successors to the class of directors whose term expires at that annual meeting shall be elected for a term expiring at the third annual meeting of stockholders to be held following their election. If the number of directors is changed, any increase or decrease shall be apportioned among the classes by the Board of Directors so as to maintain as nearly equal as possible the number of directors in each class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.

Section 4. Election of Directors. Directors shall be elected by a plurality of the votes of the shares of Class A Common Stock and Class B Common Stock, voting together as a single class, present in person or represented by proxy at such annual meeting and entitled to vote thereon. No holder of Common Stock shall be entitled to cumulate votes on behalf of any candidate for a directorship. Election of directors need not be by written ballot unless the Bylaws so provide.

Section 5. Term of Office; Resignation and Removal.

(a) A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor is duly elected and qualified or until her or her earlier death, resignation or removal from office.

(b) A director may resign at any time in accordance with the Bylaws.

(c) Any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least

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two-thirds of the combined voting power of the issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, at a meeting of the stockholders called for that purpose.

Section 6. Vacancies and Newly Created Directorships. Except as otherwise required by law, unless the Board of Directors otherwise determines, any newly created directorship on the Board of Directors that results from an increase in the number of directors and any vacancy occurring on the Board of Directors resulting from the death, resignation, removal from office or other cause shall be filled only by vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and not by the stockholders. A director of any class elected to fill a vacancy resulting from an increase in the number of directors of such class shall hold office for a term that coincides with the remaining term of that class. A director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor in office.

Section 7. Advance Notice of Stockholder Nominations. Advance notice of stockholder nominations for the election of directors of the Corporation and of business to be brought by stockholders before any meeting of stockholders of the Corporation shall be given in the manner provided in the Bylaws.

Section 8. Right of the Preferred Stock. Whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal, filling of vacancies and other features of such directorships shall be governed by the terms of this Article V applicable thereto except to the extent otherwise provided in the certificate of designations relating to any such series of Preferred Stock. Notwithstanding the foregoing, such directors so elected shall not be divided into classes pursuant to Section 3 of this Article V unless expressly provided by the terms of such series of Preferred Stock.

Section 9. Limitation of Personal Liability. To the fullest extent permitted by the DGCL or any other law of the State of Delaware (as they exist on the date hereof or as they may hereafter be amended), no director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director; provided, however, that to the extent required by the provisions of Section 102(b)(7) of the DGCL or any successor statute, or any other laws of the State of Delaware, this provision shall not eliminate or limit the liability of a director (a) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the DGCL or (d) for any transaction from which the director derived an improper personal benefit. If the DGCL or any other law of the State of Delaware is amended after the date of this Amended and Restated Certificate of Incorporation to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided in this Amended and Restated Certificate of Incorporation, shall be eliminated or limited to the fullest extent permitted by the DGCL or other law of the State of Delaware, as so amended. Neither the amendment nor repeal of this Section 9, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation inconsistent with this Section 9, nor, to the fullest extent permitted by the DGCL, any modification of law, shall eliminate, reduce or

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otherwise adversely affect any limitation on the personal liability or any right or protection of a current or former director of the Corporation existing at the time of such amendment, repeal, adoption or modification with respect to any state of facts existing or act or omission occurring, or any cause of action, suit or claim that, but for this Section 9, would accrue or arise, prior to such amendment, repeal, adoption or modification.

ARTICLE VI

STOCKHOLDER ACTION; BOOKS

Section 1. Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide.

Section 2. Unless otherwise required by law, special meetings of the stockholders of the Corporation, for any purpose or purposes, may be called only by or at the direction of (a) the Chairman of the Board of Directors, if there be one, (b) directors constituting a majority of the entire Board of Directors, (c) a committee of the Board of Directors that has been duly designated by the Board of Directors and whose powers and authority include the power to call such meetings and (d) prior to the Voting Threshold Date (as defined below), the beneficial owners of shares of capital stock of the Corporation entitled to exercise at least a majority of the combined voting power of the issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors. Except to the extent provided in clause (d) of the first sentence of this Section 2, the ability of the stockholders to call a special meeting of the stockholders of the Corporation is hereby specifically denied. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. “Voting Threshold Date” means the date on which the Founder Entities (as defined below) cease to beneficially own shares of capital stock of the Corporation entitling them to exercise at least a majority of the combined voting power of the issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors. “Founder Entities” means, collectively, Murphy Group, Inc., an Oklahoma corporation, EControls Group, Inc., a Texas corporation, their respective Affiliates (as defined below) and each of their respective successors. “Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person; the term “control,” as used in this definition, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and “controlled” and “controlling” have meanings correlative to the foregoing. For the purpose of this Amended and Restated Certificate of Incorporation, “beneficial ownership” shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Section 3. Prior to the Voting Threshold Date, any action required or permitted to be taken by the stockholders of the Corporation at any annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of issued and outstanding shares of capital stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation in accordance with Section 228 of the DGCL and the Bylaws. From and after the Voting Threshold

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Date, any action required or permitted to be taken by the stockholders of the Corporation may be taken only at an annual or special meeting of the stockholders of the Corporation duly noticed and called in accordance with the DGCL and the Bylaws and may not be effected by any consent in writing by such holders, and the ability of the stockholders of the Corporation to consent in writing to the taking of any action without a meeting is hereby specifically denied.

Section 4. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws.

ARTICLE VII

BUSINESS COMBINATIONS

Section 1. Opt Out of DGCL Section 203. The Corporation expressly elects not to be governed by Section 203 of the DGCL.

Section 2. Limitation on Business Combinations. The Corporation shall not engage in any Business Combination (as defined below) with any Person (as defined below) that is an Interested Stockholder (as defined below) for a period of three (3) years following the time that such Person became an Interested Stockholder, unless:

(a) prior to the time that such Person became an Interested Stockholder, the Board of Directors approved either the Business Combination or the transaction that resulted in such Person becoming an Interested Stockholder;

(b) upon consummation of the transaction that resulted in such Person becoming an Interested Stockholder, the Interested Stockholder owned at least eighty-five percent (85%) of the Voting Stock (as defined below) of the Corporation that was outstanding at the time the transaction commenced, excluding for purposes of determining the Voting Stock outstanding (but not the outstanding Voting Stock owned by the Interested Stockholder) those shares owned by (i) Persons who are directors and also officers of the Corporation and (ii) employee stock plans of the Corporation in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

(c) at or subsequent to the time that such Person became an Interested Stockholder, the Business Combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding Voting Stock of the Corporation that is not owned by the Interested Stockholder (or by Affiliates or Associates of the Interested Stockholder).

Section 3. Exception. The restrictions contained in this Article VII shall not apply if the Business Combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction that (a) constitutes one of the transactions described in the second sentence of this Section 3, (b) is with or by a Person who either was not an Interested Stockholder during the previous three years or who became an Interested Stockholder with the approval of the Board of Directors and (c) is approved or not opposed by a majority of the members of the Board of Directors then in office (but not less than one) who were directors prior to any Person becoming

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an Interested Stockholder during the previous three years or were recommended for election or elected to succeed such directors by a majority of such directors. The proposed transactions referred to in the preceding sentence are limited to: (i) a merger or consolidation of the Corporation (except for a merger in respect of which, pursuant to Section 251(f) of the DGCL, no vote of the stockholders of the Corporation is required), (ii) a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of the Corporation (or of any direct or indirect majority owned subsidiary of the Corporation), other than to any direct or indirect wholly owned subsidiary or to the Corporation, having an aggregate market value equal to fifty percent (50%) or more of either that aggregate market value of all of the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding Stock (as defined below) of the Corporation or (iii) a proposed tender or exchange offer for fifty percent (50%) or more of the outstanding Voting Stock of the Corporation. The Corporation shall give not less than twenty (20) days’ notice to all Interested Stockholders prior to the consummation of any of the transactions described in clause (i) or (ii) of the second sentence of this Section 3.

Section 4. Definitions. As used in this Article VII only, the term:

(a) “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another Person.

(b) “Associate,” when used to indicate a relationship with any Person, means: (i) any corporation, partnership, unincorporated association or other entity of which such Person is a director, officer or partner or is, directly or indirectly, the owner of twenty percent (20%) or more of any class of Voting Stock, (ii) any trust or other estate in which such Person has at least a twenty percent (20%) beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity and (iii) any relative or spouse of such Person, or any relative of such spouse, who has the same residence as such Person.

(c) “Business Combination” means:

(i) any merger or consolidation of the Corporation (or any direct or indirect majority owned subsidiary of the Corporation) with (A) the Interested Stockholder or (B) any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Stockholder and, as a result of such merger or consolidation, neither Section 203 of the DGCL nor Section 2 of this Article VII is applicable to the surviving entity;

(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a stockholder of the Corporation, to or with the Interested Stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation (or of any direct or indirect majority owned subsidiary of the Corporation) which assets have an aggregate market value equal to ten percent (10%) or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the outstanding Stock of the Corporation;

(iii) any transaction that results in the issuance or transfer by the Corporation (or by any direct or indirect majority owned subsidiary of the Corporation)

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of any Stock of the Corporation (or of such subsidiary) to the Interested Stockholder, except: (A) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into Stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the Interested Stockholder became such, (B) pursuant to a merger under Section 251(g) of the DGCL, (C) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into Stock of the Corporation (or any such subsidiary) which security is distributed, pro rata to all holders of a class or series of Stock of the Corporation subsequent to the time the Interested Stockholder became such, (D) pursuant to an exchange offer by the Corporation to purchase Stock made on the same terms to all holders of said Stock or (E) any issuance or transfer of Stock by the Corporation; provided, however, that in no case under items (C) through (E) of this paragraph (iii) shall there be an increase in the Interested Stockholder’s proportionate share of the Stock of any class or series of the Corporation or of the Voting Stock of the Corporation;

(iv) any transaction involving the Corporation (or any direct or indirect majority owned subsidiary of the Corporation) that has the effect, directly or indirectly, of increasing the proportionate share of the Stock of any class or series, or securities convertible into the Stock of any class or series, of the Corporation (or of any such subsidiary) that is owned by the Interested Stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of Stock not caused, directly or indirectly, by the Interested Stockholder; or

(v) any receipt by the Interested Stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges or other financial benefits (other than those expressly permitted in paragraphs (i) through (iv) of this subsection (c)) provided by or through the Corporation (or any direct or indirect majority owned subsidiary of the Corporation).

(d) “control,” including the terms “controlling,” “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Stock, by contract or otherwise. A Person who is the owner of twenty percent (20%) or more of the outstanding Voting Stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such Person holds Voting Stock, in good faith and not for the purpose of circumventing this Article VII, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity.

(e) “Interested Stockholder” means (i) any Person that is (A) the owner of fifteen percent (15%) or more of the outstanding Voting Stock of the Corporation or (B) an Affiliate or Associate of the Corporation and was the owner of fifteen percent (15%) or more of the outstanding Voting Stock of the Corporation at any time within the three (3) year period immediately prior to the date on which it is sought to be determined whether such Person is an Interested Stockholder or (ii) an Affiliate or Associate of a Person described in clause (i) of this

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subsection (e); provided, however, that the term “Interested Stockholder” shall not include (1) the Corporation or any direct or indirect majority owned subsidiary of the Corporation, (2) the Founder Entities, (3) any Person who purchases or otherwise acquires (other than in a registered public offering) five percent (5%) or more of the outstanding Voting Stock of the Corporation (in one transaction or a series of transactions) from one or more of the Founder Entities, provided that (A) such Person was not an Interested Stockholder immediately prior to such purchase or acquisition and (B) the Founder Entity(ies) from which such Person acquired such Voting Stock provide(s) written notice to the Corporation, on or before the date of such acquisition, that such Person shall not be deemed an “Interested Stockholder” for purposes of this Article VII as a result of such acquisition, (4) a Person that satisfies the conditions for being an Interested Stockholder but that did so inadvertently if such Person (A) as soon as practicable divests itself of ownership of sufficient shares so that such Person ceases to satisfy the conditions for being an Interested Stockholder and (B) would not have been an Interested Stockholder at any time within the three-year period immediately prior to a Business Combination between the Corporation and such Person, but for the inadvertent acquisition of ownership, or (5) any Person whose ownership of Voting Stock of the Corporation in excess of the fifteen percent (15%) limitation set forth herein is the result of action taken solely by the Corporation, provided that such Person shall be an Interested Stockholder if, thereafter, such Person acquires additional shares of Voting Stock of the Corporation, except as a result of further action taken solely by the Corporation not caused, directly or indirectly, by such Person. For the purpose of determining whether a Person is an Interested Stockholder, the Voting Stock of the Corporation deemed to be outstanding shall include Stock deemed to be owned by the Person through application of subsection (f) of this Section 4 but shall not include any other unissued Stock of the Corporation that may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

(f) “owner” (including the terms “own” and “owned”), when used with respect to any Stock, means a Person that individually or with or through any of its Affiliates or Associates:

(i) beneficially owns such Stock, directly or indirectly;

(ii) has (A) the right to acquire such Stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the owner of Stock tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered Stock is accepted for purchase or exchange, or (B) the right to vote such Stock pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the owner of any Stock because of such Person’s right to vote such Stock if the agreement, arrangement or understanding to vote such Stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten (10) or more Persons; or

(iii) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent as described in clause (B) of paragraph (ii) of this subsection (f)) or disposing of such Stock with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, such Stock.

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(g) “Person” means any individual, corporation, partnership, unincorporated association or other entity.

(h) “Stock” means (i) with respect to any corporation, capital stock, and (ii) with respect to any other entity, any equity interest.

(i) “Voting Stock” means (i) with respect to any corporation, Stock of any class or series entitled to vote generally in the election of directors, and (ii) with respect to any entity that is not a corporation, any equity interest entitled to vote generally in the election of the governing body of such entity. Every reference to a percentage of Voting Stock shall refer to such percentage of the votes of or voting power conferred by such Voting Stock.

ARTICLE VIII

INDEMNIFICATION

Section 1. The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by applicable law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided, however, that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this Article VIII shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition upon receipt by the Corporation of an undertaking by or on behalf of the director or officer receiving advancement to repay the amount advanced if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation under this Article VIII.

Section 2. The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.

Section 3. The rights to indemnification and to the advancement of expenses conferred in this Article VIII shall not be exclusive of any other right that any person may have or hereafter acquire under this Amended and Restated Certificate of Incorporation, the Bylaws, any statute, agreement, vote of stockholders or disinterested directors, pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise.

Section 4. Neither the amendment nor repeal of this Article VIII, nor the adoption of any provision of this Amended and Restated Certificate of Incorporation inconsistent with this Article VIII, nor, to the fullest extent permitted by the DGCL, any modification of law, shall adversely affect any rights to indemnification or to the advancement of expenses of a director, officer, employee or agent of the Corporation existing at the time of such amendment, repeal,

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adoption or modification with respect to any state of facts existing or act or omission occurring, or any cause of action, suit or claim that accrued or arose, prior to such amendment, repeal, adoption or modification.

ARTICLE IX

BYLAWS

In furtherance and not in limitation of the powers conferred by the DGCL, the Board of Directors is expressly authorized to adopt, amend, alter, change and repeal the Bylaws, without the consent or vote of the stockholders, by the affirmative vote of at least a majority of the entire Board of Directors. The stockholders of the Corporation are also expressly authorized to adopt, amend, alter, change and repeal the Bylaws; provided, however, that, in addition to any vote of the holders of any class or series of capital stock of the Corporation required by law or by this Amended and Restated Certificate of Incorporation, from and after the Voting Threshold Date, (A) the affirmative vote of the holders of at least seventy-five percent (75%) of the combined voting power of the shares of capital stock entitled to vote at an election of directors, voting together as a single class, shall be required to adopt, amend, alter, change or repeal any provision of the Bylaws and (B) any provision of the Bylaws that requires, for any action, any different or additional vote of the stockholders of the Corporation may be amended, altered, changed or repealed only by (1) the affirmative vote of the holders of at least seventy-five percent (75%) of the combined voting power of the shares of capital stock entitled to vote at an election of directors, voting together as a single class, and (2) such different or additional vote of the stockholders of the Corporation called for in such provision.

ARTICLE X

FORUM

Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the “Court of Chancery”) shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (A) any derivative action or proceeding brought on behalf of the Corporation, (B) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, creditors or other constituents, (C) any action asserting a claim against the Corporation or any director, officer, employee or agent of the Corporation arising pursuant to any provision of the DGCL, this Amended and Restated Certificate of Incorporation or the Bylaws or (D) any action asserting a claim against the Corporation or any director, officer, employee or agent of the Corporation governed by the internal affairs doctrine of the State of Delaware, in each such case excluding actions or proceedings in which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination) or for which the Court of Chancery does not have subject matter jurisdiction. Failure to enforce the foregoing provisions would cause the Corporation irreparable harm and the Corporation shall be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article X.

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ARTICLE XI

AMENDMENT

The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation; provided, however, that, notwithstanding any other provision of this Amended and Restated Certificate of Incorporation or any provision of law that might otherwise permit a lesser vote or no vote, but in addition to any other vote that may be required by law or by this Amended and Restated Certificate of Incorporation, from and after the Voting Threshold Date, (A) the affirmative vote of the holders of at least two-thirds of the combined voting power of the shares of capital stock entitled to vote at an election of directors, voting together as a single class, shall be required to amend, alter, change or repeal, or to adopt any provision as part of this Amended and Restated Certificate of Incorporation (or the Bylaws) inconsistent with the purpose and intent of, Section 6, Section 7, Section 8 and Section 9 of Article IV, Article V, Section 2 and Section 3 of Article VI, Article VIII, Article IX and Article X of this Amended and Restated Certificate of Incorporation and (B) the affirmative vote of the holders of at least eighty-five percent (85%) of the combined voting power of the shares of capital stock entitled to vote at an election of directors, voting together as a single class, shall be required to amend, alter, change or repeal, or to adopt any provision as part of this Amended and Restated Certificate of Incorporation (or the Bylaws) inconsistent with the purpose and intent of, Article VII or this Article XI of this Amended and Restated Certificate of Incorporation.

ARTICLE XII

SEVERABILITY

If any provision of this Amended and Restated Certificate of Incorporation is determined to be invalid, void, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, (A) such provision shall continue to be valid, legal and enforceable as applied to other persons or entities or to other circumstances and (B) the validity, legality and enforceability of the remaining provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each portion of any sentence of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, void, illegal or unenforceable that is not itself held to be invalid, void, illegal or unenforceable) shall not in any way be affected, impaired or invalidated thereby.

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IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be duly executed on its behalf this      day of             , 2014.

ENOVATION CONTROLS, INC.
By:
Name:	Patrick W. Cavanagh
Title:	President and Chief Executive Officer

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EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

OF

ENOVATION CONTROLS, INC.

Incorporated Under the Laws of the State of Delaware

Adopted as of             , 2014

TABLE OF CONTENTS

		Page
ARTICLE I	OFFICES AND RECORDS		1
Section 1.1.	Registered Office		1
Section 1.2.	Other Offices		1
Section 1.3.	Books and Records		1
ARTICLE II	STOCKHOLDERS		1
Section 2.1.	Annual Meeting		1
Section 2.2.	Special Meeting		1
Section 2.3.	Record Date		2
Section 2.4.	Stockholder List		3
Section 2.5.	Place of Meeting		3
Section 2.6.	Notice of Meeting		3
Section 2.7.	Quorum and Adjournment of Meetings		4
Section 2.8.	Proxies		4
Section 2.9.	Notice of Stockholder Business and Nominations		4
Section 2.10.	Conduct of Business		9
Section 2.11.	Required Vote		9
Section 2.12.	Treasury Stock		10
Section 2.13.	Inspectors of Elections		10
Section 2.14.	Stockholder Action by Written Consent		10
ARTICLE III	BOARD OF DIRECTORS		10
Section 3.1.	General Authority		10
Section 3.2.	Number, Tenure. and Qualifications		11
Section 3.3.	Classification of Directors		11
Section 3.4.	Regular Meetings		11
Section 3.5.	Special Meetings		11
Section 3.6.	Notice		11
Section 3.7.	Action by Consent of Board		12
Section 3.8.	Conference Telephone Meetings		12
Section 3.9.	Quorum		12
Section 3.10.	Vacancies and Newly Created Directorships		12
Section 3.11.	Removal		12
Section 3.12.	Records		12

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TABLE OF CONTENTS

(continued)

		Page
Section 3.13.	Compensation		12
Section 3.14.	Regulations		13
Section 3.15.	Rights of the Preferred Stock		13
ARTICLE IV	COMMITTEES		13
Section 4.1.	Designation; Powers		13
Section 4.2.	Procedure; Meetings; Quorum		13
Section 4.3.	Substitution of Members		13
ARTICLE V	OFFICERS		14
Section 5.1.	Officers		14
Section 5.2.	Election and Term of Office		14
Section 5.3.	Executive Chairman		14
Section 5.4.	Chief Executive Officer		14
Section 5.5.	President		15
Section 5.6.	Chief Technology Officer		15
Section 5.7.	Treasurer		15
Section 5.8.	Secretary		15
Section 5.9.	Vacancies		15
Section 5.10.	Action with Respect to Securities of Other Legal Entities		15
ARTICLE VI	STOCK CERTIFICATES AND TRANSFERS		16
Section 6.1.	Stock Certificates and Transfers		16
Section 6.2.	Lost, Stolen, or Destroyed Certificates		16
Section 6.3.	Ownership of Shares		16
Section 6.4.	Regulations Regarding Certificates		16
ARTICLE VII	MISCELLANEOUS PROVISIONS		17
Section 7.1.	Fiscal Year		17
Section 7.2.	Checks, Notes, Drafts, Etc.		17
Section 7.3.	Dividends		17
Section 7.4.	Seal		17
Section 7.5.	Waiver of Notice		17
Section 7.6.	Resignations		17
Section 7.7.	Indemnification and Advancement of Expenses		17

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TABLE OF CONTENTS

(continued)

		Page
Section 7.8.	Notices		19
Section 7.9.	Facsimile Signatures		19
Section 7.10.	Time Periods		19
Section 7.11.	Conflict with Applicable Law or the Certificate of Incorporation		20
Section 7.12.	Reliance Upon Books, Reports, and Records		20
ARTICLE VIII	AMENDMENTS		20
Section 8.1.	Amendments		20
Section 8.2.	Entire Board		20

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ARTICLE I

OFFICES AND RECORDS

SECTION 1.1. Registered Office. The registered office of Enovation Controls, Inc. (the “Corporation”) in the State of Delaware shall be located at 1675 South State Street, Suite B, in the City of Dover, County of Kent, 19901, and the name of the Corporation’s registered agent at such address is Capitol Services, Inc. The registered office and registered agent of the Corporation may be changed from time to time by the board of directors of the Corporation (the “Board”) in the manner provided by applicable law.

SECTION 1.2. Other Offices. The Corporation may have such other offices, either within or without the State of Delaware, as the Board may designate or as the business of the Corporation may from time to time require.

SECTION 1.3. Books and Records. The books and records of the Corporation may be kept (subject to any provision contained in the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the “DGCL”)) outside the State of Delaware at such place or places as may from time to time be designated by the Board. Any records maintained by the Corporation in the regular course of its business may be maintained on any information storage device or method; provided that the records so kept can be converted into clearly legible paper form within a reasonable time.

ARTICLE II

STOCKHOLDERS

SECTION 2.1. Annual Meeting. If required by applicable law, an annual meeting of the stockholders of the Corporation shall be held at such date, time, and place, either within or without the State of Delaware, as may be fixed by resolution of the Board. Any other proper business may be transacted at the annual meeting. The Board may postpone, reschedule, or cancel any annual meeting of stockholders previously scheduled by the Board.

SECTION 2.2. Special Meeting. Unless otherwise required by law or by the Amended and Restated Certificate of Incorporation of the Corporation, as amended from time to time (the “Certificate of Incorporation”), special meetings of the stockholders of the Corporation, for any purpose or purposes, may be called only by or at the direction of (a) the Chairman of the Board, if there be one, (b) directors constituting a majority of the entire Board, (c) a committee of the Board that has been duly designated by the Board and whose powers and authority include the power to call such meetings, and (d) prior to the Voting Threshold Date (as defined below), the beneficial owners of shares of capital stock of the Corporation entitled to exercise at least a majority of the combined voting power of the issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors. Except to the extent provided in clause (d) of the first sentence of this Section 2.2, the ability of the stockholders to call a special meeting of the stockholders of the Corporation is hereby specifically denied. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. “Voting Threshold Date” means the date on which the Founder Entities (as defined below) cease to beneficially own shares of capital stock of the Corporation entitling them to exercise at least a majority of the combined voting power of the issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors. “Founder Entities” means, collectively, Murphy Group, Inc., an Oklahoma corporation, EControls Group, Inc., a Texas corporation, their respective Affiliates (as defined below) and each of their respective successors. “Affiliate” means, with respect to any Person (as defined below), any other Person that controls, is controlled by, or is under common control with such Person; the term “control,” as used in this definition, means the power to direct or cause the direction of the management and policies

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of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and “controlled” has a meaning correlative to the foregoing. “Person” means an individual, general partnership, limited partnership, limited liability company, corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association, or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of any such entity. For the purpose of these Bylaws, “beneficial ownership” shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board may postpone, reschedule, or cancel any special meeting of the stockholders previously scheduled by the Board. Special meetings may be held either within or without the State of Delaware.

SECTION 2.3. Record Date.

(A) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by applicable law, not be more than 60 nor less than 10 days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

(B) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than 60 days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

(C) Unless otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to express consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date for determining stockholders entitled to express consent to corporate action in writing without a meeting is fixed by the Board, (i) when no prior action of the Board is required by applicable law, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, and (ii) if prior action by the Board is required by applicable law, the record date for such purpose shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

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SECTION 2.4. Stockholder List. The officer who has charge of the stock ledger shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of stockholders entitled to vote at any meeting of stockholders (provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the 10^th day before the meeting date), arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in the name of such stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting, either on a reasonably accessible electronic network (provided that the information required to gain access to the list is provided with the notice of the meeting) or during ordinary business hours at the principal place of business of the Corporation. The stock list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by applicable law, the stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled by this section to examine the list required by this section or to vote in person or by proxy at any meeting of the stockholders.

SECTION 2.5. Place of Meeting. The Board, the Executive Chairman, or the Chief Executive Officer, as the case may be, may designate the place of meeting for any annual meeting or for any special meeting of the stockholders. If no designation is so made, the place of meeting shall be the principal executive offices of the Corporation. The Board, acting in its sole discretion, may establish guidelines and procedures in accordance with applicable provisions of the DGCL and any other applicable law for the participation by stockholders and proxyholders in a meeting of stockholders by means of remote communications, and may determine that any meeting of stockholders will not be held at any place but will be held solely by means of remote communication. Stockholders and proxyholders complying with such procedures and guidelines and otherwise entitled to vote at a meeting of stockholders shall be deemed present in person and entitled to vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication.

SECTION 2.6. Notice of Meeting. Written or printed notice, stating the place, if any, day and hour of the meeting and the purpose or purposes for which the meeting is called, shall be given not less than 10 days nor more than 60 days before the date of the meeting (unless a different time is specified by applicable law), in a manner pursuant to Section 7.8 hereof, to each stockholder of record entitled to vote at such meeting. The notice shall specify (i) the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting), (ii) the place, if any, date, and time of such meeting, (iii) the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, (iv) in the case of a special meeting, the purpose or purposes for which such meeting is called, and (v) such other information as may be required by applicable law or as may be deemed appropriate by the Board, the Executive Chairman, the Chief Executive Officer, or the Secretary of the Corporation. If the stockholder list referred to in Section 2.4 of these Bylaws is made accessible on an electronic network, the notice of meeting must indicate how the stockholder list can be accessed. If the meeting of stockholders is to be held solely by means of electronic communications, the notice of meeting must provide the information required to access such stockholder list during the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the stockholder at such stockholder’s address as it appears on the stock transfer books of the Corporation. The Corporation may provide stockholders with notice of a meeting by electronic transmission provided such stockholders have consented to receiving electronic notice in accordance with the DGCL. Such further notice shall be given as may be required by applicable law.

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Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the notice of meeting. Meetings may be held without notice if all stockholders entitled to vote are present, or if notice is waived by those not present in accordance with Section 7.5 of these Bylaws.

SECTION 2.7. Quorum and Adjournment of Meetings.

(A) Except as otherwise provided by applicable law or by the Certificate of Incorporation, the holders of a majority in voting power of the issued and outstanding shares of capital stock of the Corporation entitled to vote at the meeting (the “Voting Stock”), represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, except that when specified business is to be voted on by a class or series of stock voting as a class, the holders of a majority in voting power of the shares of such class or series shall constitute a quorum of such class or series for the transaction of such business. The chairman of the meeting or holders of a majority in voting power of the shares so represented may adjourn the meeting from time to time, whether or not there is such a quorum. The stockholders present at a duly called meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

(B) Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, if any, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting.

SECTION 2.8. Proxies. At all meetings of stockholders, a stockholder may vote by proxy executed in writing (or in such other manner prescribed by the DGCL) by the stockholder or by such stockholder’s duly authorized attorney-in-fact. Any copy, facsimile transmission, or other reliable reproduction of the writing or transmission created pursuant to this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile transmission, or other reproduction shall be a complete reproduction of the entire original writing or transmission. No proxy may be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy is revocable at the pleasure of the stockholder executing it unless the proxy states that it is irrevocable and applicable law makes it irrevocable. A stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary of the Corporation.

SECTION 2.9. Notice of Stockholder Business and Nominations.

(A) Annual Meetings of Stockholders.

(1) Except as may be otherwise provided in the Certificate of Incorporation, nominations of persons for election to the Board and the proposal of other business to be considered by the stockholders at an annual meeting of stockholders may be made only (a) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (b) by or at the direction of the Board or any committee thereof, or (c) subject to the then-applicable terms of the Stockholders Agreement, among the Corporation and certain of

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its stockholders, dated as of             , 2014 (the “Stockholders Agreement”), by any stockholder of the Corporation who (i) was a stockholder of record at the time of giving of notice provided for in these Bylaws and at the time of the annual meeting, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in these Bylaws as to such business or nomination; Section 2.9(A)(1)(c) of these Bylaws shall be the exclusive means for a stockholder to make nominations or submit other business (other than matters properly brought under Rule 14a-8 under the Exchange Act, and included in the Corporation’s notice of meeting) before an annual meeting of the stockholders.

(2) For any nominations or any other business to be properly brought before an annual meeting by a stockholder pursuant to Section 2.9(A)(1)(c) of these Bylaws, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action under the DGCL. To be timely, a stockholder’s notice shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the 120^th day and not later than the close of business on the 90^th day prior to the first anniversary of the preceding year’s annual meeting (which anniversary, in the case of the first annual meeting of stockholders following the close of the Corporation’s initial public offering, shall be deemed to be             , 2015; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120^th day prior to the date of such annual meeting and not later than the close of business on the later of the 90^th day prior to such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10^th day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described above. To be in proper form, a stockholder’s notice (whether given pursuant to this Section 2.9(A)(2) or Section 2.9(B)) to the Secretary of the Corporation must:

(a) set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, if any, (ii) (A) the class or series and number of shares of the Corporation that are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner, (B) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part from the value of any class or series of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of stock of the Corporation or otherwise (a “Derivative Instrument”), directly or indirectly owned beneficially by such stockholder and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation, (C) a description of any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder has a right to vote any shares of any security of the Corporation, (D) any short interest in any

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security of the Corporation (for purposes of these Bylaws a person shall be deemed to have a “short interest” in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (E) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder that are separated or separable from the underlying shares of the Corporation, (F) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (G) any performance-related fees (other than an asset-based fee) that such stockholder is entitled to based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including without limitation any such interests held by members of such stockholder’s immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), (iii) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (iv) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting, and (v) a representation as to whether such stockholder or any such beneficial owner intends or is part of a group that intends to (x) deliver a proxy statement or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding stock required to approve or adopt the proposal or to elect each such nominee or (y) otherwise to solicit proxies from stockholders in support of such proposal or nomination. If requested by the Corporation, the information required under clauses (a)(i) and (ii) of the preceding sentence of this Section 2.9(A)(2) shall be supplemented by such stockholder and any such beneficial owner not later than 10 days after the record date for notice of the meeting to disclose such information as of such record date;

(b) if the notice relates to any business other than a nomination of a director or directors that the stockholder proposes to bring before the meeting, set forth (i) a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest of such stockholder and beneficial owner, if any, in such business and (ii) a description of all agreements, arrangements, and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder;

(c) set forth, as to each person, if any, whom the stockholder proposes to nominate for election or reelection to the Board (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of

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proxies for election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) and (ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements, and understandings during the past three years, and any other material relationships, between or among such stockholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant; and

(d) with respect to each nominee for election or reelection to the Board, include a completed and signed questionnaire, representation, and agreement required by Section 2.9(A)(2) of these Bylaws. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee.

(3) Notwithstanding anything in the second sentence of Section 2.9(A)(2) of these Bylaws to the contrary, in the event that the number of directors to be elected to the Board is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by these Bylaws shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 10^th day following the day on which such public announcement is first made by the Corporation.

(4) The foregoing notice requirements of this Section 2.9(A) shall be deemed satisfied by a stockholder with respect to business or a nomination if such stockholder has notified the Corporation of such stockholder’s intention to present a proposal or make a nomination at an annual meeting in compliance with the applicable rules and regulations promulgated under the Exchange Act and such stockholder’s proposal or nomination has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.

(5) The requirements of this Section 2.9(A) shall apply to any business or nominations to be brought before an annual meeting by a stockholder whether such business or nominations are to be included in the Corporation’s proxy statement pursuant to Rule 14a-8 of the Exchange Act or presented to stockholders by means of an independently financed proxy solicitation

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(B) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to a notice of meeting (a) by or at the direction of the Board or any committee thereof (or stockholders pursuant to Article VI of the Certificate of Incorporation and Section 2.2 of these Bylaws prior to the Voting Threshold Date) or (b) provided, that the Board (or stockholders pursuant to Article VI of the Certificate of Incorporation and Section 2.2 of these Bylaws prior to the Voting Threshold Date) has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (i) is a stockholder of record at the time of giving of notice provided for in these Bylaws and at the time of the special meeting, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in Section 2.9(A) of these Bylaws. The proposal by stockholders of other business to be conducted at a special meeting of stockholders may be made only in accordance with Article VI of the Certificate of Incorporation prior to the Voting Threshold Date. In the event a special meeting of stockholders is called for the purpose of electing one or more directors to the Board, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by Section 2.9(A)(2) of these Bylaws with respect to any nomination (including the completed and signed questionnaire, representation, and agreement required by Section 2.9(A)(2) of these Bylaws) shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the close of business on the 120^th day prior to such special meeting and not later than the close of business on the later of the 90^th day prior to such special meeting or, if the first public announcement of the date of such special meeting is less than 100 days prior to the date of such special meeting, the 10^th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.

(C) General.

(1) Only such persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in these Bylaws. Except as otherwise provided by applicable law, the Certificate of Incorporation, or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall be disregarded.

(2) For purposes of these Bylaws, “public announcement” shall mean disclosure in a press release reported by Dow Jones News Service, the Associated Press, or any other national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act and the rules and regulations promulgated thereunder.

(3) Notwithstanding the foregoing provisions of these Bylaws, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in these Bylaws; provided,

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however, that any references in these Bylaws to the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to Section 2.9(A)(1)(c) or Section 2.9(B) of these Bylaws. Nothing in these Bylaws shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any class or series of preferred stock of the Corporation (“Preferred Stock”) if and to the extent provided for under applicable law, the Certificate of Incorporation, or these Bylaws.

(4) The Corporation may require any proposed stockholder nominee for director to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation. Unless otherwise required by law, if the stockholder (or a qualified representative of the stockholder) making a nomination or proposal under this Section 2.9 does not appear at a meeting of stockholders to present such nomination or proposal, the nomination shall be disregarded and the proposed business shall not be transacted, as the case may be, notwithstanding that proxies in favor thereof may have been received by the Corporation.

For purposes of this Section 2.9, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager, or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

SECTION 2.10. Conduct of Business. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the person presiding over any meeting of stockholders shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations, and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting. Such rules, regulations, or procedures, whether adopted by the Board or prescribed by the presiding person of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders entitled to vote at the meeting, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. The presiding person at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

SECTION 2.11. Required Vote. At any meeting at which directors are to be elected, so long as a quorum is present, the directors shall be elected by a plurality of the votes of the shares of Class A

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common stock and Class B common stock of the Corporation, voting as a single class, present in person or represented by proxy and entitled to vote thereon. Unless otherwise provided in the Certificate of Incorporation, cumulative voting for the election of directors shall be prohibited. Except as otherwise provided by applicable law, the rules and regulations of any stock exchange applicable to the Corporation, the Certificate of Incorporation, or these Bylaws, in all matters other than the election of directors and certain non-binding advisory votes described below, the affirmative vote of the holders of a majority of the combined voting power of the issued and outstanding shares of capital stock of the Corporation represented in person or by proxy and entitled to vote on the matter shall be the act of the stockholders. In non-binding advisory matters with more than two possible vote choices, the plurality of the votes of the shares of capital stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the matter shall be the recommendation of the stockholders.

SECTION 2.12. Treasury Stock. The Corporation shall not vote, directly or indirectly, shares of its own stock owned by it or any other corporation, if a majority of shares entitled to vote in the election of directors of such corporation is held, directly or indirectly, by the Corporation, and such shares will not be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or such other corporation to vote stock of the Corporation held in a fiduciary capacity.

SECTION 2.13. Inspectors of Elections. At any meeting at which a vote is taken by ballots, the Board by resolution may, and when required by applicable law, shall, appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents, or representatives, to act at the meetings of stockholders and make a written report thereof. One or more persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate has been appointed to act or is able to act at a meeting of stockholders and the appointment of an inspector is required by applicable law, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before discharging his or her duties, shall take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall have the duties prescribed by applicable law.

SECTION 2.14. Stockholder Action by Written Consent. Prior to the Voting Threshold Date, any action required or permitted to be taken by the stockholders of the Corporation at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice, and without a vote of stockholders, if a consent or consents in writing, setting forth the action so taken, is or are signed by the holders of issued and outstanding shares of capital stock of the Corporation having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation in accordance with Section 228 of the DGCL and the Bylaws. On and after the Voting Threshold Date, any action required or permitted to be taken by the stockholders of the Corporation may be taken only at an annual or special meeting of the stockholders of the Corporation duly noticed and called in accordance with the DGCL and the Bylaws and may not be effected by any consent in writing by such stockholders, and the ability of the stockholders of the Corporation to consent in writing to the taking of any action without a meeting is hereby specifically denied.

ARTICLE III

BOARD OF DIRECTORS

SECTION 3.1. General Authority. The business and affairs of the Corporation shall be managed by or under the direction of the Board. In addition to the powers and authority herein or by statute expressly conferred, the Board is hereby empowered to exercise all such powers and do all such lawful acts and things as may be exercised or done by the Corporation, subject to the provisions of the DGCL,

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the Certificate of Incorporation, and any provisions of these Bylaws adopted by the stockholders of the Corporation; provided, however, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the Board that would have been valid if such Bylaws had not been adopted. The directors shall act only as a Board, and the individual directors shall have no power as such.

SECTION 3.2. Number, Tenure. and Qualifications. The number of directors shall be fixed from time to time exclusively pursuant to a resolution adopted by the affirmative vote of a majority of the Board. Each director shall be a natural person. The election and term of director shall be as set forth in these Bylaws, subject in all cases to the provisions of the Certificate of Incorporation.

SECTION 3.3. Classification of Directors. The directors shall be divided into three classes, designated Class I, Class II, and Class III. Each class shall consist, as nearly as may be possible, of one third of the total number of directors constituting the entire Board. The initial division of the Board into the three classes shall be determined by a majority of the Board. The initial Class I directors shall serve for a term expiring at the first annual meeting of stockholders of the Corporation following the effective time of these Bylaws; the initial Class II directors shall serve for a term expiring at the second annual meeting of stockholders following the effective time of these Bylaws; and the initial Class III directors shall serve for a term expiring at the third annual meeting of stockholders following the effective time of these Bylaws. At each annual meeting of stockholders beginning with the first annual meeting of stockholders following the effective time of these Bylaws, successors to the class of directors whose term expires at that annual meeting shall be elected for a term expiring at the third annual meeting of stockholders to be held following their election. If the number of directors is changed, any increase or decrease shall be apportioned among the classes by the Board so as to maintain as nearly equal as possible the number of directors in each class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.

SECTION 3.4. Regular Meetings. Subject to Section 3.6, regular meetings of the Board shall be held on such dates, and at such times and places, as are determined from time to time by resolution of the Board.

SECTION 3.5. Special Meetings. Special meetings of the Board shall be called at the request of the Executive Chairman, the Chief Executive Officer, or a majority of the directors then in office. The person or persons authorized to call special meetings of the Board may fix the place, if any, and time of the meetings. Any business may be conducted at a special meeting of the Board.

SECTION 3.6. Notice. Notice of any meeting of directors shall be given to each director at his or her business or residence in writing by hand delivery, first-class or overnight mail, courier service or facsimile or electronic transmission or orally by telephone. If mailed by first-class mail, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least five days before such meeting. If by overnight mail or courier service, such notice shall be deemed adequately delivered when the notice is delivered to the overnight mail or courier service company at least 24 hours before such meeting. If by facsimile or electronic transmission, such notice shall be deemed adequately delivered when the notice is transmitted at least 24 hours before such meeting. If by telephone or by hand delivery, the notice shall be given at least 24 hours prior to the time set for the meeting and shall be confirmed by facsimile or electronic transmission that is sent promptly thereafter. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting, except for amendments to these Bylaws, as provided under Section 8.1. A meeting may be held at any time without notice if all the directors are present or if those not present waive notice of the meeting in accordance with Section 7.5 of these Bylaws.

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SECTION 3.7. Action by Consent of Board. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, including by electronic transmission, and the writing or writings or electronic transmissions are filed with the minutes of proceedings of the Board or committee. Such consent shall have the same force and effect as a unanimous vote at a meeting, and may be stated as such in any document or instrument filed with the Secretary of State of the State of Delaware.

SECTION 3.8. Conference Telephone Meetings. Members of the Board or any committee thereof may participate in a meeting of the Board or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting, except where such person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

SECTION 3.9. Quorum. Subject to Section 3.10, a whole number of directors equal to at least a majority of the Board shall constitute a quorum for the transaction of business, but if at any meeting of the Board there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time without further notice unless (i) the date, time, and place, if any, of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 3.6 of these Bylaws shall be given to each director, or (ii) the meeting is adjourned for more than 24 hours, in which case the notice referred to in clause (i) shall be given to those directors not present at the announcement of the date, time, and place of the adjourned meeting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. The directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum.

SECTION 3.10. Vacancies and Newly Created Directorships. Except as otherwise required by law, the Stockholders Agreement and the Certificate of Incorporation, unless the Board otherwise determines, any newly created directorship on the Board that results from an increase in the number of directors and any vacancy occurring on the Board resulting from the death, resignation, removal from office, or other cause shall be filled only by vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and not by the stockholders. A director of any class elected to fill a vacancy resulting from an increase in the number of directors of such class shall hold office for a term that coincides with the remaining term of that class. A director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor in office.

SECTION 3.11. Removal. Any director, or the entire Board, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 66 ²⁄₃% of the combined voting power of the issued and outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, at a meeting of the stockholders called for that purpose.

SECTION 3.12. Records. The Board shall cause to be kept a record containing the minutes of the proceedings of the meetings of the Board and of the stockholders, appropriate stock books and registers and such books of records and accounts as may be necessary for the proper conduct of the business of the Corporation.

SECTION 3.13. Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board shall have authority to fix the compensation of directors, including fees and

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reimbursement of expenses. The Corporation will cause each non-employee director serving on the Board to be reimbursed for all reasonable out-of-pocket costs and expenses incurred by him or her in connection with such service.

SECTION 3.14. Regulations. To the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws, the Board may adopt such rules and regulations for the conduct of meetings of the Board and for the management of the affairs and business of the Corporation as the Board may deem appropriate.

SECTION 3.15. Rights of the Preferred Stock. For the avoidance of doubt, whenever the holders of any one or more series of preferred stock issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal, filling of vacancies, and other features of such directorships shall be governed by the terms of this Article III applicable thereto except to the extent otherwise provided in the certificate of designations relating to any such series of Preferred Stock. Notwithstanding the foregoing, such directors so elected shall not be divided into classes pursuant to Section 3.3 unless expressly provided by the terms of such series of preferred stock.

ARTICLE IV

COMMITTEES

SECTION 4.1. Designation; Powers. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Any such committee, to the extent permitted by applicable law and to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.

SECTION 4.2. Procedure; Meetings; Quorum. Any committee designated pursuant to Section 4.1 shall choose its own chairman by a majority vote of the members then in attendance in the event the chairman has not been selected by the Board, shall keep regular minutes of its proceedings and report the same to the Board when requested, and shall meet at such times and at such place or places as may be provided by the charter of such committee or by resolution of such committee or resolution of the Board. At every meeting of any such committee, the presence of a majority of all the members thereof shall constitute a quorum and the affirmative vote of a majority of the members present shall be necessary for the adoption by it of any resolution. The Board shall adopt a charter for each committee for which a charter is required by applicable laws, regulations, or stock exchange rules, may adopt a charter for any other committee, and may adopt other rules and regulations for the governance of any committee not inconsistent with the provisions of these Bylaws or any such charter, and each committee may adopt its own rules and regulations of governance, to the extent not inconsistent with these Bylaws or any charter or other rules and regulations adopted by the Board.

SECTION 4.3. Substitution of Members. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of the absent or disqualified member.

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ARTICLE V

OFFICERS

SECTION 5.1. Officers. The officers of the Corporation shall be an Executive Chairman, a Chief Executive Officer, a President, a Chief Technology Officer, a Treasurer, a Secretary and such other officers as the Board from time to time may deem proper. The Executive Chairman shall be chosen from among the directors. All officers elected by the Board shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article V and any applicable resolution of the Board. Such officers shall also have such powers and duties as from time to time may be conferred by the Board or by any committee thereof. The Board or any committee thereof may from time to time elect, or the Executive Chairman or Chief Executive Officer may appoint, such other officers (including one or more Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Secretaries, and Assistant Treasurers) and such agents, as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers and agents shall have such duties and shall hold their offices for such terms as shall be provided in these Bylaws or as may be prescribed by the Board or such committee thereof or by the Chairman of the Board or Chief Executive Officer, as the case may be. Any two or more offices may be held by the same person.

SECTION 5.2. Election and Term of Office. The officers of the Corporation shall be elected or appointed from time to time in accordance with Section 5.1. Each officer shall hold office until his or her successor shall have been duly elected or appointed and shall have qualified or until his or her death or until he or she shall resign, but any officer may be removed from office at any time by the affirmative vote of a majority of the entire Board or, except in the case of an officer or agent elected by the Board or any committee thereof, by the Executive Chairman or Chief Executive Officer. Such removal shall be without prejudice to the contractual rights, if any, of the person so removed. No elected officer shall have any contractual rights against the Corporation for compensation by virtue of such election beyond the date of the election of his or her successor, his or her death, his or her resignation, or his or her removal, whichever event shall first occur, except as otherwise provided in an employment contract or under an employee deferred compensation plan.

SECTION 5.3. Executive Chairman. The Executive Chairman shall preside at all meetings of the stockholders and of the Board and shall have the duties and powers of and act as the Chairman of the Board for all purposes under the DGCL, the Certificate of Incorporation, and these Bylaws. The Executive Chairman shall have general oversight of the business of the Corporation and will, from time to time, provide the Chief Executive Officer with strategic advice, knowledge, and expertise regarding the direction of the Corporation. The Executive Chairman shall perform all duties incidental to his or her office that may be required by law and all such other duties as are properly required of him or her by the Board. He or she shall make reports to the Board and the stockholders, and shall see that all orders and resolutions of the Board and of any committee thereof are carried into effect. The Executive Chairman shall, in the absence or disability of the Chief Executive Officer, perform the duties and exercise the powers of the Chief Executive Officer. The Executive Chairman may also serve as Chief Executive Officer, if so elected by the Board.

SECTION 5.4. Chief Executive Officer. The Chief Executive Officer shall act in a general executive capacity and shall assist the Executive Chairman in the administration and operation of the Corporation’s business and general supervision of its policies and affairs. The Chief Executive Officer shall have general and active management of the business of the Corporation and shall see that all orders and resolutions of the Board are carried into effect. The Chief Executive Officer shall, in the absence of or because of the inability to act of the Executive Chairman, perform all duties of the Executive Chairman and preside at all meetings of stockholders and of the Board. The Chief Executive Officer shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts, and all other documents and instruments in connection with the business of the Corporation.

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SECTION 5.5. President. The President shall report and be responsible to the Chief Executive Officer. The President shall have such powers and perform such duties as from time to time may be assigned or delegated to him by the Board or the Chief Executive Officer or are incident to the office of President. The President shall, in the absence or disability of both the Chief Executive Officer and Executive Chairman, perform the duties of and exercise the powers of the Chief Executive Officer.

SECTION 5.6. Chief Technology Officer. The Chief Technology Officer shall have general and active management of the technical, engineering, and product design aspects of the Corporation, and shall be responsible for designing and recommending the appropriate technology solutions to support the policies and directives issued by the Chief Executive Officer, and shall perform such other duties and have such other powers as the Board, the Executive Chairman or the Chief Executive Officer may from time to time prescribe.

SECTION 5.7. Treasurer. The Treasurer shall exercise general supervision over the receipt, custody and disbursement of corporate funds. The Treasurer shall cause the funds of the Corporation to be deposited in such banks as may be authorized by the Board, or in such banks as may be designated as depositaries in the manner provided by resolution of the Board. He or she shall have such further powers and duties and shall be subject to such directions as may be granted or imposed upon him or her from time to time by the Board, the Executive Chairman or the Chief Executive Officer.

SECTION 5.8. Secretary. The Secretary shall keep or cause to be kept in one or more books provided for that purpose, the minutes of all meetings of the Board, the committees of the Board and the stockholders; he or she shall see that all notices are duly given in accordance with the provisions of these Bylaws and as required by applicable law; he or she shall be custodian of the records and the seal of the Corporation and affix and attest the seal to all stock certificates of the Corporation (unless the seal of the Corporation on such certificates shall be a facsimile, as hereinafter provided) and affix and attest the seal to all other documents to be executed on behalf of the Corporation under its seal; and he or she shall see that the books, reports, statements, certificates, and other documents and records required by law to be kept and filed are properly kept and filed; and in general, he or she shall perform all the duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the Board, the Executive Chairman or the Chief Executive Officer.

SECTION 5.9. Vacancies. A newly created elected office or any vacancy in any elected office because of death, resignation, or removal may be filled by the Board for the unexpired portion of the term at any meeting of the Board. Any vacancy in an office appointed by the Executive Chairman or the Chief Executive Officer because of death, resignation, or removal may be filled by the Executive Chairman or the Chief Executive Officer.

SECTION 5.10. Action with Respect to Securities of Other Legal Entities. Unless otherwise directed by the Board, the Chief Executive Officer shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of security holders of or with respect to any action of security holders of any other legal entity in which the Corporation may hold securities and otherwise to exercise any and all rights and powers that the Corporation may possess by reason of its ownership of securities in such other legal entity.

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ARTICLE VI

STOCK CERTIFICATES AND TRANSFERS

SECTION 6.1. Stock Certificates and Transfers. The interest of each stockholder of the Corporation shall be evidenced by certificates for shares of stock in such form (other than bearer form) as the appropriate officers of the Corporation may from time to time prescribe, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock may be uncertificated or electronic shares. The shares of the stock of the Corporation shall be entered in the books of the Corporation as they are issued and shall exhibit the holder’s name and number of shares. Subject to the provisions of the Certificate of Incorporation, the shares of the stock of the Corporation shall be transferred on the books of the Corporation, which may be maintained by one or more third-party registrars or transfer agents appointed by the Board or an officer authorized to make such appointment, by the holder thereof in person or by such holder’s attorney, upon surrender for cancellation of certificates for at least the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require or upon receipt of proper transfer instructions from the registered holder of uncertificated shares and upon compliance with appropriate procedures for transferring shares in uncertificated form, at which time the Corporation shall cancel the old certificate, issue a new certificate to the person entitled thereto (if the stock is then represented by certificates) and record the transaction upon its books. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

Certificated shares of stock shall be signed by, or in the name of, the Corporation by the President or a Vice President, and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer. Any or all such signatures may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

SECTION 6.2. Lost, Stolen, or Destroyed Certificates. No certificate for shares or uncertificated shares of stock in the Corporation shall be issued in place of any certificate alleged to have been lost, destroyed, or stolen, except on production of such evidence of such loss, destruction, or theft and on delivery to the Corporation of a bond of indemnity in such amount, upon such terms and secured by such surety, as the Board or any officer may in its or his or her discretion require.

SECTION 6.3. Ownership of Shares. The Corporation shall be entitled to treat the holder of record of any share or shares of capital stock of the Corporation as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.

SECTION 6.4. Regulations Regarding Certificates. The Board shall have the power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer, and registration or the replacement of certificates for shares of stock of the Corporation. The Corporation may enter into additional agreements with stockholders to restrict the transfer of stock of the Corporation in any manner not prohibited by the DGCL.

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ARTICLE VII

MISCELLANEOUS PROVISIONS

SECTION 7.1. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January and end on the thirty-first day of December of each year.

SECTION 7.2. Checks, Notes, Drafts, Etc. All checks, notes, drafts or other orders for the payment of money of the Corporation shall be signed, endorsed or accepted in the name of the Corporation by such officer, officers, person or persons as from time to time may be designated by the Board or by an officer or officers authorized by the Board to make such designation.

SECTION 7.3. Dividends. Subject to applicable law and the Certificate of Incorporation, the Board may, in its discretion, from time to time declare, and the Corporation may pay, dividends on its outstanding shares of capital stock, which dividends may be paid in either cash, property, or securities of the Corporation. A member of the Board, or a member of any committee designated by the Board, shall be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports, or statements presented to the Corporation by any of its officers or employees, or committees of the Board, or by any other person as to matters the director reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, as to the value and amount of the assets, liabilities, or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid.

SECTION 7.4. Seal. The seal of the Corporation shall be in such form as shall be approved by the Board. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise, as may be prescribed by law or custom or by the Board.

SECTION 7.5. Waiver of Notice. Whenever any notice is required to be given to any stockholder or director of the Corporation under the provisions of the DGCL, the Certificate of Incorporation, or these Bylaws, a waiver thereof in writing, including by electronic transmission, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the stockholders or the Board or committee thereof need be specified in any waiver of notice of such meeting. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

SECTION 7.6. Resignations. Any director or any officer, whether elected or appointed, may resign at any time by giving written notice, including by electronic transmission, of such resignation to the Executive Chairman, the Chief Executive Officer, the President, or the Secretary, and such resignation shall be deemed to be effective as of the close of business on the date said notice is received by the Executive Chairman, the Chief Executive Officer, the President, or the Secretary, or at such later time as is specified therein. No formal action shall be required of the Board or the stockholders to make any such resignation effective.

SECTION 7.7. Indemnification and Advancement of Expenses.

(A) The Corporation shall indemnify and hold harmless, to the fullest extent authorized or permitted by applicable law as now or hereafter in effect, any person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened,

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pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a “proceeding”) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (a “Covered Person”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, or agent, or in any other capacity while serving as a director, officer, employee, or agent, against all expenses, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred or suffered by such Covered Person in connection with such proceeding.

(B) The Corporation shall, to the fullest extent not prohibited by applicable law as now or hereafter in effect, pay the expenses (including attorneys’ fees) incurred by a Covered Person in defending or otherwise participating in any proceeding in advance of its final disposition upon receipt of an undertaking by or on behalf of the Covered Person to repay all amounts advanced if it should be ultimately determined that the Covered Person is not entitled to be indemnified under this Section 7.7 or otherwise.

(C) The rights to indemnification and advancement of expenses under this Section 7.7 shall be contract rights and such rights shall continue as to a Covered Person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of his or her heirs, executors, administrators, and personal and legal representatives. Notwithstanding the foregoing provisions of this Section 7.7, except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to a Covered Person (or his or her heirs, executors, administrators, or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such Covered Person only if such proceeding (or part thereof) was authorized or consented to by the Board.

(D) If a claim for indemnification under this Section 7.7 (following the final disposition of such proceeding) is not paid in full within 60 days after the Corporation has received a claim therefor by the Covered Person, or if a claim for any advancement of expenses under this Section 7.7 is not paid in full within 30 days after the Corporation has received a statement or statements requesting such amounts to be advanced, the Covered Person shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. If successful in whole or in part, the Covered Person shall be entitled to be paid the expense of prosecuting such claim to the fullest extent permitted by applicable law. In any such action, the Corporation shall have the burden of proving that the Covered Person is not entitled to the requested indemnification or advancement of expenses under applicable law.

(E) The rights conferred on any Covered Person by this Section 7.7 shall not be exclusive of any other rights that such Covered Person may have or hereafter acquire under any statute, any provision of the Certificate of Incorporation, these Bylaws, any agreement, any vote of stockholders or disinterested directors, or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction, or otherwise.

(F) This Section 7.7 shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than Covered Persons (including employees and agents of the Corporation) when and as authorized by appropriate corporate action.

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(G) Any Covered Person entitled to indemnification and/or advancement of expenses, in each case pursuant to this Section 7.7, may have certain rights to indemnification, advancement and/or insurance provided by one or more persons with whom or which such Covered Person may be associated. The Corporation hereby acknowledges and agrees that (i) the Corporation shall be the indemnitor of first resort with respect to any proceeding, expense, liability, or matter that is the subject of this Section 7.7, (ii) the Corporation shall be primarily liable for all such obligations and any indemnification afforded to a Covered Person in respect of a proceeding, expense, liability, or matter that is the subject of this Section 7.7, whether created by law, organizational or constituent documents, contract, or otherwise, (iii) any obligation of any persons with whom or which a Covered Person may be associated to indemnify such Covered Person and/or advance expenses or liabilities to such Covered Person in respect of any proceeding shall be secondary to the obligations of the Corporation hereunder, (iv) the Corporation shall be required to indemnify each Covered Person and advance expenses to each Covered Person hereunder to the fullest extent provided herein without regard to any rights such Covered Person may have against any other person with whom or which such Covered Person may be associated or insurer of any such person, and (v) the Corporation irrevocably waives, relinquishes, and releases any other person with whom or which a Covered Person may be associated from any claim of contribution, subrogation, or any other recovery of any kind in respect of amounts paid by the Corporation hereunder.

(H) The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee, or agent of the Corporation or another corporation, partnership, joint venture, trust, or other enterprise against any expense, liability, or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability, or loss under the DGCL.

SECTION 7.8. Notices. Except as otherwise specifically provided herein or required by applicable law, all notices required to be given to any stockholder, director, officer, employee, or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, or by sending such notice by commercial courier service, or by facsimile, or other electronic transmission, provided that notice to stockholders by electronic transmission shall be given in the manner provided in Section 232 of the DGCL. Any such notice shall be addressed to such stockholder, director, officer, employee, or agent at his or her last known address as the same appears on the books of the Corporation. Without limiting the manner by which notice otherwise may be given effectively, notice to any stockholder shall be deemed given: (1) if by facsimile, when directed to a number at which the stockholder has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (3) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; (4) if by any other form of electronic transmission, when directed to the stockholder; and (5) if by mail, when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation.

SECTION 7.9. Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board or a committee thereof.

SECTION 7.10. Time Periods. In applying any provision of these Bylaws that require that an act be done or not done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

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SECTION 7.11. Conflict with Applicable Law or the Certificate of Incorporation. These Bylaws are adopted subject to any applicable law and the Certificate of Incorporation. Whenever these Bylaws conflict with any applicable law or the Certificate of Incorporation, such conflict shall be resolved in favor of such law or the Certificate of Incorporation.

SECTION 7.12. Reliance Upon Books, Reports, and Records. Each director, each member of any committee designated by the Board, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the Corporation and upon information, opinions, reports, or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees designated by the Board, or by any other person as to the matters such director, member, or officer reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

ARTICLE VIII

AMENDMENTS

SECTION 8.1. Amendments. In furtherance and not in limitation of the powers conferred by the DGCL, the Board is expressly authorized to adopt, amend, alter, change, and repeal these Bylaws, without the consent or vote of the stockholders, by the affirmative vote of at least a majority of the entire Board. The stockholders of the Corporation are also expressly authorized to adopt, amend, alter, change, and repeal these Bylaws; provided, however, that, in addition to any vote of the holders of any class or series of capital stock of the Corporation required by law or by the Certificate of Incorporation, from and after the Voting Threshold Date, (A) the affirmative vote of the holders of at least 75% of the combined voting power of the shares of capital stock entitled to vote at an election of directors, voting together as a single class, shall be required to adopt, amend, alter, change, or repeal any provision of these Bylaws and (B) any provision of these Bylaws that requires, for any action, any different or additional vote of the stockholders of the Corporation may be amended, altered, changed, or repealed only by (1) the affirmative vote of the holders of at least 75% of the combined voting power of the shares of capital stock entitled to vote at an election of directors, voting together as a single class, and (2) such different or additional vote of the stockholders of the Corporation called for in such provision. So long as the Stockholders Agreement remains in effect, the Board shall not approve any amendment, alteration, change, or repeal of any provision of these Bylaws, or the adoption of any new Bylaw, that would be contrary to or inconsistent with the then-applicable terms of the Stockholders Agreement.

Notwithstanding the foregoing, (x) no amendment to the Stockholders Agreement (whether or not such amendment modifies any provision to the Stockholders Agreement to which these Bylaws are subject) shall be deemed an amendment of these Bylaws for purposes of this Section 8.1, and (y) no amendment, alteration, change, or repeal of Section 7.7 shall adversely affect any rights to indemnification or to the advancement of expenses of a director, officer, employee, or agent of the Corporation existing at the time of such amendment, alternation, change, or repeal with respect to any state of facts existing or act or omission occurring, or any cause of action, suit or claim that accrued or arose, prior to such amendment, alteration, change, or repeal.

SECTION 8.2. Entire Board. As used in this Article VIII and in these Bylaws generally, the term “entire Board” means the total number of directors which the Corporation would have if there were no vacancies.

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EX-4.2

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [            ], 2014, is by and among Enovation Controls, Inc., a Delaware corporation (together with its successors by merger, acquisition, reorganization, or otherwise, the “Company”), Murphy Group, Inc., an Oklahoma corporation, and Econtrols Group, Inc., a Texas corporation (collectively, the “Founder Entities”), and each of the other holders of Units (as defined below) that are signatories hereto (collectively, the “Stockholders”).

WITNESSETH

WHEREAS, the Company was formed on June 2, 2014, in anticipation of a proposed initial public offering of shares of Class A common stock, par value $0.00001 per share, of the Company (the “Class A Shares”);

WHEREAS, on the date hereof, the Company acquired a [    ]% equity interest in Enovation Controls, LLC, an Oklahoma LLC (“Enovation Controls, LLC”), and became the Managing Member of Enovation Controls, LLC under the Second Amended and Restated Limited Liability Company Agreement, dated as of the date hereof, of Enovation Controls, LLC (the “LLC Agreement”);

WHEREAS, each of the Stockholders is a holder of LLC interests in Enovation Controls, LLC designated as “Common Units” (“Units”) and shares of Class B common stock, par value $0.00001 per share, of the Company (“Class B Shares”);

WHEREAS, pursuant to the LLC Agreement, each of the Stockholders is entitled to exchange Units and Class B Shares for Class A Shares from and after the filing by the Company of a mandatory Shelf Registration Statement, and the effectiveness thereof;

WHEREAS, the parties to this Agreement desire to set forth certain registration rights applicable to the Registrable Securities (as hereinafter defined) held by the Stockholders.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

1.1 The term “Affiliate” of any Person shall mean another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person.

1.2 The term “Board” shall mean the Board of Directors of the Company.

1.3 The term “Commission” shall mean the United States Securities and Exchange Commission or any successor agency.

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1.4 The term “Company IPO” shall mean the initial offering by the Company of Class A Shares to the public through underwriters pursuant to the registration statement on Form S-1.

1.5 The term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

1.6 The term “Fair Market Value” shall mean, any Units, the volume weighted average sale price per Class A Share on the New York Stock Exchange on such date, or if Class A Shares are not listed on the New York Stock Exchange, on the principal national securities exchange on which the Class A Shares are then listed or, if the Class A Shares are not listed on a national securities exchange, an automated quotation system on which the Class A Shares are then listed or authorized for quotation, in each case as reported by Bloomberg Financial Markets (or any successor thereto) through its “Volume at Price” functions and ignoring any block trades (which, for purposes of this definition means any transfer of more than 100,000 shares (subject to adjustment to reflect stock dividends, stock splits, stock combinations and other similar events)), and if the Class A Shares are not then listed on a national securities exchange or authorized for quotation on an automated quotation system, such value as the Board, in its reasonable discretion, shall determine.

1.7 The term “Lock-Up Period” shall mean the period of one hundred eighty (180) days immediately following the date of final prospectus for the Company IPO (or such lesser number of days as may be agreed to by the representatives of the underwriters of the Company IPO, whether under the terms of an applicable lock-up agreement or otherwise, it being understood that as used herein the term “Lock-Up Period” shall mean, with respect to any holder and any particular Shares, the actual number of days agreed to by the representatives of the underwriters with respect to such holder and such Shares).

1.8 The term “Notice and Questionnaire” shall mean a written notice delivered to the Company containing substantially the information called for by the Selling Securityholder Notice and Questionnaire attached as Annex A to this Agreement.

1.9 The term “Notice Stockholder” shall mean, on any date, any Stockholder that has delivered a Notice and Questionnaire to the Company on or prior to such date.

1.10 The term “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, or other entity and shall include any successor (by merger or otherwise) of such entity.

1.11 The term “Public Offering” shall mean a public offering of equity securities of the Company pursuant to an effective registration statement under the Securities Act (other than (i) a registration statement filed under Regulation A or on Form S-4 or any successor form, (ii) the Shelf Registration Statement, or (iii) a registration statement filed on Form S-8 or any successor form).

1.12 The term “Registrable Securities” shall mean the Shares (as hereinafter defined); provided, however, that as to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a registration statement registering such securities under the

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Securities Act has been declared effective and such securities have been sold or otherwise transferred by the holder thereof pursuant to such effective registration statement; or (ii) such securities are sold in accordance with Rule 144 (or any successor provision) promulgated under the Securities Act; or (iii) such securities are transferred under circumstances in which any legend borne by the certificates for such securities relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company. Notwithstanding anything to the contrary contained herein, Unvested Common Units (as such term is defined in the LLC Agreement) shall not be Registrable Securities until they have vested.

1.13 The term “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

1.14 The term “Shares” shall mean (i) all Class A Shares owned by the Stockholders as of the date hereof; and (ii) additional Class A Shares acquired by the Stockholders in any manner after the date hereof.

ARTICLE 2

REGISTRATION RIGHTS

2.1 Demand Registrations.

(a) Requests for Registration. At any time after the expiration of the Lock-Up Period, each Founder Entity shall be entitled to make a written request of the Company (a “Demand”) for registration under the Securities Act of all or part of the Registrable Securities for offer and sale pursuant to an underwritten offering (a “Demand Registration” and the Founder Entity making such Demand the “Demanding Holder”). Such Demand shall specify the aggregate number of Registrable Securities requested to be registered. Within ten (10) business days after receipt of a Demand, the Company shall give written notice of such Demand (an “Incidental Registration Notice”) to all other Stockholders and shall include in such registration all Registrable Securities with respect to which the Company has received a written request for inclusion therein within twenty (20) business days after the receipt by such Stockholder of the Company’s notice required by this paragraph; provided that (x) any Stockholder who seeks to exercise his, her or its rights under this Section 2.1(a) shall be required to provide the Company with an irrevocable election to exchange his, her or its Units for Class A Shares immediately prior to the closing of such offering; and provided further, that the Company shall not be required to file any registration statement covering Registrable Securities with an aggregate Fair Market Value less than $10 million.

(b) Each Stockholder wishing to sell Registrable Securities pursuant to a Demand Registration agrees to deliver a Notice and Questionnaire to the Company at least five (5) business days prior to the initial filing of the registration statement pursuant to a Demand Registration, and the Company shall provide that the Stockholder delivering such Notice and Questionnaire is named as a selling security holder in the Demand Registration and the related prospectus in such a manner as to permit such Stockholder to deliver such prospectus to purchasers of the Registrable Securities in accordance with applicable law. Notwithstanding anything contained herein to the contrary, the Company shall be under no obligation to name any Stockholder that is not a Notice Stockholder as a selling security holder in any registration

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statement under the Securities Act or related prospectus; provided, however, that any Stockholder that becomes a Notice Stockholder pursuant to the provisions of this Section 2.1(b) shall be named as a selling security holder in the Demand Registration in accordance with the requirements of this Section 2.1(b).

(c) Number and Timing of Demands. Each Founder Entity shall be entitled to no more than one (1) Demand Registration in any twelve (12) month period and shall not be permitted to exercise their Demand rights pursuant to this Section 2.1 until the expiration of the Lock-Up Period.

(d) Satisfaction of Obligations. A registration shall not be treated as a Demand Registration until (i) the applicable registration statement under the Securities Act has been filed with the Commission with respect to such Demand Registration, and (ii) all Registrable Securities included therein have been disposed of thereunder in accordance with the method of distribution set forth in such registration statement.

(e) Availability of Short Form Registrations. The Company shall use its reasonable best efforts to comply with the requirements for use of short form registration for the sale of Registrable Securities under the Securities Act.

(f) Restrictions on Demand Registrations. The Company shall not be obligated to effect any Demand Registration within one hundred eighty (180) days after the effective date of (A) a “firm commitment” underwritten registration in which all Stockholders were given “piggyback” rights pursuant to Section 2.2 hereof (provided that, with respect to such a registration in which such piggyback rights were exercised, each Founder Entity exercising such piggyback rights was permitted to include in such registration seventy-five percent (75%) of the Registrable Securities that such Founder Entity sought to include therein) or (B) any other Demand Registration. In addition, the Company shall be entitled to postpone (upon written notice to all Stockholders) for up to ninety (90) days the filing or the effectiveness of a registration statement in respect of a Demand (but no more than once in any period of twelve (12) consecutive months) if the Board determines in good faith and in its reasonable judgment that effecting the Demand Registration in respect of such Demand would (i) have a material adverse effect on any proposal or plan by the Company to engage in any debt or equity offering, material acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction or (ii) require disclosure of information not otherwise then required to be disclosed and that such disclosure would adversely affect any material business opportunity, transaction or negotiation then contemplated by the Company. In the event of a postponement by the Company of the filing or effectiveness of a registration statement in respect of a Demand, the Demanding Holders shall have the right to withdraw such Demand in accordance with Section 2.3 hereof.

(g) Participation in Demand Registrations. The Company shall not include any securities other than Registrable Securities in a Demand Registration, except with the written consent of the Demanding Holder. If, in connection with a Demand Registration, any managing underwriter(s) advises the Company and the Demanding Holder that, in its opinion, the inclusion of all the Registrable Securities and, if authorized pursuant to this Article II, other securities of the Company, in each case, sought to be registered in connection with such Demand Registration

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would adversely affect the marketability of the Registrable Securities sought to be sold pursuant thereto, then the Company shall include in the registration statement applicable to such Demand Registration only such securities as the Company and the Demanding Holder are advised by such underwriter can be sold without such an effect (the “Maximum Demand Number”), as follows and in the following order of priority:

(i) first, the number of Registrable Securities sought to be registered by the Demanding Holder and the other Founder Entity pro rata in proportion to the number of securities sought to be sold by the Demanding Holder and the other Founder Entity; and

(ii) second, if the number of Registrable Securities to be included under clause (i) above is less than the Maximum Demand Number, the number of securities sought to be included by each other seller, pro rata in proportion to the number of securities sought to be sold by all such other sellers, which in the aggregate, when added to the number of securities to be included pursuant to clause (i) above, equals the Maximum Demand Number.

(h) Selection of Underwriters. The Company shall select a nationally recognized underwriter or underwriters to manage and administer such offering, such underwriter or underwriters, as the case may be, to be subject to the approval of the Demanding Holder, which approval shall not be unreasonably conditioned, withheld or delayed.

(i) Other Registrations. If the Company has received a Demand and if the applicable registration statement in respect of such Demand has not been withdrawn or abandoned, the Company shall not file or cause to be effected any other registration of any of its equity securities or securities convertible or exchangeable into or exercisable for its equity securities under the Securities Act (other than a registration pursuant to a Shelf Registration Statement (as such term is defined in Section 2.4 below), a registration relating to the Company employee benefit plans, exchange offers by the Company or a merger or acquisition of a business or assets by the Company, including, without limitation, a registration on Form S-4 or S-8 or any successor form), whether on its own behalf or at the request of any holder or holders of such securities, until a period of at least ninety (90) days has elapsed from the effective date of any Demand Registration, unless a shorter period of time is approved by the Demanding Holder. Notwithstanding the foregoing, the Company shall be entitled to postpone any such Demand Registration and may file or cause to be effected such other registration in accordance with the terms of Section 2.1(f) hereof.

2.2 Piggyback Registrations.

(a) Right to Piggyback. Subject to the last sentence of this Section 2.2(a), and the other conditions set forth herein, at any time following completion of the Company IPO, whenever the Company proposes to conduct a Public Offering (other than pursuant to a Demand Registration, as to which Section 2.1 shall apply) (a “Piggyback Registration”), the Company shall give all Stockholders prompt written notice thereof (but not less than ten (10) business days prior to the filing by the Company with the Commission of any registration statement with respect thereto). Such notice (a “Piggyback Notice”) shall specify, at a minimum, the number of

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securities proposed to be registered, the proposed date of filing of such registration statement with the Commission, the proposed method of distribution and the proposed managing underwriter or underwriters (if any and if known). Upon the written request of a Stockholder given within ten (10) business days of such Stockholder’s receipt of the Piggyback Notice (which written request shall specify the number of Registrable Securities intended to be disposed of by such Stockholder and the intended method of distribution thereof), the Company shall include in such registration all Registrable Securities with respect to which the Company has received such written requests for inclusion; provided that (x) any Stockholder who seeks to exercise his rights under this Section 2.2(a) shall be required to provide the Company with an irrevocable election to exchange his, her or its Units for Class A Shares immediately prior to the closing of such offering.

(b) Each Stockholder wishing to sell Registrable Securities pursuant to a Piggyback Registration agrees to deliver a Notice and Questionnaire to the Company at least five (5) business days prior to the filing of the initial registration statement relating to the Piggyback Registration and the Company shall provide that the Stockholder delivering such Notice and Questionnaire is named as a selling security holder in the Piggyback Registration and the related prospectus in such a manner as to permit such Stockholder to deliver such prospectus to purchasers of the Registrable Securities in accordance with applicable law. Notwithstanding anything contained herein to the contrary, the Company shall be under no obligation to name any Stockholder that is not a Notice Stockholder as a selling security holder in any registration statement under the Securities Act or related prospectus; provided, however, that any Stockholder that becomes a Notice Stockholder pursuant to the provisions of this Section 2.2(b) shall be named as a selling security holder in the Piggyback Registration in accordance with the requirements of this Section 2.2(b).

(c) Priority on Piggyback Registrations. If, in connection with a Piggyback Registration, any managing underwriter advises the Company and the holders of the Registrable Securities sought to be included in such Piggyback Registration, that, in its opinion, the inclusion of all the securities sought to be included in such Piggyback Registration by the Company, any Persons who have sought to have shares registered thereunder pursuant to rights to demand (other than pursuant to “piggyback” or other incidental or participation registration rights) such registration (such demand rights being “Other Demand Rights” and such Persons being “Other Demanding Sellers”), any holders of Registrable Securities seeking to sell such securities in such Piggyback Registration (“Piggyback Sellers”) and any other proposed sellers, in each case, if any, would adversely affect the marketability of the securities sought to be sold pursuant thereto, then the Company shall include in the registration statement applicable to such Piggyback Registration only such securities as the Company, the Other Demanding Sellers, and the Piggyback Sellers are so advised by such underwriter can be sold without such an effect (the “Maximum Piggyback Number”), as follows and in the following order of priority:

(i) if the Piggyback Registration is an offering on behalf of the Company and not any Person exercising Other Demand Rights (whether or not other Persons seek to include securities therein pursuant to “piggyback” or other incidental or participatory registration rights) (a “Primary Offering”), then (A) first, such number of securities to be sold by the Company as the Company, in its reasonable judgment and acting in good faith, shall have determined, and (B) second, if the number of securities to

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be included under clause (A) above is less than the Maximum Piggyback Number, the number of Registrable Securities sought to be registered by each Piggyback Seller, pro rata in proportion to the number of Registrable Securities sought to be registered by all the Piggyback Sellers and all other proposed sellers, which in the aggregate, when added to the number of securities to be registered under clause (A) above, equals the Maximum Piggyback Number; and

(ii) if the Piggyback Registration is an offering other than pursuant to a Primary Offering, then (A) first, to each Other Demanding Seller, pro rata in proportion to the number of securities sought to be registered by all such Other Demanding Sellers and (B) second, if the number of securities to be included under clause (A) above is less than the Maximum Piggyback Number, the number of Registrable Securities sought to be registered by each Piggyback Seller, pro rata in proportion to the number of Registrable Securities sought to be registered by all the Piggyback Sellers and all other proposed sellers, which in the aggregate, when added to the number of securities to be registered under clause (A) above, equals the Maximum Piggyback Number.

(d) Withdrawal by the Company. If, at any time after giving written notice of its intention to register any of its securities as set forth in this Section 2.2 and prior to the time the registration statement filed in connection with such registration is declared effective, the Company shall determine for any reason not to register such securities, the Company shall give written notice of such determination to each Stockholder and thereupon shall be relieved of its obligation to register any Registrable Securities in connection with such particular withdrawn or abandoned registration (but not from its obligation to pay the Registration Expenses (as hereinafter defined) in connection therewith as provided herein). In the event that the Piggyback Sellers of such a registration hold $10 million of aggregate Fair Market Value of Registrable Securities as of such date then such holders may continue such registration as an underwritten Demand Registration.

2.3 Withdrawal Rights. Any Stockholder having notified or directed the Company to include any or all of its Registrable Securities in a registration statement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securities designated for registration thereby by giving written notice to such effect to the Company at least five (5) business days prior to the commencement of the road show for the offering. In the event of any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shall continue to be Registrable Securities hereunder. No such withdrawal shall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn; provided that in the case of a Demand Registration, if such withdrawal shall reduce the number of Registrable Securities sought to be included in such registration below $10 million of aggregate Fair Market Value as of such date, then the Company shall as promptly as practicable give each holder of Registrable Securities sought to be registered notice to such effect, referring to this Agreement and summarizing this Section 2.3, and within five (5) business days following the effectiveness of such notice, either the Company or the holders of a majority of the Registrable Securities sought to be registered may, by written notices made to each holder of Registrable Securities sought to be registered and the Company, respectively, elect that such registration statement not be filed or, if theretofore filed, be withdrawn. During such five (5) business day period, the

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Company shall not file such registration statement if not theretofore filed or, if such registration statement has been theretofore filed, the Company shall not seek, and shall use its best efforts to prevent, the effectiveness thereof. Any registration statement withdrawn or not filed (i) in accordance with an election by the Company, (ii) in accordance with an election by the Demanding Holder pursuant to Section 2.1(f) hereof, (iii) in accordance with an election by the Demanding Holder prior to the effectiveness of the applicable Demand Registration Statement or (iv) in accordance with an election by the Demanding Holder subsequent to the effectiveness of the applicable Demand Registration Statement, if any post-effective amendment or supplement to the applicable Demand Registration Statement contains adverse information regarding the Company shall not be counted as a Demand. Except as set forth in clause (iv) of the previous sentence, any Demand withdrawn in accordance with an election by the Demanding Holder subsequent to the effectiveness of the applicable Demand Registration Statement shall be counted as a Demand unless the Stockholders participating in such Demand Registration reimburse the Company for its reasonable out-of-pocket expenses (but not including any Internal Expenses, as hereinafter defined) related to the preparation and filing of such registration statement (in which event such registration statement shall not be counted as a Demand hereunder). Upon the written request of a majority of the Stockholders, the Company shall promptly prepare a definitive statement of such out-of-pocket expenses in connection with such registration statement in order to assist such holders with a determination in accordance with the immediately preceding sentence.

2.4 Mandatory Shelf Registration. The Company shall use its reasonable best efforts, at its sole expense, to file with the Commission prior to the expiration of the Lock Up Period, a shelf Registration Statement on Form S-1 or such other form under the Securities Act then available to the Company providing for (a) the exchange, from time to time, of all Units and Class B Shares held by any Stockholder for Class A Shares and (b) the resale, pursuant to Rule 415 under the Securities Act from time to time, of such Class A Shares received upon such exchange by such Stockholders (the “Shelf Registration Statement”). The Company will notify each such Stockholder, within five (5) business days after the date on which the Shelf Registration Statement is first filed with the Commission, of the filing. The Company will use its commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by the Commission as soon as reasonably practicable after the expiration of the Lock Up Period, subject to Section 2.6(d). The Company further agrees to prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective, subject to Section 2.6(d), until all Registrable Securities included in such registration statement have been sold thereunder in accordance with the method of distribution set forth therein and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition or Rule 144 under the Securities Act (or any successor rule). The filing of the Shelf Registration Statement will not affect the inclusion of any Registrable Securities in any other Registration Statement hereunder.

2.5 Holdback Agreements. Except as may be agreed to by the underwriters with respect to any Stockholder, each Stockholder agrees not to effect any public sale or distribution (including, without limitation, sales pursuant to Rule 144 of the Securities Act) of equity

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securities of the Company, or any securities convertible into or exchangeable or exercisable for such securities, during the ten (10) day period prior to the date on which the Company intends, or in the case of a Demand Registration, the Demanding Holder intends, to commence a Public Offering (as set forth in the notice thereof provided by the Company or the Demanding Holder, as applicable) through the ninety (90) day period immediately following the effective date of any Demand Registration or any Piggyback Registration (in each case, except as part of such registration), or, in each case, if later, the date of any underwriting agreement with respect thereto.

2.6 Registration Procedures.

(a) Whenever the Stockholders have requested that any Registrable Securities be registered pursuant to this Agreement (whether pursuant to Demand Registration or Piggyback Registration), the Company (subject to its right to withdraw such registration as contemplated by Section 2.2(d) hereof) shall use its best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of distribution thereof and, in connection therewith, the Company shall as expeditiously as possible, and, in any event, within sixty (60) days of receipt of such request:

(i) prepare and file with the Commission a registration statement with respect to such Registrable Securities on any form for which the Company then qualifies and is available for the sale of Registrable Securities to be registered thereunder in accordance with the intended method of distribution and use its reasonable best efforts to cause such registration statement to become effective within one hundred twenty (120) days of the date thereof;

(ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a continuous period of not less than one hundred eighty (180) days (or, if earlier, until all Registrable Securities included in such registration statement have been sold thereunder in accordance with the method of distribution set forth therein) and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof as set forth in such registration statement (including, without limitation, by incorporating in a prospectus supplement or post-effective amendment, at the request of a seller of Registrable Securities, the terms of the sale of such Registrable Securities);

(iii) before filing with the Commission any such registration statement or prospectus or any amendments or supplements thereto, the Company shall furnish to counsel selected by the Demanding Holders, counsel for the underwriter or sales or placement agent, if any, and any other counsel for holders of Registrable Securities, if any, in connection therewith, drafts of all such documents proposed to be filed and provide such counsel with a reasonable opportunity for review thereof and comment thereon, such review to be conducted and such comments to be delivered with reasonable promptness;

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(iv) promptly (i) notify each seller of Registrable Securities of each of (x) the filing and effectiveness of the registration statement and prospectus and any amendment or supplements thereto, (y) the receipt of any comments from the Commission or any state securities law authorities or any other governmental authorities with respect to any such registration statement or prospectus or any amendments or supplements thereto, and (z) any oral or written stop order with respect to such registration, any suspension of the registration or qualification of the sale of such Registrable Securities in any jurisdiction or any initiation or threat of any proceedings with respect to any of the foregoing and (ii) use its reasonable best efforts to obtain the withdrawal of any order suspending the registration or qualification (or the effectiveness thereof) or suspending or preventing the use of any related prospectus in any jurisdiction with respect thereto;

(v) furnish to each seller of Registrable Securities, the underwriters and the sales or placement agent, if any, and counsel for each of the foregoing, a conformed copy of such registration statement and each amendment and supplement thereto (in each case, including all exhibits thereto and documents incorporated by reference therein) and such additional number of copies of such registration statement, each amendment and supplement thereto (in such case without such exhibits and documents), the prospectus (including each preliminary prospectus) included in such registration statement and prospectus supplements and all exhibits thereto and documents incorporated by reference therein and such other documents as such seller, underwriter, agent or counsel may reasonably request in order to facilitate the disposition of the Registrable Securities owned by each such seller;

(vi) if requested by the managing underwriter or underwriters of any registration or by the Demanding Holders, subject to approval of counsel to the Company in its reasonable judgment, promptly incorporate in a prospectus, supplement or post-effective amendment to the registration statement such information concerning underwriters and the plan of distribution of the Registrable Securities as such managing underwriter or underwriters or such holders shall reasonably furnish to the Company in writing and request be included therein, including, without limitation, with respect to the number of Registrable Securities being sold by such holders to such underwriter or underwriters, the purchase price being paid therefor by such underwriter or underwriters and with respect to any other terms of the underwritten offering of the Registrable Securities to be sold in such offering; and make all required filings of such prospectus, supplement or post-effective amendment as soon as possible after being notified of the matters to be incorporated in such prospectus, supplement or post-effective amendment;

(vii) use its best efforts to register or qualify such Registrable Securities under such securities or “blue sky” laws of such jurisdictions as the holders of a majority of Registrable Securities sought to be registered reasonably request and do any and all other acts and things which may be reasonably necessary or advisable to enable the holders of a majority of Registrable Securities sought to be registered to consummate the disposition in such jurisdictions of the Registrable Securities owned by such holders and keep such registration or qualification in effect for so long as the registration statement remains effective under the Securities Act (provided that the Company shall not be

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required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph, (y) subject itself to taxation in any such jurisdiction where it would not otherwise be subject to taxation but for this paragraph or (z) consent to the general service of process in any jurisdiction where it would not otherwise be subject to general service of process but for this paragraph);

(viii) notify each seller of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon the discovery that, or of the happening of any event as a result of which, the registration statement covering such Registrable Securities, as then in effect, contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or any fact necessary to make the statements therein not misleading, and promptly prepare and furnish to each such seller a supplement or amendment to the prospectus contained in such registration statement (and prepare and file and cause to become effective a post-effective amendment to such registration statement) so that such registration statement shall not, and such prospectus as thereafter delivered to the purchasers of such Registrable Securities shall not, contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or any fact necessary to make the statements therein not misleading;

(ix) cause all such Registrable Securities to be listed on the New York Stock Exchange, Nasdaq Stock Market and/or any other national securities exchange and included in each established over-the-counter market on which or through which similar securities of the Company are listed or traded and, if not so listed or traded, to be listed on the NASD automated quotation system (“Nasdaq”) and, if listed on Nasdaq, use its reasonable efforts to secure designation of all such Registrable Securities covered by such registration statement as a “national market system security” within the meaning of Regulation NMS under the Exchange Act, or, failing that, to secure Nasdaq authorization for such Registrable Securities;

(x) make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant or other agent retained by any such seller or underwriter all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees, attorneys and independent accountants to supply all information reasonably requested by any such sellers, underwriters, attorneys, accountants or agents in connection with such registration statement. Information which the Company determines, in good faith, to be confidential shall not be disclosed by such persons unless (x) the disclosure of such information is necessary to avoid or correct a misstatement or omission in such registration statement or as otherwise required to be disclosed pursuant to the Securities Act and the rules promulgated thereunder, or (y) the release of such information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Each seller of Registrable Securities agrees, on its own behalf and on behalf of all its underwriters, accountants, attorneys and agents, that the information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Company unless and until such is made generally

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available to the public. Each seller of Registrable Securities further agrees, on its own behalf and on behalf of all its underwriters, accountants, attorneys and agents, that it will, upon learning that disclosure of such information is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of the information deemed confidential;

(xi) use its best efforts to comply with all applicable laws related to such registration statement and offering and sale of securities and all applicable rules and regulations of governmental authorities in connection therewith (including, without limitation, the Securities Act and the Exchange Act) and make generally available to its security holders as soon as practicable (but in any event not later than fifteen (15) months after the effectiveness of such registration statement) an earnings statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act;

(xii) permit any Stockholder, which Stockholder, in its sole and exclusive judgment, might be deemed to be an underwriter or controlling person of the Company, to participate in the preparation of such registration statement and to require the insertion therein of material furnished to the Company in writing, which in the reasonable judgment of such holder and such holder’s counsel should be included;

(xiii) in the case of an underwritten offering, use reasonable best efforts to furnish to each seller of Registrable Securities and each underwriter of such offering a signed counterpart of (x) an opinion of counsel for the Company and (y) a comfort letter signed by the independent public accountants who have certified the Company’s financial statements included or incorporated by reference in such registration statement, covering such matters with respect to such registration statement and, in the case of the accountants’ comfort letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ comfort letters delivered to the underwriters in underwritten public offerings of securities for the account of, or on behalf of, an issuer of common stock, such opinion and comfort letters to be dated the date such opinions and comfort letters are customarily dated in such transactions, and covering in the case of such legal opinion, such other legal matters and, in the case of such comfort letter, such other financial matters, as are customarily covered by such legal opinions and comfort letters;

(xiv) not permit any officer, manager, underwriter, broker or any other person acting on behalf of the Company to use any free writing prospectus (as defined in Rule 405 under the Securities Act) in connection with any registration statement covering Registrable Securities, without the prior written consent of a majority of Stockholders of Registrable Securities covered in any such registration statement and any underwriter; and

(xv) use reasonable best efforts to have officers of the Company participate in “road shows” for any Demand Registration and analyst or investor presentations and such other selling or informational activities as are customary for transactions similar to the planned disposition of securities requested by the Demanding Holder or the managing underwriter for such offerings.

(xvi) take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities.

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If a registration hereunder is a Demand Registration by a Founder Entity, all references to “a majority of Stockholders of Registrable Securities” shall be deemed to be “the Demanding Holder”.

(b) Underwriting. Without limiting any of the foregoing, in the event that any offering of Registrable Securities is to be made by or through an underwriter, the Company shall enter into an underwriting agreement with a managing underwriter or underwriters containing representations, warranties, indemnities and agreements customarily included (but not inconsistent with the agreements contained herein) by an issuer of common stock in underwriting agreements with respect to underwritten public offerings of common stock for the account of, or on behalf of, such issuers. In connection with the sale of Registrable Securities hereunder, any seller of such Registrable Securities may, at its option, require that any and all representations and warranties by, and indemnities and agreements of, the Company to or for the benefit of such underwriter or underwriters (or which would be made to or for the benefit of such an underwriter or underwriter if such sale of Registrable Securities were pursuant to a customary underwritten offering) be made to and for the benefit of such seller and that any or all of the conditions precedent to the obligations of such underwriter or underwriters (or which would be so for the benefit of such underwriter or underwriters under a customary underwriting agreement) be conditions precedent to the obligations of such seller in connection with the disposition of its securities pursuant to the terms hereof (it being agreed that in connection with any Demand Registration, without limiting any rights or remedies of the Stockholders, in the event any such condition precedent shall not be satisfied and, if not so satisfied, shall not be waived by the Demanding Holder, such Demand Registration shall not be counted as a permitted Demand hereunder). In connection with any offering of Registrable Securities registered pursuant to this Agreement, the Company shall (x) furnish to the underwriter, if any (or, if no underwriter, the sellers of such Registrable Securities), unlegended certificates representing ownership of the Registrable Securities being sold, in such denominations as requested and (y) instruct any transfer agent and registrar of the Registrable Securities to release any stop transfer order with respect thereto.

(c) Return of Prospectuses. Each seller of Registrable Securities hereunder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.6(a)(viii) hereof, such seller shall forthwith discontinue such seller’s disposition of Registrable Securities pursuant to the applicable registration statement and prospectus relating thereto until such seller’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.6(a)(viii) hereof and, if so directed by the Company, deliver to the Company all copies, other than permanent file copies, then in such seller’s possession of the prospectus current at the time of receipt of such notice relating to such Registrable Securities. In the event the Company shall give such notice, the one hundred eighty (180)-day period during which such registration statement must remain effective pursuant to this

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Agreement shall be extended by the number of days during the period from the date of giving of a notice regarding the happening of an event of the kind described in Section 2.6(a)(viii) hereof to the date when all such sellers shall receive such a supplemented or amended prospectus and such prospectus shall have been filed with the Commission.

(d) Suspensions. Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time, by providing written notice to the Stockholders, to require such Stockholders to suspend the use of the prospectus for sales of Registrable Securities under any registration statement for a reasonable period of time not to exceed 90 days in succession or 180 days in the aggregate in any 12-month period (a “Suspension Period”) if the Company shall determine that it is required to disclose in any such registration statement a financing, acquisition, corporate reorganization or other similar transaction or other material event or circumstance affecting the Company or its securities, and that the disclosure of such information at such time would be detrimental to the Company or the holders of its equity securities. Immediately upon receipt of such notice, the Stockholders shall suspend the use of the prospectus until the requisite changes to the prospectus have been made as required below. Any Suspension Period shall terminate at such time as the public disclosure of such information is made. After the expiration of any Suspension Period and without any further request from a Stockholder, the Company shall as promptly as reasonably practicable prepare a post-effective amendment or supplement to the applicable registration statement or the prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

2.7 Registration Expenses. All expenses incident to the Company’s performance of, or compliance with, its obligations under this Agreement, including, without limitation, all registration and filing fees, all fees and expenses of compliance with securities and “blue sky” laws (including, without limitation, the fees and expenses of counsel for underwriters or placement or sales agents, if any, in connection therewith), all printing and copying expenses, all messenger and delivery expenses, all fees and expenses of underwriters and sales and placement agents, if any, in connection therewith (excluding discounts and commissions), all fees and expenses of the Company’s independent certified public accountants and counsel (including, without limitation, with respect to comfort letters and opinions) (collectively, the “Registration Expenses”) shall be borne by the Company. The Company shall be responsible for the fees and expenses of one (1) firm of attorneys retained by all of the Stockholders in the aggregate in connection with the sale of Registrable Securities. Notwithstanding the foregoing, the Company shall not be responsible for the fees and expenses of any additional counsel, or any of the accountants, agents or experts retained by the Stockholders in connection with the sale of Registrable Securities. The Company will pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties, the expense of any annual audit and the expense of any liability insurance) (collectively, “Internal Expenses”) and, except as otherwise provided in this Section 2.7, the expenses and fees for listing the securities to be registered on each securities exchange and included in each established over-the-counter market on which similar securities issued by the Company are then listed or traded or for listing on Nasdaq.

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2.8 Indemnification. In the event of any registration of any Registrable Securities under the Securities Act pursuant to this Agreement (other than an underwritten offering, where the provisions of the underwriting agreement shall apply):

(a) By the Company. The Company agrees to indemnify, to the fullest extent permitted by law, each holder of Registrable Securities being sold, its officers, directors, managers, partners, stockholders, members, employees and agents and each Person who controls (within the meaning of the Securities Act) such holder or such another indemnified Person against all losses, claims, damages, liabilities and expenses (collectively, the “Losses”) caused by, resulting from or relating to any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or a fact necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished to the Company in writing by or on behalf of such holder expressly for use therein or by such holder’s failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Company has furnished such holder with a sufficient number of copies of the same as required by Article II hereof. In connection with an underwritten offering and without limiting any of the Company’s other obligations under this Agreement, the Company shall indemnify such underwriters, their officers, directors, employees and agents and each Person who controls (within the meaning of the Securities Act) such underwriters or such other indemnified Person to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities being sold.

(b) By Stockholders. In connection with any registration statement in which a holder of Registrable Securities is participating, each such holder will furnish, or cause to be furnished, to the Company in writing information regarding such holder’s ownership of Registrable Securities and its intended method of distribution thereof and, to the extent permitted by law, shall indemnify the Company, its directors, officers, employees and agents and each Person who controls (within the meaning of the Securities Act) the Company or such other indemnified Person against all Losses caused by, resulting from or relating to any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is caused by and contained in such information so furnished in writing by or on behalf of such holder and such information was actually used by the Company in a final prospectus or a post-effective amendment; provided, however, that each holder’s obligation to indemnify the Company hereunder shall be limited to an amount equal to the net amount received by each holder from the sale of Registrable Securities pursuant to such registration statement.

(c) Notice. Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect to which its seeks indemnification; provided, however, the failure to give such notice shall not release the indemnifying party from its obligation, except to the extent that the indemnifying party has been materially prejudiced by such failure to provide such notice.

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(d) Defense of Actions. In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof the indemnifying party will not (so long as it shall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnified party hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, supervision and monitoring (unless such indemnified party reasonably objects to such assumption on the grounds that there may be defenses available to it which are different from or in addition to the defenses available to such indemnifying party, in which event the indemnified party shall be reimbursed by the indemnifying party for the expenses incurred in connection with retaining separate legal counsel). An indemnifying party shall not be liable for any settlement of an action or claim effected without its consent. The indemnifying party shall lose its right to defend, contest, litigate and settle a matter if it shall fail diligently to contest such matter (except to the extent settled in accordance with the next following sentence). No matter shall be settled by an indemnifying party without the consent of the indemnified party (which consent shall not be unreasonably withheld).

(e) Survival. The indemnification and contribution obligations of the Company and the Stockholders selling Registrable Securities under this Section 2.8 shall survive until the expiration of all applicable statutes of limitation or extensions of such statutes. The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified Person and will survive the transfer of the Registrable Securities and the termination of this Agreement.

(f) Contribution. If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, any Person who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses with respect to which such Person would be entitled to such indemnification but for such reason or reasons. In determining the amount of contribution to which the respective Persons are entitled, there shall be considered the Persons’ relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and other equitable considerations appropriate under the circumstances. It is hereby agreed that it would not necessarily be equitable if the amount of such contribution were determined by pro rata or per capita allocation. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, no Stockholder shall be required to make a contribution in excess of the net amount received by such holder from the sale of Registrable Securities

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ARTICLE 3

MISCELLANEOUS

3.1 Term. The rights of Stockholders with respect to the registration rights granted pursuant to this Agreement shall remain in effect, subject to the terms hereof, so long as there are Registrable Securities or securities which are convertible or exchangeable for Registrable Securities issued and outstanding.

3.2 Specific Performance. Each of the Company and the Stockholders acknowledges and agrees that, in the event of any breach of this Agreement, the non-breaching party or parties would be irreparably harmed and could not be made whole by monetary damages. The Company and the Stockholders hereby agree that, in addition to any other remedy to which any party may be entitled at law or in equity, they shall be entitled to seek to compel specific performance of this Agreement in any action instituted in any court of the United States or any state thereof having subject matter jurisdiction for such action.

3.3 Headings. Captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope or intent of this Agreement or any provision hereof.

3.4 Entire Agreement. This Agreement and the LLC Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and thereof. They supersede any prior agreement or understanding among the parties, and they may not be modified or amended in any manner other than by an instrument in writing signed by the parties hereto or thereto, or their respective successors or assigns, or otherwise as provided herein or therein.

3.5 Expenses. Except as set forth in Section 2.7 hereof, each party agrees that such party shall bear its own expenses incurred in connection with this Agreement.

3.6 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given on the date of delivery, if personally delivered, or if mailed (registered or certified mail, postage prepaid, return receipt requested), on the third (3^rd) business day following mailing as follows:

If to the Company, to:	Enovation Controls, Inc. 5311 South 122nd East Avenue Tulsa, OK 74146 Attn: CEO Telephone: (918) 317-4100 Fax: (918) 317-4266
with copies to:	Norton Rose Fulbright 300 Convent, Suite 2100 Attn:   Daryl L. Lansdale, Jr. Telephone: (210) 270-9367 Fax: (210) 270-7205

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If to the Stockholders, to the addresses of the Stockholders as set forth in the books and records of the Company.

3.7 Applicable Law. This Agreement shall be governed by and interpreted and enforced in accordance with the substantive laws of the State of Delaware, without giving effect to the conflicts of law principles thereof.

3.8 Jurisdiction; Service of Process. Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of the Court of Chancery of the State of Delaware or, if the Court of Chancery lacks subject matter jurisdiction, any other Delaware state court or any federal court located in the State of Delaware in the event any dispute arises out of this Agreement or any transaction or other agreement contemplated hereby, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to this Agreement or any transaction or other agreement contemplated hereby in any court other than the Court of Chancery of the State of Delaware, or if the Court of Chancery lacks subject matter jurisdiction, any other Delaware state court or any federal court sitting in the state of Delaware and (d) waives any right to trial by jury with respect to any action related to or arising out of this Agreement or any transaction or other agreement contemplated hereby.

3.9 Severability. The invalidity, illegality, or unenforceability of one or more of the provisions of this Agreement in any jurisdiction shall not affect the validity, legality, or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality, or enforceability of this Agreement, including any such provision, in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

3.10 Successors; Assigns; and Third-Party Beneficiaries. The provisions of this Agreement shall be binding upon the parties hereto and their respective heirs, successors, and permitted assigns. Any of the Stockholders’ “Permitted Transferees” under the terms of the LLC Agreement will be permitted to enter into this Agreement by means of a joinder agreement and to benefit from the registration rights applicable to Registrable Securities held by such transferring Stockholder. Except as expressly provided herein, neither this Agreement nor the rights or obligations of any Stockholder hereunder may be assigned. Any such attempted assignment in contravention of this Agreement shall be void and of no effect.

3.11 Amendments. This Agreement may not be amended, modified, or supplemented unless such modification is in writing and signed by the parties hereto. Notwithstanding the foregoing, each party agrees that if any Person who holds Class A Shares (or securities that are exchangeable or convertible into Class A Shares) other than a Stockholder, enters into an agreement with the Company on terms that are more favorable to such holder than those contained in this Agreement with respect to the Stockholders, then this Agreement shall be immediately amended to incorporate such favorable terms in favor of the Stockholders.

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3.12 Waiver. Any waiver (express or implied) of any default or breach of this Agreement shall not constitute a waiver of any other or subsequent default or breach.

3.13 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same Agreement.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned hereby agree to be bound by the terms and provisions of this Registration Rights Agreement as of the date first above written.

ENOVATION CONTROLS, INC.
By:
Name:	Patrick W. Cavanagh
Title:	Chief Executive Officer
MURPHY GROUP, INC.
By:
Name:	Frank Murphy
Title:
ECONTROLS GROUP, INC.
By:
Name:	Kennon Guglielmo
Title:

[Signature Page to Registration Rights Agreement]

STOCKHOLDERS

[Signature Page to Registration Rights Agreement]

ANNEX A

SELLING STOCKHOLDER QUESTIONNAIRE

Enovation Controls, Inc.

5311 South 122nd East Avenue

Tulsa, Oklahoma 74146

Ladies and Gentlemen:

The undersigned acknowledges that it, he or she is a beneficial owner of securities of Enovation Controls, Inc. (the “Company”). The undersigned understands that it, he or she will be named as a selling stockholder in the prospectus that forms a part of the Company’s Registration Statement on Form S-     to be filed with the Securities and Exchange Commission (the “Registration Statement”). The Registration Statement will register for resale in a public offering under the Securities Act of 1933, as amended (the “Securities Act”), the shares of Class A common stock, par value $0.00001 per share (“Class A Common Stock”), of the Company that the undersigned beneficially owns that are disclosed in response to Question 5(b) of this Questionnaire (the “Registrable Securities”), [as well as shares of Class A Common Stock to be newly issued by the Company]. The Company will use the information that the undersigned provides in this Questionnaire to ensure the accuracy of the Registration Statement and the prospectus.

Certain legal consequences arise from being named as a selling securityholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of securities to be registered under the Registration Statement are advised to consult securities counsel regarding the consequences of being named or not being named as a selling securityholder in the Registration Statement and the related prospectus.

The undersigned acknowledges that by completing, dating, executing and returning this Questionnaire to the Company, it, he or she is giving written notice to the Company of its, his or her desire to have the securities disclosed in response to Question 5(b) of this Questionnaire included in the Registration Statement.

Please answer every question.

If the answer to any question is “none” or “not applicable,” please so state.

1. Name. Type or print the full legal name of the selling securityholder.

2. Contact Information. Provide the address, telephone number, fax number and email address of the selling securityholder.

ANNEX A-1

Address:

Phone:

Fax:

Email:

3. Relationship with the Company. Describe the nature of any position, office or other material relationship the selling securityholder has had with the Company during the past three years.

4. Organizational Structure. Please indicate or (if applicable) describe how the selling securityholder is organized.

Is the selling securityholder a natural person (i.e., an individual rather than a corporation or other legal entity)?	Yes	No
(If so, please mark the box and skip to Question 5.)
Is the selling securityholder a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)?	Yes	No
(If so, please mark the box and skip to Question 5.)

ANNEX A-2

Is the selling securityholder a majority-owned subsidiary of a reporting company under the Exchange Act?	Yes	No
(If so, please mark the box and skip to Question 5.)
Is the selling securityholder a registered investment company under the Investment Company Act of 1940?	Yes	No
(If so, please mark the box and skip to Question 5.)

If the answer to all of the foregoing questions is “no,” please describe: (i) the exact legal description of the selling securityholder (e.g., corporation, partnership, limited liability company, etc.); (ii) whether the legal entity so described is managed by another entity and the exact legal description of such entity (repeat this step until the last entity described is managed by a person or persons, each of whom is described in any one of (a) through (d) above); (iii) the names of each person or persons having voting and investment control over the Company’s securities that the entity owns (e.g., director(s), general partner(s), managing member(s), etc.).

(a) Legal Description of Entity:

(b) Name of Entit(ies)/(y) Managing Such Entity (if any):

(c) Name of Entit(ies)/(y) Managing such Entit(ies)/(y) (if any):

(d) Name(s) of Natural Person(s) Having Voting or Investment Control Over the Shares Held by such Entit(ies)/(y):

5. Ownership of the Company’s Securities. This question covers beneficial ownership of the Company’s securities. Please consult Appendix A to this Questionnaire for information as to the

ANNEX A-3

meaning of “beneficial ownership.” State (a) the number of shares of the Company’s Class A Common Stock or Class B common stock (including any shares issuable upon exercise of warrants or options, or upon vesting of restricted stock units) that the selling securityholder beneficially owned as of the date this Questionnaire is signed and (b) the number of shares of the Company’s Class A Common Stock that the selling securityholder wishes to have registered for resale in public offering under the Registration Statement:

(a) Number of shares of Class A Common Stock and other equity securities owned:

(b) Number of shares of Class A Common Stock owned to be registered for resale in the Registration Statement:

6. Acquisition of Shares. If the selling securityholder did not acquire the securities to be sold directly from the Company (for example, through a trade in the open market or in a private sale by a third party) please describe below the manner in which the securities were acquired including, but not limited to, the date, the name and address of the seller(s), the purchase price and pursuant to which documents (the “Acquisition Documents”) and please forward such documents as provided below.

7. Broker-Dealer Status.

(a)
Is the selling securityholder a broker-dealer?	Yes	No
(b)
If the answer to Section 7(a) is “yes,” did the selling securityholder receive the Registrable Securities as compensation for investment banking services to the Company?	Yes	No
Note: If the answer to 7(b) is “no,” SEC guidance has indicated that the selling securityholder should be identified as an underwriter in the Registration Statement.

ANNEX A-4

(c)
Is the selling securityholder an affiliate of a broker-dealer?	Yes	No
(d)
If the selling securityholder is an affiliate of a broker-dealer, does the selling securityholder certify that it purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, the selling securityholder had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?	Yes	No
Note: If the answer to 7(d) is “no,” SEC guidance has indicated that the selling securityholder should be identified as an underwriter in the Registration Statement.

8. Legal Proceedings with the Company. Is the Company a party to any pending legal proceeding in which the selling securityholder is named as an adverse party?

      Yes       No

State any exceptions here:

ANNEX A-5

9. Reliance on Responses. The undersigned acknowledges and agrees that the Company and its legal counsel shall be entitled to rely on its responses in this Questionnaire in all matters pertaining to the Registration Statement and the sale of any Registrable Securities in the public offering pursuant to the Registration Statement.

The undersigned hereby acknowledges and is advised of the SEC’s Compliance and Disclosure Interpretation 239.10 regarding short selling:

An Issuer filed a Form S-3 registration statement for a secondary offering of common stock which is not yet effective. One of the selling shareholders wanted to do a short sale of common stock “against the box” and cover the short sale with registered shares after the effective date. The issuer was advised that the short sale could not be made before the registration statement become effective, because the shares underlying the short sale are deemed to be sold at the time such sale is made. There would, therefore, be a violation of Section 5 if the shares were effectively sold prior to the effective date.

By returning this Questionnaire, the undersigned will be deemed to be aware of the foregoing interpretation.

If the Company is required to file a new or additional registration statement to register Registrable Securities beneficially owned by the selling securityholder, the undersigned hereby agrees to complete and return to the Company, upon the request of the Company, a new Questionnaire (in a form substantially similar to this Questionnaire).

If the selling securityholder transfers all or any portion of its Registrable Securities after the date on which the information in this Questionnaire is provided to the Company, the undersigned hereby agrees to notify the transferee(s) at the time of transfer of its rights and obligations hereunder.

By signing below, the undersigned represents that the information provided herein is accurate and complete. The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective.

By signing below, the undersigned consents to the disclosure of the information contained herein and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.

[SIGNATURE PAGE FOLLOWS]

ANNEX A-6

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Selling Stockholder Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Dated:	Beneficial Owner:
	By:
	Name:
	Title:

AS SOON AS POSSIBLE, PLEASE E-MAIL A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

Enovation Controls, Inc.

5311 South 122nd East Avenue

Tulsa, Oklahoma 74146

Attn: Dennis Bunday

E-mail: dbunday@enovationcontrols.com

ANNEX A-7

APPENDIX A

DEFINITION OF “BENEFICIAL OWNERSHIP”

1. A “Beneficial Owner” of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares:

(a) Voting power which includes the power to vote, or to direct the voting of, such security; and/or

(b) Investment power which includes the power to dispose, or direct the disposition of, such security.

Please note that either voting power or investment power, or both, is sufficient for you to be considered the beneficial owner of shares.

2. Any person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting such person of beneficial ownership of a security or preventing the vesting of such beneficial ownership as part of a plan or scheme to evade the reporting requirements of the federal securities acts shall be deemed to be the beneficial owner of such security.

3. Notwithstanding the provisions of paragraph (1), a person is deemed to be the “beneficial owner” of a security if that person has the right to acquire beneficial ownership of such security within 60 days, including but not limited to any right to acquire: (a) through the exercise of any option, warrant or right; (b) through the conversion of a security; (c) pursuant to the power to revoke a trust, discretionary account or similar arrangement; or (d) pursuant to the automatic termination of a trust, discretionary account or similar arrangement; provided, however, any person who acquires a security or power specified in (a), (b) or (c) above, with the purpose or effect of changing or influencing the control of the issuer, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition shall be deemed to be the beneficial owner of the securities which may be acquired through the exercise or conversion of such security or power.

ANNEX A-8

EX-4.3

Exhibit 4.3

STOCKHOLDERS AGREEMENT

of

ENOVATION CONTROLS, INC.

Dated as of             , 2014

TABLE OF CONTENTS

		PAGE
ARTICLE 1	DEFINITIONS		1
1.1	Certain Definitions		1
1.2	Terms Generally		4
ARTICLE 2	GOVERNANCE AND MANAGEMENT OF THE COMPANY		5
2.1	Board of Directors		5
2.2	Committees of the Board		6
2.3	Fees and Expenses		6
2.4	Approvals		6
2.5	Certain Actions		7
ARTICLE 3	TRANSFERS/CERTAIN COVENANTS		7
3.1	Transfers of Shares		7
3.2	Tag-Along Rights		8
3.3	No Circumvention of Transfer Restrictions		10
3.4	Legend		10
ARTICLE 4	MISCELLANEOUS		11
4.1	Termination		11
4.2	Effective Time		11
4.3	Agreement Expenses		11
4.4	Conflicts		11
4.5	Further Assurances		12
4.6	No Founder Entity Duties		12
4.7	Amendment; Waivers, etc.		12
4.8	Assignment		12
4.9	Binding Effect		12
4.10	No Third Party Beneficiaries		12
4.11	Notices		13
4.12	Severability		13
4.13	Headings		14
4.14	Entire Agreement		14
4.15	Governing Law		14
4.16	Consent to Jurisdiction		14
4.17	Waiver of Jury Trial		14
4.18	Enforcement		14
4.19	Counterparts; Facsimile Signatures		15

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STOCKHOLDERS AGREEMENT

STOCKHOLDERS AGREEMENT (this “Agreement”), dated as of             , 2014, among Enovation Controls, Inc., a Delaware corporation (the “Company”), and each Founder Entity (as defined below) listed on the signature pages hereto, and any other Person that may become a party to this Agreement after the date and pursuant to the terms hereof.

WHEREAS, concurrently with the effectiveness of this Agreement, the Company has consummated an initial Public Offering of its Class A common stock (the “IPO”); and

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Certain Definitions.

“Act” has the meaning set forth in Section 3.5(a)(i).

“Affiliate,” with respect to (a) a Founder Entity, means (i) any Person that, directly or indirectly, through one or more intermediaries, is in control of, is controlled by, or is under common control with, such Founder Entity or (ii) any Person who is a general partner, manager, director or officer (A) of such Founder Entity or (B) of any Person described in clause (i) above, (b) the Company, means (1) any Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, the Company or (2) any Person who is a general partner, manager, director or officer of the Company. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) of a Person shall mean the power, directly or indirectly, (y) to vote fifty percent (50%) or more of the securities having ordinary voting power for the election of directors of such Person whether by ownership of securities, contract, proxy or otherwise, or (z) to direct or cause the direction of the management and policies of such Person whether by ownership of securities, contract, proxy or otherwise.

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

“Applicable Law” means all applicable provisions of constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances, codes or orders of any Regulatory Entity, any consents or approvals of any Regulatory Entity and any orders, decisions, injunctions, judgments, awards, decrees of or agreements with any Regulatory Entity.

“Board” has the meaning set forth in Section 2.1(a)(i).

“Brokers’ Transaction” has the meaning set forth in Section 3.1(b).

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in The City of New York.

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“Class A Shares” means the Class A common stock, $0.00001 par value per share, of the Company, and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation, exchange or other similar reorganization.

“Class B Shares” means the Class B common stock, $0.00001 par value per share, of the Company, and any securities issued in respect thereof, or in substitution therefor, in connection with any stock split, dividend or combination, or any reclassification, recapitalization, merger, consolidation, exchange or other similar reorganization.

“Code” has the meaning set forth in Section 3.6.

“Committee” has the meaning set forth in Section 2.2.

“Common Stock” means collectively the Class A Shares and the Class B Shares.

“Common Units” means the limited liability company interests of the LLC that are denominated as “Common Units” pursuant to the LLC Agreement.

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

“Control Securities” means, at any time, shares of any class of securities of the Company entitled to vote generally on matters submitted to the stockholders of the Company for a vote.

“EControls Group” means EControls Group, Inc., a Texas corporation, together with any of its Permitted Transferees that as of any applicable time of determination owns Shares.

“EControls Group Nominee” has the meaning set forth in Section 2.1(a)(i)(A).

“Effective Time” has the meaning set forth in Section 4.2.

“Equity Securities” means any and all shares of Common Stock of the Company, securities of the Company convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder.

“Family Group” means for any individual, such individual’s current or former spouse, their respective parents, descendants of such parents (whether natural or adopted) and the spouses of such descendants, and any trust, limited partnership, corporation or limited liability company established solely for the benefit of such individual or such individual’s current or former spouse, their respective parents, descendants of such parents (whether natural or adopted) or the spouses of such descendants.

“Founder Entities” means EControls Group and Murphy Group.

“Founder Entity Nominees” has the meaning set forth in Section 2.1(a)(i)(B).

“Group” has the meaning assigned to such term in section 13(d)(3) of the Exchange Act.

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“Hedging Transaction” has the meaning set forth in Section 3.1.

“Immediate Family” means, with respect to any natural person, each of such person’s lineal descendants and ancestors, spouse, brothers, and sisters, including adoptive relationships, or any trust or entity formed for estate planning purposes or a private foundation for the benefit of the foregoing Persons.

“Independent Director” means an “independent director” as such term is defined from time to time in the corporate governance rules for NYSE-listed companies.

“IPO” has the meaning set forth in the recitals.

“Joint Nominee” has the meaning set forth in Section 2.1(a)(i)(C).

“LLC” means Enovation Controls, LLC, an Oklahoma limited liability company.

“LLC Agreement” means the Second Amended and Restated Operating Agreement of Enovation Controls, LLC, dated as of             , 2014.

“Murphy Group” means Murphy Group, Inc., an Oklahoma corporation, together with any of its Permitted Transferees that as of any applicable time of determination owns Shares.

“Murphy Group Nominees” has the meaning set forth in Section 2.1(a)(i)(B).

“Necessary Action” means, with respect to a specified result, (a) voting, providing written consent or a proxy, in each case, with respect to Control Securities, (b) calling and attending meetings in person or by proxy for purposes of obtaining a quorum and/or (c) not taking any actions to frustrate the intent of this Agreement.

“Original Agreement” has the meaning set forth in the recitals.

“Permitted Transferee” has the meaning set forth in Section 3.1(a).

“Person” means an individual, corporation, partnership, limited liability company, limited liability partnership, syndicate, person, trust, association, organization or other entity, including any governmental authority, and including any successor, by merger or otherwise, of any of the foregoing.

“Prospective Purchaser” has the meaning set forth in Section 3.2(a).

“Public Offering” means an offering of the Class A Shares pursuant to a registration statement filed in accordance with the Securities Act.

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of             , 2014, among the Company, EControls Group, Murphy Group and the other stockholders of the Company named on the signature pages thereto.

“Regulations” has the meaning set forth in Section 3.5(a)(i).

“Regulatory Entity” means any federal, state, local or foreign court, legislative, executive or regulatory authority or agency, including (without limitation) any exchange upon which Equity Securities of the Company are listed.

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“Restricted Securities” has the meaning set forth in Section 3.1(a).

“Rule 144” means Rule 144 under the Securities Act (or any successor rule).

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder.

“Shares” means issued and outstanding shares of Common Stock (as adjusted for stock splits, stock dividends, reclassifications, recapitalizations and similar transactions).

“Subsidiary” means each Person in which a Person owns or controls, directly or indirectly, capital stock or other equity interests representing more than 50% of the outstanding capital stock or other equity interests.

“Tag-Along Notice” has the meaning set forth in Section 3.2(a).

“Tag-Along Notice Period” has the meaning set forth in Section 3.2(c).

“Tag-Along Offeree” has the meaning set forth in Section 3.2(a).

“Tagging Persons” has the meaning set forth in Section 3.2(c).

“Tag-Along Response Notice” has the meaning set forth in Section 3.2(c).

“Tag-Along Sale” has the meaning set forth in Section 3.2(a).

“Tag-Along Securities” has the meaning set forth in Section 3.2(a).

“Tag-Along Selling Stockholder” has the meaning set forth in Section 3.2(a).

“Transfer” means, directly or indirectly, to sell, transfer, assign, exchange, pledge, encumber, hypothecate, grant a participation or security interest in, or otherwise dispose of, either with or without consideration, voluntarily or involuntarily, by operation of law or otherwise, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, exchange, pledge, encumbrance, hypothecation, grant or other disposition of, any Equity Securities owned by a Person or any interest (including but not limited to a beneficial interest) in any Equity Securities owned by a Person. The terms “Transfer,” “Transferred” and other forms of the word “Transfer” shall have the correlative meanings.

“Transferee” means any Person to whom any Founder Entity or any Transferee thereof Transfers Equity Securities of the Company in accordance with the terms hereof.

“Transfer Restriction Period” has the meaning set forth in Section 3.1(a).

1.2 Terms Generally. The words “hereby,” “herein,” “hereof,” “hereunder” and words of similar import refer to this Agreement as a whole and not merely to the specific section, paragraph or clause in which such word appears. All references herein to the preamble, recitals,

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Articles and Sections shall be deemed references to the preamble, recitals, Articles and Sections of this Agreement unless the context shall otherwise require. The words “include,” “includes” and “including” shall mean “including without limitation.” The definitions given for terms in this Article 1 and elsewhere in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. References herein to any agreement or letter shall be deemed references to such agreement or letter as it may be amended, restated or otherwise revised from time to time.

ARTICLE 2

GOVERNANCE AND MANAGEMENT OF THE COMPANY

2.1 Board of Directors.

(a) Board Nominees.

(i) Number of Directors. Subject to Section 2.1(a)(ii) and Section 2.1(a)(iii) and any rights of the holders of shares of any class or series of preferred stock of the Company to elect additional members to the board of directors of the Company (the “Board”), the Founder Entities and the Company shall take all Necessary Action to cause the Board to be comprised of eight directors (or such other number, not less than five, as the Board may agree), which shall include:

(A) two persons designated by EControls Group (the “EControls Group Nominees”), who shall initially be Kennon Guglielmo and                     ;

(B) two persons designated by Murphy Group (the “Murphy Group Nominees,” and collectively with the EControls Group Nominees, the “Founder Entity Nominees”), who shall initially be Frank W. Murphy III and                     ; and

(C) one person designated jointly by the Econtrols Group and the Murphy Group (the “Joint Nominee”), who shall initially be                     .

Notwithstanding the foregoing, (i) if a Founder Entity ceases to beneficially own at least 10% of the Shares, it shall only have the right to nominate to the Board one designee as well as the Joint Nominee pursuant to clause (C) above and (ii) if a Founder Entity ceases to beneficially own at least at least 5% of the Shares, it shall not be entitled to nominate to the Board any designees, and in such event the Founder Entities shall no longer have the right to nominate the Joint Nominee.

(ii) Compliance with Law. If the membership of the Board (or Committees) as designated in accordance with Section 2.1(a)(i) would not comply with the requirements of Applicable Law, the Company and the Founder Entities will take all Necessary Action to cause the size of the Board to increase to the extent necessary to allow the Company to comply with Applicable Law with respect to the composition of the Board (and Committees), and the directors shall elect Independent Directors to fill each of the vacancies created by such increase.

(iii) Election of Directors. In advance of each meeting of its stockholders at which directors are to be elected, the Company shall include any Founder Entity

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Nominees and Joint Nominee designated for election or reelection at such meeting in its slate of nominees in the proxy materials it distributes to its stockholders, and shall recommend that the Company’s stockholders vote in favor of such Founder Entity Nominees and Joint Nominee.

(b) Removal and Replacement of Directors. If any Founder Entity provides notice to any other Founder Entity that it desires to remove one or more of its Founder Entity Nominees or the Joint Nominee from the Board, such Founder Entity receiving notice shall take all Necessary Action requested to effect such removal. No Founder Entity Nominee may be removed from the Board without the consent of the Founder Entity that designated such Founder Entity Nominee unless such Founder Entity Nominee (i) is convicted (including any plea of guilty or nolo contendere) of a misdemeanor involving moral turpitude or a felony, (ii) materially violates fiduciary duties owed to the Company, as determined by the Board or (iii) commits an act that constitutes intentional misconduct, bad faith or an intentional violation of law in respect of his position as a director. If a vacancy is created on the Board or a Committee as a result of the death, disability, retirement, resignation or removal of any Founder Entity Nominee, except pursuant to the last sentence Section 2.1(a)(i) , then the Founder Entity that designated such Founder Entity Nominee shall have the right to designate such person’s replacement, who shall serve in the same class of directors. If a vacancy is created on the Board or a Committee as a result of the death, disability, retirement, resignation or removal of the Joint Nominee, except pursuant to the last sentence Section 2.1(a)(i), the Founder Entities shall jointly have the right to designate such person’s replacement, who shall serve in the same class of directors.

2.2 Committees of the Board. The Board may establish any committees of the Board as the Board shall approve (each, a “Committee”), with such authority as the Board shall so determine from time to time. For so long as a Founder Entity is entitled under this Article 2 to designate any Founder Entity Nominees, such Founder Entity shall have the right to nominate one director to serve on each of the Compensation Committee and the Nominating and Corporate Governance Committee or any other committee with comparable responsibilities to the aforementioned committees.

2.3 Fees and Expenses.

(a) Director Fees. No Founder Entity Nominee who is also an employee of the Company or any Company Subsidiary shall be paid any fee for serving as a director or member of any Committee.

(b) Expenses. The Company shall cause each non-employee Founder Entity Nominee and the Joint Nominee serving on the Board, any Committees or any Company Subsidiary board to be reimbursed for all reasonable out-of-pocket costs and expenses incurred by him or her in connection with such service, including reasonable travel, lodging and meal expenses.

(c) Indemnification. The Company shall enter into an agreement, in substantially the form filed as an exhibit to the Registration Statement relating to the Company’s IPO, to indemnify each Founder Entity Nominee and the Joint Nominee for liabilities in respect of his or her service as a director and, if applicable, officer.

2.4 Approvals. For so long as the Founder Entities collectively own not less than 25% of the Shares as of any applicable time of determination, then, for so long as the (i) EControls

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Group owns not less than 5% of the Shares as of any applicable time of determination, without the prior written consent of EControls Group and (ii) Murphy Group owns not less than 5% of the Shares as of any applicable time of determination, without the prior written consent of the Murphy Group, the Company shall not, and each Founder Entity shall take all Necessary Action to cause the Company not to, take any of the following actions:

(a) any merger, recapitalization, issuance of Control Securities or other adjustment in voting rights, in one or any series of related transactions, if following such event, the Founder Entities would not together have sufficient voting power or otherwise be entitled to elect a majority of the Board;

(b) any sale of all or substantially all the assets of the LLC or the Company, in each case in one or any series of related transactions;

(c) except in accordance with employee benefit programs approved by the Board and the issuance of Class A Shares upon an exchange of Common Units and Class B Shares in accordance with the LLC Agreement, any issuance by the Company or any Subsidiary of the Company of debt securities or Equity Securities;

(d) create any new class or series of shares of equity securities having rights, preferences or privileges senior to or on a parity with the Common Stock; or

(e) amend the certificate of incorporation, bylaws or equivalent organization documents of the Company or any Subsidiary of the Company in a manner that could reasonably be expected to adversely affect the rights of EControls Group or Murphy Group.

2.5 Certain Actions. Each Founder Entity shall take all Necessary Action to cause the election, removal and replacement of directors and members of Committees in the manner contemplated in, and otherwise give the fullest effect possible to the provisions of this Article 2.

ARTICLE 3

TRANSFERS/CERTAIN COVENANTS

3.1 Transfers of Shares.

(a) Until the earlier of (i) the third anniversary of the Effective Time and (ii) the time when EControls Group and Murphy Group no longer collectively own at least 10% of the Shares (the “Transfer Restriction Period”), neither Founder Entity shall Transfer any of its Shares or Common Units (collectively, “Restricted Securities”) without the prior written consent of the other Founder Entity, except (A) in the case of Transfers to such Founder Entity’s Affiliate (including, in the case of any Founder Entity that is an entity, any distribution by such Founder Entities’ members, partners or shareholders (the “Member Owners”), and any related distributions by the Member’s Owners to their respective members, partners or shareholders) and (B) in the case of Transfers by the members, partners or shareholders of a Founder Entity to any member of its Family Group (the transferees in clauses (A) and (B) each a “Permitted Transferee”), (C) in connection with a proposed Tag Along Sale, (D) pursuant to such Founder Entity’s rights under the Registration Rights Agreement or (E) for bona fide hedging purposes not intended to circumvent the restrictions contained in this Section 3 (a “Hedging Transaction”).

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(b) Any Permitted Transferee that after the Effective Time acquires Restricted Securities from a Founder Entity, other than in connection with a Public Offering, brokers transactions (within the meaning of Section 4(4) of the Securities Act (a “Brokers’ Transaction”)) or Hedging Transactions, shall, as a condition precedent to the Transfer of such Restricted Securities to such Transferee, (i) become a party to this Agreement by completing and executing a signature page hereto (including the address of such party), (ii) represent in writing to the Company that such Transfer was made in accordance with Applicable Law, and execute all such other agreements or documents as may reasonably be requested by the Company (which may include such other representations and warranties made by the Transferee to the Company as shall be reasonably requested by the Company), (iii) ensure with the transferring stockholders that any regulatory authorizations needed in connection with such Transfer are duly obtained, and (iv) deliver such signature page and, if applicable, other agreements and documents to the Company at its address specified in Section 4.11. Any Permitted Transferee shall, upon its satisfaction of such conditions and acquisition of Restricted Securities, be a member of the Founder Entity from which it received Restricted Securities for all purposes of this Agreement.

(c) Any Transfer or attempted Transfer of Restricted Securities in violation of any provision of this Agreement shall be void, and the Company shall give no effect thereto.

3.2 Tag-Along Rights.

(a) During the Transfer Restriction Period, if at any time any member of a Founder Entity (i.e., a Founder Entity and its Permitted Transferees) (a “Tag-Along Selling Stockholder”), proposes to effect a Transfer of any of its Restricted Securities to a Person (a “Prospective Purchaser”) other than (i) to a Permitted Transferee, (ii) pursuant to such Founder Entity’s rights under the Registration Rights Agreement or (iii) Hedging Transactions (the Restricted Securities subject to such proposed Transfer, the “Tag-Along Securities” and such Transfer, a “Tag-Along Sale”), then such Tag-Along Selling Stockholder shall promptly give written notice (the “Tag-Along Notice”) to each member of the other Founder Entity (each, a “Tag-Along Offeree”) and to the Company of the terms and conditions of such Tag-Along Sale.

(b) The Tag-Along Notice shall identify (i) the type and number of Tag-Along Securities, (ii) the consideration for which the Tag-Along Sale is proposed to be made, (iii) the name and address of each Prospective Purchaser, (iv) the proposed closing date for such Tag-Along Sale and (v) all other material terms and conditions of the Tag-Along Sale, including the form of the proposed agreement, if any, and a firm offer by each Prospective Purchaser.

(c) The Tag-Along Selling Stockholder shall not be permitted to Transfer any Tag-Along Securities unless and until each Tag-Along Offeree shall have been afforded the right, exercisable upon written notice (the “Tag-Along Response Notice”) to the Company and the Tag-Along Selling Stockholder within ten Business Days after the date of receipt by such Tag-Along Offeree of the Tag-Along Notice (the “Tag-Along Notice Period”), to participate in the sale of the Tag-Along Securities by the Tag-Along Selling Stockholder on the same terms and conditions under which the Tag-Along Selling Stockholder will sell its Tag-Along Securities in the Tag-Along Sale. Each such Tag-Along Offeree may sell all or any part of its pro rata portion of the Tag-Along Securities, where such pro rata portion is based on a fraction, the numerator of which is the number of Restricted Securities at the time beneficially owned by such Tag-Along Offeree and the denominator of which is the sum of (i) the total number of Restricted Securities

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then beneficially owned by all Tagging Persons and (ii) the total number of Restricted Securities beneficially owned by the Tag-Along Selling Stockholder. For purposes of this Section 3.2, Restricted Securities will be counted as follows: (A) each Class A Share will be counted as one (1) Restricted Security and (B) each Class B Share and Common Unit together will be counted as one (1) Restricted Security. The Tag-Along Response Notice shall include wire transfer instructions for payment of the purchase price for the Restricted Securities of the Tag-Along Offeree to be sold in such Tag-Along Sale. Delivery of the Tag-Along Response Notice shall constitute an irrevocable acceptance of the Tag-Along Offer by the Tag-Along Offerees that exercise their Tag-Along Rights hereunder (the “Tagging Persons”). In order to participate in a Tag-Along Sale, the Tagging Persons must agree to enter into and execute substantially identical agreements and documents as the Tag-Along Selling Stockholder enters into and executes in connection with the Tag-Along Sale, which agreements and documents may include, without limitation, provisions with respect to escrows, holdbacks, representations and warranties, covenants and indemnities, provided, however, that notwithstanding the foregoing, the Tagging Persons shall not be obligated to agree to any non-competition covenants.

(d) The Tag-Along Selling Stockholder shall use its reasonable best efforts to obtain the inclusion in the proposed Tag-Along Sale of all of the Restricted Securities that each of the Tagging Persons requested to have included in the Tag-Along Sale (as evidenced in the case of the Tag-Along Selling Stockholder by the Tag-Along Notice and in the case of each Tagging Person by such Tagging Person’s Tag-Along Response Notice). In the event the Tag-Along Selling Stockholder shall be unable to obtain the inclusion of all of the Restricted Securities in the proposed Tag-Along Sale, the number of Restricted Securities that may be included in the Tag-Along Sale by the Tag-Along Selling Stockholder and each Tagging Person shall be equal to the product determined by multiplying the number of Restricted Securities that the Prospective Purchaser is willing to purchase by a fraction, the numerator of which is the number of Restricted Securities at the time beneficially owned by the Tag-Along Selling Stockholder or Tagging Person, as applicable, and the denominator of which is the sum of (x) the total number of Restricted Securities then beneficially owned by all Tagging Persons and (y) the total number of Restricted Securities beneficially owned by the Tag-Along Selling Stockholder.

(e) The parties acknowledge that, under the terms of the certificate of incorporation of the Company and the LLC Agreement, a Class B Share may not be Transferred without a simultaneous Transfer of a Common Unit, and vice versa. The parties agree that the Restricted Securities to be sold by a Tagging Person pursuant to the exercise of Tag-Along Rights shall consist, to the greatest extent possible, of the same proportion of the type and class of Restricted Securities being sold by the Tag-Along Selling Stockholder. To the extent that a Tagging Person is unable to sell the same proportion of the type and class of Restricted Securities being sold by the Tag-Along Selling Stockholder, one Class B Share together with one Common Unit may be substituted for one Class A Share, and vice versa.

(f) The Tag-Along Selling Stockholder shall Transfer, or cause to be Transferred, on behalf of itself and the Tagging Persons, the Restricted Securities subject to the Tag-Along Offer and elected by the Tagging Person to be Transferred on the terms and conditions set forth in the Tag-Along Notice within 120 days after the expiration of the Tag-Along Notice Period. If within 120 days after the expiration of the Tag-Along Notice Period, the Tag-Along Sale has not been consummated, the Tag-Along Selling Stockholder shall (i) promptly return or destroy any documents in the possession of the Tag-Along Selling Stockholder executed or delivered by

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the Tagging Persons in connection with the proposed Tag-Along Sale, and (ii) not conduct any Transfer of any of the Tag-Along Securities or any of the Shares that the Tagging Persons requested to have included in the Tag-Along Sale without again complying with this Section 3.2.

(g) Concurrently with the consummation of the Tag-Along Sale, the Tag-Along Selling Stockholder shall (i) notify the Tagging Persons thereof, (ii) remit or cause to be remitted to the Tagging Persons the total consideration to be paid at the closing of the Tag-Along Sale for the Restricted Securities of the Tagging Persons Transferred pursuant thereto, with the cash portion of the purchase price paid by wire transfer of immediately available funds in accordance with the wire transfer instructions in the Tag-Along Response Notice, and (iii) promptly after the consummation of such Tag-Along Sale, furnish such other evidence of the completion and the date of completion of such Transfer and the terms thereof as may be reasonably requested by the Tagging Persons.

(h) If at the expiration of the Tag-Along Notice Period, any Tag-Along Offeree has not elected to participate in the Tag-Along Sale, such Tag-Along Offeree shall be deemed to have waived its rights under Section 3.2(a) with respect to, and only with respect to, the Transfer of its Restricted Securities pursuant to such Tag-Along Sale.

(i) All costs and expenses incurred by any Founder Entity or the Company in connection with any proposed Tag-Along Sale (whether or not consummated), including all attorneys’ fees and charges, all accounting fees and charges and all finders, brokerage or investment banking fees, charges or commissions, shall be borne by the party incurring such costs and expenses.

3.3 No Circumvention of Transfer Restrictions. Each Founder Entity agrees that the Transfer restrictions in this Agreement may not be avoided by the holding of Restricted Securities directly or indirectly through a Person that was formed solely for purposes of holding Restricted Securities, and undertaking a Transfer of equity securities of such Person, the principal purpose of which is to indirectly dispose of an interest in Restricted Securities free of such restrictions, if such Transfer results in a substantial ownership interest or controlling interest (direct or indirect) in the Company being held other than by such Person, whether directly or indirectly. Any Transfer of any Equity Securities, directly or indirectly, of a Person that was formed solely for purposes of holding Restricted Securities, the principal purpose of which Transfer was to dispose of (directly or indirectly) the Restricted Securities held by the Person, that results in a substantial ownership interest or controlling interest (direct or indirect) in the Company being held other than by such Person, whether directly or indirectly, shall be treated as being a Transfer of the Restricted Securities held by the applicable Founder Entity in violation of this Agreement.

3.4 Legend.

(a) All certificates and ownership statements representing the Restricted Securities held by each Founder Entity shall bear a legend substantially in the following form:

“THE SECURITIES REPRESENTED BY THIS [CERTIFICATE/STATEMENT] ARE SUBJECT TO A STOCKHOLDERS AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS [CERTIFICATE/STATEMENT] MAY BE

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MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT AND (A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS [CERTIFICATE/STATEMENT], AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH STOCKHOLDERS AGREEMENT.”

(b) Upon the permitted sale of any Restricted Securities pursuant to (i) Section 3.1(a) or (ii) upon the termination of this Agreement, the certificates or ownership statements representing such Restricted Securities shall be replaced, at the expense of the Company, with certificates or instruments not bearing the legends required by this Section 3.4; provided that the Company may condition such replacement of certificates or ownership statements under clause (ii) upon the receipt of an opinion of securities counsel reasonably satisfactory to the Company; provided further that the legend be retained in the case of Transfers to a Permitted Transferee as defined in Section 3.1.

ARTICLE 4

MISCELLANEOUS

4.1 Termination. Subject to the early termination of any provision as a result of an amendment to this Agreement agreed to by the Company and the Founder Entities as provided under Section 4.7:

(a) the provisions of Article 2 shall, with respect to each Founder Entity, terminate as provided in Article 2;

(b) the provisions of Article 3 shall terminate as provided in Article 3; and

(c) all other provisions of this Agreement shall survive its termination.

Nothing in this Agreement shall relieve any party from any liability for the breach of any obligations set forth in this Agreement.

4.2 Effective Time. This Agreement shall be effective upon the execution hereof by the Founder Entities and the consummation of the IPO (the time of such effectiveness, the “Effective Time”) provided, that if the IPO is not consummated on or prior to December 31, 2014, this Agreement shall become null and void ab initio.

4.3 Agreement Expenses. Each of the Founder Entities shall be reimbursed by the Company for all reasonable out-of-pocket costs and expenses (including reasonable attorney’s fees) incurred by such Founder Entity in connection with and related to the negotiation and documentation of this Agreement.

4.4 Conflicts. Each of the parties covenants and agrees to vote their Control Securities and to take any other action reasonably requested by the Company or any Founder Entity to amend the Company’s bylaws and/or certificate of incorporation so as to avoid any conflict with the provisions hereof.

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4.5 Further Assurances. Each party hereto shall do and perform or cause to be done and performed all such further acts and things, and shall execute and deliver all such further agreements, certificates, instruments and documents, as any other party hereto reasonably may request in order to carry out the provisions of this Agreement and the consummation of the transactions contemplated hereby.

4.6 No Founder Entity Duties. The Founder Entities agree, notwithstanding anything to the contrary in any other agreement or at law or in equity, that when any Founder Entity takes any action under this Agreement to give or withhold its consent, such Founder Entity shall have no duty (fiduciary or other) to consider the interests of the Company or the other Founder Entities and may act exclusively in its own interest and shall have no duty to act in good faith; provided that the foregoing shall in no way affect the obligations of the parties hereto to comply with the provisions of this Agreement.

4.7 Amendment; Waivers, etc. This Agreement may be amended, and the Company and any Founder Entity may take any action herein prohibited, or omit to perform any act herein required to be performed by it, if and only if any such amendment, action or omission to act, has been approved by the Company, EControls Group and Murphy Group; provided that the approval of EControls Group or Murphy Group shall not be so required with respect to and in order to authorize the amendment, action or omission to act with respect to any Section of this Agreement for which such Founder Entity’s rights or obligations have been terminated pursuant to Section 4.1; provided further that the approval of the Company shall not be so required with respect to and in order to authorize the amendment, action or omission to act if the Company’s rights or obligations are not adversely affected thereby; provided further that this Agreement may not be amended in a manner that adversely and disproportionately affects the rights or obligations of any Founder Entity relative to the rights or obligations of the other Founder Entity, in each case without the consent of such Founder Entity. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. Any Founder Entity may waive (in writing) the benefit of any provision of this Agreement with respect to itself for any purpose. Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the Founder Entity granting such waiver in any other respect or at any other time.

4.8 Assignment. Neither this Agreement nor any right or obligation arising under this Agreement may be assigned by any party without the prior written consent of the other parties, provided that any Founder Entity may assign all or a portion of its rights and obligations hereunder to any Person that either is, or becomes a Transferee that holds 20% or more of the Shares as a result of a transfer of Shares from such Founder Entity, provided that (i) the transfer is permitted under this Agreement and (ii) is not pursuant to a registered offering or a Hedging Transaction. Any Founder Entity assigning its rights pursuant to Section 2.1(a) of this Agreement shall provide prior notice to the Company of such assignment.

4.9 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns.

4.10 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.

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4.11 Notices. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed duly given (w) on the date of delivery if delivered personally, (x) on the first Business Day following the date of dispatch if delivered by a nationally recognized next-day courier service, (y) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail (postage prepaid, return receipt requested) or (z) if sent by facsimile transmission, when transmitted and receipt is confirmed. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

(a) if to the Company:

Enovation Controls, Inc.

5311 South 122nd East Avenue

Tulsa, Oklahoma 74146

Attention: CEO

Facsimile: (918) 317-4265

(b) if to the EControls Group:

EControls Group, Inc.

5757 Farinon Drive

San Antonio, Texas 78249

Attention: Kennon Guglielmo

Facsimile: (210) 590-7593

(c) if to the Murphy Group, to:

Murphy Group, Inc.

5311 South 122nd East Avenue

Tulsa, Oklahoma 74146

Attention: Frank W. Murphy III

Facsimile: (918) 317-4265

4.12 Severability. Any term or provision of this Agreement that is invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without rendering invalid, illegal or unenforceable the remaining terms and provisions of this Agreement or affecting the validity, illegality or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated herein are consummated as originally contemplated to the fullest extent possible.

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4.13 Headings. The headings contained in this Agreement are for purposes of convenience only and shall not affect the meaning or interpretation of this Agreement.

4.14 Entire Agreement. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.

4.15 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware (regardless of the laws that might otherwise govern under applicable principles or rules of conflicts of law to the extent such principles or rules are not mandatorily applicable by statute and would require the application of the laws of another jurisdiction).

4.16 Consent to Jurisdiction. Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined in the Court of Chancery of the State of Delaware; provided that if jurisdiction is not then available in the Court of Chancery of the State of Delaware, then any such legal action or proceeding may be brought in any federal court located in the State of Delaware or any other Delaware state court. Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

4.17 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

4.18 Enforcement. Each party hereto acknowledges that money damages would not be an adequate remedy in the event that any of the covenants or agreements in this Agreement are not performed in accordance with its terms, and it is therefore agreed that in addition to and without limiting any other remedy or right it may have, the non-breaching party will have the right to an injunction, temporary restraining order or other equitable relief in any court of competent

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jurisdiction enjoining any such breach and enforcing specifically the terms and provisions hereof. In the event that the Company or one or more Founder Entities shall file suit to enforce the covenants contained in this Agreement (or obtain any other remedy in respect of any breach thereof), the prevailing party in the suit shall be entitled to recover, in addition to all other damages to which it may be entitled, the costs incurred by such party in conducting the suit, including, without limitation, reasonable attorney’s fees and expenses.

4.19 Counterparts; Facsimile Signatures. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Agreement may be executed by facsimile signature(s).

[Signature Page Follows.]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Stockholders Agreement by their authorized representatives as of the date first above written.

ENOVATION CONTROLS, INC.
By:
Name:	Patrick W. Cavanagh
Title:	Chief Executive Officer
ECONTROLS GROUP, INC.
By:
Name:	Kennon Guglielmo
Title:
MURPHY GROUP, INC.
By:
Name:	Frank W. Murphy III
Title:

[SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT]

EX-5.1

Exhibit 5.1

            , 2014

Fulbright & Jaworski LLP

300 Convent Street, Suite 2100

San Antonio, Texas 78205-3792

United States

Tel +1 210 224 5575

Fax +1 210 270 7205

nortonrosefulbright.com

Enovation Controls, Inc.

5311 South 122nd East Avenue

Tulsa, Oklahoma 74146

Re: Registration Statement on Form S-1

Ladies and Gentlemen:

We have acted as special counsel to Enovation Controls, Inc., a Delaware corporation (the “Company”), in connection with the proposed offer and sale by the Company (the “Offering”) of up to shares (the “Shares”) of Class A common stock, par value $0.00001 per share (which includes shares subject to the underwriters’ option to purchase additional shares to cover overallotments), pursuant to a prospectus forming a part of a Registration Statement on Form S-1, Registration No.                     , originally filed with the Securities and Exchange Commission on                     (such Registration Statement, as amended through the date hereof, being referred to herein as the “Registration Statement”).

In connection with this opinion, we have assumed that: (i) the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective; (ii) the Shares will be issued and sold in the manner described in the Registration Statement and the prospectus relating thereto; and (iii) a definitive underwriting agreement with respect to the sale of the Shares, in the form filed as an exhibit to the Registration Statement, will have been duly authorized and validly executed and delivered by the Company and the other parties thereto.

In connection with the opinion expressed herein, we have examined, among other things: (i) the form of Amended and Restated Certificate of Incorporation of the Company (the “New Charter”) and the form of Amended and Restated Bylaws of the Company (the “New Bylaws”) to be in effect in connection with the consummation of the Offering and filed as exhibits to the Registration Statement; (ii) the records of corporate proceedings that have occurred prior to the date hereof with respect to the Offering; (iii) the Registration Statement; and (iv) the form of underwriting agreement filed as an exhibit to the Registration Statement.

We have also reviewed such questions of law as we have deemed necessary or appropriate. As to matters of fact relevant to the opinion expressed herein, and as to factual matters arising in connection with our examination of corporate documents, records, and other documents and writings, we relied upon certificates and other communications of corporate officers of the Company, without further investigation as to the facts set forth therein. We have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of the documents submitted to us as originals, the conformity with the originals of all documents submitted to us as copies, and the authenticity of the originals of all documents submitted to us as copies. In making our examination of executed documents, we have assumed that the parties thereto, other than the Company, had the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents and the validity and binding effect thereof on such parties.

            , 2014

Page 2

Based upon and subject to the foregoing, we are of the opinion that the Shares, upon (i) the due filing of the New Charter with the Secretary of State of the State of Delaware, (ii) the adoption by the Board of Directors of the Company of the New Bylaws, and (iii) the delivery of the Shares in accordance with a definitive underwriting agreement approved by the Board of Directors of the Company against payment of the consideration therefor provided for therein (not less than the par value of the Shares), will be duly authorized, validly issued, fully paid and nonassessable.

The foregoing opinions are limited in all respects to the General Corporation Law of the State of Delaware (including the applicable provisions of the Delaware Constitution and the reported judicial decisions interpreting these laws), and we do not express any opinions as to the laws of any other jurisdiction.

We hereby consent to the statements with respect to us under the heading “Legal Matters” in the prospectus forming a part of the Registration Statement and to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, and the rules and regulations thereunder.

Very truly yours,

EX-10.1

Exhibit 10.1

ENOVATION CONTROLS, LLC

An Oklahoma Limited Liability Company

SECOND AMENDED AND RESTATED OPERATING AGREEMENT

Dated as of                  , 2014

THE LIMITED LIABILITY COMPANY INTERESTS IN ENOVATION CONTROLS, LLC (THE “COMPANY”) HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS AND ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE LIMITED LIABILITY COMPANY INTERESTS IN THE COMPANY MAY BE ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, THE APPLICABLE SECURITIES LAWS OF ANY STATE AND ANY OTHER APPLICABLE SECURITIES LAWS; (II) THE TERMS AND CONDITIONS OF THIS SECOND AMENDED AND RESTATED OPERATING AGREEMENT AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN THE MANAGING MEMBER OF THE COMPANY AND THE CURRENT OR ANY PREDECESSOR HOLDER OF SUCH INTERESTS. THEREFORE, MEMBERS OF THE COMPANY AND OTHER TRANSFEREES OF SUCH LIMITED LIABILITY COMPANY INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT OR ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.

TABLE OF CONTENTS

			Page
ARTICLE I	ORGANIZATIONAL MATTERS			2
Section 1.1		Formation of the Company		2
Section 1.2		Second Amended and Restated Operating Agreement		2
Section 1.3		Name		2
Section 1.4		Purpose; Powers		2
Section 1.5		Principal Office; Registered Office		2
Section 1.6		Term		2
Section 1.7		Existence and Good Standing; Foreign Qualification		3
Section 1.8		No State Law Partnership		3
Section 1.9		Admission		3
ARTICLE II	CAPITALIZATION; ADMISSION OF MEMBERS; CAPITAL ACCOUNTS			3
Section 2.1		Capitalization		3
Section 2.2		Admission of Members; Additional Members		7
Section 2.3		Capital Accounts		8
Section 2.4		Negative Capital Accounts		9
Section 2.5		No Withdrawal		9
Section 2.6		Loans From Members		9
Section 2.7		No Right of Partition		9
Section 2.8		Non-Certification of Common Units; Legend; Common Units Are Securities		9
ARTICLE III	DISTRIBUTIONS			10
Section 3.1		Distributions		10
Section 3.2		Successors		10
Section 3.3		Distributions In-Kind		10
Section 3.4		Distributions to ECI		10
Section 3.5		Tax-Related Distributions		10
Section 3.6		Unvested Common Units		11
ARTICLE IV	ALLOCATIONS			12
Section 4.1		Allocations		12
Section 4.2		Regulatory Allocations		12
Section 4.3		Tax Allocations		13
Section 4.4		Members’ Tax Reporting		13
Section 4.5		Withholding; Indemnification and Reimbursement for Payments on Behalf of a Member		14
ARTICLE V	MANAGEMENT; RIGHTS AND DUTIES OF MEMBERS			14
Section 5.1.		Managing Member: Delegation of Authority and Duties		14
Section 5.2.		Officers		15
Section 5.3.		Exculpation		16
Section 5.4.		Indemnification		16
Section 5.5.		Insurance		16
Section 5.6.		Investment Representations of Members		17
Section 5.7.		Certain Costs and Expenses		17

i

TABLE OF CONTENTS

			Page
ARTICLE VI	TAX MATTERS			18
Section 6.1		Preparation of Tax Returns		18
Section 6.2		Tax Elections		18
Section 6.3		Tax Controversies		18
Section 6.4		Tax Allocations		18
Section 6.5		Fiscal Year		18
Section 6.6		Books and Records; Fiscal Year		18
Section 6.7		Reports		19
ARTICLE VII	TRANSFER OF UNITS; SUBSTITUTE MEMBERS; REGISTRATION RIGHTS			19
Section 7.1		Restrictions on Transfers		19
Section 7.2		Recognition of Transfer; Substituted and Additional Members		19
Section 7.3		Expense of Transfer; Indemnification		21
Section 7.4		Additional Requirements		21
Section 7.5		Registration Rights		21
ARTICLE VIII	EXCHANGE			21
Section 8.1		General		21
Section 8.2		Exchange Notice		21
Section 8.3		Closing		22
Section 8.4		Closing Condition		23
Section 8.5		Closing Deliveries		23
Section 8.6		Expenses		23
Section 8.7		Termination of Membership; Cancellation and Registration of Common Units		23
Section 8.8		Tax Treatment		23
Section 8.9		Adjustment		23
Section 8.10		Cash Exchange		23
Section 8.11		Mandatory Exchange		24
ARTICLE IX	DISSOLUTION AND LIQUIDATION; WITHDRAWAL			24
Section 9.1		Dissolution		24
Section 9.2		Liquidation and Termination		24
Section 9.3		Complete Distribution		25
Section 9.4		Articles of Dissolution		25
Section 9.5		Reasonable Time for Winding Up		25
Section 9.6		Return of Capital		25
Section 9.7		HSR Act		25
Section 9.8		Member Withdrawal		25
ARTICLE X	GENERAL PROVISIONS			25
Section 10.1		Power of Attorney		25
Section 10.2		Amendments		26

ii

TABLE OF CONTENTS

			Page
Section 10.3		Remedies		27
Section 10.4		Successors and Assigns		28
Section 10.5		Severability		28
Section 10.6		Counterparts		28
Section 10.7		Applicable Law; Jurisdiction; Waiver of Jury Trial		28
Section 10.8		Addresses and Notices		28
Section 10.9		Creditors		28
Section 10.10		Waiver		29
Section 10.11		Further Action		29
Section 10.12		Entire Agreement		29
Section 10.13		Delivery by Facsimile or Email		29
Section 10.14		Spousal Consent		29
ARTICLE XI	DEFINITIONS			29
Section 11.1		Certain Definitions		29
Section 11.2		Index of Additional Definitions		38
Section 11.3		Interpretative Matters		39

Exhibit A	Schedule of Members
Exhibit B	Form of Exchange Notice
Exhibit C	Consent of Spouse and Proxy

iii

SECOND AMENDED AND RESTATED OPERATING AGREEMENT

OF ENOVATION CONTROLS, LLC

THIS SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF ENOVATION CONTROLS, LLC (as hereafter amended in accordance with its terms, this “Agreement”), dated and effective as of                  , 2014 (the “Effective Date”), is adopted, executed and agreed to, for good and valuable consideration, by and among Enovation Controls, LLC, an Oklahoma limited liability company (the “Company”), and each other Person who is or at any time becomes a Member in accordance with the terms of this Agreement and the Act. Any reference in this Agreement to any Member shall include such Member’s Successors in Interest to the extent such Successors in Interest have become Substituted Members in accordance with the provisions of this Agreement. Certain capitalized terms used in this Agreement are defined in Article XI.

RECITALS:

WHEREAS, the Company was formed as a limited liability company under the Act by filing of Articles of Organization (the “Articles”) with the Secretary of State of the State of Oklahoma on August 28, 2009;

WHEREAS, the Company’s members entered into an Operating Agreement of the Company, dated on or about September 30, 2009 (as amended, the “Original Agreement”);

WHEREAS, the Company’s members entered into a First Amended and Restated Operating Agreement of the Company, dated September 29, 2011 to amend and restate the Original Agreement (as amended and restated, the “A&R Agreement”);

WHEREAS, Enovation Controls, Inc., a Delaware corporation (including its successors, “ECI”), has entered into an underwriting agreement (i) to issue and sell to the several Underwriters named therein (the “Underwriters”) shares of Class A Common Stock and (ii) to make a public offering of such shares of Class A Common Stock (collectively, the “IPO”);

WHEREAS, in connection with the IPO, it is contemplated that pursuant to this Agreement (i) immediately prior to consummation of the IPO (the “Effective Time”), all of the outstanding limited liability company interests in the Company will be converted into the number of Common Units set forth opposite each Member’s name in Exhibit A (the “Schedule of Members”) and (ii) immediately after the IPO, ECI will purchase newly-issued Common Units from the Company and a number of outstanding Common Units from the Members using the net proceeds from the IPO (collectively, the “IPO Transactions”);

WHEREAS, the Company and the Members set forth on the Schedule of Members now wish to amend and restate the A&R Agreement as set forth herein to give effect to the IPO Transactions and to reflect the admission of ECI as a Member and as sole managing member of the Company; and

WHEREAS, this Agreement shall supersede and completely replace in its entirety the A&R Agreement as of the date hereof.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements herein made, and intending to be legally bound, the parties hereby to this Agreement hereby agree as follows:

ARTICLE I

ORGANIZATIONAL MATTERS

Section 1.1 Formation of the Company. The Company was formed on August 28, 2009 as an Oklahoma limited liability company pursuant to the provisions of the Act.

Section 1.2 Second Amended and Restated Operating Agreement. The Members agree to continue the Company as a limited liability company under the Act, upon the terms and subject to the conditions set forth in this Agreement. The rights, powers, duties, obligations and liabilities of the Members shall be determined pursuant to the Act and this Agreement. To the extent that the rights, powers, duties, obligations and liabilities of any Members are different by reason of any provision of this Agreement than they would be in the absence of such provision, this Agreement shall, to the extent permitted by the Act, control.

Section 1.3 Name. The name of the Company shall be “Enovation Controls, LLC.” The Managing Member may change the name of the Company at any time and from time to time. Prompt notification of any such change shall be given to all Members. The Company’s business may be conducted under its name or any other name or names deemed advisable by the Managing Member.

Section 1.4 Purpose; Powers.

(a) The nature of the business or purposes to be conducted or promoted by the Company is to engage in any lawful act or activity for which limited liability companies may be organized under the Act; provided, however, that unless the Managing Member is the sole Member of the Company, the Managing Member shall not cause the Company to engage, directly or indirectly, in any business activity that the Managing Member determines in its sole and absolute discretion could cause the Company to be treated as an association taxable as a corporation or otherwise liable as an entity for federal income tax purposes. The Company may engage in any and all activities necessary, desirable or incidental to the accomplishment of the foregoing. Notwithstanding anything herein to the contrary, nothing set forth herein shall be construed as authorizing the Company to possess any purpose or power, or to do any act or thing, forbidden by law to a limited liability company organized under the laws of the State of Oklahoma.

(b) Subject to the provisions of this Agreement and except as prohibited by applicable law, (i) the Company may, with the approval of the Managing Member, enter into and perform any and all documents, agreements and instruments, all without any further act, vote or approval of any Member, and (ii) the Managing Member may authorize any Person (including any Member or Officer) to enter into and perform any document, agreement or instrument on behalf of the Company.

Section 1.5 Principal Office; Registered Office. The registered office of the Company required by the Act to be maintained in the State of Oklahoma (which need not be a place of business of the Company) shall be designated from time to time by the Managing Member in the manner provided by law. The principal office of the Company shall be at such place as the Managing Member may from time to time designate, which need not be in the State of Oklahoma, and the Company shall maintain records at such place. The Company may maintain offices at such other place or places as the Managing Member deems advisable. Prompt notice of any change in the principal office shall be given to all Members.

Section 1.6 Term. The term of the Company commenced on the date the Articles were filed with the office of the Secretary of State of the State of Oklahoma and shall continue in existence perpetually until termination or dissolution in accordance with the provisions of Article IX.

2

Section 1.7 Existence and Good Standing; Foreign Qualification. The Managing Member may take all action which may be necessary or appropriate (a) for the continuation of the Company’s valid existence as a limited liability company under the laws of the State of Oklahoma (and of each other jurisdiction in which such existence is necessary to enable the Company to conduct the business in which it is engaged) and (b) for the maintenance, preservation and operation of the business of the Company in accordance with the provisions of this Agreement and applicable laws and regulations. The Managing Member may file or cause to be filed for recordation in the office of the appropriate authorities of the State of Oklahoma, and in the proper office or offices in each other jurisdiction in which the Company is formed or qualified, such certificates (including certificates of limited liability companies and fictitious name certificates) and other documents as are required by the applicable statutes, rules or regulations of any such jurisdiction or as are required to reflect the identity of the Members and the amounts of their respective capital contributions. The Managing Member may cause the Company to comply, to the extent procedures are available and those matters are reasonably within the control of the Officers, with all requirements necessary to qualify the Company as a foreign limited liability company in each jurisdiction where its assets or operations require it to be so qualified.

Section 1.8 No State Law Partnership.

(a) The Members intend that the Company shall not be a partnership (including a limited partnership) or joint venture, and that no Member or Officer shall be a partner or joint venturer of any other Member or Officer by virtue of this Agreement, for any purposes other than as is set forth in Section 1.8(b), and this Agreement shall not be construed to the contrary.

(b) The Members intend that the Company shall be treated as a partnership for federal and, if applicable, state or local income tax purposes, and each Member and the Company shall file all tax returns and shall otherwise take all tax and financial reporting positions in a manner consistent with such treatment. To ensure that Common Units are not traded on an established securities market within the meaning of Regulations Section 1.7704-1(b) or readily tradable on a secondary market or the substantial equivalent thereof within the meaning of Regulations Section 1.7704-1(c), notwithstanding anything to the contrary contained herein, (i) the Company shall not participate in the establishment of any such market or the inclusion of Common Units thereon and (ii) the Company shall not recognize any Transfer made on any such market by: (A) redeeming the Transferor Member (in the case of a redemption or repurchase by the Company) or (B) admitting the Transferee as a Member or otherwise recognizing any rights of the Transferee, such as a right of the Transferee to receive Company distributions (directly or indirectly) or to acquire an interest in the capital or profits of the Company.

Section 1.9 Admission. The Managing Member is hereby admitted as a Member of the Company upon its execution of a counterpart signature page to this Agreement and each member of the Company immediately prior to the effectiveness of this Agreement shall continue as a Member hereunder.

ARTICLE II

CAPITALIZATION; ADMISSION OF MEMBERS; CAPITAL ACCOUNTS

Section 2.1 Capitalization.

(a) Each Member’s interest in the Company, including such Member’s interest, if any, in the capital, income, gains, losses, deductions and expenses of the Company shall be represented by units of limited liability company interest of a single authorized class (each, a “Common Unit”). All Common Units shall have identical rights and privileges in all respects. The Company shall have the authority to issue an unlimited number of Common Units.

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(b) At the Effective Time, all of the Class A Units, Class B Units, Class C Units and Class D Units (each as defined in the A&R Agreement) issued and outstanding immediately prior to the Effective Time are hereby automatically converted into the number of Common Units set forth opposite each Member’s name on the Schedule of Members as originally attached to this Agreement on the Effective Date. Immediately after the IPO, ECI will contribute $         to the Company in exchange for                  Common Units.

(c) The Managing Member shall have the right to cause the Company to issue and/or create and issue at any time after the Effective Date, and for such amount and form of consideration as the Managing Member may determine, additional Common Units or other Equity Securities of the Company (including creating classes or series thereof having such powers, designations, preferences and rights as may be determined by the Managing Member), subject to Section 10.2. The Managing Member shall have the power to make such amendments to this Agreement in order to provide for such powers, designations, preferences and rights as the Managing Member in its discretion deems necessary or appropriate to give effect to such additional authorization or issuance in accordance with the provisions of this Section 2.1(c) and Section 10.2. Notwithstanding the foregoing, (x) the Company may not issue any additional Common Units to any member of the ECI Group unless substantially simultaneously ECI issues or sells an equal number of shares of Class A Common Stock to another Person and (y) the Company may not issue any other Equity Securities of the Company to any member of the ECI Group unless substantially simultaneously ECI issues or sells to another Person an equal number of shares of a new class or series of Equity Securities of ECI with rights to dividends and distributions (including distributions upon liquidation) and other economic rights as are determined in Good Faith to correspond to those of such Equity Securities of the Company. With respect to any class or series of Equity Securities of ECI, the Equity Securities of the Company that have such corresponding rights are referred to as the “Corresponding Company Securities.”

(i) Notwithstanding the foregoing or anything else to the contrary in this Agreement, if ECI issues shares of Class A Common Stock (other than (A) an issuance of the type covered by Section 2.1(c)(ii), (B) the issuance of shares of Class A Common Stock in the IPO or (C) the issuance of shares of Class A Common Stock to a Member pursuant to Section 6 of Part B of Article IV of the Amended and Restated Certificate of Incorporation of ECI) or any other Equity Security of ECI, (x) the Company shall issue to ECI one Common Unit for each share of Class A Common Stock issued by ECI and one Corresponding Company Security for each other Equity Security issued by ECI and (y) the net proceeds received by ECI with respect to such shares of Class A Common Stock or other Equity Security, if any, shall be concurrently transferred (directly or indirectly through one or more Subsidiaries of ECI) to the Company; provided, however, that to the extent that ECI issues any shares of Class A Common Stock in order to fund the acquisition for cash from a Member of a number of Common Units equal to the number of shares of Class A Common Stock so issued, the Company shall not issue any new Common Units in connection therewith and ECI shall not be required to transfer (directly or indirectly) such net proceeds to the Company (it being understood that such net proceeds shall instead be transferred to such Member as consideration for such purchase).

(ii) At any time ECI issues one or more shares of Class A Common Stock in connection with an equity incentive program, whether such share or shares are issued upon exercise (including cashless exercise) of an option, settlement of a restricted stock unit, as restricted stock or otherwise, the Managing Member shall cause the Company to issue an equal number of Common Units, registered in the name of ECI; provided that ECI shall be required to contribute all (but not less than all) the net proceeds and property

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(if any) received by ECI from or otherwise in connection with such issuance of one or more shares of Class A Common Stock, including the exercise price of any option exercised, to the Company. If any such shares of Class A Common Stock so issued by ECI in connection with an equity incentive program are subject to vesting or forfeiture provisions, then the Common Units that are issued by the Company to ECI in connection therewith in accordance with the preceding provisions of this Section 2.1(c)(ii) shall be subject to vesting or forfeiture on the same basis and if any of such shares of Class A Common Stock vest or are forfeited, then an equal number of Common Units issued by the Company in accordance with the preceding provisions of this Section 2.1(c)(ii) shall automatically vest or be forfeited, as applicable. Any cash or property held by either ECI or the Company or on either’s behalf in respect of dividends paid on restricted Class A Common Stock that fail to vest shall be returned to the Company upon the forfeiture of such restricted Class A Common Stock.

(iii) Notwithstanding the foregoing, Section 2.1(c)(i) shall not apply to the issuance by ECI of any warrants, options, other rights to acquire Equity Securities of ECI or rights or property that may be converted into or settled in Equity Securities of ECI, but Section 2.1(c)(i) shall, in each of the foregoing cases, apply to the issuance of Equity Securities of ECI in connection with the exercise or settlement of such warrants, options or other rights or property (for cash or other consideration in accordance with their terms or otherwise); provided that, if such warrants, options or other rights are issued pursuant to an equity incentive program, the provisions of Section 2.1(c)(ii), and not this Section 2.1(c)(iii), shall apply.

(iv) For purposes of this Section 2.1(c), “net proceeds” means gross proceeds to ECI from the issuance of Class A Common Stock or other securities less all underwriters’ discounts and commissions payable in connection with such issuance.

(d) If, at any time, any shares of Class A Common Stock or other Equity Securities of ECI are repurchased, redeemed or otherwise acquired (whether by exercise of a put or call, pursuant to an open market purchase, automatically or by means of another arrangement) by ECI for cash and subsequently cancelled, the Managing Member shall cause the Company, immediately prior to such repurchase, redemption or other acquisition of Class A Common Stock or other Equity Securities of ECI, to redeem an equal number of Common Units or Corresponding Company Securities held by ECI, at an aggregate redemption price equal to the aggregate purchase or redemption price of the Class A Common Stock or other Equity Securities of ECI being repurchased, redeemed or otherwise acquired by ECI (plus any expenses related thereto) and upon such other terms as are the same for the Class A Common Stock or other Equity Securities of ECI being repurchased, redeemed or otherwise acquired by ECI. Notwithstanding the foregoing, to the extent that any consideration payable by ECI in connection with the redemption or repurchase of any shares of Class A Common Stock or other Equity Securities of ECI consists (in whole or in part) of shares of Class A Common Stock or such other Equity Securities, then the redemption or repurchase of the corresponding Common Units or Corresponding Company Securities shall be effectuated in an equivalent manner.

(e) Notwithstanding the foregoing, Section 2.1(c)(i) and Section 2.1(d) shall not apply to the issuance and distribution to holders of shares of Class A Common Stock of rights to purchase Class A Common Stock or other Equity Securities of ECI under a “poison pill” or similar stockholder rights plan (it being understood that upon exchange of Common Units for Class A Common Stock, such Class A Common Stock will be issued together with a corresponding right), but shall apply to the issuance of Class A Common Stock or other Equity Securities of ECI in connection with the exercise or settlement of such rights (for cash or other consideration in accordance with their terms or otherwise).

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(f) The Company shall not in any manner effect any subdivision (by any stock split, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, reclassification, recapitalization or otherwise) of the outstanding Common Units unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Class A Common Stock with corresponding changes made with respect to any other exchangeable or convertible securities. ECI shall not in any manner effect any subdivision (by any stock split, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, reclassification, recapitalization or otherwise) of the outstanding Class A Common Stock unless accompanied by an identical subdivision or combination, as applicable, of the outstanding Common Units, with corresponding changes made with respect to any other exchangeable or convertible securities.

(g) It is the intention of the Members that, subject to Section 2.1(e), the ECI Group collectively owns an aggregate number of Common Units that is equal to the aggregate number of outstanding shares of Class A Common Stock and an aggregate number of Corresponding Company Securities that is equal to the aggregate number of corresponding other Equity Securities of ECI, and this Section 2.1(g) shall be interpreted consistent with such intent. Subject to Section 2.1(e), in the event that a member of the ECI Group acquires from other Members any Common Units or Corresponding Company Securities and such acquisition results in the ECI Group collectively owning an aggregate number of Common Units that exceeds the aggregate number of outstanding shares of Class A Common Stock or an aggregate number of Corresponding Company Securities that exceeds the aggregate number of corresponding other Equity Securities of ECI, the Managing Member may cause a recapitalization or other similar adjustment regarding the Company such that (i) the ECI Group collectively owns an aggregate number of Common Units that is equal to the aggregate number of outstanding shares of Class A Common Stock and an aggregate number of Corresponding Company Securities that is equal to the aggregate number of corresponding other Equity Securities of ECI and (ii) the Members maintain to the maximum extent possible the economic sharing arrangement among the Members as in place immediately prior to such recapitalization or other adjustment.

(h) By executing this Agreement, each Member authorizes and directs the Company to elect to have the “safe harbor” described in the proposed Revenue Procedure set forth in Internal Revenue Service Notice 2005-43 (the “Notice”) apply to any interest in the Company transferred to a service provider by the Company on or after the effective date of such Revenue Procedure in connection with services provided to the Company. For purposes of making such safe harbor election, the Tax Matters Member is hereby designated as the “partner who has responsibility for federal income tax reporting” by the Company and, accordingly, for execution of a “safe harbor election” in accordance with Section 3.03(1) of the Notice. The Company and each Member hereby agree to comply with all requirements of the safe harbor described in the Notice, including the requirement that each Member shall prepare and file all federal income tax returns reporting the income tax effects of each safe harbor partnership interest issued by the Company in a manner consistent with the requirements of the Notice. Each Member authorizes the Tax Matters Member to amend the foregoing provisions of this Section 2.1(h) to the extent necessary to achieve substantially the same tax treatment with respect to any interest in the Company transferred to a service provider by the Company in connection with services provided to the Company as set forth in Section 4 of the Notice (e.g., to reflect changes from the rules set forth in the Notice in subsequent Internal Revenue Service or Treasury Department guidance); provided that such amendment is not materially adverse to any Member (as compared with the

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after-tax consequences that would result if the provisions of the Notice applied to all interests in the Company transferred to a service provider by the Company in connection with services provided to the Company).

Section 2.2 Admission of Members; Additional Members.

(a) The Company shall maintain and keep at its principal executive office the Schedule of Members on which it shall set forth the names and address of each Member, the aggregate number of Common Units and the aggregate amount of cash Capital Contributions that have been made by such Member at any time, as applicable, and the Fair Market Value of any property other than cash contributed by such Member with respect to the Common Units (including, if applicable, a description and the amount of any liability assumed by the Company or to which contributed property is subject).

(b) The Managing Member shall cause the Schedule of Members to be amended from time to time to reflect the admission of any Additional Member, the withdrawal or termination of any Member, receipt by the Company of notice of any change of address of a Member or the occurrence of any other event requiring amendment of the Schedule of Members.

(c) Notwithstanding anything in this Agreement to the contrary:

(i) the Common Units held by any Member as a result of the conversion of Class B Units, Class C Units or Class D Units which, as of the Effective Date, are subject to any vesting, forfeiture, repurchase or similar provisions pursuant to the A&R Agreement or in any applicable unit subscription agreement, restricted unit agreement or other agreement pursuant to which such unvested Class B Units, Class C Units or Class D Units were issued (in each case, “Unvested Common Units”) shall continue to be subject to such vesting, forfeiture, repurchase or similar provisions, except that the second sentence of Section 5.1(c)(iii) of the A&R Agreement shall not be applicable to the Unvested Common Units and, in lieu of such provision, it shall be the case that all forfeiture restrictions applicable to the Unvested Common Units shall lapse upon the consummation of a Change in Control; and

(ii) no Member may Transfer any Unvested Common Units; provided that, with the consent of the Managing Member, a Member may Transfer Unvested Common Units pursuant to and in accordance with Article VIII if the Member acknowledges and agrees in writing, in a form reasonably satisfactory to the Managing Member, that any securities received in exchange therefor shall continue to be subject to the vesting, forfeiture, repurchase or similar provisions to which such Unvested Common Units are then subject. A Common Unit shall cease to be an Unvested Common Unit at such time as such Common Unit ceases to be subject to such vesting, forfeiture, repurchase or similar provisions.

For the avoidance of doubt, the IPO shall not be considered a sale or exchange of assets, a sale or exchange of units of limited liability company interest of the Company, a merger, consolidation or combination or any other event that would cause the lapse of the forfeiture restrictions applicable to the Class B Units, Class C Units or Class D Units under the second sentence of Section 5.1(c)(iii) of the A&R Agreement or a Change of Control or any other event that would cause the lapse of the forfeiture restrictions applicable to the Unvested Common Units under Section 2.2(c)(i).

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Section 2.3 Capital Accounts.

(a) The Company shall establish and maintain a separate capital account for each Member (each a “Capital Account”). The Capital Account of each Member shall be credited initially with an amount equal to such Member’s cash contributions and the initial Gross Asset Value of property contributed to the Company by the Member (net of any liabilities securing such contributed property that the Company is considered to assume or take subject to).

(b) The Capital Account of each Member shall be (i) credited with all Net Income and items of Income allocated to such Member pursuant to Section 4.1 and Section 4.2, and with the amount of cash and the initial Gross Asset Value of property subsequently contributed to the Company by the Member (net of any liabilities securing such contributed property that the Company is considered to assume or take subject to) following the Effective Date and (ii) debited with all Net Loss and items of Loss allocated to such Member pursuant to Section 4.1 and Section 4.2, and with the amount of cash and the Gross Asset Value of any property (net of liabilities assumed by such Member and liabilities to which such property is subject) distributed (or deemed distributed) by the Company to such Member.

(c) The Capital Accounts as of the Effective Date, as adjusted for the revaluation that will occur under clause (b) of the definition of Gross Asset Value in connection with the direct or indirect investment in the Company by ECI that is expected to occur as of the Effective Date, are set forth on the Schedule of Members. It is the intention of the Members that the Capital Accounts be maintained in accordance with the provisions of Code Section 704(b) and the Regulations thereunder and that this Agreement be interpreted consistently therewith. Notwithstanding anything expressed or implied to the contrary in this Agreement, in the event the Managing Member shall determine, in its sole and absolute discretion, that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order to effectuate the intended economic sharing arrangement of the Members or comply with the principles of Code Section 704(b) and the Regulations thereunder, the Managing Member may make such modification, notwithstanding any other provision hereof, without the consent of any other Person.

(d) Unless otherwise determined by the Managing Member, immediately preceding the issuance of additional Common Units or other Equity Securities in exchange for cash, property or services to a new or existing Member and upon the redemption of any portion of an interest in the Company of any Member (or such other times as may be determined by the Managing Member), the then prevailing Gross Asset Values of the Company’s property shall be adjusted to equal their respective gross Fair Market Values and any increase in the net equity value of the Company (Gross Asset Value less liabilities) shall be credited to the Capital Accounts of the Members in the same manner as Net Income is credited under Section 4.1 (and any decrease in the net equity value of the Company shall be debited in the same manner as Net Loss is debited under Section 4.1). The Capital Accounts shall be revalued immediately prior to the (direct or indirect) investment by ECI in the Company that is expected to occur as of the Effective Date.

(e) Any income of the Company that is exempt from federal income tax shall be credited to the Capital Accounts in the same manner as Net Income is credited under Section 4.1 when such income is realized. Any expenses or expenditures of the Company that may neither be deducted nor capitalized for tax purposes (or are so treated for tax purposes) shall be debited to the Capital Accounts of the Members in the same manner as Net Loss is debited under Section 4.1. If any special adjustments are made to or with respect to Company property pursuant to

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Code Sections 734(b) or 743(b), Capital Accounts shall be adjusted to the extent required by the Regulations under Code Section 704. The amount by which the Fair Market Value of any property to be distributed in kind to the Members exceeds or is less than the then prevailing Gross Asset Value of such property shall, to the extent not otherwise recognized by the Company, be taken into account in determining Net Income and Net Loss and determining the Capital Accounts of the Members as if such property had been sold at its Fair Market Value immediately prior to such distribution.

(f) In the event that all or a portion of the Common Units or other Equity Securities of a Member are transferred in accordance with this Agreement, the transferee of such Common Units or other Equity Securities shall also succeed to all or the relevant portion of the Capital Account of the transferor.

Section 2.4 Negative Capital Accounts. No Member shall be required to pay to any other Member or the Company any deficit or negative balance that may exist from time to time in such Member’s Capital Account (including upon and after dissolution of the Company).

Section 2.5 No Withdrawal. No Person shall be entitled to withdraw any part of such Person’s Capital Contributions or Capital Account or to receive any Distribution from the Company, except as expressly provided herein. Except to the extent otherwise expressly provided for in this Agreement, no interest shall be paid to any Person with respect to such Person’s Capital Contributions or Capital Account.

Section 2.6 Loans From Members. Loans by Members to the Company shall not be considered Capital Contributions. If any Member shall loan funds to the Company, then the making of such loans shall not result in any increase in the Capital Account balance of such Member. The amount of any such loans shall be a debt of the Company to such Member and shall be payable or collectible in accordance with the terms and conditions upon which such loans are made.

Section 2.7 No Right of Partition. No Member shall have the right to seek or obtain partition by court decree or operation of law of any property of the Company or any of its Subsidiaries or the right to own or use particular or individual assets of the Company or any of its Subsidiaries, or, except as expressly contemplated by this Agreement, be entitled to Distributions of specific assets of the Company or any of its Subsidiaries.

Section 2.8 Non-Certification of Common Units; Legend; Common Units Are Securities.

(a) Common Units shall be issued in non-certificated form; provided, however, that the Managing Member may cause the Company to issue certificates to a Member representing the Common Units held by such Member. If any Common Unit certificate is issued, then such certificate shall bear a legend substantially in the following form:

THIS CERTIFICATE EVIDENCES COMMON UNITS REPRESENTING AN INTEREST IN ENOVATION CONTROLS, LLC AND SHALL BE A SECURITY WITHIN THE MEANING OF ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE. THE INTEREST IN ENOVATION CONTROLS, LLC REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF ENOVATION CONTROLS, LLC, DATED AS OF                  , 2014, BY AND AMONG ENOVATION CONTROLS, LLC AND EACH OF THE MEMBERS FROM TIME TO TIME PARTY THERETO, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.

(b) All Common Units will be “securities” within the meaning of Section 8-102(a)(15) and as provided by Section 8-103(c) of the Uniform Commercial Code as in effect from time to time in the State of Oklahoma or analogous provisions in the Uniform Commercial Code in effect in any other jurisdiction.

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ARTICLE III

DISTRIBUTIONS

Section 3.1 Distributions. Except as provided in this Article III and Section 9.2, distributions shall be made to the Members as and when determined by the Managing Member, pro rata in proportion to the number of Common Units owned by each Member.

Section 3.2 Successors. For purposes of determining the amount of Distributions, each Member shall be treated as having received the Distributions received by its predecessors in respect of any of such Member’s Common Units.

Section 3.3 Distributions In-Kind. To the extent that the Company distributes property in-kind to the Members, the Company shall be treated as making a Distribution equal to the Fair Market Value of such property for purposes of Section 3.1 and such property shall be treated as if it were sold for an amount equal to its Fair Market Value. Any resulting gain or loss shall be allocated to the Members’ Capital Accounts in accordance with Section 4.1 and Section 4.2.

Section 3.4 Distributions to ECI. The Managing Member, in its sole discretion, may authorize that cash be distributed to any member of the ECI Group (which distribution shall be made without pro rata distributions to the other Members) in exchange for the redemption, repurchase or other acquisition of Common Units (or other Equity Securities of the Company) held by such member of the ECI Group, where the redemption proceeds are to be used by ECI to acquire shares of its outstanding Class A Common Stock (or other Equity Securities of ECI) in accordance with Section 2.1. In addition, in the event that any payment or reimbursement by the Company of any costs, fees, operating expenses or other expenses of the Managing Member pursuant to Section 5.7 is characterized for any purpose as a distribution by the Company to the Managing Member, the Members agree and acknowledge that such distribution shall be made without pro rata distributions to the other Members. For the avoidance of doubt, distributions under this Section 3.4 may not be used to pay or facilitate dividends or distributions on the Class A Common Stock or other Equity Securities of ECI (other than distributions in redemption of Class A Common Stock or other Equity Securities of ECI in accordance with Section 2.1).

Section 3.5 Tax-Related Distributions.

(a) Subject to the Act and to any restrictions contained in any agreement to which the Company is bound and notwithstanding the provisions of Section 3.1, the Company shall distribute to the Members, on a quarterly basis, by the tenth day (or next succeeding Business Day) of each March, June, September and December of each taxable year, or such other dates as may be appropriate in light of tax payment requirements (each a “Tax Distribution Date”), an aggregate amount (the “Tax Distribution”) in cash equal to the excess, if any, of (i) the Company’s Tax Liability with respect to such taxable year over (ii) the amounts previously distributed pursuant to this Section 3.5(a) with respect to such taxable year. Notwithstanding the foregoing, Tax Distributions shall be made for only periods (or portions thereof) beginning on or after the Effective Date. For purposes of computing a Tax Distribution under this Section 3.5(a), salaries, bonuses and any other payments in the nature of compensation shall not be taken into account, other than as an expense of the Company.

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(b) For purposes of this Section 3.5, the “Company’s Tax Liability” means, with respect to a taxable year (or portion thereof) beginning as of the first day of such taxable year (or portion thereof) and ending on the last day of the month immediately preceding the relevant Tax Distribution Date, the product of (i) the cumulative excess of taxable income over taxable losses of the Company for such taxable year (or portion thereof), calculated without regard to (A) any gain or loss attributable to or realized in connection with a sale of all or substantially all of the assets of the Company and (B) for clarity, any tax deductions or basis adjustments of any Member arising under Code Section 743, and (ii) the highest combined marginal federal, state and local tax rate then applicable (including any Medicare Contribution tax on net investment income) to an individual (or, if higher, to a corporation) resident in Tulsa, Oklahoma (assuming the maximum limitations on the use of deductions for state and local taxes). A final accounting for Tax Distributions shall be made for each taxable year after the taxable income or taxable loss of the Company has been determined for such taxable year, and the Company shall promptly thereafter make supplemental Tax Distributions (or future Tax Distributions will be reduced) to reflect any difference between estimates previously used in calculating the Company’s Tax Liability and the actual amounts so determined.

(c) Notwithstanding Section 3.5(a) or Section 3.5(d), if, on a Tax Distribution Date, (i) there are not sufficient funds in the Company (or any of its U.S. Subsidiaries that are disregarded entities for U.S. federal income tax purposes) to distribute the full amount of the relevant Tax Distribution otherwise to be made or (ii) any credit agreement or other debt documents to which the Company (or any of its Subsidiaries) is a party do not permit the Company to receive from such Subsidiaries or distribute to each Member the full amount of the Tax Distributions otherwise to be made to each such Member, then distributions pursuant to this Section 3.5 shall be made to the extent of the available funds.

(d) If (i) following an audit or examination, there is an adjustment that would affect the calculation of the Company’s taxable income or taxable loss for a given taxable year (or portion thereof) after the Effective Date or (ii) the Company files an amended tax return that has such effect, then the Company shall promptly recalculate the Company’s Tax Liability for the applicable period and, if the Company’s Tax Liability is increased thereby, make additional Tax Distributions (increased by an additional amount estimated to be sufficient to cover any interest or penalties that would be imposed on the Company if it were an individual (or, if higher, a corporation) resident in Tulsa, Oklahoma) to give effect to such adjustment or amended tax return.

(e) All Tax Distributions to the Members pursuant to this Section 3.5, or adjustments thereto, shall be made pro rata in proportion to the number of Common Units owned by each Member.

Section 3.6 Unvested Common Units. To the extent that any distribution, other than a Tax Distribution, is to be made to a Member in respect of any Unvested Common Unit, such distribution shall be set aside for such Member to be distributed to such Member at the time that such Common Unit ceases to be an Unvested Common Unit (or if, as provided in Section 2.2(c)(ii), any Unvested Common Unit has been Transferred pursuant to and in accordance with Article VIII, at such later time that the securities received in exchange therefor cease to be subject to the vesting, forfeiture, repurchase or similar provisions to which such Unvested Common Unit was subject). To the extent that such Unvested Common Unit shall be forfeited by or repurchased from such Member without having ceased to be an Unvested Common Unit, such distribution shall revert to the Company.

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ARTICLE IV

ALLOCATIONS

Section 4.1 Allocations. After giving effect to the special allocations in Section 4.2, Net Income and Net Loss (and, if necessary, individual items of Income and Loss) shall be allocated annually (and at such other times as the Managing Member determines) to the Members in such manner that the Capital Account balance of each Member shall, to the greatest extent possible, be equal (proportionately) to the (a) amount that would be distributed to such Member if (i) the Company were to sell the assets of the Company for their Gross Asset Values, (ii) all Company liabilities were satisfied (limited with respect to each nonrecourse liability to the Gross Asset Values of the assets securing such liability), (iii) the Company were to distribute the net proceeds of sale pursuant to Section 3.1, minus (b) such Member’s share of Company Minimum Gain or Member Minimum Gain, computed immediately prior to the hypothetical sale of assets.

Section 4.2 Regulatory Allocations.

(a) Loss attributable to Member Nonrecourse Debt shall be allocated in the manner required by Regulations Section 1.704-2(i). If there is a net decrease during a taxable year in Member Minimum Gain, Income for such taxable year (and, if necessary, for subsequent taxable years) shall be allocated to the Members in the amounts and of such character as is determined according to Regulations Section 1.704-2(i)(4). This Section 4.2(a) is intended to be a “partner nonrecourse debt minimum gain chargeback” provision that complies with the requirements of Regulations Section 1.704-2(i)(4), and shall be interpreted in a manner consistent therewith.

(b) Except as otherwise provided in Section 4.2(a), if there is a net decrease in Company Minimum Gain during any taxable year, each Member shall be allocated Income for such taxable year (and, if necessary, for subsequent taxable years) in the amounts and of such character as is determined according to Regulations Section 1.704-2(f). This Section 4.2(b) is intended to be a “minimum gain chargeback” provision that complies with the requirements of Regulations Section 1.704-2(f), and shall be interpreted in a manner consistent therewith.

(c) If any Member that unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) has an Adjusted Capital Account Deficit as of the end of any taxable year, computed after the application of Section 4.2(a) and Section 4.2(b), but before the application of any other provision of Section 4.1, Section 4.2 and Section 4.3, then Income for such taxable year shall be allocated to such Member in proportion to, and to the extent of, such Adjusted Capital Account Deficit. This Section 4.2(c) is intended to be a “qualified income offset” provision as described in Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted in a manner consistent therewith.

(d) “Nonrecourse deductions” (as defined in Regulations Sections 1.704-2(b)(l) and (c)) shall be allocated among the Members pro rata in accordance with the number of Common Units owned by each of them.

(e) No Loss or Net Loss shall be allocated to a Member to the extent such allocation would cause or increase an Adjusted Capital Account Deficit for such Member. Instead, such Loss or Net Loss shall be allocated among the other Members in the same ratios that such other Members are allocated Net Loss for such year under Section 4.1.

(f) Income and Loss described in clause (d) of the definition of Gross Asset Value shall be allocated in a manner consistent with the manner that the adjustments to the Capital Accounts are required to be made pursuant to Regulations Section 1.704-1(b)(2)(iv)(m).

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(g) The allocations set forth in Section 4.2(a) through Section 4.2(f) inclusive (the “Regulatory Allocations”) are intended to comply with certain requirements of Section 1.704-1(b) and 1.704-2 of the Regulations. The Regulatory Allocations may not be consistent with the manner in which the Members intend to allocate Income and Loss of the Company or to make Distributions. Accordingly, notwithstanding the other provisions of Section 4.1, Section 4.2 and Section 4.3, but subject to the Regulatory Allocations, items of Income and Loss of the Company shall be allocated among the Members so as to eliminate the effect of the Regulatory Allocations and thereby cause the respective Capital Account balances of the Members to be in the amounts (or as close thereto as possible) they would have been if Income and Loss had been allocated without reference to the Regulatory Allocations. In general, the Members anticipate that this shall be accomplished by specially allocating other Income and Loss among the Members so that the net amount of Regulatory Allocations and such special allocations to each such Member is zero.

Section 4.3 Tax Allocations.

(a) The income, gains, losses and deductions of the Company shall be allocated for federal, state and local income tax purposes among the Members in accordance with the allocation of such income, gains, losses and deductions among the Members for purposes of computing their Capital Accounts; except that if any such allocation is not permitted by the Code or other applicable law, then the Company’s subsequent income, gains, losses and deductions for tax purposes shall be allocated among the Members so as to reflect as nearly as possible the allocation set forth herein in computing their Capital Accounts.

(b) Items of Company taxable income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall be allocated among the Members in accordance with Code Section 704(c) so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Gross Asset Value using such method or methods described in Regulations Section 1.704-3 as are selected by the Managing Member.

(c) If the Gross Asset Value of any Company asset is adjusted pursuant to the requirements of Regulations Section 1.704-1(b)(2)(iv)(e) or (f), subsequent allocations of items of taxable income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c).

(d) Tax credits, tax credit recapture and any items related thereto shall be allocated to the Members according to their interests in such items as reasonably determined by the Managing Member taking into account the principles of Regulations Sections 1.704-1(b)(4)(ii). Any recapture of depreciation or any other items of deduction shall be allocated in accordance with Regulations Sections 1.1245-1(e) and 1.1254-5 to the Member that received the benefits of such depreciation or deduction.

(e) Allocations pursuant to this Section 4.3 are solely for the purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Income, Loss, Distributions or other Company items pursuant to any provision of this Agreement.

Section 4.4 Members’ Tax Reporting. The Members acknowledge and are aware of the income tax consequences of the allocations made pursuant to this Article IV and, except as may otherwise be required by applicable law or regulatory requirements, hereby agree to be bound by the provisions of this Article IV in reporting their shares of Company income, gain, loss, deduction and credit for federal, state and local income tax purposes.

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Section 4.5 Withholding; Indemnification and Reimbursement for Payments on Behalf of a Member. Each Member shall, to the fullest extent permitted by law, indemnify and hold harmless the Company, the Managing Member and each other Person who is, or who is deemed to be, the responsible withholding agent for United States federal, state or local or foreign income tax purposes against all claims, liabilities and expenses of whatever nature relating to the Company’s, the Managing Member’s or such other Person’s obligation to withhold and to pay over, or otherwise to pay, any withholding or other taxes payable by the Company or any of its Affiliates with respect to such Member or as a result of such Member’s ownership of Common Units or participation in the Company. Each Member hereby authorizes the Company and the Managing Member on behalf of the Company to withhold and to pay over, or otherwise to pay, any withholding or other taxes determined by the Managing Member to be payable by the Company (pursuant to any provision of United States federal, state or local or foreign law) with respect to such Member or such Member’s Common Units or as a result of such Member’s participation in the Company. If and to the extent that the Company withholds and pays, or otherwise pays, any such withholding or other taxes with respect to a Member, such Member shall be deemed for all purposes of this Agreement to have received a distribution from the Company as of the time such withholding or other tax is paid (or, if earlier, required to be paid) with respect to such Member or such Member’s Common Units or such Member’s participation in the Company, and, to the extent such taxes exceed the amount that would otherwise be distributable to such Member, as a demand loan payable by the Member to the Company with interest at a 10% rate, compounded annually. The Managing Member may, in its discretion, either demand payment of the principal and accrued interest on such demand loan at any time, and enforce payment thereof by legal process, or may withhold from one or more distributions to a Member amounts sufficient to satisfy such Member’s obligations under any such demand loan. In the event that the Company receives a refund of taxes previously withheld, the economic benefit of such refund shall be apportioned among the Members in a manner reasonably determined by the Managing Member to offset the prior operation of this Section 4.5 in respect of such withheld taxes.

ARTICLE V

MANAGEMENT; RIGHTS AND DUTIES OF MEMBERS

Section 5.1 Managing Member: Delegation of Authority and Duties.

(a) The business, property and affairs of the Company shall be managed under the sole, absolute and exclusive direction of the Managing Member, which may from time to time delegate authority to officers (“Officers”) or to others to act on behalf of the Company. Without limiting the foregoing provisions of this Section 5.1(a), the Managing Member shall have the sole power to manage or cause the management of the Company, including, without limitation, the power and authority to effectuate the sale, lease, transfer, exchange or other disposition of any, all or substantially all of the assets of the Company (including, but not limited to, the exercise or grant of any conversion, option, privilege or subscription right or any other right available in connection with any assets at any time held by the Company) or the merger, consolidation, reorganization or other combination of the Company with or into another entity.

(b) No Member who is not also a Managing Member, in his or her or its capacity as such, shall participate in or have any control over the business of the Company. Except as expressly provided herein, the Common Units, other Equity Securities in the Company, or the fact of a Member’s admission as a member of the Company do not confer any rights upon the Members to participate in the management of the affairs of the Company. Except as expressly

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provided herein, no Member who is not also a Managing Member shall have any right to vote on any matter involving the Company, including with respect to any merger, consolidation, combination or conversion of the Company, or any other matter with respect to which a Member might otherwise have the ability to vote or consent under the Act, at law, in equity or otherwise. The conduct, control and management of the Company shall be vested exclusively in the Managing Member. In all matters relating to or arising out of the conduct of the operation of the Company, the decision of the Managing Member shall be the decision of the Company. Except as required by law, or expressly provided in Section 5.1(c) or by separate agreement with the Company, no Member who is not also a Managing Member (and acting in such capacity) shall take any part in the management or control of the operation or business of the Company in its capacity as a Member, nor shall any Member who is not also a Managing Member (and acting in such capacity) have any right, authority or power to act for or on behalf of or bind the Company in his or her or its capacity as a Member in any respect or assume any obligation or responsibility of the Company or of any other Member.

(c) The Company may employ one or more Members from time to time, and such Members, in their capacity as employees or agents of the Company (and not, for clarity, in their capacity as Members of the Company), may take part in the control and management of the business of the Company to the extent such authority and power to act for or on behalf of the Company has been delegated to them by the Managing Member. To the fullest extent permitted by applicable law, the Managing Member shall have the power and authority to delegate to one or more other Persons the Managing Member’s rights and powers to manage and control the business and affairs of the Company, including to delegate to Members, agents and employees of a Member or the Company (including Officers), and to delegate by a management agreement or another agreement with, or otherwise to, other Persons. The Managing Member may authorize any Person (including any Member or Officer) to enter into and perform any document on behalf of the Company.

Section 5.2 Officers.

(a) The Managing Member may, from time to time, employ and retain Persons as may be necessary or appropriate for the conduct of the Company’s business, including employees, agents and other Persons (any of whom may be a Member) who may be designated as Officers of the Company, with such titles as and to the extent authorized by the Managing Member. Any number of offices may be held by the same Person. In its discretion, the Managing Member may choose not to fill any office for any period as it may deem advisable. Officers need not be residents of the State of Oklahoma or Members. Any Officers so designated shall have such authority and perform such duties as the Managing Member may from time to time delegate to them. Each Officer shall hold office until his successor shall be duly designated and shall qualify or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. The salaries or other compensation, if any, of the Officers of the Company shall be fixed from time to time by the Managing Member. Designation of an Officer shall not of itself create any employment rights.

(b) Any Officer may resign as such at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time is specified, at the time of its receipt by the Managing Member. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. All employees, agents and Officers shall be subject to the supervision and direction of the Managing Member and may be removed, with or without cause, from such office by the Managing Member and the authority, duties or responsibilities of any employee, agent or Officer of the Company may be suspended by or altered the Managing Member from time to time, in each case in the sole discretion of the Managing Member.

(c) The Officers, in the performance of their duties as such, shall owe to the Company duties of loyalty and due care of the type owed by officers of a Delaware corporation pursuant to the laws of the state of Delaware.

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Section 5.3 Exculpation. Except as provided in this Agreement, in the Articles, in a separate written agreement with the Company or as required under the Act, no Member, Officer, employee or other agent of the Company will be personally liable for the debts, obligations or liabilities of the Company, whether that liability arises in contract, tort, or otherwise. No Member, Officer, employee or other agent of the Company will be liable in damages or otherwise to the Company or any other Member for any loss or damage incurred by reason of any act or omission performed or omitted by such Member or Officer in Good Faith either on behalf of the Company or in furtherance of the interests of the Company, and performed or omitted in a manner reasonably believed by such Person to be within the scope of the authority granted by this Agreement, by law or by the consent of the Managing Member, provided such Person was not guilty of gross negligence or willful misconduct with respect to such act or omission.

Section 5.4 Indemnification. To the fullest extent permitted by law, the Company will indemnify and hold harmless each of the Members, Officers, employees or other agents who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of any act or omission or alleged act or omission arising out of such Person’s activities as a Member, Officer, employee or other agent or otherwise on behalf of the Company if such activities were performed or omitted in Good Faith either on behalf of the Company or in furtherance of the interests of the Company, and were performed or omitted in a manner reasonably believed by such Person to be within the scope of the authority conferred by this Agreement, by law or by the Managing Member, against losses, damages or expenses for which such Person has not otherwise been reimbursed (including, without limitation, attorneys and accountant fees and expenses, judgment fines and amounts paid in settlement), actually and reasonably incurred by such Person in connection with such action, suit or proceeding, so long as such Person was not guilty of gross negligence or willful misconduct with respect to such act or omission. Expenses, including attorneys’ fees and expenses, incurred by any such indemnified Person in defending a proceeding as to which it is entitled to indemnification hereunder (as reasonably determined by the Managing Member) shall be paid by the Company periodically in advance of the final disposition of such proceeding, including any appeal therefrom, upon receipt of an undertaking by or on behalf of such indemnified Person to repay such amount if it shall ultimately be determined that such Indemnified Person is not entitled to be indemnified by the Company. Notwithstanding anything contained herein to the contrary, any indemnity by the Company relating to the matters covered in this Section 5.4 shall be provided and satisfied out of and to the extent of Company assets only. The right to indemnification and the advancement of expenses conferred in this Section 5.4 shall not be exclusive of any other right which any such Person may have or hereafter acquire under any agreement, law or otherwise. If this Section 5.4 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each such indemnified Person pursuant to this Section 5.4 to the fullest extent permitted by any applicable portion of this Section 5.4 that shall not have been invalidated.

Section 5.5 Insurance. The Company shall have the power to purchase and maintain insurance on behalf of any Member, Officer, employee or other agent of the Company against any liability asserted against such Person and incurred by such Person in any such capacity, or arising out of such Person’s status as a Member, Officer, employee or other agent of the Company, whether or not the Company would have the power to indemnify such Person against such liability under the provisions of Section 5.4 or under applicable law.

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Section 5.6 Investment Representations of Members. Each Member hereby represents, warrants and acknowledges to the Company that:

(a) such Member has such knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of an investment in the Company and is making an informed investment decision with respect thereto;

(b) such Member is acquiring interests in the Company for investment only and not with a view to, or for resale in connection with, any distribution to the public or public offering thereof;

(c) the execution, delivery and performance of this Agreement have been duly authorized by such Member;

(d) such Member has executed and provided the Company properly completed copies of IRS Form W-8 or W-9, as applicable, which are valid as of the Effective Date (with respect to Members as of the Effective Date) or as of the date that an Additional Member or Substituted Member becomes a Member (with respect to Additional Members and Substituted Members), and will promptly provide any additional information or documentation requested by the Managing Member relating to tax matters (including any information reasonably requested in connection with ensuring compliance under Code Sections 1471 through 1474) (and if any such information or documentation previously provided becomes incorrect or obsolete, such Member will promptly notify the Managing Member and provide updated information and documentation);

(e) such Member is not a disregarded entity for U.S. federal income tax purposes and is acquiring its Common Units for its own account and is the sole beneficial owner thereof for U.S. federal income tax purposes;

(f) either (i) such Member is not, for U.S. federal income tax purposes, a partnership, trust, estate or “S Corporation” as defined in the Code (in each case, a “Pass-Through Entity”) or (ii) such Member is, for U.S. federal income tax purposes, a Pass-Through Entity and, within the meaning of Regulations Section 1.7704-1, (A) it is not a principal purpose of the use of the tiered arrangement involving such Member to permit the Company to satisfy the 100-partner limitation described in Regulations Section 1.7704-1(h)(1)(ii) or (B) at no time during the term of the Company will substantially all of the value of a beneficial owner’s interest in such Member (directly or indirectly) be attributable to such Member’s ownership of its Common Units, and such Member has not transferred and will not transfer its Common Units on or through (1) an established securities market or (2) a secondary market or the substantial equivalent thereof, all within the meaning of Code Section 7704(b); and

(g) such Member’s taxable year-end is December 31 or has been otherwise indicated to the Managing Member in writing.

Section 5.7 Certain Costs and Expenses. The Company shall (a) pay (or cause to be paid) all costs, fees, operating expenses and other expenses of the Company (including the costs, fees and expenses of attorneys, accountants or other professionals and the compensation of all personnel providing services to the Company) incurred in pursuing and conducting, or otherwise related to, the activities of the Company and (b) pay (or cause to be paid) and/or reimburse the Managing Member for all costs, fees,

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operating expenses and other expenses of the Managing Member (including, without suggesting any limitation of any kind, costs of securities offerings not borne directly by Members, board of directors compensation and meeting costs, cost of periodic reports to its stockholders, litigation costs and damages arising from litigation, accounting and legal costs and franchise taxes); provided, however, that, the Company shall not pay or bear any income tax obligations of the Managing Member).

ARTICLE VI

TAX MATTERS

Section 6.1 Preparation of Tax Returns. The Tax Matters Member shall arrange for the preparation and timely filing of all returns required to be filed by the Company. As promptly as practicable after the end of each Fiscal Year, the Managing Member shall cause the Company to provide to each Member a Schedule K-1 for such Fiscal Year. Additionally, the Managing Member shall cause the Company to provide on a timely basis to each Member, to the extent commercially reasonable and available to the Company without undue cost, any information reasonably required by the Member to prepare, or in connection with an audit of, such Member’s income tax returns.

Section 6.2 Tax Elections. The taxable year shall be the Fiscal Year unless the Managing Member shall determine otherwise in compliance with applicable laws. The Tax Matters Member shall determine whether to make or revoke any available election pursuant to the Code; provided that the Tax Matters Member shall cause the Company to make and to maintain and keep in effect at all times, in accordance with Code Sections 734, 743 and 754 and applicable Regulations and comparable state law provisions, an election to adjust tax basis in the event (a) any Common Unit is Transferred in accordance with this Agreement (including the purchase by ECI of Common Units from the Members (other than the Managing Member) in connection with the IPO) or (b) any Company property is distributed to any Member. Each Member will upon request supply any information necessary to give proper effect to any tax elections. Notwithstanding the foregoing, no election shall be made to treat the Company as a corporation for tax purposes and the Managing Member agrees not to take any action to treat the Company as a corporation for tax purposes.

Section 6.3 Tax Controversies. The Managing Member is hereby designated as the Tax Matters Member and is authorized and required to represent the Company (at the Company’s expense) in connection with all examinations of the Company’s affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Company funds for professional services reasonably incurred in connection therewith. Each Member agrees to cooperate reasonably with the Company and to do or refrain from doing any or all things reasonably requested by the Company with respect to the conduct of such proceedings. The Tax Matters Member shall keep the Members reasonably informed of the progress of any examinations, audits or other proceedings, and shall provide the Members with information on a full and timely basis.

Section 6.4 Tax Allocations. All matters concerning allocations for United States federal, state, and local and non-United States income tax purposes, including accounting procedures, not expressly provided for by the term of this Agreement shall be determined in Good Faith by the Managing Member.

Section 6.5 Fiscal Year. The Fiscal Year of the Company shall end on December 31 unless otherwise determined by the Managing Member in its sole discretion in accordance with Code Section 706.

Section 6.6 Books and Records; Fiscal Year. The Company shall maintain the Company’s books and records at its principal office. Such books will be kept on such method of accounting as the Managing Member may select. The Company’s accounting period will be the Fiscal Year, unless and until changed by the Managing Member. The books and records of the Company shall reflect all the Company transactions and shall be appropriate and adequate for the Company’s business, including without limitation:

(a) a current list in alphabetical order of the full name and last known business street address of each Member;

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(b) a copy of the certified Articles and all amendments to it, together with executed copies of any powers of attorney pursuant to which any amendment has been executed;

(c) copies of the Company’s federal, state and local income tax returns and reports, if any, for the three (3) most recent years;

(d) a copy of this Agreement; and

(e) any other documents or records required to be maintained under the Act.

Section 6.7 Reports. The Company will close the books of account promptly after the close of each Fiscal Year and will prepare and send to each Member a statement of such Member’s distributive share of income and expense for federal income tax reporting purposes.

ARTICLE VII

TRANSFER OF UNITS; SUBSTITUTE MEMBERS; REGISTRATION RIGHTS

Section 7.1 Restrictions on Transfers. Other than as provided for below in this Section 7.1, no Member may Transfer all or any portion of its Membership Interest except with the written consent of the Managing Member, which may be granted or withheld in its sole discretion. Without the consent of the Managing Member (but otherwise in compliance with this Section 7.1), a Member may, at any time, (a) Transfer all or any portion of such Member’s Membership Interest pursuant to Article VIII or (b) Transfer all or any portion of such Member’s Membership Interest to a Permitted Transferee of such Member, provided that such Member Transfers an equivalent number of shares of Class B Common Stock to such Permitted Transferee. Any purported Transfer of all or any portion of a Member’s Membership Interest not complying with this Section 7.1 shall be void ab initio and shall not create any obligation on the part of the Company or the other Members to recognize the purported Transfer or to recognize the Person to which the Transfer purportedly was made as a Member, Assignee or Transferee. A Person acquiring a Member’s Membership Interest in accordance with this Section 7.1 shall not be admitted as a Substituted Member or Additional Member except upon satisfaction of the conditions set forth in Section 7.2, but such Person shall, to the extent of the Membership Interest transferred to it, be entitled to such Member’s (i) share of Distributions, (ii) share of profits and losses, including Net Profits and Net Losses and (iii) Capital Account in accordance with Section 2.3. Notwithstanding anything in this Section 7.1 or elsewhere in this Agreement to the contrary, if a Member Transfers all or any portion of its Membership Interest after the designation of a record date and declaration of a distribution pursuant to Section 3.1 and before the payment date of such distribution, the transferring Member (and not the Person acquiring all or any portion of its Membership Interest) shall be entitled to receive such distribution in respect of such transferred Membership Interest.

Section 7.2 Recognition of Transfer; Substituted and Additional Members.

(a) No direct or indirect Transfer of all or any portion of a Member’s Membership Interest may be made, and no purchaser, assignee, transferee or other recipient of all or any part of such Membership Interest shall be admitted to the Company as a Substituted Member or Additional Member hereunder, if:

(i) such Transfer is made to any Person who lacks the legal right, power or capacity to own such Membership Interest;

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(ii) such Transfer (together with prior Transfers) would pose a material risk that the Company would be a “publicly traded partnership” as defined in Code Section 7704;

(iii) such Transfer would require the registration of such Transferred Membership Interest pursuant to any applicable United States federal or state securities laws (including, without limitation, the Securities Act or the Exchange Act);

(iv) such Transfer would cause any portion of the assets of the Company to become “plan assets” of any “benefit plan investor” within the meaning of regulations issued by the U.S. Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the Code of Federal Regulations as modified by Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended from time to time; or

(v) to the extent requested by the Managing Member, the Managing Member shall not have received the opinion of counsel, if any, required by Section 7.2(c) in connection with such Transfer.

In addition, notwithstanding any contrary provision in this Agreement, to the extent the Managing Member determines that the Company (or Common Units or other interests in the Company) do not (or are not reasonably expected to) meet the requirements of Regulation Section 1.7704-1(h), the Managing Member may impose such restrictions on the Transfer of Common Units or other interests in the Company as the Managing Member may determine to be necessary or advisable to avoid any material risk that the Company could be treated as a publicly traded partnership under Code Section 7704.

(b) Each Substituted Member and Additional Member shall be bound by all of the provisions of this Agreement. Each Substituted Member and Additional Member, as a condition to its admission as a Member, shall execute and acknowledge such instruments (including a counterpart of this Agreement or a joinder agreement in customary form), in form and substance reasonably satisfactory to the Managing Member, as the Managing Member reasonably deems necessary or desirable to effectuate such admission and to confirm the agreement of such Substituted Member or Additional Member to be bound by all the terms and provisions of this Agreement with respect to the Membership Interest acquired by such Substituted Member or Additional Member. The admission of a Substituted Member or Additional Member shall not require the consent of any Member other than the Managing Member (if and to the extent such consent of the Managing Member is expressly required by this Article VIII). As promptly as practicable after the admission of a Substituted Member or Additional Member, the books and records of the Company and the Schedule of Members shall be revised to reflect such admission.

(c) As a further condition to any Transfer of all or any part of a Member’s Membership Interest, other than Transfers pursuant to Article VIII, the Managing Member may, in its discretion, require a written opinion of counsel to the transferring Member (which counsel is reasonably satisfactory to the Managing Member), which opinion shall be obtained at the sole expense of the transferring Member and shall be reasonably satisfactory in form and substance to the Managing Member, as to such matters as are customary and appropriate in transactions of this type, including, without limitation (or, in the case of any Transfer made to a Permitted Transferee, limited to an opinion) to the effect that such Transfer will not result in a violation of the registration or other requirements of the Securities Act or any other federal or state securities laws. No such opinion, however, shall be required in connection with a Transfer made pursuant to Article VIII.

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Section 7.3 Expense of Transfer; Indemnification. All reasonable costs and expenses incurred by the Managing Member and the Company in connection with any Transfer of a Member’s Membership Interest, including any filing and recording costs and the reasonable fees and disbursements of counsel for the Company, shall be paid by the transferring Member. In addition, the transferring Member hereby indemnifies the Managing Member and the Company against any losses, claims, damages or liabilities to which the Managing Member, the Company or any of their Affiliates may become subject arising out of or based upon any false representation or warranty made by, or breach or failure to comply with any covenant or agreement of, such transferring Member or such transferee in connection with such Transfer.

Section 7.4 Additional Requirements. Notwithstanding any contrary provision in this Agreement, for the avoidance of doubt, the Managing Member may impose such vesting requirements, forfeiture provisions, Transfer restrictions, minimum retained ownership requirements or other similar provisions with respect to any interests in the Company that are outstanding as of the date of this Agreement or are created hereafter, with the written consent of the holder of such interests in the Company. Such requirements, provisions and restrictions need not be uniform among holders of interests in the Company and may be waived or released by the Managing Member in its sole discretion with respect to all or any portion of the interests in the Company owned by any one or more Members or Assignees at any time and from time to time.

Section 7.5 Registration Rights. The Members shall have registration rights as and to the extent set forth in the Registration Rights Agreement dated on or about the date hereof among ECI and certain of the Members entered into in connection with the IPO (the “Registration Rights Agreement”).

ARTICLE VIII

EXCHANGE

Section 8.1 General. Subject to adjustment as set forth in Section 8.9, each Member (other than the Managing Member) shall be permitted, at any time and from time to time after the expiration or earlier termination of the Lock-Up Period (as that term is defined in the Registration Rights Agreement), to exchange one or more Common Units together with an equivalent number of shares of Class B Common Stock, as such number may be adjusted equitably for any stock split, stock dividend or reverse stock split of the Class B Common Stock, for a like number of fully paid and non-assessable shares of Class A Common Stock or, if ECI so elects, the Cash Amount contemplated by Section 8.10 (an “Exchange”); provided, however, that, from time to time during the Restricted Exchange Period, a Member (other than a Founder Entity), together with any Permitted Transferees of such Member, may not exercise rights of Exchange with respect to an aggregate number of Common Units (and equivalent number of shares of Class B Common Stock) that exceeds such Member’s Exchange Allowance in effect at such time. An Assignee shall have rights to effect an Exchange as though such Assignee was a Member.

Section 8.2 Exchange Notice. In order to exercise rights of Exchange as provided for under Section 8.1, the exchanging Member shall present and surrender to the Managing Member the certificate or certificates representing the Common Units and shares of Class B Common Stock to be exchanged (in each case, if certificated), during usual business hours at the principal executive offices of the Managing Member, accompanied by written notice in the form attached hereto as Exhibit B (the “Exchange Notice”) stating that the exchanging Member elects to exchange the number of Common Units and shares of Class B Common Stock specified in such notice (represented by such surrendered certificate or certificates, if applicable) and, if the shares of Class A Common Stock to be received are to be issued other than in the

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name of the exchanging Member, specifying the name(s) of the Person(s) in whose name or on whose order the shares of Class A Common Stock are to be issued. The Member seeking to Exchange shall represent in the Exchange Notice that such Member owns the Common Units and shares of Class B Common Stock to be delivered at the Closing of the Exchange pursuant to Section 8.3, free and clear of all Liens, except as set forth therein, and, if there are any Liens identified in the Exchange Notice, such Member shall covenant that such Member will deliver at the applicable Closing evidence reasonably satisfactory to ECI that all such Liens have been released. An Exchange Notice may be revoked or modified at any time prior to consummation of the Exchange in the discretion of the Member seeking to Exchange, including at any such time after which ECI provides a notice of Cash Exchange to such Member as provided in Section 8.9. The Managing Member may adopt policies and procedures for the administration of Exchanges in addition to those set forth herein, which policies and procedures may include limitations on Members’ ability to Exchange other than in specified periods.

Section 8.3 Closing.

(a) If an Exchange Notice has been delivered pursuant to Section 8.2, then as promptly as practicable after receipt of the Exchange Notice, the parties shall effect the closing of the transactions contemplated by this Article VIII (the “Closing”) at the executive offices of the Managing Member, or at such other time, at such other place, and in such other manner, as the applicable parties to such Exchange shall agree in writing. The date on which a Closing of an Exchange shall occur is the “Closing Date” with respect to such Exchange.

(b) No Exchange in which the shares of Class A Common Stock are to be issued other than in the name of the Exchanging Member shall be permitted (and, if attempted, shall be void ab initio) if, in the Good Faith determination of the Managing Member, such Exchange would not comply with the conditions to Transfer set forth in Section 7.2(a).

(c) Notwithstanding anything to the contrary in this Article VIII, during a Blackout Period (as defined below), the Managing Member, in its sole discretion, shall have the right to prohibit any Member from effecting an Exchange and the Managing Member and the Company shall have the right to delay or suspend any Exchange (whether such Exchange will result in the issuance of shares of Class A Common Stock or the payment of a Cash Amount). For purposes of this Section 8.3(c):

(i) “Blackout Period” means any time period (A) that is not an Open Window (as defined below), (B) during which the Managing Member is in possession of material non-public information and has determined in Good Faith that the disclosure of such information would not be in the best interests of the Managing Member or (C) during which both (1) the registration statement contemplated by Section 2.4 of the Registration Rights Agreement is not effective or is otherwise unavailable and (2) the exchanging Member would not be able to sell the Class A Common Stock it receives in the Exchange under Rule 144 promulgated under the Securities Act; provided that any such Blackout Period shall expire on the first date on which no circumstances set forth in clauses (A), (B) and (C), in the Managing Member’s sole discretion, continue to exist; and

(ii) “Open Window” means any period during which, in the discretion of the Managing Member, (A) the directors and executive officers of the Managing Member are permitted to trade securities of the Managing Member under the Managing Member’s insider trading policy and (B) the Managing Member is not in possession of material non-public information.

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Section 8.4 Closing Condition. The obligations of the parties to consummate an Exchange pursuant to this Article VIII shall be subject to the conditions that there shall be no injunction, restraining order or decree of any nature of any Governmental Entity that is then in effect that restrains or prohibits the Exchange of Common Units.

Section 8.5 Closing Deliveries. At each Closing, the Company, the Managing Member and each Member that has submitted an Exchange Notice in respect of such Closing shall deliver the following:

(a) each such Member shall deliver an instrument of transfer in form reasonably satisfactory to the Managing Member, sufficient to transfer to ECI the number of Common Units and shares of Class B Common Stock set forth in the Exchange Notice of such Member;

(b) if applicable, each such Member shall deliver evidence reasonably satisfactory to ECI and the Managing Member that all Liens on the Common Units and shares of Class B Common Stock surrendered by such Member pursuant to this Section 8.5 have been released; and

(c) the Managing Member shall deliver to each such Member a certificate issued in the name of such Member representing a number of shares of Class A Common Stock equal to the number of Common Units such Member elected to Exchange.

Section 8.6 Expenses. Each party to an Exchange or a Closing shall bear such party’s own expenses in connection with such Exchange or Closing, whether or not such Exchange is ultimately consummated.

Section 8.7 Termination of Membership; Cancellation and Registration of Common Units. Upon consummation of each Closing contemplated by this Article VIII, each Common Unit exchanged at such Closing shall thereafter be registered in the name of ECI, and the Managing Member shall modify the books and records of the Company to reflect such Transfer. In the event that, as a result of an Exchange, a Member shall cease to hold any Common Units, such Member shall cease to be a “member” of the Company for any purpose under this Agreement or the Act.

Section 8.8 Tax Treatment. As required by the Code and the Regulations: (a) the parties shall report an Exchange consummated hereunder as a taxable sale of Common Units by a Member to ECI (in conjunction with an associated cancellation of shares of Class B Common Stock) and (b) no party shall take a contrary position on any income tax return, amendment thereof or communication with a taxing authority.

Section 8.9 Adjustment. In the event that the outstanding shares of Class A Common Stock are converted into another class or series of stock of ECI, then each Member otherwise entitled to effect an Exchange pursuant to Section 8.1 shall, instead of receiving shares of Class A Common Stock, receive upon such Exchange the amount of such other class or series of stock of ECI that such Member would have received if the Exchange had occurred immediately before the effective date of such event and the shares of Class A Common Stock received by such Member had been converted into the new class or series.

Section 8.10 Cash Exchange. Notwithstanding anything to the contrary in Section 8.1 through Section 8.9, ECI may, in its sole and absolute discretion, elect to deliver an amount of cash in lieu of some or all of the shares of Class A Common Stock otherwise deliverable to a Member at the Closing of an Exchange (a “Cash Exchange”). The amount of cash to be paid in a Cash Exchange (the “Cash Amount”) shall be equal to the product obtained by multiplying (a) the Class A Fair Market Value (as defined below) on the date that the Exchange Notice is delivered to the Company, by (b) the aggregate

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number of shares of Class A Common Stock for which the Cash Exchange has been elected. If ECI elects a Cash Exchange with respect to all or a portion of the shares of Class A Common Stock otherwise deliverable to a Member at the Closing of an Exchange pursuant to this Section 8.11, the Company shall give written notice thereof to such exchanging Member on or before the close of business three days prior to the Closing, and the number of shares of Class A Common Stock to be delivered in the Exchange pursuant to Section 8.1 through Section 8.9 shall be correspondingly reduced. As provided in Section 8.2, upon receipt of such notice of Cash Exchange, and prior to the consummation of the Exchange, the Member may in its discretion, revoke or modify its Exchange Notice. “Class A Fair Market Value” means, on the any date of determination, the volume weighted average sale price per share of Class A Common Stock on the New York Stock Exchange on such date, or if the Class A Common Stock is not listed on the New York Stock Exchange, on the principal national securities exchange on which the Class A Common Stock is then listed or, if the Class A Common Stock is not listed on a national securities exchange, an automated quotation system on which the Class A Common Stock is then listed or authorized for quotation, in each case as reported by Bloomberg Financial Markets (or any successor thereto) through its “Volume at Price” functions and ignoring any block trades (which, for purposes of this definition means any transfer of more than 100,000 shares (subject to adjustment to reflect stock dividends, stock splits, stock combinations and other similar events)), and if the Class A Common Stock is not then listed on a national securities exchange or authorized for quotation on an automated quotation system, the Fair Market Value of one (1) share of Class A Common Stock.

Section 8.11 Mandatory Exchange. The Managing Member may require all Members holding Common Units to exchange all Common Units and shares of Class B Common Stock held by them for shares of Class A Common Stock (subject to a Cash Exchange) pursuant to Section 8.1 with the consent of each Founder Entity that is a Member.

ARTICLE IX

DISSOLUTION AND LIQUIDATION; WITHDRAWAL

Section 9.1 Dissolution. The Company shall not be dissolved by the admission of Additional Members or Substituted Members. The Company shall be dissolved and its affairs shall be wound up upon the first to occur of any of the following events:

(a) an election by the Managing Member to dissolve, wind up or liquidate the Company;

(b) the entry of a decree of judicial dissolution of the Company under Section 2038 of the Act; or

(c) at any time there are no members of the Company, unless the Company is continued in accordance with the Act.

Except as otherwise set forth in this Section 9.1, the Company is intended to have perpetual existence.

Section 9.2 Liquidation and Termination.

(a) On the dissolution of the Company, the Managing Member shall act as liquidator or (in its sole discretion) may appoint one (1) or more representatives, Members or other Persons as liquidator(s). The liquidators shall proceed diligently to wind up the affairs of the Company and make final distributions as provided herein and in the Act. The costs of liquidation shall be borne as a Company expense. Until final distribution, the liquidators shall continue to operate the Company with all of the power and authority of the Managing Member. The steps to be accomplished by the liquidators are as follows:

(i) the liquidators shall pay, satisfy or discharge from Company funds all of the debts, liabilities and obligations of the Company (including all expenses incurred in liquidation) or otherwise make adequate provision for payment and discharge thereof (including the establishment of a cash fund for contingent liabilities in such amount and for such term as the liquidators may reasonably determine); and

(ii) after payment or provision for payment of all of the Company’s liabilities has been made in accordance with Section 9.1, all remaining assets of the Company shall be distributed in accordance with Article III.

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Section 9.3 Complete Distribution. The distribution to a Member in accordance with the provisions of Section 3.1 constitutes a complete return to the Member of its Capital Contributions and a complete distribution to the Member of its interest in the Company and all the Company’s property and constitutes a compromise to which all Members have consented within the meaning of the Act.

Section 9.4 Articles of Dissolution. On completion of the distribution of Company assets as provided herein, the Managing Member (or such other Person or Persons as the Act may require or permit) shall file articles of dissolution with the Secretary of State of the State of Oklahoma, cancel any other filings made pursuant to this Agreement that are or should be canceled and take such other actions as may be necessary to terminate the Company. The Company shall be deemed to continue in existence for all purposes of this Agreement until it is terminated pursuant to this Section 9.4.

Section 9.5 Reasonable Time for Winding Up. A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets pursuant to Section 9.2 to minimize any losses otherwise attendant upon such winding up.

Section 9.6 Return of Capital. The liquidators shall not be personally liable for the return of Capital Contributions or any portion thereof to the Members (it being understood that any such return shall be made solely from Company assets).

Section 9.7 HSR Act. Notwithstanding any other provision in this Agreement, in the event that the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) is applicable to any Member by reason of the fact that any assets of the Company shall be distributed to such Member in connection with the dissolution of the Company, the dissolution of the Company shall not be consummated until such time as the applicable waiting periods (and extensions thereof) under the HSR Act have expired or otherwise been terminated with respect to each such Member.

Section 9.8 Member Withdrawal. No Member shall have the power or right to withdraw or otherwise resign from the Company prior to the dissolution and winding up of the Company, except pursuant to a Transfer permitted under this Agreement.

ARTICLE X

GENERAL PROVISIONS

Section 10.1 Power of Attorney. Each Member hereby constitutes and appoints the Managing Member and the liquidators, with full power of substitution, as his, her or its true and lawful agent and attorney-in-fact, with full power and authority in his, her or its name, place and stead, to execute, swear to, acknowledge, deliver, file and record in the appropriate public offices:

(a) this Agreement, all certificates and other instruments and all amendments thereof in accordance with the terms hereof that the Managing Member deems appropriate or necessary to form, qualify or continue the qualification of, the Company as a limited liability company in the State of Oklahoma and in all other jurisdictions in which the Company may conduct business or own property;

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(b) all instruments that the Managing Member deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms;

(c) all conveyances and other instruments or documents that the Managing Member or the liquidators deem appropriate or necessary to reflect the dissolution and liquidation of the Company pursuant to the terms of this Agreement, including a certificate of cancellation; and

(d) all instruments relating to the admission, withdrawal or substitution of any Member.

The foregoing power of attorney is irrevocable and coupled with an interest, and shall survive the death, disability, incapacity, dissolution, bankruptcy, insolvency or termination of any Member and the Transfer of all or any portion of his, her or its Common Units and shall extend to such Member’s heirs, successors, assigns and personal representatives.

Section 10.2 Amendments.

(a) This Agreement may be amended, supplemented, waived or modified by the written consent of the Managing Member in its sole discretion without the approval of any other Member or other Person; provided, however, that, except as otherwise provided herein, no amendment may materially and adversely affect the rights of a holder of Common Units, as such, other than on a pro rata basis with other holders of Common Units of the same class, without the consent of such holder (or, if there is more than one such holder that is so affected, without the consent of a majority of such affected holders in accordance with their holdings of Common Units); provided further, however, that notwithstanding the foregoing, the Managing Member may, without the written consent of any other Member or any other Person, amend, supplement, waive or modify any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record whatever documents may be required in connection therewith, to reflect:

(i) any amendment, supplement, waiver or modification that the Managing Member determines to be necessary or appropriate in connection with the creation, authorization or issuance of any class of Common Units or other Equity Securities in the Company or other Company securities in accordance with this Agreement;

(ii) the admission, substitution, withdrawal or removal of Members in accordance with this Agreement;

(iii) a change in the name of the Company, the location of the principal place of business of the Company, the registered agent of the Company or the registered office of the Company;

(iv) any amendment, supplement, waiver or modification that the Managing Member determines in its sole discretion to be necessary or appropriate to address changes in U.S. federal income tax regulations, legislation or interpretation; or

(v) a change in the Fiscal Year or taxable year of the Company and any other changes that the Managing Member determines to be necessary or appropriate as a result of a change in the Fiscal Year or taxable year of the Company, including a change in the dates on which distributions are to be made by the Company;

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provided further, that the books and records of the Company shall be deemed amended from time to time to reflect the admission of a new Member, the withdrawal or resignation of a Member, the adjustment of the Common Units or other interests in the Company resulting from any issuance, Transfer or other disposition of Common Units or other interests in the Company, in each case that is made in accordance with the provisions hereof. If an amendment has been approved in accordance with this Agreement, such amendment shall be adopted and effective with respect to all Members. Upon obtaining such approvals as may be required by this Agreement, and without further action or execution on the part of any other Member or other Person, any amendment to this Agreement may be implemented and reflected in a writing executed solely by the Managing Member and the other Members shall be deemed a party to and bound by such amendment.

(b) Notwithstanding the foregoing, in addition to any other consent that may be required, the consent of each Founder Entity that holds a number of Common Units that is five percent (5%) or more of the number of Common Units outstanding immediately following the closing of the IPO and the related purchase of Common Units by the Managing Member with the net proceeds therefrom (such number to be adjusted for any subdivision or combination of the Common Units effected after the closing of the IPO) (the “Special Consent Right”) shall be required for any amendment of this Agreement (or the rights of the Common Units in connection with the authorization or issuance of any other Common Units or Equity Securities of the Company) that:

(i) reduces the right of any Member to receive Tax Distributions other than on a pro rata basis with a reduction in taxable income allocable to such Member and other holders of Common Units of the same class;

(ii) precludes or limits the rights of any Member to exercise its respective rights under Article VIII;

(iii) requires any Member to make a Capital Contribution (including as a condition to maintaining any rights necessary to permit such Member to exercise its respective rights under Article VIII);

(iv) materially increases the obligations of any Member under this Agreement; or

(v) results in the Company being treated as a corporation for tax purposes.

(c) No failure or delay by any party in exercising any right, power or privilege hereunder (other than a failure or delay beyond a period of time specified herein) 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. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 10.3 Remedies. Each Member shall have all rights and remedies set forth in this Agreement and all rights and remedies that such Person has been granted at any time under any other agreement or contract and all of the rights that such Person has under any applicable law. Any Person having any rights under any provision of this Agreement or any other agreements contemplated hereby shall be entitled to enforce such rights specifically (without posting a bond or other security) to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by applicable law.

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Section 10.4 Successors and Assigns. All covenants and agreements contained in this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective Successors in Interest; provided that no Person claiming by, through or under a Member (whether as such Member’s Successor in Interest or otherwise), as distinct from such Member itself, shall have any rights as, or in respect to, a Member (including the right to approve or vote on any matter or to notice thereof).

Section 10.5 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

Section 10.6 Counterparts. This Agreement may be executed simultaneously in two or more separate counterparts, any one of which need not contain the signatures of more than one party, but each of which shall be an original and all of which together shall constitute one and the same agreement binding on all the parties hereto.

Section 10.7 Applicable Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Oklahoma, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Oklahoma or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Oklahoma. Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of the federal and state courts of the State of Oklahoma in the event any dispute arises out of this Agreement or any transaction or other agreement contemplated hereby, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it will not bring any action relating to this Agreement or any transaction or other agreement contemplated hereby in any court other than the federal and state courts of the State of Oklahoma and (d) waives any right to trial by jury with respect to any action related to or arising out of this Agreement or any transaction or other agreement contemplated hereby.

Section 10.8 Addresses and Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given or made when (a) delivered personally to the recipient, (b) sent by facsimile to the recipient (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if sent by facsimile before 5:00 p.m. New York time on a Business Day, and otherwise on the next Business Day, or (c) one Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands and other communications shall be sent to the address for such recipient set forth on the Schedule of Members, or in the Company’s books and records, or to such other address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. Any notice to the Managing Member or the Company shall be deemed given if received by the Managing Member at the principal office of the Company designated pursuant to Section 1.5.

Section 10.9 Creditors. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company or any of its Affiliates, and no creditor who makes a loan to the Company or any of its Affiliates may have or acquire (except pursuant to the terms of a separate agreement executed by the Company in favor of such creditor) at any time as a result of making the loan any direct or indirect interest in Company profits, losses, Distributions, capital or property other than as a secured creditor.

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Section 10.10 Waiver. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.

Section 10.11 Further Action. The parties agree to execute and deliver all documents, provide all information and take or refrain from taking such actions as may be necessary or appropriate to achieve the purposes of this Agreement.

Section 10.12 Entire Agreement. This Agreement, the other Transaction Documents, those documents expressly referred to herein and other documents dated as of the Effective Date related to the subject matter hereof embody the complete agreement and understanding among the parties hereto and supersede and preempt any prior understandings, agreements or representations by or among the parties hereto, written or oral, that may have related to the subject matter hereof in any way.

Section 10.13 Delivery by Facsimile or Email. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or email with scan or facsimile attachment, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or email as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense.

Section 10.14 Spousal Consent. Each Member who is an individual and is married has caused such Person’s spouse to execute and deliver a Spousal Consent and Proxy in substantially the form of Exhibit C.

ARTICLE XI

DEFINITIONS

Section 11.1 Certain Definitions. Unless the context otherwise requires, the following terms shall have the following meanings for purposes of this Agreement:

“Act” means the Oklahoma Limited Liability Company Act as set forth in Title 18, Section 2000, et. seq., of the Oklahoma Statutes.

“Additional Member” means any Person that has been admitted to the Company as a Member after the Effective Date pursuant to Section 2.2(b) by virtue of having received its Membership Interest from the Company and not from any other Member or Assignee.

“Adjusted Capital Account Deficit” means, with respect to any Person’s Capital Account as of the end of any taxable year, the amount by which the balance in such Capital Account is less than zero. For this purpose, such Capital Account balance shall be (a) reduced for any items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6) and (b) increased for any amount such Person is

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obligated to contribute or is treated as being obligated to contribute to the Company pursuant to Regulations Sections 1.704-1(b)(2)(ii)(c) (relating to partner liabilities to a partnership) or 1.704-2(g)(1) and 1.704-2(i) (relating to minimum gain).

“Affiliate” when used with reference to another Person means any Person (other than the Company), directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such other Person. An entity is an Affiliate for purposes of this definition only for such periods as the requisite control relationship is maintained. In addition, Affiliates of a Member shall include all its directors, managers, officers in their capacities as such, except that this sentence shall not apply to the use of Affiliate in the definition of “Change in Control.”

“Assignee” means any Transferee to which a Member or another Assignee has Transferred all or a portion of its interest in the Company in accordance with the terms of this Agreement, but that is not a Member.

“Bankruptcy” means, with respect to any Person, the occurrence of any of the following events:

(a) the filing of an application by such Person for, or a consent to, the appointment of a trustee or custodian of such Person’s assets;

(b) the filing by such Person of a voluntary petition in bankruptcy or the seeking of relief under Title 11 of the United States Code, as now constituted or hereafter amended, or the filing of a pleading in any court of record admitting in writing such Person’s inability to pay its debts as they become due;

(c) the failure of such Person to pay its debts as such debts become due;

(d) the making by such Person of a general assignment for the benefit of creditors;

(e) the filing by such Person of an answer admitting the material allegations of, or such Person’s consenting to, or defaulting in answering, a bankruptcy petition filed against him in any bankruptcy proceeding or petition seeking relief under Title 11 of the United States Code, as now constituted or as hereafter amended; or

(f) the entry of an order, judgment or decree by any court of competent jurisdiction adjudicating such Person a bankrupt or insolvent or for relief in respect of such Person or appointing a trustee or custodian of such Person’s assets and the continuance of such order, judgment or decree unstayed and in effect for a period of 60 consecutive calendar days.

“Beneficial Owner” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act, as amended from time to time.

“Business Day” means any calendar day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required to close.

“Capital Contributions” means any cash, cash equivalents or, at the consent of the Managing Member, the Fair Market Value of other property that a Member contributes to the Company with respect to any Common Unit or other Equity Securities issued pursuant to Article II (net of liabilities assumed by the Company or to which such property is subject).

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“Change in Control” means the occurrence of any of the following:

(a) a transaction or series of related transactions (other than an offering of Class A Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any Third Party directly or indirectly becomes the Beneficial Owner of securities of ECI representing fifty percent (50%) or more of the combined voting power of ECI’s then outstanding securities;

(b) during any twenty-four (24) consecutive month period, the individuals who, at the beginning of such period, constitute the Board of Directors of ECI (the “Incumbent Directors”) cease for any reason other than death to constitute at least a majority of the Board of Directors of ECI; provided, however, that an individual who becomes a member of the Board of Directors of ECI subsequent to the beginning of the twenty-four (24) month period will be deemed to have satisfied such twenty-four (24) month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds (2/3) of the directors who then qualified as Incumbent Directors;

(c) the consummation of a sale or disposition of all or substantially all of ECI’s assets in one or a series of related transactions, other than (i) such a sale, disposition or lease to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of ECI in substantially the same proportions as their ownership of ECI immediately prior to such sale or disposition or (ii) the distribution directly to ECI’s stockholders (in one distribution or a series of related distributions) of all of the stock of one or more Subsidiaries of ECI that represent substantially all of ECI’s assets;

(d) there is consummated a merger or consolidation of ECI or any direct or indirect Subsidiary of ECI with any other corporation or other entity, other than (i) a merger or consolidation which results in (A) the voting securities of ECI outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary under an employee benefit plan of ECI or any Subsidiary of ECI, more than fifty percent (50%) of the combined voting power of the securities of ECI or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (B) the individuals who comprise the Board immediately prior thereto constituting immediately thereafter at least a majority of the board of directors of ECI, the entity surviving such merger or consolidation or, if ECI or the entity surviving such merger is then a Subsidiary of another Person, the ultimate parent thereof, or (ii) a merger or consolidation effected to implement a recapitalization of ECI (or similar transaction) in which no Third Party is or becomes the Beneficial Owner, directly or indirectly, of securities of ECI (not including in the securities Beneficially Owned by such Third Party any securities acquired directly from ECI or its Affiliates) representing at least fifty percent (50%) of the combined voting power of ECI’s then outstanding securities;

(e) a transaction pursuant to which the Founder Entities cease to own at least 50% of the combined voting power of ECI’s then outstanding securities; or

(f) the stockholders of ECI approve a plan of complete liquidation or dissolution of ECI.

“Class A Common Stock” means the shares of Class A Common Stock, par value $0.00001 per share, of ECI.

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“Class B Common Stock” means the shares of Class B Common Stock, par value $0.00001 per share, of ECI.

“Code” means the United States Internal Revenue Code of 1986, as amended from time to time.

“Company Minimum Gain” has the meaning set forth for the term “partnership minimum gain” in Regulations Section 1.704-2(d).

“Control” means, when used with reference to any Person, the power to direct the management or policies of such Person, directly or indirectly, by or through stock or other equity ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or other understanding (written or oral); and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing.

“Depreciation” has the meaning set forth in paragraph (e) of the definition of “Net Income” or “Net Loss.”

“Distribution” means each distribution after the Effective Date made by the Company to a Member, whether in cash, property or securities of the Company, pursuant to, or in respect of, Article III or Article IX.

“ECI Group” means ECI and/or any Subsidiary of ECI (other than the Company or any Subsidiary of the Company).

“Economic Interest” means the right to allocations of items of income, gain, loss, deduction, credit or similar items and the right to Distributions of cash and other property as provided in Article III, Article IV, Article IX and Article X and in the Act, but shall not include any right to participate in the management or affairs of the Company or any right to receive information concerning the business and affairs of the Company, in each case, except as expressly otherwise provided in this Agreement or required by the Act.

“EControls Group” means EControls Group, Inc., a Texas corporation, its Affiliates and each of their respective successors.

“Equity Securities” means, as applicable:

(a) any capital stock, membership interests or other share capital;

(b) any securities directly or indirectly convertible into or exchangeable for any capital stock, membership interests or other share capital or containing any profit participation features;

(c) any rights or options directly or indirectly to subscribe for or to purchase any capital stock, membership interests, other share capital or securities containing any profit participation features or to subscribe for or to purchase any securities directly or indirectly convertible into or exchangeable for any capital stock, membership interests, other share capital or securities containing any profit participation features;

(d) any share appreciation rights, phantom share rights or other similar rights; or

(e) any Equity Securities issued or issuable with respect to the securities referred to in clause (a) through clause (d) above in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization.

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“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and applicable rules and regulations thereunder. Any reference herein to a specific section, rule or regulation of the Exchange Act shall be deemed to include any corresponding provisions of future law.

“Exchange Allowance” means, as of a particular time of determination with respect to any Member, (a) the Exchange Allowance Percentage multiplied by the number of Common Units set forth opposite such Member’s name on the Schedule of Members as originally attached to this Agreement on the Effective Date minus (b) the number of Common Units Transferred by such Member prior to such time of determination (other than pursuant to an exercise of rights of Exchange pursuant to Article VIII); provided, however, that Common Units Transferred by a Member to a Permitted Transferee shall not be deemed to have been Transferred solely for purposes of this definition for so long as such Common Units continue to be held by a Permitted Transferee of such Member (and provided that such Permitted Transferee shall be subject to such Member’s Exchange Allowance with respect to its exercise of rights of Exchange pursuant to Article VIII).

“Exchange Allowance Percentage” means, as of a particular time of determination, the greater of (a) the percentage of the number of Common Units set forth opposite Murphy Group’s name on the Schedule of Members as originally attached to this Agreement on the Effective Date that have been Transferred by Murphy Group at or prior to such time of determination and (b) the percentage of the number of Common Units set forth opposite EControls Group’s name on the Schedule of Members as originally attached to this Agreement on the Effective Date that have been Transferred by EControls Group at or prior to such time of determination, in each case including Common Units Transferred by the applicable Founder Entity pursuant to an exercise of rights of Exchange pursuant to Article VIII; provided, however, that Common Units Transferred by a Founder Entity (or its Permitted Transferees) to a Permitted Transferee shall not be deemed to have been Transferred solely for purposes of this definition for so long as such Common Units continue to be held by a Permitted Transferee of such Founder Entity (or by a member of the Family Group of a Permitted Transferee of such Founder Entity).

“Fair Market Value” means, with respect to any asset or securities, the fair market value for such assets or securities as between a willing buyer and a willing seller in an arm’s length transaction occurring on the date of valuation, taking into account all relevant factors determinative of value, as determined in Good Faith by the Managing Member.

“Family Group” means for any individual, such individual’s current or former spouse, their respective parents, descendants of such parents (whether natural or adopted) and the spouses of such descendants, and any trust, limited partnership, corporation or limited liability company established solely for the benefit of such individual or such individual’s current or former spouse, their respective parents, descendants of such parents (whether natural or adopted) or the spouses of such descendants.

“Fiscal Year” means the fiscal year of the Company, which unless otherwise determined by the Managing Member in its sole discretion shall be each period ending on December 31.

“Founder Entity” means each of Murphy Group and EControls Group.

“Good Faith” shall mean a Person having acted in good faith and in a manner that such Person reasonably believed to be in or not opposed to the best interests of the Company and, with respect to a criminal proceeding, having had no reasonable cause to believe such Person’s conduct was unlawful.

“Governmental Entity” means the United States of America or any other nation, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of government, including any court, in each case, having jurisdiction over the Company or any of its Subsidiaries or any of the property or other assets of the Company or any of its Subsidiaries.

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“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(a) the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross Fair Market Value of such asset on the date of the contribution;

(b) the Gross Asset Values of all Company assets shall be adjusted to equal their respective gross Fair Market Values as of the following times:

(i) the acquisition of an additional interest in the Company after the Effective Date by a new or existing Member in exchange for more than a de minimis Capital Contribution, if the Managing Member reasonably determines that such adjustment is necessary or appropriate to reflect the relative Economic Interests of the Members in the Company;

(ii) the grant of an interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company or any of its Subsidiaries by an existing or a new Member acting in a partner capacity, or in anticipation of becoming a partner;

(iii) the Distribution by the Company to a Member of more than a de minimis amount of Company property as consideration for an interest in the Company, if the Managing Member reasonably determines that such adjustment is necessary or appropriate to reflect the relative Economic Interests of the Members in the Company; and

(iv) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);

(c) the Gross Asset Value of any Company asset distributed to a Member shall be the gross Fair Market Value of such asset on the date of Distribution;

(d) the Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Sections 734(b) or 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (d) to the extent that the Managing Member determines that an adjustment pursuant to clause (b) of this definition of Gross Asset Value is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (d); and

(e) with respect to any asset that has a Gross Asset Value that differs from its adjusted tax basis, Gross Asset Value shall be adjusted by the amount of Depreciation rather than any other depreciation, amortization or other cost recovery method.

“Income” means individual items of Company income and gain determined in accordance with the definitions of Net Income and Net Loss (except clause (g) thereof).

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“Lien” means any mortgage, pledge, hypothecation, claim, security interest, encumbrance, lease, sublease, license, occupancy agreement, adverse claim or interest, easement, covenant, encroachment, burden, title defect, title retention agreement, interest, equity, option, lien, right of first refusal, charge or other restriction or limitation of any nature whatsoever.

“Loss” means individual items of Company loss and deduction determined in accordance with the definitions of Net Income and Net Loss.

“Managing Member” means ECI and its successors and assigns and any substitute Managing Member appointed in accordance with the terms of this Agreement.

“Member” means each Person listed on the Schedule of Members and each other Person who is hereafter admitted as a Member in accordance with the terms of this Agreement and the Act. The Members shall constitute the “members” (as such term is defined in the Act) of the Company. Any reference in this Agreement to any Member shall include such Member’s Successors in Interest to the extent such Successors in Interest have become Substituted Members in accordance with the provisions of this Agreement. Except as otherwise set forth herein or in the Act, the Members shall constitute a single class or group of members of the Company for all purposes of the Act and this Agreement.

“Member Minimum Gain” means minimum gain attributable to Member Nonrecourse Debt determined in accordance with Regulations Section 1.704-2(i).

“Member Nonrecourse Debt” has the meaning set forth for the term “partner nonrecourse debt” in Regulations Section 1.704-2(b)(4).

“Membership Interest” means, with respect to each Member, such Member’s Economic Interest and rights as a Member.

“Murphy Group” means Murphy Group, Inc., an Oklahoma corporation, its Affiliates and each of their respective successors.

“Net Income” or “Net Loss” means, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such Fiscal Year or other period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in such taxable income or loss), with the following adjustments:

(a) any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be added to such taxable income or loss;

(b) any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be subtracted from such taxable income or loss;

(c) in the event the Gross Asset Value of any Company asset is adjusted pursuant to clause (b) or clause (c) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain (if the adjustment increases the Gross Asset Value of the asset) or loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset for purposes of computing Net Income or Net Loss;

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(d) gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(e) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, with respect to a Company asset having a Gross Asset Value that differs from its adjusted basis for tax purposes, “Depreciation” with respect to such asset shall be computed by reference to the asset’s Gross Asset Value in accordance with Regulations Section 1.704-1(b)(2)(iv)(g);

(f) to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Sections 734(b) or 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts as a result of a Distribution other than in liquidation of a Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss; and

(g) any Income or Loss that is allocated under Section 4.2 shall be excluded for purposes of computing Net Income or Net Loss.

“Percentage Interest” of each Member is set forth on the Schedule of Members, which may be amended from time to time and which shall be equal to a fraction (expressed as a percentage), the numerator of which is the number of Common Units held by such Member and the denominator of which is the number of Common Units held by all the Members (it being understood that if the Company hereafter issues any Equity Securities other than the Common Units, then this definition shall be changed pursuant to an amendment of this Agreement in accordance with the terms hereof).

“Permitted Transferee” means, with respect to any Member, (a) its Affiliates (including, in the case of any Member that is an entity, any distribution by such Member to its members, partners or stockholders (the “Member’s Owners”), and any related distributions by the Member’s Owners to their respective members, partners or stockholders) and (b) in the case of an individual, any member of its Family Group.

“Person” means an individual, a partnership (including a limited partnership), a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, association or other entity or a Governmental Entity.

“Regulations” means the regulations, including temporary regulations, promulgated by the United States Treasury Department under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“Restricted Exchange Period” means the period beginning on the Effective Date and ending on the first to occur of (a) the three-year anniversary of the closing of the IPO and (b) the date on which the Founder Entities cease to own at least 15% of the combined voting power of ECI’s then outstanding securities.

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“Securities Act” means the United States Securities Act of 1933, as amended, and applicable rules and regulations thereunder. Any reference herein to a specific section, rule or regulation of the Securities Act shall be deemed to include any corresponding provisions of future law.

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which:

(a) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; or

(b) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing member, general partner or analogous controlling Person of such limited liability company, partnership, association or other business entity.

For purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of the Company.

“Substituted Member” means any Person that has been admitted to the Company as a Member pursuant to Section 7.2 by virtue of such Person receiving all or a portion of a Membership Interest from a Member or its Assignee and not from the Company.

“Successor in Interest” means any (a) trustee, custodian, receiver or other Person acting in any Bankruptcy or reorganization proceeding with respect to, (b) assignee for the benefit of the creditors of, (c) trustee or receiver, or current or former officer, director or partner, or other fiduciary acting for or with respect to the dissolution, liquidation or termination of or (d) other Transferee, executor, administrator, committee, legal representative or other successor or assign of, any Member, whether by operation of law or otherwise (including any Person acquiring (whether by merger, consolidation, sale, exchange or otherwise) all or substantially all of the assets or Equity Securities of the Company and its Subsidiaries).

“Tax Matters Member” has the same meaning as “tax matters partner” set forth in Code Section 6231.

“Tax Receivable Agreement” means the Tax Receivable Agreement dated on or about the date hereof between ECI, the Company and the Members immediately prior to consummation of the IPO, as it may be amended or supplemented from time to time.

“Third Party” means any “person” within the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Section 13(d) and Section 14(d) thereof, except that such term will not include (a) ECI or any Subsidiary thereof, (b) Murphy Group or any Affiliate thereof, (c) EControls Group or any Affiliate thereof, (d) a trustee or other fiduciary holding securities under an employee benefit plan of ECI or any Subsidiary thereof, (e) an underwriter temporarily holding securities pursuant to an offering of such securities or (f) a corporation owned, directly or indirectly, by the stockholders of ECI in substantially the same proportions as their ownership of stock of ECI.

37

“Transaction Documents” means, together, this Agreement and the Tax Receivable Agreement.

“Transfer” means any sale, transfer, assignment, pledge, mortgage, exchange, hypothecation, grant of a participation in, grant of a security interest or other direct or indirect disposition or encumbrance of a Common Unit (whether with or without consideration, whether voluntarily or involuntarily or by operation of law). The terms “Transferee,” “Transferor,” “Transferred” and other forms of the word “Transfer” shall have the correlative meanings.

Section 11.2 Index of Additional Definitions.

Term	Section
A&R Agreement		Recitals
Agreement		Preamble
Articles		Recitals
Blackout Period		8.3(c)(i)
Capital Account		2.3(a)
Cash Amount		8.10
Cash Exchange		8.10
Class A Fair Market Value		8.10
Closing		8.3(a)
Closing Date		8.3(a)
Common Unit		2.1(a)
Company		Preamble
Company’s Tax Liability		3.5(b)
Corresponding Company Securities		2.1(c)
ECI		Recitals
Effective Date		Preamble
Effective Time		Recitals
Exchange		8.1
Exchange Notice		8.2
HSR Act		8.7
IPO		Recitals
IPO Transactions		Recitals
Notice		2.1(h)
Officers		5.1(a)
Open Window		8.3(c)(ii)
Original Agreement		Recitals
Pass-Through Entity		5.6(f)(i)
Registration Rights Agreement		7.5
Regulatory Allocations		4.2(g)
Schedule of Members		Recitals
Special Consent Right		9.2(b)
Tax Distribution		3.5(a)
Tax Distribution Date		3.5(a)
Underwriters		Recitals
Unvested Common Units		2.2(c)(i)

38

Section 11.3 Interpretative Matters. In this Agreement, unless otherwise specified or where the context otherwise requires:

(a) the headings of particular provisions of this Agreement are inserted for convenience only and will not be construed as a part of this Agreement or serve as a limitation or expansion on the scope of any term or provision of this Agreement;

(b) words importing any gender shall include other genders;

(c) words importing the singular only shall include the plural and vice versa;

(d) the words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation”;

(e) the words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement;

(f) references to “Articles,” “Exhibits,” “Sections” or “Schedules” shall be to Articles, Exhibits, Sections or Schedules of or to this Agreement;

(g) references to any Person include the successors and permitted assigns of such Person;

(h) the use of the words “or,” “either” and “any” shall not be exclusive;

(i) wherever a conflict exists between this Agreement and any other agreement, this Agreement shall control but solely to the extent of such conflict;

(j) references to “$” or “dollars” means the lawful currency of the United States of America;

(k) references to any agreement, contract or schedule, unless otherwise stated, are to such agreement, contract or schedule as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; and

(l) the parties hereto have participated jointly in the negotiation and drafting of this Agreement; accordingly, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any provisions of this Agreement.

* * * * * *

39

IN WITNESS WHEREOF, Enovation Controls, LLC, intending to be legally bound, has executed this Second Amended and Restated Operating Agreement of Enovation Controls, LLC as of the day and year first set forth above.

Enovation Controls, LLC, an Oklahoma limited liability company

By:

Name:

Title:

COMPANY SIGNATURE PAGE TO

SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF ENOVATION CONTROLS, LLC

IN WITNESS WHEREOF, the undersigned Members of Enovation Controls, LLC, intending to be legally bound, have executed this Second Amended and Restated Operating Agreement of Enovation Controls, LLC as of the day and year first set forth above.

MEMBERS:

Murphy Group, Inc., an Oklahoma corporation

By:

Name:

Title:

EControls Group, Inc., a Texas corporation

By:

Name:

Title:

{Name}

MEMBER SIGNATURE PAGE TO

SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF ENOVATION CONTROLS, LLC

IN WITNESS WHEREOF, the undersigned, desiring to be admitted as an Additional Member of Enovation Controls, LLC, and intending to be legally bound, has executed this Second Amended and Restated Operating Agreement of Enovation Controls, LLC as of the day and year set forth adjacent to the undersigned’s signature below, and agrees to be bound by the terms and provisions of the Second Amended and Restated Operating Agreement of Enovation Controls, LLC as if originally a party thereto.

{This page is a template. Duplicate and conform this form of signature page as appropriate for either an entity or an individual Additional Member.}

	ADDITIONAL MEMBER:
	{Insert name of entity Member}, a {insert state of formation} {insert type of entity}
Date:                 , 20	By:
	Name:
	Title:
Date:                 , 20
	{insert name of individual Member}

ADDITIONAL MEMBER SIGNATURE PAGE TO

SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF ENOVATION CONTROLS, LLC

IN WITNESS WHEREOF, the undersigned, desiring to be admitted as a Substituted Member of Enovation Controls, LLC, and intending to be legally bound, has executed this Second Amended and Restated Operating Agreement of Enovation Controls, LLC as of the day and year set forth adjacent to the undersigned’s signature below, and agrees to be bound by the terms and provisions of the Second Amended and Restated Operating Agreement of Enovation Controls, LLC as if originally a party thereto.

{This page is a template. Duplicate and conform this form of signature page as appropriate for either an entity or an individual Substituted Member.}

	SUBSTITUTED MEMBER:
	{Insert name of entity Member}, a {insert state of formation} {insert type of entity}
Date:                 , 20	By:
	Name:
	Title:
Date:                 , 20
	{insert name of individual Member}

SUBSTITUTED MEMBER SIGNATURE PAGE TO

SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF ENOVATION CONTROLS, LLC

EXHIBIT A

Schedule of Members

EXHIBIT B

Form of Exchange Notice

EXHIBIT C

Consent of Spouse and Proxy

I acknowledge that I have read the foregoing Second Amended and Restated Operating Agreement and that I know its contents. I am aware that by its provisions the Membership Interest of the Company held by me, my spouse, or either or both of us, including my community property interest in such Membership Interest, if any, is subject to transfer restrictions and other restrictions pursuant to the Second Amended and Restated Operating Agreement. I hereby agree and consent that such Membership Interest and my interest in it, if any, are subject to all of the provisions of the foregoing Second Amended and Restated Operating Agreement and that I will take no action at any time to hinder operation of, or violate, the foregoing Second Amended and Restated Operating Agreement. I hereby grant to my spouse an irrevocable proxy, coupled with an interest, with power of substitution, with respect to all matters relating to such Membership Interest, including the voting and transfer thereof.

By:

Name:

Spouse:

Address:

Phone:

Fax:

EXHIBIT C TO

SECOND AMENDED AND RESTATED OPERATING AGREEMENT OF ENOVATION CONTROLS, LLC

EX-10.2

Exhibit 10.2

TAX RECEIVABLE AGREEMENT

This TAX RECEIVABLE AGREEMENT (this “Agreement”) is dated as of [            ], 2014, by and among Enovation Controls, Inc., a Delaware corporation (the “Corporation”), and each of the Members (as defined herein).

RECITALS:

WHEREAS, pursuant to that certain [Enovation Controls, LLC Common Unit Purchase Agreement], dated as of             , 2014, by and among the Corporation and [certain] Members (as defined below) of Enovation Controls, LLC, an Oklahoma limited liability company (“EC LLC”), such Members will sell to the Corporation certain membership interests in EC LLC designated as “Common Units” (the “Units”) in exchange for a cash purchase price of [        ] (the “Original Sale”);

WHEREAS, pursuant to that certain Second Amended and Restated Limited Liability Company Agreement of EC LLC, dated as of the date hereof (the “LLC Agreement”), by and among the Corporation and the Members, the Members have the right under certain circumstances to exchange Units, together with an equal number of shares of Class B common stock, par value $0.00001 per share, of the Corporation (“Class B Shares”), for shares of Class A common stock, par value $0.00001 per share, of the Corporation (“Class A Shares”), subject to the Corporation’s right to substitute cash in lieu of such Class A shares at its option (each such case, in addition to the Original Sale, an “Exchange”);

WHEREAS, EC LLC and each of its direct or indirect subsidiaries that is a partnership for U.S. federal income tax purposes (but only if such indirect subsidiaries are held only through subsidiaries treated as pass-through entities) will have in effect an election under Section 754 of the Code (as defined herein) for the Taxable Year (as defined herein) in which any Exchange occurs, which election will result in an adjustment to the Corporation’s share of the tax basis of the assets owned by EC LLC and certain of its subsidiaries as of the date of the Exchange, with a consequent result on the taxable income subsequently derived therefrom;

WHEREAS, immediately prior to the Original Sale, the Corporation will become the managing member of EC LLC and exercise control of EC LLC, including of its business and affairs; and

WHEREAS, the parties to this Agreement desire to provide for certain payments and make certain arrangements with respect to any tax benefits to be derived by the Corporation as the result of Exchanges and any payments made hereunder.

NOW, THEREFORE, in consideration of the foregoing and the respective covenants and agreements set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows:

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ARTICLE I

DEFINITIONS

As used in this Agreement, the terms set forth in this Article I shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined). Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to such terms in the LLC Agreement.

“Advisory Firm” means an accounting or law firm that is nationally recognized as being expert in Covered Tax matters and not an Affiliate of the Corporation, selected by the Corporation.

“Advisory Firm Letter” means a letter from the Advisory Firm stating that the relevant schedule, notice or other information to be provided by the Corporation to the Members and all supporting schedules and work papers were prepared in a manner consistent with the terms of this Agreement and, to the extent not expressly provided in this Agreement, on a reasonable basis in light of the facts and law in existence on the date such schedule, notice or other information is delivered to the Members.

“Affiliate” has the meaning set forth in Rule 405 promulgated under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Agreed Rate” means LIBOR plus 200 basis points.

“Agreement” is defined in the preamble.

“Allocable Share” means with respect to each Member, for any Taxable Year, the quotient (expressed as a percentage) obtained by dividing (x) such person’s Member Realized Tax Benefit Amount by (y) the sum of all Member Realized Tax Benefit Amounts.

“Amended Tax Benefit Schedule” is defined in Section 2.2(b) of this Agreement.

“Attributable”: The portion of any Realized Tax Benefit of the Corporation that is “Attributable” to any present or former Member other than the Corporation shall be determined by reference to the assets from which arise the depreciation, amortization or other similar deductions for recovery of cost or basis (“Depreciation”) and the Imputed Interest that produce the Realized Tax Benefit, and in any case involving Realized Tax Benefits resulting from the sale of an asset in any given Taxable Year by reference to the tax basis of the asset that produce the Realized Tax Benefit, under the following principles:

(i) Any Realized Tax Benefit arising from a deduction to the Corporation with respect to a Taxable Year for Depreciation arising in respect of a Basis Adjustment to an Exchange Asset is Attributable to a Member in accordance with the ratio of (a) all Depreciation for the Taxable Year in respect of Basis Adjustments resulting from all Exchanges by such Member to (b) the aggregate of all Depreciation for the Taxable Year in respect of Basis Adjustments resulting from all Exchanges by all Members,

(ii) Any Realized Tax Benefit arising from a deduction to the Corporation with respect to a Taxable Year in respect of Imputed Interest is Attributable to the Person that is required to include the Imputed Interest in income (without regard to whether such Person is actually subject to tax thereon), and

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(iii) Any Realized Tax Benefit arising from additional tax basis to the Corporation upon the disposition of an asset by EC LLC or any of its subsidiaries treated as pass-through entities in respect of a Basis Adjustment to an Exchange Asset is Attributable to a Member to the extent that the ratio of all tax basis for the asset in respect of Basis Adjustments resulting from all Exchanges by such Member bears to the aggregate of all tax basis in respect of Basis Adjustments resulting from all Exchanges by all Members.

“Basis Adjustment” means the increase or decrease to the tax basis of, or the Corporation’s share of the tax basis of, the Exchange Assets (i) under Sections 734(b), 743(b) and 754 of the Code and, in each case, the comparable sections of U.S. state and local income and franchise tax law (in situations where, following an Exchange, EC LLC remains in existence as an entity for tax purposes) and (ii) under Sections 732 and 1012 of the Code and, in each case, the comparable sections of U.S. state and local income and franchise tax law (in situations where, as a result of one or more Exchanges, EC LLC becomes an entity that is disregarded as separate from its owner for Tax purposes), in each case as a result of any Exchange and any payments made under this Agreement. For the avoidance of doubt, payments under this agreement shall not be treated as resulting in a Basis Adjustment to the extent such payments are treated as Imputed Interest.

“Beneficial Owner” of a security means a Person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of, such security and/or (ii) investment power, which includes the power to dispose, or to direct the disposition of, such security. The terms “Beneficially Own” and “Beneficial Ownership” shall have a correlative meaning.

“Board” means the Board of Directors of the Corporation.

“Business Day” means any calendar day that is not a Saturday, Sunday or other calendar day on which banks are required or authorized to be closed in the City of New York.

“Change of Control” means the occurrence of any of the following events:

(i) any Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act, or any successor provisions thereto (excluding any group of Persons which includes the Founding Members and their respective Permitted Transferees) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Corporation representing more than fifty percent (50%) of the combined voting power of the Corporation’s then outstanding voting securities;

(ii) the following individuals cease for any reason to constitute a majority of the number of directors of the Corporation then serving: individuals who were directors of the Corporation on the date of the Original Sale and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Corporation) whose appointment or election by the board of directors of the Corporation or nomination for election by the Corporation’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors of

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the Corporation on the date of the Original Sale or whose appointment, election or nomination for election was previously so approved or recommended by the directors referred to in this clause (ii);

(iii) there is consummated a merger or consolidation of the Corporation or any direct or indirect subsidiary of the Corporation (including EC LLC) with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, either (x) the board of directors of the Corporation immediately prior to the merger or consolidation does not constitute at least a majority of the board of directors of the company surviving the merger or, if the surviving company is a subsidiary, the ultimate parent thereof, or (y) all of the Persons who were the respective Beneficial Owners of the voting securities of the Corporation immediately prior to such merger or consolidation do not Beneficially Own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the Person resulting from such merger or consolidation;

(iv) the stockholders of the Corporation approve a plan of complete liquidation or dissolution of the Corporation or there is consummated an agreement or series of related agreements for the sale or other disposition, directly, or indirectly, by the Corporation of all or substantially all of the Corporation’s assets (including a sale of assets of EC LLC), other than such sale or other disposition by the Corporation of all or substantially all of the Corporation’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Corporation in substantially the same proportions as their ownership of the Corporation immediately prior to such sale.

Notwithstanding the foregoing, except with respect to clause (ii) and clause (iii)(x) above, a “Change of Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the shares of the Corporation immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Corporation immediately following such transaction or series of transactions.

“Class A Shares” is defined in the recitals.

“Class B Shares” is defined in the recitals.

“Code” means the Internal Revenue Code of 1986, as amended (or any successor U.S. federal income tax statute and the corresponding provisions thereof).

“Corporation” is defined in the preamble.

“Covered Taxes” means any taxes imposed under Subtitle A of the Code or any other provision of U.S. federal income tax law (including, without limitation, the taxes imposed by Sections 11, 55, 59A, and 1201(a) of the Code) and U.S. state and local income and franchise taxes.

“Default Rate” means LIBOR plus 400 basis points.

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“Determination” shall have the meaning ascribed to such term in Section 1313(a) of the Code or similar provision of state or local income or franchise tax law, as applicable, or any other event (including the execution of IRS Form 870-AD) that finally and conclusively establishes the amount of any liability for any Covered Tax.

“Early Termination Date” is the last day of the Taxable Year in which an Early Termination Notice is given.

“Early Termination Notice” is defined in Section 4.2 of this Agreement.

“Early Termination Payment” means, for any Member, as of the date of an Early Termination Notice, a payment equal to the present value, discounted at the Termination Rate, of all Tax Benefit Payments that would be required to be paid by the Corporation to such Member beginning from the Early Termination Date assuming the Valuation Assumptions are applied.

“EC LLC” is defined in the recitals.

“Exchange” is defined in the recitals.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Exchange Assets” means the assets owned by EC LLC and each of its direct or indirect subsidiaries that are treated as pass-through entities (but only if such indirect subsidiaries are held only through subsidiaries treated as pass-through entities) for U.S. federal income tax purposes as of an applicable Exchange Date (and any asset whose tax basis is determined, in whole or in part, by reference to the adjusted basis of any such asset).

“Exchange Basis Schedule” is defined in Section 2.1(a) of this Agreement.

“Exchange Date” means the date on which an Exchange is effected.

“Expert” is defined in Section 7.2(a) of this Agreement.

“Founding Members” means Murphy Group, Inc. and EControls Group, Inc.

“Governmental Entity” means any U.S. federal, state or local government or any court of competent jurisdiction, administrative agency or commission or other domestic governmental authority or instrumentality.

“Hypothetical Tax Basis” means, with respect to any Exchange Asset at any time, the tax basis that such asset would have at such time if no Basis Adjustments had been made as a result of any Exchange.

“Hypothetical Tax Liability” means, with respect to any Taxable Year, the liability for Covered Taxes of the Corporation (and EC LLC and any of its direct or indirect subsidiaries that are treated as pass-through entities, but only with respect to Taxes allocable to the Corporation and that are imposed on EC LLC or each of such direct or indirect subsidiaries) using the same

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methods, elections, conventions and similar practices used on the actual Tax Returns of the Corporation, but (i) using the Hypothetical Tax Basis instead of the actual tax basis of each relevant asset and (ii) excluding any deduction attributable to the Imputed Interest. For the avoidance of doubt, Hypothetical Tax Liability shall be determined without taking into account the carryover or carryback of any Covered Tax item that is attributable to the Basis Adjustment or Imputed Interest.

“Imputed Interest” and “Imputed Principal” means the portion of a payment treated as interest or principal, as applicable, under Section 1272, 1274 or 483 or other provision of the Code and the similar section of the applicable U.S. state or local income or franchise tax law with respect to the Corporation’s payment obligations to the Members under this Agreement.

“IPO” means the initial public offering of Class A Shares by the Corporation pursuant to a registration statement filed with, and declared effective by, the Securities and Exchange Commission.

“IPO Date” means [            , 2014].

“IRS” means the U.S. Internal Revenue Service.

“LIBOR” means, for each month (or portion thereof) during any period, an interest rate per annum equal to the rate per annum reported, on the date two days prior to the first day of such month, on the Telerate Page 3750 (or if such screen shall cease to be publicly available, as reported on Reuters Screen page “LIBO” or by any other publicly available source of such market rate) for London interbank offered rates for U.S. dollar deposits for such month (or portion thereof).

“LLC Agreement” is defined in the recitals.

“Material Breach” means (i) the failure to make any payment due pursuant to this Agreement within three months of the date such payment is due, (ii) the failure to honor any other material obligations required hereunder to the extent not cured within 30 days of notice by any Member that is materially prejudiced by such failure (including without limitation any breach of Section 6.1 hereof), or (iii) the Corporation makes an assignment for the benefit of creditors, files a petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any receiver of or any trustee for the Corporation or any substantial part of its property, commences any proceeding relating to the Corporation under any reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect, or there is commenced against the Corporation any such proceeding which remains undismissed for a period of 30 days, or the Corporation by any act indicates its consent to, approval of or acquiescence in any such proceeding or the appointment of any receiver of or any trustee for the Corporation or any substantial part of its property, or suffers any such receivership or trusteeship to continue undischarged for a period of 60 days. The date of a Material Breach means the date that such failure, assignment, filing, etc. occurs without regard to any cure period. Notwithstanding anything in this Agreement to the contrary, the failure of the Corporation to make any Tax Benefit Payment (or portion thereof) when due shall not constitute a Material Breach to the extent that the Board determines in good faith that (x) the

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Corporation does not have sufficient cash to make such payment as a result of limitations imposed by credit agreements or any other documents evidencing indebtedness to which EC LLC is a party, guarantor or otherwise an obligor as of the date of this Agreement (or within the one-year anniversary of the date of this Agreement) (the “Initial Debt Documents”) or any other document evidencing indebtedness to which EC LLC becomes a party, guarantor or otherwise an obligor thereafter to the extent the terms of such other documents are not materially more restrictive in respect of the Corporation ability to receive from its direct or indirect Subsidiaries funds sufficient to make such payments compared to the terms of the Initial Debt Documents (again, as determined by the Board in good faith), or (y) such payments could (i) be set aside as fraudulent transfers or conveyances or similar actions under fraudulent transfer laws or (ii) could cause the Corporation to be insolvent, in which case Section 5.2 shall apply.

“Member” means each person party to this Agreement who is a member of EC LLC on the date hereof, other than the Corporation, whether or not such Person is a member of EC LLC on the date any Tax Benefit Payment is due hereunder, and shall include any transferee of such member’s rights hereunder pursuant to Section 7.10 hereof.

“Member Representative” means [Murphy Group, Inc.]

“Original Sale” is defined in the recitals.

“Original Sale Date” means the date on which the Original Sale is effected.

“Permitted Transferee” means, with respect to any Member, (a) its Affiliates (including, in the case of any Member that is an entity, any distribution by such Member to its members, partners or shareholders (the “Member’s Owners”), and any related distributions by the Member’s Owners to their respective members, partners or shareholders) and (b) in the case of an individual, any member of its Family Group. For purposes hereof, “Family Group” means for any individual, such individual’s current or former spouse, their respective parents, descendants of such parents (whether natural or adopted) and the spouses of such descendants, and any trust, limited partnership, corporation or limited liability company established solely for the benefit of such individual or such individual’s current or former spouse, their respective parents, descendants of such parents (whether natural or adopted) or the spouses of such descendants.

“Person” means and includes any individual, firm, corporation, partnership (including, without limitation, any limited, general or limited liability partnership), company, limited liability company, trust, joint venture, association, joint stock company, unincorporated organization or similar entity or Governmental Entity.

“Proceeding” means a suit, action or proceeding relating to this Agreement.

“Realized Tax Benefit” means, for a Taxable Year, the excess, if any, of the Hypothetical Tax Liability over the actual tax liability for Covered Taxes of the Corporation (and EC LLC and any of its direct or indirect subsidiaries that are treated as pass-through entities, but only with respect to Taxes allocable to the Corporation and that are imposed on EC LLC or each of such direct or indirect subsidiaries) for such Taxable Year, calculated in accordance with the applicable principles set forth in Section 2.2(c) hereof. If all or a portion of the actual tax liability for Covered Taxes for the Taxable Year arises as a result of an audit by a Taxing

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Authority of any Taxable Year, such adjustment to the liability shall not be included in determining the Realized Tax Benefit or the Realized Tax Detriment unless and until there has been a Determination.

“Realized Tax Benefit Amount” means, for any Member and Taxable Year, the amount of the Realized Tax Benefit that is Attributable to such Member for such Taxable Year, taking into account only Exchanges made by such Member in such Taxable Year or all prior Taxable Years.

“Realized Tax Detriment” means, for a Taxable Year, the excess, if any, of the actual tax liability for the Covered Taxes of the Corporation (and EC LLC and any of its direct or indirect subsidiaries that are treated as pass-through entities, but only with respect to Taxes allocable to the Corporation and that are imposed on EC LLC or each of such direct or indirect subsidiaries) over the Hypothetical Tax Liability for such Taxable Year calculated in accordance with the applicable principles set forth in Section 2.2(c) hereof. If all or a portion of the actual tax liability arises as a result of an audit by a Taxing Authority of any Taxable Year, such adjustment to the liability shall not be included in determining the Realized Tax Benefit or Realized Tax Detriment unless and until there has been a Determination.

“Reconciliation Dispute” is defined in Section 7.2(a) of this Agreement.

“Reconciliation Procedures” shall mean those procedures set forth in Section 7.2 of this Agreement.

“Senior Obligations” means principal, interest or other amounts due and payable in respect of any debt of the Corporation for borrowed funds.

“Tax Benefit Payment” is defined in Section 3.1(b) of this Agreement.

“Tax Benefit Schedule” is defined in Section 2.2(a) of this Agreement.

“Taxable Year” means a taxable year as defined in Section 441(b) of the Code or comparable section of U.S. state or local income or franchise tax law, as applicable (and, therefore, for the avoidance of doubt, may include a period of less than 12 months for which a Tax Return is made), ending on or after the IPO Date.

“Tax Return” means any return or filing required to be made with respect to Covered Taxes, including amended returns, for any Taxable Year with any Taxing Authority.

“Taxing Authority” means the IRS and any state or local Governmental Entity responsible for the administration of Covered Taxes.

“Termination Rate” means the lesser of (i) 6.5% and (ii) LIBOR plus 100 basis points.

“Treasury Regulations” means the final, temporary and proposed regulations under the Code promulgated from time to time (including corresponding provisions of succeeding provisions) as in effect for the relevant taxable period.

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“Units” is defined in the recitals.

“Valuation Assumptions” means as of any Valuation Date, the assumptions that:

(i) The Corporation will have income that exceeds the amount of any increase in deductions that may be derived from the Basis Adjustment and the Imputed Interest throughout the relevant period for purposes of all Covered Taxes.

(ii) There will be no change in the applicable rates of any Covered Taxes throughout the relevant period, except to the extent such changes have already been enacted into law.

(iii) All taxable income of the Corporation will be subject to the maximum applicable rates for Covered Taxes throughout the relevant period.

(iv) Any loss carryovers or carrybacks generated by the Basis Adjustment or the Imputed Interest (including such Basis Adjustment and Imputed Interest generated as a result of payments made under this Agreement), and available as of the date of the Early Termination Notice will be utilized by the Corporation on a pro rata basis from the Early Termination Date through the scheduled expiration date of such loss carryovers or carrybacks.

(v) Any non-amortizable assets are deemed to be disposed of on the fifteenth anniversary of the earlier of the Basis Adjustment and the Early Termination Date.

(vi) If an Early Termination is effected prior to an Exchange of all Units, such remaining Units that are not exchanged as of the Early Termination Date shall be treated as sold in an Exchange occurring on the Early Termination Date.

“Valuation Date” means the date of an Early Termination Notice for purposes of determining an Early Termination Payment.

ARTICLE II

DETERMINATION OF REALIZED TAX BENEFIT OR REALIZED TAX DETRIMENT

Section 2.1 Basis Adjustment Attributable to an Exchange

(a) Exchange Basis Schedule Generally. Within 90 calendar days after filing its U.S. federal income Tax Return for each Taxable Year in which any Exchange has been effected, the Corporation shall deliver (or cause EC LLC to deliver) to each Member that effected an Exchange during such Taxable Year a schedule (the “Exchange Basis Schedule”) that shows, in reasonable detail, for U.S. federal income tax purposes, (i) the actual tax basis of the Exchange Assets as of each applicable Exchange Date, (ii) the Basis Adjustment with respect to the Exchange Assets as a result of the Exchanges effected in such Taxable Year and all prior Taxable Years, calculated (a) in the aggregate and (b) solely with respect to Exchanges by the relevant Member, (iii) the period or periods, if any, over which such Exchange Assets are amortizable or depreciable and (iv) the period or periods, if any, over which each Basis Adjustment is amortizable or depreciable. At the time the Corporation delivers (or causes EC LLC to deliver) the Exchange Basis Schedule to a Member, it shall (or cause EC LLC to) (x) deliver to such Member an Advisory Firm Letter supporting such Exchange Basis Schedule, (y)

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provide schedules and work papers providing reasonable detail regarding the preparation of the Exchange Basis Schedule to the Founding Members and the Member Representative and (z) allow the Founding Members and the Member Representative reasonable access to the appropriate representatives at the Corporation, EC LLC and the Advisory Firm in connection with its review of such schedule. The Exchange Basis Schedule shall become final and binding on the parties unless any Founding Member, within 30 calendar days after receiving such Exchange Basis Schedule, provides the Corporation with notice of an objection to such Exchange Basis Schedule made in good faith and in reasonable detail. If the parties, negotiating in good faith, are unable to successfully resolve the issues raised in such notice within 60 calendar days after such notice was delivered to the Corporation, the Corporation and the objecting Founding Member shall employ the Reconciliation Procedures.

(b) Amendments to an Exchange Basis Schedule. An Exchange Basis Schedule may be amended from time to time by the Corporation (i) in connection with a Determination, (ii) to correct inaccuracies to the original Exchange Basis Schedule identified or agreed to by the Corporation after the date of the Exchange as a result of the receipt of additional information, (iii) to comply with the expert’s determination under the Reconciliation Procedures or (iv) to take into account payments made pursuant to this Agreement. At the time the Corporation delivers such amended Exchange Basis Schedule to a Member, it shall (or cause EC LLC to) (x) deliver to such Member an Advisory Firm Letter supporting such amended Exchange Basis Schedule, (y) provide schedules and work papers providing reasonable detail regarding the preparation of the amended Exchange Basis Schedule to the Founding Members and the Member Representative and (z) allow the Founding Members and the Member Representative reasonable access to the appropriate representatives at the Corporation, EC LLC and the Advisory Firm in connection with its review of such schedule. The amended Exchange Basis Schedule shall become final and binding on the parties unless, with respect to any change made pursuant to clauses (ii) or (iv) of the first sentence of this Section 2.1(b), any Founding Member, within 30 calendar days after receiving such amended Exchange Basis Schedule, provides the Corporation with notice of an objection to such amended Exchange Basis Schedule made in good faith and in reasonable detail. If the parties, negotiating in good faith, are unable to successfully resolve the issues raised in such notice within 30 calendar days after such notice was delivered to the Corporation, the Corporation and the objecting Founding Member shall employ the Reconciliation Procedures.

Section 2.2 Tax Benefit Schedule

(a) Generally. Within 90 calendar days after filing its U.S. federal income Tax Return for any Taxable Year in which there is a Realized Tax Benefit or a Realized Tax Detriment, including for this purpose where a Realized Tax Benefit or Realized Tax Detriment is deemed to equal zero pursuant to the proviso in the definition thereof, the Corporation shall provide to each Member a schedule showing, in reasonable detail, the calculation of the Corporation’s Realized Tax Benefit or Realized Tax Detriment for such Taxable Year, such Member’s Realized Tax Benefit Amount and such Member’s Allocable Share (the “Tax Benefit Schedule”). At the time the Corporation delivers the Tax Benefit Schedule to a Member, it shall (i) deliver to such Member an Advisory Firm Letter supporting such Tax Benefit Schedule, (ii) deliver to the Founding Members and the Member Representative schedules and work papers providing reasonable detail regarding the preparation of the Tax Benefit Schedule and (iii) allow

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the Founding Members and the Member Representative reasonable access to the appropriate representatives at the Corporation, EC LLC and the Advisory Firm in connection with its review of such schedules. The Tax Benefit Schedule shall become final and binding on the parties unless any Founding Member within 30 calendar days after receiving such Tax Benefit Schedule, provides the Corporation with notice of an objection to such Tax Benefit Schedule made in good faith and in reasonable detail. If the parties, negotiating in good faith, are unable to successfully resolve the issues raised in such notice within 60 calendar days after receipt thereof by the Corporation, the Corporation and the objecting Founding Member shall employ the Reconciliation Procedures.

(b) Amendments to Tax Benefit Schedule. A Tax Benefit Schedule for any Taxable Year may be amended from time to time by the Corporation (i) in connection with a Determination affecting such Tax Benefit Schedule, (ii) to correct inaccuracies in the original Tax Benefit Schedule identified as a result of the receipt of additional factual information relating to a Taxable Year after the date the Tax Benefit Schedule was provided to the Members, (iii) to reflect a change in the Realized Tax Benefit, Realized Tax Detriment, a Member Realized Tax Benefit Amount or an Allocable Share for such Taxable Year attributable to a carryback or carryforward of a loss or other tax item to such Taxable Year, (iv) to reflect a change in the Realized Tax Benefit or Realized Tax Detriment for such Taxable Year attributable to an amended Tax Return filed for such Taxable Year (provided, however, that such a change attributable to an audit of a Tax Return by an applicable Taxing Authority shall not be taken into account on an Amended Tax Benefit Schedule unless and until there has been a Determination with respect to such change) or (v) to comply with the Expert’s determination under the Reconciliation Procedures. At the time the Corporation delivers such an amended Tax Benefit Schedule pursuant to this subsection (b) (an “Amended Tax Benefit Schedule”) to a Member it shall (x) deliver to such Member an Advisory Firm Letter supporting such Amended Tax Benefit Schedule, (y) deliver to the Founding Member and the Member Representative schedules and work papers providing reasonable detail regarding the preparation of the Amended Tax Benefit Schedule and (z) allow the Founding Members and the Member Representative reasonable access to the appropriate representatives at the Corporation, EC LLC and the Advisory Firm in connection with its review of such schedule. Such Amended Tax Benefit Schedule shall become final and binding on the parties unless, with respect to any change made pursuant to clauses (ii), (iii) or (iv) of the first sentence of this Section 2.2(b), any Founding Member within 30 calendar days after receiving such Amended Tax Benefit Schedule, provides the Corporation with notice of an objection to such Amended Tax Benefit Schedule made in good faith and in reasonable detail. If the parties, negotiating in good faith, are unable to successfully resolve the issues raised in such notice within 30 calendar days after such notice was delivered to the Corporation, the Corporation and the objecting Founding Member shall employ the Reconciliation Procedures.

(c) Applicable Principles. The Realized Tax Benefit or Realized Tax Detriment for each Taxable Year is intended to measure the decrease or increase in the actual Covered Tax liability of the Corporation for such Taxable Year attributable to the Basis Adjustments and Imputed Interest, determined using a “with and without” methodology. For the avoidance of doubt, the actual Covered Tax liability will take into account the deduction of the portion of the Tax Benefit Payment that must be accounted for as Imputed Interest under the Code based upon the characterization of the Tax Benefit Payment as additional consideration payable by the Corporation for the Units acquired in an Exchange. Carryovers or carrybacks of

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any Covered Tax item attributable to the Basis Adjustment and Imputed Interest (determined using such “with and without” methodology) shall be considered to be subject to the rules of the Code and the Treasury Regulations or the appropriate provisions of U.S. state and local income and franchise tax law, as applicable, governing the use, order of use, limitation and expiration of carryovers or carrybacks of the relevant type. If a carryover or carryback of any Covered Tax item includes a portion that is attributable to the Basis Adjustment and Imputed Interest and another portion that is not, such portions shall be considered to be used in the order determined using such “with and without” methodology. The parties agree that all Tax Benefit Payments (except any interest component thereof) (i) will be treated as subsequent upward purchase price adjustments that give rise to further Basis Adjustments for the Corporation, (ii) will have the effect of creating additional Basis Adjustments for the Corporation in the year of payment, and (iii) as a result, such additional Basis Adjustments will be incorporated into the current year calculation and into future year calculations, as appropriate, with any circularity created in the current year continuing until any incremental current year benefits equal an immaterial amount.

(d) At the time of any Exchange, the Member Representative shall conclude whether the aggregate value of the Tax Benefit Payments can be ascertained with any reasonable certainty for U.S. federal income tax purposes. Unless there is a Determination to the contrary, the Corporation and the Members, on their own behalf and on behalf of each of their Affiliates, agree to report and cause to be reported for all U.S. purposes, including for purposes of all Covered Taxes and U.S. financial reporting purposes, all payments made under this Agreement in a manner consistent with such conclusion.

ARTICLE III

TAX BENEFIT PAYMENTS

Section 3.1 Payments.

(a) Within five calendar days of the delivery of the Tax Benefit Schedule to the Members for any Taxable Year, and, if applicable, within five calendar days of the final determination of the Tax Benefit Schedule pursuant to the procedures set forth in Section 2.2(a), the Corporation shall pay to each Member an amount equal to such Member’s Allocable Share of the Tax Benefit Payment for such Taxable Year (or in the case of such a final determination, the portion thereof not previously paid). Within five calendar days of the delivery of an Amended Tax Benefit Schedule to the Members for any Taxable Year, and, if applicable, within five calendar days of the final determination of an Amended Tax Benefit Schedule pursuant to the procedures set forth in Section 2.2(b), the Corporation shall pay to each Member an amount equal to such Member’s Allocable Share of the additional Tax Benefit Payment (or in the case of such a final determination, the portion thereof not previously paid), if any, for such Taxable Year. Each Tax Benefit Payment shall be made by wire transfer of immediately available funds to the bank account of the Member previously designated to the Corporation by such person, and no Member shall be required to return any portion of any previously made Tax Benefit Payment. For the avoidance of doubt, no Tax Benefit Payment shall be made in respect of estimated tax payments, including, without limitation, estimated federal income tax payments. Notwithstanding the foregoing, for each Taxable Year ending on or after the date of a Change of Control, if the Corporation has not elected to terminate this Agreement pursuant to Sections 4.1 or 4.2, then all Tax Benefit Payments, whether paid with respect to Units that were exchanged

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(y) prior to the date of such Change of Control or (z) on or after the date of such Change of Control, shall be calculated by utilizing Valuation Assumptions (i), (iv), (v) and (vi), substituting in each case the terms “the date of a Change of Control” for an “Early Termination Date”.

(b) A “Tax Benefit Payment” shall equal 85% of the Corporation’s Realized Tax Benefit, if any, for such Taxable Year,

increased by:

(i) interest calculated at the Agreed Rate from the due date (without extensions) for filing the relevant Tax Return for such Taxable Year); and

(ii) 85% of the amount of the excess, if any, of the Realized Tax Benefit reflected on an Amended Tax Benefit Schedule for a previous Taxable Year over the Realized Tax Benefit (or Realized Tax Detriment) reflected on the Tax Benefit Schedule for such previous Taxable Year, and

decreased by:

(iii) an amount equal to 85% of the Corporation’s Realized Tax Detriment (if any) for any previous Taxable Year; and

(iv) 85% of the amount of the excess, if any, of the Realized Tax Benefit reflected on the Tax Benefit Schedule for a previous Taxable Year over the Realized Tax Benefit (or Realized Tax Detriment) reflected on the Amended Tax Benefit Schedule for such previous Taxable Year;

provided, however, that the amounts described in clauses (ii), (iii) and (iv) shall not be taken into account in determining a Tax Benefit Payment attributable to any Taxable Year to the extent of such amounts were taken into account in determining any Tax Benefit Payment in a preceding Taxable Year.

Section 3.2 No Duplicative Payment. No duplicative payment of any amount (including interest) will be required under this Agreement.

Section 3.3 Pro Rata Payments. If for any reason the Corporation does not fully satisfy its payment obligations to make all Tax Benefit Payments due under this Agreement in respect of a particular Taxable Year, then the Corporation and the Members agree that no Tax Benefit Payment shall be made in respect of any subsequent Taxable Year until all Tax Benefit Payments in respect of prior Taxable Years have been made in full.

ARTICLE IV

TERMINATION

Section 4.1 Early Termination. Within 30 days of a Change of Control, the Corporation may terminate this Agreement effective as of the Early Termination Date by paying to each Member (including, for the avoidance of doubt, any transferee pursuant to Section 7.10(a)) such Member’s Early Termination Payment as provided in Section 4.3 below. Upon

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payment of the Early Termination Payment by the Corporation, the Corporation shall have no further payment obligations under this Agreement, other than for any (i) Tax Benefit Payment agreed to by the Corporation and a Member, as due and payable but unpaid as of the Early Termination Date and (ii) Tax Benefit Payment due for the Taxable Year ending with or including the Early Termination Date (except to the extent that the amount described in clause (i) or (ii) is included in the Early Termination Payment).

Section 4.2 Early Termination Notice. To exercise its right of early termination under Section 4.1 above, the Corporation shall deliver to the Members a notice (the “Early Termination Notice”) specifying the Corporation’s intention to exercise its right of termination and showing in reasonable detail the calculation of each Member’s Early Termination Payment. At the time the Corporation delivers the Early Termination Notice to the Members, the Corporation shall (i) deliver to each Member schedules and work papers providing reasonable detail regarding the calculation of such Member’s Early Termination Payment in a manner consistent with the definition of such term and an Advisory Firm Letter supporting such calculation, and (ii) allow the Founding Members and the Member Representative reasonable access to the appropriate representatives at the Corporation, EC LLC and the Advisory Firm in connection with its review of such calculation. The calculation contained in such Early Termination Notice shall become final and binding on the parties unless any Founding Member, within 30 calendar days after receiving such calculation, provides the Corporation with notice of an objection to such calculation made in good faith and in reasonable detail. If the parties, negotiating in good faith, are unable to successfully resolve the issues raised in such calculation within 30 calendar days after such notice of material objection, the Corporation and the objecting Founding Member shall employ the Reconciliation Procedures.

Section 4.3 Payment upon Early Termination. Within 45 calendar days after the delivery to the Members of the Early Termination Notice or 10 days after any amendment to the Early Termination Notice (whether pursuant to a notice of objection, the Reconciliation Procedures or otherwise), the Corporation shall pay to each Member an amount equal to such Member’s Early Termination Payment. Such payment shall be made by wire transfer of immediately available funds to a bank account designated by such Member. No Member shall be required to return any portion of any Early Termination Payment even if there is later a Determination affecting such Early Termination Payment.

Section 4.4 Breach of Agreement. In the event of a Material Breach, all obligations hereunder shall be accelerated and such obligations shall be calculated as if an Early Termination Notice had been delivered on the date of such Material Breach and shall include, but not be limited to, (1) the Early Termination Payment calculated as if an Early Termination Notice had been delivered on the date of such Material Breach, (2) any Tax Benefit Payment agreed to by the Corporation and any Member as due and payable but unpaid as of the date of such Material Breach, and (3) any Tax Benefit Payment due for the Taxable Year ending with or including the date of such Material Breach. Notwithstanding the foregoing, in the event of a Material Breach (other than by reason of bankruptcy), any Member shall be entitled to elect to accelerate all obligations due to it hereunder as set forth in (1), (2) and (3), above or to seek specific performance of the terms hereof.

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ARTICLE V

SUBORDINATION AND LATE PAYMENTS

Section 5.1 Subordination. Notwithstanding any other provision of this Agreement to the contrary, any Tax Benefit Payment or Early Termination Payment required to be made under this Agreement shall rank subordinate and junior in right of payment to any Senior Obligations and shall rank pari passu with all current or future unsecured obligations of the Corporation that are not Senior Obligations.

Section 5.2 Late Payments by the Corporation. The amount of all or any portion of a payment not made to any Member when due under the terms of this Agreement shall be payable together with any interest thereon, computed at the Default Rate and commencing from the date on which such payment was due and payable.

ARTICLE VI

ELECTION; NO DISPUTES; CONSISTENCY; COOPERATION

Section 6.1 Election to be Filed. As managing member of EC LLC, the Corporation shall cause EC LLC and each direct or indirect subsidiary ((but only if such indirect subsidiaries are held only through subsidiaries treated as pass-through entities) of EC LLC that is a partnership for U.S. federal income tax purposes to file an election under Section 754 of the Code effective for such entity’s Taxable Year in which the Original Sale occurs (or, if such entity is formed or acquired after such Taxable Year, for the Taxable Year of such formation or acquisition), and shall not cause EC LLC to revoke or cause to be revoked such election until this Agreement is no longer in effect.

Section 6.2 Member Participation in the Corporation’s and EC LLC’s Tax Matters. Except as otherwise provided herein, the Corporation shall have full responsibility for, and sole discretion over, all matters concerning Covered Taxes of the Corporation and EC LLC, including without limitation the preparation, filing or amending of any Tax Return and defending, contesting or settling any issue pertaining to Covered Taxes. Notwithstanding the foregoing, the Corporation shall notify the Members of, and keep them reasonably informed with respect to, and any Founding Member shall have the right to participate in and monitor (but, for the avoidance of doubt, not to control) the portion of any audit of the Corporation and EC LLC by a Taxing Authority the outcome of which is reasonably expected to affect such Member’s rights under this Agreement. The Corporation shall provide to the Founding Members reasonable opportunity to provide information and other input to the Corporation, EC LLC and their respective advisors concerning the conduct of any such portion of such audits. The Corporation shall not settle or otherwise resolve any audit or other challenge by a Taxing Authority relating to the Basis Adjustment or the deduction of Imputed Interest without the consent of each of the Founding Members, which consent any such person shall not unreasonably withhold, condition or delay.

Section 6.3 Consistency. Unless there is a Determination to the contrary or except with the consent of the Corporation and each of the Founding Members, each Member on its own behalf and on behalf of each of its Affiliates, agrees to report and cause to be reported for all U.S. purposes, including for purposes of all Covered Taxes and U.S. financial reporting

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purposes, all items related to Covered Taxes and this Agreement (including without limitation the Basis Adjustments and each Tax Benefit Payment) in a manner consistent with that specified by the Corporation in any schedule, letter or certificate required to be provided by or on behalf of the Corporation under this Agreement as such schedule, letter or certificate is modified as a result of the negotiation of the parties pursuant to this Agreement or the Reconciliation Procedures. In the event that an Advisory Firm is replaced by the Corporation with another firm, such replacement Advisory Firm shall be required to perform its services under this Agreement using procedures and methodologies consistent with the previous Advisory Firm, unless otherwise required by law or the Corporation and each of the Founding Members agrees to the use of other procedures and methodologies.

Section 6.4 Cooperation. The Corporation and each Member shall (and shall cause its respective Affiliates to) (i) furnish to each other in a timely manner such information, documents and other materials as the other may reasonably request for purposes of making any determination or computation necessary or appropriate under this Agreement, preparing any Tax Return or contesting or defending any audit, examination or controversy with any Taxing Authority, (ii) make its employees and representatives available to provide explanations of documents and materials and such other information as may be reasonably requested in connection with any of the matters described in clause (i) above, and (iii) reasonably cooperate in connection with any such matter, and the Corporation shall reimburse each such Member for any reasonable third-party costs and expenses incurred pursuant to this Section.

ARTICLE VII

GENERAL PROVISIONS

Section 7.1 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed duly given and received (i) on the date of delivery if delivered personally, or by facsimile upon confirmation of transmission by the sender’s fax machine if sent on a Business Day (or otherwise on the next Business Day) or (ii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:

if to the Corporation, to:
	Enovation Controls, Inc. 5311 South 122nd East Avenue Tulsa, OK 74146 Attention: President Telephone: 918-317-4100 Fax:

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with copies to (which shall constitute notice):
	Norton Rose Fulbright 300 Convent Street, Suite 2100 San Antonio, TX 78205-3792 Attention: Daryl L. Lansdale, Esq. Telephone: 210-270-9367 Fax: 210-270-7205

if to any Member, the address of such Member set forth from time to time in the books and records of EC LLC.

Any party may change its address or fax number by giving each party written notice of its new address or fax number in the manner set forth above.

Section 7.2 Reconciliation.

(a) In the event that the Corporation and the Founding Members are unable to resolve a disagreement within the relevant period designated in this Agreement (“Reconciliation Dispute”), the Reconciliation Dispute shall be submitted for determination to a nationally recognized expert (the “Expert”) in the particular area of disagreement mutually acceptable to both parties. The Expert shall be a partner in a nationally recognized accounting firm or a law firm (other than the Advisory Firm), and the Expert shall not, and the firm that employs the Expert shall not, have any material relationship with the Corporation, EC LLC or any Member, or other actual or potential conflict of interest. If the parties are unable to agree on an Expert within fifteen (15) days of receipt by the respondent(s) of written notice of a Reconciliation Dispute, the Expert shall be appointed by the American Arbitration Association. The Expert shall resolve any matter relating to an Exchange Basis Schedule or an amendment thereto or the Early Termination Schedule or an amendment thereto within 30 calendar days and shall resolve any matter relating to a Tax Benefit Schedule or an amendment thereto within 15 calendar days or as soon thereafter as is reasonably practicable, in each case after the matter has been submitted to the Expert for resolution. Notwithstanding the foregoing, if the matter is not resolved before any payment that is the subject of a disagreement is due or any Tax Return reflecting the subject of a disagreement is due, such payment shall be made on the date prescribed by this Agreement as determined by the Corporation and such Tax Return may be filed as prepared by the Corporation, subject to adjustment or amendment upon resolution.

(b) The costs and expenses relating to the engagement of such Expert or amending any Tax Return shall be borne equally by the Corporation and the other parties participating in the Reconciliation Dispute. Any dispute as to whether a dispute is a Reconciliation Dispute within the meaning of this Section 7.2 shall be decided by the Expert. The Expert shall finally determine any Reconciliation Dispute and the determinations of the Expert pursuant to this Section 7.2 shall be binding on the Corporation and the Members and may be entered and enforced in any court having jurisdiction.

Section 7.3 Withholding. The Corporation shall be entitled to deduct and withhold from any payment payable pursuant to this Agreement such amounts as the Corporation is required to deduct and withhold with respect to the making of such payment under the Code, or

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any provision of state, local or foreign tax law. To the extent that amounts are so withheld and paid over to the appropriate Taxing Authority by the Corporation, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to such Member. Each party will cooperate to minimize withholding obligations, if any, with respect to payments required hereunder.

Section 7.4 Admission of the Corporation into a Consolidated Group; Dispositions of Assets to a Corporation.

(a) If the Corporation is or becomes a member of an affiliated or consolidated group of corporations that files a consolidated income tax return pursuant to Sections 1501 et seq. of the Code or any corresponding provisions of state or local law, then: (i) the provisions of this Agreement shall be applied with respect to the group as a whole; and (ii) Tax Benefit Payments, Early Termination Payments and other applicable items hereunder shall be computed with reference to the consolidated taxable income of the group as a whole.

(b) If any entity that is obligated to make a Tax Benefit Payment or Early Termination Payment hereunder transfers one or more assets to a corporation (or a Person classified as a corporation for United States federal income tax purposes) with which such entity does not file a consolidated tax return pursuant to Section 1501 of the Code, such entity, for purposes of calculating the amount of any Tax Benefit Payment or Early Termination Payment (e.g., calculating the gross income of the entity and determining the Realized Tax Benefit of such entity) due hereunder, shall be treated as having disposed of such asset in a fully taxable transaction on the date of such contribution. The consideration deemed to be received by such entity shall be equal to the fair market value of the contributed asset. For purposes of this Section 7.4, a transfer of a partnership or limited liability company interest shall be treated as a transfer of the transferring partner’s or member’s share of each of the assets and liabilities of that partnership or limited liability company.

Section 7.5 Change in Law. Notwithstanding anything herein to the contrary, if, in connection with an actual or proposed change in law, a Founding Member reasonably believes that the existence of this Agreement could cause income (other than income arising from receipt of a payment under this Agreement) recognized by such Member upon any Exchange by such Member to be treated as ordinary income rather than capital gain (or otherwise taxed at ordinary income rates) for United States federal income tax purposes or would have other material adverse tax consequences to such Member (a “Change in Tax Law”), then at the election of such Member and to the extent specified by such Member, this Agreement (i) shall cease to have further effect with respect to such Member, (ii) shall not apply to an Exchange by such Member occurring after a date specified by such Member, or (iii) shall otherwise be amended in a manner determined by such Member provided that such amendment shall not result in an increase in payments under this Agreement at any time as compared to the amounts and times of payments that would have been due in the absence of such amendment.

Section 7.6 Submission to Jurisdiction; Waivers. Any Proceeding must be brought against any of the parties in the Court of Chancery of the State of Delaware in and for New Castle County or, if the Court of Chancery lacks subject matter jurisdiction, in another court of the State of Delaware, County of New Castle, or in the United States District Court for the

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District of Delaware, and each of the parties consent to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. Each party to this Agreement irrevocably (i) waives any objection which such party may have at any time to the laying of venue of any Proceeding brought in any such court, waives any claim that such Proceeding has been brought in an inconvenient forum and further waives the right to object, with respect to such Proceeding, that such court does not have jurisdiction over such party; and (ii) waives, to the fullest extent permitted by applicable law, any and all rights to trial by jury in connection with any Proceeding. No failure by any party to insist upon the strict performance of any covenant, duty, agreement, or condition of this Agreement, or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or any other covenant, duty, agreement or condition.

Section 7.7 Amendments. No amendment to this Agreement shall be effective unless it is (i) in writing, and (ii) signed by the Corporation and each Founding Member affected by such amendment; provided, that no such amendment shall be effective if such amendment will have a disproportionate effect on the payments certain Members will or may receive under this Agreement unless all such Members disproportionately affected consent in writing to such amendment.

Section 7.8 Entire Agreement; No Third Party Beneficiaries. This Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 7.9 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

Section 7.10 Successors’ Assignment.

(a) No Member may assign any of its rights, interests or entitlements under this Agreement to any person without the prior written consent of the Corporation and each Founding Member; provided, however , that

(i) to the extent Units are effectively transferred in accordance with the terms of the LLC Agreement and any other agreements the Members may have

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entered into with respect thereto, the transferring Member may assign to the transferee of such Units the transferring Member’s rights under this Agreement with respect to such transferred Units, as long as such transferee has executed and delivered, or, in connection with such transfer, executes and delivers, a joinder to this Agreement, in form and substance reasonably satisfactory to the Corporation and each Founding Member, agreeing to become a “Member” for all purposes of this Agreement, except as otherwise provided in such joinder,

(ii) once an Exchange has occurred, any and all payments that may become payable to a Member pursuant to this Agreement with respect to such Exchange may be assigned to any Person or Persons, as long as any such Person has executed and delivered, or, in connection with such assignment, executes and delivers, a joinder to this Agreement, in form and substance reasonably satisfactory to the Corporation and each Founding Member, and

(iii) a Member may pledge some or all of its rights, interests or entitlements under this Agreement to any U.S. money center bank in connection with a bona fide loan or other indebtedness.

(b) The Corporation may not assign any of its rights, interests or entitlements under this Agreement without the consent of each Founding Member, not to be unreasonably withheld or delayed.

(c) Subject to subsections (a) and (b), this Agreement will be binding upon, inure to the benefit of and be enforceable by, the parties and their respective successors and assigns including any acquirer of all or substantially all of the business or assets of the Corporation. The Corporation shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place (except to the extent expressly provided by this Agreement and provided that, for the avoidance of doubt, if a Change of Control has occurred and an Early Termination Payment is required to be made then the Corporation’s payment obligations shall be determined taking into account the provisions of Article IV).

Section 7.11 Remedies; Specific Performance. The parties hereto acknowledge that money damages would not be an adequate remedy at Law if any party fails to perform in any material respect any of its obligations hereunder and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to seek to compel specific performance of the obligations of any other party under this Agreement, without the posting of any bond, in accordance with the terms and conditions of this Agreement in any court of the United States or any State thereof having jurisdiction, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at Law. No remedy shall be exclusive of any other remedy, and all available remedies shall be cumulative.

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Section 7.12 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

Section 7.13 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

Section 7.14 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to applicable principles of conflict of laws that would mandate the application of the laws of another jurisdiction.

[Signature page follows.]

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IN WITNESS WHEREOF, the Corporation and each Member have duly executed this Agreement as of the date first written above.

ENOVATION CONTROLS, INC.

By:

Name:

Title:

MEMBERS

Each Member set forth on Annex A hereto

By:

Name:

Title:

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EX-10.3

Exhibit 10.3

FORM OF ENOVATION CONTROLS, INC.

2014 LONG-TERM INCENTIVE PLAN

Table of Contents

ARTICLE I	GENERAL	1
Section 1.01	Purposes	1
Section 1.02	Definitions	1
Section 1.03	Administration	5
Section 1.04	Stock Subject to Plan	5
Section 1.05	Eligibility	7
ARTICLE II	AWARDS UNDER THE PLAN	7
Section 2.01	Awards Under the Plan; Award Agreement	7
Section 2.02	Options	7
Section 2.03	Stock Appreciation Rights	9
Section 2.04	Restricted Stock	11
Section 2.05	Restricted Stock Units	12
Section 2.06	Stock Bonuses	12
Section 2.07	Other Stock-Based Awards	13
Section 2.08	Cash Awards	13
Section 2.09	Performance Awards	13
ARTICLE III	PROVISIONS APPLICABLE TO AWARDS	16
Section 3.01	Change of Control Provisions	16
Section 3.02	Rights as a Stockholder	16
Section 3.03	No Employment Rights; No Right to Award	16
Section 3.04	Securities Matters and Regulations	17
Section 3.05	Withholding Taxes	17
Section 3.06	Notification of Election Under Section 83(b) of the Code	17
Section 3.07	Notification Upon Disqualifying Disposition Under Section 421(b) of the Code	18
Section 3.08	Amendment or Termination of the Plan	18
Section 3.09	Transferability of Awards	18
Section 3.10	Expenses and Receipts	19
Section 3.11	Term of Plan	19
Section 3.12	Participant Rights	19
Section 3.13	Unfunded Status of Awards	19
Section 3.14	No Fractional Shares	19
Section 3.15	Beneficiary	19
Section 3.16	Paperless Administration	19
Section 3.17	Severability	19
Section 3.18	Applicable Law	19
Section 3.19	Clawback	19
Section 3.20	Section 409A Compliance	20
Section 3.21	Correction of Errors	20
Section 3.22	Plan Establishment	20

i

ARTICLE I

GENERAL

Section 1.01 Purpose. The purpose of the Enovation Controls, Inc. 2014 Long-Term Incentive Plan (the “Plan”) is to provide an additional incentive to selected officers, employees, non-employee directors and consultants of the Company or its Subsidiaries (as hereinafter defined) whose contributions are essential to the growth and success of the Company’s business, and to attract and retain competent and dedicated persons whose efforts will contribute to and promote the long-term growth and profitability of the Company. To accomplish such purposes, the Plan provides that the Company may grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Stock Bonuses, Other Stock-Based Awards, Cash Awards, Performance Awards or any combination of the foregoing.

Section 1.02 Definitions. Wherever the following terms are used they will have the meanings set forth below, unless the context clearly indicates otherwise:

(a) “Administrator” means the Board, or, if and to the extent the Board delegates such responsibility, the Committee.

(b) “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified. An entity is an Affiliate of the Company for purposes of this definition only for such periods as the requisite ownership or control relationship is maintained.

(c) “Award” means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Stock Bonus, Other Stock-Based Award, Cash Award or Performance Award, together with any other right or interest granted under the Plan to a Participant.

(d) “Award Agreement” means the writing evidencing an Award or a notice of an Award delivered to a Participant by the Company.

(e) “Beneficial Owner” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act, as amended from time to time.

(f) “Board” means the Company’s Board of Directors.

(g) “Cash Award” means an Award granted under Section 2.08 of the Plan

(h) “Change of Control” means, except as otherwise provided in an Award Agreement, the occurrence of any of the following:

(i) A transaction or series of related transactions (other than an offering of Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any Person directly or indirectly becomes the Beneficial Owner of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities;

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(ii) During any twenty-four (24) consecutive month period, the individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason other than death to constitute at least a majority of the Board; provided, however, that an individual who becomes a member of the Board subsequent to the beginning of the twenty-four (24) month period will be deemed to have satisfied such twenty-four (24) month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds (2/3) of the directors who then qualified as Incumbent Directors;

(iii) The consummation of a sale or disposition of all or substantially all the Company’s assets in one or a series of related transactions, other than (A) such a sale, disposition or lease to an entity, 50% or more of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale or disposition or (B) the distribution directly to the Company’s stockholders (in one distribution or a series of related distributions) of all of the stock of one or more Subsidiaries of the Company that represent substantially all of the Company’s assets;

(iv) There is consummated a merger or consolidation of the Company or any direct or indirect Subsidiary with any other corporation or other entity, other than (A) a merger or consolidation which results in (1) the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary under an employee benefit plan of the Company or any Subsidiary of the Company, more than 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (2) the individuals who comprise the Board immediately prior thereto constituting immediately thereafter at least a majority of the board of directors of the Company, the entity surviving such merger or consolidation or, if the Company or the entity surviving such merger is then a Subsidiary, the ultimate parent thereof, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company’s then outstanding securities; or

(v) The stockholders of the Company approve a plan of complete liquidation or dissolution of the Company.

(i) “Code” means the Internal Revenue Code of 1986, as amended. Any reference herein to a section of the Code includes any successor provision to such section.

(j) “Committee” means a committee of two or more directors designated by the Board to administer this Plan, and, to the extent the Board determines it is appropriate for the compensation realized from Awards under the Plan to be “performance-based” compensation under Section 162(m) of the Code, will be a committee or subcommittee of the Board composed

2

of two or more members, each of whom is an “outside director” within the meaning of section 162(m) of the Code, and which, to the extent the Board determines it is appropriate for Awards under the Plan to qualify for the exemption available under Rule 16b-3, will be a committee or subcommittee of the Board composed of two or more members, each of whom is a “non-employee director” within the meaning of Rule 16b-3.

(k) “Company” means Enovation Controls, Inc., a Delaware corporation, and, where appropriate, each of its Affiliates and successors.

(l) “Covered Employee” means an individual who is both (i) designated by the Committee as likely to be a “covered employee” within the meaning of Section 162(m)(3) of the Code, and (ii) expected by the Committee to be the recipient of compensation (other than “performance-based compensation” under Section 162(m)(3) of the Code) in excess of $1,000,000 for the tax year of the Company with regard to which a deduction for compensation paid to such Participant under the Plan would be allowed notwithstanding Section 162(m) of the Code.

(m) “Effective Date” means, notwithstanding the Plan’s establishment date described in Section 3.22, the first date on which Awards may be granted pursuant to the Plan, which date will be immediately prior to the closing of the Company’s initial public offering.

(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(o) “Fair Market Value” means, with respect to Stock as of any specified date, (i) if the Stock is traded on a national securities exchange, the closing price of the Stock on the immediately preceding date (or if no sales occur on that date, on the last preceding date on which such sales of the Stock are so reported); (ii) if the Stock is not traded on a national securities exchange but is traded over the counter, the average between the reported high and low or closing bid and asked prices of the Stock on the most recent date on which Stock was publicly traded; (iii) if the Stock is not publicly traded, the amount determined by the Administrator in its discretion in such manner as it deems appropriate; or (iii) if the specified date is the date of an initial public offering of Stock, the offering price under such initial public offering. In all events, Fair Market Value will be determined pursuant to a method that complies with the requirements of Section 409A of the Code.

(p) “Incentive Stock Option” or “ISO” means an Option that is intended to qualify for special Federal income tax treatment pursuant to Sections 421 and 422 of the Code, and which is so designated in the applicable Award Agreement.

(q) “Non-Employee Director” means a member of the Board who is not an employee of the Company or any of its subsidiaries.

(r) “Nonqualified Stock Option” means an Option that is not an Incentive Stock Option.

(s) “Option” means a right granted to a Participant under Section 2.02 to purchase Stock at a specified price during specified time periods.

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(t) “Other Stock-Based Award” means an Award granted to a Participant under Section 2.07.

(u) “Participant” means, as of a specified date, a person who holds an Award that is outstanding as of such specified date.

(v) “Performance Award” means a right, granted to a Participant under Section 2.09, to receive a cash payment, Stock or other Award based upon performance criteria specified by the Administrator (or the Committee if the Performance Award is a Qualified Performance-Based Award).

(w) “Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term will not include (i) the Company or any Subsidiary thereof, (ii) Murphy Group, Inc. or any Affiliate thereof, (iii) EControls Group, Inc. or any Affiliate thereof, (iv) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary thereof, (v) an underwriter temporarily holding securities pursuant to an offering of such securities, or (vi) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(x) “Qualified Performance-Based Award” means a Performance Award granted to a Covered Person that is intended to qualify as “performance-based compensation” within the meaning of Section 162(m)(3) of the Code.

(y) “Restricted Stock” means Stock granted to a Participant under Section 2.04, that is subject to certain restrictions and to a risk of forfeiture.

(z) “Restricted Stock Unit” means an unfunded and unsecured right granted to a Participant under Section 2.05, to receive Stock, cash or a combination thereof at the end of a specified period, which right is subject to certain restrictions and to a risk of forfeiture.

(aa) “Rule 16b-3” means Rule 16b-3, promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act, applicable to the Plan and Participants.

(bb) “Section 162(m) Transition Period” has the meaning set forth in Section 2.09(b).

(cc) “Securities Act” means the Securities Act of 1933, as amended.

(dd) “Stock” means the Company’s Class A common stock, par value $0.00001 per share.

(ee) “Stock Bonus” means a bonus payable in fully vested shares of Stock granted pursuant to Section 2.06.

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(ff) “Stock Appreciation Right” or “SAR” means a right to receive, upon exercise thereof, the excess of (i) the Fair Market Value of one share of Stock on the date of exercise over (ii) the exercise price of the SAR.

(gg) “Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or business entity of which: (A) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof; or (B) if a limited liability company, partnership, association or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing member, general partner or analogous controlling Person of such limited liability company, partnership, association or other business entity.

For purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such times that such Person has one or more Subsidiaries and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of the Company.

Section 1.03 Administration. The Plan shall be administered by the Administrator. The Administrator shall have the authority in its sole discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority (a) to the extent not inconsistent with the Plan, prescribe, amend and rescind rules and regulations relating to the Plan including rules governing its own operations, (b) make all determinations necessary or advisable in administering the Plan, (c) correct any defect, supply any omission and reconcile any inconsistency in the Plan, (d) grant Awards and determine who will receive Awards, when such Awards will be granted and the terms of such Awards, including setting forth provisions with regard to the termination of a recipient’s employment or service, (e) accelerate the time or times at which an Award becomes vested, unrestricted or may be exercised, and (f) waive or amend any goals, restrictions or conditions set forth in an Award Agreement, unless otherwise provided in the Award Agreement. The determinations of the Administrator will be final, binding and conclusive. By accepting any Award under the Plan, each Participant and each person claiming under or through him or her will be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, any action taken under the Plan by the Administrator.

Section 1.04 Stock Subject to Plan.

(a) Total Shares Available. The maximum number of shares of Stock reserved for issuance under the Plan shall be [—] shares (subject to adjustment as provided by Section 1.04(c)), all of which may be granted in respect of Options (including Incentive Stock

5

Options) or Stock Appreciation Rights. The shares of Stock that may be delivered pursuant to Awards may be authorized but unissued Stock or authorized and issued Stock held in the Company’s treasury, or otherwise acquired for purposes of the Plan.

(b) Individual Awards. Except as provided under this Section 1.04(b), there is no limit on the amount of cash and securities (other than the overall Plan limit on shares of Stock as provided in Section 1.04(a)) that may be subject to Awards to any eligible individual under the Plan.

(i) Annual Limit on Qualified Performance-Based Awards. The maximum number of shares of Stock with respect to which Qualified Performance-Based Awards may be granted during any calendar year to any Covered Employee shall be [—] (as adjusted pursuant to the provisions of Section 1.04(c)). The maximum payment under any Qualified Performance-Based Award denominated in dollars that may be granted during any calendar year to any Covered Employee shall be $[—] for each 12-month period contained in the performance period for such Qualified Performance-Based Award.

(ii) Annual Limit on Options and SARs. In any single calendar year no individual may be granted Options or SARs covering or relating to more than [—] shares of Stock, subject to adjustment in a manner consistent with any adjustment made pursuant to Section 1.04(c).

(iii) Annual Limit on Awards to Non-Employee Directors. The maximum number of shares of Stock with respect to which Awards may be granted during any calendar year to any Non-Employee Director shall be [—] (as adjusted pursuant to the provisions of Section 1.04(c)). The maximum payment under any Award denominated in dollars that may be granted during any calendar year to any Non-Employee Director shall be $[—].

(c) Adjustment for Change in Capitalization. In the event that any special or extraordinary dividend or other extraordinary distribution is declared (whether in the form of cash, Stock, or other property), or there occurs any recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, share exchange or other similar corporate transaction or event, the Administrator shall adjust, as it deems necessary or appropriate, (i) the number and kind of shares of stock which may thereafter be issued in connection with Awards, (ii) the number and kind of shares of stock or other property, including cash, issued or issuable in respect of outstanding Awards, (iii) the exercise price, grant price or purchase price relating to any Award, and (iv) the limitations set forth in Section 1.04(a) and (b); provided that, with respect to Incentive Stock Options, such adjustment shall be made in accordance with Section 424 of the Code; and provided further that no such adjustment shall cause any Award hereunder which is or becomes subject to Section 409A of the Code to fail to comply with the requirements of such section.

(d) Reuse of Shares. If any shares of Stock subject to an Award are forfeited, cancelled, exchanged or surrendered or if an Award otherwise terminates or expires without a distribution of shares to the Participant, the shares of Stock with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available for Awards under the Plan. In addition, any shares of Stock that are

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exchanged by a Participant or withheld by the Company as full or partial payment in connection with any Option or Stock Appreciation Right under the Plan, as well as any shares of Stock exchanged by a Participant or withheld by the Company or any Subsidiary to satisfy the tax withholding obligations related to any Option or Stock Appreciation Right under the Plan, shall again be available for Awards under the Plan. Upon the exercise of any Award granted in tandem with any other Awards, such related Awards shall be cancelled to the extent of the number of shares of Stock as to which the Award is exercised and, notwithstanding the foregoing, such number of shares shall no longer be available for Awards under the Plan. In addition, (i) to the extent an Award is denominated in shares of Stock, but paid or settled in cash, the number of shares of Stock with respect to which such payment or settlement is made shall again be available for Awards under the Plan and (ii) shares of Stock underlying Awards that can only be settled in cash shall not be counted against the aggregate number of shares of Stock available for Awards under the Plan.

Section 1.05 Eligibility. The individuals who shall be eligible to receive Awards under the Plan shall be such employees of the Company and its Subsidiaries (including officers of the Company and its Subsidiaries, whether or not they are directors of the Company), consultants to the Company and Non-Employee Directors as the Administrator shall select from time to time. The grant of an Award hereunder in any year to any individual shall not entitle such individual to a grant of an Award in any future year.

ARTICLE II

AWARDS UNDER THE PLAN

Section 2.01 Awards Under the Plan; Award Agreement. The Administrator may grant Awards in such amounts and with such terms and conditions as the Administrator shall determine, subject to the provisions of the Plan. Each Award granted under the Plan (except an unconditional Stock Bonus) shall be evidenced by an Award Agreement which shall contain such provisions as the Administrator may in its sole discretion deem necessary or desirable and which are not in conflict with the terms of the Plan. By accepting an Award, a Participant shall be deemed to agree that the Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement.

Section 2.02 Options. The Administrator is authorized to grant Options to eligible individuals on the following terms and conditions:

(a) Identification of Options. Each Option shall be clearly identified in the applicable Award Agreement as either an Incentive Stock Option or a Nonqualified Stock Option.

(b) Exercise Price. Each Award Agreement with respect to an Option shall set forth the amount per share (the “option exercise price”) payable by the Participant to the Company upon exercise of the Option. The option exercise price shall be equal to or greater than the Fair Market Value of a share of Stock on the date of grant. Other than with respect to an adjustment described in Section 1.04(c), in no event shall the exercise price of an Option be reduced following the grant of an Option, nor shall an Option be cancelled in exchange for a replacement Option with a lower exercise price or in exchange for another type of Award or cash payment without stockholder approval.

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(c) Term and Exercise of Options.

(i) Each Option shall become exercisable at the time or times determined by the Administrator and set forth in the applicable Award Agreement. At the time of grant of an Option, the Administrator may impose such restrictions or conditions to the exercisability of the Option as it, in its absolute discretion, deems appropriate, including, but not limited to, achievement of performance criteria. Subject to Section 2.02(d) hereof, the Administrator shall determine and set forth in the applicable Award Agreement the expiration date of each Option, which shall be no later than the tenth anniversary of the date of grant of the Option.

(ii) An Option shall be exercised by delivering the form of notice of exercise provided by the Company or in such other form as approved by the Company. Payment for shares of Stock purchased upon the exercise of an Option shall be made on the effective date of such exercise by one or a combination of the following means: (A) in cash or by personal check, certified check, bank cashier’s check or wire transfer; (B) in shares of Stock owned by the Participant and valued at their Fair Market Value on the effective date of such exercise; (C) broker assisted cashless exercise or net exercise; or (D) by any such other method as the Administrator may from time to time authorize in its sole discretion. Except as authorized by the Administrator, any payment in shares of Stock shall be effected by the delivery of such shares to the Secretary of the Company (or his designee), duly endorsed in blank or accompanied by stock powers duly executed in blank, together with any other documents and evidences as the Secretary of the Company shall require.

(iii) Shares of Stock purchased upon the exercise of an Option shall, as determined by the Administrator, be evidenced by a book entry record or certificate issued in the name of or for the account of the Participant or other individual entitled to receive such shares, and delivered to the Participant or such other individual as soon as practicable following the effective date on which the Option is exercised.

(d) Provisions Relating to Incentive Stock Options. Incentive Stock Options may only be granted to employees of the Company and its Subsidiaries, in accordance with the provisions of Section 422 of the Code. To the extent that the aggregate Fair Market Value of shares of Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year under the Plan and any other stock option plan of the Company or a Subsidiary shall exceed $100,000, such Options shall be treated as Nonqualified Stock Options. For purposes of this Section 2.02(d), Fair Market Value shall be determined as of the date on which each such Incentive Stock Option is granted. No Incentive Stock Option may be granted to an individual if, at the time of the proposed grant, such individual owns (or is deemed to own under the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company unless (A) the exercise price of such Incentive Stock Option is at least 110% of the Fair Market Value of a share of Stock at the time such Incentive Stock Option is granted and (B) such Incentive Stock Option is not exercisable after the expiration of five years from the date such Incentive Stock Option is granted. For purposes of the grant of Incentive Stock Options, a “Subsidiary” shall mean a “subsidiary corporation” as defined in Section 424(f) of the Code.

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(e) Effect of Termination of Employment (or Provision of Services). Except as may otherwise be provided in the applicable Award Agreement, and subject to the Administrator’s authority under Section 1.03 hereof:

(i) In the event that the employment of a Participant with the Company and its Subsidiaries (or the Participant’s service to the Company and its Subsidiaries) shall terminate for any reason other than death or disability, each Option granted to such Participant that is outstanding and exercisable as of the date of such termination shall remain exercisable for the 90-day period immediately following such termination, but in no event following the expiration of its term, and any Option that is not exercisable as of the date of such termination shall be terminated at the time of such termination.

(ii) In the event that the employment of a Participant with the Company and its Subsidiaries (or the Participant’s service to the Company and its Subsidiaries) shall terminate on account of the Participant’s death or disability, each Option granted to such Participant that is outstanding and exercisable as of the date of such termination shall remain exercisable for the one-year period immediately following such termination, but in no event following the expiration of its term, and any Option that is not exercisable as of the date of such termination shall be terminated at the time of such termination.

(f) Leave of Absence. In the case of any Participant on an approved leave of absence, the Administrator may make such provision respecting the continuance of the Option while in the employ or service of the Company as it may deem equitable, except that in no event may an Option be exercised after the expiration of its term.

(g) No Repricing. Except as otherwise provided in Section 1.04(c), without the prior approval of the stockholders of the Company: (i) the exercise price of an Option may not be reduced, directly or indirectly, (ii) an Option may not be cancelled in exchange for cash in an amount, or other Awards with a value, that exceeds the excess, if any, of the Fair Market Value of the shares of Stock subject to the Option at the time of the cancellation or exchange over the exercise price of such Option, or for Options or SARs with an exercise price that is less than the exercise price of the original Option, except as permitted in accordance with Section 3.01, and (iii) the Company may not repurchase an Option for value (in cash, substitutions, cash buyouts, or otherwise) from a Participant if the current Fair Market Value of the Stock underlying the Option is lower than the exercise price of the Option.

Section 2.03 Stock Appreciation Rights.

(a) Grant; Term. A Stock Appreciation Right may be granted in connection with an Option, either at the time of grant or, with respect to a Nonqualified Stock Option, at any time thereafter during the term of the Option, or may be granted unrelated to an Option. At the time of grant of a Stock Appreciation Right, the Administrator may impose such restrictions or conditions to the exercisability of the Stock Appreciation Right as it, in its absolute discretion, deems appropriate, including, but not limited to, achievement of performance criteria. The term

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of a Stock Appreciation Right granted without relationship to an Option shall not exceed ten years from the date of grant. In addition, the exercise price of a Stock Appreciation Right shall be equal to or greater than the Fair Market Value of a share of Stock on the date of grant.

(b) Tandem Awards. A Stock Appreciation Right related to an Option shall require the holder, upon exercise, to surrender such Option with respect to the number of shares as to which such Stock Appreciation Right is exercised, in order to receive payment of any amount computed pursuant to Section 2.03(c). Such Option will, to the extent surrendered, then cease to be exercisable. Subject to such rules and restrictions as the Administrator may impose, a Stock Appreciation Right granted in connection with an Option will be exercisable at such time or times, and only to the extent that a related Option is exercisable.

(c) Exercise. Upon the exercise of a Stock Appreciation Right whether related or unrelated to an Option, the holder will be entitled to receive payment of an amount determined by multiplying:

(i) the excess of the Fair Market Value of a share of Stock on the date of exercise of such Stock Appreciation Right over the exercise price of the Stock Appreciation Right, by

(ii) the number of shares as to which such Stock Appreciation Right is exercised.

(d) Limitations. Notwithstanding subsection (c) above, the Administrator may place a limitation on the amount payable upon exercise of a Stock Appreciation Right. Any such limitation must be determined as of the date of grant and noted in the applicable Award Agreement.

(e) Form of Settlement. Payment of the amount determined under subsection (c) above may be made solely in whole shares of Stock valued at their Fair Market Value on the date of exercise of the Stock Appreciation Right or alternatively, in the sole discretion of the Administrator, solely in cash or a combination of cash and shares, in each case as set forth in the applicable Award Agreement. If the Administrator decides that payment will be made in shares of Stock, and the amount payable results in a fractional share, payment for the fractional share will be made in cash.

(f) No Repricing. Except as otherwise provided in Section 1.04(c), without the prior approval of the stockholders of the Company: (i) the exercise price of a SAR may not be reduced, directly or indirectly, (ii) a SAR may not be cancelled in exchange for cash in an amount, or other Awards with a value, that exceeds the excess, if any, of the Fair Market Value of the shares of Stock subject to the SAR at the time of the cancellation or exchange over the exercise price of such SAR, or for Options or SARs with an exercise price that is less than the exercise price of the original SAR, except as permitted in accordance with Section 3.01, and (iii) the Company may not repurchase a SAR for value (in cash, substitutions, cash buyouts, or otherwise) from a Participant if the current Fair Market Value of the Stock underlying the SAR is lower than the exercise price of the SAR.

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Section 2.04 Restricted Stock.

(a) Price. At the time of the grant of shares of Restricted Stock, the Administrator shall determine the price, if any, to be paid by the Participant for each share of Restricted Stock subject to the Award.

(b) Vesting Date. At the time of the grant of shares of Restricted Stock, the Administrator shall establish a vesting date or vesting dates with respect to such shares. The Administrator may divide such shares into classes and assign a different vesting date for each class. Provided that all conditions to the vesting of a share of Restricted Stock are satisfied, and subject to Section 2.04(h), upon the occurrence of the vesting date with respect to a share of Restricted Stock, such share shall vest and the restrictions of Section 2.04(d) shall lapse.

(c) Conditions to Vesting. At the time of the grant of shares of Restricted Stock, the Administrator may impose such restrictions or conditions to the vesting of such shares as it, in its absolute discretion, deems appropriate, including, but not limited to, achievement of performance criteria. The Administrator may also provide that the vesting or forfeiture of shares of Restricted Stock may be based upon the achievement of, or failure to achieve, certain levels of performance and may provide for partial vesting of Restricted Stock in the event that the maximum level of performance is not met if the minimum level of performance has been equaled or exceeded.

(d) Restrictions on Transfer Prior to Vesting. Prior to the vesting of a share of Restricted Stock, such Restricted Stock may not be transferred, assigned or otherwise disposed of, and no transfer of a Participant’s rights with respect to such Restricted Stock, whether voluntary or involuntary, by operation of law or otherwise, shall be permitted.

(e) Dividends on Restricted Stock. The Administrator in its discretion may require that any dividends paid on shares of Restricted Stock be held in escrow until all restrictions on such shares have lapsed.

(f) Issuance of Certificates. The Administrator may, upon such terms and conditions as it determines, provide that (i) a certificate or certificates representing the shares of Restricted Stock shall be registered in the Participant’s name and bear an appropriate legend specifying that such shares are not transferable and are subject to the provisions of the Plan and the restrictions, terms and conditions set forth in the applicable Award Agreement, (ii) such certificate or certificates shall be held in escrow by the Company on behalf of the Participant until such shares become vested or are forfeited or (iii) the Participant’s ownership of the Restricted Stock shall be registered by the Company in book entry form.

(g) Consequences of Vesting. Upon the vesting of a share of Restricted Stock pursuant to the terms hereof, the restrictions of Section 2.04(d) shall lapse with respect to such share. Following the date on which a share of Restricted Stock vests, the Company shall, as determined by the Administrator, make a book entry record of such share or cause to be delivered to the Participant to whom such share was granted, a certificate evidencing such share, either of which may bear a restrictive legend, if the Administrator determines such a legend to be appropriate.

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(h) Effect of Termination of Employment (or Provision of Services). Except as may otherwise be provided in the applicable Award Agreement, and subject to the Administrator’s authority under Section 1.03 hereof, upon the termination of a Participant’s employment with the Company and its Subsidiaries (or the Participant’s service to the Company and its Subsidiaries) for any reason, any and all shares to which restrictions on transferability apply shall be immediately forfeited by the Participant and transferred to, and reacquired by, the Company. In the event of a forfeiture of shares pursuant to this section, the Company shall repay to the Participant (or the Participant’s estate) any amount paid by the Participant for such shares.

Section 2.05 Restricted Stock Units

(a) Vesting Date. At the time of the grant of Restricted Stock Units, the Administrator shall establish a vesting date or vesting dates with respect to such units. The Administrator may divide such units into classes and assign a different vesting date for each class. Provided that all conditions to the vesting of the Restricted Stock Units imposed pursuant to Section 2.05(c) are satisfied, and subject to Section 2.05(d), upon the occurrence of the vesting date with respect to the Restricted Stock Units, such units shall vest.

(b) Benefit Upon Vesting. Unless otherwise provided in an Award Agreement, upon the vesting of Restricted Stock Units, the Participant shall be paid, within 30 days of the date on which such units vest, an amount, in cash and/or shares of Stock, as determined by the Administrator. In the case of Awards denominated in shares of Stock, the amount per Restricted Stock Unit shall be equal to the sum of (i) the Fair Market Value of a share of Stock on the date on which such Restricted Stock Unit vests and (ii) the aggregate amount of cash dividends paid with respect to a share of Stock during the period commencing on the date on which the Restricted Stock Unit was granted and terminating on the date on which such unit vests. In the case of Awards denominated in cash, the amount per Restricted Stock Unit shall be equal to the cash value of the Restricted Stock Unit on the date on which such Restricted Stock Unit vests.

(c) Conditions to Vesting. At the time of the grant of Restricted Stock Units, the Administrator may impose such restrictions or conditions to the vesting of such units as it, in its absolute discretion, deems appropriate, including, but not limited to, achievement of performance criteria.

(d) Effect of Termination of Employment (or Provision of Services). Except as may otherwise be provided in the applicable Award Agreement, and subject to the Administrator’s authority under to Section 1.03 hereof, Restricted Stock Units that have not vested, together with any dividend equivalents deemed to have been credited with respect to such unvested units, shall be forfeited upon the Participant’s termination of employment (or upon cessation of such Participant’s services to the Company) for any reason.

Section 2.06 Stock Bonuses. In the event that the Administrator grants a Stock Bonus, the shares of Stock constituting such Stock Bonus shall, as determined by the Administrator, be evidenced by a book entry record or a certificate issued in the name of the Participant to whom such grant was made and delivered to such Participant as soon as practicable after the date on which such Stock Bonus is payable.

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Section 2.07 Other Stock-Based Awards. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Stock, including but not limited to dividend equivalents, may be granted either alone or in addition to other Awards (other than in connection with Options or Stock Appreciation Rights) under the Plan. Subject to the provisions of the Plan, the Administrator shall have sole and complete authority to determine the individuals to whom and the time or times at which such Other Stock-Based Awards shall be granted, the number of shares of Stock to be granted pursuant to such Other Stock-Based Awards, or the manner in which such Other Stock-Based Awards shall be settled (e.g., in shares of Stock or cash), or the conditions to the vesting and/or payment or settlement of such Other Stock-Based Awards (which may include, but not be limited to, achievement of performance criteria) and all other terms and conditions of such Other Stock-Based Awards.

Section 2.08 Cash Awards. The Administrator may grant awards that are payable solely in cash, as deemed by the Administrator to be consistent with the purposes of the Plan, and such Cash Awards shall be subject to the terms, conditions, restrictions and limitations determined by the Administrator, in its sole discretion, from time to time. Cash Awards may be granted with value and payment contingent upon the achievement of performance criteria.

Section 2.09 Performance Awards.

(a) Performance Conditions. The right of a Participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as may be specified by the Administrator. The Administrator may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase the amounts payable under any Award subject to performance conditions, except as limited under Section 2.09(b).

(b) Qualified Performance-Based Awards. If the Administrator intends that a Performance Award to be granted to a Covered Person should qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, the grant, exercise or settlement of such Qualified Performance-Based Award will be contingent upon achievement of pre-established performance goals and other terms set forth in this Section 2.09(b). Notwithstanding anything to the contrary in the Plan, the Company intends to rely on the transition relief set forth in Treasury Regulation § 1.162-27(f) and, as such, the deduction limitation imposed by Section 162(m) of the Code will not apply to the Company until the earliest to occur of (i) the material modification of the Plan within the meaning of Treasury Regulation § 1.162-27(h)(1)(iii), or (ii) the first meeting of the shareholders of the Company at which directors are to be elected that occurs after December 31, 2018 (the “Section 162(m) Transition Period”).

(i) Performance Goals Generally. The performance goals for such Qualified Performance-Based Awards will consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Administrator consistent with this Section 2.09(b). Performance goals will be objective and will be designed to meet the requirements for “performance-based compensation” under Section 162(m) of the Code and may differ from Participant to Participant and from Award to Award. The Administrator may determine that such Qualified Performance-Based Awards will be granted, exercised, or settled upon achievement of any one or more performance goals.

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(A) Performance Goals. One or more of the following business criteria will be used by the Administrator in establishing performance goals for such Performance Awards: (1) earnings, including one or more of operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, adjusted EBITDA, economic earnings, or extraordinary or special items or book value per share (which may exclude nonrecurring items); (2) earnings (as defined in (1), above) as a percentage of revenues; (3) pre-tax income, after-tax income or adjusted net income; (4) earnings per share (basic or diluted); (5) operating profit; (6) revenue, revenue growth or rate of revenue growth; (7) return on assets (gross or net), return on investment, return on capital, or return on equity; (8) returns on sales or revenues; (9) operating expenses; (10) stock price appreciation; (11) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (12) implementation or completion of critical projects or processes; (13) total stockholder return; (14) cumulative earnings per share growth; (15) operating margin or profit margin; (16) cost targets, reductions and savings, productivity and efficiencies; (17) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, goals relating to acquisitions, divestitures, joint ventures and/or similar transactions and/or goals relating to budget comparisons; and (18) any combination of, or a specified increase or decrease in, any of the foregoing. Such performance goals may be measured on a generally accepted accounting principles (GAAP) or non-GAAP basis, and be based solely by reference to the performance of the Company as a whole or any subsidiary, division, business segment or business unit of the Company, or any combination thereof or based upon the relative performance of other companies or upon comparisons of any of the indicators of performance relative to a peer group of other comparable companies, or as compared to the performance of a published or special index deemed applicable by the Administrator, including by not limited to, the Standard & Poor’s 500 Stock Index. Unless otherwise stated in an Award Agreement a performance goal need not be based on an increase or positive result under a particular business criterion and could include, for example, maintaining the status quo or limiting economic losses (measured, in each case, by reference to specific business criteria).

(B) Adjustments to Performance Goals. The Administrator may provide for adjustment of performance goals for certain accounting charges as it determines is appropriate; provided, however, that any such adjustment not described in the immediately following sentence shall have been provided for by the Administrator in the performance goals that are established at the time such performance goals are established. The Administrator may also exclude the impact of any of the following events or occurrences which the Administrator determines should appropriately be excluded, but only to the extent such exclusions will not cause Awards intended to qualify as Qualified Performance-Based Compensation to fail to so qualify: (1) asset write-downs; (2) litigation, claims, judgments, or settlements; (3) the effect of changes in tax law or other such laws or regulations affecting reported results; (4) accruals for reorganization and restructuring programs; (5) any extraordinary, unusual, or nonrecurring items as described in the Accounting Standards Codification Topic 225, as the same may be amended or superseded from time to time; (6) any change in accounting principles as defined in the

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Accounting Standards Codification Topic 250, as the same may be amended or superseded from time to time; (7) any loss from a discontinued operation as described in the Accounting Standards Codification Topic 360, as the same may be amended or superseded from time to time; (8) goodwill impairment charges; (9) operating results for any business acquired during the calendar year; (10) third party expenses associated with any acquisition by the Company or any Subsidiary; and (11) any other extraordinary events or occurrences identified by the Administrator, to the extent set forth with reasonable particularity in connection with the establishment of performance goals.

(ii) Performance Period; Timing for Establishing Performance Goals. Achievement of performance goals in respect of such Qualified Performance-Based Awards will be measured over a performance period of up to ten years, as specified by the Administrator. Performance goals will be established not later than 90 days after the beginning of any performance period, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m) of the Code.

(iii) Settlement of Qualified Performance-Based Awards; Other Terms. After the end of each performance period, the Committee will determine the amount, if any, of the potential Qualified Performance-Based Award payable to each Participant. Settlement of such Qualified Performance-Based Awards will be in cash, Stock, other Awards or other property, in the discretion of the Administrator. The Administrator may reduce the amount of any settlement otherwise to be made in connection with such Qualified Performance-Based Awards, but the Administrator may not increase any such amount payable to a Covered Employee in respect of a Qualified Performance-Based Award. The Administrator will specify the circumstances in which such Qualified Performance-Based Awards will be paid or forfeited in the event of a Participant’s termination of employment before the end of a performance period or settlement date.

(c) Performance Award Pool. The Administrator may establish a Performance Award pool, which will be an unfunded pool, for purposes of measuring performance of the Company in connection with Performance Awards. The amount of such Performance Award pool will be based upon the achievement of a performance goal or goals based on one or more of the criteria set forth in Section 2.09(b)(i)(A) hereof during the given performance period, as specified by the Administrator. The Administrator may specify the amount of the Performance Award pool as a percentage of any of such criteria, a percentage thereof in excess of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such criteria.

(d) Written Determinations. All determinations as to the establishment of performance goals, the amount of any performance award pool or potential individual Performance Awards, and the achievement of performance goals relating to and final settlement of Performance Awards, shall be made in writing by the Administrator in the case of any Award intended to be a Qualified Performance-Based Award. The Administrator may not delegate any responsibility relating to such Performance Awards.

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ARTICLE III

PROVISIONS APPLICABLE TO AWARDS

Section 3.01 Change of Control Provisions. Unless otherwise provided by the Administrator or in the applicable Award Agreement or otherwise, and subject to Section 1.04(c), in the event of a Change of Control:

(a) With respect to each outstanding Award that is not assumed or substituted in connection with a Change of Control, immediately upon the occurrence of the Change in Control, (i) such Award shall become fully vested and exercisable, (ii) the restrictions, payment conditions, and forfeiture conditions applicable to any such Award granted shall lapse, and (iii) any performance conditions imposed with respect to such Award shall be deemed to be achieved at target performance levels.

(b) For purposes of this Section 3.01, an Award shall be considered assumed or substituted for if, following the Change of Control, the Award is of substantially comparable value and remains subject to the same terms and conditions that were applicable to the Award immediately prior to the Change of Control except that, if the Award related to shares of Stock, the Award instead confers the right to receive common stock of the acquiring or ultimate parent entity.

(c) Notwithstanding any other provision of the Plan, in the event of a Change of Control, except as would otherwise result in adverse tax consequences under Section 409A of the Code, the Administrator may, in its discretion, provide that each Award shall, immediately upon the occurrence of a Change of Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (i) the excess of the consideration paid per share of Stock in the Change of Control over the exercise or purchase price (if any) per share of Stock subject to the Award multiplied by (ii) the number of shares of Stock granted under the Award.

Section 3.02 Rights as a Stockholder. No individual shall have any rights as a stockholder with respect to any shares of Stock covered by or relating to any Award until the date of record issuance of such shares of Stock in the books of the Company or the issuance of a stock certificate with respect to such shares. Except for adjustments provided in Section 1.04(c), no adjustment to any Award shall be made for dividends or other rights for which the record date occurs prior to the date such stock certificate is issued.

Section 3.03 No Employment Rights; No Right to Award. Nothing contained in the Plan or any Award Agreement shall confer upon any individual any right with respect to the continuation of employment by or provision of services to the Company or interfere in any way with the right of the Company, subject to the terms of any separate agreement to the contrary, at any time to terminate such employment or service or to increase or decrease the compensation of such individual. No individual shall have any claim or right to receive an Award hereunder. The Administrator’s granting of an Award to a Participant at any time shall neither require the Administrator to grant any other Award to such Participant or other individual at any time nor preclude the Administrator from making subsequent grants to such Participant or any other individual.

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Section 3.04 Securities Matters and Regulations.

(a) Notwithstanding anything herein to the contrary, the obligation of the Company to sell or deliver Stock with respect to any Award granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Administrator. The Administrator may require, as a condition of the issuance and delivery of certificates evidencing shares of Stock pursuant to the terms hereof, that the recipient of such shares make such agreements and representations, and that such certificates bear such legends, as the Administrator, in its sole discretion, deems necessary or advisable.

(b) Each Award is subject to the requirement that, if at any time the Administrator determines that the listing, registration or qualification of Stock issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Award or the issuance of Stock, no such Award shall be granted or payment made or Stock issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Administrator.

(c) In the event that the disposition of Stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act and is not otherwise exempt from such registration, such Stock shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Administrator may require a Participant receiving Stock pursuant to the Plan, as a condition precedent to receipt of such Stock, to represent to the Company in writing that the Stock acquired by such Participant is acquired for investment only and not with a view to distribution.

Section 3.05 Withholding Taxes. Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any applicable withholding tax requirements related thereto. Whenever shares of Stock are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any applicable withholding tax requirements related thereto. A Participant may satisfy the foregoing requirement by electing to have the Company withhold from delivery shares of Stock having a value equal to the minimum amount of tax required to be withheld. Such shares shall be valued at their Fair Market Value on the date of which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award.

Section 3.06 Notification of Election Under Section 83(b) of the Code. If any Participant shall, in connection with the acquisition of shares of Stock under the Plan, make the election permitted under Section 83(b) of the Code, such Participant shall notify the Company of such election within 10 days of filing notice of the election with the Internal Revenue Service.

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Section 3.07 Notification Upon Disqualifying Disposition Under Section 421(b) of the Code. Each Award Agreement with respect to an Incentive Stock Option shall require the Participant to notify the Company of any disposition of shares of Stock issued pursuant to the exercise of such Option under the circumstances described in Section 421(b) of the Code (relating to certain disqualifying dispositions) within 10 days of such disposition.

Section 3.08 Amendment or Termination of the Plan. The Board may, at any time, suspend or terminate the Plan or revise or amend it in any respect whatsoever; provided, however, that stockholder approval shall be required for any such amendment if and to the extent such approval is required in order to comply with applicable law or stock exchange listing requirement. Nothing herein shall restrict the Administrator’s ability to exercise its discretionary authority pursuant to Section 1.03 and Section 1.04, which discretion may be exercised without amendment to the Plan. No action hereunder may, without the consent of a Participant, reduce the Participant’s rights under any outstanding Award.

Section 3.09 Transferability of Awards.

(a) General. No Award (or any rights and obligations thereunder) may be sold, exchanged, transferred or assigned, whether voluntarily or involuntarily, other than by will or by the laws of descent and distribution, and all such Awards (and any rights thereunder) will be exercisable during the life of the Participant only by the Participant or the Participant’s legal representative. Notwithstanding the preceding sentence, the Administrator may permit, under such terms and conditions that it deems appropriate in its sole discretion, (i) that a Participant may transfer an Award in whole or in part without payment of consideration to a member of the Participant’s immediate family, to a trust established for the benefit of a member of the Participant’s immediate family, or to a partnership whose only partners are members of the Participant’s immediate family, or (ii) that except as prohibited by Rule 16b-3, a Participant may transfer all or a portion of an Award to a person for which the Participant is entitled to a deduction for a “charitable contribution” under Section 170(a)(i) of the Code, provided in either case that no further transfer by such permitted transferee will be permitted, and provided further that the exercise of the Award remains the power and responsibility of the Participant or his or her legal representative. Any sale, exchange, transfer or assignment violation of the provisions of this Section 3.09 will be null and void. All of the terms and conditions of this Plan and the Award Agreements will be binding upon any permitted successors and assigns.

(b) Transfers Upon Death. Upon the death of a Participant, outstanding Awards granted to such Participant may be exercised only by the executor or administrator of the Participant’s estate or by individual who shall have acquired the right to such exercise by will or by the laws of descent and distribution. No transfer of an Award by will or the laws of descent and distribution shall be effective to bind the Company unless the Administrator shall have been furnished with (i) written notice thereof and with a copy of the will and/or such evidence as the Administrator may deem necessary to establish the validity of the transfer and (ii) an agreement by the transferee to comply with all the terms and conditions of the Award that are or would have been applicable to the Participant and to be bound by the acknowledgments made by the Participant in connection with the grant of the Award.

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Section 3.10 Expenses and Receipts. The expenses of the Plan shall be paid by the Company. Any proceeds received by the Company in connection with any Award may be used for general corporate purposes.

Section 3.11 Term of Plan. Unless earlier terminated by the Board pursuant to Section 3.08, the right to grant Awards under the Plan shall terminate on the tenth anniversary of the Effective Date. Awards outstanding at Plan termination shall remain in effect according to their terms and the provisions of the Plan.

Section 3.12 Participant Rights. No Participant shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment for Participants.

Section 3.13 Unfunded Status of Awards. The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give any such Participant any rights that are greater than those of a general creditor of the Company.

Section 3.14 No Fractional Shares. No fractional shares of Stock shall be issued or delivered pursuant to the Plan. The Administrator shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

Section 3.15 Beneficiary. A Participant may file with the Administrator a written designation of a beneficiary on such form as may be prescribed by the Administrator and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, the executor or administrator of the Participant’s estate shall be deemed to be the Participant’s beneficiary.

Section 3.16 Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.

Section 3.17 Severability. If any provision of the Plan is held to be invalid or unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if the invalid or unenforceable provision had not been included in the Plan.

Section 3.18 Applicable Law. Except to the extent preempted by any applicable federal law, the Plan shall be construed and administered in accordance with the laws of the State of Delaware without reference to its principles of conflicts of law.

Section 3.19 Clawback. Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).

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Section 3.20 Section 409A Compliance. The Plan as well as payments and benefits under the Plan are intended to be exempt from, or to the extent subject thereto, to comply with Section 409A of the Code, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted in accordance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, the Participant shall not be considered to have terminated employment with the Company for purposes of the Plan and no payment shall be due to the Participant under the Plan or any Award until the Participant would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A of the Code. Any payments described in the Plan that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. Notwithstanding anything to the contrary in the Plan, to the extent that any Awards are payable upon a separation from service and such payment would result in the imposition of any individual tax and penalty interest charges imposed under Section 409A of the Code, the settlement and payment of such awards shall instead be made on the first business day after the date that is six (6) months following such separation from service (or death, if earlier). Each amount to be paid or benefit to be provided under this Plan shall be construed as a separate identified payment for purposes of Section 409A of the Code. The Company makes no representation that any or all of the payments or benefits described in this Plan will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment. The Participant shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A of the Code.

Section 3.21 Correction of Errors. Notwithstanding anything in this Plan or an Award Agreement to the contrary, the Administrator may amend an Award, to take effective retroactively or otherwise, as deemed necessary or advisable for the purpose of correcting errors occurring in connection with the grant or documentation of an Award, including rescinding an Award erroneously granted, including, but not limited to, an Award erroneously granted to an individual who is not eligible to receive on an Award on the date of grant of the Award. By accepting an Award under the Plan, each Participant agrees to any amendment made pursuant to this Section 3.21 to any Award made under the Plan without further consideration or action.

Section 3.22 Plan Establishment. This Plan was adopted by the Board on [—] and approved by the Company’s stockholders on [—]. Awards may be granted under this Plan no earlier than the Effective Date specified in Section 1.02(m).

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EX-10.6

Exhibit 10.6

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made as of [     ] by and between Enovation Controls, Inc., a Delaware corporation (the “Company”), and [     ], a director and/or officer of the Company (the “Indemnitee”).

WHEREAS, the Company has concluded that to retain and attract talented and experienced individuals to serve as directors and officers of the Company, it is necessary for the Company to contractually indemnify directors and officers and to assume for itself maximum liability for expenses and damages in connection with claims against such directors and officers in connection with their service to the Company;

WHEREAS, Section 145 of the Delaware General Corporation Law (the “DGCL”), under which the Company is organized, empowers the Company to indemnify by agreement its directors, officers, employees and agents, and persons who serve, at the request of the Company, as directors, officers, employees or agents of other corporations or enterprises, and expressly provide that the indemnification provided by the DGCL is not exclusive;

WHEREAS, the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and the Company’s Bylaws (the “Bylaws” and, together with the Certificate of Incorporation, the “Constituent Documents”) authorize the Company to provide indemnification and to advance expenses to the full extent permitted by Delaware law;

WHEREAS, Indemnitee is currently serving as a[n] [director][and][officer] of the Company and the Company wishes Indemnitee to continue his service in such capacity without concern of unwarranted personal liability arising out of or related to such services to the Company;

WHEREAS, the Company wishes to provide Indemnitee with an independent contractual right to indemnification and advancement of expenses in addition to those rights provided by the DGCL and the Constituent Documents, which right is intended to be enforceable irrespective of, among other things, any amendment to the Constituent Documents, any change in the composition of the Company’s Board of Directors (the “Company Board”) or any Change in Control (as defined below);

NOW, THEREFORE, in consideration of the foregoing and Indemnitee’s agreement to provide, or continue to provide, services to the Company, the Company and Indemnitee, intending to be legally bound, hereby agree as follows:

1. Definitions. As used in this Agreement:

(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

(i) Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Company Board, and any new director (other than a director designated by a

person who has entered into an agreement with the Company to effect a transaction described in Sections 1(a)(ii) or 1(a)(iii)) whose election by the Company Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Company Board;

(ii) Corporate Transactions. The effective date of (A) a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity or (B) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becoming the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities without the prior approval of at least two-thirds of the members of the Company Board in office immediately prior to such person attaining such percentage;

(iii) Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; and

(iv) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirement.

(b) “Corporate Status” describes the status of a person who, at the request of the Company, is or was a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other Enterprise.

(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(d) “Enterprise” means the Company and any other corporation, limited liability company, limited or general partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, employee, agent or fiduciary.

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(e) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(f) “Expenses” shall include all reasonable attorneys’ fees and expenses, retainers, court costs, transcript costs, fees of experts (including, without limitation, auditors and accountants), witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, settling, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include Expenses incurred in connection with any appeal(s) resulting from any Proceeding, including, without limitation, the premium, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee. Should any payments by the Company to or for the account of an Indemnitee under this Agreement be determined to be subject to any federal, state or local income or excise tax, Expenses shall also include such amounts as are necessary to place Indemnitee in the same after-tax position after giving effect to all applicable taxes, Indemnitee would have been in had no such tax been determined to apply to those payments.

(g) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) any Enterprise or any affiliate thereof or Indemnitee in any matter material to any such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

(h) “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken (or failure to act) by him or her or any action (or failure to act) on his or her part while acting as a director or officer of the Company, or by reason of the fact that he or she is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any Enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement; provided that the term “Proceeding” shall not include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other

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actual, threatened or completed proceeding by Indemnitee against the Company, including, without limitation, proceedings initiated by Indemnitee or involving a counterclaim by Indemnitee, other than a Proceeding permitted by Section 7(c) or pursuant to Section 12(e).

(i) Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; references to “applicable law” shall include Delaware law as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the extent that such amendment or interpretation permits the Company to provide broader indemnification rights than were permitted prior thereto); and a person who acted in good faith and in a manner he or she reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

2. Services to the Company. Indemnitee will serve or continue to serve, at the will of the Company in accordance with the Company’s bylaws, as a director or officer of one or more Enterprises for so long as Indemnitee is duly elected, appointed or requested or until Indemnitee tenders his or her resignation from all Enterprises.

3. Indemnity in Third-Party Proceedings. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law, against all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Company and, in the case of a criminal proceeding, he or she had no reasonable cause to believe that his or her conduct was unlawful.

4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law, against all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties and amounts paid in settlement) actually and reasonably incurred by him or her or on his or her behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not

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opposed to, the best interests of the Company; provided, however, that no such indemnification shall be made in respect of any claim, issue, or matter as to which Delaware law expressly prohibits such indemnification by reason of any adjudication of liability of Indemnitee to the Company, unless and then only to the extent that the Court of Chancery of the State of Delaware (the “Delaware Court”) or the court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is entitled to indemnification for such costs, judgments, penalties, fines, liabilities, amounts paid in settlement and Expenses as such court shall deem proper.

5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or her in connection therewith. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the costs, judgments, penalties, fines, liabilities, amounts paid in settlement or Expenses actually and reasonably incurred in connection with any Proceeding, or in connection with any judicial proceeding or arbitration pursuant to Section 12 to enforce rights under this Agreement, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such costs, judgments, penalties, fines, liabilities, amounts paid in settlement and Expenses actually and reasonably incurred to which Indemnitee is entitled. For purposes of this Agreement and without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Company, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company, and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

6. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his or her Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he or she shall be indemnified against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection therewith.

7. Limitation on Indemnification. Notwithstanding any other provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity payment in connection with any claim made against Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or under another valid and enforceable indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision and except for any payments which are required to be disgorged by Indemnitee; or

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(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of other federal or state statutory law or common law; or

(c) except as otherwise provided in Section 12(e), in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company’s directors, officers, employees or other indemnitees, unless (i) such indemnification is expressly required to be made by applicable law, (ii) the Company Board authorized the Proceeding (or any part of the Proceeding) prior to its initiation or (iii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company to the fullest extent permitted by applicable law.

The Company shall have no obligation to indemnify Indemnitee under this Agreement for amounts paid in settlement of any action, suit or proceeding without the Company’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed. The Company shall not settle any action, suit or proceeding in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed.

8. Advances of Expenses. Notwithstanding any provision of this Agreement to the contrary, to the fullest extent permitted by applicable law, the Company shall advance the expenses incurred by Indemnitee in connection with any Proceeding within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances and the undertaking referred to below shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the advances and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement. Indemnitee shall qualify for advances solely upon the execution and delivery to the Company of an undertaking providing that Indemnitee undertakes to repay the advance to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. This Section 8 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 7.

9. Procedure for Notification and Defense of Claim.

(a) Within thirty (30) days after service of process on Indemnitee relating to notice of the commencement of any Proceeding, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The omission to notify the Company within such thirty (30) day period will not relieve the Company from any liability which it may have to Indemnitee under this Agreement except, and then only, to the extent the failure of Indemnitee to provide such notice within thirty (30) days after receipt by Indemnitee of notice of the commencement of any Proceeding adversely affects the Company’s rights, legal position, ability

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to defend or ability to obtain insurance coverage with respect to such Proceeding. The omission to notify the Company will not relieve the Company from any liability which it may have to Indemnitee otherwise than under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Company Board in writing that Indemnitee has requested indemnification.

(b) If the Company shall be obligated to pay the Expenses of any Proceeding against Indemnitee, the Company shall be entitled to assume and control the defense of such Proceeding (with counsel consented to by Indemnitee, which consent shall not be unreasonably withheld), upon the delivery to Indemnitee of written notice of its election so to do. After delivery of such notice, consent to such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided that if (i) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (ii) Indemnitee or counsel selected by the Company shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee or among Indemnitees jointly represented in the conduct of any such defense or (iii) the Company shall not, in fact, have employed counsel, to which Indemnitee has consented as aforesaid, to assume the defense of such Proceeding, then the reasonable fees and expenses of Indemnitee’s counsel shall be at the expense of the Company. Notwithstanding the foregoing, Indemnitee shall have the right to employ counsel in any such Proceeding at Indemnitee’s expense. The Company shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Company or as to which Indemnitee shall have made the conclusion provided for in clause (ii) above.

(c) The Company will be entitled to participate in the Proceeding at its own expense. The Company will not, without prior written consent of Indemnitee, effect any settlement of a claim against Indemnitee in any threatened or pending Proceeding unless such settlement solely involves the payment of money and includes an unconditional release of Indemnitee from all liability on any claims that are or were threatened to be made against Indemnitee in the Proceeding.

10. Procedure Upon Application for Indemnification.

(a) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 9(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Company Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Company Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Company Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Company Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Company Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the

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person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and expenses and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(b) In the event the determination of entitlement to indemnification is to be made by the Independent Counsel pursuant to Section 10(a) hereof, the Independent Counsel shall be selected as provided in this Section 10(b). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Company Board, and the Company shall give written notice to Indemnitee advising him or her of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Company Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1(g) of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 9(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of an Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Delaware Court or by such other person as the Delaware Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 10(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12(a) of this Agreement, the Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

(c) The Company agrees to pay the reasonable fees and expenses of the Independent Counsel selected as provided in this Section 10 and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

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11. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 9(a) of this Agreement, and the Company shall have the burden of proof, by adducing clear and convincing evidence to the contrary, to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

(b) If the person, persons or entity empowered or selected under Section 10 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided, however, that such 60-day period shall be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 11(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 10(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Company Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within one hundred twenty (120) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within one hundred five (105) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is made by Independent Counsel pursuant to Section 10(a) of this Agreement.

(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his or her conduct was unlawful.

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(d) For purposes of this Agreement, Indemnitee shall be deemed to have acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company if Indemnitee’s actions or omissions to act are taken in good faith reliance upon the records of the Company, including its financial statements, or upon information, opinions, reports or statements furnished to Indemnitee by the officers or employees of the Company in the course of their duties, or by committees of the Company Board, or by any other person (including legal counsel, accountants and financial advisors) as to matters Indemnitee reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company. The provisions of this Section 11(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(e) The knowledge and/or actions, or failure to act, of any director, trustee, partner, managing member, fiduciary, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

12. Remedies of Indemnitee.

(a) In the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 10(a) of this Agreement within the time period specified in Section 11(b) of this Agreement, (iv) payment of indemnification is not made pursuant to Section 5 or 6 or the last sentence of Section 10(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to Section 3 or 4 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by a court of his or her entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his or her sole option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b) In the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 12, the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(c) If a determination shall have been made pursuant to Section 10(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a prohibition of such indemnification under applicable law.

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(d) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

(e) The Company shall indemnify Indemnitee to the fullest extent permitted by law against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002 or other applicable law, such Expenses to Indemnitee which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement, any other agreement or provision of the Company’s Constituent Documents or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

13. Liability Insurance. The Company represents to Indemnitee that it presently has in place certain directors’ and officers’ liability insurance policies covering the directors and officers of the Company and any other Enterprise for losses from wrongful acts. Subject only to the provisions of this Section 13, the Company agrees that for the duration of Indemnitee’s service as a director and/or officer of the Company and/or any other Enterprise, and thereafter for so long as Indemnitee shall be subject to any pending or possible Proceeding, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to cause to be maintained in effect one or more policies of directors’ and officers’ liability insurance with reputable insurers providing coverage for directors and/or officers of the Company and any other Enterprise that is at least substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance. Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain such insurance if the Company determines in good faith that such insurance is not reasonably available, that the premium costs for such insurance are disproportionate to the amount of coverage provided, that the coverage provided by such insurance is limited by exclusions so as to provide an insufficient benefit, or that Indemnitee is covered by similar insurance maintained by a subsidiary or parent of the Company. The Company shall promptly notify Indemnitee of any good faith determination not to provide such coverage.

14. Non-Exclusivity; Survival of Rights; Subrogation.

(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company’s Constituent Documents, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the

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Company’s Constituent Documents and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, trustees, partners, managing members, fiduciaries, employees or agents of the Company or of any other Enterprise which such person serves at the request of the Company, Indemnitee shall be an insured under such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, trustee, partner, managing member, fiduciary, employee or agent under such policy or policies. The Company may, but will not be required to, create a trust fund, grant a security interest or use other means, including, without limitation, a letter of credit, to ensure the payment of such amounts as may be necessary to satisfy the obligations to indemnify and advance Expenses pursuant to this Agreement. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company and Indemnitee shall mutually cooperate and take all reasonable actions to cause such insurers to pay on behalf of the insureds, all amounts payable as a result of such proceeding in accordance with the terms of all applicable policies.

(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other Enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other Enterprise.

15. Duration of Agreement, Successors and Assigns. This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after Indemnitee has ceased to occupy any positions or have any relationships described in Section 2 of this Agreement; and (b) the final termination of all actions, suits, proceedings or investigations pending or threatened during such ten (10) year period to which Indemnitee may be subject by reason of the fact that Indemnitee is or was a director or officer of the Company or is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other Enterprise which Indemnitee served at the request of the Company or by reason of anything done or not done by Indemnitee in any such capacity. This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of and be enforceable by Indemnitee and his or her personal and legal representatives, heirs, executors, administrators, distributees, legatees and other successors.

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16. Severability. If any provision or provisions of this Agreement or any application of any provision hereof shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. In the event that any court shall decline to reform a provision of the Agreement held to be invalid, unenforceable or otherwise illegal as contemplated by the preceding sentence, the parties hereto shall take all actions as may be necessary or appropriate to replace the provision so held to be invalid, unenforceable or otherwise illegal with one or more alternative provisions that effectuate the purpose and intent of the original provisions of this Agreement as fully as possible without being invalid, unenforceable or otherwise illegal.

17. Other Provisions.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of one or more Enterprises, and the Company acknowledges that Indemnitee is relying upon this Agreement in agreeing to serve and continuing to serve as a director or officer of one or more Enterprises.

(b) The parties hereto intend that this Agreement shall provide for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Company’s Constituent Documents, vote of its stockholders or disinterested directors or applicable law.

(c) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Company’s Constituent Documents and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

(d) The indemnification and advancement of Expenses provided by or granted pursuant to this Agreement shall apply to Indemnitee’s service as a (i) director or officer of the Company prior to the date of this Agreement and (ii) director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other Enterprise which Indemnitee served at the request of the Company prior to the date of this Agreement.

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(e) Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise.

18. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

19. Notices. For all purposes of this Agreement, all communications, including without limitation notices, consents, requests or approvals, required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt thereof orally confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid or one business day after having been sent for next-day delivery by a nationally recognized overnight courier service, addressed to the Company (to the attention of the Secretary of the Company) and to Indemnitee at the addresses shown on the signature page hereto, or to such other address as any party may have furnished to the other in writing and in accordance herewith, except that notices of changes of address will be effective only upon receipt.

20. Contribution. To the fullest extent permissible by applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents other than Indemnitee) and Indemnitee in connection with such event(s) and/or transaction(s).

21. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 12 of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court, and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

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22. Injunctive Relief. The Company and Indemnitee agree herein that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult to prove, and further agree that such breach may cause Indemnitee and the Company irreparable harm. Accordingly, the parties hereto agree that the parties may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, they shall not be precluded from seeking or obtaining any other relief to which they may be entitled. The Company and Indemnitee further agree that they shall be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertaking in connection therewith. The Company and Indemnitee acknowledge that in the absence of a waiver, a bond or undertaking may be required by the Delaware Court, and they hereby waive any such requirement of such a bond or undertaking.

23. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in certain instances, Federal law or applicable public policy may prohibit the Company from indemnifying its directors, officers or other advisors under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake to the Securities and Exchange Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.

24. Employment Rights. Nothing in this Agreement is intended to create in Indemnitee any right to employment or continued employment.

25. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

26. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

ENOVATION CONTROLS, INC.
By:
	Name:
	Title:

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[INDEMNITEE]

Address

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EX-10.7

Exhibit 10.7

$110,000,000

CREDIT AGREEMENT

among

ENOVATION CONTROLS, LLC,

as Borrower,

CERTAIN SUBSIDIARIES THEREOF,

as Subsidiary Guarantors

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

as Lenders

and

BOKF, NA dba BANK OF OKLAHOMA,

as Administrative Agent, Swingline Lender and LC Issuer

HSBC BANK USA, NATIONAL ASSOCIATION

as Syndication Agent

KEYBANK NATIONAL ASSOCIATION,

as Documentation Agent

Dated as of June 30, 2014

BOKF, NA dba BANK OF OKLAHOMA,

as Lead Arranger and Sole Bookrunner

TABLE OF CONTENTS

ARTICLE I
DEFINITIONS	1
1.1 Defined Terms.	1
1.2 Accounting Terms and Calculations.	26
1.3 Terms Defined in UCC.	26
1.4 Other Definitional Provisions.	26
ARTICLE II
AMOUNTS AND TERMS OF COMMITMENTS	27
2.1 Term Commitments.	27
2.2 Procedure for Term Loan Borrowing.	28
2.3 Repayment of Term Loans.	28
2.4 Revolving Commitments.	28
2.5 Procedure for Revolving Loan Borrowing.	29
2.6 Letters of Credit.	29
2.7 Swingline Loans.	33
2.8 Fees.	34
2.9 Termination or Reduction of Revolving Commitments.	34
2.10 Optional Prepayments.	35
2.11 Mandatory Prepayments and Commitment Reductions.	35
2.12 Conversion and Continuation Options.	36
2.13 Limitations on LIBOR Tranches.	36
2.14 Interest Rates and Payment Dates.	37
2.15 Computation of Interest and Fees.	38
2.16 Inability to Determine Interest Rate.	38
2.17 Pro Rata Treatment and Payments.	38
2.18 Requirements of Law.	40
2.19 Taxes.	41
2.20 Indemnity.	44
2.21 Change of Lending Office.	45
2.22 Replacement of Lenders.	45
2.23 Defaulting Lenders.	46
2.24 Increase Option.	47
2.25 Repayment of Loans; Evidence of Debt.	49
ARTICLE III
REPRESENTATIONS AND WARRANTIES	50
3.1 Financial Condition.	50
3.2 No Change.	50
3.3 Existence; Compliance with Law.	50
3.4 Power; Authorization; Enforceable Obligations.	50
3.5 No Legal Bar.	51
3.6 Litigation.	51
3.7 No Default.	51
3.8 Ownership of Property; Liens.	51
3.9 Intellectual Property.	51

3.10 Taxes.	52
3.11 Federal Regulations.	52
3.12 Labor Matters.	52
3.13 ERISA.	52
3.14 Investment Company Act; Other Regulations.	53
3.15 Subsidiaries.	53
3.16 Environmental Matters.	53
3.17 Accuracy of Information.	54
3.18 Collateral Documents.	55
3.19 Solvency.	55
3.20 Anti-Terrorism Laws.	55
ARTICLE IV
AFFIRMATIVE COVENANTS	56
4.1 Financial Statements.	56
4.2 Certificates; Other Information.	57
4.3 Notices.	58
4.4 Payment of Tax and Government Liabilities.	59
4.5 Maintenance of Existence; Compliance.	59
4.6 Maintenance of Property; Insurance.	60
4.7 Inspection of Property; Books and Records; Discussions.	61
4.8 Environmental Laws.	61
4.9 Additional Collateral.	62
4.10 Use of Proceeds.	63
4.11 Deposit Accounts.	63
4.12 Anti-Corruption Laws.	64
ARTICLE V
NEGATIVE COVENANTS	64
5.1 Indebtedness.	64
5.2 Liens.	65
5.3 Fundamental Changes.	67
5.4 Disposition of Property.	68
5.5 Distributions.	68
5.6 Investments and Acquisitions.	69
5.7 Optional Payments and Modifications of Certain Debt Instruments.	70
5.8 Transactions with Affiliates.	70
5.9 Sales and Leasebacks.	71
5.10 Changes in Fiscal Periods.	71
5.11 Negative Pledge Clauses.	71
5.12 Clauses Restricting Subsidiary Distributions.	72
5.13 Lines of Business.	72
5.14 Anti-Terrorism Law.	72
5.15 Anti-Corruption Law.	72
5.16 Embargoed Person.	73
5.17 Anti-Money Laundering.	73
ARTICLE VI
FINANCIAL COVENANTS.	73

6.1 Total Leverage Ratio.	73
6.2 Consolidated Fixed Charge Coverage Ratio.	73
ARTICLE VII
CONDITIONS PRECEDENT	74
7.1 Conditions to Initial Loans.	74
7.2 Conditions to Each Credit Extension.	75
ARTICLE VIII
EVENTS OF DEFAULT	76
8.1 Events of Default.	76
8.2 Termination of Commitments; Acceleration.	78
ARTICLE IX
EXPENSES AND INDEMNITY.	79
9.1 Reimbursement of Certain Fees and Expenses.	79
9.2 Indemnity.	79
9.3 Waiver of Consequential and Punitive Damages.	80
9.4 Survival.	80
ARTICLE X
THE ADMINISTRATIVE AGENT	80
10.1 Appointment and Authorization.	80
10.2 Action by Administrative Agent.	81
10.3 Consultation with Experts.	81
10.4 Liability of Administrative Agent.	81
10.5 Indemnification.	82
10.6 Right to Request and Act on Instructions.	82
10.7 Credit Decision.	82
10.8 Collateral Matters.	82
10.9 Agency for Perfection.	83
10.10 Notice of Default.	83
10.11 Successor Administrative Agent.	83
10.12 Right to Perform, Preserve and Protect.	84
10.13 Additional Titled Agents.	84
ARTICLE XI
SUBSIDIARY GUARANTY	84
11.1 Obligations Guaranteed.	84
11.2 Nature of Guaranty.	84
11.3 Administrative Agent’s Rights.	85
11.4 Waivers.	85
11.5 Maturity of Obligations, Payment.	86
11.6 Administrative Agent’s Expenses.	86
11.7 Liability.	87
11.8 Events and Circumstances Not Reducing or Discharging any Subsidiary Guarantor’s Obligations.	87
11.9 Subordination of All Subsidiary Guarantor Claims.	89
11.10 Claims in Bankruptcy.	90
11.11 Payments Held in Trust.	90
11.12 Benefit of Guaranty.	90

11.13 Reinstatement.	90
11.14 Liens Subordinate.	91
11.15 Subsidiary Guarantors’ Enforcement Rights.	91
11.16 Limitation.	91
11.17 Contribution Rights.	91
11.18 Keepwell.	92
11.19 Release of Subsidiary Guarantors.	92
ARTICLE XII
MISCELLANEOUS	93
12.1 Amendments and Waivers.	93
12.2 Notices.	94
12.3 No Waiver; Cumulative Remedies.	94
12.4 Survival of Representations and Warranties.	95
12.5 Successors and Assigns; Participations and Assignments.	95
12.6 Adjustments; Set-off.	98
12.7 Counterparts.	99
12.8 Severability.	99
12.9 Integration.	99
12.10 GOVERNING LAW.	99
12.11 Submission To Jurisdiction; Waivers.	99
12.12 Acknowledgements.	100
12.13 Releases of Guarantees and Liens.	100
12.14 Confidentiality.	101
12.15 WAIVERS OF JURY TRIAL.	101
12.16 USA PATRIOT Act.	102

SCHEDULES:
1.1	-	Commitments
3.6	-	Pending Litigation
3.15	-	Subsidiaries
3.18	-	UCC Filing Locations
4.11	-	Deposit Accounts
5.1	-	Existing Indebtedness
5.2	-	Existing Liens
5.6	-	Investments
5.8	-	Transactions with Affiliates
EXHIBITS:
A	-	Form of Term Note
B-1	-	Form of Revolving Note
B-2		Form of Swingline Note
C	-	Form of Security Agreement
D	-	Form of Notice of Borrowing
E	-	Form of Notice of Letter of Credit Event

F	-	Form of Notice of Continuation/Conversion
G	-	Form of Compliance Certificate
H	-	Form of Exemption Certificate
I	-	Form of Assignment and Assumption
J	-	Items to be Covered by Legal Opinion of Fulbright & Jaworski LLP

CREDIT AGREEMENT

THIS CREDIT AGREEMENT is entered into as of June 30, 2014, among ENOVATION CONTROLS, LLC, an Oklahoma limited liability company (the “Borrower”), the SUBSIDIARY GUARANTORS (hereinafter defined), the several banks and other financial institutions or entities from time to time parties hereto (collectively, the “Lenders” and individually, a “Lender”), and BOKF, NA dba BANK OF OKLAHOMA, as administrative agent for the Lenders and as Swingline Lender and LC Issuer.

The parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1 Defined Terms. Unless the context otherwise requires, the following terms used herein shall be construed and controlled by the following definitions:

“ABR Loan” means any Loan bearing interest at a rate determined by reference to the Alternate Base Rate.

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Borrower or any of its Subsidiaries (i) acquires any going business or all or substantially all of the assets of any firm, corporation or limited liability company, or division thereof, whether through purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage or voting power) of the outstanding ownership interests of a partnership or limited liability company.

“Acquisition Consideration” means the purchase consideration for any Permitted Acquisition, whether paid in cash or by exchange of Equity Interests (other than Equity Interests of PubCo) or of assets or otherwise and whether payable at or prior to the consummation of such Permitted Acquisition or deferred for payment at any future time, whether or not any such future payment is subject to the occurrence of any contingency, based upon the Borrower’s reasonable estimate of any and all payments representing the purchase price and any assumptions of Indebtedness, “earn-outs” and other agreements to make any payment the amount of which is, or the terms of payment of which are, in any respect subject to or contingent upon the revenues, income, cash flow or profits (or the like) of any person or business; provided that any such future payment that is subject to a contingency shall be considered Acquisition Consideration only to the extent of the reserve, if any, required under GAAP at the time of such sale to be established in respect thereof by the Borrower or any of its Subsidiaries.

“Adjustment Date” means the first Business Day after the then most recent financial statements are delivered pursuant to Section 4.1(a) or (b), as applicable, and the accompanying Compliance Certificate is delivered pursuant to Section 4.2. If the Borrower fails to deliver the financial statements and accompanying Compliance Certificate to the Administrative Agent and the Lenders at the time required by Sections 4.1(a) or (b), as applicable, and Section 4.2, then the Adjustment Date shall be one Business Day following the date the applicable financial statements and Compliance Certificate were required to be so delivered.

“Administrative Agent” means BOKF, NA dba Bank of Oklahoma, together with its Affiliates, as the arranger of the Commitments and as the administrative agent for the Lenders under this Agreement and the other Loan Documents, together with any of its successors.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person has “control” over another Person if such Person has the ability to exercise a controlling influence over the management and policies of the other Person.

“Aggregate Exposure” means, with respect to any Lender at any time, an amount equal to (a) until the Closing Date, the aggregate amount of such Lender’s Commitments at such time and (b) thereafter, the sum of (i) the aggregate then unpaid principal amount of such Lender’s Term Loans and (ii) the amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have been terminated, the amount of such Lender’s Revolving Loans and participations in Letter of Credit Liabilities then outstanding.

“Aggregate Exposure Percentage” means, with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate Exposure of all Lenders at such time.

“Agreement” means this Credit Agreement, including all schedules and exhibits attached hereto, as it may be amended, modified, supplemented or restated from time to time in accordance with the provisions hereof.

“Alternate Base Rate” means, for any day, the rate equal to the highest on such day of (a) the rate per annum designated as the “National Prime Rate” as published by The Wall Street Journal, (b) the Federal Funds Rate, plus 0.50%, or (c) the LIBOR Rate that would be calculated as of such day (or, if such day is not a Business Day, as of the next preceding Business Day) in respect of a proposed LIBOR Loan with a one-month Interest Period plus 1.00%. Any change in the Alternate Base Rate due to a change in the “National Prime Rate,” the Federal Funds Rate or such LIBOR Rate shall be effective as of the opening of business on the day of such change in the “National Prime Rate,” the Federal Funds Rate or such LIBOR Rate, respectively.

“Anti-Corruption Laws” means all Laws of any jurisdiction applicable to the Borrower and its Subsidiaries concerning or relating to bribery or corruption.

“Anti-Terrorism Laws” has the meaning set forth in Section 3.20.

“Applicable Margin” or “Applicable Fee Rate,” as applicable means, for any day, with respect to any ABR Loan or LIBOR Loan or with respect to the non-use fees and letter of credit fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “ABR Margin,” “LIBOR Spread,” “Letter of Credit Fee” or “Non-Use Fee,” as the case may be, determined by reference to the applicable Total Leverage Ratio in effect on such date as set forth in the pricing grid below:

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Pricing Level	Total Leverage Ratio	ABR Margin	LIBOR Margin	Non-Use Fee Rate	Letter of Credit Fee Rate
I	³ 2.50	1.500%	2.500%	0.350%	2.500%
II	³ 2.00, but < 2.50	1.000%	2.000%	0.300%	2.000%
III	³ 1.50, but < 2.00	0.750%	1.750%	0.250%	1.750%
IV	³ 1.00, but < 1.50	0.500%	1.500%	0.200%	1.500%
V	< 1.00	0.250%	1.250%	0.150%	1.250%

The Applicable Margin and Applicable Fee Rate, as applicable, shall be based upon the Total Leverage Ratio as of the last day of each fiscal quarter in accordance with the foregoing table and shall be determined based upon the information set forth in the financial statements delivered pursuant to Section 4.1(a) or (b), as applicable, following the end of each fiscal quarter and the accompanying Compliance Certificate delivered pursuant to Section 4.2(a). Adjustments, if any, to the Applicable Margin and Applicable Fee Rate shall take effect on the applicable Adjustment Date and shall remain in effect until the next change to be effected pursuant to this paragraph. If the Borrower fails to deliver the financial statements and accompanying Compliance Certificate to the Administrative Agent and the Lenders at the time required by Sections 4.1(a) or (b), as applicable, and Section 4.2(a), then the Applicable Margin and Applicable Fee Rate from and after the applicable Adjustment Date shall be at Pricing Level I set forth in the foregoing table until five days after such financial statements and Compliance Certificate are so delivered. Until the first Adjustment Date following the Closing Date, the Applicable Margin and Applicable Fee Rate shall be based upon Pricing Level III.

“Approved Fund” has the meaning set forth in Section 12.5(b).

“Asset Sale” means any Disposition of Property (or series of related Dispositions of Property), excluding any such Disposition permitted by clause (a), (b), (c), (d), (e), (g), (h) or (i) of Section 5.4, that yields gross proceeds to the Borrower or any of its Subsidiaries (valued at the initial principal amount thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at fair market value in the case of other non-cash proceeds) in excess of $1,000,000 per Disposition (or series of related Dispositions); provided, however, that the term “Asset Sale” shall not be construed to include the sale of Equity Interests in the Borrower to PubCo or employees of any Group Member.

“Assignee” has the meaning set forth in Section 12.5(b).

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“Assignment and Assumption” means an Assignment and Assumption, substantially in the form of Exhibit I.

“Available Revolving Commitment” means, as to any Revolving Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s Revolving Commitment then in effect over (b) such Lender’s Revolving Loans and participations in Letter of Credit Liabilities and Swingline Loans then outstanding.

“Benefitted Lender” has the meaning set forth in Section 12.6(a).

“Borrower” means Enovation Controls, LLC, an Oklahoma limited liability company.

“Borrowing Date” any Business Day specified by the Borrower as a date on which the Borrower requests the relevant Lenders to make Loans hereunder.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in Tulsa, Oklahoma, are authorized or required by law to close, provided, that with respect to notices and determinations in connection with, and payments of principal and interest on, LIBOR Loans, such day is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.

“Capital Expenditures” means, for any period with respect to any Person, the aggregate of all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets or additions to equipment (including replacements, capitalized repairs and improvements during such period) that, in conformity with GAAP, would be classified as “property, plant or equipment” or any comparable items on a cash flow statement of such Person and its Subsidiaries.

“Capital Lease Obligations” means, as to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

“Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of one year or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within 270 days from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days, with respect to securities issued or fully guaranteed or insured by the United States government; (e) securities

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with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A2 by Moody’s; (f) securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; (g) money market mutual or similar funds that invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition; (h) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and (i) investments in certificates of deposit with a depository institution participating in the Certificate of Deposit Account Registry Service (CDARS) network maturing within one year from the date of acquisition thereof, if the amount so invested is unconditionally guaranteed by the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States). With respect to any Foreign Subsidiary, “Cash Equivalents” shall also include any Investment substantially comparable to the foregoing but in the currency of the jurisdiction of organization of such Subsidiary, or in Euros or Dollars.

“Cash Interest Expense” means, for any period, Consolidated Interest Expense for such period, including imputed interest expense for Capital Lease Obligations and excluding any interest expense not payable in cash (such as, for example, amortization of discount, amortization of debt issuance costs and interest payable-in-kind).

“Change in Law” means, the adoption or taking effect of, or any change in, any Law, or any change in the interpretation, administration or application of any Law by any Governmental Authority, central bank or comparable agency charged with the interpretation, administration or application thereof, or compliance by any Lender with any request, guideline or directive (whether or not having the force of law) of any such authority, central bank or comparable agency occurring after the Closing Date, provided, however, that notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law” regardless of the date enacted, adopted or issued.

“Change of Control” means, (i) prior to the successful completion of the IPO, the failure of the Permitted Investors, either directly or through the Existing Members, to own and Control at least 50.1% of the Equity Interests in the Borrower, and (ii) within one year following the successful completion of the IPO, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), excluding the Permitted Investors (either directly or through the Existing Members), shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of greater than 35% of the Equity Interests of PubCo with ordinary voting power for the election of directors of PubCo unless any combination of the Permitted Investors (either directly or through the Existing Members), directly or indirectly, owns or Controls a greater percentage.

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“Closing Date” means the time and date, as specified in Section 7.1, on which the Loan Documents are delivered by the parties and the conditions precedent set forth in Section 7.2 have been satisfied.

“Closing Date Distribution” means the cash Distribution to be made by the Borrower to the Existing Members on the Closing Date in the principal amount not to exceed $60,000,000.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute.

“Collateral” means all property of the Loan Parties or any other Person, now owned or hereafter acquired, upon which a Lien is granted or created (or intended to be granted or created) in favor of the Administrative Agent pursuant to any Collateral Document to secure repayment of the Obligations (or any portion thereof).

“Collateral Documents” means, collectively, the Security Agreement, any Mortgages, and all other security agreements, pledge agreements, mortgages, assignments, financing statements, and other documents executed or to be executed in connection with the grant, creation, perfection or continuation of the Liens covering the Collateral.

“Commitment” means, as to any Lender, the sum of the Term Commitment and the Revolving Commitment of such Lender.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. §§ 1 et seq.), as amended from time to time, and any successor statute.

“Commonly Controlled Entity” means an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes the Borrower that is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“Compliance Certificate” means a certificate duly executed by a Responsible Officer substantially in the form of Exhibit G.

“Consolidated Amortization Expense” means, for any period, the amortization expense of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated Depreciation Expense” means, for any period, the depreciation expense of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated EBITDA” means, for any period, Consolidated Net Income for such period, plus the sum of (a) Consolidated Interest Expense for such period, (b) Consolidated Amortization Expense for such period, (c) Consolidated Depreciation Expense for such period,

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(d) Consolidated Tax Expense for such period, (e) costs, fees, expenses, and charges for such period, not to exceed $5,000,000 for such period, relating to (1) the Transactions, (2) any issuance of Equity Interests in the Borrower or PubCo, including the IPO, (3) the reorganization associated with the IPO, and (4) any Permitted Acquisition, and (f) the aggregate amount of all other non-cash charges (other than any write down or write off of receivables or any other payment rights similar to receivables) reducing Consolidated Net Income (excluding any non-cash charge that results in an accrual of a reserve for cash charges in any future period) for such period, and minus the aggregate amount of all non-cash items increasing Consolidated Net Income (other than the accrual of revenue or recording of receivables in the ordinary course of business) for such period. With respect to any proposed Permitted Acquisition or Disposition (other than any asset Disposition in the ordinary course of business), Consolidated EBITDA shall be calculated on a pro forma basis to give effect to such Permitted Acquisition or Disposition consummated at any time on or after the first day of the four consecutive fiscal quarters thereof as if each such Permitted Acquisition had been effected on the first day of such four-quarter period and as if each such Disposition had been consummated on the day prior to the first day of such four-quarter period.

“Consolidated Fixed Charge Coverage Ratio” means, as at the last day of any period of four consecutive fiscal quarters of the Borrower, the ratio of (a) Consolidated EBITDA for such period, minus the sum of (i) unfinanced Capital Expenditures for such period, (ii) cash taxes for such period, and (iii) Distributions for such period (but excluding the Closing Date Distribution), in each case determined for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, to (b) Cash Interest Expense for such period, plus scheduled principal payments on all Funded Debt of the Borrower and its Subsidiaries for such period.

“Consolidated Indebtedness” means, at any particular date, all Indebtedness of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP at such date, but excluding Indebtedness of the type described in clause (j) of the definition thereof.

“Consolidated Interest Expense” means, with respect to the Borrower and its Subsidiaries on a consolidated basis for any period, the sum of (a) interest expense determined in accordance with GAAP for such period (net of any cash interest income), plus (i) the amortization of debt discounts, (ii) the amortization of all fees payable in connection with the incurrence of Indebtedness to the extent included in interest expense (but excluding the amortization of debt issuance costs in connection with the Transactions) and (iii) the portion of any payments of accruals with respect to Capital Lease Obligations allocable to interest expense and (b) capitalized interest.

“Consolidated Net Income” means, for any period, the net income or loss of the Borrower and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded therefrom without duplication:

(a) the income or loss of any Person (other than consolidated Subsidiaries of the Borrower) in which any other Person (other than the Borrower or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of its Subsidiaries by such Person during such period;

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(b) any net after-tax income (loss) from discontinued operations and any net after-tax gains or losses on disposal of discontinued operations;

(c) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any of its Subsidiaries or that Person’s assets are acquired by the Borrower or any of its Subsidiaries;

(d) the income of any consolidated Subsidiary to the extent that declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its Contractual Obligations and Requirements of Law;

(e) any (i) extraordinary gain (or extraordinary loss) realized during such period by the Borrower or any of its Subsidiaries or (ii) gain (or loss) realized during such period by the Borrower or any of its Subsidiaries upon any Disposition (other than Dispositions in the ordinary course of business), in each case, together with any related provision for taxes on any such gain (or the tax effect of any such loss), recorded or recognized by the Borrower or any of its Subsidiaries during such period;

(f) unrealized gains and losses with respect to Swap Agreements during such period;

(g) purchase accounting or similar accounting adjustments required or permitted by GAAP in connection with any Permitted Acquisition;

(h) to the extent reflected in the calculation of such net income or loss, payments under earn-outs to which the seller in any Permitted Acquisition or Disposition becomes entitled;

(i) the cumulative effect of a change in accounting principles during such period; and

(j) non-recurring or unusual gains (losses) that the Administrative Agent has agreed may be excluded from the calculation of Consolidated Net Income.

“Consolidated Tax Expense” means, for any period, the tax expense of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated Tax Liability” means, with respect to a taxable year (or portion thereof) beginning as of the first day of such taxable year (or portion thereof) and ending on the last day of the most recent relevant determination date, the product of (x) the cumulative excess of taxable income over taxable losses of the Borrower for such taxable year (or portion thereof), calculated without regard to (A) any gain or loss attributable to or realized in connection with a sale of all or substantially all of the assets of the Borrower, and (B) for clarity, any tax deductions or basis adjustments of any member of Borrower arising under Section 743 of the Code, and (y) the highest combined marginal federal, state and local tax rate then applicable (including any Medicare Contribution tax on net investment income) to an individual (or, if higher, to a corporation) resident in Tulsa, Oklahoma (assuming the maximum limitations on the use of deductions for state and local taxes).

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“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar federal or state debtor relief Laws from time to time in effect and affecting the rights of creditors generally.

“Default” means any the occurrence of any of events or the existence of any circumstances specified in Article VIII, which with the giving of notice, the lapse of time, or both, would be an Event of Default.

“Defaulting Lender” means any Lender, that has (a) failed to fund any portion of its Revolving Loans within three Business Days of the date required to be funded by it hereunder (unless such Lender has notified the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular Default, if any) has not been satisfied; (b) notified the Borrower, the Administrative Agent or any Lender orally or in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement, the other Loan Documents or under other agreements in which it commits to extend credit (unless such oral or written notification or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular Default, if any) to funding under this Agreement cannot be satisfied); (c) failed, within three Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement or the other Loan Documents relating to its obligations to fund prospective Revolving Loans or participations in Letters of Credit or Swingline Loans, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s receipt of such certification in form and substance satisfactory to the Administrative Agent; (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute; (e) as to which Administrative Agent has a good faith belief that such Lender has defaulted in fulfilling its obligations (as a lender, agent or letter of credit issuer) generally under other syndicated credit facilities (provided, that, with respect to each Lender that is not an Affiliate of the Loan Parties, the Borrower shall have consented to the determination that such Lender is a “Defaulting Lender” pursuant to this clause (e)); or (f) (i) become or is insolvent or has a parent company that has become or is insolvent or made a general assignment for the benefit of creditors, or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or for any substantial part of its assets, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a direct or indirect parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or for any substantial part of its assets or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

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“Default Rate” has the meaning set forth in Section 2.14(c).

“Designated Person” means any Person listed on a Sanctions List.

“Disposition” means, with respect to any asset or property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed of” have correlative meanings.

“Distribution” means, as to any Person, any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in such Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interest in such Person or any option, warrant or other right to acquire any such Equity Interest in such Person.

“Dollars” and “$” means dollars in lawful currency of the United States.

“Domestic Subsidiary” means any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States.

“Environmental Laws” means any and all applicable foreign, federal, state, local or municipal laws, rules having the force and effect of law, written orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental Authority or other Requirements of Law regulating, relating to or imposing liability or standards of conduct concerning protection of worker health or the environment, as now or may at any time hereafter be in effect.

“Equity Interest” means, with respect to any Person, (i) all of the shares of capital stock of (or other ownership, membership, partnership or profit interests in) such Person, (ii) all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership, membership, partnership or profit interests in) such Person, (iii) all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership, membership, partnership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and (iv) all of the other ownership, membership, partnership or profit interests in such Person, whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, or any successor statute.

“Event of Default” means the occurrence of any of the events or existence of any of the circumstances specified in Section 8.1, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

“Excluded Foreign Subsidiary” means any Foreign Subsidiary in respect of which either (a) the pledge of all of the Equity Interests of such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower, result in adverse tax consequences to the Borrower.

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“Excluded Swap Obligation” means (a) with respect to any Subsidiary Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Subsidiary Guarantor of, or the grant by such Subsidiary Guarantor of a security interest to secure, as applicable, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation, or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) and (b) with respect to the Borrower, any Swap Obligation of another Loan Party if, and to the extent that, all or a portion of the joint and several liability of the Borrower with respect to, or the grant by the Borrower of a security interest to secure, as applicable, such Swap Obligation is or becomes illegal under the Commodity Exchange Act or any rule, regulation, or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof), by virtue of such Subsidiary Guarantor’s (in the case of (a)) or the Borrower’s (in the case of (b)) failure to constitute an “eligible contract participant,” as defined in the Commodity Exchange Act and the regulations thereunder, at the time the guarantee of such Subsidiary Guarantor, joint and several liability of the Borrower, or grant of such security interest by such Subsidiary Guarantor or the Borrower, as applicable, becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one Swap Obligation, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swap Obligations for which such guarantee or security interest or joint and several liability, as applicable, is or becomes illegal.

“Existing Members” means Murphy Group, Inc., an Oklahoma corporation, and EControls Group, Inc., a Texas corporation.

“Facility” means the Term Facility or the Revolving Facility, as applicable.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means that certain fee letter dated May 13, 2014, between the Administrative Agent and the Borrower.

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“Fee Payment Date” means (a) the third Business Day following the last day of each March, June, September and December and (b) the last day of the Revolving Commitment Period.

“Financial Covenants” means the covenants set forth in Article VI.

“Foreign Plan” means each employee benefit plan (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA) that is not subject to United States law and is maintained or contributed to by the Borrower or any of its Subsidiaries or any ERISA Affiliate.

“Foreign Subsidiary” means any Subsidiary of the Borrower that is not a Domestic Subsidiary.

“FRB” means the Board of Governors of the Federal Reserve System of the United States (or any successor thereto).

“Funded Debt” mean, as to any Person, all Indebtedness of such Person that matures more than one year from the date of its creation or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date, including all current maturities and current sinking fund payments in respect of such Indebtedness (other than Indebtedness hereunder) whether or not required to be paid within one year from the date of its creation.

“Funding Office” means the office of the Administrative Agent specified in Section 12.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower and the Lenders.

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time. In the event that any “Accounting Change” (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent agree to enter into good faith negotiations in order to amend such provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired result that the criteria for evaluating the Borrower’s consolidated financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred. “Accounting Changes” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC.

“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization (including the National Association of Insurance Commissioners).

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“Group Members” means the Borrower and its Subsidiaries.

“Guarantee Obligation” means, as to any Person (the “guaranteeing person”), any obligation, including a reimbursement, counterindemnity or similar obligation, of the guaranteeing Person that guarantees or in effect guarantees, or which is given to induce the creation of a separate obligation by another Person (including any bank under any letter of credit) that guarantees or in effect guarantees, any Indebtedness, leases, dividends or other obligations (the “primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith. For the avoidance of doubt, for purposes of determining any Guarantee Obligations of any Subsidiary Guarantor pursuant to the Guaranty or any of the Collateral Documents, the definition of “Specified Swap Agreement” shall not create any guarantee by any Subsidiary Guarantor of (or grant of security interest by any Subsidiary Guarantor to support, if applicable) any Excluded Swap Obligation of such Subsidiary Guarantor.

“Guaranty” means the guaranty of the Subsidiary Guarantors set forth in Article XI.

“Highest Lawful Rate” has the meaning set forth in Section 2.14(d).

“IPO” means an initial public offering by PubCo of its Equity Interests by means of an effective registration statement under the Securities Act of 1933, as amended (other than on Form S-8 or S-4 (or any successor thereof)), producing net proceeds in excess of $100,000,000, with such net proceeds being used by PubCo to purchase common Equity Interests of the Borrower, whether such Equity Interests are purchased directly from Persons who are members of the Borrower immediately prior to the consummation of the IPO or in connection with a new equity issuance by the Borrower, and resulting in PubCo becoming the sole managing member of the Borrower.

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“Indebtedness” of any Person means, at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than current trade payables incurred in the ordinary course of such Person’s business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property) (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under or in respect of acceptances, letters of credit, surety bonds or similar arrangements, (g) all obligations of such Person in respect of mandatorily redeemable preferred Equity Interests of such Person, (h) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (g) above, (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation, and (j) the Swap Termination Value of all Swap Agreements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor. Notwithstanding anything to the contrary contained herein, the term “Indebtedness” shall not include (i) any amounts relating to employee consulting arrangements, accrued expenses, deferred rent, deferred taxes, obligations under employment agreements and deferred compensation or (ii) post-closing purchase price adjustments or (except to the extent they are required under GAAP to be reflected on a balance sheet of such Person) earn-outs relating to Permitted Acquisitions.

“Insolvency” means, with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

“Intellectual Property” mean the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“Interest Payment Date” means (a) as to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December to occur while such Loan is outstanding and the final maturity date of such Loan; (b) as to any LIBOR Loan having an Interest Period of three months or less, the last day of such Interest Period; (c) as to any LIBOR Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period; (d) as to any Swingline Loan, the day that such Swingline Loan is required to be repaid and (e) as to any Loan (other than any Revolving Loan that is an ABR Loan), the date of any repayment or prepayment made in respect thereof.

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“Interest Period” means, as to any LIBOR Loan, (a) initially, the period commencing on the borrowing or conversion or continuation date, as the case may be, with respect to such LIBOR Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion or continuation, as the case may be, given with respect thereto and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such LIBOR Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not later than 11:00 a.m., Tulsa time, on the date that is three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

(ii) the Borrower may not select an Interest Period under either Facility that would extend beyond the Maturity Date; and

(iii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.

“Investment” has the meaning set forth in Section 5.6.

“Laws” means and includes laws (including common law), statutes, treaties, rules, regulations, ordinances and codes of any Governmental Authority.

“LC Disbursement” means a payment made by an LC Issuer pursuant to a Letter of Credit.

“LC Issuer” means BOKF, NA, in its capacity as the issuer of Letters of Credit hereunder. The LC Issuer may, in its discretion, arrange for one or more Letters of Credit to be issued by an Affiliate of the LC Issuer or by another Lender, in which case the term “LC Issuer” shall include any such Affiliate or Lender with respect to Letters of Credit issued by such Affiliate or Lender.

“Lender” means each bank or other financial institution from time to time party to this Agreement as a Lender. Unless the context otherwise requires, each reference herein to the “Lenders” shall be deemed to include each LC Issuer and the Swingline Lender.

“Letter of Credit” means a standby or documentary (trade) letter of credit issued for the account of the Borrower or any Subsidiary by the LC Issuer which expires by its terms within

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one year after the date of issuance and in any event at least 30 days prior to the Maturity Date. Notwithstanding the foregoing, a Letter of Credit may provide for automatic extensions of its expiry date for one or more successive one-year periods provided that the LC Issuer that issued such Letter of Credit has the right to terminate such Letter of Credit on each such annual expiration date and no renewal term may extend the term of the Letter of Credit to a date that is later than the 30^th day prior to the Maturity Date.

“Letter of Credit Exposure” means, at any time, the aggregate principal amount of all Letter of Credit Liabilities outstanding at such time. The Letter of Credit Exposure of any Lender at any time shall be its Revolving Percentage of the total Letter of Credit Exposure at such time.

“Letter of Credit Liabilities” means, at any time of calculation, the sum of (i) without duplication, the amount then available for drawing under all outstanding Letters of Credit, in each case without regard to whether any conditions to drawing thereunder can then be met plus (ii) without duplication, the aggregate unpaid amount of all reimbursement obligations in respect of previous drawings made under all such Letters of Credit.

“LIBOR Loan” means any Loan bearing interest at a rate determined by reference to the LIBOR Rate.

“LIBOR Rate” means, with respect to any LIBOR Loan for any Interest Period, a rate (expressed to the fifth decimal place) equal to (i) the rate of interest which is identified and normally published by ICE Benchmark Administration as the offered rate for loans in United States dollars for the applicable Interest Period as of 11:00 a.m. (London time), on the second full Business Day next preceding the first day of such Interest Period (unless such date is not a Business Day, in which event the next succeeding Business Day will be used); plus (ii) the maximum reserve requirement, if any, then imposed under Regulation D of the FRB for “Eurocurrency Liabilities” (as defined therein). If ICE Benchmark Administration no longer reports the LIBOR Rate or the Administrative Agent determines in good faith that the rate so reported no longer accurately reflects the rate available to the Lenders in the London Interbank Market or if such index no longer exists or accurately reflects the rate available to the Lenders in the London Interbank Market, the Administrative Agent may, using commercially reasonably discretion, select a replacement index.

“LIBOR Tranche” means the collective reference to LIBOR Loans under a particular Facility the then current Interest Periods with respect to all of which begin on the same date and end on the same later date (whether or not such Loans shall originally have been made on the same day).

“Lien” means any mortgage, pledge, hypothecation, assignment for security, deposit arrangement for security, encumbrance, lien (statutory or other), charge or other security interest (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“Loan” means any loan made by any Lender pursuant to this Agreement.

“Loan Documents” means this Agreement, the Notes, the Collateral Documents, and any amendment, waiver, supplement or other modification to any of the foregoing.

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“Loan Parties” mean the Borrower and the Subsidiary Guarantors.

“Material Adverse Effect” means a material adverse effect on (a) the business, property, operations, prospects or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform or fulfill its material obligations under the terms and conditions of the Loan Documents to which it is a party, or (c) the validity or enforceability of this Agreement or any of the Loan Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.

“Materials of Environmental Concern” means any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Law, including asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

“Maturity Date” means June 30, 2019.

“Moody’s” means Moody’s Investors Service, Inc. (or any successor thereto).

“Mortgaged Properties” means the owned real properties of the Borrower or any Subsidiary Guarantor valued in excess of $500,000, as to which the Administrative Agent for the benefit of the Lenders shall be granted a Lien pursuant to the Mortgages.

“Mortgages” means each of the mortgages and deeds of trust made by any Loan Party pursuant to Section 4.9(b) in favor of, or for the benefit of, the Administrative Agent for the benefit of the Lenders, in a form reasonably acceptable to the Administrative Agent.

“Multiemployer Plan” means an employee benefit plan that is covered by Title IV of ERISA, in respect of which the Borrower or a Commonly Controlled Entity is an “employer” as defined in Section 3(5) of ERISA and that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Cash Proceeds” means (a) in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable, purchase price adjustment receivable, release of escrows and reserves or otherwise, but only as and when received), net of attorneys’ fees, accountants’ fees, investment banking fees, sales commissions, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Collateral Document), related escrows, reserves established to fund related contingent liabilities reasonably estimated to be payable and other customary fees, costs and expenses actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) for the tax year in which such Asset Sale or Recovery Event occurred, and (b) in connection with any issuance or incurrence of Indebtedness, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees, sales commissions, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.

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“New Lender” has the meaning set forth in Section 2.24(a).

“Non-Excluded Taxes” has the meaning set forth in Section 2.19(a).

“Non-U.S. Lender” has the meaning set forth in Section 2.19(d).

“Notes” means, collectively, the Term Notes, the Revolving Notes and the Swingline Note.

“Notice of Borrowing” means a written request from the Borrower for Loans to be made by the Lenders, substantially in the form of Exhibit D.

“Notice of Continuation/Conversion” means a written request from the Borrower for the continuation or conversion of Loans pursuant to Section 2.12, substantially in the form of Exhibit F.

“Notice of LC Event” means a written request for the issuance, amendment, increase or extension of a Letter of Credit, substantially in the form of Exhibit E.

“Obligations” means the unpaid principal of and interest and fees on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding under any Debtor Relief Law, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the Borrower to the Administrative Agent or to any Lender (or, in the case of Specified Swap Agreements and Specified Cash Management Agreements, any Affiliate of any Lender or, in the case of Letter of Credit Liabilities, any LC Issuer), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, any Specified Swap Agreement, any Specified Cash Management Agreement or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, loan fees, reimbursement obligations, reasonable costs, expenses (including all reasonable fees, charges and disbursements of counsel to the Administrative Agent or to any Lender that are required to be paid by the Borrower pursuant to Section 9.1 or otherwise; provided, that the Obligations shall not include Excluded Swap Obligations.

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of Treasury.

“Organizational Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

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“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, including any interest, additions to tax or penalties applicable thereto.

“Participant” has the meaning set forth in Section 12.5(c).

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

“Perfection Certificate” means a certificate in form reasonably acceptable to the Administrative Agent, as the same shall be supplemented from time to time by a Compliance Certificate or otherwise.

“Permitted Acquisition” any Acquisition so long as (a) the assets to be acquired will be used in, or the Person to be acquired is engaged in, as the case may be, a business of the type permitted under Section 5.13, and (b)(i) no Event of Default has occurred and is continuing or would result therefrom, (ii) in the case of an acquisition of Equity Interests, the Person acquired shall become immediately after given effect thereto a Subsidiary Guarantor or be merged into the Borrower or a Subsidiary Guarantor (unless such acquired Person is an Excluded Foreign Subsidiary), and in the case of all Acquisitions, all actions required to be taken under Section 4.9 shall have been taken, (iii) the Borrower and its Subsidiaries shall be in compliance, on a pro forma basis, after giving effect to such Acquisition, with the Financial Covenants, as if such Acquisition (and any related incurrence or repayment of Indebtedness) had occurred on the first day of the relevant period, (iv) any Indebtedness that is incurred, acquired or assumed in connection with such Acquisition shall be in compliance with Section 5.1(h), and (v) in the case of an Acquisition involving Acquisition Consideration of more than $5,000,000, the Borrower shall have delivered to the Administrative Agent a certificate of a Responsible Officer to the effect set forth in clauses (a), (b)(i) and (b)(iii) above, together with pro forma financial statements of Borrower and its Subsidiaries (as of the last day of the most recently ended fiscal quarter prior to the date of consummation of such Acquisition for which financial statements are required to be delivered pursuant to this Agreement) after giving effect to the consummation of such Acquisition.

“Permitted Investors” means Frank W. Murphy, III and Kennon Guglielmo and their respective Permitted Transferees.

“Permitted Transferee” means (a) any executor, administrator, guardian, conservator or similar legal representative of Frank W. Murphy, III or Kennon Guglielmo, (b) any member of the immediate family of either of such individuals, (c) any trust or similar entity formed by (i) Frank. W. Murphy or Kennon Guglielmo for the benefit of the Persons described in clause (b) or (ii) any Person described in clause (b) above, and (d) any Person acting as agent for any Person described in clauses (a) through (c) above.

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“Person” means and includes an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“Plan” means any employee benefit plan that is covered by ERISA and in respect of which the Borrower or a Subsidiary is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prohibited Transaction” has the meaning set forth in Section 406 of ERISA and Section 4975(c) of the Code.

“Projections” has the meaning set forth in Section 4.2(c).

“PubCo” means Enovation Controls, Inc., a Delaware corporation, or such other entity formed for the purpose of conducting the IPO.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, the Borrower and each Subsidiary Guarantor that has total assets exceeding $10,000,000 at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Recovery Event” means any settlement of or payment in respect of (or any series of related settlements of or payments in respect of) any property or casualty insurance claim or any condemnation proceeding relating to any property of any Loan Party.

“Register” has the meaning set forth in Section 12.5(b).

“Regulation U” means Regulation U of the FRB as in effect from time to time.

“Reinvestment Deferred Amount” means, with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by any Loan Party in connection therewith that are not applied to prepay the Term Loans or reduce the Revolving Commitments pursuant to Section 2.11(b) as a result of the delivery of a Reinvestment Notice.

“Reinvestment Event” means any Asset Sale or Recovery Event in respect of which the Borrower has delivered a Reinvestment Notice.

“Reinvestment Notice” means a written notice executed by a Responsible Officer stating that no Event of Default has occurred and is continuing and that the Borrower (directly or indirectly through a Subsidiary) intends and expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to acquire, construct, improve or repair assets useful in its business or for a Permitted Acquisition.

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“Reinvestment Prepayment Amount” means, with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended prior to the relevant Reinvestment Prepayment Date to acquire, construct, improve or repair assets useful in the Borrower’s business (directly or through a Subsidiary) or for a Permitted Acquisition.

“Reinvestment Prepayment Date” means, with respect to any Reinvestment Event, the earlier of (a) 270 days following of such Reinvestment Event and (b) the date on which the Borrower shall have determined not to, or shall have otherwise ceased to, acquire, construct, improve or repair assets useful in the Borrower’s business or for a Permitted Acquisition with all or any portion of the relevant Reinvestment Deferred Amount.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Reorganization” means, with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the 30-day notice period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043, with respect to a Pension Plan.

“Required Lenders” means, at any time, the holders of more than 50% of (a) until the Closing Date, the Commitments then in effect and (b) thereafter, the sum of (i) the aggregate unpaid principal amount of the Term Loans then outstanding and (ii) the Total Revolving Commitments then in effect or, if the Revolving Commitments have been terminated, the Revolving Loans, Swingline Loans and Letter of Credit Liabilities then outstanding.

“Requirement of Law” means, as to any Person, (i) the Organizational Documents of such Person and (ii) any Law or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” means the chief executive officer, president or chief financial officer of the Borrower, or any other officer having substantially the same authority and responsibility, and, with respect to financial matters, the chief financial officer, the principal accounting officer, treasurer or controller of the Borrower or any other officer having substantially the same authority and responsibility.

“Revolving Commitment” means, as to any Lender, the obligation of such Lender, if any, to make Revolving Loans and purchase participations in Letters of Credit and Swingline Loans in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Revolving Commitment” opposite such Lender’s name on Schedule 1.1 or in the Assignment and Assumption pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The original amount of the Total Revolving Commitments is $80,000,000.

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“Revolving Commitment Period” means the period from and including the Closing Date to the close of business on the Business Day immediately prior to the Maturity Date.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its Letter of Credit Exposure and Swingline Exposure at such time.

“Revolving Facility” means the Revolving Commitments and the extensions of credit made thereunder.

“Revolving Lender” means each Lender that has a Revolving Commitment or that holds Revolving Loans or participations in Letters of Credit.

“Revolving Loans” has the meaning set forth in Section 2.4(a).

“Revolving Note” means a promissory note to be made by the Borrower payable to the order of a Revolving Lender in the amount of such Lender’s Revolving Commitment, substantially in the form of Exhibit B-1 (with appropriate insertions).

“Revolving Percentage” means, as to any Revolving Lender at any time, the percentage which such Lender’s Revolving Commitment then constitutes of the Total Revolving Commitments or, at any time after the Revolving Commitments shall have expired or terminated, the percentage which the aggregate principal amount of such Lender’s Revolving Loans and participations in Letter of Credit Liabilities and Swingline Loans then outstanding constitutes of the aggregate principal amount of the Revolving Loans, Letter of Credit Liabilities and Swingline Loans then outstanding.

“S&P” means Standard & Poor’s Financial Services, LLC, a subsidiary of The McGraw Hill Companies, Inc. (or any successor thereto).

“Sanctioned Country” means a country or territory that is at any time subject to Sanctions.

“Sanctions” means and includes (a) economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by the United States government and administered by OFAC and (b) economic or financial sanctions imposed, administered or enforced from time to time by the U.S. State Department, the U.S. Department of Commerce or the US Department of the Treasury.

“Sanctions List” means any of the lists of specifically designated nationals or designated persons or entities (or equivalent) held by the United States government and administered by OFAC, the U.S. State Department, the U.S. Department of Commerce or the U.S. Department of the Treasury or the United Nations Security Council or any similar list maintained by any other United States government entity, in each case as the same may be amended, supplemented or substituted from time to time.

“SEC” means the Securities and Exchange Commission or any successor to its functions.

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“Security Agreement” means the Security Agreement to be executed and delivered by the Borrower and each Subsidiary Guarantor, substantially in the form of Exhibit C.

“Single Employer Plan” means any employee benefit plan (other than a Multiemployer plan) that is covered by Title IV of ERISA and is maintained or contributed to by the Borrower or any Commonly Controlled Entity.

“Solvent”, when used with respect to any Person, means that, as of any date of determination, (a) the amount of the “present fair saleable value” of the assets of such Person (on a going concern basis) will, as of such date, exceed the amount of all “liabilities of such Person, contingent or otherwise”, as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors; (b) the present fair saleable value of the assets of such Person (on a going concern basis) will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured; (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business; and (d) such Person will be able to pay its debts as they mature.

“Specified Cash Management Agreement” means any agreement providing for treasury, depositary, purchasing card or cash management services, including in connection with any automated clearing house transfers of funds or any similar transactions between the Borrower or any Subsidiary Guarantor and any Lender or Affiliate thereof, which has been designated by such Lender and the Borrower, by notice to the Administrative Agent not later than 90 days after the execution and delivery by the Borrower or such Subsidiary Guarantor, as a “Specified Cash Management Agreement.”

“Specified Swap Agreement” means any Swap Agreement in respect of interest rates, currency exchange rates, commodities, weather, power or emissions entered into by the Borrower or any Subsidiary Guarantor and any Person that is a Lender or an Affiliate of a Lender at the time such Swap Agreement is entered into (or, in respect of any Swap Agreement entered into prior to the Closing Date, any Person that is a Lender or an Affiliate of a Lender on the Closing Date), which has been designated as a “Specified Swap Agreement” by such Lender and the Borrower, by notice to the Administrative Agent not later than 15 days after the later of (i) the Closing Date and (ii) the execution and delivery by the Borrower or such Subsidiary Guarantor of such Swap Agreement (or such later date agreed by the Administrative Agent and the Borrower, but in no event more than 30 days after such later date referred to above); provided that for purposes of determining any Guarantee Obligations of any Subsidiary Guarantor pursuant to the Guaranty or any Collateral Documents, the definition of “Specified Swap Agreement” shall not create any guarantee by any Subsidiary Guarantor of (or grant of security interest by any Subsidiary Guarantor to support, if applicable) any Excluded Swap Obligation of such Subsidiary Guarantor.

“Subordinated Indebtedness” means Indebtedness of the Borrower or any Subsidiary Guarantor that is subordinated in right of payment to the Obligations of the Borrower and such Subsidiary Guarantor, as applicable, pursuant to a subordination agreement or other subordination provisions acceptable to the Administrative Agent.

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“Subsidiary” means, as to any Person, a corporation, partnership, limited liability company or other entity of which Equity Interests having ordinary voting power (other than Equity Interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

“Subsidiary Guarantor” means each Subsidiary of the Borrower other than any Excluded Foreign Subsidiary. The initial Subsidiary Guarantors are listed on the signature pages to this Agreement.

“Swap Agreement” means any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, including any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or any of its Subsidiaries shall be a “Swap Agreement.”

“Swap Obligations” means, with respect to any Person, any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction.

“Swap Termination Value” means, in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on or after the date such Swap Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Agreements (which may include a Lender or any Affiliate of a Lender).

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Revolving Percentage of the total Swingline Exposure at such time.

“Swingline Lender” means BOKF, NA dba Bank of Oklahoma, in its capacity as lender of Swingline Loans hereunder.

“Swingline Loan” means a Swingline Loan made pursuant to the swingline facility established under Section 2.7.

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“Swingline Note” means a promissory note to be made by the Borrower payable to the order of the Swingline Lender in the amount of $5,000,000, substantially in the form of Exhibit B-2 (with appropriate insertions).

“Tax Receivables Agreement” means that certain Tax Receivables Agreement to be entered into among PubCo and certain of the members of the Borrower immediately prior to the consummation of the IPO.

“Term Commitment” means, as to any Lender, the obligation of such Lender, if any, to make a Term Loan to the Borrower in a principal amount equal to the amount set forth under the heading “Term Commitment” opposite such Lender’s name on Schedule 1.1. The original aggregate amount of the Term Commitments is $30,000,000. The Term Commitments will expire upon the funding of the Term Loans on the Closing Date.

“Term Facility” means the Term Commitments and the extensions of credit made thereunder.

“Term Lender” means each Lender that has a Term Commitment or that holds any portion of a Term Loan.

“Term Loans” has the meaning set forth in Section 2.1.

“Term Note” means a promissory note to be made by the Borrower payable to the order of a Term Lender in the amount of such Lender’s Term Commitment, substantially in the form of Exhibit A (with appropriate insertions).

“Term Percentage” means, as to any Term Lender at any time, the percentage which such Lender’s Term Commitment then constitutes of the aggregate Term Commitments (or, at any time after the Closing Date, the percentage which the aggregate principal amount of such Lender’s Term Loans then outstanding constitutes of the aggregate principal amount of the Term Loans then outstanding).

“Total Leverage Ratio” means, as at the last day of any period of four consecutive fiscal quarters of the Borrower, the ratio of (a) Consolidated Indebtedness on such day to (b) Consolidated EBITDA for such period.

“Total Revolving Commitments” means, at any time, the aggregate amount of the Revolving Commitments then in effect.

“Transactions” means the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the borrowing of Loans, the use of the proceeds thereof (including the funding and making of the Closing Date Distribution), and the other transactions contemplated by the Loan Documents.

“Transferee” means any Assignee or Participant.

“Type” means, as to any Loan, its nature as an ABR Loan or a LIBOR Loan.

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“UCC” means the Uniform Commercial Code as from time to time in effect in the State of New York; provided, however, that if by reason of mandatory provisions of applicable Law, the perfection or the effect of perfection or non-perfection or priority of the security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” shall also mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection, or priority of such security interest.

“United States” or “U.S.” means the United States of America.

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended from time to time.

“Wireharness Disposition” means the proposed sale of a portion of the business of the Borrower referred to as the “wireharness business” and being generally described as the smart board and supporting equipment to manufacture wire harnesses in San Antonio, which sale is expected to occur within one year from the Closing Date.

1.2 Accounting Terms and Calculations. As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms relating to the Borrower and its Subsidiaries that are not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not fully defined, shall have the respective meanings given to them under GAAP (provided that, notwithstanding anything to the contrary herein, all accounting or financial terms used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (i) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein) and (ii) any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof))

1.3 Terms Defined in UCC. Unless the context otherwise requires, terms used herein that are defined in the UCC have the respective meanings set forth therein.

1.4 Other Definitional Provisions. Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(a) (i) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; (ii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings); (iii) the words “asset” and

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“property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Equity Interests, securities, revenues, accounts, leasehold interests and contract rights; and (iv) references to agreements or other Contractual Obligations shall, unless otherwise specified, be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated or otherwise modified from time to time.

(b) The words “hereof,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(c) Any reference herein or in any other Loan Document to the payment, satisfaction and discharge in full of the Obligations (or words to that effect) shall mean (i) the payment or repayment in full in cash or other immediately available funds of (A) the principal amount of, and interest accrued and unpaid with respect to, all outstanding Loans, and (B) all fees (including non-use fees), expenses and other charges of the Administrative Agent and the Lenders that have accrued and are unpaid, regardless of whether demand has been made therefor, (ii) the receipt by the Administrative Agent of cash collateral in order to secure any contingent Obligations for which a claim or demand for payment has been made on or prior to such time or in respect of matters or circumstances known to the Administrative Agent or any Lender at such time that are reasonably expected to result in any loss, cost, damage, or expense (including attorneys’ fees and legal expenses), such cash collateral to be in such amount as the Administrative Agent reasonably determines is appropriate to secure such contingent Obligations, (iii) the payment or repayment in full in cash or other immediately available funds of all other outstanding Obligations (including the payment of any termination amount then applicable (or which could reasonably be expected to become applicable as a result of the repayment of the other Obligations) under Specified Swap Agreements) other than (A) unasserted contingent indemnification Obligations, (B) any obligations under Specified Cash Management Agreements that, at such time, are allowed by the applicable Lender to remain outstanding without being required to be repaid or cash collateralized, and (C) any Specified Swap Obligations that, at such time, are allowed by the applicable Lender (or Affiliate thereof) to remain outstanding without being required to be repaid, and (iv) the termination of all of the Commitments of the Lenders.

(d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

ARTICLE I

AMOUNTS AND TERMS OF COMMITMENTS

2.1 Term Commitments. Subject to the terms and conditions hereof, (a) each Term Lender severally agrees to make a term loan (each, a “Term Loan”) to the Borrower on the Closing Date in an amount of the Term Commitment of such Lender. The Term Loans may from time to time be LIBOR Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.12. The Term Commitments are several obligations of the Term Lenders, and no Term Lender shall be responsible for any other Term Lender’s failure to make its Term Loan on the Closing Date. Once advanced and repaid, the Term Loans (and any portion thereof) may not be re-borrowed.

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2.2 Procedure for Term Loan Borrowing. The Borrower shall give the Administrative Agent irrevocable notice, substantially in the form of a Notice of Borrowing, which must be received by the Administrative Agent prior to 11:00 a.m., Tulsa time, (a) two Business Days prior to the anticipated Closing Date, in the case of LIBOR Loans, or (b) one Business Day prior to the anticipated Closing Date, in the case of ABR Loans, requesting that the Term Lenders make the Term Loans on the Closing Date and specifying the amount to be borrowed. Upon receipt of such notice the Administrative Agent shall promptly notify each Term Lender thereof. Not later than 12:00 noon, Tulsa time, on the Closing Date each Term Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loan to be made by such Lender. The Administrative Agent shall credit the account of the Borrower on the books of such office of the Administrative Agent with the aggregate of the amounts made available to the Administrative Agent by the Term Lenders in immediately available funds or wire such funds as directed by the Borrower.

2.3 Repayment of Term Loans. The Term Loan of each Term Lender shall be payable as to principal in consecutive quarterly installments on each March 31, June 30, September 30 and December 31 of each year, beginning September 30, 2014, and on the Maturity Date, in a principal amount determined in accordance with the following payment schedule:

Payment Due Dates	Percentage of Original Principal Amount Due on Each Payment Due Date
September 30, 2014, through June 30, 2017	1.25%
September 30, 2017 through March 31, 2019	2.50%
Maturity Date	Entire remaining principal balance

provided, however, that if the IPO is not successfully closed on or before the first anniversary of the Closing Date, then thereafter each quarterly installment due prior to the Maturity Date on each Term Loan shall be an amount equal to 1/24^th of the outstanding principal amount of such Term Loan as of the close of business on the first anniversary of the Closing Date.

2.4 Revolving Commitments.

(a) Subject to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving credit loans (“Revolving Loans”) to the Borrower from time to time during the Revolving Commitment Period in an aggregate principal amount at any one time outstanding which will not result in such Lender’s Revolving Credit Exposure at any time exceeding such Lender’s Revolving Commitment. During the Revolving Commitment Period, the Borrower may use the Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The Revolving Commitments are several obligations of the Revolving Lenders, and no Revolving Lender shall be responsible for any other Revolving Lender’s failure to make Revolving Loans as required. The Revolving Loans may from time to time be LIBOR Loans or ABR Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.5 and 2.12.

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(b) The Borrower shall repay all outstanding Revolving Loans on the Maturity Date.

2.5 Procedure for Revolving Loan Borrowing. The Borrower may borrow under the Revolving Commitments during the Revolving Commitment Period on any Business Day, provided that the Borrower shall give the Administrative Agent irrevocable notice, substantially in the form of a Notice of Borrowing, which must be received by the Administrative Agent prior to 11:00 a.m., Tulsa time, at least (a) two Business Days prior to the requested Borrowing Date, in the case of LIBOR Loans, or (b) one Business Day prior to the requested Borrowing Date, in the case of ABR Loans, specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case of LIBOR Loans, the respective amounts of each such Type of Loan and the respective lengths of the initial Interest Period therefor. Each borrowing under the Revolving Commitments shall be in an amount equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof (or, if the then aggregate Available Revolving Commitments are less than $1,000,000, such lesser amount) and (y) in the case of LIBOR Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof. Upon receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender will make the amount of its Revolving Percentage share of each borrowing available to the Administrative Agent for the account of the Borrower at the Funding Office prior to 12:00 noon, Tulsa time, on the Borrowing Date requested by the Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent crediting the account of the Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.

2.6 Letters of Credit.

(a) On the terms and subject to the conditions set forth herein, during the Revolving Commitment Period, the Revolving Commitments may be used by Borrower, in addition to the making of Revolving Loans hereunder, for the issuance (or the amendment, increase or extension of an outstanding Letter of Credit) by the LC Issuer of one or more Letters of Credit, so long as, in each case: the Administrative Agent and an LC Issuer shall have received a Notice of LC Event at least two Business Days before the relevant date of issuance, amendment, increase or extension, and after giving effect to such issuance, amendment, increase or extension, (x) the aggregate Letter of Credit Liabilities under all Letters of Credit do not exceed $10,000,000 and (y) the Revolving Credit Exposure of all Lenders does not exceed the Total Revolving Commitments. If requested by the applicable LC Issuer, the Borrower also shall submit a letter of credit application on such LC Issuer’s standard form in connection with any request for a Letter of Credit. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, any LC Issuer relating to any Letter of Credit, the terms and conditions of this Agreement shall control. Notwithstanding anything herein to the contrary, no LC Issuer shall have any obligation

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hereunder to issue, and shall not issue, any Letter of Credit the proceeds of which would be made to any Person (i) to fund any activity or business of or with any Person, or in any country or territory, that at the time of such funding is the subject of any Sanctions or (ii) in any manner that would result in a violation of any Sanctions by any party to this Agreement. The parties acknowledge that Prosperity Bank (a Lender hereunder) has previously issued for the account of the Borrower a currently outstanding letter of credit in the face amount of $200,000 and that such letter of credit will be treated as a Letter of Credit issued hereunder and Prosperity Bank will be deemed the LC Issuer as to such letter of credit, provided that (i) no fronting fees shall be payable with respect to such letter of credit, and (ii) such letter of credit will be not be extended beyond its current expiry date but instead shall be replaced by a Letter of Credit issued by BOKF, NA as long as all conditions to the issuance of a Letter of Credit are satisfied as of the date the replacement Letter of Credit is issued.

(b) For each Letter of Credit that may be issued, amended or extended, the Borrower agrees to pay promptly to the LC Issuer a fronting fee equal to 0.125% of such Letter of Credit.

(c) If the LC Issuer shall honor any draw request under, and make payment in respect of, a Letter of Credit, (i) the Borrower shall reimburse the LC Issuer for the amount of such payment no later than 4:30 p.m. Tulsa time on the date of such payment or (ii) the Borrower shall be deemed to have immediately requested that the Revolving Lenders make Revolving Loans, which shall be made as ABR Loans, in a principal amount equal to the amount of such payment (but solely to the extent the Borrower shall have failed to directly reimburse the applicable LC Issuer for the amount of such payment). The Borrower shall pay interest, on demand, on all amounts so paid by the LC Issuer until the Borrower reimburses the LC Issuer therefor at a rate equal to the then current interest rate applicable to ABR Revolving Loans for such day.

(d) The obligations of the Borrower to reimburse the applicable LC Issuer pursuant to paragraph (c) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including the following: (i) any lack of validity or enforceability of, or any amendment or waiver of or any consent to departure from, any Letter of Credit or any related document; (ii) the existence of any claim, set-off, defense or other right which the Borrower may have at any time against the beneficiary of any Letter of Credit, the LC Issuer (including any claim for improper payment), the Administrative Agent, any Lender or any other Person, whether in connection with any Loan Document or any unrelated transaction, provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (iii) any statement or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; (iv) any affiliation between the LC Issuer and the Administrative Agent or any Lender; or (v) to the extent permitted under applicable law, any other circumstance or happening whatsoever, whether or not similar to any of the foregoing. Neither the Administrative Agent, the Lenders nor any LC Issuer, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder),

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any error in interpretation of technical terms or any consequence arising from causes beyond the control of any LC Issuer; provided that the foregoing shall not be construed to excuse any LC Issuer from liability to the Borrower to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such LC Issuer’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, an LC Issuer may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(e) An LC Issuer shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. Such LC Issuer shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such LC Issuer has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such LC Issuer and the Lenders with respect to any such LC Disbursement. If any LC Issuer shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the reimbursement is due and payable at the rate per annum then applicable to Alternate Base Rate Revolving Loans; provided that, if the Borrower fails to reimburse such LC Disbursement within one Business Day of the date that the reimbursement is due and payable, then interest shall thereafter accrue at the Default Rate, it being understood that a drawing of a Revolving Loan pursuant to paragraph (c) of this Section shall constitute reimbursement of such LC Disbursement. Interest accrued pursuant to this paragraph shall be for the account of any LC Issuer, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse any LC Issuer shall be for the account of such Lender to the extent of such payment.

(f) In the event any Letters of Credit are outstanding at the time that the Borrower prepays or is required to repay the Obligations or the Revolving Commitments have terminated, the Borrower shall (i) deposit with Administrative Agent cash in an amount equal to one hundred and five percent (105%) of the aggregate outstanding Letter of Credit Liability to be available to the Administrative Agent to reimburse payments of drafts drawn under such Letters of Credit and pay any fees and expenses related thereto and (ii) prepay the fee payable under paragraph (b) above with respect to such Letters of Credit for the full remaining terms of such Letters of Credit. Upon termination of any such Letter of Credit and provided no Event of Default then exists, the unearned portion of such prepaid fee attributable to such Letter of Credit shall be refunded to the Borrower, together with the deposit described in the preceding clause (i) attributable to such Letter of Credit, but only to the extent not previously applied by Administrative Agent in the manner described herein.

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(g) By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the LC Issuer or the Revolving Lenders, the applicable LC Issuer hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from such LC Issuer, a participation in such Letter of Credit equal to such Revolving Lender’s Revolving Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the applicable LC Issuer, such Revolving Lender’s Applicable Percentage of each LC Disbursement made by such LC Issuer and not reimbursed by the Borrower on the date due as provided in paragraph (d) above, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(h) If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Revolving Loans has been accelerated, Lenders with Letter of Credit Exposure representing greater than 66-2/3% of the total Letter of Credit Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the total Letter of Credit Liabilities as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (f) of Section 8.1. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse the LC Issuer for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the Letter of Credit Liabilities at such time or, if the maturity of the Revolving Loans has been accelerated (but subject to the consent of Lenders with Letter of Credit Exposure representing greater than 66-2/3% of the total Letter of Credit Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.

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2.7 Swingline Loans.

(a) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Revolving Commitment Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $5,000,000 or (ii) the Revolving Credit Exposure exceeding the Total Revolving Commitments; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

(b) Each Swingline Loan shall be an ABR Loan.

(c) Each Swingline Loan shall be due and payable on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two Business Days after such Swingline Loan is made; provided that on each date that Revolving Loans are made, the Borrower shall repay all Swingline Loans then outstanding. For the avoidance of doubt, the Borrower may request a Revolving Loan the proceeds of which are used to repay outstanding Swingline Loans.

(d) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 11:00 a.m., Tulsa time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan (which shall not be less than $100,000). The Administrative Agent shall promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender by 2:00 p.m., Tulsa time, on the requested date of such Swingline Loan.

(e) The Swingline Lender may by written notice given to the Administrative Agent not later than 9:00 a.m., Tulsa time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender’s Revolving Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Revolving Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this Section 2.7(e) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Lender shall comply with its obligation under this Section 2.7(e) by wire transfer of immediately available funds, in the same manner as provided in Section 2.5 with respect to Revolving Loans made by such Lender (and Section 2.5 shall apply, mutatis mutandis, to the payment obligations of the

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Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this Section 2.7(e), and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a Swingline Loan pursuant to this Section 2.7(e) shall not relieve the Borrower of any default in the payment thereof.

2.8 Fees.

(a) The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a non-use fee for the period from and including the date hereof to the last day of the Revolving Commitment Period, computed at the Applicable Fee Rate on the average daily amount of the Available Revolving Commitment of such Lender during the period for which payment is made, payable quarterly in arrears on each Fee Payment Date, commencing on the first such date to occur after the date hereof.

(b) The Borrower shall pay to the Administrative Agent for the account of each Revolving Lender a letter of credit fee with respect to the Letter of Credit Liabilities for each Letter of Credit, computed for each day from the date of issuance of such Letter of Credit to the date that is the last day a drawing is available under such Letter of Credit, at a rate per annum equal to the Applicable Fee Rate then in effect. Such fee shall be payable quarterly in arrears on each Fee Payment Date; provided that such fee shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand.

(c) The Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the dates as set forth in the Fee Letter and to perform any other obligations contained therein.

2.9 Termination or Reduction of Revolving Commitments. The Borrower shall have the right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments; provided that no such termination or reduction of Revolving Commitments shall be permitted if, after giving effect thereto and to any prepayments of the Revolving Loans made on the effective date thereof, the total Revolving Credit Exposure of all Lenders would exceed the Total Revolving Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently the Revolving Commitments then in effect.

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2.10 Optional Prepayments. The Borrower may at any time and from time to time prepay Loans, in whole or in part, without premium or penalty, upon irrevocable notice delivered to the Administrative Agent no later than 11:00 a.m., Tulsa time, three Business Days prior thereto, in the case of LIBOR Loans, and no later than 11:00 a.m., Tulsa time, one Business Day prior thereto, in the case of ABR Loans, which notice shall specify the date and amount of prepayment and whether the prepayment is of LIBOR Loans or ABR Loans; provided, that if a LIBOR Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.20. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with (except in the case of Revolving Loans that are ABR Loans) accrued interest to such date on the amount prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple thereof. Optional prepayments of the Term Loans shall be applied to the remaining installments thereof in inverse order of maturity and shall not reduce the scheduled amounts of the remaining installments.

2.11 Mandatory Prepayments and Commitment Reductions.

(a) If any Indebtedness shall be issued or incurred by any Loan Party (excluding any Indebtedness incurred in accordance with Section 5.1), an amount equal to 100% of the Net Cash Proceeds thereof shall be applied on the date of such issuance or incurrence toward the prepayment of the Term Loans and then to the reduction of the Revolving Commitments as set forth in Section 2.11(c).

(b) If any Loan Party shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, 100% of such Net Cash Proceeds shall be paid to the Administrative Agent within three Business Days after such Loan Party’s receipt of such Net Cash Proceeds and applied toward the prepayment of the Term Loans and the reduction of the Revolving Commitments as set forth in Section 2.11(c); provided, that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event shall be paid to the Administrative Agent and applied toward the prepayment of the Term Loans and the reduction of the Revolving Commitments as set forth in Section 2.11(c).

(c) Amounts to be applied in connection with prepayments and Commitment reductions made pursuant to Section 2.11 shall be applied, first, to the prepayment of the Term Loans and, second, to reduce permanently the Revolving Commitments. Any such reduction of the Revolving Commitments shall be accompanied by prepayment of the Revolving Loans to the extent, if any, that the total Revolving Credit Exposure exceeds the amount of the Total Revolving Commitments as so reduced. The application of any prepayment pursuant to Section 2.11 shall be made, first, to ABR Loans and, second, to LIBOR Loans. Each prepayment of the Loans under Section 2.11 (except in the case of Revolving Loans that are ABR Loans) shall be accompanied by accrued interest to the date of such prepayment on the amount prepaid. Mandatory prepayments of the Term Loans pursuant to this Section 2.11 shall be applied to the remaining installments thereof in inverse order of maturity.

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2.12 Conversion and Continuation Options.

(a) The Borrower may elect from time to time to convert LIBOR Loans to ABR Loans by giving the Administrative Agent prior irrevocable notice of such election, substantially in the form of a Notice of Continuation/Conversion, no later than 11:00 a.m., Tulsa time, on the Business Day preceding the proposed conversion date, provided that any such conversion of LIBOR Loans may only be made on the last day of an Interest Period with respect thereto or, subject to payment of any amounts owing pursuant to Section 2.20, at any other time. The Borrower may elect from time to time to convert ABR Loans to LIBOR Loans by giving the Administrative Agent prior irrevocable notice of such election, substantially in the form of a Notice of Continuation/Conversion, no later than 11:00 a.m., Tulsa time, on the third Business Day preceding the proposed conversion date (which notice shall specify the length of the initial Interest Period therefor), provided that no ABR Loan under a particular Facility may be converted into a LIBOR Loan when any Event of Default has occurred and is continuing and the Administrative Agent or the Required Lenders in respect of such Facility have determined in its or their sole discretion not to permit such conversions. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

(b) Any LIBOR Loan may be continued as such upon the expiration of the then current Interest Period with respect thereto by the Borrower giving irrevocable notice, substantially in the form of Notice of Continuation/Conversion, to the Administrative Agent, in accordance with the applicable provisions of the term “Interest Period” set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans, provided that no LIBOR Loan under a particular Facility may be continued as such when any Event of Default has occurred and is continuing and the Administrative Agent has or the Required Lenders in respect of such Facility have determined in its or their sole discretion not to permit such continuations, and provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso such Loans shall be automatically converted to ABR Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

(c) This Section 2.12 shall not apply to Swingline Loans, which may not be converted or continued.

2.13 Limitations on LIBOR Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions and continuations of LIBOR Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the LIBOR Loans comprising each LIBOR Tranche shall be equal to $1,000,000 or a whole multiple of $500,000 in excess thereof and (b) no more than seven LIBOR Tranches shall be outstanding at any one time under either Facility.

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2.14 Interest Rates and Payment Dates.

(a) Each LIBOR Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the LIBOR Rate determined for such day plus the Applicable Margin.

(b) Each ABR Loan shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.

(c) If all or a portion of the principal amount of any Loan shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to in the case of the Loans, the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section 2.14 plus 2%, and (ii) if all or a portion of any interest payable on any Loan or any fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to ABR Loans under the relevant Facility plus 2% (or, in the case of any such other amounts that do not relate to a particular Facility, the rate then applicable to ABR Loans under the Revolving Facility plus 2%), in each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such amount is paid in full (as well after as before judgment) (the “Default Rate”).

(d) It is not the intention of the Administrative Agent, the Lenders or the Borrower to violate the laws of any applicable jurisdiction relating to usury or other restrictions on the maximum lawful interest rate. The Loan Documents and all other agreements between the Borrower and the Administrative Agent or the Lenders, whether now existing or hereafter arising and whether written or oral, are hereby limited so that in no event shall the interest paid or agreed to be paid to the Administrative Agent or the Lenders for the use, forbearance or detention of money loaned, or for the payment or performance of any covenant or obligation contained herein or in any other Loan Document, exceed the maximum amount permissible under applicable Law (the “Highest Lawful Rate”). If from any such circumstances the Administrative Agent or the Lenders should ever receive anything of value deemed interest under applicable Law which would exceed interest at the Highest Lawful Rate, such excessive interest shall be applied to the reduction of the principal amount owing hereunder, and not to the payment of interest, or if such excessive interest exceeds any unpaid balance of principal, such excess shall be refunded to the Borrower. All sums paid or agreed to be paid to the Administrative Agent or the Lenders for the use, forbearance or detention of monies advanced under any Loan shall, to the extent permitted by applicable Law, be amortized, prorated, allocated and spread throughout the full term of the Obligations until payment in full so that the rate of interest on account of the Obligations are uniform throughout the term thereof. This Section 2.14(d) shall control every other provision of the Loan Documents and all other agreements between the Administrative Agent, the Lenders and the Borrower.

(e) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (c) of this Section 2.14 shall be payable from time to time on demand.

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2.15 Computation of Interest and Fees.

(a) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of a LIBOR Rate.

(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.14(a).

2.16 Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

(a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower in the absence of manifest error) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the LIBOR Rate for such Interest Period, or

(b) the Administrative Agent shall have received notice from the Required Lenders in respect of the relevant Facility that the LIBOR Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as practicable thereafter. If such notice is given (x) any LIBOR Loans under the relevant Facility requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Loans under the relevant Facility that were to have been converted on the first day of such Interest Period to LIBOR Loans shall be continued as ABR Loans and (z) any outstanding LIBOR Loans under the relevant Facility shall be converted, on the last day of the then-current Interest Period, to ABR Loans. Until such notice has been withdrawn by the Administrative Agent, no further LIBOR Loans under the relevant Facility shall be made or continued as such, nor shall the Borrower have the right to convert Loans under the relevant Facility to LIBOR Loans.

2.17 Pro Rata Treatment and Payments.

(a) Each borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of any fee and any reduction of the Commitments of the Lenders shall be made pro rata according to the respective Term Percentages or Revolving Percentages, as the case may be, of the relevant Lenders.

(b) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Term Loans shall be made pro rata according to the respective outstanding principal amounts of the Term Loans then held by the Term Lenders. Amounts prepaid on account of the Term Loans may not be reborrowed.

(c) Each payment (including each prepayment) by the Borrower on account of principal of and interest on the Revolving Loans shall be made pro rata according to the respective outstanding principal amounts of the Revolving Loans then held by the Revolving Lenders.

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(d) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 12:00 noon, Tulsa time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding Office, in Dollars and in immediately available funds. The Administrative Agent shall distribute such payments to each relevant Lender promptly upon receipt in like funds as received, net of any amounts owing by such Lender pursuant to Section 9.2. If any payment hereunder (other than payments on the LIBOR Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a LIBOR Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

(e) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon, at a rate equal to the greater of (i) the Federal Funds Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest error. If such Lender’s share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to ABR Loans under the relevant Facility, on demand, from the Borrower. Nothing herein shall be deemed to limit the rights of the Administrative Agent or the Borrower against such Lender for failure to make such payment.

(f) Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

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(g) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.5, 2.17(e), 2.17(f), or 10.5, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision of this Agreement), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

2.18 Requirements of Law.

(a) If any Change in Law made subsequent to the date hereof:

(i) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement or any LIBOR Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes and Other Taxes covered by Section 2.19 and changes in the rate of tax on the overall net income of such Lender or changes in the rate of any branch taxes or franchise taxes (in both cases, imposed in lieu of net income taxes) imposed on such Lender or resulting from any of the circumstances described in the final proviso of Section 2.19(a));

(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the LIBOR Rate; or

(iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender, by an amount that such Lender deems to be material, of making, converting into, continuing or maintaining LIBOR Loans or, in the case of (i), any Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled and deliver a certificate contemplated by Section 2.18(c) with respect thereto.

(b) If any Lender shall have determined that the adoption of any Change in Law regarding capital adequacy or liquidity or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy or liquidity (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy or liquidity) by an amount deemed

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by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

(c) A certificate as to any additional amounts payable pursuant to this Section 2.18 submitted by any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section 2.18, the Borrower shall not be required to compensate a Lender pursuant to this Section 2.18 for any amounts incurred more than nine months prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such nine-month period shall be extended to include the period of such retroactive effect. The obligations of the Borrower pursuant to this Section 2.18 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

2.19 Taxes.

(a) All payments made by or on behalf of any Loan Party under this Agreement or any other Loan Document shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority (including any interest, additions to tax or penalties applicable thereto), excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) and, in each case imposed on the Administrative Agent or any Lender as a result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document); provided, that if any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld from any amounts payable to the Administrative Agent or any Lender as determined in good faith by the applicable withholding agent, (i) such amounts shall be paid to the relevant Governmental Authority in accordance with applicable law and (ii) the amounts so payable by the applicable Loan Party to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement as if such withholding or deduction had not been made, provided further, however, that the applicable Loan Party shall not be required to increase any such amounts payable to any Lender with respect to, or indemnify any Lender for, any Non-Excluded Taxes (w) that are attributable to such Lender’s failure to comply with the requirements of paragraph (e) or (f) of this Section 2.19; (x) that are United States withholding taxes attributable to such Lender designating a successor lending office at which it maintains its Loans other than at the request of the applicable Loan Party and except to the extent such Lender was entitled, at the time of the successor lending office is designated, to receive additional amounts from the applicable Loan Party with respect to such Non-Excluded Taxes pursuant to this

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paragraph; (y) that are United States withholding taxes imposed on amounts payable by the applicable Loan Party to such Lender at the time such Lender becomes a party to this Agreement, except to the extent that such Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from such Loan Party with respect to such Non-Excluded Taxes pursuant to this paragraph; or (z) that are U.S. withholding taxes imposed under FATCA.

(b) In addition, the applicable Loan Party shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Laws.

(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by a Loan Party, as promptly as possible thereafter the applicable Loan Party shall send to the Administrative Agent for its own account or for the account of the relevant Lender, as the case may be, a certified copy of an official receipt received by such Loan Party (or if an official receipt is not available, such other documentation as shall be reasonably satisfactory to the Administrative Agent) showing payment thereof. Each Loan Party shall indemnify the Administrative Agent and each Lender, within 10 days after demand therefor, for (i) the full amount of any Non-Excluded Taxes or Other Taxes (including Non-Excluded Taxes or Other Taxes imposed or attributable to amounts payable under this Section 2.19) paid by the Administrative Agent or such Lender and any penalties, interests and reasonable expenses arising therefrom or with respect thereto, and (ii) any incremental taxes, interest, penalties or reasonable expenses that may become payable by the Administrative Agent or any Lender as a result of any failure of the Borrower to properly remit to the Administrative Agent the required receipts or other required documentary evidence, whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally imposed by the relevant Government Authority. A certificate as to the amount of such payment or liability delivered to the Loan Party by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d) Each Lender shall indemnify the Administrative Agent for the full amount of any taxes, levies, imposts, duties, charges, fees, deductions, withholdings or similar charges imposed by any Governmental Authority that are attributable to such Lender and that are payable or paid by the Administrative Agent (but only to the extent that the Loan Parties have not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), together with all interest, penalties, reasonable costs and expenses arising therefrom or with respect thereto, as determined by the Administrative Agent in good faith. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.

(i) Each Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”), on or before the date such Lender (or Transferee) becomes a party to this Agreement, shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) (A) two original copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, as appropriate or any subsequent versions thereof or successors thereto, true, correct and complete in all material respects and duly executed by such Non-U.S. Lender claiming complete

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exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrower under this Agreement and the other Loan Documents, (B) in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of applicable Exhibit H and an applicable Form W-8, or any subsequent versions thereof or successors thereto, true, correct and complete in all material respects and duly executed by such Non-U.S. Lender, or (C) two copies of Form W-8IMY (together with the forms described above in clauses (A) or (B), as required).

(ii) Each Lender (or Transferee) that is a “U.S. Person” as defined in Section 7701(a)(30) of the Code, on or before the date such Lender (or Transferee) becomes a party to this Agreement (and from time to time thereafter as prescribed by applicable law or upon the request of the Borrower or the Administrative Agent), two original copies of U.S. Internal Revenue Service Form W-9, or any subsequent versions or successors thereto, true, correct and complete in all material respects and duly executed by such Lender, establishing that the Lender is not subject to U.S. backup withholding tax.

(iii) The forms described in (i) and (ii) above shall be delivered by the applicable Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation). In addition, each Lender shall deliver such forms from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent, and promptly upon the obsolescence or invalidity of any form previously delivered by such Lender. Each Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to such Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Lender shall not be required to deliver any form pursuant to this paragraph that such Lender is not legally able to deliver.

(iv) If a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (iv), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

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(e) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate; provided that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender’s judgment such completion, execution or submission would not materially prejudice the legal or commercial position of such Lender.

(f) If any Lender or the Administrative Agent receives a refund, in the sole discretion of such Lender or Administrative Agent (exercised in good faith), is allocable to any amount paid by a Loan Party pursuant to this Section 2.19, it shall promptly notify the applicable Loan Party of such refund and shall, within 15 days after receipt, repay such refund or credit (but only to the extent of indemnity payments made, or additional amounts paid, by such Loan Party) to such Loan Party net of all out-of-pocket expenses of such Lender or the Administrative Agent and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, however, that such Loan Party, upon the request of such Lender or the Administrative Agent, agrees to repay the amount paid over to such Loan Party to such Lender or the Administrative Agent (plus any penalties, interest or other charges imposed by the relevant Governmental Authority), within 15 days after receipt of written request by such Lender of the Administrative Agent in the event such Lender or the Administrative Agent is required to repay such refund. This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any information relating to its taxes which it deems confidential) to any Loan Party or any other Person.

(g) The agreements in this Section 2.19 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

2.20 Indemnity. The Borrower agrees to indemnify each Lender for, and to hold each Lender harmless from, any loss or expense that such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of LIBOR Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement; (b) default by the Borrower in making any prepayment of or conversion from LIBOR Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of LIBOR Loans or the conversion of LIBOR Loans to ABR Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid or converted, or not so borrowed, converted or continued, for the period from the date of such prepayment or conversion or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a

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comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section 2.20 submitted to the Borrower by any Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

2.21 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to a request by such Lender for the payment of any additional amounts pursuant to Sections 2.18, 2.19(a), 2.19(c) or 2.20 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section 2.21 shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.18 or 2.19(a).

2.22 Replacement of Lenders.

(a) The Borrower shall be permitted to replace any Lender that (i) requests reimbursement for amounts owing pursuant to Section 2.18, 2.19(a) or 2.19(c); (ii) is a Defaulting Lender; or (iii) does not consent to any proposed amendment, supplement, modification, consent or waiver of any provision of this Agreement or any other Loan Document that requires the consent of each of the Lenders or each of the Lenders affected thereby (so long as the consent of the Required Lenders has been obtained), with a replacement financial institution; provided that (A) such replacement does not conflict with any Requirement of Law, (B) prior to any such replacement, such Lender shall have taken no action under Section 2.21 so as to fully eliminate the continued need for payment of amounts owing pursuant to Section 2.18 or 2.19(a), (C) the replacement financial institution shall purchase, at par, all Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (D) the Borrower shall be liable to such replaced Lender under Section 2.20 if any LIBOR Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (E) the replacement financial institution shall be approved by the Administrative Agent (which approval shall not be unreasonably withheld, conditioned or delayed and provided that, with respect to a replacement financial institution under the Term Facility, no consent of the Administrative Agent shall be needed if such replacement financial institution is a Lender, an Affiliate of a Lender or an Approved Fund), (F) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 12.5 (provided that the Borrower shall be obligated to pay the registration and processing fee referred to therein), (G) until such time as such replacement shall be consummated, the Borrower shall pay all additional amounts (if any) required pursuant to Section 2.18 or 2.19(a), as the case may be, and (H) any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

(b) With respect to a Lender that is a Defaulting Lender, the Borrower or the Administrative Agent may obtain a replacement Lender and execute an assignment on behalf of such Defaulting Lender at any time and without prior notice to such Defaulting Lender and cause all of its interest, rights, and obligations hereunder including all of its Loans and Commitments

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and other amounts at any time owing to it hereunder and the other Loan Documents to be sold and assigned at par. Upon any such assignment and payment and compliance with the other provisions of Section 12.5, such replaced Lender shall no longer constitute a “Lender” for purposes hereof; provided, any rights of such replaced Lender to the benefits of Sections 2.18, 2.19, 2.20 and 9.1 (to the extent not accounted for in the first paragraph of this Section 2.21) shall survive as to such replaced Lender.

2.23 Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender or be payable for the benefit of such Defaulting Lender pursuant to Section 2.8(a) and (b);

(b) the unpaid principal amount of the Term Loans and the Revolving Commitments (or if the Revolving Commitments have been terminated, the Revolving Loans and participations in Letters of Credit Liabilities and Swingline Loans) of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 12.1), provided that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender shall require the consent of such Defaulting Lender;

(c) if any Letter of Credit Exposure or Swingline Exposure exists at the time a Lender becomes a Defaulting Lender then:

(i) all or any part of the Letter of Credit Exposure and Swingline Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Revolving Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’ Revolving Credit Exposure plus such Defaulting Lender’s Letter of Credit Exposure and Swingline Exposure does not exceed the total of all non-Defaulting Lenders’ Revolving Commitments and (y) the conditions set forth in Section 7.2 are satisfied at such time; and

(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall, within one Business Day following notice by the Administrative Agent, (A) first, prepay such Swingline Exposure, and (B) second, cash collateralize such Defaulting Lender’s Letter of Credit Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.6(f) for so long as such Letter of Credit Exposure is outstanding;

(iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s Letter of Credit Exposure pursuant to this Section 2.23(c), the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.8(b) with respect to such Defaulting Lender’s Letter of Credit Exposure during the period such Defaulting Lender’s Letter of Credit Exposure is cash collateralized;

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(iv) if the Letter of Credit Exposure of the non-Defaulting Lenders is reallocated pursuant to this Section 2.23(c), then the fees payable to the Lenders pursuant to Section 2.8(a) and (b) shall be adjusted in accordance with such non-Defaulting Lenders’ Revolving Percentages; or

(v) if any Defaulting Lender’s Letter of Credit Exposure is neither cash collateralized nor reallocated pursuant to this Section 2.23(c), then, without prejudice to any rights or remedies of the LC Issuer or any Lender hereunder, all facility fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Commitment that was utilized by such Letter of Credit Exposure) and letter of credit fees payable under Section 2.8(b) with respect to such Defaulting Lender’s Letter of Credit Exposure shall be payable to the LC Issuer until such Letter of Credit Exposure is cash collateralized and/or reallocated;

(d) so long as any Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the LC Issuer shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Revolving Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.23(c), and participating interests in any such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.23(c)(i) (and Defaulting Lenders shall not participate therein); and

(e) any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender) shall, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in a segregated account and, subject to any applicable Requirements of Law, be applied at such time or times as may be determined by the Administrative Agent (i) first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second, to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent, (iii) third, if so determined by the Administrative Agent and the Borrower, held in such account as cash collateral for future funding obligations of the Defaulting Lender in respect of any Loans under this Agreement and (iv) fourth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction.

2.24 Increase Option.

(a) At any time and from time to time after the Closing Date, the Borrower may request an increase in the Total Revolving Commitments, provided that (i) each requested increase in the Total Revolving Commitments shall be in the minimum amount of $20,000,000 (and in multiples of $5,000,000 in excess thereof), (ii) not more than two requests may be made prior to the Maturity Date, and (iii) in no event may the Total Revolving Commitments be increased to an amount greater than $130,000,000. If the Borrower desires an increase in the Total Revolving Commitments, it shall first deliver a written request (“Request for Commitment Increase”) to the Administrative Agent and each of the Lenders specifying the amount of the

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proposed increase in the Total Revolving Commitments and the proposed effective date of such increase and requesting that the Lenders severally increase their respective Revolving Commitments. Upon the Borrower’s delivery of any Request for Commitment Increase, each of the Lenders will have the right, but not the obligation, to increase its Revolving Commitment in accordance with its Revolving Percentage of the requested increase in the Total Revolving Commitments. Each of the Lenders shall notify the Borrower and the Administrative Agent of its determination within ten days after receipt of the Request for Commitment Increase. If one or more of the Lenders elects not to increase its Revolving Commitment (or to increase its Revolving Commitment by an amount less than its Revolving Percentage of the requested increase in the total Revolving Commitments), the Borrower may request that the other Lenders increase their Revolving Commitments by the amount of the shortfall or seek to obtain Revolving Commitments from other financial institutions to become additional Lenders under this Agreement (subject to the consent of the Administrative Agent, but without the consent of any other Lenders). The Borrower shall notify the Administrative Agent of any financial institution that shall have agreed to become an additional Lender party to this Agreement (a “New Lender”) in connection with a Request for Commitment Increase and the amount of its proposed Revolving Commitment, and the Administrative Agent shall then have a period of five Business Days in which to consent or withhold consent to the admission of the proposed New Lender. If the Borrower is unable within 30 days after delivering any Request for Commitment Increase to obtain approval from the Lenders to increase their Revolving Commitments and/or to secure Revolving Commitments from New Lenders for the full amount of the requested increase in the total Revolving Commitments, the Request for Commitment Increase shall become effective to the extent of the amount of the increased or new Revolving Commitments actually obtained, even if such amount is less than the minimum amount of a requested increase specified in clause (i) of the proviso to the first sentence of this Section 2.24(a). Nothing contained herein shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Revolving Commitment at any time, and no Lender shall be obligated to agree to any increase in its Revolving Commitment.

(b) If one or more Lenders (including any New Lenders approved by the Administrative Agent) have agreed to increase their respective Revolving Commitments as contemplated in Section 2.24, the Administrative Agent shall notify the Borrower, the Lenders and any New Lenders of the effective date (“Increase Effective Date”) proposed by the Borrower for the increase in the total Revolving Commitments and the Revolving Commitments which will be in effect for each of the applicable Lenders and any New Lenders as of the Increase Effective Date.

(c) Any increase in the Total Revolving Commitments shall be subject to the satisfaction of the following conditions precedent at or as of the Increase Effective Date: (i) no Default or Event of Default shall have occurred and then be continuing; (ii) all representations and warranties contained in this Agreement shall be true and correct in all material respects as though made on such date; (iii) each Lender that shall have agreed to provide an increase in its Revolving Commitment shall have confirmed such increase to the Borrower and the Administrative Agent in writing; (iv) each New Lender shall have executed and delivered such documents as the Administrative Agent shall have reasonably required in order for it to subscribe to the terms and conditions of this Agreement and the other Loan Documents and agree to be bound by the terms and provisions hereof and thereof or as the Administrative Agent shall have

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reasonably requested in connection with such increase; (v) the Borrower shall have executed a replacement Revolving Note to each Lender that shall have agreed to provide an increase in its Revolving Commitment and a new Revolving Note to each New Lender, (vi) the Borrower shall have executed and delivered, or caused to be executed and delivered, such amendments or supplements to the Collateral Documents and other Loan Documents (as applicable) as may be required by law or reasonably requested by the Administrative Agent in order to reflect that the obligations secured thereby include all Obligations arising under the Revolving Commitments (as so increased) and to continue in favor of the Administrative Agent a perfected Lien on the Collateral described therein as security for the prompt payment and performance of such obligations, (vii) a secretary or assistant secretary (or equivalent officer) of the Borrower shall have provided to the Administrative Agent a certified copy of the resolutions adopted by the managers or directors of the Borrower authorizing such increase in the Total Revolving Commitments; (viii) the outstanding Revolving Loans shall have been reallocated ratably among the Lenders (including the New Lenders) after giving effect to such increase; and (ix) all legal matters incident to such increase and the admission of any New Lenders under this Agreement shall be reasonably satisfactory to the Administrative Agent and its counsel. The Borrower hereby agrees to compensate each Lender, as and to the extent provided in Section 2.20 of this Agreement, for all losses, expenses and liabilities incurred by such Lender in connection with the reallocation of any outstanding LIBOR Loans. Upon delivery of the documents contemplated by clause (iv) of the first sentence of this paragraph, each New Lender shall become for all purposes a Lender party to this Agreement and all other Loan Documents and shall have all the rights and obligations of a Lender under this Agreement and all other Loan Documents, to the same extent as if it were an original party thereto. No increase in the Total Revolving Commitments shall become effective unless and until each of the foregoing conditions precedent has been satisfied.

2.25 Repayment of Loans; Evidence of Debt.

(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(b) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(c) The entries made in the accounts maintained pursuant to paragraph (a) or (b) of this Section 2.25 shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(d) Any Lender may request that the Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a Term Note, Revolving Note or Swingline Note (as applicable) payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns).

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement and to make the Loans and other credit extensions hereunder, the Loan Parties hereby jointly and severally represent and warrant to the Administrative Agent and each Lender that:

3.1 Financial Condition. The audited consolidated balance sheets of the Borrower as at December 31, 2011, December 31, 2012 and December 31, 2013, and the related consolidated statements of income and of cash flows for the fiscal years ended on such dates, reported on by and accompanied by an unqualified report from Grant Thornton LLP, present fairly in all material respects the consolidated financial condition of the Borrower as at such date, and the consolidated results of its operations and its consolidated cash flows for the respective fiscal years then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein). Neither the Borrower nor any of its Subsidiaries has, as of the Closing Date, any material Guarantee Obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including any Swap Obligations, that are not reflected in the most recent financial statements referred to in this Section 3.1 (or which are subsequently delivered to Lender pursuant to Section 4.1) and that are required to be reflected under GAAP.

3.2 No Change. Since December 31, 2013, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

3.3 Existence; Compliance with Law. Each Group Member (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the requisite power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign company and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification except to the extent that the failure to so qualify could not reasonably be expected to have a Material Adverse Effect, and (d) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

3.4 Power; Authorization; Enforceable Obligations. Each Loan Party has the requisite limited liability company or other corporate power and authority, and the legal right, to enter into, execute, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to obtain extensions of credit hereunder. Each Loan Party has taken all necessary organizational action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the Loans and credit extensions on the terms and conditions of this Agreement. No consent or authorization of,

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filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the Loans and credit extensions hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the Loan Documents, except (i) consents, authorizations, filings and notices that have been obtained or made and are in full force and effect, (ii) consents, authorizations, filings and notices contemplated by the Collateral Documents, (iii) consents, authorizations, filings and notices which customarily are required in connection with the exercise of remedies in respect of the Collateral, (iv) those consents, authorizations, filings and notices the failure of which to obtain, take, give or make could not be reasonably expected to have a Material Adverse Effect and (v) the filings referred to in Section 3.18. Each Loan Document has been duly executed and delivered on behalf of each Loan Party party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

3.5 No Legal Bar. The execution, delivery and performance of this Agreement and the other Loan Documents, the borrowings hereunder and the use of the proceeds thereof will not violate any Requirement of Law or any Contractual Obligation of any Loan Party and will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than the Liens created by the Collateral Documents).

3.6 Litigation. Except as set forth on Schedule 3.6, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of any Loan Party, threatened in writing against any Group Member or against any of its respective Properties or revenues (a) with respect to any of the Loan Documents, or (b) that, if adversely determined, could reasonably be expected to have a Material Adverse Effect.

3.7 No Default. No Default or Event of Default has occurred and is continuing.

3.8 Ownership of Property; Liens. Each Group Member has title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in or other right to use, all its other property necessary for the conduct of its business as currently conducted, except for defects in the foregoing that do not materially interfere with its ability to conduct its business as currently conducted or to utilize such properties and assets for their intended purposes, except where the failure to have such title or interest could not have a Material Adverse Effect, and none of such property is subject to any Lien except as permitted by Section 5.2.

3.9 Intellectual Property. Each Group Member owns, or is licensed to use, all material Intellectual Property necessary for the conduct of its business as currently conducted. No material claim has been asserted and is pending by any Person challenging any Intellectual Property owned by any Group Member, nor does any Loan Party know of any valid basis for any such claim except for such claims that in the aggregate could not reasonably be expected to have a Material Adverse Effect. The conduct of the business by each Group Member does not infringe

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the rights of any Person in any material respect, and each Group Member’s Intellectual Property is not being infringed by any Person, except, in each case, for such infringements (if any) that in the aggregate could not reasonably be expected to have a Material Adverse Effect.

3.10 Taxes. Each Group Member has filed or caused to be filed all federal, state and other material tax returns (with material referring to the Group Members taken as a whole) that are required to be filed (subject to any applicable extensions) and has paid all material taxes shown to be due and payable on said returns or on any assessments made against it or any of its Property and all other material taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the Borrower or applicable Subsidiary). To the knowledge of each Loan Party, no claim is being asserted, with respect to any such tax, fee or other charge except any such taxes, fees or charges, the payment of which, or the failure to pay, could not have a Material Adverse Effect.

3.11 Federal Regulations. No part of the proceeds of any Loans, and no other extensions of credit hereunder, will be used (a) for “buying” or “carrying” any “margin stock” within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect for any purpose that violates the provisions of the Regulations of the FRB or (b) for any purpose that violates the provisions of the Regulations of the FRB. If reasonably requested by any Lender or the Administrative Agent and appropriate under the circumstances, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

3.12 Labor Matters. Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (a) there are no strikes or other labor disputes against the Borrower or any of its Subsidiaries or, to the knowledge of any Loan Party, threatened; (b) hours worked by and payment made to employees of each Group Member have not been in violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing with such matters; and (c) all payments due from any Group Member on account of employee health and welfare insurance have been paid or accrued as a liability on the books of the relevant Group Member.

3.13 ERISA. Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (a) no Reportable Event nor any failure by any Single Employer Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Single Employer Plan, whether or not waived in accordance with Section 412(c) of the Code or Section 302(c) of ERISA, has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Single Employer Plan; (b) each Plan maintained by any Group Member has complied in all respects with the applicable provisions of ERISA and the Code; (c) no termination of a Single Employer Plan has occurred with respect to which the liability remains unsatisfied, and no Lien in favor of the PBGC has arisen, during such five-year period; (d) the present value of all accrued benefits under each Single Employer Plan did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made,

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exceed the value of the assets of such Single Employer Plan allocable to such accrued benefits (determined in both cases using the assumptions promulgated under Section 430 of the Code and the Treasury Regulations promulgated thereunder) and there has been no determination that any Single Employer Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA); (e) neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in any liability under Section 4201 of ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to any liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made; (f) neither the Borrower nor any Commonly Controlled Entity has received any notice of a determination that a Multiemployer Plan is in Reorganization, Insolvent or in “endangered” or “critical” status (within the meaning of Sections 431 or 432 of the Code or Sections 304 or 305 of ERISA); and (g) with respect to each Foreign Plan, there has been no failure (i) to make or, if applicable, accrue in accordance with normal accounting practices, any employer or employee contributions required by applicable law or by the terms of such Foreign Plan; (ii) to register or loss of good standing with applicable regulatory authorities of any such Foreign Plan required to be registered; or (iii) of any Foreign Plan to comply with any material provisions of applicable law and regulations or with the material terms of such Foreign Plan.

3.14 Investment Company Act; Other Regulations. No Loan Party is an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

3.15 Subsidiaries. Except as disclosed to the Administrative Agent by the Borrower in writing from time to time after the Closing Date, Schedule 3.15 sets forth the name and jurisdiction of incorporation of each Subsidiary and, as to each such Subsidiary, (i) the percentage of each class of Equity Interests owned by any Loan Party and (ii) whether such Subsidiary is Excluded Foreign Subsidiary.

3.16 Environmental Matters. Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect:

(a) to the knowledge of the applicable Loan Parties, the facilities and Properties owned, leased or operated by any Loan Party do not contain, and to the knowledge of the Loan Parties, have not previously contained, any conditions of contamination by any Materials of Environmental Concern in amounts or concentrations or under circumstances that constitute or constituted a violation of, or could reasonably be expected to give rise to liability under, any Environmental Law;

(b) no Loan Party has received or is aware of any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws with regard to any of the Properties or the business operated by any Loan Party, nor does any Loan Party have knowledge or reason to believe that any such notice will be received or is being threatened in writing;

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(c) Materials of Environmental Concern have not been transported or disposed of from the Properties of the Loan Parties in violation of, or in a manner or to a location that could reasonably be expected to give rise to liability under, any Environmental Law, nor have any Materials of Environmental Concern been generated, treated, stored or disposed of at, on or under any of such Properties in violation of, or in a manner that could reasonably be expected to give rise to liability under, any applicable Environmental Law;

(d) no judicial proceeding or governmental or administrative action is pending or, to the knowledge of any Loan Party, threatened in writing, under any Environmental Law to which any Loan Party is or will be named as a party with respect to its Properties or its business, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to its Properties or business;

(e) to the knowledge of the Loan Parties, there has been no release or threat of release of Materials of Environmental Concern at or from the Properties, or arising from or related to the operations of any Group Member in connection with its Properties or otherwise in connection with its business, in violation of or in amounts or in a manner that could reasonably be expected to give rise to liability under Environmental Laws;

(f) the Properties of the Group Members and all operations at their respective Properties are in compliance, and have in the last five years been in compliance, with all applicable Environmental Laws, and to the knowledge of the Loan Parties, there is no contamination at, under or about the Properties of any Group Member or violation of any Environmental Law with respect to its Properties or business; and

(g) no Loan Party has assumed any material liability of any other Person under any Environmental Laws.

3.17 Accuracy of Information. The statements and information contained in this Agreement, any other Loan Document, or any other document, certificate or statement furnished in writing by or on behalf of any Loan Party to the Administrative Agent or the Lenders, or any of them, for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, when taken as a whole, did not contain as of the date such statement, information, document or certificate was so furnished, any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained herein or therein taken as a whole not materially misleading in light of the circumstances under which they were made; provided, that the forecasts, the projections and pro forma financial information contained in the materials referenced above and any document, certificate or statement based upon such forecasts, projections and information are based upon good faith estimates and assumptions believed by management of the Borrower to be reasonable at the time made, it being recognized by the Lenders that (a) such financial information as it relates to future events is not to be viewed as fact, (b) such forecast and projections are subject to uncertainties and contingencies, (c) no assurance can be given that any forecast or projection will be realized and (d) actual results during the period or periods covered by such financial information may differ from the projected results set forth therein and such differences may be material.

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3.18 Collateral Documents.

(a) The Security Agreement is effective to create in favor of the Administrative Agent, for the benefit of the Lenders, a legal, valid and enforceable security interest in the Collateral described therein and proceeds thereof. In the case of the Pledged Equity Interests described in the Security Agreement, when stock certificates (if any) representing any such Pledged Equity Interests are delivered to the Administrative Agent (together with a properly completed and signed stock power or endorsement), and in the case of the other Collateral described in the Security Agreement, when financing statements and other filings specified on Schedule 3.18 (except as disclosed to the Administrative Agent by the Borrower in writing from time to time after the Closing Date) in appropriate form are filed in the offices specified on Schedule 3.18 (except as disclosed to the Administrative Agent by the Borrower in writing from time to time after the Closing Date), the Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof (to the extent such Lien and security interest can be perfected by such filings), as security for the Obligations (as defined in the Security Agreement), in each case prior and superior in right to any other Person (except, in the case of Collateral other than Pledged Equity Interests in certificated form, Liens permitted by Section 5.2).

(b) As of the Closing Date, there is no parcel of owned real property located in the United States and held by any Group Member that has a value, in the reasonable opinion of the Borrower, in excess of $500,000.

3.19 Solvency. As of the Closing Date, the Group Members, taken as a whole, immediately after giving effect to the incurrence of all Indebtedness and obligations being incurred in connection herewith, are Solvent.

3.20 Anti-Terrorism Laws.

(a) No Loan Party nor, to the knowledge of any of the Loan Parties, any of its Affiliates is in violation of any laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the USA PATRIOT Act;

(b) The Loan Parties and, to the knowledge of any Loan Party, any of its brokers or other agents acting in any capacity in connection with the Loans have conducted their business in compliance with Anti-Corruption Laws and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws;

(c) No Loan Party or, to the knowledge of any of the Loan Parties, any of their Affiliates or their Affiliates or their respective brokers or other agents acting or benefiting in any capacity in connection with the Loans is any of the following:

(i) a Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

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(ii) a Person or entity owned or controlled by, or acting for or on behalf of, any Person or entity that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(iii) a Person or entity with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

(iv) a Person or entity that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order;

(v) a Designated Person;

(vi) a Person that is owned or controlled by a Designated Person;

(vii) located, organized or resident in a Sanctioned Country.

(d) No Loan Party or, to the knowledge of any Loan Party, any of its brokers or other agents acting in any capacity in connection with the Loans (i) has directly or indirectly engaged in, or is now directly or indirectly engaged in, any dealings or transactions (x) with any Designated Person, (y) in any Sanctioned Country, or (z) otherwise in violation of Sanctions, (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order, or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

ARTICLE IV

AFFIRMATIVE COVENANTS

The Loan Parties hereby jointly and severally agree that, so long as the Commitments remain in effect or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder, each of the Loan Parties shall and shall cause each of its Subsidiaries to:

4.1 Financial Statements. Furnish to the Administrative Agent (with sufficient copies for each Lender):

(a)(i) prior to the successful completion of the IPO, within 120 days after the end of each fiscal year of the Borrower (commencing with the fiscal year ending December 31, 2014), a copy of the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures for the previous year, reported on without a “going concern” or like qualification, exception or note, or qualification arising out of the scope of the audit, by Grant Thornton LLP or other independent certified public accountants of nationally recognized standing, or (ii) if the IPO has been completed, within 90 days after the end of each fiscal year of the Borrower, a copy of the consolidated and consolidating balance sheet of PubCo and the Group Members as at the end of such Fiscal Year, and the related consolidated and consolidating statements of income or operations, members’ equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous Fiscal Year, which consolidated financial

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statements shall contain a footnote setting forth (y) for the Group Members a balance sheet as at the end of such Fiscal Year and the related statements of income or operations, members’ equity and cash flows for such Fiscal Year and (z) a reconciliation of the consolidated balance sheet and statements of income or operations, members’ equity and cash flows to the balance sheet and statements described in clause (y), all in reasonable detail and prepared in accordance with GAAP, and, in the case of the consolidated statements, audited by and accompanied by a report and opinion of Grant Thornton LLP or other independent certified public accountants of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any qualification or exception, and, in the case of the consolidating statements and the statements described in clauses (x), (y) and (z) above, certified by a Responsible Officer of Borrower as fairly stated when considered in relation to the consolidated financial statements of PubCo and the Group Members; and

(b) within 45 days after the end of each of the first three quarterly periods of each fiscal year of the Borrower (commencing with the fiscal quarter ending June 30, 2014), the unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to the absence of footnotes and normal year-end audit adjustments).

All such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP (except that financial statements delivered under clause (b) above, shall be subject to normal year-end audit reclassifications and adjustments and shall not have notes) applied (except as approved by such accountants or officer, as the case may be, and disclosed in reasonable detail therein) consistently throughout the periods reflected therein and with prior periods.

4.2 Certificates; Other Information. Furnish to the Administrative Agent (with sufficient copies for each Lender):

(a) concurrently with the delivery of any financial statements pursuant to Section 4.1(a) or (b), a Compliance Certificate of a Responsible Officer stating that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate, and containing all information and calculations necessary for determining compliance with the Financial Covenants as of the last day of the fiscal quarter or fiscal year of the Borrower, as the case may be;

(b) concurrently with the delivery of any financial statements pursuant to Section 4.1(b), to the extent not previously disclosed to the Administrative Agent, (1) a description of any change in the jurisdiction of organization of any Loan Party, (2) a list of any material registered Intellectual Property acquired by any Loan Party and (3) a description of any Person that has become a Group Member, in each case since the date of the most recent Compliance Certificate delivered pursuant to Section 4.2(a) (or, in the case of the first such Compliance Certificate so delivered, since the Closing Date);

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(c) as soon as available, and in any event no later than 60 days after the end of each fiscal year of the Borrower, a detailed consolidated budget for the following fiscal year (including a projected consolidated balance sheet of the Borrower and its Subsidiaries as of the end of the following fiscal year, the related consolidated statements of projected cash flow and projected income and a description of the underlying assumptions applicable thereto) (collectively, the “Projections”);

(d) within 45 days after the end of each fiscal quarter of the Borrower, a narrative discussion and analysis of the financial condition and results of operations of the Borrower and its Subsidiaries for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, as compared to the portion of the Projections covering such periods and to the comparable periods of the previous year;

(e) within five days after the same are sent, copies of all financial statements and reports that the Borrower or PubCo may make to or file with the SEC, provided that this obligation shall be satisfied to the extent such financial statements and/or reports are available on the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system;

(f) promptly, such additional financial and other information relating to the business, financial or corporate affairs of the Borrower and its consolidated Subsidiaries, or compliance with the terms of the Loan Documents, as any Lender may from time to time reasonably request; and

(g) promptly following receipt thereof, copies of (i) any documents described in Section 101(f), 101(k) or 101(l) of ERISA that any Group Member or any ERISA Affiliate may request with respect to any Single Employer Plan or Multiemployer Plan, as applicable; provided, that if the relevant Group Members or ERISA Affiliates have not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plans, then, upon reasonable request of the Administrative Agent, such Group Member or the ERISA Affiliate shall promptly make a request for such documents or notices from such administrator or sponsor and the Borrower shall provide copies of such documents and notices to the Administrative Agent promptly after receipt thereof.

4.3 Notices. Promptly upon acquiring knowledge thereof, give notice to the Administrative Agent (which shall notify each Lender thereof) of:

(a) the occurrence of any Default or Event of Default;

(b) any litigation, investigation or proceeding that may exist at any time between any Group Member and any Governmental Authority, that in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect;

(c) any litigation or proceeding affecting any Group Member (i) in which the amount involved is $1,000,000 or more and not covered by insurance, (ii) in which injunctive or similar relief is sought and which would reasonably be expected to have a Material Adverse Effect or (iii) which relates to any Loan Document;

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(d) the following events if any such event would reasonably be expected to have a Material Adverse Effect: (i) the occurrence of any Reportable Event with respect to any Single Employer Plan, a failure to make any required contribution to a Plan, any determination that any Single Employer Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA), the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or any determination that a Multiemployer Plan is in endangered or critical status (within the meaning of Section 432 of the Code or Section 305 of ERISA), or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from any Single Employer Plan or Multiemployer Plan, or the termination, Reorganization or Insolvency of any Multiemployer Plan or determination that any such Multiemployer Plan is in “endangered” or “critical” status (within the meaning of Sections 431 or 432 of the Code or Sections 304 or 305 of ERISA), or (iii) with respect to any Foreign Plan, (A) the failure to make or, if applicable, accrue in accordance with normal accounting practices, any employer or employer contributions required by applicable law or by the terms of such Foreign Plan; (B) the failure to register or loss of good standing with applicable regulatory authorities of any such Foreign Plan required to be registered; or (C) the failure of any Foreign Plan to comply with any material provisions of applicable law and regulations or with the material terms of such Foreign Plan; and

(e) any development or event that has had or would reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to Section 4.3(a) shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the relevant Group Member proposes to take with respect thereto.

4.4 Payment of Tax and Government Liabilities. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations for the payment of taxes or other material charges of any Governmental Authority, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of the relevant Group Member, and timely file (subject to any applicable extensions) all material tax returns required to be filed by it.

4.5 Maintenance of Existence; Compliance.

(a)(i) Preserve, renew and keep in full force and effect its organizational existence except as otherwise permitted by Section 5.4 and (ii) take all commercially reasonable action to maintain all material rights, privileges and franchises necessary in the normal conduct of its business, except as otherwise permitted by Section 5.4; provided, however, that nothing contained in this Section 4.5 shall be deemed to prohibit any Group Member from reorganizing or changing its entity form.

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(b) Comply with all Contractual Obligations except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) Comply with all Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

4.6 Maintenance of Property; Insurance.

(a) Keep all Property used or useful and necessary in its business in good working order and condition, ordinary wear and tear excepted.

(b) Maintain in full force and effect (i) casualty insurance on all real and personal property included in the Collateral on an “all-risks” basis (including the perils of flood) covering the repair and replacement cost of all such Property, (ii) insurance coverage for business interruption and public liability insurance (including products/completed operations liability coverage), in each case of the kinds customarily carried or maintained by Persons of established reputation engaged in similar businesses and in amounts and with deductibles acceptable to the Administrative Agent as of the Closing Date, and (iii) upon thirty (30) days’ written notice from Administrative Agent, such other insurance coverage in such amounts and with respect to such risks as the Administrative Agent may reasonably request. Notwithstanding the requirements of the immediately preceding sentence, Lender acknowledges and agrees that it has reviewed Borrower’s existing insurance coverage and determined that such coverage is in compliance with the requirements of this Section 4.6. All such insurance shall be provided by financially sound and reputable insurance companies not Affiliates of the Borrower and having a minimum A.M. Best rating of A, size category VII. On or prior to the Closing Date, and at all times thereafter, the Borrower will cause the Administrative Agent to be named as an additional insured, assignee and loss payee (which shall include, as applicable, identification as mortgagee), as applicable, on each insurance policy required to be maintained pursuant to this Section 4.6(b) pursuant to endorsements in form and content reasonably acceptable to the Administrative Agent. The Borrower will deliver to the Administrative Agent (i) on or before the Closing Date, a certificate from the Borrower’s insurance broker dated such date showing the amount of coverage as of such date, and that such policies will include effective waivers (whether under the terms of any such policy or otherwise) by the insurer of all claims for insurance premiums against all loss payees and additional insureds and all rights of subrogation against all loss payees and additional insureds, and to the extent that such insurance company is willing to do so, that if all or any part of such policy is canceled, terminated or expires, the insurer will forthwith give notice thereof to each additional insured, assignee and loss payee and that no cancellation, reduction in amount or material change in coverage thereof shall be effective until at least 30 days after receipt by each additional insured, assignee and loss payee of written notice thereof, (ii) on an annual basis, and upon the request of the Administrative Agent from time to time full information as to the insurance carried, (iii) within five days of receipt of notice from any insurer, a copy of any notice of cancellation, nonrenewal or material change in coverage from that existing on the date of this Agreement, and (iv) immediately, notice of any cancellation or nonrenewal of coverage by the Borrower. In the event the Borrower fails to provide the Administrative Agent with evidence of the insurance coverage required by this Agreement, the Administrative Agent may purchase insurance at the Borrower’s expense to protect the Administrative Agent’s interest in the

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Collateral. The coverage purchased by the Administrative Agent may, but need not, protect the interests of the Loan Parties. The Borrower may later cancel any insurance purchased by the Administrative Agent, but only after providing the Administrative Agent with evidence that the Borrower or other applicable Loan Party has obtained insurance as required by this Agreement. If the Administrative Agent purchases insurance for the Collateral, to the fullest extent provided by law, the Borrower will be responsible for the costs of that insurance, including interest and other charges imposed by the Administrative Agent in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to the Obligations. The Borrower acknowledges that the costs of insurance purchased by the Administrative Agent may be more than the cost of insurance that the Borrower would be able to obtain on its own. All written communications, documents, certificates of insurance or other material relating to insurance sent to Administrative Agent shall be delivered to the following address, with a copy thereof also delivered to Administrative Agent pursuant to the notice provisions contained in Section 12.2:

BOKF, NA

Attn: Credit Services – Insurance Monitoring

P.O. Box 271

Tulsa, OK 74101

4.7 Inspection of Property; Books and Records; Discussions.

(a) Keep proper books of records and account with full, true and correct entries in all material respects in conformity with GAAP.

(b) Permit representatives of the Administrative Agent or any Lender (when accompanying the Administrative Agent) to visit and inspect any of its properties and examine and make abstracts from any of its books and records at any reasonable time upon reasonable notice and as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of the Borrower and its Subsidiaries with officers and employees of the Borrower and its Subsidiaries and with their independent certified public accountants, provided that (i) the Borrower and its Subsidiaries shall not be required to pay the expenses of more than one visit and inspection during any fiscal year unless an Event of Default has occurred and is continuing, (ii) each Lender shall at all times coordinate with the Administrative Agent the frequency and timing of any such visits and inspections so as to reasonably minimize the burden imposed on the Borrower and its Subsidiaries, and (iii) a representative of the Borrower shall be given the opportunity to be present for any communication with the independent certified public accountants.

4.8 Environmental Laws.

(a) Comply in all material respects with, and undertake commercially reasonable efforts to ensure compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws except for such noncompliance which in the aggregate could not reasonably be expected to have a Material Adverse Effect.

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(b) Conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws and promptly comply in all material respects with all lawful written orders and directives of all Governmental Authorities regarding Environmental Laws except for such noncompliance which in the aggregate could not reasonably be expected to have a Material Adverse Effect.

4.9 Additional Collateral.

(a) With respect to any property acquired after the Closing Date by any Loan Party (other than (x) any property described in paragraph (b), (c) or (d) below, (y) any leased real property or any personal property excluded from the grant of the security interest granted under the Security Agreement and (z) any property subject to a Lien expressly permitted by Section 5.2(f)) as to which the Administrative Agent, for the benefit of the Lenders, does not have a perfected Lien, promptly (i) execute and deliver to the Administrative Agent such amendments to the Security Agreement or such other documents as the Administrative Agent reasonably deems necessary to grant to the Administrative Agent, for the benefit of the Lenders, a security interest in such property and (ii) take all actions reasonably necessary to grant to the Administrative Agent, for the benefit of the Lenders, a perfected first priority security interest in such Property, including the filing of UCC financing statements in such jurisdictions as may be required by the Security Agreement or by law or as may be reasonably requested by the Administrative Agent.

(b) With respect to any fee interest in any real property having a value (together with improvements thereof) of at least $500,000 acquired after the Closing Date by any Loan Party, or owned by any new Subsidiary that becomes a Loan Party as provided in clause (c) below after the Closing Date (other than any such real property subject to a Lien expressly permitted by Section 5.2(f)), promptly (i) execute and deliver a first priority Mortgage, in favor of the Administrative Agent, for the benefit of the Lenders, covering such real property, (ii) if requested by the Administrative Agent, provide the Lenders with (x) title and extended coverage insurance covering such real property in an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Administrative Agent) as well as a current ALTA survey thereof, together with a surveyor’s certificate and (y) any consents or estoppels reasonably deemed necessary by the Administrative Agent in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the Administrative Agent and (iii) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent and (iv) deliver to the Administrative Agent a completed “Life-of-Loan” Federal Emergency Management Agency Standard Flood Hazard Determination with respect to the such real property (together with a notice about special floor hazard area status and floor disaster assistance duly executed by the Borrower and each Loan Party relating thereto) and if such real property is located in a special flood hazard area, evidence of flood insurance in form and amount reasonably satisfactory to the Administrative Agent.

(c) With respect to any new Subsidiary (other than an Excluded Foreign Subsidiary) created or acquired after the Closing Date by any Loan Party, within 30 days after such creation or acquisition (or such longer period as the Administrative Agent may provide in its sole

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discretion) (i) execute and deliver to the Administrative Agent such amendments to the Security Agreement as the Administrative Agent reasonably deems necessary to grant to the Administrative Agent, for the benefit of the Lenders, a perfected security interest in the Equity Interests of such new Subsidiary that is owned by any Loan Party, (ii) deliver to the Administrative Agent the certificates representing such Equity Interests, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Loan Party, (iii) cause such new Subsidiary (A) to become a party to this Agreement and the Security Agreement, (B) to take such actions reasonably necessary to grant to the Administrative Agent for the benefit of the Lenders a perfected first priority security interest (except as to Liens permitted by Section 5.2) in the Collateral described in the Security Agreement with respect to such new Subsidiary, including, if applicable, the filing of UCC financing statements in such jurisdictions as may be required by the Security Agreement or by law or as may be requested by the Administrative Agent and (C) to deliver to the Administrative Agent a closing certificate (with insertions and attachments as required in Section 7.1(g)) of such Subsidiary, with appropriate insertions and attachments, and (iv) if requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

(d) With respect to any first-tier Excluded Foreign Subsidiary created or acquired after the Closing Date by any Loan Party, within 45 days after such creation or acquisition (or such longer period as the Administrative Agent may provide in its sole discretion) (i) execute and deliver to the Administrative Agent such amendments to the Security Agreement (or a separate Collateral Document) as the Administrative Agent reasonably deems necessary to grant to the Administrative Agent, for the benefit of the Lenders, a perfected first priority security interest in the Equity Interests of such new Subsidiary that is owned by any such Loan Party (provided that in no event shall more than 66% of the total outstanding voting Equity Interests of any such new Subsidiary be required to be so pledged), (ii) deliver to the Administrative Agent the certificates representing such Equity Interests, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the relevant Loan Party, and take such other action as may be reasonably necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect the Administrative Agent’s security interest therein, and (iii) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.

4.10 Use of Proceeds. Use the proceeds of the Term Loans and Revolving Loans made on the Closing Date solely for the purposes of (i) refinancing existing Funded Debt, (ii) funding the Closing Date Distribution, and (iii) payment of fees and expenses incurred in connection with the consummation of the Transaction, and use the proceeds of Revolving Loans made after the Closing Date solely to finance working capital, Capital Expenditures, Permitted Acquisitions and for other general corporate purposes.

4.11 Deposit Accounts. Maintain all of its primary deposit accounts with the Administrative Agent; provided, however, that the Borrower shall have a reasonable period of time, not to exceed 30 days, in which to close all primary deposit accounts maintained with any depository institutions other than the Administrative Agent, except that the Borrower shall be permitted to continue the existing operating account (or any successor account) maintained with HSBC Bank USA, National Association, and utilized in connection with the operations of the Borrower’s Foreign Subsidiaries.

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4.12 Anti-Corruption Laws. (a) Conduct its business in compliance in all material respects with Anti-Corruption Laws; (b) maintain policies and procedures designed to promote and achieve compliance in all material respects with Anti-Corruption Laws; and (c) have appropriate controls and safeguards in place reasonably designed to prevent any Loans from being used in a way that would violate Section 5.15.

ARTICLE V

NEGATIVE COVENANTS

Until the Commitments have been terminated and the Obligations have been paid in full, the Loan Parties jointly and severally covenant and agree that the Loan Parties shall not, and shall not permit any of their Subsidiaries to:

5.1 Indebtedness. Create, issue, incur, assume, become liable in respect of or suffer to exist any Indebtedness, except:

(a) Indebtedness of any Loan Party pursuant to any Loan Document, including any additional Indebtedness resulting from an increase in the Total Revolving Commitments pursuant to Section 2.24;

(b) Indebtedness of the Borrower to any Subsidiary Guarantor and of any Subsidiary Guarantor to the Borrower or any other Subsidiary Guarantor;

(c)(i) Guarantee Obligations incurred by the Borrower or any Subsidiary Guarantor of obligations of the Borrower or any other Subsidiary Guarantor and (ii) Guarantee Obligations incurred by a Subsidiary that is not a Subsidiary Guarantor of obligations of the Borrower or any other Subsidiary;

(d) Indebtedness outstanding on the date hereof and listed on Schedule 5.1 and any refinancings, refundings, renewals or extensions thereof (without shortening the maturity thereof or increasing the principal amount thereof except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder);

(e) Indebtedness owed to any Person providing worker’s compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such Person;

(f) Indebtedness of the Borrower and its Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds, completion guarantees, bankers’ acceptances and similar obligations and trade-related letters of credit, in each case provided in the ordinary course of business and not in connection with Indebtedness for money borrowed, including without limitation those incurred to secure health, safety and environmental obligations in the ordinary course of business;

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(g) Indebtedness incurred by Foreign Subsidiaries in an aggregate principal amount outstanding not to exceed $10,000,000 at any one time, and guarantees of such Indebtedness;

(h) Indebtedness assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any refinancings, refundings, renewals or extensions thereof (without shortening the maturity thereof or increasing the principal amount thereof except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder);

(i) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 5.2(f) in an aggregate principal amount not to exceed $5,000,000 at any one time outstanding;

(j) Swap Agreements entered into in the ordinary course of business for non-speculative hedging purposes and not as financing;

(k) Indebtedness in respect of netting services, overdraft protection and similar arrangements, including Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;

(l) to the extent it constitutes Indebtedness, Indebtedness incurred by the Borrower or any of its Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price, sharing of tax benefits (whether under the Tax Receivables Agreement or otherwise) or similar obligations, or from guaranties or letters of credit, surety bonds or performance bonds securing the performance of the Borrower or any such Subsidiary pursuant to such agreements, in connection with Permitted Acquisitions or Dispositions permitted by Section 5.4;

(m) Indebtedness incurred in connection with the financing of insurance premiums in an amount not to exceed the annual premiums in respect thereof at any one time outstanding;

(n) other Indebtedness of the Borrower or the Subsidiaries in an aggregate principal amount not exceeding $5,000,000 at any time outstanding; and

(o) Investments in the form of Indebtedness permitted by Section 5.6.

5.2 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except:

(a) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, suppliers’ or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith by appropriate proceedings;

(b) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation;

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(c) deposits to secure the performance of bids, trade, proposals, contracts (other than for borrowed money), leases, statutory obligations, indemnity, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(d) easements, licenses, rights-of-way, survey exceptions, zoning or other restrictions and other similar encumbrances incurred in the ordinary course of business or other minor irregularities in title (including leasehold title) that do not in any case materially detract from the value of the property subject thereto and do not materially interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

(e) Liens in existence on the date hereof listed on Schedule 5.2 and any renewals or extensions thereof, provided that no such Lien is spread to cover any additional property after the Closing Date and that the amount of obligations secured thereby is not increased except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such renewal or extension and by an amount equal to any existing commitments unutilized thereunder;

(f) Liens securing Indebtedness of the Borrower or any Subsidiary incurred pursuant to Section 5.1(i) to finance the acquisition, construction or improvement of fixed or capital assets, provided that (i) such Liens shall be created substantially simultaneously with the acquisition, construction or improvement of such fixed or capital assets or within 90 days thereof and (ii) such Liens do not at any time encumber any Property other than the fixed or capital assets financed by such Indebtedness;

(g) Liens created pursuant to the Collateral Documents;

(h) Liens existing on assets acquired in connection with any Permitted Acquisition; provided that such Liens were not incurred in connection with, or in contemplation of, such Permitted Acquisition and do not extend to any assets of the Borrower or any of its Subsidiaries other than the specific assets so acquired (and improvements thereon);

(i) Liens for taxes, assessments or governmental charges or claims or other like statutory Liens that do not secure Indebtedness for borrowed money and (i) that are not yet delinquent or (ii) that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that, unless the amount is immaterial, any adequate reserves or other appropriate provision as shall be required are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;

(j) Liens resulting from any judgments, awards or orders to the extent that such judgments, awards or orders do not cause or constitute an Event of Default;

(k) Liens in the form of licenses or sublicenses (including licenses or sublicenses of Intellectual Property), or leases or subleases granted or created by the Borrower or any of its Subsidiaries in the ordinary course of business;

(l) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

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(m) bankers’ Liens, including normal and customary rights of setoff, and similar Liens existing solely with respect to cash and Cash Equivalents and Investments permitted by Section 5.6 on deposit in one or more accounts maintained by the Borrower or any Subsidiary of the Borrower, in each case granted in the ordinary course of business in favor of the bank or banks or other depository institutions which such accounts are maintained, securing amounts owing to such bank with respect to cash management or other account arrangements, including those involving pooled accounts and netting arrangements, provided that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

(n) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(o) Liens on assets of Foreign Subsidiaries to secure Indebtedness permitted by Section 5.1(g);

(p) any interest or title of licensor or sublicensor of Intellectual Property not prohibited hereby;

(q) Liens on the property of a Person existing at the time such Person becomes a Subsidiary of a Loan Party; and

(r) any replacement, extension and renewal of any Lien permitted hereby, to the extent any such replacement, extension or renewal is not spread to cover any additional Property.

For the avoidance of doubt, any obligation imposed pursuant to Section 430(k) of the Code or 303(k) of ERISA shall not be a permitted Lien hereunder.

5.3 Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its property or business, or amend (or allow the amendment of any of its Organizational Documents in a manner adverse to the interests of the Lenders, except that:

(a) (i) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or surviving Person) or with or into any Subsidiary Guarantor (provided that the Subsidiary Guarantor shall be the continuing or surviving Person); and (ii) any Subsidiary of the Borrower that is not a Subsidiary Guarantor may be merged or consolidated with or into any other Subsidiary that is not a Subsidiary Guarantor;

(b) any Subsidiary of the Borrower may Dispose of any or all of its assets (i) to the Borrower or any Subsidiary Guarantor (upon voluntary liquidation or otherwise) or (ii) pursuant to a Disposition permitted by Section 5.5;

(c) any Investment expressly permitted by Section 5.6 may be structured as a merger, consolidation or amalgamation;

(d) any Subsidiary may dissolve, liquidate or wind up its affairs at any time provided that such dissolution, liquidation or winding up, as applicable, would not reasonably be expected to have a Material Adverse Effect and all of its assets and business are transferred to a Loan Party; or

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(e) any Subsidiary that is not a Subsidiary Guarantor may dissolve, liquidate, wind up its affairs and distribute its assets ratably to its shareholders, partners or members, as applicable (provided that in connection with the foregoing and to the extent such assets are distributed to a Loan Party, the Borrower will, and will cause each Subsidiary Guarantor to, take all actions necessary and reasonably requested by the Administrative Agent to perfect Liens on Collateral granted to the Administrative Agent pursuant to the Collateral Documents).

5.4 Disposition of Property. Dispose of any of its property, whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Equity Interests to any Person, except:

(a) the Disposition of obsolete or worn out property;

(b) the sale of inventory in the ordinary course of business;

(c) the sale or issuance of any Subsidiary’s Equity Interests to the Borrower or any Subsidiary Guarantor or the sale or issuance of Equity Interests of a Subsidiary that is not a Subsidiary Guarantor to any other Subsidiary that is not a Subsidiary Guarantor or the issuance of any qualifying shares;

(d) Disposition of property by any Foreign Subsidiary to another Foreign Subsidiary and Dispositions of property by any Subsidiary that is not a Guarantor to the Borrower or any other Subsidiary;

(e) leases, subleases, licenses and sublicenses of property (including Intellectual Property) in the ordinary course of business;

(f) the Wireharness Disposition;

(g) the Disposition of other properties or assets having a fair market value not to exceed $1,000,000 in the aggregate for any fiscal year of the Borrower;

(h) Dispositions, discounts or forgiveness of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business; and

(i) the abandonment or other Disposition of Intellectual Property that is, in the reasonable business judgment of the Borrower, no longer necessary for the conduct of the business of the Loan Parties taken as a whole.

For the avoidance of doubt, the issuance of Equity Interests by the Borrower shall not be deemed a Disposition of property or in any manner be prohibited by this Section 5.4.

5.5 Distributions. Declare, make or pay any Distribution (other than Distributions payable solely in Equity Interests of the Person making such Distribution, including any payment-in-kind distribution), either directly or indirectly, whether in cash or property or in obligations of any Group Member, except that:

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(a) any Subsidiary may make Distributions to the Borrower or any Subsidiary Guarantor and any Subsidiary that is not a Subsidiary Guarantor may make Distributions to the Borrower or any other Subsidiary that is not a Subsidiary Guarantor;

(b) the Borrower may make the Closing Date Distribution; and

(c) the Borrower may (i) make Distributions to PubCo to permit PubCo to pay, corporate overhead expenses incurred in the ordinary course of business (including expenses relating to insurance and professional fees), not to exceed $2,000,000 in any fiscal year, (ii) make Distributions to PubCo to permit PubCo to pay expenses relating to the IPO which, when added to the expenses permitted under the foregoing clause (i), do not exceed $5,000,000 in the year in which the IPO is completed, (iii) make Distributions to PubCo to permit PubCo to pay director fees and expenses, and (iv) for as long as the Borrower remains a partnership or “disregarded entity” for tax purposes, make Distributions in each year to the members of the Borrower on a quarterly basis by the 10th (or next succeeding Business Day) of each of March, June, September and December of each taxable year, or such other dates as may be appropriate in light of tax payment requirements, of an aggregate amount in cash equal to the excess, if any, of (A) the Consolidated Tax Liability with respect to such taxable year over (B) the amounts previously distributed pursuant to this Section 5.5(c) with respect to such taxable year; and

(d) in addition to the Distributions permitted by Section 5.5(c), the Borrower may make Distributions to its members or other equity holders so long as (i) no Default or Event of Default has occurred and is continuing at the time any Distribution is to be made or will result from the making of such Distribution, (ii) both before and after giving effect to any Distribution, the Borrower will remain in compliance with the Financial Covenants, and (iii) prior to making such Distribution, the Borrower notifies the Administrative Agent of the amount of the Distribution to be made and provides satisfactory evidence that the proposed Distribution will comply with this Section 5.5(d).

5.6 Investments and Acquisitions. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Equity Interests, bonds, notes, debentures or other debt securities of, or make any Acquisition of assets constituting a business unit of, make any other investment in, any Person (all of the foregoing, “Investments”), except:

(a) extensions of trade credit (including extensions in the nature of accounts receivable or notes receivable arising from the grant of trade credit) in the ordinary course of business and Investments received (i) in satisfaction or partial satisfaction thereof from financially troubled account debtors or (ii) in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(b) investments in cash or Cash Equivalents;

(c) Investments existing as of the Closing Date and set forth on Schedule 5.6;

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(d) Guarantee Obligations permitted by Section 5.1;

(e) loans and advances to employees, officers or directors of any Group Member in the ordinary course of business (including for travel, entertainment and relocation expenses) in an aggregate amount for the Borrower and all of its Subsidiaries not to exceed $1,000,000 at any one time outstanding;

(f) Investments in assets useful in the business of the Borrower and its Subsidiaries made by the Borrower or any of its Subsidiaries with the proceeds of any Reinvestment Deferred Amount;

(g) Investments in promissory notes received as consideration for Dispositions permitted by Section 5.4, provided that at least 50% of the fair market value of the assets that are the subject of each such Disposition shall have been received in cash;

(h) intercompany Investments by any Group Member in the Borrower or any Person that, in the case of an Investment in a Person other than the Borrower, prior to such Investment, such Person is a Subsidiary Guarantor or, after such Investment, such Person becomes a Subsidiary Guarantor pursuant to Section 4.9;

(i) Investments by any Subsidiary that is not a Loan Party in any other Subsidiary that is not a Loan Party;

(j) Investments in the form of Swap Agreements;

(k) Investments made after the Closing Date in Foreign Subsidiaries that are not and do not become Subsidiary Guarantors in an aggregate amount (valued at cost) not to exceed $10,000,000 during the term of this Agreement;

(l) Permitted Acquisitions; and

(m) in addition to Investments otherwise expressly permitted by this Section 5.6, other Investments by the Borrower or any of its Subsidiaries in an aggregate amount (valued at cost) not to exceed $5,000,000 during the term of this Agreement.

5.7 Optional Payments and Modifications of Certain Debt Instruments. (a) Make or offer to make any optional or voluntary prepayment, repurchase or redemption of or otherwise optionally or voluntarily defease or segregate funds with respect to any Subordinated Indebtedness or (b) amend, modify, waive or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms of any Subordinated Indebtedness (other than any such amendment, modification, waiver or other change that (i) would extend the maturity or reduce the amount of any payment of principal thereof or reduce the rate or extend any date for payment of interest thereon or would not otherwise be materially adverse to the Lenders and (ii) does not involve the payment of a consent fee).

5.8 Transactions with Affiliates. Enter into any transaction, including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than the Borrower or any Subsidiary

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Guarantor), except for (a) any transaction that (i) otherwise permitted under this Agreement, including Distributions permitted pursuant to Section 5.5, (ii) in the ordinary course of business of the relevant Group Member, and (iii) upon fair and reasonable terms no less favorable to the relevant Group Member than it would obtain in a comparable arm’s length transaction with a Person that is not an Affiliate, (b) any employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by any Group Member in the ordinary course of business and payments pursuant thereto, (c) payment of reasonable directors’ fees, (d) transactions pursuant to or contemplated by the Tax Receivables Agreement or any other agreement of, or any instrument entered into or issued by, the Borrower and its Subsidiaries as in effect on the date of this Agreement and disclosed in Schedule 5.8, or any amendment thereto or any replacement agreements so long as any such amendment or replacement agreement is not more disadvantageous to the holders in any material respect than the original agreement or instrument as in effect on the date hereof, (e) the issuance of Equity Interests of the Borrower to PubCo in connection with the IPO or thereafter, (f) the lease of real property from the Permitted Investors, and (g) customary compensation and other employee benefit plans, indemnification and reimbursement of expenses of employees, officers and directors.

5.9 Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by any Group Member of real or personal property that has been or is to be sold or transferred by such Group Member to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of such Loan Party.

5.10 Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day other than December 31 or change the Borrower’s method of determining fiscal quarters.

5.11 Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of any Loan Party to create, incur, assume or suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter acquired, to secure its obligations under the Loan Documents to which it is a party other than (a) this Agreement and the other Loan Documents; (b) any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby); (c) restrictions applicable to specific property to be sold pursuant to an executed agreement with respect to a permitted asset Disposition; (d) restrictions by reason of customary provisions restricting assignments, subletting or other transfers contained in leases, licenses and similar agreements entered into in the ordinary course of business (provided that such restrictions are limited to the property or assets secured by such Liens or the property or assets subject to such leases, licenses or similar agreements, as the case may be); (e) restrictions imposed by customary provisions in partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person; (f) any such agreement existing on the Closing Date; (g) any agreement in effect at the time any Person becomes a Subsidiary of the Borrower; provided that such agreement was not entered into in contemplation of such Person becoming a Subsidiary of the Borrower; and (h) customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary of the Borrower or assets of the Borrower or any of its Subsidiaries pending such sale.

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5.12 Clauses Restricting Subsidiary Distributions. Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary of the Borrower to (a) make Distributions in respect of any Equity Interests of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or advances to, or other Investments in, the Borrower or any other Subsidiary of the Borrower or (c) transfer any of its assets to the Borrower or any other Subsidiary of the Borrower, except for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Loan Documents, (ii) customary provisions restricting assignments, subletting or other transfers contained in leases, licenses, joint venture agreements and other agreements entered into in the ordinary course of business, (iii) any transfer of, agreement to transfer or option or right with respect to any property, assets or Equity Interests not otherwise prohibited under this Agreement, (iv) any instrument governing Indebtedness or Equity Interests of a Person acquired by the Borrower or any of its Subsidiaries as in effect at the time of such Acquisition (except to the extent such Indebtedness or Equity Interests was incurred or issued in connection with or in contemplation of such Acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness is permitted by Section 5.1 to be incurred, (v) any agreement for the Disposition of a Subsidiary permitted by this Agreement that restricts Distributions by such Subsidiary pending such Disposition, and (vi) provisions in agreements or instruments which prohibit the making of Distributions with respect to any class of Equity Interests of a Person other than on a pro rata basis.

5.13 Lines of Business. Enter into any business, either directly or through any Subsidiary, except for those businesses in which the Borrower and its Subsidiaries are engaged on the date of this Agreement or that are similar, complementary, or reasonably related or incidental thereto or are reasonable extensions thereof.

5.14 Anti-Terrorism Law. (a) Conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described in Section 3.20, (b) deal in, or otherwise engage in any transaction relating to, any property of interests in property blocked pursuant to the Executive Order of any other Anti-Terrorism Law or (c) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

5.15 Anti-Corruption Law. (a) Directly or indirectly use the proceeds of the Loans (i) for any purpose which would breach the U.K. Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions, (ii) to fund, finance or facilitate any activities, business or transaction of or with any Designated Person or in any Sanctioned Country, or otherwise in violation of Sanctions, as such Sanctions Lists or Sanctions are in effect from time to time, or (iii) in any other manner that will result in the violation of any applicable Sanctions by the Administrative Agent or any Lender and (b) use funds or assets

obtained directly or indirectly from transactions with or otherwise relating to (i) Designated Persons or (ii) any Sanctioned Country, to pay or repay any of the Obligations.

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5.16 Embargoed Person. At all times throughout the terms of the Loans, (a) none of the funds or assets of the Loan Parties that are used to repay the Loans shall constitute property of, or shall be beneficially owned directly or, to the knowledge of the Borrower, indirectly by, any Person subject to sanctions or trade restrictions under United States law (“Embargoed Person” or “Embargoed Persons”) that is identified on (i) the “List of Specially Designated Nationals and Blocked Persons” (the “SDN List”) maintained by OFAC, U.S. Department of Treasury, and/or to the knowledge of the Borrower, as of the date thereof, or any other similar list (“Other List”) maintained by OFAC pursuant to any authorizing statute including, but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Order or regulation promulgated thereunder, with the result that the investment in any of the Loan Parties (whether directly or indirectly) is prohibited by law, or the Loans made by the Lenders hereunder would be in violation of law, or (ii) the Executive Order, any related enabling legislation or any other similar Executive Orders (collectively, “Executive Orders”), and (b) no Embargoed Person shall have any direct interest, and to the knowledge of the Borrower, as of the Closing Date, indirect interest, of any nature whatsoever in any of the Loan Parties, with the result that the investment in any of the Loan Parties (whether directly or indirectly) is prohibited by law or the Loans are in violation of Law.

5.17 Anti-Money Laundering. At all times throughout the term of the Loans, to the knowledge of the Borrower, none of the funds of any of the Loan Parties that are used to repay the Loans shall be derived from any unlawful activity with the result that the investment in any of the Loan Parties (whether directly or indirectly), is prohibited by law or the Loans would be in violation of law.

ARTICLE VI

FINANCIAL COVENANTS.

Until the Commitments have been terminated and the Obligations have been paid in full, the Loan Parties jointly and severally covenant and agree that they will not:

6.1 Total Leverage Ratio. Permit the Total Leverage Ratio as at the last day of any period of four consecutive fiscal quarters of the Borrower, commencing with the period of four consecutive fiscal quarters ending June 30, 2014, to exceed 3.00 to one (3.00:1.00); provided that, if an IPO is not closed within one year following the Closing Date, then the maximum permitted Total Leverage Ratio as at the last day of any period of four consecutive fiscal quarters shall be reduced to 2.50 to one (2.50:1.00) commencing with the period ending September 30, 2015, and provided, further, that if an IPO is closed at any time after one year from the Closing Date, then the maximum permitted Total Leverage Ratio shall be re-established at 3.0 to one (3.00:1.00) effective as the last day of the fiscal quarter during which the IPO is closed.

6.2 Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge Coverage Ratio as at the last day of any period of four consecutive fiscal quarters of the Borrower, commencing with the period of four consecutive fiscal quarters ending June 30, 2014, to be less than 1.10 to one (1.10:1.00).

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ARTICLE VII

CONDITIONS PRECEDENT

7.1 Conditions to Initial Loans. The agreements of each Lender to make Loans and extensions of credit hereunder is subject to the satisfaction, prior to or concurrently with the making of such Loan or other extension of credit on the Closing Date, of the following conditions precedent:

(a) The Administrative Agent (or its counsel) shall have received (i) this Agreement, executed and delivered by the Borrower, the initial Subsidiary Guarantors, and each Lender listed on Schedule 1.1, (ii) the Notes (to the extent requested by any Lender in accordance with Section 2.25(d)), executed and delivered by the Borrower, (iii) the Security Agreement, executed and delivered by the Borrower and each initial Subsidiary Guarantor, and (iv) an Acknowledgment and Consent in the form attached to the Security Agreement, executed delivered by each Issuer (as defined therein), if any that is not a Loan Party.

(b) Prior to or concurrently with the Closing Date, all amounts outstanding under, and all other amounts due in respect of all outstanding Funded Debt of the Borrower shall have been repaid in full and all Liens securing such Funded Debt shall have been terminated, or agreed to be terminated pursuant to pay-off letters, on terms and conditions reasonably satisfactory to the Administrative Agent.

(c) The Administrative Agent shall have received (i) audited consolidated financial statements of the Borrower and its consolidated Subsidiaries for the three most recent fiscal years ended prior to the Closing Date and (ii) income statement projections for the Borrower and its Subsidiaries through December 31, 2018.

(d) The Administrative Agent shall have received a certificate of the Vice President of Finance of the Borrower as to the satisfaction of the conditions set forth in this Section 7.1.

(e) The Administrative Agent shall have received the results of a recent Lien search with respect to each Loan Party in each relevant jurisdiction, and such search shall reveal no Liens on any of the Properties of the Loan Parties except for Liens permitted by Section 5.2 or discharged on or prior to the Closing Date pursuant to documentation reasonably satisfactory to the Administrative Agent.

(f) The Administrative Agent shall have received all fees required to be paid by the Borrower pursuant to the Fee Letter, and all expenses for which invoices have been presented (including the documented reasonable and out-of-pocket fees and expenses of legal counsel), on or before the Closing Date. All such amounts will be paid with proceeds of Loans made on the Closing Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Closing Date.

(g) The Administrative Agent shall have received (i) a certificate of the secretary or assistant secretary (or equivalent officer) each Loan Party, dated the Closing Date, certifying as

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to the Organizational Documents of such Loan Party and as to the adoption of resolutions by the managers or directors of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which it is a party, and (ii) a good standing certificate for each Loan Party from its jurisdiction of organization.

(h) The Administrative Agent shall have received, on behalf of itself and the Lenders, an opinion of Fulbright & Jaworski, LLP, counsel for the Loan Parties, covering the matters set forth on Exhibit J.

(i) Each document (including any UCC financing statement) required by the Collateral Documents or under Law or reasonably requested by the Administrative Agent (other than control agreements which are to be entered into in accordance with Section 4.12) to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 5.2), shall be in proper form for filing, registration or recordation.

(j) The Administrative Agent shall have received a solvency certificate dated as of the Closing Date from the Vice President of Finance of the Borrower in form reasonably satisfactory to the Administrative Agent.

(k) The Administrative Agent shall have received insurance certificates satisfying the requirements of Section 4.6(b).

For the purpose of determining compliance with the conditions specified in this Section 7.1, each Lender that has signed this Agreement shall be deemed to have accepted, and to be satisfied with, each document or other matter required under this Section 7.1 unless the Administrative Agent shall have received written notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

7.2 Conditions to Each Credit Extension. The agreement of each Lender to make any Loan requested to be made by it on any Borrowing Date (including its initial Loans), and of the LC Issuer to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions precedent:

(a) Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such Borrowing Date or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except for representations and warranties made as of a specific earlier date that shall be true and correct in all material respects as of such earlier date.

(b) At the time of and immediately after giving effect to such Loan or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of Default shall have occurred and be continuing, and no event or circumstance shall have occurred or be existing which has had or could reasonably be expected to have a Material Adverse Effect.

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Each Loan and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

ARTICLE VIII

EVENTS OF DEFAULT

8.1 Events of Default. The occurrence of any of the following events or the existence of any of the following circumstances shall constitute an “Event of Default”:

(a) the Borrower shall fail to pay any principal of or interest or fee on or in respect of any Loan when due in accordance with the terms hereof; or the Borrower shall fail to pay any other amount payable hereunder or under any other Loan Document within 10 days after any such other amount becomes due in accordance with the terms hereof;

(b) any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made;

(c) any Loan Party shall default in the observance or performance of any covenant contained in Sections 4.1, 4.2, 4.4, 4.5, 4.6, 4.8, 4.9 or 4.11 (or the corresponding provision of any other Loan Document), and such default shall continue unremedied for a period of 30 days after written notice to the Borrower from the Administrative Agent or the Required Lenders;

(d) any Loan Party shall default in the observance or performance of any agreement or covenant contained in Sections 4.3, 4.7, 4.10 or 4.12 or in Articles V or VI (or the corresponding provision of any other Loan Document);

(e) any Group Member shall (i) default in making any payment of any principal of any Indebtedness (including any Guarantee Obligation, but excluding the Loans and guaranties thereof and excluding Indebtedness under Swap Agreements) beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable with any applicable grace period having expired; or (iv) there occurs under any Swap Agreement an Early Termination Date (as defined in such Swap Agreement) resulting from (A) any event of default under such Swap Agreement as to which any Group Member is the Defaulting Party (as defined in such Swap Agreement) or (B) any Termination Event (as defined in such Swap Agreement) under such Swap Agreement as to which any Group Member is an Affected Party (as defined in such Swap Agreement); provided, that an Event of Default under this clause (e) shall continue only so long as the applicable event or condition constituting such Event of Default is unremedied and is not waived or rescinded by the holders of such Indebtedness;

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(f) (i) any Group Member shall commence any case, proceeding or other action (A) under any existing or future Debtor Relief Law seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets; (ii) there shall be commenced against any Group Member any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed or undischarged for a period of 60 days; (iii) there shall be commenced against any Group Member any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; (iv) any Group Member shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; (v) any Group Member shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (vi) or any Group Member shall make a general assignment for the benefit of its creditors;

(g) (i) any Person shall engage in any non-exempt Prohibited Transaction involving any Plan; (ii) any failure to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any Group Member or any Commonly Controlled Entity; (iii) a determination shall be made that any Single Employer Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA); (iv) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is reasonably likely to result in the termination of such Plan for purposes of Title IV of ERISA; (v) any Single Employer Plan shall terminate for purposes of Title IV of ERISA; (vi) any Group Member or any Commonly Controlled Entity shall, or shall be reasonably likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or there shall be a determination that any Multiemployer Plan is, or is expected to be, in “endangered” or “critical” status (within the meaning of Sections 431 or 432 of the Code or Sections 304 or 305 of ERISA); (vii) with respect to any Foreign Plan, there shall occur (A) a failure to make or, if applicable, accrue in accordance with normal accounting practices, any employer or employee contributions required by applicable law or by the terms of such Foreign Plan, (B) a failure to register or loss of good standing with applicable regulatory authorities of any such Foreign Plan required to be registered; or (C) a failure of any Foreign Plan to comply with any material provisions of applicable law and regulations or with the material terms of such Foreign Plan; or (viii) any other similar event or condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (viii) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to have a Material Adverse Effect;

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(h) one or more judgments or decrees shall be entered against any Group Member involving in the aggregate a liability (not paid or fully covered by insurance (other than with respect to deductibles) as to which the relevant insurance company has been notified of such liability and has not challenged such coverage) of $1,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 45 days from the entry thereof;

(i) any of the Loan Documents shall cease, for any reason, to be in full force and effect (other than as a direct result of an action taken by the Administrative Agent or any Lender or their respective Affiliates or the failure of the Administrative Agent to take any action requested by a Loan Party in writing that is within the Administrative Agent’s control), or any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien created by any of the Collateral Documents shall cease to be enforceable and of the same effect and priority as purported to be created thereby, except to the extent that any such loss of perfection or priority results from the failure of the Administrative Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Collateral Documents or to file UCC continuation statements and except as to Collateral consisting of real property to the extent that such losses are covered by a Lender’s title policy and such insurer has not denied coverage;

(j) the Guaranty shall cease, for any reason, to be in full force and effect or any Loan Party or any Affiliate of any Loan Party shall so assert, except with respect to the release of any Guarantor from its obligations permitted by this Agreement; or

(k) a Change of Control shall occur.

8.2 Termination of Commitments; Acceleration. Upon the occurrence of an Event of Default specified in clause (i) or (ii) of paragraph (f) of Section 8.1 with respect to the Borrower, automatically the Revolving Commitments shall immediately terminate and the outstanding Loans (with accrued interest thereon), Letter of Credit Liabilities (including contingent reimbursement obligations), and all other amounts owing under this Agreement and the other Loan Documents shall immediately become due and payable. Upon the occurrence of any other Event of Default and at any time thereafter during the continuation of such Event of Default, either or both of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower declare the Revolving Commitments to be terminated forthwith, whereupon the Revolving Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Loans (with accrued interest thereon), Letter of Credit Liabilities (including contingent reimbursement obligations), and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as may be expressly provided in Section 8.1, presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Borrower.

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ARTICLE IX

EXPENSES AND INDEMNITY.

9.1 Reimbursement of Certain Fees and Expenses.

(a) Whether or not the closing of the Transactions takes place, other than any failure to close due to a default of any Lender, the Loan Parties shall pay or reimburse the Administrative Agent for all out-of-pocket expenses reasonably incurred by the Administrative Agent in connection with the negotiation and preparation of this Agreement and the other Loan Documents and the consummation of the Transactions herein contemplated, including all reasonable fees and expenses of the Administrative Agent’s counsel, all recording and filing fees, recording costs, examinations of and certifications as to public records, and all other reasonable expenses of every kind resulting from or incident to the consummation of the Transactions. The Loan Parties will also pay or reimburse the Administrative Agent from time to time, within 30 days after a request made by the Administrative Agent, for all out-of-pocket expenses reasonably incurred by the Administrative Agent in connection with the administration of this Agreement or the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including all such out-of-pocket expenses reasonably incurred in connection with any workout, restructuring or negotiations in respect of the Loans. Such expenses will also include the reasonable fees and expenses of the Administrative Agent’s counsel incurred in connection with any amendment, modification, or supplement to this Agreement or the other Loan Documents or in connection with any waiver or consent which may be requested by the Loan Parties.

(b) Upon the occurrence of an Event of Default, the Loan Parties will from time to time, within 30 days after a request made by the Administrative Agent or any Lender, reimburse the Administrative Agent or such Lender for all amounts reasonably expended, advanced or incurred by the Administrative Agent or such Lender to satisfy any obligation of the Loan Parties under this Agreement or any other Loan Documents, or to collect upon the Notes or any of the Obligations, or to enforce the rights of Administrative Agent or such Lender under this Agreement and any other Loan Documents, or to protect the Collateral, which amounts will include all court costs, bonds, reasonable attorneys’ fees and expenses, reasonable fees of auditors and accountants, and investigation expenses reasonably incurred by the Administrative Agent in connection with any such matters, together with interest at the Default Rate on each such amount from the date the same is due and payable to the Administrative Agent or such Lender until the date it is repaid to the Administrative Agent or such Lender. All amounts advanced in connection herewith shall be secured by the Collateral.

9.2 Indemnity. The Loan Parties shall jointly and severally indemnify the Administrative Agent and each Lender and each of their respective Related Parties (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Loan Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument

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contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, the administration of this Agreement and the other Loan Documents, (ii) the Loans or the use or proposed use of the proceeds therefrom, (iii) the environmental condition of, or any release, spill, storage, use, transportation or disposal of any Materials of Environmental Concern on, at or from any Properties owned by the Borrower or any of its Subsidiaries, (iv) any activity carried on or undertaken by the Borrower or any of its Subsidiaries, or (v) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any of its Subsidiaries, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of any Indemnitee.

9.3 Waiver of Consequential and Punitive Damages. To the fullest extent permitted by applicable Law, the Loan Parties shall not assert, and each of the Loan Parties hereby waives, any claim against each Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, or the use of the proceeds of the Loans. To the fullest extent permitted by applicable Law, the Lenders shall not assert, and each of the Lenders hereby waives, any claim against each Loan Party, on any theory of liability, for exemplary or punitive damages arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated; provided that this sentence shall not in any manner limit the indemnity obligations of the Loan Parties under Section 9.2 with respect to claims asserted by third parties.

9.4 Survival. The agreements in this Article IX shall survive the resignation of the Administrative Agent, the replacement of any Lender, the release of any Loan Party from further liability for payment of the Loans and the repayment, satisfaction or discharge of all of the other Obligations.

ARTICLE X

THE ADMINISTRATIVE AGENT

10.1 Appointment and Authorization. Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to enter into each of the Loan Documents to which it is a party (other than this Agreement) on its behalf and to take such actions as the Administrative Agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with all such powers as are reasonably incidental thereto. Subject to the terms of Section 12.1 and to the terms of the other Loan Documents, the Administrative Agent is authorized and empowered to amend, modify, or waive any provisions of this Agreement or the other Loan Documents on behalf of the Lenders. The provisions of this Article X are solely for the benefit of the Administrative Agent and the Lenders, and no Loan Party shall have any rights as a third party beneficiary of any of the

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provisions hereof. In performing its functions and duties under this Agreement, the Administrative Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for any Borrower or any other Loan Party. The Administrative Agent may perform any of its duties hereunder, or under the Loan Documents, by or through its own agents or employees. The Administrative Agent shall have the same rights and powers under the Loan Documents as any other Lender and may exercise or refrain from exercising the same as though it were not the Administrative Agent, and the Administrative Agent and its Affiliates may lend money to, invest in and generally engage in any kind of business with each Loan Party or Affiliate of any Loan Party as if it were not the Administrative Agent hereunder.

10.2 Action by Administrative Agent. The duties of the Administrative Agent shall be mechanical and administrative in nature. The Administrative Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender. Nothing in this Agreement or any of the Loan Documents is intended to or shall be construed to impose upon the Administrative Agent any obligations in respect of this Agreement or any of the Loan Documents except as expressly set forth herein or therein.

10.3 Consultation with Experts. The Administrative Agent may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.

10.4 Liability of Administrative Agent. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to any Lender for any action taken or not taken by it in connection with the Loan Documents, except that the Administrative Agent shall be liable with respect to its specific duties set forth hereunder, but only to the extent of its own gross negligence or willful misconduct in the discharge thereof as determined by a final non-appealable judgment of a court of competent jurisdiction. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements specified in any Loan Document; (iii) the satisfaction of any condition specified in any Loan Document; (iv) the validity, effectiveness, sufficiency or genuineness of any Loan Document, any Lien purported to be created or perfected thereby or any other instrument or writing furnished in connection therewith; (v) the existence or non-existence of any Default or Event of Default; or (vi) the financial condition of any Loan Party. The Administrative Agent shall not incur any liability by acting in reliance upon any notice, consent, certificate, statement, or other writing (which may be a bank wire, telex, facsimile or electronic transmission or similar writing) believed by it to be genuine or to be signed by the proper party or parties. The Administrative Agent shall not be liable for any apportionment or distribution of payments made by it in good faith and if any such apportionment or distribution is subsequently determined to have been made in error the sole recourse of any Lender to whom payment was due but not made, shall be to recover from the other Lenders any payment in excess of the amount to which they are determined to be entitled (and such other Lenders hereby agree to return to such Administrative Agent any such erroneous payments received by them).

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10.5 Indemnification. Each Lender shall, in accordance with its Aggregate Exposure Percentage, indemnify the Administrative Agent (to the extent not reimbursed by the Borrower) upon demand against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from the Administrative Agent’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction) that the Administrative Agent may suffer or incur in connection with the Loan Documents or any action taken or omitted by the Administrative Agent hereunder or thereunder. If any indemnity furnished to the Administrative Agent for any purpose shall, in the opinion of the Administrative Agent, be insufficient or become impaired, the Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against even if so directed by the Required Lenders until such additional indemnity is furnished.

10.6 Right to Request and Act on Instructions. The Administrative Agent may at any time request instructions from the Lenders with respect to any actions or approvals which by the terms of this Agreement or of any of the Loan Documents the Administrative Agent is permitted or desires to take or to grant, and if such instructions are promptly requested, the Administrative Agent shall be absolutely entitled to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for refraining from any action or withholding any approval under any of the Loan Documents until it shall have received such instructions from the Required Lenders or all or such other portion of the Lenders as shall be prescribed by this Agreement. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of the Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) and, notwithstanding the instructions of the Required Lenders (or all or such other portion of the Lenders), the Administrative Agent shall have no obligation to take any action if it believes, in good faith, that such action would violate applicable Law or expose the Administrative Agent to any liability for which it has not received satisfactory indemnification in accordance with the provisions of Section 10.5.

10.7 Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Loan Documents.

10.8 Collateral Matters. The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, to release any Lien granted to or held by the Administrative Agent under any Collateral Document (i) upon payment in full of all Obligations, or (ii) constituting assets or property sold or disposed of as part of or in connection with any Transfer permitted under this Agreement or the other Loan Documents (it being understood and agreed that the Administrative Agent may conclusively rely without further inquiry on a certificate of any Responsible Officer as to the sale or other disposition of property being made in full compliance with the provisions of the Loan Documents). Upon request by the Administrative Agent at any time, the Lenders will confirm the Administrative Agent’s authority to release particular types or items of personal property included in the Collateral pursuant to this Section 10.8.

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10.9 Agency for Perfection. The Administrative Agent and each Lender hereby appoint each other Lender as agent for the purpose of perfecting the Administrative Agent’s security interest in assets which, in accordance with the UCC can be perfected by possession or control. Should any Lender (other than the Administrative Agent) obtain possession or control of any such assets, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor, shall deliver such assets to the Administrative Agent or in accordance with the Administrative Agent’s instructions or transfer control to the Administrative Agent in accordance with the Administrative Agent’s instructions. Each Lender agrees that it will not have any right individually to enforce or seek to enforce any Collateral Document or to realize upon any Collateral unless instructed to do so by the Administrative Agent, it being understood and agreed that such rights and remedies may be exercised only by the Administrative Agent.

10.10 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or any Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default.” The Administrative Agent will notify each Lender of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders (or all or such other portion of the Lenders as shall be prescribed by this Agreement) in accordance with the terms hereof. Unless and until the Administrative Agent has received any such request, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interests of the Lenders.

10.11 Successor Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor Administrative Agent. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder and notice of such acceptance to the retiring Administrative Agent, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, the retiring Administrative Agent’s resignation shall become immediately effective and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder and under the other Loan Documents (if such resignation was not already effective and such duties and obligations not already discharged, as provided below in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders (but without any obligation) appoint a successor Administrative Agent. From and following the expiration of such 30-day period, the

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Administrative Agent shall have the exclusive right, upon one Business Day’s notice to the Borrower and the Lenders, to make its resignation effective immediately. From and following the effectiveness of such notice, (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. The provisions of this Agreement shall continue in effect for the benefit of any retiring Administrative Agent and its sub-agents after the effectiveness of its resignation hereunder and under the other Loan Documents in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting or was continuing to act as Administrative Agent.

10.12 Right to Perform, Preserve and Protect. If any Loan Party fails to perform any obligation hereunder or under any other Loan Document, the Administrative Agent itself may, but shall not be obligated to, cause such obligation to be performed at the Borrower’s expense. The Administrative Agent is further authorized by the Borrower and the Lenders to make expenditures from time to time which the Administrative Agent, in its reasonable business judgment, deems necessary or desirable to (i) preserve or protect the business conducted by the Borrower and its Subsidiaries and the Collateral and/or (ii) enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations. The Borrower hereby agrees to reimburse the Administrative Agent on demand for any and all costs, liabilities and obligations incurred by the Administrative Agent pursuant to this Section 10.12. Each Lender hereby agrees to indemnify the Administrative Agent upon demand for any and all costs, liabilities and obligations incurred by the Administrative Agent pursuant to this Section 10.12.

10.13 Additional Titled Agents. Except for rights and powers, if any, expressly reserved under this Agreement to any bookrunner, arranger or to any titled agent named on the cover page of this Agreement, other than the Administrative Agent (collectively, the “Additional Titled Agents”), and except for obligations, liabilities, duties and responsibilities, if any, expressly assumed under this Agreement by any Additional Titled Agent, no Additional Titled Agent, in such capacity, has any rights, powers, liabilities, duties or responsibilities hereunder or under any of the other Loan Documents. Without limiting the foregoing, no Additional Titled Agent shall have nor be deemed to have a fiduciary relationship with any Lender. At any time that any Lender serving as an Additional Titled Agent shall have transferred to any other Person (other than any Affiliates) all of its interests in the Loans, such Administrative Agent shall be deemed to have concurrently resigned as such Additional Titled Agent.

ARTICLE XI

SUBSIDIARY GUARANTY

11.1 Obligations Guaranteed. Each Subsidiary Guarantor hereby, joint and severally, irrevocably and unconditionally guarantees the prompt payment at maturity of the Obligations. Reference in this Article XI to “this Guaranty” means the provisions of this Article XI.

11.2 Nature of Guaranty. This Guaranty is an absolute, irrevocable, completed and continuing guaranty of payment and not a guaranty of collection, and no notice of the

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Obligations or any extension of credit already or hereafter contracted by or extended to the Borrower need be given to any Subsidiary Guarantor. This guaranty may not be revoked by any Subsidiary Guarantor and shall continue to be effective with respect to the Obligations arising or created after any attempted revocation by such Subsidiary Guarantor and shall remain in full force and effect until the Obligations are paid in full and the Commitments are terminated, notwithstanding that from time to time prior thereto no Obligations may be outstanding. The Borrower and the Lenders may modify, alter, rearrange, extend for any period and/or renew from time to time, the Obligations, and the Lenders may waive any Default or Events of Default without notice to any Subsidiary Guarantor and in such event each Subsidiary Guarantor will remain fully bound hereunder on the Obligations. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of the Obligations is rescinded or must otherwise be returned by any of the Lenders upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as though such payment had not been made. This Guaranty may be enforced by the Administrative Agent, the Lenders and any subsequent holder of any of the Obligations and shall not be discharged by the assignment or negotiation of all or part of the Obligations. Each Subsidiary Guarantor hereby expressly waives presentment, demand, notice of non-payment, protest and notice of protest and dishonor, notice of Default or Event of Default, and also notice of acceptance of this guaranty, acceptance on the part of the Lenders being conclusively presumed by the Lenders’ request for this Guaranty and the Subsidiary Guarantors’ being party to this Agreement.

11.3 Administrative Agent’s Rights. Each Subsidiary Guarantor authorizes the Administrative Agent, without notice or demand and without affecting any Subsidiary Guarantor’s liability hereunder, to take and hold security for the payment of its obligations under this Guaranty and/or the Obligations, and exchange, enforce, waive and release any such security; and to apply such security and direct the order or manner of sale thereof as the Administrative Agent in its discretion may determine, and to obtain a guaranty of the Obligations from any one or more Persons and at any time or times to enforce, waive, rearrange, modify, limit or release any of such other Persons from their obligations under such guaranties.

11.4 Waivers.

(a) Each Subsidiary Guarantor waives any right to require the Administrative Agent or any of the Lenders to (i) proceed against the Borrower or any other person liable on the Obligations, (ii) enforce any of their rights against any other guarantor of the Obligations, (iii) proceed or enforce any of their rights against or exhaust any security given to secure the Obligations, (iv) have the Borrower joined with any Subsidiary Guarantor in any suit arising out of this Guaranty and/or the Obligations, or (v) pursue any other remedy in the Administrative Agent’s or the Lenders’ powers whatsoever. It is agreed between the Subsidiary Guarantors and the Administrative Agent and the Lenders that the foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Loan Documents and that, but for this Guaranty and such waivers, the Lenders would not extend or continue to extend credit under this Agreement. The Lenders shall not be required to mitigate damages or take any action to reduce, collect or enforce the Obligations. Each Subsidiary Guarantor waives any defense arising by reason of any disability, lack of corporate authority or power, or other defense of the Borrower or any other guarantor of the Obligations, and shall remain liable hereon regardless of whether the Borrower or any other guarantor be found not liable thereon for any reason. Whether and when

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to exercise any of the remedies of the Lenders under any of the Loan Documents shall be in the sole and absolute discretion of the Administrative Agent, and no delay by the Administrative Agent in enforcing any remedy, including delay in conducting a foreclosure sale, shall be a defense to any Subsidiary Guarantor’s liability under this Guaranty.

(b) In addition to the waivers contained in Section 11.4(a), the Subsidiary Guarantors waive, and agree that they shall not at any time insist upon, plead or in any manner whatsoever claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, marshaling of assets or redemption laws, or exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance by the Subsidiary Guarantors of their obligations under, or the enforcement by the Administrative Agent or the Lenders of, this Guaranty. The Subsidiary Guarantors hereby waive diligence, presentment and demand (whether for nonpayment or protest or of acceptance, maturity, extension of time, change in nature or form of the Obligations, acceptance of further security, release of further security, composition or agreement arrived at as to the amount of, or the terms of, the Obligations, notice of adverse change in the Borrower’s financial condition or any other fact which might materially increase the risk to the Subsidiary Guarantors) with respect to any of the Obligations or all other demands whatsoever and waive the benefit of all provisions of law which are or might be in conflict with the terms of this Guaranty. The Subsidiary Guarantors, jointly and severally, represent, warrant and agree that, as of the date of this Guaranty, their obligations under this Guaranty are not subject to any offsets or defenses of any kind against the Administrative Agent, the Lenders, the Borrower or any other Person that executes a Loan Document. The Subsidiary Guarantors further jointly and severally agree that their obligations under this Guaranty shall not be subject to any counterclaims, offsets or defenses of any kind which may arise in the future against the Administrative Agent, the Lenders, the Borrower or any other Person that executes a Loan Document.

(c) Until the Obligations have been paid in full, each Subsidiary Guarantor waives all rights of subrogation or reimbursement against the Borrower, whether arising by contract or operation of law (including, without limitation, any such right arising under any federal, state or other applicable Debtor Relief Laws) and waives any right to enforce any remedy which the Administrative Agent or the Lenders now have or may hereafter have against the Borrower, and waives any benefit or any right to participate in any security now or hereafter held by the Administrative Agent or any Lender.

11.5 Maturity of Obligations, Payment. Each Subsidiary Guarantor agrees that if the maturity of any of the Obligations is accelerated by bankruptcy or otherwise, such maturity shall also be deemed accelerated for the purpose of this Guaranty without demand or notice to any Subsidiary Guarantor. Each Subsidiary Guarantor will, forthwith upon notice from the Administrative Agent, jointly and severally pay to the Administrative Agent the amount due and unpaid by the Borrower and guaranteed hereby. The failure of the Administrative Agent to give this notice shall not in any way release any Subsidiary Guarantor hereunder.

11.6 Administrative Agent’s Expenses. If any Subsidiary Guarantor fails to pay the Obligations after notice from the Administrative Agent of the Borrower’s failure to pay any Obligations at maturity, and if the Administrative Agent obtains the services of an attorney for collection of amounts owing by any Guarantor hereunder, or obtaining advice of counsel in

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respect of any of their rights under this Guaranty, or if suit is filed to enforce this Guaranty, or if proceedings are had under any Debtor Relief Laws for the establishment or collection of any amount owing by any Subsidiary Guarantor hereunder, or if any amount owing by any Subsidiary Guarantor hereunder is collected through such proceedings, each Subsidiary Guarantor jointly and severally agrees to pay to the Administrative Agent the Administrative Agent’s reasonable attorneys’ fees.

11.7 Liability. It is expressly agreed that the liability of each Subsidiary Guarantor for the payment of the Obligations guaranteed hereby shall be primary and not secondary.

11.8 Events and Circumstances Not Reducing or Discharging any Subsidiary Guarantor’s Obligations. Each Subsidiary Guarantor hereby consents and agrees to each of the following to the fullest extent permitted by law, and agrees that each Subsidiary Guarantor’s obligations under this Guaranty shall not be released, diminished, impaired, reduced or adversely affected by any of the following, and waives any rights (including without limitation rights to notice) which each Subsidiary Guarantor might otherwise have as a result of or in connection with any of the following:

(a) Any renewal, extension, modification, increase, decrease, alteration or rearrangement of all or any part of the Obligations, or this Agreement or any instrument executed in connection therewith, or any contract or understanding between the Borrower and any of the Lenders, or any other Person, pertaining to the Obligations, or the waiver or consent by any Agent or the Lenders with respect to any of the provisions hereof or thereof, or any modification or termination of the terms of any intercreditor or subordination agreement pursuant to which claims of other creditors against any Subsidiary Guarantor or the Borrower are subordinated to the claims of the Lenders or pursuant to which the Obligations are subordinated to claims of other creditors;

(b) Any adjustment, indulgence, forbearance or compromise that might be granted or given by any of the Lenders to the Borrower or any Subsidiary Guarantor or any Person liable on the Obligations;

(c) The insolvency, bankruptcy, rearrangement, adjustment, composition, liquidation, disability, dissolution, death or lack of power of the Borrower or any other Subsidiary Guarantor or any other Person at any time liable for the payment of all or part of the Obligations; or any dissolution of the Borrower or any other Subsidiary Guarantor, or any sale, lease or transfer of any or all of the assets of the Borrower or any other Subsidiary Guarantor, or any changes in the shareholders, partners, or members of the Borrower or any other Subsidiary Guarantor; or any reorganization of the Borrower or any other Subsidiary Guarantor;

(d) The invalidity, illegality or unenforceability of all or any part of the Obligations, or any document or agreement executed in connection with the Obligations, for any reason whatsoever, including without limitation the fact that the Obligations, or any part thereof, exceed the amount permitted by law, the act of creating the Obligations or any part thereof is ultra vires, the officers or representatives executing the documents or otherwise creating the Obligations acted in excess of their authority, the Obligations violate applicable usury laws, the Borrower has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the

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Obligations wholly or partially uncollectible from the Borrower, the creation, performance or repayment of the Obligations (or the execution, delivery and performance of any document or instrument representing part of the Obligations or executed in connection with the Obligations, or given to secure the repayment of the Obligations) is illegal, uncollectible, legally impossible or unenforceable, or this Agreement or other documents or instruments pertaining to the Obligations have been forged or otherwise are irregular or not genuine or authentic;

(e) Any full or partial release of the liability of the Borrower on the Obligations or any part thereof, of any co-guarantors, or any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Obligations or any part thereof, it being recognized, acknowledged and agreed by any Subsidiary Guarantor that such Subsidiary Guarantor may be required to pay the Obligations in full without assistance or support of any other Person, and no Subsidiary Guarantor has been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other parties other than the Borrower will be liable to perform the Obligations, or the Lenders will look to other parties to perform the Obligations;

(f) The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Obligations;

(g) Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Obligations;

(h) The failure of the Administrative Agent, the Lenders or any other Person to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security;

(i) The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by each Subsidiary Guarantor that no Subsidiary Guarantor is entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Obligations;

(j) Any payment by the Borrower to the Administrative Agent or the Lenders is held to constitute a preference under any Debtor Relief Law, or for any reason the Lenders are required to refund such payment or pay such amount to the Borrower or any other Person; or

(k) Any other action taken or omitted to be taken with respect to this Agreement, the Obligations, or the security and collateral therefor, whether or not such action or omission prejudices any Subsidiary Guarantor or increases the likelihood that any Subsidiary Guarantor will be required to pay the Obligations pursuant to the terms hereof, it being the unambiguous and unequivocal intention of each Subsidiary Guarantor that each Subsidiary Guarantor shall be obligated to joint and severally pay the Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Obligations.

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11.9 Subordination of All Subsidiary Guarantor Claims.

(a) As used herein, the term “Subsidiary Guarantor Claims” shall mean all debts and liabilities of the Borrower or any Subsidiary of the Borrower to any Subsidiary Guarantor, whether such debts and liabilities now exist or are hereafter incurred or arise, or whether the obligation of the Borrower or such Subsidiary thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the person or persons in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by any Subsidiary Guarantor. The Subsidiary Guarantor Claims shall include without limitation all rights and claims of any Subsidiary Guarantor against the Borrower or any Subsidiary of the Borrower arising as a result of subrogation or otherwise as a result of such Subsidiary Guarantor’s payment of all or a portion of the Obligations. Until the Obligations shall be paid and satisfied in full and each Subsidiary Guarantor shall have performed all of its obligations hereunder, no Subsidiary Guarantor shall receive or collect, directly or indirectly, from the Borrower or any Subsidiary of the Borrower or any other party any amount upon the Subsidiary Guarantor Claims.

(b) The Borrower and each Subsidiary Guarantor hereby (i) authorizes the Administrative Agent and the Lenders to demand specific performance of the terms of this Section 11.9, whether or not the Borrower or any Subsidiary Guarantor shall have complied with any of the provisions hereof applicable to it, at any time when it shall have failed to comply with any provisions of this Section 11.9 which are applicable to it and (ii) irrevocably waives any defense based on the adequacy of a remedy at law, which might be asserted as a bar to such remedy of specific performance.

(c) Upon any distribution of assets of any Loan Party in any dissolution, winding up, liquidation or reorganization (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or otherwise):

(i) The Lenders shall first be entitled to receive payment in full in cash of the Obligations before the Borrower or any Subsidiary Guarantor is entitled to receive any payment on account of the Subsidiary Guarantor Claims.

(ii) Any payment or distribution of assets of any Loan Party of any kind or character, whether in cash, property or securities, to which the Borrower or any Subsidiary Guarantor would be entitled except for the provisions of this Section 11.9(c), shall be paid by the liquidating trustee or agent or other Person making such payment or distribution directly to the Lenders, to the extent necessary to make payment in full of all Obligations remaining unpaid after giving effect to any concurrent payment or distribution or provisions therefor to the Lenders.

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(d) No right of the Lenders or any other present or future holders of any Obligations to enforce the subordination provisions herein shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Loan Party or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Borrower or any Subsidiary Guarantor with the terms hereof, regardless of any knowledge thereof which any such holder may have or be otherwise charged with.

11.10 Claims in Bankruptcy. In the event of any proceedings under any Debtor Relief Laws involving the Borrower or any Subsidiary of the Borrower, as debtor, the Lenders shall have the right to prove their claim in any proceeding, so as to establish their rights hereunder and receive directly from the receiver, trustee or other court custodian, dividends and payments which would otherwise be payable upon Subsidiary Guarantor Claims. Each Subsidiary Guarantor hereby assigns such dividends and payments to the Lenders. Should the Administrative Agent or any Lender receive, for application upon the Obligations, any such dividend or payment which is otherwise payable to any Subsidiary Guarantor, and which, as between the Borrower or any Subsidiary of the Borrower and any Subsidiary Guarantor, shall constitute a credit upon the Subsidiary Guarantor Claims, then upon payment in full of the Obligations, such Subsidiary Guarantor shall become subrogated to the rights of the Lenders to the extent that such payments to the Lenders on the Subsidiary Guarantor Claims have contributed toward the liquidation of the Obligations, and such subrogation shall be with respect to that proportion of the Obligations which would have been unpaid if the Administrative Agent or a Lender had not received dividends or payments upon the Subsidiary Guarantor Claims.

11.11 Payments Held in Trust. In the event that notwithstanding Sections 11.9 and 11.10 above, any Subsidiary Guarantor should receive any funds, payments, claims or distributions which is prohibited by such Sections, such Subsidiary Guarantor agrees to hold in trust for the Lenders an amount equal to the amount of all funds, payments, claims or distributions so received, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims or distributions except to pay them promptly to the Administrative Agent, and each Subsidiary Guarantor covenants promptly to pay the same to the Administrative Agent.

11.12 Benefit of Guaranty. The provisions of this Guaranty are for the benefit of the Lenders, their successors, and their permitted transferees, endorsees and assigns. In the event all or any part of the Obligations are transferred, endorsed or assigned by the Lenders, as the case may be, to any Person or Persons in accordance with the terms of this Agreement, any reference to the “Lenders” herein, as the case may be, shall be deemed to refer equally to such Person or Persons.

11.13 Reinstatement. This Guaranty shall remain in full force and effect and continue to be effective in the event any petition is filed by or against the Borrower or any Subsidiary Guarantor for liquidation or reorganization, in the event that any of them becomes insolvent or makes an assignment for the benefit of creditors or in the event a receiver, trustee or similar Person is appointed for all or any significant part of any of their assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to Legal Requirements, rescinded or reduced in amount, or must otherwise be restored or returned by the Lenders, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

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11.14 Liens Subordinate. Each Subsidiary Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the Borrower’s or any Subsidiary of the Borrower’s assets securing payment of the Subsidiary Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon the Borrower’s or any Subsidiary of the Borrower’s assets securing payment of the Obligations, regardless of whether such encumbrances in favor of any Subsidiary Guarantor, the Administrative Agent or the Lenders presently exist or are hereafter created or attach.

11.15 Subsidiary Guarantors’ Enforcement Rights. Without the prior written consent of the Lenders, no Subsidiary Guarantor shall (a) exercise or enforce any creditor’s right it may have against the Borrower or any Subsidiary of the Borrower, or (b) foreclose, repossess, sequester or otherwise take steps or institute any action or proceeding (judicial or otherwise, including without limitation the commencement of or joinder in any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any lien, mortgages, deeds of trust, security interest, collateral rights, judgments or other encumbrances on assets of the Borrower or any Subsidiary of the Borrower held by any Subsidiary Guarantor.

11.16 Limitation. It is the intention of the Subsidiary Guarantors and each Secured Party that the amount of the Obligations guaranteed by each Subsidiary Guarantor shall be in, but not in excess of, the maximum amount permitted by fraudulent conveyance, fraudulent transfer and similar Requirement of Law applicable to such Subsidiary Guarantor. Accordingly, notwithstanding anything to the contrary contained in this Guaranty or in any other agreement or instrument executed in connection with the payment of any of the Obligations guaranteed hereby, the amount of the Obligations guaranteed by a Subsidiary Guarantor under this Guaranty shall be limited to an aggregate amount equal to the largest amount that would not render such Subsidiary Guarantor’s obligations hereunder subject to avoidance under Section 548 of the United States Bankruptcy Code or any comparable provision of any other Legal Requirement.

11.17 Contribution Rights.

(a) To the extent that any payment is made under this Guaranty (a “Subsidiary Guarantor Payment”), by a Subsidiary Guarantor, which Subsidiary Guarantor Payment, taking into account all other Subsidiary Guarantor Payments then previously or concurrently made by all other Subsidiary Guarantors, exceeds the amount which such Subsidiary Guarantor would otherwise have paid if each Subsidiary Guarantor had paid the aggregate Obligations satisfied by such Subsidiary Guarantor Payment in the same proportion that such Subsidiary Guarantor’s Allocable Amount (as defined below) (in effect immediately prior to such Subsidiary Guarantor Payment) bore to the aggregate Allocable Amounts of all of the Subsidiary Guarantors in effect immediately prior to the making of such Subsidiary Guarantor Payment, then, following the date on which the Obligations shall be paid and satisfied in full and each Subsidiary Guarantor shall have performed all of its obligations hereunder, such Subsidiary Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each of the other Subsidiary Guarantors for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Subsidiary Guarantor Payment.

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(b) As of any date of determination, the “Allocable Amount” of any Subsidiary Guarantor shall be equal to the maximum amount of the claim which could then be recovered from such Subsidiary Guarantor under this Guaranty without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the United States Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

(c) This Section 11.17 is intended only to define the relative rights of the Subsidiary Guarantors and nothing set forth in this Section 11.17 is intended to or shall impair the obligations of the Subsidiary Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Guaranty.

(d) The rights of the parties under this Section 11.17 shall be exercisable upon the date the Obligations shall be paid and satisfied in full and each Subsidiary Guarantor shall have performed all of its obligations hereunder.

(e) The parties hereto acknowledge that the right of contribution and indemnification hereunder shall constitute assets of any Subsidiary Guarantor to which such contribution and indemnification is owing.

11.18 Keepwell. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Subsidiary Guarantor to honor all of its obligations under this Guaranty in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section, or otherwise under this Guaranty, as it relates to such other Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until discharged in accordance with Section 11.3. Each Qualified ECP Guarantor intends that this Section constitute, and this Section shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Subsidiary Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

11.19 Release of Subsidiary Guarantors. Upon the Disposition of any Subsidiary Guarantor in accordance with the terms of this Agreement to any Person other than the Borrower or any other Subsidiary Guarantor, the Administrative Agent shall, at the Borrower’s expense, execute and deliver to such Subsidiary Guarantor such documents as such Subsidiary Guarantor shall reasonably require and take any other actions reasonably required to evidence or effect the release of such Subsidiary Guarantor from this Agreement and the other Loan Documents.

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ARTICLE XII

MISCELLANEOUS

12.1 Amendments and Waivers.

(a) Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 12.1. The Required Lenders and each Loan Party party to the relevant Loan Document may, or, with the written consent of the Required Lenders, the Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall:

(i) forgive the principal amount or extend the final scheduled date of maturity of any Loan, extend the scheduled date of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee payable hereunder (except (X) in connection with the waiver of applicability or reduction of any post-default increase in interest rates (which waiver or reduction shall be effective with the consent of the Required Lenders of each adversely affected Facility) and (Y) that any amendment or modification of defined terms used in the Financial Covenants shall not constitute a reduction in the rate of interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment thereof, or increase the amount or extend the expiration date of any Lender’s Revolving Commitment, in each case without the written consent of each Lender directly affected thereby;

(ii) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release all or substantially all of the Collateral or, except in connection with any Disposition expressly permitted hereunder of all or substantially all of the assets of a Subsidiary Guarantor, the release of any Subsidiary Guarantor from its obligations under the Guaranty or the Security Agreement, in each case without the written consent of each Lender directly affected thereby;

(iii) eliminate or reduce the voting rights of any Lender under this Section 12.1 or reduce any percentage specified in the definition of Required Lenders without the written consent of each Lender; or

(iv) amend, modify or waive any provision of Articles X or XII or any other provision of any Loan Document that affects the Administrative Agent without the written consent of the Administrative Agent.

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(b) Any waiver, amendment, supplement or modification made pursuant to this Section 12.1 shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Administrative Agent and all future holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.

(c) Notwithstanding the foregoing, the Administrative Agent, with the consent of the Borrower, may amend, modify or supplement any Loan Document without the consent of any Lender or the Required Lenders in order to correct, amend or cure any ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document.

12.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail, postage prepaid, or, in the case of telecopy notice, when received, addressed as follows in the case of the Borrower and the Administrative Agent, and as set forth in an administrative questionnaire delivered to the Administrative Agent in the case of the Lenders, or to such other address as may be hereafter notified by the respective parties hereto:

If to the Administrative Agent:	BOKF, NA dba Bank of Oklahoma
	Bank of Oklahoma Tower
	P.O. Box 2300
	Tulsa, Oklahoma 74102-2300
	Telecopy No.: (918) 295-0400
	Attention: David G. Lamb
If to the Borrower:	Enovation Controls, LLC
	5311 S. 122nd East Ave.
	Tulsa, Oklahoma 74146
	Telecopy No.: (918) 317-4100
	Attention: Dave Crowell, Vice President of Finance

Notices and other communications to the Administrative Agent and the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and any applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

12.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or

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privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

12.4 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans and other extensions of credit hereunder.

12.5 Successors and Assigns; Participations and Assignments.

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 12.5.

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees other than the Borrower (or any of its Subsidiaries) or a natural person (each, an “Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent of:

(A) the Borrower (such consent not to be unreasonably withheld, conditioned or delayed and such consent shall be deemed given if the Borrower has not objected within five Business Days of a written request for consent), provided that (i) the Borrower may withhold consent if the proposed Assignee (or any Affiliate of the proposed Assignee) is a competitor of the Group Members, so long as no Event of Default has occurred and is continuing, and (ii) no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund (as defined below) or, if an Event of Default has occurred and is continuing, any other Person; and

(B) the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed), provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitments or Loans under either Facility, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with

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respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that (1) no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing and (2) such amounts shall be aggregated in respect of each Lender and its Affiliates or Approved Funds, if any;

(B) (1) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 and (2) the assigning Lender shall have paid in full any amounts owing by it to the Administrative Agent; and

(C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an administrative questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Affiliates and their related parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

For the purposes of this Section 12.5, “Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from and after the effective date specified in each Assignment and Assumption the Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.18, 2.19, 2.20 and 9.2). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.5 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(ii) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Lender and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.

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(iii) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) (i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that (1) requires the consent of each Lender directly affected thereby pursuant to the proviso to the second sentence of Section 12.1(b) and (2) directly affects such Participant. Subject to paragraph (c)(ii) of this Section 12.5, the Borrower agrees that each Participant shall be entitled to the benefits of, and subject to the limitations of, Sections 2.18, 2.19 and 2.20 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 12.5. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.6(b) as though it were a Lender, provided such Participant shall be subject to Section 12.6(a) as though it were a Lender. Each Lender that sells a participation, acting solely for this purpose as an agent of the Borrower, shall maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive, and such Lender, each Loan Party and the Administrative Agent shall treat each person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of such participation for all purposes of this Agreement, notwithstanding notice to the contrary.

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(ii) A Participant shall not be entitled to receive any greater payment under Section 2.18 or 2.19 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent (not to be unreasonably withheld). Any Participant that is a Non-U.S. Lender shall not be entitled to the benefits of Section 2.19 unless such Participant complies with Section 2.19(e) and (f).

(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section 12.5 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or Assignee for such Lender as a party hereto.

(e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue Notes to any Lender requiring Notes to facilitate transactions of the type described in paragraph (d) above.

12.6 Adjustments; Set-off.

(a) Except to the extent that this Agreement or a court order expressly provides for payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if any Lender (a “Benefitted Lender”) shall receive any payment of all or part of the Obligations owing to it (other than in connection with an assignment made pursuant to Section 12.5), or receive any realization on account of any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 8.1(f), or otherwise), in a greater proportion than any such payment to or realization received by any other Lender, if any, in respect of the Obligations owing to such other Lender, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of the Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such realization, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such realization ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

(b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any Obligations becoming due and payable by the Borrower (whether at the stated maturity, by acceleration or otherwise) and an Event of Default having occurred and being continuing, to apply to the payment of such Obligations, by setoff or otherwise, any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or

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claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender, any Affiliate thereof or any of their respective branches or agencies to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such application made by such Lender, provided that the failure to give such notice shall not affect the validity of such application.

12.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by email or facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be maintained with the Borrower and the Administrative Agent.

12.8 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

12.9 Integration. This Agreement and the other Loan Documents represent the entire agreement of the Borrower, each of the Subsidiary Guarantors, the Administrative Agent and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

12.10 GOVERNING LAW. THIS AGREEMENT, EACH NOTE AND EACH OTHER LOAN DOCUMENT, AND ALL MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

12.11 Submission To Jurisdiction; Waivers. Each of the Loan Parties, the Administrative Agent and the Lenders hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of Oklahoma, the courts of the United States for the Northern District of Oklahoma, and appellate courts from any thereof; provided that nothing contained herein or in any other Loan Document will prevent any Lender or the Administrative Agent from bringing any action to enforce any award or judgment or exercise any right under the Collateral Documents or against any Collateral or any other property of any Loan Party in any other forum in which jurisdiction can be established;

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(b) consents and agrees that any such action or proceeding shall be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower at its address set forth in Section 12.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; and

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction.

12.12 Acknowledgements. Each of the Loan Parties, the Administrative Agent and the Lenders hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

(b) neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to the Borrower or any Subsidiary Guarantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between Administrative Agent and Lenders, on one hand, and the Borrower and the Subsidiary Guarantors, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or between the Borrower and the Lenders.

12.13 Releases of Guarantees and Liens.

(a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender) to take any action requested by the Borrower having the effect of releasing any Collateral or Guarantee Obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 12.1 or (ii) under the circumstances described in paragraph (b) below.

(b) At such time as the Loans, the other obligations under the Loan Documents (other than obligations under or in respect of Specified Swap Agreements or Specified Cash Management Agreements and contingent indemnification obligations) shall have been paid in full, the Commitments have been terminated, the Collateral shall be released from the Liens created by the Collateral Documents, and the Collateral Documents and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Loan Party under the Collateral Documents shall terminate, all without delivery of any instrument or performance of any act by any Person. At the request and sole expense of any Loan

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Party following any such termination, the Administrative Agent shall deliver to such Loan Party any Collateral held by the Administrative Agent on behalf of the Administrative Agent and the Lenders hereunder, and execute and deliver to such Loan Party such documents as such Loan Party shall reasonably request to evidence such termination.

12.14 Confidentiality.

(a) Each of the Administrative Agent and each Lender agrees to keep confidential all non-public information provided to it by any Loan Party, the Administrative Agent or any Lender pursuant to or in connection with this Agreement; provided that nothing herein shall prevent the Administrative Agent or any Lender from disclosing any such information (a) to the Administrative Agent, any other Lender or any Affiliate thereof, (b) subject to an agreement to comply with the provisions of this Section 12.15, to any actual or prospective Transferee or any direct or indirect counterparty to any Swap Agreement (or any professional advisor to such counterparty), (c) to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its Affiliates, (d) upon the request or demand of any Governmental Authority, (e) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (f) if required to do so in connection with any litigation or similar proceeding, (g) that has been publicly disclosed, (h) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio in connection with ratings issued with respect to such Lender, (i) in connection with the exercise of any remedy hereunder or under any other Loan Document, or (j) if agreed by the Borrower in its sole discretion, to any other Person.

(b) Each Lender acknowledges that information furnished to it pursuant to this Agreement or the other Loan Documents may include material non-public information concerning the Borrower and its Affiliates and their related parties or their respective securities, and confirms that it has developed compliance procedures regarding the use of material non-public information and that it will handle such material non-public information in accordance with those procedures and applicable law, including Federal and state securities laws.

(c) All information, including requests for waivers and amendments, furnished by the Borrower or the Administrative Agent pursuant to, or in the course of administering, this Agreement or the other Loan Documents will be syndicate-level information, which may contain material non-public information about the Borrower and its Affiliates and their related parties or their respective securities. Accordingly, each Lender represents to the Borrower and the Administrative Agent that it has identified in its administrative questionnaire a credit contact who may receive information that may contain material non-public information in accordance with its compliance procedures and applicable law, including Federal and state securities laws.

12.15 WAIVERS OF JURY TRIAL. EACH OF THE LOAN PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

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12.16 USA PATRIOT Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the USA PATRIOT Act.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURES APPEAR ON FOLLOWING PAGES.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

BORROWER:
ENOVATION CONTROLS, LLC
By:	/s/ David L. Crowell
Name:	David L. Crowell
Title:	Vice President, Finance
SUBSIDIARY GUARANTORS:
GC&I GLOBAL, INC.
By:	/s/ David L. Crowell
Name:	David L. Crowell
Title:	Vice President, Finance
MURPHY INDUSTRIES, LLC
By:	/s/ David L. Crowell
Name:	David L. Crowell
Title:	Vice President, Finance
ECONTROLS, LLC
By:	/s/ David L. Crowell
Name:	David L. Crowell
Title:	Vice President, Finance

SIGNATURE PAGE TO CREDIT AGREEMENT

BOKF, NA dba BANK OF OKLAHOMA, as Administrative Agent, Swingline Lender and LC Issuer and as a Lender
By:	/s/ David G. Lamb
Name:	David G. Lamb
Title:	Senior Vice President

SIGNATURE PAGE TO CREDIT AGREEMENT

HSBC BANK USA, NATIONAL ASSOCIATION, as Syndication Agent and as a Lender
By:	/s/ Celestino Gonzalez
Name:	Celestino Gonzalez
Title:	Vice President HSBC Bank USA, N.A.

SIGNATURE PAGE TO CREDIT AGREEMENT

KEYBANK NATIONAL ASSOCIATION, as Documentation Agent and as a Lender
By:	/s/ Suzannah Valdivia
Name:	Suzannah Valdivia
Title:	Vice President

SIGNATURE PAGE TO CREDIT AGREEMENT

JPMORGAN CHASE BANK, N.A., as a Lender
By:	/s/ Dylan McCants
Name:	Dylan McCants
Title:	VP, Commercial Banking

SIGNATURE PAGE TO CREDIT AGREEMENT

PROSPERITY BANK, as a Lender
By:	/s/ Matt C. Crew
Name:	Matt C. Crew
Title:	Senior Vice President

SIGNATURE PAGE TO CREDIT AGREEMENT

EX-10.8

Exhibit 10.8

LEASE AGREEMENT

This Lease Agreement (“Lease”) is made and entered into in on this the 30^th day of September, 2009 (the “Effective Date”) by and between Legacy Capital Group A Limited Partnership, an Oklahoma limited partnership (“Lessor”), and Murphy Industries, LLC, an Oklahoma limited liability company (“Lessee”).

R E C I T A L S

A. Lessor has agreed to lease to Lessee the property located at 5311 S. 122nd East Ave., Tulsa, Oklahoma 74146 (the “Real Property”) and more particularly described on Exhibit “A” attached hereto and made a part hereof.

B. Lessor and Lessee are willing to enter into this Lease for the foregoing purposes, all subject to the terms and conditions set forth herein. This Lease expressly supplants and supersedes any prior lease for the Real Property and Demised Premises (hereinafter defined).

NOW THEREFORE, in consideration of the mutual covenants contained herein, and with the recitals above incorporated herein, Lessor and Lessee agree as follows:

1. DEMISED PREMISES. Lessor hereby leases to Lessee the Real Property, together with all improvements located thereon (collectively, the “Demised Premises”).

2. LEASE TERM. This Lease shall begin on the Effective Date and shall continue until December 31, 2014, such term being defined herein as the “Term”. Provided Lessee is not in default under this Lease, Lessee shall have the option to extend for Term for an unlimited number of successive one (1) year periods on the same terms and conditions set forth herein (each, an “Extension Option”). Lessee must exercise each Extension Option by written notice to Lessor on or before sixty (60) days prior to expiration of the Term, as same may have been previously extended.

3. RENT. As base rent for the Demised Premises, beginning on the Effective Date and continuing on the first day of each month thereafter during the first two years of the Term, Lessee will pay to Lessor the monthly sum of $60,152. The base rent shall be increased on the second anniversary of the Effective Date and every two years thereafter to an amount equal to the “Fair Market Value” of rental amounts of comparable properties in the area of the Real Property. Lessor and Lessee shall attempt in good faith to agree as to Fair Market Value. In the event Lessor and Lessee cannot so agree within twenty (20) days after such discussions commence, Lessor and Lessee shall each select one real estate broker licensed in the state of where the Demised Premises is located (collectively, the “Brokers”) within ten (10) days after the twenty (20) day period stated above; following which Brokers shall attempt in good faith to determine the Fair Market Value. In the event the Brokers cannot so agree within twenty (20) days after such discussion commence, the Brokers shall select a third real estate broker licensed in the state where the Demised Premises is located (“Third Broker”) within ten (10) days after the twenty (20) day period stated above. Each of the Brokers shall submit their figure for Fair Market Value to the Third Broker within ten (10) days after the selection of the Third Broker. Within twenty (20) days after such submittals to the Third Broker, the Third Broker shall produce its own figure for Fair Market Value. The Fair Market Value for shall be conclusively determined by averaging the Third Broker’s determination of Fair Market Value with that determination previously submitted by the Brokers which is numerically closest to the Third Broker’s determination.

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In the event the Effective Date falls on a day other than the first day of a month, Lessee’s first base rent payment shall be prorated accordingly. In addition to such base rent, within ten (10) business days following receipt of an invoice from Lessor, Lessee shall pay, as additional rent, to the extent not paid directly by Lessee, the cost of Lessor’s insurance on the Demised Premises as provided in Section 10, all real property taxes on the Demised Premises, and all utility, repair and maintenance expenses incurred by Lessor to the extent not covered by the insurance carried by Lessor under this Lease. It is intended by the parties hereto that this Lease is a “net” Lease.

4. UTILITIES. Lessee shall pay when due all utility bills for electricity, water, gas and any other services consumed by Lessee at the Demised Premises. In no event shall Lessor be liable to Lessee for an interruption or failure in the supply of any such utilities to the Demised Premises, except to the extent such interruption or failure is caused by the gross negligence or willful misconduct of Lessor.

5. LAWS. Throughout the term of this Lease, the Lessee will promptly observe and comply with all laws, orders, regulations, rules and ordinances required by each and every governmental authority.

6. USE. Lessee will use the Demised Premises solely for manufacturing and ancillary office and warehouse purposes thereto.

7. REPAIRS AND MAINTENANCE. Throughout the term of this Lease, and any renewals and extensions thereof, Lessor will maintain and keep in good repair all structural components of the Demised Premises, including, but, not limited to the foundation, sidewalks, roof, plumbing, load bearing walls, and electrical and HVAC systems. Lessee shall maintain and keep in their current condition, subject to normal wear and tear, all non-structural components of the Demised Premises, including interior wall finishes, carpet or other flooring, and windows. In the event Lessee or Lessor fails to so maintain the applicable elements of the Demises Premises as set forth hereinabove, after ten (10) days prior notice from the other party, or such other period of time as may be reasonable to perform such repair and maintenance, provided such party promptly commences and diligently pursues same to completion, the other party may perform such maintenance or repair, and the party that failed to so maintain the applicable elements of the Demises Premises shall pay the costs incurred by the other party within ten (10) business days upon receipt of invoice.

8. OBSERVATION OF RULES. Lessee shall observe all rules and regulations that have been or hereafter may be promulgated by Lessor for conduct while on the Real Property, including, but not limited to, rules and regulations with respect to acts or practices deemed hazardous by Lessor, and Lessee agrees to enforce compliance therewith by its employees, agents and contractors, provided, however, such rules and regulations shall not materially prevent or hinder Lessee from its permitted use of the Demised Premises.

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9. INDEMNIFICATION BY LESSEE. Lessee agrees to indemnify, defend with counsel reasonably acceptable to Lessor, and hold Lessor and Lessor’s members, managers, employees and affiliates (collectively, the “Lessor Indemnified Parties”) harmless from and against any and all claims of liability for any injury or damage to any person or property arising from the use by Lessee, its agents, employees, contractors or invitees of the Demised Premises or from any activity, work, or thing done, or permitted by Lessee in or about the Demised Premises, except claims and liabilities to the extent occasioned by the negligence or willful misconduct of Lessor, its agents, employees, contractors or invitees. Further, Lessee agrees to indemnify, defend with counsel reasonably acceptable to Lessor, and hold the Lessor Indemnified Parties harmless from and against any and all claims, demands, losses, suits, actions, causes of action, liabilities and expenses, including any liability to third parties and losses and damage to property suffered by any Lessor Indemnified Party, directly or indirectly arising out of the presence or release of any Hazardous Materials, as defined below, in violation of applicable law in, on or under the Real Property, including, without limitation, the cost of any required or necessary repair, clean-up or detoxification and the preparation of any closure or other required plans to the extent that such action is attributable directly or indirectly to the presence (in violation of applicable law), release, threatened release or disposal of Hazardous Materials by Lessee or any individual or entity operating for or on behalf of Lessee. “Hazardous Materials” shall include all substances defined as “hazardous substances,” “hazardous materials” or “toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., and in any future amendments or additions to such laws, and in the regulations now or hereafter adopted and publications now or hereafter promulgated pursuant to said federal and state laws (collectively, the “Environmental Laws”). The obligations of Lessee under this Section 9 shall survive the expiration or termination of this Lease.

10. INSURANCE.

10.1 Lessee shall obtain and maintain the following insurance during the term of this Lease:

(A) Commercial General Liability Coverage with minimum limits of $2,000,000, combined single limit; and

(B) Commercial Automobile Liability Coverage with minimum limits of $500,000, combined single limit covering all owned, hired, and non-owned vehicles.

All of the insurance required to be maintained by Lessee shall be obtained from an insurer which is licensed to do business in the state where the Real Property is located. Lessee shall provide to Lessor copies of the policies evidencing all required coverage hereunder within ten (10) days following the Effective Date. All of the insurance required hereunder shall name Lessor as an additional insured and shall include a waiver of subrogation in favor of Lessor. All insurance policies required by this Lease shall state that the insurer shall endeavor that such policy may not be terminated or cancelled without first providing Lessor with thirty (30) days prior written notice.

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Lessee shall be responsible for obtaining any casualty insurance on Lessee’s personal property, equipment and fixtures at the Demised Premises.

10.2 Lessor shall obtain and maintain the following insurance during the term of this Lease:

(A) Commercial General Liability Coverage with minimum limits of $2,000,000, combined single limit; and

(B) “All-risk” property and casualty insurance in an amount equal to the replacement value of the Demised Premises.

11. ACCEPTANCE OF DEMISED PREMISES. Lessee accepts the lease granted herein and its use of the Real Property pursuant to same on an AS IS, WHERE IS, AND WITH ALL FAULTS, PATENT AND LATENT BASIS.

12. REMOVAL OF PROPERTY. Upon the expiration or earlier termination of this Lease, Lessee may, at its own expense and risk, remove all of Lessee’s property, equipment and trade fixtures from the Demised Premises, and shall remediate any damage to the Demised Premises resulting from Lessee’s use of the Demised Premises under this Lease or from removal of such Lessee’s property, equipment and trade fixtures from the Demised Premises. If Lessee should fail to remove its property, equipment and trade fixtures upon the expiration or earlier termination of this Lease, they shall become the property of Lessor. This Section 12 shall survive expiration or termination of this Lease.

13. ASSESSMENTS. Lessee shall pay, before the same becomes delinquent, all charges, taxes, rates and assessments upon or against any property of Lessee upon or on the Real Property.

14. DAMAGE OR DESTRUCTION. If the Demised Premises is partially destroyed during the term of this Lease, Lessor will proceed with reasonable diligence to restore the same with insurance proceeds or at Lessor’s expense. If the Demised Premises is completely destroyed during the term of this Lease, this Lease shall automatically terminate effective on the date of such destruction.

15. DEFAULT. In the case of default by Lessee, Lessor may terminate the Lease if such default continues for a period of ten (10) days after Lessor notifies Lessee of such default, unless such default is of such a nature that it is incapable of being remedied within such ten (10) day period, and provided that Lessee diligently prosecutes the remedy of such default until same is corrected. In the case of default by Lessor, Lessee may terminate the Lease if such default continues for a period of ten (10) days after Lessee notifies Lessor of such default, unless such default is of such a nature that it is incapable of being remedied within such ten (10) day period, and provided that Lessor diligently prosecutes the remedy of such default until same is corrected. Notwithstanding the foregoing, in the event of a failure by either party to perform any repair, maintenance or reconstruction required under this Lease, and such continues for a period of ten (10) days after the non-defaulting notifies the defaulting party in writing of such failure, the non-defaulting party may perform such repair, maintenance or reconstruction and charge the reasonable costs of same to the defaulting party.

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16. QUIET ENJOYMENT. Lessor hereby covenants and agrees that if Lessee will at all times comply with the terms and conditions of the Lease, then during the Term, as same may be extended or renewed, Lessee shall have the peaceable and quiet enjoyment and possession of the Demised Premises.

17. ASSIGNMENT. Lessee may not assign this Lease or sublease the Demised Premises without Lessor’s prior written consent, which consent shall not be unreasonably withheld.

18. NOTICES. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) if served personally, on the day of such service, or (ii) if mailed by certified or registered mail (return receipt requested), on the second business day after mailing, and (iii) if transmitted by recognized overnight carrier, on the next business day after tender to the carrier. Such communications shall be sent to the following addresses

TO Lessor:

Legacy Capital Group A Limited Partnership

PO Box 470248

Tulsa, Oklahoma 74147

Attention: Dave Crowell, Vice President, Finance

TO Lessee:

Murphy Industries, LLC

PO Box 470248

Tulsa, Oklahoma 74147

Attention: Dave Crowell, Vice President, Finance

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.

19. MISCELLANEOUS.

(A) The laws of the State of Oklahoma will govern this Lease. If any provision of this Lease is held to be invalid or unenforceable, the validity and enforceability of the remaining portions of the Lease will not be affected thereby.

(B) This Lease contains the entire agreement of the parties hereto and shall not be modified in any manner except by an instrument in writing signed by the parties hereto.

(C) Any intention to create a joint venture or partnership relationship between Lessor and Lessee is hereby expressly disclaimed.

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(D) The covenants and agreements herein contained will inure to the benefit of, and be binding upon, the parties hereto, their respective heirs, legal representatives, successors and permitted assigns.

(E) This Lease may be executed in counterparts, which shall collectively constitute one original document.

Signatures on following page

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IN WITNESS WHEREOF, this Lease is executed to be effective on the day and year first above written.

LESSEE:	Murphy Industries, LLC
	By:	/s/ Frank W. Murphy III
		Frank W. Murphy III, CEO
LESSOR:	Legacy Capital Group A Limited Partnership
	By:	/s/ Frank W. Murphy III
		Frank W. Murphy III, Sole Member of Legacy Management Company (General Partner of Legacy Capital Group A Limited Partnership)

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EXHIBIT A

(Legal Description of the Real Property)

The West 845.0 feet of the South 1032.0 feet of Lot One (1), Block Four (4), METRO PARK, an Addition to the City of Tulsa, Tulsa County, State of Oklahoma, according to the Recorded Plat thereof.

EX-10.9

Exhibit 10.9

FIRST AMENDMENT TO LEASE AGREEMENT

THIS FIRST AMENDMENT TO LEASE (“First Amendment”) made this 19^th day of March, 2013, by and between Legacy Capital Group A Limited Partnership, an Oklahoma limited partnership, (“Lessor”), and Enovation Controls, LLC, an Oklahoma limited liability company, (“Lessee”) with reference to the following facts:

(a) Lessor entered into a Lease Agreement dated March 31, 2004 (“Original Lease”) pursuant to which Murphy Industries, LLC (formerly known as Murphy Industries, Inc.) (“Original Lessee”) leased a certain tract of land described on Exhibit “A” attached to the Original Lease.

(b) Certain assets and operations of Original Lessee were transferred to Lessee effective January 1, 2013.

NOW THEREFORE, the Lessee assumes all rights and responsibilities under the Original Lease.

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment on the day and year first above set forth.

“Lessor”:	LEGACY CAPITAL GROUP A LIMITED PARTNERSHIP, an Oklahoma limited partnership
	By:	Legacy Management Company, LLC an Oklahoma limited liability company, Its General Partner
		By:	/s/ Frank W. Murphy III
			Frank W. Murphy III, Manager 2602 E. 28th Street Tulsa, Oklahoma 74114
“Lessee”:	ENOVATION CONTROLS, LLC, an Oklahoma limited liability company
	By:	/s/ Frank W. Murphy III
		Frank W. Murphy III, Executive Chairman 5311 S. 122nd East Avenue Tulsa, Oklahoma 74146

EX-10.10

Exhibit 10.10

SECOND AMENDMENT TO LEASE AGREEMENT

THIS SECOND AMENDMENT TO LEASE (“Second Amendment”) made this 1st day of September, 2013, by and between Legacy Capital Group A Limited Partnership, an Oklahoma limited partnership, (“Lessor”), and Enovation Controls, LLC, an Oklahoma limited liability company, (“Lessee”) with reference to the following facts:

(a) LEASE TERM. This Lease shall be extended and continue until January 31, 2022.

NOW THEREFORE, the Lessee assumes all rights and responsibilities under the Original Lease.

IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment on the day and year first above set forth.

“Lessor”:	LEGACY CAPITAL GROUP A LIMITED PARTNERSHIP, an Oklahoma limited partnership
	By:	Legacy Management Company, LLC an Oklahoma limited liability company, Its General Partner
		By:	/s/ Frank W. Murphy III
			Frank W. Murphy, III, Manager 2602 E. 28th Street Tulsa, Oklahoma 74114
“Lessee”:	ENOVATION CONTROLS, LLC, an Oklahoma limited liability company
	By:	/s/ Dave Crowell
		Dave Crowell, VP Finance 5311 S. 122nd East Avenue Tulsa, Oklahoma 74146

EX-10.11

Exhibit 10.11

LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”) is made as of August 1st, 2013, by and between GOOSE ISLAND LLC, an Oklahoma limited liability company (“Lessor”), and ENOVATION CONTROLS, LLC (“Lessee”).

1. The Property. Subject to the terms and conditions hereof, Lessor hereby leases to Lessee, the real property commonly known as 32560 S. Wood Drive Afton, OK 74331 and having the following legal description:

Parts of Lots 11, 12, 13, 14, 15, and 17 in Play Haven Subdivision

Delaware County, Oklahoma

together with all other improvements and fixtures thereon and appurtenances thereto (the “Property”).

2. Term. The term of this Lease shall commence on August 1st, 2013, and shall continue until December 31st, 2016 unless earlier terminated as provided in this Lease (the “Term”).

3. Termination. This Lease may be terminated by Lessor at any time upon 30 days prior written notice to Lessee.

4. Rent. The monthly rent shall be $ 3950.00 (the “Rent”), payable to Lessor at the address specified by Lessor, which shall be due and payable in advance and without demand on the first day of each month during the term hereof.

5. Condition of Property. Lessee stipulates, represents, and warrants that Lessee has examined the Property, and that it is at the time of this Lease in good order, repair, and in a safe, clean, and tenantable condition.

6. Utility Charges. Lessor will pay all costs and expenses for water, sewage, gas, electric, and other utility services to the Property.

7. Taxes and Insurance. Lessor shall pay or cause to be paid all property taxes assessed against the Property. Lessee shall be responsible for insuring all personal property or fixtures of Lessee located on the Property.

8. Use of Property. Lessee may use the Property for any lawful purpose, and will conform to and obey all present and future laws and ordinances and all rules, regulations, requirements, and orders of all governmental agencies or authorities respect the use and occupation of the Property.

9. Indemnification of Lessor. Lessee will indemnify and hold Lessor harmless of and from any loss or damage to any personal property belonging to Lessee or any of Lessee’s guests or occupants, or for any injuries to Lessee or any of Lessee’s guests or occupants, except for any such loss arising from the gross negligence of Lessor.

10. Maintenance and Repairs. Lessee will, at its sole expense, keep and maintain the Property and appurtenances in good and sanitary condition and repair during the term of this Lease, and otherwise maintain the Property in accordance with the policies and procedures provided to Lessee by Lessor in writing from time to time. Notwithstanding the foregoing, Lessor shall be responsible any repairs or replacements to the roof, foundation, or structural integrity of the Property or improvements to the Property or any repairs or replacements that are occasioned by or attributable to defective materials or workmanship in the construction of the Property or improvements, except to the extent caused by the negligence of Lessee.

11. Alterations. Lessee shall make no alterations to the buildings or improvements on the Property or construct any building or make any other improvements on the Property without the prior written consent of Lessor. Any and all alterations, changes, and/or improvements built, constructed or placed on the Property by Lessee shall, unless otherwise provided by written agreement between Lessor and Lessee, be and become the property of Lessor and remain on the Property at the expiration or earlier termination of this Lease.

12. Damage to or Destruction to Property. Lessor shall maintain property and casualty insurance on the Property. If the Property is partially or entirely damaged or destroyed by fire or by the elements or other causes so as to render the Property unfit for occupancy, this Lease may be terminated, at the option of either Lessor or Lessee, in which event Lessor shall return to Lessee all prepaid and unearned Rent, prorated as of the date of such destruction. Lessor shall not be required to expend funds in excess of insurance proceeds actually received in repairing or restoring the Property.

13. Eminent Domain. If all the Property is taken by a public authority for public use or conveyed in lieu of such a taking, or if a portion of the Property is so taken or conveyed as to materially interfere with Lessee’s continued use of the Property, then this Lease shall terminate from the time when possession is required for such public use, and the rent will be apportioned to that time. Lessee may not claim and is not entitled to any part of an award of damages or compensation for such a taking or conveyance.

14. Inspection. Lessor shall have the right upon reasonable notice (but not less than one day) and at reasonable hours to enter the Property for inspection and to make such repairs and alterations as may be deemed necessary or desirable by Lessor for the safety and maintenance of the Property.

15. Holdover by Tenant. If Lessee remains in possession of the Property with the consent of Lessor after the expiration of this Lease, a new tenancy from month to month shall be created between Lessor and Lessee which shall be subject to all the terms and conditions hereof, but which shall be terminable on 30 days written notice served by either Lessor or Lessee and Rent during such holdover period shall be equal to the amount of Rent that would otherwise be payable pursuant to the terms of this Lease. Upon Lessee’s notice, Lessee shall pay Lessor all unpaid Rent through the last day of the month in which the 30th day of Lessee’s notice occurs.

16. Surrender of Property. At the expiration of the term, Lessee shall quit and surrender the Property in as good a condition as it was at the commencement of this Lease, reasonable use and wear excepted.

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17. Subordination of Lease. This Lease and Lessee’s interest hereunder are and shall be subordinate, junior, and inferior to any and all mortgages, liens, or encumbrances now or hereafter placed on the Property by Lessor, all advances made under any such mortgages, liens, or encumbrances (including, but not limited to, future advances), the interest payable on such mortgages, liens, or encumbrances and any and all renewals, extensions, or modifications of such mortgages, liens, or encumbrances.

18. Assignment and Subletting. Lessee shall not assign this Lease or sublease the Property.

19. Notices. Each notice, demand, request, and other communication required or permitted hereunder shall be in writing and shall be deemed to be delivered if delivered in person, if mailed by United States certified mail, return receipt requested, postage prepaid, or private contract carrier against signed delivery receipt, on the date evidenced by the signed receipt, or the date upon which the U.S. Postal Service or carrier certifies that delivery has been refused by the addressee or is otherwise deemed impossible, addressed to the party to be notified at the address stated below:

If to Lessee:	Enovation Controls, LLC                                                                                       5311 S. 122nd E. Ave Tulsa, Oklahoma 74146
If to Lessor:	Goose Island LLC 2602 East 28th St. Tulsa, Oklahoma 74114

20. Default. An event of default will be deemed to have occurred if (i) Lessee fails to pay Rent within five days of the first of the month, (ii) Lessee neglects or fails to perform or observe any other covenant to be performed by Lessee hereunder within 14 days of written demand by Lessor, (iii) Lessee abandons the Property, (iv) Lessee is the subject of any voluntary or involuntary bankruptcy, insolvency, or similar proceeding, or (v) Lessee makes an assignment for the benefit of creditors (each an “Event of Default”). On the occurrence of any Event of Default, Lessor may take the following actions without any notice or demand and in addition to any other remedy permitted by law or by this Lease:

20.1 Termination. Terminate this Lease, in which event Lessee must immediately surrender the Property to Lessor. If Lessee fails to do so, Lessor may, without prejudice to any other remedy Lessor might have, enter and take possession of the Property and remove Lessee and Lessee’s property therefrom without being subject to any claim for damages therefor. To the extent allowed by applicable laws, Lessee shall pay Lessor all costs incurred by Lessor in any such action, including the costs of taking possession of and repairing any damage to the Property, and all other damages caused by Lessee’s default.

20.2 Reletting. If Lessor does not elect to terminate this Lease, Lessor may, at its option, reenter the Property and remove any personal property of Lessee, forcibly, if necessary, without being guilty of trespass, and relet the Property for the benefit of Lessee. To the extent allowed by applicable laws, Lessee shall pay Lessor all costs incurred by Lessor in

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such action including, without limitation, the costs of taking possession of and repairing the Property, the cost of preparing the Property for reletting, and all other damages caused by Lessee’s default. Lessee shall remain obligated to Lessor for the difference between any rent received by Lessor as a result of such reletting and the rent for which Lessee is obligated under the Lease. In the event that reletting results in payment of rent to Lessor in excess of the Rent for which Lessee is obligated, Lessor will retain such excess.

20.3 Option to Perform. Lessor may perform or cause to be performed the unperformed obligations of Lessee under this Lease and may enter the Property for this purpose without being subject to any claim for damages therefor. Lessee agrees to reimburse Lessor on demand for any expense that Lessor might incur in effecting compliance with this Lease on behalf of Lessee.

21. Late Charge. In the event that any payment required to be paid by Lessee hereunder is not made within three days of when due, Lessee shall pay to Lessor, in addition to such payment or other charges due hereunder, a “late fee” in the amount of $100.

22. Time of the Essence. Time is of the essence of this Lease.

23. Remedies Cumulative. The various rights, powers, elections, and remedies of the parties to this Lease are cumulative; no one of them is exclusive of the others or exclusive of any right or power allowed by law, and no right shall be exhausted by being exercised on one or more occasions.

24. Binding Effect. Each of the covenants herein contained shall extend to and be binding upon the respective successors, survivors, heirs, administrators, and assigns of the parties hereto.

25. Entire Agreement. This Lease constitutes the entire agreement between the parties and may not be modified or amended except by a written instrument executed by both parties.

26. Governing Law. This Lease shall be governed by and construed in accordance with Oklahoma law.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have executed this Lease to be delivered and effective as of the day and year first above written.

LESSEE:	ENOVATION CONTROLS, LLC
	By:	/s/ Patrick C. Cavanagh
		Patrick C. Cavanagh, President/CEO
LESSOR:	GOOSE ISLAND LLC
	By:	/s/ Frank W. Murphy III
		Frank W. Murphy III

[Signature Page to Lease Agreement]

EX-10.12

Exhibit 10.12

LEASE AGREEMENT

This Lease Agreement (“Lease”) is made and entered into in on this the 30^th day of September, 2009 (the “Effective Date”) by and between Chesapeake Capital Group LP (“Lessor”), and Murphy Industries, LLC, an Oklahoma limited liability company (“Lessee”).

R E C I T A L S

A. Lessor has agreed to lease to Lessee the property located at 105 Randon Dyer Road, Rosenberg, Texas 77471 (the “Real Property”) and more particularly described on Exhibit “A” attached hereto and made a part hereof.

B. Lessor and Lessee are willing to enter into this Lease for the foregoing purposes, all subject to the terms and conditions set forth herein. This Lease expressly supplants and supersedes any prior lease for the Real Property and Demised Premises (hereinafter defined).

NOW THEREFORE, in consideration of the mutual covenants contained herein, and with the recitals above incorporated herein, Lessor and Lessee agree as follows:

1. DEMISED PREMISES. Lessor hereby leases to Lessee the Real Property, together with all improvements located thereon (collectively, the “Demised Premises”).

2. LEASE TERM. This Lease shall begin on the Effective Date and shall continue until December 31, 2014, such term being defined herein as the “Term”. Provided Lessee is not in default under this Lease, Lessee shall have the option to extend for Term for an unlimited number of successive one (1) year periods on the same terms and conditions set forth herein (each, an “Extension Option”). Lessee must exercise each Extension Option by written notice to Lessor on or before sixty (60) days prior to expiration of the Term, as same may have been previously extended.

3. RENT. As base rent for the Demised Premises, beginning on the Effective Date and continuing on the first day of each month thereafter during the first two years of the Term, Lessee will pay to Lessor the monthly sum of $8,750. The base rent shall be increased on the second anniversary of the Effective Date and every two years thereafter to an amount equal to the “Fair Market Value” of rental amounts of comparable properties in the area of the Real Property. In the event the Effective Date falls on a day other than the first day of a month. Lessee’s first base rent payment shall be prorated accordingly. In addition to such base rent, within ten (10) business days following receipt of an invoice from Lessor, Lessee shall pay, as additional rent, to the extent not paid directly by Lessee, the cost of Lessor’s insurance on the Demised Premises as provided in Section 10, all real property taxes on the Demised Premises, and all utility, repair and maintenance expenses incurred by Lessor to the extent not covered by the insurance carried by Lessor under this Lease. It is intended by the parties hereto that this Lease is a “net” Lease. Lessor and Lessee shall attempt in good faith to agree as to Fair Market Value. In the event Lessor and Lessee cannot so agree within twenty (20) days after such discussions commence, Lessor and Lessee shall each select one real estate broker licensed in the state of where the Demised Premises is located (collectively, the “Brokers”) within ten (10) days after the twenty (20) day period stated above; following which Brokers shall attempt in good

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faith to determine the Fair Market Value. In the event the Brokers cannot so agree within twenty (20) days after such discussion commence, the Brokers shall select a third real estate broker licensed in the state where the Demised Premises is located (“Third Broker”) within ten (10) days after the twenty (20) day period stated above. Each of the Brokers shall submit their figure for Fair Market Value to the Third Broker within ten (10) days after the selection of the Third Broker. Within twenty (20) days after such submittals to the Third Broker, the Third Broker shall produce its own figure for Fair Market Value. The Fair Market Value for shall be conclusively determined by averaging the Third Broker’s determination of Fair Market Value with that determination previously submitted by the Brokers which is numerically closest to the Third Broker’s determination.

4. UTILITIES. Lessee shall pay when due all utility bills for electricity, water, gas and any other services consumed by Lessee at the Demised Premises. In no event shall Lessor be liable to Lessee for an interruption or failure in the supply of any such utilities to the Demised Premises, except to the extent such interruption or failure is caused by the gross negligence or willful misconduct of Lessor.

5. LAWS. Throughout the term of this Lease, the Lessee will promptly observe and comply with all laws, orders, regulations, rules and ordinances required by each and every governmental authority.

6. USE. Lessee will use the Demised Premises solely for manufacturing and ancillary office and warehouse purposes thereto.

7. REPAIRS AND MAINTENANCE. Throughout the term of this Lease, and any renewals and extensions thereof, Lessor will maintain and keep in good repair all structural components of the Demised Premises, including, but, not limited to the foundation, sidewalks, roof, plumbing, load bearing walls, and electrical and HVAC systems. Lessee shall maintain and keep in their current condition, subject to normal wear and tear, all non-structural components of the Demised Premises, including interior wall finishes, carpet or other flooring, and windows. In the event Lessee or Lessor fails to so maintain the applicable elements of the Demises Premises as set forth hereinabove, after ten (10) days prior notice from the other party, or such other period of time as may be reasonable to perform such repair and maintenance, provided such party promptly commences and diligently pursues same to completion, the other party may perform such maintenance or repair, and the party that failed to so maintain the applicable elements of the Demises Premises shall pay the costs incurred by the other party within ten (10) business days upon receipt of invoice.

8. OBSERVATION OF RULES. Lessee shall observe all rules and regulations that have been or hereafter may be promulgated by Lessor for conduct while on the Real Property, including, but not limited to, rules and regulations with respect to acts or practices deemed hazardous by Lessor, and Lessee agrees to enforce compliance therewith by its employees, agents and contractors, provided, however, such rules and regulations shall not materially prevent or hinder Lessee from its permitted use of the Demised Premises.

9. INDEMNIFICATION BY LESSEE. Lessee agrees to indemnify, defend with counsel reasonably acceptable to Lessor, and hold Lessor and Lessor’s members, managers,

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employees and affiliates (collectively, the “Lessor Indemnified Parties”) harmless from and against any and all claims of liability for any injury or damage to any person or property arising from the use by Lessee, its agents, employees, contractors or invitees of the Demised Premises or from any activity, work, or thing done, or permitted by Lessee in or about the Demised Premises, except claims and liabilities to the extent occasioned by the negligence or willful misconduct of Lessor, its agents, employees, contractors or invitees. Further, Lessee agrees to indemnify, defend with counsel reasonably acceptable to Lessor, and hold the Lessor Indemnified Parties harmless from and against any and all claims, demands, losses, suits, actions, causes of action, liabilities and expenses, including any liability to third parties and losses and damage to property suffered by any Lessor Indemnified Party, directly or indirectly arising out of the presence or release of any Hazardous Materials, as defined below, in violation of applicable law in, on or under the Real Property, including, without limitation, the cost of any required or necessary repair, clean-up or detoxification and the preparation of any closure or other required plans to the extent that such action is attributable directly or indirectly to the presence (in violation of applicable law), release, threatened release or disposal of Hazardous Materials by Lessee or any individual or entity operating for or on behalf of Lessee. “Hazardous Materials” shall include all substances defined as “hazardous substances,” “hazardous materials” or “toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., and in any future amendments or additions to such laws, and in the regulations now or hereafter adopted and publications now or hereafter promulgated pursuant to said federal and state laws (collectively, the “Environmental Laws”). The obligations of Lessee under this Section 9 shall survive the expiration or termination of this Lease.

10. INSURANCE.

10.1 Lessee shall obtain and maintain the following insurance during the term of this Lease:

(A) Commercial General Liability Coverage with minimum limits of $2,000,000, combined single limit; and

(B) Commercial Automobile Liability Coverage with minimum limits of $500,000, combined single limit covering all owned, hired, and non-owned vehicles.

All of the insurance required to be maintained by Lessee shall be obtained from an insurer which is licensed to do business in the state where the Real Property is located. Lessee shall provide to Lessor copies of the policies evidencing all required coverage hereunder within ten (10) days following the Effective Date. All of the insurance required hereunder shall name Lessor as an additional insured and shall include a waiver of subrogation in favor of Lessor. All insurance policies required by this Lease shall state that the insurer shall endeavor that such policy may not be terminated or cancelled without first providing Lessor with thirty (30) days prior written notice.

Lessee shall be responsible for obtaining any casualty insurance on Lessee’s personal property, equipment and fixtures at the Demised Premises.

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10.2 Lessor shall obtain and maintain the following insurance during the term of this Lease:

(A) Commercial General Liability Coverage with minimum limits of $2,000,000, combined single limit; and

(B) “All-risk” property and casualty insurance in an amount equal to the replacement value of the Demised Premises.

11. ACCEPTANCE OF DEMISED PREMISES. Lessee accepts the lease granted herein and its use of the Real Property pursuant to same on an AS IS, WHERE IS, AND WITH ALL FAULTS, PATENT AND LATENT BASIS.

12. REMOVAL OF PROPERTY. Upon the expiration or earlier termination of this Lease, Lessee may, at its own expense and risk, remove all of Lessee’s property, equipment and trade fixtures from the Demised Premises, and shall remediate any damage to the Demised Premises resulting from Lessee’s use of the Demised Premises under this Lease or from removal of such Lessee’s property, equipment and trade fixtures from the Demised Premises. If Lessee should fail to remove its property, equipment and trade fixtures upon the expiration or earlier termination of this Lease, they shall become the property of Lessor. This Section 12 shall survive expiration or termination of this Lease.

13. ASSESSMENTS. Lessee shall pay, before the same becomes delinquent, all charges, taxes, rates and assessments upon or against any property of Lessee upon or on the Real Property.

14. DAMAGE OR DESTRUCTION. If the Demised Premises is partially destroyed during the term of this Lease, Lessor will proceed with reasonable diligence to restore the same with insurance proceeds or at Lessor’s expense. If the Demised Premises is completely destroyed during the term of this Lease, this Lease shall automatically terminate effective on the date of such destruction.

15. DEFAULT. In the case of default by Lessee, Lessor may terminate the Lease if such default continues for a period of ten (10) days after Lessor notifies Lessee of such default, unless such default is of such a nature that it is incapable of being remedied within such ten (10) day period, and provided that Lessee diligently prosecutes the remedy of such default until same is corrected. In the case of default by Lessor, Lessee may terminate the Lease if such default continues for a period often (10) days after Lessee notifies Lessor of such default, unless such default is of such a nature that it is incapable of being remedied within such ten (10) day period, and provided that Lessor diligently prosecutes the remedy of such default until same is corrected. Notwithstanding the foregoing, in the event of a failure by either party to perform any repair, maintenance or reconstruction required under this Lease, and such continues for a period of ten (10) days after the non-defaulting notifies the defaulting party in writing of such failure, the non-defaulting party may perform such repair, maintenance or reconstruction and charge the reasonable costs of same to the defaulting party.

16. QUIET ENJOYMENT. Lessor hereby covenants and agrees that if Lessee will at all times comply with the terms and conditions of the Lease, then during the Term, as same may be extended or renewed, Lessee shall have the peaceable and quiet enjoyment and possession of the Demised Premises.

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17. ASSIGNMENT. Lessee may not assign this Lease or sublease the Demised Premises without Lessor’s prior written consent, which consent shall not be unreasonably withheld.

18. NOTICES. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) if served personally, on the day of such service, or (ii) if mailed by certified or registered mail (return receipt requested), on the second business day after mailing, and (iii) if transmitted by recognized overnight carrier, on the next business day after tender to the carrier. Such communications shall be sent to the following addresses

TO Lessor:

Chesapeake Capital Group LP

PO Box 470248

Tulsa, Oklahoma 74147

Attention: Dave Crowell, Vice President, Finance

TO Lessee:

Murphy Industries, LLC

PO Box 470248

Tulsa, Oklahoma 74147

Attention: Dave Crowell, Vice President, Finance

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.

19. MISCELLANEOUS.

(A) The laws of the State of Oklahoma will govern this Lease. If any provision of this Lease is held to be invalid or unenforceable, the validity and enforceability of the remaining portions of the Lease will not be affected thereby.

(B) This Lease contains the entire agreement of the parties hereto and shall not be modified in any manner except by an instrument in writing signed by the parties hereto.

(C) Any intention to create a joint venture or partnership relationship between Lessor and Lessee is hereby expressly disclaimed.

(D) The covenants and agreements herein contained will inure to the benefit of, and be binding upon, the parties hereto, their respective heirs, legal representatives, successors and permitted assigns.

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(E) This Lease may be executed in counterparts, which shall collectively constitute one original document.

Signatures on following page

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IN WITNESS WHEREOF, this Lease is executed to be effective on the day and year first above written.

LESSEE:	Murphy Industries, LLC
	By:	/s/ Frank W. Murphy III
		Frank W. Murphy III
LESSOR:	Chesapeake Capital Group LP
	By:	/s/ Frank W. Murphy III
		Frank W. Murphy III

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EXHIBIT A

(Legal Description of the Real Property)

that certain tract or parcel of land lying and situated in Fort Bend County, Texas, out of the Yandell Ferris Survey, Abstract No. 374. Said 8.734 acre tract being a part or portion of that certain 69.774 acre tract described in a deed from Edith Valenta Krajcik and Vernon J. Valenta to Frank W. Murphy Mfr., Inc., Nominee and recorded in Volume 887, Page 226 of the Deed Records of Fort Bend County, Texas, to which reference is made for all purpose and the said 8,734 acres being described by metes and bounds as follows, TO-WIT:

BEGINNING at a  ¹⁄₂ inch iron pin set in West right of way line of Random Road, said iron pin being also N 06° 51’ 22” W 400.00 feet from Southeast corner of said 69.774 acre tract.

THENCE S 83° 07’ 35” W a distance of 960.00 feet, to a  ¹⁄₂ inch iron pin set for Southwest corner of said 8.734 acre tract.

THENCE N 06° 51’ 22” W a distance of 396.31 feet to a  ¹⁄₂ inch iron pin set for Northwest corner of said 8.734 acre tract.

THENCE N 83° 07’ 35” E a distance of 960.00 feet to a  ¹⁄₂ inch iron pin set in West right of way line of said Random Road.

THENCE S 06° 51’ 22” E a distance of 396.31 feet with West right of way line of said Random Road to place of beginning, containing 8.734 acres of land as surveyed by Leonard W. Frank, County Surveyor of Colorado County, Texas, Registered Public Surveyor, Registration No. 1669.

EX-10.13

Exhibit 10.13

FIRST AMENDMENT TO LEASE AGREEMENT

THIS FIRST AMENDMENT TO LEASE (“First Amendment”) made this 1st day of September, 2013, by and between Chesapeake Capital Group Limited Partnership, a Texas limited partnership, (“Lessor”), and Enovation Controls, LLC, an Oklahoma limited liability company, (“Lessee”) with reference to the following facts:

(a) LEASE TERM. This Lease shall be extended and continue until January 31, 2022.

NOW THEREFORE, the Lessee assumes all rights and responsibilities under the Original Lease.

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment on the day and year first above set forth.

“Lessor”:	CHESAPEAKE CAPITAL GROUP A LIMITED PARTNERSHIP, a Texas limited partnership
	By:	Chesapeake Capital Group LP Texas limited liability company, Its General Partner
		By:	/s/ Frank W. Murphy III
			Frank W. Murphy, III, General Partner 2602 E. 28th Street Tulsa, Oklahoma 74114
“Lessee”:	ENOVATION CONTROLS, LLC, an Oklahoma limited liability company
	By:	/s/ Dave Crowell
		Dave Crowell, VP Finance 5311 S. 122nd East Avenue Tulsa, Oklahoma 74146

EX-10.14

Exhibit 10.14

LEASE AGREEMENT

This Lease Agreement (“Lease”) is made and entered into in on this the 30^th day of September, 2009 (the “Effective Date”) by and between CONTROL AND INSTRUMENTATION HOLDING COMPANY, LTD, A TEXAS LIMITED PARTNERSHIP (“Lessor”), and ECONTROLS, LLC, A TEXAS LIMITED LIABILITY COMPANY (“Lessee”).

R E C I T A L S

A. Lessor has agreed to lease to Lessee the property located at 3523 Crosspoint, San Antonio, Texas 78217 (the “Real Property”) and more particularly described on Exhibit “A” attached hereto and made a part hereof.

B. Lessor and Lessee are willing to enter into this Lease for the foregoing purposes, all subject to the terms and conditions set forth herein. This Lease expressly supplants and supersedes any prior lease for the Real Property and Demised Premises (hereinafter defined).

NOW THEREFORE, in consideration of the mutual covenants contained herein, and with the recitals above incorporated herein, Lessor and Lessee agree as follows:

1. DEMISED PREMISES. Lessor hereby leases to Lessee the Real Property, together with all improvements located thereon (collectively, the “Demised Premises”).

2. LEASE TERM. This Lease shall begin on the Effective Date and shall continue until December 31, 2014, such term being defined herein as the “Term”. Provided Lessee is not in default under this Lease, Lessee shall have the option to extend for Term for an unlimited number of successive one (1) year periods on the same terms and conditions set forth herein (each, an “Extension Option”). Lessee must exercise each Extension Option by written notice to Lessor on or before sixty (60) days prior to expiration of the Term, as same may have been previously extended.

3. RENT. As base rent for the Demised Premises, beginning on the Effective Date and continuing on the first day of each month thereafter during the first two years of the Term, Lessee will pay to Lessor the monthly sum of $17,347.00. The base rent shall be increased on the second anniversary of the Effective Date and every two years thereafter to an amount equal to the “Fair Market Value” of rental amounts of comparable properties in the area of the Real Property. In the event the Effective Date falls on a day other than the first day of a month, Lessee’s first base rent payment shall be prorated accordingly. In addition to such base rent, within ten (10) business days following receipt of an invoice from Lessor, Lessee shall pay, as additional rent, to the extent not paid directly by Lessee, the cost of Lessor’s insurance on the Demised Premises as provided in Section 10, all real property taxes on the Demised Premises, and all utility, repair and maintenance expenses incurred by Lessor to the extent not covered by the insurance carried by Lessor under this Lease. It is intended by the parties hereto that this Lease is a “net” Lease. Lessor and Lessee shall attempt in good faith to agree as to Fair Market Value. In the event Lessor and Lessee cannot so agree within twenty (20) days after such discussions commence, Lessor and Lessee shall each select one real estate broker licensed in the state of where the Demised Premises is located (collectively, the “Brokers”) within ten (10) days

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after the twenty (20) day period stated above; following which Brokers shall attempt in good faith to determine the Fair Market Value. In the event the Brokers cannot so agree within twenty (20) days after such discussion commence, the Brokers shall select a third real estate broker licensed in the state where the Demised Premises is located (“Third Broker”) within ten (10) days after the twenty (20) day period stated above. Each of the Brokers shall submit their figure for Fair Market Value to the Third Broker within ten (10) days after the selection of the Third Broker. Within twenty (20) days after such submittals to the Third Broker, the Third Broker shall produce its own figure for Fair Market Value. The Fair Market Value for shall be conclusively determined by averaging the Third Broker’s determination of Fair Market Value with that determination previously submitted by the Brokers which is numerically closest to the Third Broker’s determination.

4. UTILITIES. Lessee shall pay when due all utility bills for electricity, water, gas and any other services consumed by Lessee at the Demised Premises. In no event shall Lessor be liable to Lessee for an interruption or failure in the supply of any such utilities to the Demised Premises, except to the extent such interruption or failure is caused by the gross negligence or willful misconduct of Lessor.

5. LAWS. Throughout the term of this Lease, the Lessee will promptly observe and comply with all laws, orders, regulations, rules and ordinances required by each and every governmental authority.

6. USE. Lessee will use the Demised Premises solely for manufacturing and ancillary office and warehouse purposes thereto.

7. REPAIRS AND MAINTENANCE. Throughout the term of this Lease, and any renewals and extensions thereof, Lessor will maintain and keep in good repair all structural components of the Demised Premises, including, but, not limited to the foundation, sidewalks, roof, plumbing, load bearing walls, and electrical and HVAC systems. Lessee shall maintain and keep in their current condition, subject to normal wear and tear, all non-structural components of the Demised Premises, including interior wall finishes, carpet or other flooring, and windows. In the event Lessee or Lessor fails to so maintain the applicable elements of the Demises Premises as set forth hereinabove, after ten (10) days prior notice from the other party, or such other period of time as may be reasonable to perform such repair and maintenance, provided such party promptly commences and diligently pursues same to completion, the other party may perform such maintenance or repair, and the party that failed to so maintain the applicable elements of the Demises Premises shall pay the costs incurred by the other party within ten (10) business days upon receipt of invoice.

8. OBSERVATION OF RULES. Lessee shall observe all rules and regulations that have been or hereafter may be promulgated by Lessor for conduct while on the Real Property, including, but not limited to, rules and regulations with respect to acts or practices deemed hazardous by Lessor, and Lessee agrees to enforce compliance therewith by its employees, agents and contractors, provided, however, such rules and regulations shall not materially prevent or hinder Lessee from its permitted use of the Demised Premises.

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9. INDEMNIFICATION BY LESSEE. Lessee agrees to indemnify, defend with counsel reasonably acceptable to Lessor, and hold Lessor and Lessor’s members, managers, employees and affiliates (collectively, the “Lessor Indemnified Parties”) harmless from and against any and all claims of liability for any injury or damage to any person or property arising from the use by Lessee, its agents, employees, contractors or invitees of the Demised Premises or from any activity, work, or thing done, or permitted by Lessee in or about the Demised Premises, except claims and liabilities to the extent occasioned by the negligence or willful misconduct of Lessor, its agents, employees, contractors or invitees. Further, Lessee agrees to indemnify, defend with counsel reasonably acceptable to Lessor, and hold the Lessor Indemnified Parties harmless from and against any and all claims, demands, losses, suits, actions, causes of action, liabilities and expenses, including any liability to third parties and losses and damage to property suffered by any Lessor Indemnified Party, directly or indirectly arising out of the presence or release of any Hazardous Materials, as defined below, in violation of applicable law in, on or under the Real Property, including, without limitation, the cost of any required or necessary repair, clean-up or detoxification and the preparation of any closure or other required plans to the extent that such action is attributable directly or indirectly to the presence (in violation of applicable law), release, threatened release or disposal of Hazardous Materials by Lessee or any individual or entity operating for or on behalf of Lessee. “Hazardous Materials” shall include all substances defined as “hazardous substances,” “hazardous materials” or “toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., and in any future amendments or additions to such laws, and in the regulations now or hereafter adopted and publications now or hereafter promulgated pursuant to said federal and state laws (collectively, the “Environmental Laws”). The obligations of Lessee under this Section 9 shall survive the expiration or termination of this Lease.

10. INSURANCE.

10.1 Lessee shall obtain and maintain the following insurance during the term of this Lease:

(A) Commercial General Liability Coverage with minimum limits of $2,000,000, combined single limit; and

(B) Commercial Automobile Liability Coverage with minimum limits of $500,000, combined single limit covering all owned, hired, and non-owned vehicles.

All of the insurance required to be maintained by Lessee shall be obtained from an insurer which is licensed to do business in the state where the Real Property is located. Lessee shall provide to Lessor copies of the policies evidencing all required coverage hereunder within ten (10) days following the Effective Date. All of the insurance required hereunder shall name Lessor as an additional insured and shall include a waiver of subrogation in favor of Lessor. All insurance policies required by this Lease shall state that the insurer shall endeavor that such policy may not be terminated or cancelled without first providing Lessor with thirty (30) days prior written notice.

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Lessee shall be responsible for obtaining any casualty insurance on Lessee’s personal property, equipment and fixtures at the Demised Premises.

10.2 Lessor shall obtain and maintain the following insurance during the term of this Lease:

(A) Commercial General Liability Coverage with minimum limits of $2,000,000, combined single limit; and

(B) “All-risk” property and casualty insurance in an amount equal to the replacement value of the Demised Premises.

11. ACCEPTANCE OF DEMISED PREMISES. Lessee accepts the lease granted herein and its use of the Real Property pursuant to same on an AS IS, WHERE IS, AND WITH ALL FAULTS, PATENT AND LATENT BASIS.

12. REMOVAL OF PROPERTY. Upon the expiration or earlier termination of this Lease, Lessee may, at its own expense and risk, remove all of Lessee’s property, equipment and trade fixtures from the Demised Premises, and shall remediate any damage to the Demised Premises resulting from Lessee’s use of the Demised Premises under this Lease or from removal of such Lessee’s property, equipment and trade fixtures from the Demised Premises. If Lessee should fail to remove its property, equipment and trade fixtures upon the expiration or earlier termination of this Lease, they shall become the property of Lessor. This Section 12 shall survive expiration or termination of this Lease.

13. ASSESSMENTS. Lessee shall pay, before the same becomes delinquent, all charges, taxes, rates and assessments upon or against any property of Lessee upon or on the Real Property.

14. DAMAGE OR DESTRUCTION. If the Demised Premises is partially destroyed during the term of this Lease, Lessor will proceed with reasonable diligence to restore the same with insurance proceeds or at Lessor’s expense. If the Demised Premises is completely destroyed during the term of this Lease, this Lease shall automatically terminate effective on the date of such destruction.

15. DEFAULT. In the case of default by Lessee, Lessor may terminate the Lease if such default continues for a period of ten (10) days after Lessor notifies Lessee of such default, unless such default is of such a nature that it is incapable of being remedied within such ten (10) day period, and provided that Lessee diligently prosecutes the remedy of such default until same is corrected. In the case of default by Lessor, Lessee may terminate the Lease if such default continues for a period of ten (10) days after Lessee notifies Lessor of such default, unless such default is of such a nature that it is incapable of being remedied within such ten (10) day period, and provided that Lessor diligently prosecutes the remedy of such default until same is corrected. Notwithstanding the foregoing, in the event of a failure by either party to perform any repair, maintenance or reconstruction required under this Lease, and such continues for a period of ten (10) days after the non-defaulting notifies the defaulting party in writing of such failure, the non- defaulting party may perform such repair, maintenance or reconstruction and charge the reasonable costs of same to the defaulting party.

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16. QUIET ENJOYMENT. Lessor hereby covenants and agrees that if Lessee will at all times comply with the terms and conditions of the Lease, then during the Term, as same may be extended or renewed, Lessee shall have the peaceable and quiet enjoyment and possession of the Demised Premises.

17. ASSIGNMENT. Lessee may not assign this Lease or sublease the Demised Premises without Lessor’s prior written consent, which consent shall not be unreasonably withheld.

18. NOTICES. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) if served personally, on the day of such service, or (ii) if mailed by certified or registered mail (return receipt requested), on the second business day after mailing, and (iii) if transmitted by recognized overnight carrier, on the next business day after tender to the carrier. Such communications shall be sent to the following addresses

TO Lessor:

Control and Instrumentation Holding Company Ltd.

c/o EControls, Inc.

3523 Crosspoint

San Antonio, Texas 78217

Attention: Kennon Guglielmo

TO Lessee:

EControls, LLC

3523 Crosspoint

San Antonio, Texas 78217

Attention: Kennon Guglielmo

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.

19. MISCELLANEOUS.

(A) The laws of the State of Texas will govern this Lease. If any provision of this Lease is held to be invalid or unenforceable, the validity and enforceability of the remaining portions of the Lease will not be affected thereby.

(B) This Lease contains the entire agreement of the parties hereto and shall not be modified in any manner except by an instrument in writing signed by the parties hereto.

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(C) Any intention to create a joint venture or partnership relationship between Lessor and Lessee is hereby expressly disclaimed.

(D) The covenants and agreements herein contained will inure to the benefit of, and be binding upon, the parties hereto, their respective heirs, legal representatives, successors and permitted assigns.

(E) This Lease may be executed in counterparts, which shall collectively constitute one original document.

Signatures on following page

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IN WITNESS WHEREOF, this Lease is executed to be effective on the day and year first above written.

LESSEE:	EControls, LLC, a Texas limited liability company
	By:	/s/ Kennon Guglielmo
	Name:	Kennon Guglielmo
	Title:	President
LESSOR:	Control and Instrumentation Holding Company, Ltd., a Texas limited partnership
	By:	EControls, Inc., a Texas corporation, its general partner
	By:	/s/ Kennon Guglielmo
	Name:	Kennon Guglielmo
	Title:	President

EXHIBIT A

(LEGAL DESCRIPTION OF THE REAL PROPERTY)

NCB 16837, Blk 1, Lot 28, Crosspoint Subdivision, City of San Antonio, Bexar County, Texas.

EX-10.15

Exhibit 10.15

INDUSTRIAL LEASE

Gold Tooth Development, LLC, a Texas limited liability company,

LANDLORD,

AND

Enovation Controls, LLC, an Oklahoma limited liability company,

TENANT

DATED: July 24, 2014

PROPERTY: 5757 Farinon Drive, San Antonio, Bexar County, Texas

Execution Copy

TABLE OF CONTENTS

(continued)

ARTICLE 1: BASIC TERMS	1
ARTICLE 2: LEASE TERM	3
ARTICLE 3: USE OF PREMISES	4
ARTICLE 4: RENT	4
ARTICLE 5: PROPERTY TAXES	6
ARTICLE 6: UTILITIES	7
ARTICLE 7: COMPLIANCE WITH LAW	7
ARTICLE 8: INSURANCE/INDEMNITY	9
ARTICLE 9: CONDITION AND MAINTENANCE OF PREMISES	14
ARTICLE 10: HAZARDOUS MATERIALS	18
ARTICLE 11: CASUALTY AND CONDEMNATION	20
ARTICLE 12: ASSIGNMENT AND SUBLETTING	22
ARTICLE 13: DEFAULTS AND REMEDIES	23
ARTICLE 14: PROTECTION OF LENDERS AND OWNERS	27
ARTICLE 15: MISCELLANEOUS PROVISIONS	29

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TABLE OF CONTENTS

(continued)

Exhibits
A	Legal Description of the Land
B	Survey or Site Plan Depicting the Premises
C	Schedule of Rents
D	Landlord Personalty
E	Rules and Regulations
F	No Option to Purchase
G	Third Party Reports
H	Guaranty of Lease
I	Roof Restrictions
J	Work Letter

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INDUSTRIAL LEASE

THIS INDUSTRIAL LEASE (the “Lease”) is made as of July 24, 2014 (the “Effective Date”), between GOLD TOOTH DEVELOPMENT LLC, a Texas limited liability company (“Landlord”), and the Tenant named below.

ARTICLE 1: BASIC TERMS

The following terms used in this Lease shall have the meanings set forth beside such terms in this Article 1.

Tenant	Enovation Controls, LLC, an Oklahoma limited liability company
Tenant’s Notice Address	Enovation Controls, LLC
	5311 S 122nd East Ave
	Tulsa, OK 74146
	Email: dcrowell@fwmurphy.com
Tenant’s Billing Address (if different)	N/A
Landlord’s Notice Address	Gold Tooth Development, LLC
	235 Primrose Place
	San Antonio, Texas 78209
	Attn: Kennon Guglielmo, Manager
	Email: kgug@econtrols.com
Landlord’s Rent Payment Address	Gold Tooth Development, LLC
	235 Primrose Place
	San Antonio, Texas 78209
	Attn: Kennon Guglielmo, Manager
Guarantor	Enovation Controls, LLC (p/k/a Global Controls & Instrumentation, LLC), an Oklahoma limited liability company
Premises	The tracts of real property legally described on Exhibit A attached hereto and incorporated herein (the “Land”), together with the industrial/warehouse facility located thereon, known as 5757 Farinon Building and having an address of 5757 Farinon Drive, San Antonio, Texas (the “Building”), together with the parking areas,

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	landscaping, walkways and other improvements owned by Landlord and located on the Land. A site plan or survey of the foregoing Land and Building is attached hereto as Exhibit B
Lease Term	One Hundred Eighty-Six (186) calendar months, beginning on the Commencement Date and ending on January 31, 2030 (the last day of the 186th full calendar month after the Commencement Date)
Commencement Date	July 24, 2014
Base Rent	As stated on the Schedule of Base Rent attached hereto as Exhibit C and incorporated herein
Permitted Use	The Premises shall be used only for offices and for the purpose of engineering, manufacturing, assembling, testing, receiving, storing, shipping and selling (but limited to wholesale sales) of products, materials and equipment made and/or distributed by Tenant in connection with engine control and instrumentation for engines and engine driven equipment and for such other lawful purposes as may be incidental thereto
Landlord Personalty	The furniture, fixtures, equipment and other personal property owned by the Landlord, located on the Premises, and described in Exhibit D attached hereto and incorporated herein, and any replacements thereof
Security Deposit	$50,000.00

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ARTICLE 2: LEASE TERM

2.01 Lease of Premises for Lease Term. Landlord hereby leases the Premises and the Landlord Personalty to Tenant and Tenant leases the Premises and the Landlord Personalty from Landlord for the Lease Term, upon and subject to all of the terms, conditions and provisions of this Lease, and subject to the Permitted Encumbrances (defined below). As used in this Lease, the term “Premises” includes the Land and the Building and other improvements owned by Landlord and located thereon. A survey or site plan depicting the Premises is attached as Exhibit B. As used herein, the term “Permitted Encumbrances” means those covenants, restrictions, reservations, liens, conditions, encroachments, easements, encumbrances and other matters of record that affect the Premises or Landlord Personalty as of the Effective Date, or which arise due to the acts or omissions of Tenant, or due to the acts or omissions of Landlord with Tenant’s consent, after the Effective Date.

2.02 No Early Possession. This Lease governs Tenant’s access to the Premises upon the Commencement Date and no earlier. No access to the Premises by Tenant prior to this the Commencement Date (“Early Possession”) is contemplated, allowed, or governed under this Lease. It is recognized that Tenant may have access to the Premises prior to the Commencement Date under the authority of a different controlling lease as negotiated with a different entity, but Landlord specifically has no responsibility under the terms of any such other controlling lease.

2.03 Delay in Commencement. If Landlord is unable to deliver the Premises on the Commencement Date, such date will be postponed to the date possession of the Premises is delivered to Tenant (the “New Commencement Date”). In such event, Landlord and Tenant will execute a Memorandum of Acceptance of Lease, in a form to be prepared by Landlord, setting forth the New Commencement Date and new expiration date of this Lease, which will be ten years after the New Commencement Date; provided, however, that if the New Commencement Date is more than 31 days after the original Commencement Date through no fault of Tenant, then the Tenant’s sole and exclusive remedy for such delay shall be the right to terminate the Lease upon written notice to the Landlord of such termination prior to Landlord’s delivery of the Premises to Tenant, and in such event, the Landlord shall return the Security Deposit to Tenant and neither party shall have any obligation to the other under this Lease, except those indemnity obligations that expressly survive termination. If Tenant fails to deliver such termination notice timely to Landlord, Tenant shall be deemed to have accepted the delay in the Commencement Date and the New Commencement Date shall be the Commencement Date for all purposes under this Lease.

2.04 Covenant of Quiet Enjoyment. Tenant, on paying the Rent and performing its obligations hereunder, will peacefully and quietly have, hold and enjoy the Premises throughout the Lease Term without any manner of hindrance from Landlord, subject however to all the terms and provisions hereof.

2.05 Holding Over. If Tenant does not vacate the Premises and surrender the Premises and the Landlord Personalty in the condition required hereby upon the expiration or earlier termination of this Lease, (i) Tenant will indemnify Landlord against all damages, costs, liabilities and expenses, including attorneys’ fees, which Landlord incurs on account of Tenant’s failure to vacate and surrender, and (ii) the Base Rent will increase to 150% of the Base Rent

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then in effect and Tenant’s obligation to pay Additional Rent will continue. Any holdover by Tenant shall constitute a tenancy at sufferance, subject to termination by Landlord at any time, and shall not constitute an extension of the Lease or recognition by Landlord of any right of Tenant to remain in the Premises.

ARTICLE 3: USE OF PREMISES

3.01 Manner of Use. Tenant will use the Premises and the Landlord Personalty only for the Permitted Use. Tenant will not cause or permit the Premises or the Landlord Personalty to be used in any way which (i) constitutes a violation of any Legal Requirements (as defined in Section 7.01 below), or (ii) constitutes a violation of any of the rules and regulations established by Landlord, a copy of which is attached as Exhibit E, as they may be amended in writing by Landlord (the “Rules and Regulations”), or (iii) constitutes a nuisance or waste or will invalidate any insurance carried by Landlord or by Tenant. Tenant shall not cause or permit the Landlord Personalty to be removed from the Premises at any time, except a temporary removal for cleaning or maintenance, after which the Landlord Personalty will be promptly returned to the Premises. Tenant is responsible for determining whether or not the zoning is appropriate for Tenant’s intended use. Tenant will, at its sole cost and expense, obtain and pay for all necessary permits, including a certificate of occupancy, and will promptly take all actions necessary to comply with all applicable Federal, State or local statutes, applicable workplace regulations, ordinances, rules, regulations, orders, recorded declarations, covenants and requirements regulating the use by Tenant of the Premises, including, without limitation, the Occupational Safety and Health Act and the Americans With Disabilities Act.

3.02 Landlord’s Access. Landlord or its agents may enter the Premises from time to time, upon 24 hours prior notice to Tenant (except in the case of an emergency when no notice is required), to show the Premises or any portion of the Landlord Personalty to potential buyers, investors, lenders or tenants or other parties, for property inspections, for maintenance or for any other purpose Landlord deems reasonably necessary. Except in the case of an emergency, Tenant shall have the right to have a representative present during any such access by Landlord. With respect to Landlord’s access for the purpose of showing the Premises, Landlord agrees to use reasonable efforts to schedule the showings during normal business hours that are mutually convenient for Landlord and Tenant, and with respect to Landlord’s access for the purpose of non-emergency property inspections, maintenance or any other purpose, Landlord agrees to use reasonable efforts to schedule the access during Tenant’s normal business hours that are mutually convenient for Landlord and Tenant so as to minimize disruptions to Tenant’s production operations at the Premises. During the last 12 months of the Lease Term, Landlord may place customary “For Lease” signs on the Premises.

ARTICLE 4: RENT

4.01 Base Rent. On the first day of each calendar month during the Lease Term, Tenant will pay to Landlord the Base Rent in monthly installments, in lawful money of the United States, in advance and without offset, deduction, prior notice or demand. The obligation of Tenant to pay Base Rent and other sums to Landlord and the obligations of Landlord under this Lease are independent obligations. The Base Rent is payable at Landlord’s Rent Payment Address or at such other place or to such other person as Landlord may designate in writing from time to time. Payments of Base Rent for any partial calendar month will be prorated.

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4.02 Additional Rent. All sums payable to Landlord by Tenant under this Lease other than Base Rent are “Additional Rent”; the term “Rent” includes both Base Rent and Additional Rent. It is the specific intention of the Landlord and the Tenant that this Lease is a “triple net lease,” that the Base Rent shall be absolutely net to the Landlord, and that, except for any obligations under this Lease specifically assigned to the Landlord, the Tenant shall pay costs and expenses (in whatever form) related to the Premises or the Landlord Personalty or their upkeep and maintenance, which expenses are attributable to any period during the Lease Term. Landlord will estimate in advance and charge to Tenant the following costs (collectively, the “Tenant Costs”), which Tenant will pay throughout the Occupancy Period (as defined below) as Additional Rent each month (along with payment of the monthly Base Rent) in the amount of one-twelfth (1/12) of the Landlord’s total annual estimate: (a) Landlord Insurance Costs for which Tenant is responsible under Article 8 of this Lease, (b) Real Property Taxes under Article 5 of this Lease; (c) all Operating Expenses under Section 4.05 of this Lease, and (d) the expense for modifications due to changes in the law as set forth in Section 7.03 of this Lease. The monthly amount estimated by Landlord to be paid by Tenant to Landlord for Tenant Costs may be adjusted by Landlord during the first 90 days of each calendar year by providing written notice to Tenant of such adjusted amount no later than thirty (30) days prior to the effective date of such increase, together with the estimated calculations and rationale for such adjustment. Following the end of each calendar year during which this Lease is in effect, Landlord will furnish to Tenant a statement showing the total amount of Tenant Costs items paid or incurred by Landlord during the preceding calendar year, itemized by category, reconciled against the payments received by Landlord from Tenant for such Tenant Costs. Within thirty (30) days after Tenant’s receipt of such statement, there will be an adjustment between Landlord and Tenant, with payment to or credit given by Landlord (as the case may be). “Occupancy Period” means the period from the time Tenant first enters the Premises, throughout the Lease Term and for as long as Tenant remains in the Premises thereafter.

4.03 Interest. Any Rent or other amount due to Landlord, if not paid when due, will bear interest commencing thirty (30) days after the date such Rent amount is due and continuing until paid at the rate of 12% per annum, but not to exceed the highest rate legally permitted.

4.04 Late Charge. If any installment of Rent or any other sums due from Tenant is not received by Landlord within 5 business days following the due date, Tenant will pay to Landlord a late charge equal to 5% of such overdue amount; provided, however, Landlord will not charge any late charge for the first time in each calendar year that such payment is not made within 5 business days of the due date if payment is received within 5 business days of receipt of notice. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant.

4.05 Operating Expenses. Tenant will pay as Additional Rent to Landlord all Operating Expenses incurred by Landlord and allocable to the Occupancy Period. “Operating Expenses” means all costs and expenses incurred by Landlord with respect to the ownership, maintenance and operation of the Premises or the Landlord Personalty, including, but not limited to;

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(a) any fees for required licenses and permits; all assessments, fees or other charges payable by Landlord under Section 5.04 below; and

(b) maintenance, repairs and replacements that are the obligation of Tenant under Section 9.03 below, but that are performed by Landlord.

Operating Expenses do not include: (i) debt service under mortgages or ground rent underground leases; (ii) costs of restoration to the extent of net insurance proceeds received by Landlord; (iii) leasing commissions; (iv) Landlord’s general corporate overhead costs; (v) roof repairs or replacements, and (vi) structural repairs to exterior walls and foundations.

ARTICLE 5: PROPERTY TAXES

5.01 Real Property Taxes. As Additional Rent, Tenant will pay Landlord for all Real Property Taxes allocable to the Occupancy Period. Landlord will pay the Real Property Taxes to the appropriate taxing authorities. If Landlord receives a refund of any Real Property Taxes for which Tenant has paid Landlord, Landlord will refund to Tenant its share after deducting therefrom all related costs and expenses. Landlord shall have the right, but not the obligation, to protest, appeal, or institute proceedings to effect a reduction of Real Property Taxes at any time, including the right to seek a reduction in the valuation of the Building or the Premises assessed for real estate tax purposes. Landlord will endeavor to provide promptly to Tenant copies of notices of appraised value, tax assessments and bills that it receives from any taxing authorities or other governmental entities with respect to the ad valorem tax on the Premises and the Landlord Personalty. In the event that Landlord elects not to pursue any protest, appeal, or other proceeding relating such ad valorem tax, then Landlord will provide notice to Tenant of such election. Upon Tenant’s receipt of such notice, provided this Lease is not previously cancelled or terminated, and there shall be no Event of Default, or an event that with the giving of notice or the lapse of time, or both, would constitute an Event of Default, then Tenant shall have the right, at its sole cost and expense, to contest the amount or validity of any ad valorem tax or assessment assessed and levied against the Premises or Landlord Personalty, or to seek a reduction in the valuation of the Building or the Premises or the Landlord Personalty assessed for ad valorem tax purposes, by appropriate proceedings diligently conducted in good faith (the “Tenant Tax Appeal”), but only after payment of such taxes and assessments. If required by law, Landlord shall, upon written request of Tenant, join in the Tenant Tax Appeal or permit the Tenant Tax Appeal to be brought in Landlord’s name, and Landlord will reasonably cooperate with Tenant in authorizing such actions, at the sole cost and expense of Tenant. Tenant shall pay any increase that may result in ad valorem taxes or assessments as a consequence of the Tenant Tax Appeal, which payment obligations shall survive the expiration or earlier termination of this Lease. Tenant shall have no right to file a Tenant Tax Appeal during the last 12 months of the Lease Term.

5.02 Definition of “Real Property Taxes”. “Real Property Taxes” means taxes, assessments (special, betterment, or otherwise), levies, fees, rent taxes, excises, impositions, charges, water and sewer rents and charges, and all other government levies and charges, general and special, ordinary and extraordinary, foreseen and unforeseen, which are imposed or levied upon or assessed against the Premises, the Landlord Personalty, or any other fixtures, furniture or equipment owned by Landlord and available for use by Tenant on the Premises, or any Rent or

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other sums payable by Tenant or occupants of the Premises. Real Property Taxes include Landlord’s reasonable costs and expenses of reviewing and contesting any Real Property Tax. If, and to the extent that, Landlord is assessed a sales tax, rent tax, capital levy or other tax on the gross rents received with respect to the Premises or Landlord Personalty or a federal, state, county, municipal, or other local income, franchise, excise or similar tax, assessment, levy, or charge measured by or based, in whole or in part, upon gross rents or any similar tax or levy, then all of such taxes, assessments, levies or charges, to the extent so measured or based, will be deemed to be a Real Property Tax.

5.03 Personal Property Taxes. Tenant will pay directly all taxes charged against the trade fixtures, furnishings, equipment, inventory or any other personal property belonging to Tenant. Tenant will use its best efforts to have its personal property taxed separately from the Premises. If any of Tenant’s personal property is taxed with the Premises, Tenant will pay Landlord the taxes for such personal property within 30 days after Tenant receives a written statement from Landlord for such personal property taxes.

5.04 Industrial Park and Property Agreement Fees. As Additional Rent, Tenant will pay Landlord for all assessments, maintenance fees or other charges levied against the Premises or for operations at the Premises by any industrial park authority or any other association or authority, including those payable under the Property Agreements (as defined in Section 7.05 below), to the extent allocable to the Occupancy Period. Landlord will pay such fees and charges to the appropriate authorities.

ARTICLE 6: UTILITIES

6.01 Utilities. Tenant will promptly pay, directly to the appropriate supplier, the cost of all natural gas, heat, cooling, energy, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the Premises, together with any related installation or connection charges or deposits (collectively, “Utility Costs”) incurred during the Occupancy Period.

ARTICLE 7: COMPLIANCE WITH LAW

7.01 Use. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation as to the condition of the Premises or the Landlord Personalty or the suitability of the same for Tenant’s intended use and that Tenant is responsible for determining whether or not the zoning is appropriate for Tenant’s intended use. Tenant shall be responsible for obtaining all permits and approvals required by the Legal Requirements in connection with Tenant’s specific manner of use, and specific character of, operations at the Premises and shall provide a copy of the same to Landlord upon receipt of such, if applicable. The term “Legal Requirements” shall mean all laws, statutes, ordinances, rules, regulations, recorded declarations or covenants, orders and other requirements of any government or public authority now in force or which may hereafter be in force, with all requirements of any board of fire underwriters or other similar body now or hereafter constituted, and with all directions and certificates of occupancy issued pursuant to any law by any governmental agency or officer, insofar as any thereof relate to or are required by the condition, use or occupancy of the Premises or the operation, use or maintenance of any personal property, fixtures, machinery, equipment or improvements in the Premises, including the Landlord Personalty.

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7.02 Legal Compliance. Tenant, at its expense, shall comply with all Legal Requirements (including any Environmental Laws) with respect to Tenant’s use, occupancy and operations of or at the Premises, including any Legal Requirements that may require alterations, repairs or replacements, whether structural or nonstructural, exterior or interior to the Premises as well as all Legal Requirements with respect to the Landlord Personalty. Upon Landlord’s request, Tenant shall evidence to Landlord Tenant’s compliance with such Legal Requirements, including, without limitation, by providing to Landlord copies of all operating permits and other approvals, licenses, registrations and the like required by Legal Requirements in connection with Tenant’s operations at the Premises and use of the Landlord Personalty.

7.03 Change in Law. Subject to Section 7.04, in the event that a change in Legal Requirements in effect and applicable to the Premises occurs after the Commencement Date of this Lease, which requires any modification of the Premises or the Building, Landlord shall make the necessary modifications and the expense of such modifications shall be reimbursed by Tenant to Landlord, as part of the Tenant Costs, in an amount equal to the monthly installment required to fully amortize the amount of Landlord’s expense of such modifications over the useful life of such improvement as reasonably determined by Landlord in accordance with generally accepted accounting principles, and such amount shall be included in Additional Rent. Notwithstanding the preceding sentence, from the Commencement Date through the expiration of the Lease Term or earlier termination of this Lease, Tenant, at Tenant’s sole cost and expense, shall be responsible for complying with all Legal Requirements with respect to the use of Landlord Personalty, Tenant fixtures, Tenant installations and alterations, equipment, racking systems and other similar items in the Premises, including any and all modifications, repairs, or replacements required thereto as a result of a change in Legal Requirements after the Commencement Date (it being agreed that Landlord’s responsibility is solely for the Premises and Building).

7.04 Changes to Fire Suppression System. If any bureau, department or official of the state or city government having jurisdiction shall require or recommend that any changes, modifications, alterations, additional sprinkler heads or other equipment be made or supplied to the fire suppression system directly resulting from Tenant’s business use, or by any changes in the Premises made by Tenant as part of its initial occupancy or after initial occupancy, or if any such changes, modifications, alterations, additional sprinkler heads or other equipment become necessary to prevent the imposition of a penalty or charge against the full allowance for a fire suppression system in the initial insurance rate as fixed by the appropriate board or authority, or by a fire insurance company, then, in any such event, Tenant shall be liable for the cost of installing, repairing, or replacing as the case may be, any such equipment, and the cost of any such changes, modifications, alterations, additional sprinkler heads or such other equipment.

7.05 Property Agreements. Tenant agrees that Tenant shall perform all obligations of the owner of the Premises under any reciprocal easement agreement or other agreement or document of record now affecting the Premises, including, but not limited to, that certain Amended and Restated Declaration of Covenants, Easements, and Option to Repurchase dated January 1, 1997 and recorded as Document No. 97-0058346 in Volume 7075, Page 520 of the Official Public

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Records of Bexar County, Texas (as the same has been subsequently amended) and that certain Reciprocal Easement Agreement dated September 29, 2005 and recorded as Document No. 20050227356 in Volume 11676, Page 1875 of the Official Public Records of Bexar County, Texas (collectively, the “Property Agreements”), to the extent the same relates to the Premises or to Tenant’s use and occupancy of the Premises, and that Tenant shall comply in all material respects with all of the terms and conditions of the Property Agreements during the term of this Lease; provided, however, that Tenant is not obligated to pay directly to third parties any regular assessments or other charges under the Property Agreements to the extent that the amount of such assessments or charges are included in the estimate of Operating Expenses or other Tenant Costs that Tenant pays to Landlord monthly as Additional Rent.

7.06 Legal Compliance by Landlord. Landlord hereby represents to Tenant that as of the Effective Date, to Landlord’s Knowledge (as defined in Section 15.15), Landlord has received no written notice that either the Premises or the Landlord Personalty fail to comply materially with applicable Legal Requirements.

ARTICLE 8: INSURANCE/INDEMNITY

8.01 Tenant’s Insurance. Tenant, at its expense, will maintain the following insurance coverages during the Occupancy Period:

(a) Liability Insurance. Commercial general liability insurance insuring Tenant against liability for bodily injury, property damage (including loss of use of property) and personal injury at the Premises, including contractual liability with this Lease as a covered contract. Such insurance will name Landlord, its property manager, any mortgagee, and such other parties as Landlord may designate, as additional insureds (the additional insured status under the commercial general liability insurance policy will be provided by additional insured endorsement on ISO Form CG 2026 1185 or such other form acceptable to Landlord). The initial amount of such insurance will be Three Million Dollars ($3,000,000) per occurrence and will be subject to periodic increases reasonably specified by Landlord based upon inflation, increased liability awards, recommendations of Landlord’s professional insurance advisers, and other relevant factors. The liability insurance obtained by Tenant under this Section 8.01 will (i) be primary and (ii) insure Tenant’s obligations to Landlord under Section 8.06. The amount and coverage of such insurance will not limit Tenant’s liability nor relieve Tenant of any other obligation under this Lease.

(b) Worker’s Compensation Insurance. Worker’s Compensation Insurance in the statutory amount (and Employers’ Liability Insurance in the amount of One Million Dollars ($1,000,000) each for (i) bodily injury per accident, (ii) disease for each employee, and (iii) disease policy limit) covering all employees of Tenant employed or performing services at the Premises, in order to provide the statutory benefits required by the laws of the State of Texas.

(c) Automobile Liability Insurance. Automobile Liability Insurance, including but not limited to, passenger liability, on all owned, non-owned, and hired vehicles used in connection with the Premises, with a combined single limit per occurrence of not less than One Million Dollars ($1,000,000) for injuries or death of one or more persons or loss or damage to property.

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(d) Personal Property Insurance. Personal Property Insurance covering leasehold improvements paid for by Tenant and Tenant’s personal property and fixtures from time to time in, on, or at the Premises, in an amount not less than 100% of the full replacement cost, without deduction for depreciation, providing protection against events protected under a Causes of Loss–Special Form property insurance policy as well as against flood, sprinkler damage, vandalism, and malicious mischief and other perils reasonably requested by Landlord. Any proceeds from the Personal Property Insurance will be used for the repair or replacement of the property damaged or destroyed, unless the Lease Term is terminated under an applicable provision herein. If the Premises are not repaired or restored in accordance with this Lease, Landlord will receive any proceeds from the personal property insurance allocable to Tenant’s leasehold improvements.

(e) Insurance for Landlord’s Property. Causes of Loss - Special Form property insurance (in ISO Form CP 10 30, or equivalent form acceptable to Landlord) covering loss of or damage to all or any part of the Premises (including the Building and other improvements) and the Landlord Personalty, which names Landlord as an additional insured pursuant to an “Additional Insured-Building Owner” endorsement using ISO Form CP 12 19 06 07 or equivalent form acceptable to Landlord, and names Landlord (or Landlord’s mortgagee, if applicable) as the sole loss payee using ISO Form CP 12 18 (or equivalent form acceptable to Landlord) and using the “Building Owner Loss Payable” designation for the loss payee (or the “Lender Loss Payable” designation, if applicable), and which (i) insures against loss or damage by fire, lightning, windstorm, tornado, hail or such other further and additional hazards of whatever kind or nature as are now or hereafter may be covered by extended all risk coverage, (ii) includes “all risk” endorsements required by Landlord (including, but without limiting the generality of the foregoing, vandalism, malicious mischief, flood, and damage by water), (iii) insures against war risk as, when and to the extent such insurance is obtainable from the United States of America or an agency thereof, if requested by Landlord, (iv) includes a “Flood Coverage” endorsement using ISO Form CP 10 65 06 07, or equivalent form acceptable to Landlord, (v) insures against earthquakes and other earth movement (including subsidence), (vi) insures against any other risk commonly insured against by persons operating properties similar to the Premises and located in the vicinity of the Premises or conducting operations similar to the operations conducted at the Premises, (vii) includes an “Ordinance or Law Coverage” endorsement using ISO Form CP 04 05 or an equivalent form acceptable to Landlord, that includes Coverage for Loss to the Undamaged Portions of the Building, Demolition Cost Coverage, and Increased Cost of Construction, in an amount to be reasonably determined by the Landlord, but not less than $1,000,000.00, (viii) includes a “Debris Removal Additional Limit of Insurance” endorsement using ISO Form CP 04 15 or equivalent form acceptable to Landlord, in an amount to be reasonably determined by the Landlord, (ix) includes sprinkler leakage insurance, (x) insures for the full replacement cost of the Landlord Personalty, the Building, and all other improvements on the Premises owned by Landlord, with an annual “agreed value” endorsement acceptable to Landlord (without deduction for deprecation), (x) includes all other endorsements reasonably requested by Landlord or required by any mortgagee of the Premises from time to time, and (xi) has a “deductible” under such insurance that is no greater than $50,000.00 (the “Casualty Insurance for Landlord”).

(f) Business Income and Extra Expense Insurance. Business Income and Extra Expense insurance using ISO Form CP 00 30, or an equivalent form acceptable to Landlord, that provides

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coverage of the actual losses sustained and includes business income/rental value coverage identifying Landlord as the additional insured pursuant to a “Business Income – Landlord as Additional Insured (Rental Value)” endorsement using ISO Form CP 15 03 06 07, or an equivalent form acceptable to Landlord, that names Landlord (or Landlord’s mortgagee) as the sole loss payee, and which (i) covers the full amount of all Rent (Base Rent and Additional Rent) required of Tenant under this Lease, (ii) covers the Rent during the time period required to rebuild and/or replace the insured property, (iii) includes “Extended Period of Recovery” endorsements so that not less than twelve (12) additional months of Rent is covered for the period of time after the insured property is repaired and/or rebuilt, and (iv) has no “deductible” under such insurance (the “Rent Loss Insurance for Landlord”).

(g) At the end of each calendar year of the Lease Term, Tenant shall review with Landlord the coverages and limits of any or all of the policies of Casualty Insurance for Landlord and Rent Loss Insurance for Landlord required above and, at that time, shall cause such coverages and liability limits to be increased as reasonably required by Landlord in view of inflation, replacement costs, and other relevant factors.

(h) The Casualty Insurance for Landlord described in Section 8.01(e) and the Rent Loss Insurance for Landlord described in Section 8.01 (f) above may be referred to herein collectively as the “Property Insurance for Landlord”. Upon request of Landlord from time to time, Tenant shall also provide coverage under such Property Insurance for Landlord (or so much thereof as Landlord may require) for the benefit of any Landlord’s mortgagee now or hereafter holding a lien on the Premises and shall name such mortgagee under a standard mortgagee provision.

8.02 Landlord’s Insurance.

(a) In the event that there occurs a Tenant Insurance Default (as defined in Section 13.02(f) below), then at any time thereafter during the Lease Term, Landlord shall have the right (but no obligation) to obtain and maintain at the expense of Tenant one or more replacement policies for the Property Insurance for Landlord (as defined in Section 8.01 above), with such endorsements and deductibles as Landlord determines from time to time, or as may be required by any mortgagee of the Premises, and which names Landlord (or Landlord’s mortgagee) as the sole loss payee (the “Landlord Insurance”). Landlord may (but is not obligated to) obtain and maintain such Landlord Insurance through one or more blanket policies of insurance that cover property sites and locations in addition to the Premises and personal property of Landlord in addition to the Landlord Personalty. Landlord Insurance will not be required to insure Tenant’s fixtures or equipment or building improvements paid for by Tenant.

(b) Landlord may obtain commercial general liability insurance in an amount and with coverage determined by Landlord insuring Landlord against liability with respect to the Premises and any such policy obtained by Landlord will not provide primary insurance, will not be contributory and will be excess over any liability insurance maintained by Tenant.

(c) Tenant will pay to Landlord as part of the Tenant Costs the premiums and other costs for the Landlord Insurance obtained and maintained by Landlord pursuant to Section 8.02(a) (“Landlord Insurance Costs”). Tenant shall not keep or do anything in the Premises that will: (i) cause an increase in the rate of any insurance on the Premises or Landlord Personalty; (ii) violate

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the terms of any insurance coverage on the Premises or Landlord Personalty carried by Landlord or by Tenant; (iii) prevent Landlord from obtaining such policies of insurance acceptable to Landlord or any mortgagee of the Premises; or (iv) violate the rules, regulations or recommendations of Landlord’s insurers, loss prevention consultants, safety engineers, the National Fire Protection Association, or any similar body having jurisdiction over the Premises. If Tenant does so, Tenant shall pay to Landlord upon demand the amount of any increase in any such insurance premium as Additional Rent. In determining the cause of any increase in insurance premiums, the schedule or rate of the organization issuing the insurance or rating procedures shall be conclusive evidence of the items and charges which comprise the insurance rates and premiums on such property.

8.03 General Insurance Provisions. Any insurance which Tenant is required to maintain under this Lease will expressly include provisions stating that the insurance carrier is required to give Landlord not less than 30 days’ written notice prior to any cancellation or modification of such coverage, that the coverage provided by such policy shall be deemed primary insurance, and that any insurance provided by or on behalf of Landlord shall be in excess of any insurance provided by such policy. Prior to the earlier of Tenant’s entry into the Premises or the Commencement Date, Tenant will deliver to Landlord one or more insurance company certificates, with “Notice of Cancellation” endorsements noted, or other insurance company documents that adequately confirm to Landlord’s reasonable satisfaction that Tenant maintains the insurance coverages required by Section 8.01 (including required endorsements and that Landlord is named as additional insured and as sole loss payee, as applicable), and not less than

30 days prior to the expiration or termination of any such insurance, Tenant will deliver to Landlord renewal certificates therefor or other insurance company documents that adequately confirm such coverage to Landlord’s reasonable satisfaction. Upon Landlord’s request from time to time, Tenant will promptly provide Landlord with copies of the such policies that confirm the insurance coverages required by Section 8.01 (including required endorsements and that Landlord is named as additional insured and as sole loss payee, as applicable). All insurance policies required under this Lease will be with companies qualified and licensed to do business in Texas and having a “Best’s Rating” of “A” or better and a “Financial Size Category” of “Class X” or larger, as set forth in the most current issue of the Best’s Key Rating Guide.

8.04 Tenant’s Damage Waiver. Except as set forth below, Tenant assumes all risk with respect to damage to or theft of its property located at the Premises and agrees to look solely to its own insurance in the case of any damage to its property or interruption of its business. Accordingly, Tenant expressly, knowingly and voluntarily waives and releases any claims which it may have against the Landlord or Landlord’s employees, agents, contractors or managers for damage to or theft of Tenant’s property located at the Premises or a loss of business as a result of the acts or omissions of Landlord or Landlord’s employees, agents, contractors or managers, INCLUDING AS A RESULT OF THE NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY OF LANDLORD OR ITS EMPLOYEES, AGENTS, CONTRACTORS OR MANAGERS, BUT SUCH RELEASE AND WAIVER DOES NOT INCLUDE ANY LOSSES CAUSED BY THE WILLFUL MISCONDUCT OF LANDLORD OR ITS EMPLOYEES, AGENTS, CONTRACTORS OR MANAGERS. Without limiting the foregoing, Tenant waives any claims against Landlord as a result of any explosion, flooding or leaking in the Premises, the Premises or Landlord Personalty becoming out of repair, any latent or patent defects in the Premises or Landlord Personalty or any accident within or adjacent to the Premises. Tenant

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shall, on or before the earlier of the Lease Commencement Date or the date on which Tenant first enters the Premises for any purpose, at its sole cost and expense, obtain and keep in full force and effect at all times thereafter a waiver of subrogation from its insurer with respect to the property insurance maintained by Tenant in connection with the Premises and property located therein. Notwithstanding the foregoing, in the event of loss caused by the gross negligence or willful misconduct of Landlord or its employees, agents, contractors, or managers, the Landlord shall be liable to Tenant for the amount of any insurance deductible up to $50,000.00.

8.05 Landlord’s Damage Waiver. Except as set forth below, Landlord assumes all risk with respect to loss or damage to the Premises or the Landlord Personalty (including theft by third parties) and interruption to the operation of the Premises and agrees to look solely to the Property Insurance for Landlord or the Landlord Insurance, as applicable, in the case of any damage to the Premises or the Landlord Personalty or interruption to its business. Accordingly, Landlord expressly, knowingly and voluntarily waives and releases any claims which it may have against the Tenant or Tenant’s employees, agents, or contractors for damage to the Premises or any of the Landlord Personalty (including theft of the Landlord Personalty) and a loss of business (including lost rents at the Premises) as a result of the acts or omissions of Tenant or Tenant’s employees, agents or contractors, INCLUDING AS A RESULT OF THE NEGLIGENCE, GROSS NEGLIGENCE, OR STRICT LIABILITY OF TENANT OR ITS EMPLOYEES, AGENTS OR CONTRACTORS, BUT SUCH RELEASE AND WAIVER DOES NOT INCLUDE ANY LOSSES CAUSED BY THE WILLFUL MISCONDUCT (INCLUDING THEFT) OF TENANT OR ITS EMPLOYEES, AGENTS, OR CONTRACTORS, AND SUCH RELEASE AND WAIVER DOES NOT INCLUDE ANY LOSSES INCURRED BY LANDLORD OR ANY CLAIMS AGAINST TENANT ARISING FROM THE TENANT’S FAILURE TO OBTAIN AND MAINTAIN THE PROPERTY INSURANCE FOR LANDLORD REQUIRED BY SECTION 8.01 OF THIS LEASE. In the event that Landlord obtains any Landlord Insurance under Section 8.02, Landlord shall, at its sole cost and expense, obtain and keep in full force and effect at all times a waiver of subrogation from its insurer with respect to the Premises, the Landlord Personalty, and Landlord’s rent loss insurance. Notwithstanding the foregoing, in the event of loss caused by the gross negligence or willful misconduct of Tenant or Tenant’s employees, agents, or contractors, Tenant shall additionally be liable to Landlord for any insurance deductible up to $50,000.00 and such amount shall be payable to Landlord upon demand.

8.06 Indemnity.

(a) Tenant shall indemnify, defend, and hold harmless Landlord and Landlord’s employees, agents, contractors and managers (collectively, the “Landlord Indemnitees”) from and against any and all loss, damage, claim, demand, liability or expense (including reasonable attorneys’ fees) resulting from claims by third parties and based on (i) any acts or omissions of Tenant, its employees, agents or contractors, or (ii) any personal injury or property damage occurring within the Premises or arising out of Tenant’s operations in and around the Premises, EVEN IF SUCH CLAIMS ARE BASED IN WHOLE OR IN PART UPON THE NEGLIGENCE OF THE LANDLORD INDEMNITEES (BUT NOT TO THE EXTENT SUCH CLAIMS ARE BASED SOLELY UPON THE GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT OF THE LANDLORD INDEMNITEES). Tenant shall have the right to assume the defense of any claim covered by this indemnity on behalf of both itself and the Landlord Indemnitees and the

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Landlord Indemnitees may not settle such claim without the consent of Tenant, provided (1) Tenant acknowledges to the Landlord Indemnitees in writing that it is responsible for such claim under the terms of this paragraph and (2) the lawyers selected by Tenant to handle such defense are reasonably satisfactory to the Landlord Indemnitees and such representation does not result in a conflict of interest for such lawyers. The Landlord Indemnitees may participate in the defense of such claim at their own expense unless Tenant is not representing the Landlord Indemnitees in which case the reasonable expense of the Landlord Indemnitees in defending against such claim shall be paid by Tenant.

(b) Landlord shall indemnify, defend, and hold harmless the Tenant from and against any and all loss, damage, claim, demand, liability or expense (including reasonable attorneys’ fees) resulting from claims by third parties to the extent such claims are based solely on the gross negligence or willful misconduct of Landlord or Landlord’s employees. Landlord shall have the right to assume the defense of any claim covered by this indemnity and the Tenant may not settle such claim without the consent of Landlord, provided (1) Landlord acknowledges to the Tenant in writing that it is responsible for such claim under the terms of this paragraph and (2) the lawyers selected by Landlord to handle such defense are reasonably satisfactory to the Tenant and such representation does not result in a conflict of interest for such lawyers. The Tenant may participate in the defense of such claim at its own expense unless Landlord is not representing the Tenant in which case the reasonable expense of the Tenant in defending against such claim shall be paid by Landlord.

(c) The provisions of this Section 8.06 shall survive the expiration or sooner termination of this Lease.

8.07 Business Interruption. Landlord shall not be responsible for, and Tenant releases and discharges Landlord from, and Tenant further waives any right of recovery from Landlord for, any loss for or from business interruption or loss of use of the Premises or Landlord Personalty suffered by Tenant in connection with Tenant’s use or occupancy of the Premises, EVEN IF SUCH LOSS IS CAUSED SOLELY OR IN PART BY THE NEGLIGENCE OR GROSS NEGLIGENCE OF LANDLORD, BUT NOT IF CAUSED BY THE INTENTIONAL MISCONDUCT OF LANDLORD. Tenant shall, on or before the earlier of the Lease Commencement Date or the date on which Tenant first enters the Premises for any purpose, at its sole cost and expense, obtain and keep in full force and effect at all times thereafter a waiver of subrogation from its insurer with respect to any business interruption insurance and any Rent Loss Insurance for Landlord (defined in Section 8.01(f) above) maintained by Tenant in connection with the Premises.

ARTICLE 9: CONDITION AND MAINTENANCE OF PREMISES

9.01 Existing Condition. EXCEPT AS EXPRESSLY PROVIDED OTHERWISE HEREIN, TENANT HEREBY ACKNOWLEDGES AND AGREES THAT (a) TENANT HAS LEASED AND TAKES THE PREMISES AND THE LANDLORD PERSONALTY “AS IS” “WHERE-IS” AND “WITH ALL FAULTS”; (b) LANDLORD HAS NOT MADE, AND WILL NOT BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO THE PREMISES OR THE LANDLORD PERSONALTY, INCLUDING (BUT NOT LIMITED TO) ANY WARRANTY OR

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REPRESENTATION AS TO THE PREMISES’ OR THE LANDLORD PERSONALTY’S: (i) FITNESS, CONDITION, OR DESIGN FOR A PARTICULAR PURPOSE; (ii) HABITABILITY, MERCHANTABILITY, OR QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN; (iii) CONDITION (LATENT OR PATENT); OR (iv) VALUE, COMPLIANCE WITH SPECIFICATIONS, LOCATION, USE, ZONING, QUALITY, DESCRIPTION, DURABILITY, OR OPERATION; (c) ALL RISKS INCIDENT TO THE FOREGOING ARE, AS BETWEEN TENANT AND LANDLORD, TO BE BORNE BY TENANT; (d) TENANT HAS MADE ITS OWN INSPECTION OF, AND INQUIRY REGARDING, THE CONDITION OF THE PREMISES AND THE LANDLORD PERSONALTY, AND BOTH MEET TENANT’S SPECIFICATIONS AND ARE SATISFACTORY TO IT; AND (e) IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN THE PREMISES OR THE LANDLORD PERSONALTY OF ANY NATURE, WHETHER PATENT OR LATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS SECTION 9.01 HAVE BEEN NEGOTIATED BY LANDLORD AND TENANT AND THE FOREGOING PROVISIONS ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS AND WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE PREMISES OR THE LANDLORD PERSONALTY, ARISING PURSUANT TO THE TEXAS PROPERTY CODE, THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR OTHERWISE. Tenant hereby expressly represents and warrants that, to the extent Tenant has received any representation, promise or other statement of Landlord and/or its agents, employees, managers or brokers relating to this Lease, the Premises, or the Landlord Personalty if such representation, promise or other statement is not set forth in this Lease, then Tenant did not rely on any such representation, promise or other statement or the subject matter thereof, and it is the Landlord’s express intent to fully disclaim and disavow reliance on any such representation, promise or other statement that is not expressly set forth in this Lease. Tenant further acknowledges and agrees that it has received from Landlord the reports and other information prepared by third parties and listed on Exhibit G to this Lease (“Property Information”), that Landlord acquired the Premises from the Current Tenant and received some of the Property Information from the Current Tenant, that Landlord has not yet occupied the Premises, that Landlord has not made and does not make any representation or warranty regarding the truth, accuracy or completeness of the Property Information or any other documents delivered to Tenant, that Landlord has not undertaken any independent investigation as to the truth, accuracy or completeness of the Property Information, and that Landlord is providing the same solely as an accommodation to the Tenant, with the expectation that Tenant will conduct its own independent investigation.

9.02 Landlord’s Obligations. Subject to the provisions of Article 11 (Casualty and Condemnation), Tenant’s express obligations hereunder, and Tenant’s obligation to pay Additional Rent pursuant to Section 4.02, Landlord shall have no responsibility to maintain any portion of the Premises in good repair. Without limiting the foregoing and for an abundance of clarity, Landlord shall not be responsible for maintaining the roof, the foundation, the structural soundness of the exterior walls, windows, glass or plate glass, doors, special store fronts or office

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entries, or any other part of the Premises. Tenant shall promptly give Landlord written notice of a defect or need for repairs under this Section, after which Tenant shall also promptly initiate such repair or correction of defect at Tenant’s sole expense. Landlord shall not be liable for any damages resulting from a failure to make repairs.

9.03 Tenant’s Obligations. Subject to the provisions of Article 11 (Casualty and Condemnation), Tenant shall, at its sole cost and expense, keep all portions of the Premises and the Landlord Personalty in good order, and in a first class condition and repair, promptly making all necessary repairs and replacements, including without limitation, all building systems and equipment and structural components, such as the roof, exterior walls, foundation, HVAC, electrical, plumbing, and mechanical systems, fire suppressions systems, dock levelers, bumpers, doors, windows, plate glass, special store fronts, office entries, floors, slabs and slab repairs, crack filling and joint repairs, interior walls and finish work, floors and floor covering, downspouts, gutters, and the driveways, parking areas, shrubbery, landscape and lawn, and those portions of the Premises that may require repainting and refinishing, including exterior walls. If any portion of the Premises or any system or equipment in the Premises or any Landlord Personalty which Tenant is obligated to repair can not be fully repaired or restored, Tenant will promptly replace such portion of the Premises or system or equipment or Landlord Personalty. Tenant will maintain a preventive maintenance contract providing for the regular inspection and maintenance of the heating and air conditioning system by a heating and air conditioning contractor, such contract and contractor to be approved by Landlord, such approval not to be unreasonably withheld. Tenant shall provide proper and sanitary receptacles within the Premises for any and all trash, rubbish or discarded merchandise, which will be maintained in a clean and sanitary fashion and all expenses of trash, storage and removal will be borne by Tenant. Tenant shall maintain janitorial services and termite and other pest extermination and maintenance treatments by qualified contractors, such contracts and contractors to be reasonably approved by Landlord. Without limiting the foregoing, Tenant shall also maintain all parking areas in a first class condition and appearance, free and clear of any debris or obstructions, and shall promptly repair any damage to any parking areas, including the filling of potholes and the maintenance of the curbs, gutters, and striping in the parking areas, and shall re-surface and re-seal the parking areas promptly as and when necessary to maintain its first class condition and appearance; provided, however that Tenant shall have no obligation to either re-seal or re-surface the parking areas during the first three (3) years of the Lease Term, unless such work is necessitated by Tenant’s misuse of such parking areas. If Tenant fails to maintain or repair any portion of the Premises or Landlord Personalty as herein required, then Landlord may, at its election, perform Tenant’s maintenance and repair obligations under this Section 9.03, in which event Tenant will immediately reimburse Landlord for all costs incurred in doing so upon receipt of an invoice from Landlord, and such costs shall be considered Additional Rent. Furthermore, notwithstanding anything in this Lease to the contrary, Tenant shall be solely responsible, at its expense, for correcting any non-compliance with Legal Requirements arising out of the specific use to which Tenant will put the Premises or Landlord Personalty or any installations, alterations, additions or improvements made or to be made by Tenant, and further agrees to comply with all Legal Requirements throughout the Lease Term. Without limiting the foregoing, Tenant shall be responsible for any repairs to the roof caused by or arising from Tenant’s failure to comply with the Roof Restrictions and the other terms and conditions set forth on Exhibit I attached hereto and incorporated herein.

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9.04 Tenant’s Alterations.

(a) Tenant’s Work. Tenant may not make any installations, alterations, additions, or improvements in or to the Building or any part of the Premises, or any of the Landlord Personalty, and Tenant will not make any major repairs to any of the foregoing, without first notifying Landlord in writing as to the method, nature and extent of such repairs, installations, alterations, additions, or improvements and then obtaining Landlord’s prior written consent, which consent will not be unreasonably withheld or delayed provided that such proposed work will not require the construction of an additional building on the Premises or an additional floor on the Building, will not impair the structure of the Building or other improvements on the Premises, will not increase Landlord’s maintenance obligations under Section 9.02 of this Lease, and will not involve roof penetrations (or if it will involve roof penetrations, Landlord must first receives assurances acceptable to Landlord that Landlord’s roof warranties will not be voided, and that Tenant will comply with the Roof Restrictions and the other terms and conditions set forth on Exhibit I, which include Landlord approval of the roof contractor). All work will be performed in accordance with plans and specifications approved by Landlord. Tenant will procure all necessary permits and licenses before undertaking any work on the Premises and will perform all work in a good and workmanlike manner employing materials of good quality and in conformity with all applicable Legal Requirements and insurance requirements. Tenant will (i) employ only contractors reasonably approved by Landlord, (ii) require all contractors employed by Tenant to carry worker’s compensation insurance in accordance with statutory requirements, commercial general liability insurance covering such contractors on or about the Premises with a combined single limit not less than $1,000,000, and “special form” (also known as “all-risk”) Builder’s Risk property insurance in an amount and on a form Landlord reasonably approves covering the construction on the Premises and all materials, equipment and supplies that will become a part of the alterations or improvements on the Premises, and (iii) submit certificates evidencing such coverage to Landlord prior to the commencement of any work. Landlord may inspect Tenant’s work at reasonable times. Tenant will prosecute and complete such work with reasonable diligence and will provide Landlord with “as built” plans, copies of all construction contracts and proof of payment for all labor and materials. Notwithstanding any supervision of or approval of Tenant’s work by Landlord, Landlord shall have no responsibility for any work performed by or on behalf of Tenant. Contemporaneously with the execution of this Lease and as more specifically described in the Work Letter attached hereto as Exhibit “J” (“Work Letter”), Tenant has delivered to Landlord, and Landlord has conditionally approved, those certain proposed improvements and alterations to the Premises described in the Proposed Premises Layout (as defined in the Work Letter), which Tenant may commence only upon Landlord’s written approval of certain final plans and specifications as more specifically described in the Work Letter

(b) No Liens. Tenant will pay when due all claims for labor and material furnished to the Premises or Landlord Personalty and keep the Premises and Landlord Personalty at all times free from liens for labor and materials. Tenant will give Landlord at least 20 days’ prior written notice of the commencement of any work on the Premises, regardless of whether Landlord’s consent to such work is required. Landlord may record and post notices of non-responsibility on the Premises.

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9.05 Surrender. Upon the expiration or earlier termination of the Lease, Tenant will surrender the Premises and the Landlord Personalty to Landlord in the condition which Tenant is required to maintain the Premises and the Landlord Personalty under this Lease. Tenant will not be obligated to repair any damage which Landlord is required to repair under Article 11 (Casualty and Condemnation). Except as provided below, Landlord may require Tenant, at its expense, to remove any alterations, additions or improvements made by Tenant prior to the expiration or earlier termination of the Lease, and to restore the Premises to their condition as of the Commencement Date, normal wear and tear excepted. Specifically, Tenant will restore or replace any portion of the wall, floor, ceiling, door or wall surfaces and floor coverings within the Premises which have been scratched, gouged, broken, stained, burned, torn, or otherwise marred by Tenant’s operations within the Premises during the Lease Term or as a result of removal of Tenant’s property, and Tenant agrees to reasonably clean such surfaces of dirt, grease, paint, tar marks, or other discoloration prior to surrendering the Premises to Landlord and shall deliver the Premises in a broom clean condition. With respect to any alterations, additions or improvements which require Landlord’s approval, Landlord will specify in writing if Tenant will be required to remove the same at the time of such approval. Any work which Tenant is not required to remove will, at Landlord’s option, become Landlord’s property and will be surrendered to Landlord upon the expiration or earlier termination of the Lease, except that Tenant may remove any of Tenant’s machinery or equipment which can be removed without damage to the Premises so long as Tenant repairs any damage caused by such removal. Landlord shall have the right to remove and dispose of, at Tenant’s expense, personal property of Tenant remaining in the Premises upon the expiration or earlier termination of this Lease. Tenant’s liability in connection herewith shall survive the termination or expiration of this Lease.

9.06 Exemption of Landlord from Liability. Landlord will not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares, merchandise or other property of Tenant, Tenant’s employees, invitees, customers or any other person on or about the Premises, whether such damage or injury is caused by or results from: (a) fire, steam, electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause; (c) conditions arising in or about the Premises, or from other sources or places; or (d) any curtailment or interruption in utility services. Tenant will give Landlord prompt notice upon the occurrence of any accident or casualty at the Premises. Notwithstanding Landlord’s negligence or breach of this Lease, Landlord shall under no circumstances be liable for injury to Tenant’s business or for any loss of income or profit therefrom.

9.07 Lease Governs. This Lease governs the parties’ respective obligations for repair and maintenance of the Premises, and the parties waive the benefit of any existing or future statute that is inconsistent with the provisions hereof or affords Tenant the right to terminate the Lease or make repairs at the expense of Landlord.

ARTICLE 10: HAZARDOUS MATERIALS

10.01 Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the

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environment, or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Landlord to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, PCB’s, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by- products or fractions thereof. Tenant shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Landlord, which consent may be given or withheld in Landlord’s sole discretion, and timely compliance (at Tenant’s expense) with all Legal Requirements. “Reportable Use” shall mean (i) the installation or use of any above ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Legal Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Tenant may use any ordinary and customary materials, in reasonable quantities, which are reasonably required to be used in the normal course of the Permitted Use, so long as the use thereof is in compliance with all Legal Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Landlord to any liability therefor. In addition, Landlord may condition its consent to any Reportable Use upon receiving such additional assurances as Landlord reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit.

10.02 Duty to Inform Landlord. If Tenant knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Landlord, Tenant shall immediately give written notice of such fact to Landlord, and provide Landlord with a copy of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance.

10.03 Tenant Remediation. Tenant shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system). In the event there occurs any contamination of the Premises or any part thereof (a) that was caused or materially contributed to by Tenant, or its employees, agents or contractors, or (b) that pertains to or involves any Hazardous Substance brought onto the Premises during the term of this Lease, whether by or for Tenant, by Tenant’s employees, agents or contractors, or by any third party, or (c) that results from a violation by Tenant of any of its obligations under this Lease concerning Hazardous Substances or otherwise, then Tenant shall promptly, at Tenant’s sole cost and expense, take all investigatory and/or remedial action reasonably recommended (whether or not formally ordered or required) for the cleanup of any such contamination on the Premises or neighboring properties, and for the maintenance, security and/or monitoring of any such contamination on the Premises or neighboring properties.

10.04 Tenant Indemnification. Tenant shall indemnify, defend and hold Landlord, its agents, employees and lenders, if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and consultants’ fees

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arising out of or involving any Hazardous Substance (a) brought onto the Premises during the term of this Lease or thereafter while Tenant occupies the Premises (provided, however, that Tenant shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties which Tenant did not contribute to or exacerbate), or (b) brought onto any portion of Premises at any time by Tenant or its employees, agents or contractors. Tenant’s obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Tenant or its employees, agents or contractors, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Landlord and Tenant shall release Tenant from its obligations under this Lease with respect to Hazardous Substances, unless Landlord specifically agrees thereto in writing at the time of such agreement and such agreement specifically identifies this Section 10.04. Landlord hereby represents to Tenant that as of the Effective Date, to Landlord’s Knowledge (as defined in Section 15.15), Landlord has received no written notice that the Premises fail to comply materially with applicable Legal Requirements concerning Hazardous Substances, except as may be disclosed otherwise in the Property Information that Tenant has received from Landlord.

10.05 Investigations and Remediation. As between Landlord and Tenant, Landlord shall retain the responsibility and pay for any investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to the Commencement Date, unless such remediation measure is required as a result of Tenant’s use (including any installations, additions, additions or improvements by Tenant) of the Premises, in which event Tenant shall be responsible for such payment, and to the extent paid by Landlord, Tenant shall reimburse Landlord immediately upon demand. Tenant shall cooperate fully in any such activities at the request of Landlord, including allowing Landlord and Landlord’s agents to have reasonable access to the Premises at reasonable times in order to carry out Landlord’s investigative and remedial responsibilities.

ARTICLE 11: CASUALTY AND CONDEMNATION

11.01 Damage to Premises.

(a) If the Building, the Premises, or any portion of the Landlord Personalty are destroyed or rendered untenantable or unusable, either wholly or in part, by fire or other cause of damage or loss (“Damage Event”), Tenant will immediately notify Landlord in writing upon the occurrence of such Damage Event. Landlord may elect either to (i) repair the damage and replace the loss of property caused by such Damage Event (including the loss of Landlord Personalty) as soon as reasonably possible, in which case this Lease will remain in full force and effect, or (ii) terminate the Lease Term as of the date the Damage Event occurred; and in either event Landlord shall receive and retain all insurance proceeds from such Damage Event relating to the Premises, the Rent and the Landlord Personalty. Landlord will notify Tenant within 30 days after receipt of notice of the Damage Event whether Landlord elects to repair the damage and replace the loss of property caused by such Damage Event (including the loss of Landlord Personalty) or to terminate the Lease Term. Unless Tenant establishes that the Damage Event was caused solely by the willful misconduct of Landlord, Tenant will immediately pay Landlord upon demand an amount equal to the lesser of (x) the deductible amount (up to $50,000) under either the Casualty

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Insurance for Landlord or the Landlord Insurance (as applicable) allocable to the damage to and the loss of the Premises and the Landlord Personalty, or (y) the cost to repair such damage and replace such loss (as reasonably estimated by Landlord) if such cost is less than $50,000; such payment to be made by Tenant whether Landlord elects to terminate the Lease Term or Landlord elects to repair the damage and replace the loss. If the Damage Event was caused by the gross negligence or willful misconduct of Tenant or its employees, agents, contractors or invitees, Tenant’s liability to Landlord under the preceding sentence for the deductible amount will not be limited to $50,000. Upon any Damage Event, Tenant shall assign to Landlord and cause the insurer to remit promptly to Landlord all insurance proceeds payable under any of the Property Insurance for Landlord, and if such proceeds are unavailable to Landlord or inadequate as a result of Tenant’s failure to obtain and maintain the Property Insurance for Landlord required by Section 8.01 of this Lease, then Tenant shall immediately pay to Landlord an amount in cash equal to the amount of insurance proceeds that would have been payable to Landlord as a result of such Damage Event if Tenant had maintained the Property Insurance for Landlord required by Section 8.01, plus any deductible amount.

(b) If (i) based on the estimate (the “Restoration Estimate”) of Landlord or Landlord’s architect or contractor, it will take Landlord more than six (6) months to rebuild the Premises and replace or repair the Landlord Personalty following a Damage Event affecting the Premises or the Landlord Personalty, or (ii) the Damage Event occurs during the last six (6) months of the Lease Term and the damage to the Premises or the Landlord Personalty is estimated by Landlord to require more than 30 days to repair and replace, then, provided (x) the Damage Event was not the result of the gross negligence or willful misconduct of Tenant, or its employees, agents, contractors or invitees, and (y) Tenant cannot reasonably be expected to continue its business operations in the Premises while the replacement, repair or restoration work proceeds, Tenant may elect to terminate the Lease Term as of the date the Damage Event occurred, which election to terminate must be exercised by written notification to Landlord within 10 business days after the occurrence of the Damage Event, and, if such termination is based upon the facts described in clause (b)(i) above, such 10-day period shall be extended to the date 10 business days after Tenant’s receipt of the Restoration Estimate. Tenant’s failure to elect to terminate timely under this Section 11.01(b) shall be deemed an election not to terminate the Lease.

(c) If the Premises are destroyed or damaged by a Damage Event and Landlord elects to repair or restore the same pursuant to the provisions of this Article 11, any Rent payable during the period of such damage, repair and/or restoration will be reduced according to the degree, if any, to which Tenant’s use of the Premises is impaired, but any such reduction in Rent will be limited to the amount that Landlord receives as insurance proceeds from such Damage Event under the Rent Loss Insurance for Landlord maintained by Tenant under Section 8.01(f).

(d) The provisions of this Article 11 will govern the rights and obligations of Landlord and Tenant in the event of any damage or loss or destruction of or to the Premises or the Landlord Personalty. Tenant waives the protection of any statute, code or judicial decision which grants a tenant the right to terminate a lease in the event of the damage or destruction or loss of the leased property.

11.02 Condemnation. If more than 17.50% of the floor area of the Building is taken by eminent domain, then either Landlord or Tenant may terminate the Lease as of the date the

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condemning authority takes title or possession, by delivering notice to Tenant within 10 days after receipt of written notice of such taking (or in the absence of such notice, within 10 days after the condemning authority takes title or possession). In addition, if more than 22.50% of the parking area of the Premises is taken by eminent domain, either Landlord or Tenant may terminate the Lease as of the date the condemning authority takes title or possession, by delivering notice to the other within 10 days after receipt of written notice of such taking (or in the absence of such notice, within 10 days after the condemning authority takes title or possession). If neither party terminates the Lease, this Lease will remain in effect as to the portion of the Premises not taken, except that the Base Rent will be reduced in proportion to the reduction in the floor area of the Building. Any condemnation award or payment will be paid to Landlord. Tenant will have no claim against Landlord or the condemning authority for the value of the unexpired lease term or otherwise; provided, however, Tenant may make a separate claim with the condemning authority for its personal property and/or moving costs so long as Landlord’s award is not reduced thereby.

ARTICLE 12: ASSIGNMENT AND SUBLETTING

12.01 Landlord’s Consent Required. Except as otherwise provided for in Section 12.02 below, Tenant will not voluntarily or by operation of law assign or transfer this Lease or sublease the Premises or Landlord Personalty or any part thereof or interest therein, or mortgage, pledge or hypothecate its leasehold interest, without Landlord’s prior written consent, which may be withheld, conditioned, or delayed in Landlord’s sole discretion. Unless Tenant is a publicly traded company, any transfer, in one or more transactions, of a controlling ownership interest in or more than a fifty percent (50.0%) ownership interest in either Tenant or Guarantor will be deemed an assignment of this Lease without Landlord’s consent. Any transfer or attempted transfer without consent will be void as to Landlord and will constitute a non-curable Event of Default (as defined below) under this Lease, without any notice from Landlord. Any Tenant request for Landlord’s consent under this Section must include the details of the proposed sublease or assignment, including the name, business and financial condition of the prospective transferee, financial details of the proposed transaction (e.g., the term of and the rent and security deposit payable under any proposed assignment or sublease), and any other information Landlord deems relevant. Without limiting the foregoing, Tenant acknowledges that Landlord may withhold its consent to a proposed assignment or sublease in any of the following instances: (i) the assignee or sublessee is not, in Landlord’s opinion, sufficiently creditworthy to perform the obligations such assignee or sublessee will have under this Lease; (ii) the intended use of the Premises by the assignee or sublessee is not the same as set forth in this Lease or otherwise satisfactory to Landlord; (iii) occupancy of the Premises by the assignee or sublessee would, in the good faith judgment of Landlord, violate any agreement binding upon Landlord or the Premises; (iv) the identity or business reputation of the assignee or sublessee will, in the good faith judgment of Landlord, tend to damage the goodwill or reputation of the Premises; or (v) in the case of a sublease, the subtenant has not acknowledged that the Lease controls over any inconsistent provision in the sublease. The foregoing criteria shall not exclude any other reasonable basis for Landlord to refuse its consent to such assignment or sublease. Tenant will promptly furnish to Landlord copies of all transaction documentation reasonably requested by Landlord, the receipt of which will be a pre-condition to Landlord’s consent.

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12.02 Transfers to Affiliates. Notwithstanding Section 12.01, so long as Tenant is not in default under any of the provisions of this Lease, Tenant may assign its interest under this Lease or sublet the entire Premises (but not a part thereof) to an entity that (i) is wholly owned by Tenant or by Guarantor, or (ii) is majority-owned and controlled by an entity or persons which also controls and owns the majority of the ownership interests in Tenant and Guarantor (the foregoing hereinafter known as a “Tenant Affiliate”), without the prior consent of Landlord; provided that Tenant shall first give written notice to Landlord of the proposed assignment or subletting to a Tenant Affiliate (together with satisfactory evidence that the transferee is in fact a Tenant Affiliate) at least ten (10) business days prior to the effective date of such assignment or subletting, the Tenant Affiliate must operate substantially the same business as Tenant, and the Tenant Affiliate must have a net worth equal to or greater than Tenant, and in no event shall any such assignment or sublease release or relieve Tenant or Guarantor from any obligations under this Lease.

12.03 Sale of Tenant or Guarantor. Landlord will not unreasonably withhold its consent to a one-time transfer, in one transaction, of (i) a controlling ownership interest in Tenant or Guarantor or (ii) more than a fifty percent (50.0%) ownership interest in Tenant or Guarantor, as a result of a merger or a stock sale, provided that Tenant shall first give notice to Landlord of the proposed transfer at least twenty (20) business days prior to the effective date of the proposed transfer, and any Tenant request for Landlord’s consent under this Section must include the details of the proposed transfer, including the name, business and financial condition of the prospective transferee(s) and any other information Landlord deems relevant. Without limiting the foregoing, Tenant acknowledges that it would be reasonable for Landlord to withhold its consent to a proposed transfer in any of the following instances: (i) the transferee is not, in Landlord’s opinion, sufficiently creditworthy to perform the obligations such transferee will have under this Lease or the Lease Guaranty (defined in Section 15.14 below); (ii) the intended use of the Premises by the transferee is not the same as set forth in this Lease or otherwise satisfactory to Landlord; (iii) occupancy of the Premises by the transferee would, in the good faith judgment of Landlord, violate any agreement binding upon Landlord or the Premises; or (iv) the identity or business reputation of the transferee will, in the good faith judgment of Landlord, tend to damage the goodwill or reputation of the Premises. The foregoing criteria shall not exclude any other basis for Landlord to refuse its consent to such transfer. Tenant or Guarantor will promptly furnish to Landlord copies of all transaction documentation.

12.04 No Release of Tenant. Notwithstanding any assignment or subletting or transfer of ownership interests in Tenant or Guarantor, Tenant and Guarantor will at all times remain fully responsible and primarily liable for the payment of Rent and compliance with all of Tenant’s obligations under this Lease. Consent to one transfer will not be deemed a consent to any subsequent transfer or a waiver of the obligation to obtain consent on subsequent occasions. If Tenant’s assignee or transferee defaults under this Lease, Landlord may proceed directly against Tenant or Guarantor without pursuing remedies against the assignee or transferee.

ARTICLE 13: DEFAULTS AND REMEDIES

13.01 Covenants and Conditions. Each of Tenant’s obligations under this Lease is a covenant and a condition. Tenant’s right to continue in possession of the Premises is conditioned upon such performance. Time is of the essence in the performance by Tenant of all covenants and conditions.

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13.02 Defaults. Each of the following constitutes an “Event of Default” under this Lease:

(a) Tenant fails to pay Rent or any other sum payable under this Lease within 5 business days after it is due; provided, however, with respect to the first such nonpayment in any calendar year, Tenant will have 5 business days after receipt of notice that Rent is due to pay such amount;

(b) Tenant fails to perform any of Tenant’s other obligations under this Lease (other than a failure to pay Rent under Section 13.02(a) or a failure resulting in a Tenant Insurance Default defined in Section 13.02(f) below) and such failure continues for a period of 10 days after notice from Landlord; provided that if more than 10 days are reasonably required to complete such performance, Tenant will not be in default if Tenant commences such performance within the 10 day period and thereafter diligently pursues its completion and completes the same within 120 days of its receipt of written notice;

(c) Tenant abandons the Premises;

(d) The making by Tenant of any general assignment for the benefit of creditors, the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days); the appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets, where possession is not restored to Tenant within sixty (60) days; the attachment, execution or other judicial seizure of substantially all of Tenant’s assets where such seizure is not discharged within sixty (60) days; or Tenant shall be liquidated or dissolved or shall begin proceedings towards its liquidation or dissolution;

(e) Any of the events described in Section 15.14 below occurs with respect to the Guarantor;

or

(f) Tenant fails to comply timely with any of its obligations under subsections (e), (f), (g) or (h) of Section 8.01, under Section 8.03 or under Section 8.04 with respect to any of the Property Insurance for Landlord (any such failure, a “Tenant Insurance Default”).

13.03 Remedies. Upon each occurrence of an Event of Default, Landlord may at any time thereafter at its election:

(a) Terminate Lease. Landlord may terminate this Lease by written notice to Tenant. If Landlord terminates this Lease, Landlord may recover from Tenant the sum of: (i) all Base Rent, all Additional Rent and all other amounts accrued hereunder to the date of such termination; (ii) the value of any free or reduced rent provided for in this Lease; (iii) the cost of removing and storing Tenant’s or any other occupant’s property, repairing, altering, remodeling, or otherwise putting the Premises and the Landlord Personalty into condition acceptable to a new tenant or tenants, and all reasonable expenses incurred by Landlord in pursuing its remedies, including

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reasonable attorneys’ fees and court costs; and (iv) the excess of (x) the then present value of the Base Rent and other amounts payable by Tenant under this Lease as would otherwise have been required to be paid by Tenant to Landlord during the period following the termination of this Lease, measured from the date of such termination to the expiration date stated in this Lease, over (y) the present value of any net amounts which Tenant establishes Landlord can reasonably expect to recover by reletting the Premises and the Landlord Personalty for such period, taking into consideration the availability of acceptable tenants, the time period to secure future tenants (and the commencement of the payment of rents), and other market conditions affecting leasing. Such present values shall be calculated at a discount rate equal to the WSJ Rate (as defined below) at the date of such termination. As used herein, the term “WSJ Rate” shall mean the lowest per annum rate of interest then most recently published as a “U.S. prime rate” in the “Money Rates” column in the “Money & Investing” section of the Southwest Edition of the Wall Street Journal; provided, however, that if the Wall Street Journal shall discontinue or shall fail to regularly publish such rate in its “Money & Investing” section or an alternative section, then the term “WSJ Rate” shall mean or refer to the prevailing prime interest rate as set forth from time to time by Citibank, N.A., at its principal office in Las Vegas, Nevada, as its prime lending rate for domestic commercial loans.

(b) Terminate Right of Possession. Landlord may terminate Tenant’s right of possession of the Premises and the Landlord Personalty without terminating this Lease. If Landlord terminates Tenant’s right of possession (but not this Lease), Landlord may relet the Premises and the Landlord Personalty for the account of Tenant for such rent and upon such terms as shall be satisfactory to Landlord without thereby releasing Tenant from any liability hereunder and without demand or notice of any kind to Tenant. For the purpose of such reletting Landlord is authorized to make any repairs, changes, alterations, or additions in or to the Premises and the Landlord Personalty as Landlord deems reasonably necessary or desirable. If the Premises are not relet, then Tenant shall pay to Landlord as damages a sum equal to the amount of the rental reserved in this Lease for such period or periods, plus the cost of recovering possession of the Premises and the Landlord Personalty (including attorneys’ fees and costs of suit), the unpaid Base Rent and other amounts accrued hereunder at the time of repossession, and the costs incurred in any attempt by Landlord to relet the Premises. If the Premises are relet and a sufficient sum shall not be realized from such reletting to satisfy the Rent provided for in this Lease to be paid, then Tenant shall immediately satisfy and pay any such deficiency. Any such payments due Landlord shall be made upon demand therefor from time to time and Tenant agrees that Landlord may file suit to recover any sums falling due from time to time. Notwithstanding any such reletting, or termination of Tenant’s right of possession, without termination, Landlord may at any time thereafter elect in writing to terminate this Lease for such previous breach. With respect to any reletting by Landlord, Landlord and Tenant agree that: (i) Landlord shall have the right to first lease other space owned or controlled by Landlord and located in the same vicinity as the Premises; (ii) Landlord shall not be obligated to lease the Premises for any use which is not commonly found at similar properties or for any use which, in Landlord’s reasonable opinion, would be inappropriate for the Premises; (iii) Landlord shall not be obligated to lease the Premises if the parking requirements for the proposed use exceed the parking requirements for the use provided for in the Lease; (iv) any proposed tenant or proposed use must meet all of Landlord’s leasing criteria, including, without limitation, financial strength and operating experience; and (v) Landlord shall retain for its benefit any excess rents or other amounts received pursuant to such re-letting until all amounts owed by Tenant to Landlord under this Lease have been fully paid and satisfied.

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(c) Right to Re-Enter. Upon the termination of this Lease or termination of Tenant’s right of possession, it shall be lawful for Landlord, without formal demand or notice of any kind, to re- enter the Premises by any action or proceeding authorized by law and to remove Tenant and all persons and property therefrom. If Landlord re-enters the Premises, Landlord shall have the right to keep in place and use, or remove and store, all of the furniture, fixtures and equipment at the Premises.

(d) Waiver. Any law, usage, or custom to the contrary notwithstanding, Landlord shall have the right at all times to enforce the provisions of this Lease in strict accordance with the terms hereof; and the failure of Landlord at any time to enforce its rights under this Lease strictly in accordance with same shall not be construed as having created a custom in any way or manner contrary to the specific terms, provisions, and covenants of this Lease or as having modified the same. Tenant and Landlord further agree that forbearance or waiver by Landlord to enforce its rights pursuant to this Lease or at law or in equity, shall not be a waiver of Landlord’s right to enforce one or more of its rights in connection with any subsequent default. A receipt by Landlord of rent or other payment with knowledge of the breach of any covenant hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of any provision of this Lease shall be deemed to have been made unless expressed in writing and signed by Landlord.

(e) Additional Remedies. Landlord may pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of the State of Texas.

13.04 Damages. On any termination, Landlord’s damages will include all costs and fees, including reasonable attorneys’ fees, that Landlord incurs in connection with any bankruptcy court or other court proceeding with respect to the Lease, the obtaining of relief from any stay in bankruptcy restraining any action to evict Tenant, or the pursuing of any action with respect to Landlord’s right to possession of the Premises and the Landlord Personalty. All such damages suffered (apart from Rent payable hereunder) will constitute pecuniary damages which will be paid to Landlord prior to assumption of the Lease by Tenant or any successor to Tenant in any bankruptcy or other proceedings.

13.05 Cumulative Remedies. Except as otherwise expressly provided herein, any and all rights and remedies which Landlord may have under this Lease and at law and equity are cumulative and will not be deemed inconsistent with each other, and any two or more of all such rights and remedies may be exercised at the same time to the greatest extent permitted by law.

13.06 Notice to Landlord. Tenant will give written notice of any failure by Landlord to perform any of its obligations under this Lease to Landlord and to any ground lessor, mortgagee or beneficiary under any Security Document (as defined in Section 14.01) encumbering the Premises whose name and address have been furnished to Tenant. Landlord will not be in default under this Lease unless Landlord (or such ground lessor, mortgagee or beneficiary) fails to cure such non-performance within 30 days after receipt of Tenant’s notice or such longer period as may be required to diligently complete such matter. If Landlord (or such ground lessor, mortgagee or beneficiary) cannot perform any of its obligations due to events beyond its

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reasonable control, the time provided for performing such obligations will be extended by a period of time equal to the duration of such events. Events beyond Landlord’s reasonable control include, but are not limited to, acts of God, war, civil commotion, labor disputes, strikes, fire, flood or other casualty or weather conditions, and Legal Requirements.

13.07 Landlord’s Right to Cure. If Tenant defaults in the performance of any obligation under this Lease, Landlord will have the right (but is not required) to perform such obligation and, if necessary, to enter upon the Premises. All costs incurred by Landlord in connection with such performance (together with interest at the rate of 12.0% per annum but not to exceed the highest legal rate) will be deemed to be Additional Rent under this Lease and will be payable to Landlord immediately on demand. Without limiting the foregoing, upon the occurrence of a Tenant Insurance Default, Landlord will have the right (but is not required) to take either or both of the following actions: (i) obtain immediately, at Tenant’s expense, one or more policies of Landlord Insurance (under Section 8.02(a)) in replacement of one or more of the policies of the Property Insurance for Landlord that Tenant is required to provide under Section 8.01, in which event Tenant shall pay to Landlord immediately on demand, as Additional Rent, the insurance premiums and other costs incurred by Landlord for such replacement Landlord Insurance (together with interest at the rate of 12.0% per annum but not to exceed the highest legal rate), and (ii) notify Tenant that Tenant may no longer obtain the Property Insurance for Landlord under Section 8.01, in which event the Landlord Insurance Costs of the renewals for the Landlord Insurance shall be added to Tenant Costs for the estimate of monthly Additional Rent under Section 4.02. Landlord may exercise the foregoing rights without waiving any of its other rights or releasing Tenant from any of its obligations under this Lease.

13.08 Security Deposit. Upon the execution of this Lease, Tenant will deposit with Landlord the Security Deposit. Landlord may, at its option, apply all or part of the Security Deposit to any unpaid Rent or other charges due from Tenant, cure any other defaults of Tenant, or compensate Landlord for any loss or damage which Landlord may suffer due to Tenant’s default. If Landlord uses any part of the Security Deposit, Tenant will restore the Security Deposit to its full amount within 10 days after Landlord’s request. No interest will be paid on the Security Deposit. No trust relationship is created herein between Landlord and Tenant with respect to the Security Deposit, and the Security Deposit may be commingled with other funds of Landlord. Upon expiration of the Lease Term, or earlier termination of this Lease not resulting from Tenant’s default, and after Tenant has vacated and surrendered the Premises in the manner required by this Lease, Landlord will return to Tenant any balance of the Security Deposit that is not applied pursuant to this Section within thirty (30) days after Tenant vacates the Premises.

ARTICLE 14: PROTECTION OF LENDERS AND OWNERS

14.01 Subordination. Tenant agrees that this Lease and the rights of Tenant hereunder shall be subject and subordinate to any and all deeds of trust, security interests, mortgages, master leases, ground leases or other security documents and any and all modifications, renewals, extensions, consolidations and replacements thereof (collectively, “Security Documents”) which now or hereafter constitute a lien upon or affect the Land, the Building, or any part of the Premises or Landlord Personalty. Such subordination shall be effective without the necessity of the execution by Tenant of any additional document for the purpose of evidencing or effecting such subordination. In addition, Landlord shall have the right to subordinate or cause to be

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subordinated any such Security Documents to this Lease and in such case, in the event of the termination or transfer of Landlord’s estate or interest in the Premises by reason of any termination or foreclosure of any such Security Documents, Tenant shall, notwithstanding such subordination, attorn to and become the Tenant of the successor in interest to Landlord at the option of such successor in interest. Furthermore, Tenant shall within fifteen (15) days of demand therefor execute any instruments or other documents which may be required by Landlord or the holder of any Security Document and specifically shall execute, acknowledge and deliver within fifteen (15) days of demand therefor a subordination of lease or subordination of deed of trust, in the form customarily employed by such holder requesting the document; and the failure to do so by Tenant within such time period shall be a material default hereunder.

14.02 Attornment and Non-disturbance. If Landlord’s interest in the Premises and the Landlord Personalty is acquired by any ground lessor, beneficiary, mortgagee, or purchaser at a foreclosure sale, Tenant will attorn to the transferee of or successor to Landlord’s interest in the Premises and the Landlord Personalty and recognize such transferee or successor as successor Landlord under this Lease and Tenant waives the protection of any statute or rule of law which gives Tenant any right to terminate this Lease or surrender possession of the Premises upon the transfer of Landlord’s interest. As a condition to Tenant’s execution of any subordination agreement required under Section 14.01 or any attornment agreement required under this Section

14.02, Tenant may require a reasonable provision stating that Tenant’s possession of the Premises shall not be disturbed in the event of any foreclosure or exercise of mortgagee rights so long as Tenant shall continue to perform all of the covenants and conditions of this Lease.

14.03 Estoppel Certificates. Within 10 days after Landlord’s request, Tenant will execute, acknowledge and deliver to Landlord a written statement certifying: (i) that none of the terms or provisions of this Lease have been changed (or if they have been changed, stating how they have been changed); (ii) that this Lease has not been canceled or terminated; (iii) the last date of payment of the Base Rent and other charges and the time period covered by such payment; (iv) that Landlord is not in default under this Lease (or if Landlord is claimed to be in default, setting forth such default in reasonable detail); and (v) such other information with respect to Tenant or this Lease as Landlord may reasonably request or which any prospective purchaser or encumbrancer of the Premises may require. Landlord may deliver any such statement by Tenant to any prospective purchaser or encumbrancer of the Premises, and such purchaser or encumbrancer may rely conclusively upon such statement as true and correct. If Tenant does not deliver such statement to Landlord within such 10-day period, Landlord, and any prospective purchaser or encumbrancer, may conclusively presume and rely upon (and Tenant will be estopped from denying): (i) that the terms and provisions of this Lease have not been changed except as otherwise represented by Landlord; (ii) that this Lease has not been canceled or terminated except as otherwise represented by Landlord; (iii) that not more than one month’s Base Rent or other charges have been paid in advance; and (iv) that Landlord is not in default under this Lease.

14.04 Tenant’s Financial Condition. Within 10 days after request from Landlord, but not more frequently than once in a calendar year, Tenant will deliver to Landlord Tenant’s financial statements (audited, if available) for the most recent two fiscal years. Such financial statements may be delivered to Landlord’s mortgagees, lenders and investors and prospective mortgagees, lenders, purchasers and investors. Landlord shall exercise commercially reasonable efforts to

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keep all non-public financial statements confidential to Landlord and such mortgagees and lenders or prospective mortgagees, lenders, purchasers and investors, and their respective attorneys, accountants and representatives, and Landlord will use them only in connection with the Premises and this Lease.

14.05 Landlord’s Liability. No owner of the Premises shall be liable under this Lease except for breaches of Landlord’s obligations occurring while owner of the Premises. Any liability of Landlord for a default by Landlord under this Lease, or a breach by Landlord of any of its obligations under the Lease, shall be limited solely to its interest in the Premises, and in no event shall any personal liability be asserted against Landlord in connection with this Lease nor shall any recourse be had to any other property or assets of Landlord. The terms of this Section 14.05 shall also apply in the event the holder of any ground lease, deed of trust or mortgage encumbering the Premises, or any purchaser or transferee pursuant to the foreclosure or transfer of the Premises under any such instrument becomes the Landlord.

ARTICLE 15: MISCELLANEOUS PROVISIONS

15.01 Landlord’s Consent. Tenant will pay Landlord its reasonable fees and expenses incurred in connection with any act by Tenant which requires Landlord’s consent or approval under this Lease, not to exceed $1,500 per each consent or approval request.

15.02 Interpretation. The captions of the Articles or Sections of this Lease are not a part of the terms or provisions of this Lease. Whenever required by the context of this Lease, the singular includes the plural and the plural includes the singular. The masculine, feminine and neuter genders each include the other. In any provision relating to the conduct, acts or omissions of Tenant, the term “Tenant” includes Tenant, any others using or occupying the Premises or any portion thereof with Tenant’s express or implied permission, and their respective agents, employees, contractors, invitees and guests. This Lease does not, and nothing contained herein, will create a partnership or other joint venture between Landlord and Tenant. A determination by a court of competent jurisdiction that any provision of this Lease or any part thereof is illegal or unenforceable will not invalidate the remainder of such provision, which will remain in full force and effect.

15.03 Incorporation of Prior Agreements; - Modifications. This Lease is the only agreement between the parties pertaining to the lease of the Premises and the Landlord Personalty. All amendments to this Lease must be in writing and signed by all parties. Any other attempted amendment will be void.

15.04 Notices. All notices, requests and other communications required or permitted under this Lease will be in writing and personally delivered, sent by electronic mail, sent by a national overnight delivery service which maintains delivery records, or sent by certified mail, return receipt requested via the United States Postal Service. Notices will be delivered to Tenant’s Notice Address or to Landlord’s Notice Address, as appropriate. All notices personally delivered or sent by national overnight delivery service will be effective upon delivery (or refusal to accept delivery), those sent by certified mail, return receipt requested will be deemed effective on the earlier of actual receipt by the intended recipient or three (3) business days after such notice is deposited by the sender in the United States mail with the required postage affixed, and those

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sent by electronic mail shall be effective upon delivery provided that the sender retains a computer generated record confirming the addressee’s receipt of such notice. Either party may change its notice address upon ten (10) days prior written notice to the other party given in accordance with the terms of this Section.

15.05 Waivers. Any waiver, to be effective, must be in writing and signed by the waiving party. Landlord’s failure to enforce any provision of this Lease or its acceptance of Rent is not a waiver and will not prevent Landlord from enforcing that provision or any other provision of this Lease in the future. No statement on a payment check from Tenant or in a letter accompanying a payment check will be binding on Landlord. Landlord may, with or without notice to Tenant, negotiate such check without being bound by to the conditions of such statement.

15.06 Memorandum of Lease. Neither party hereto will record this Lease or any memorandum thereof without the prior written consent of the other party.

15.07 Binding Effect; Choice of Law; Wavier of Jury Trial; Venue. This Lease will bind any party who legally acquires any rights or interest in this Lease from Landlord or Tenant, provided that Landlord will have no obligation to Tenant’s successor unless the rights or interests of Tenant’s successor are acquired in accordance with the terms of this Lease. The laws of the State of Texas govern this Lease. THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY(IES) AGAINST ANY OTHER PARTY(IES) ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE OR THE RELATIONSHIP OF THE PARTIES HEREUNDER. The parties hereby agree that the sole and exclusive venue for any suit or claim arising from or related to this Lease shall be Bexar County, Texas.

15.08 Execution of Lease. This Lease may be executed in counterparts and, when all counterpart documents are executed, the counterparts will constitute a single binding instrument. Landlord’s delivery of this Lease to Tenant is not to be deemed to be an offer to lease and will not be binding upon either party until executed and delivered by both parties.

15.09 Survival. Unless otherwise expressly provided in this Lease, all representations and warranties of Landlord and Tenant, Tenant’s indemnity under Sections 2.05 and 8.06, the provisions of Article 10, the indemnification provisions of Section 15.10, and all obligations of Tenant to pay Additional Rent hereunder, shall survive the termination of this Lease.

15.10 No Brokers. Both Tenant and Landlord acknowledge that no Brokers are involved in this transaction in any way. No fees of any type are due to any Broker as a result of the consummation of this Lease. Tenant hereby agrees to defend, indemnify and hold harmless Landlord from and against any claim by any third party claiming by, through, or under Tenant, including claims by Tenant Broker for brokerage, commission, finders or other fees arising from this Lease, and any court costs, reasonable attorneys’ fees or other costs or expenses arising therefrom. The provisions of this Section and the indemnities contained herein shall survive the expiration or earlier termination of the Lease.

15.11 Attorney Costs. In any enforcement proceeding brought by either party with respect to this Lease, the non-prevailing party will pay to the prevailing party in such proceeding all costs, including reasonable attorneys’ fees and court costs, incurred by such other party with respect to said proceeding and any appeals therefrom.

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15.12 Severability. If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws, then and in that event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby. It is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or unenforceable, there be added, as a part of this Lease, a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable.

15.13 No Purchase Option. The Tenant has not negotiated any option to purchase the Premises or the Landlord Personalty. The Landlord explicitly makes no representation as to the possibility or price of any such desire by the Tenant to purchase the Premises or the Landlord Personalty at any time during the term of this Lease or thereafter.

15.14 Lease Guaranty. In consideration of Landlord’s leasing the Premises and the Landlord Personalty to Tenant, Tenant shall contemporaneously deliver to Landlord a Guaranty of Lease (the “Lease Guaranty”) in the form attached hereto as Exhibit H executed by Global Controls & Instrumentation, LLC (“Guarantor”). Tenant acknowledges that but for the Lease Guaranty, Landlord would not have entered into this Lease with Tenant. In addition to those events listed in Section 13.02 above, it shall be an Event of Default under this Lease if any of the following shall occur: (i) the making by Guarantor of any general assignment for the benefit of creditors, the filing by or against Guarantor of a petition to have Guarantor adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Guarantor, the same is dismissed within sixty (60) days); (ii) the appointment of a trustee or receiver to take possession of substantially all of Guarantor’s assets, where possession is not restored to Guarantor within sixty (60) days; (iii) the attachment, execution or other judicial seizure of substantially all of Guarantor’s assets where such seizure is not discharged within sixty (60) days; or (iv) Guarantor shall be liquidated or dissolved or shall begin proceedings towards its liquidation or dissolution. The obligations hereunder imposed upon Tenant shall be the joint and several obligations of Tenant and Guarantor.

15.15 Knowledge. All references in the Lease to “Landlord’s Knowledge”, “the knowledge of Landlord”, or whether Landlord is “aware” (i) shall refer solely to the current actual knowledge (as opposed to constructive, deemed or imputed knowledge) of David Roznovsky as the duly authorized agent of Landlord, (ii) shall not impose upon the foregoing individual or Landlord any duty to investigate the matter to which the actual knowledge, or the absence thereof, pertains, and (iii) shall not impose any personal liability upon such person for the inaccuracy of such representation or warranty.

15.16 Additional Provisions. The exhibits and riders, if any, attached hereto, are incorporated herein by reference.

(SIGNATURES ON NEXT PAGES)

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LANDLORD’S AND TENANT’S SIGNATURE PAGE TO INDUSTRIAL LEASE

IN WITNESS WHEREOF, this Industrial Lease has been executed by the duly authorized representatives of Landlord and Tenant on the respective dates set forth below, to be effective for all purposes, however, as of the Effective Date as set forth above.

LANDLORD:

GOLD TOOTH DEVELOPMENT, LLC,

a Texas limited liability company

By: /s/ Kennon Guglielmo

Name:	Kennon Guglielmo
Title:	Manager

Date: 7-24-2014

TENANT:
ENOVATION CONTROLS, LLC, an Oklahoma limited liability company
By:	/s/ Dennis Bunday
Name:	Dennis Bunday
Title:	CFO

Date: 7/24/14

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GUARANTOR’S SIGNATURE PAGE TO INDUSTRIAL LEASE

Guarantor hereby executes this Industrial Lease to acknowledge that it has reviewed the terms and conditions hereof and to evidence its agreement to execute and deliver to Landlord contemporaneously herewith that certain Guaranty of Lease attached hereto as Exhibit H and incorporated herein by reference.

GUARANTOR:

ENOVATION CONTROLS, LLC (p/k/a GLOBAL CONTROLS &

INSTRUMENTATION, LLC), an Oklahoma limited liability company

By: /s/ Dennis Bunday

Name:	Dennis Bunday
Title:	CFO

Date Signed: 7/24/14

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EXHIBIT A

LEGAL DESCRIPTION OF THE LAND

Tract 1:

Lot 9, Block 1, New City Block 14876, FARINON SUBDIVISION, in the City of San Antonio, Bexar County, Texas, according to plat thereof recorded in Volume 9567, Pages 85-87, Deed and Plat Records of Bexar County, Texas.

Tract 2:

13.696 acres of land in New City Block (N.C.B.) 14876, San Antonio, Bexar County, Texas, being the same tract shown as a Variable Width Drainage Right-of-Way on the subdivision plat of TECHNOLOGY PARK UNIT-1 and recorded in Volume 9000, Page 80-82, Deed and Plat Records, Bexar County, Texas, and more particularly described by metes and bounds on Exhibit A-1 attached hereto and incorporated herein for all purposes.

[EXHIBIT A-1 (Legal Description of 13.696 Acres) to follow]

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EXHIBIT A-1

(Legal Description of 13.696 Acres)

13.696 acres of land in New City Block (N.C.B.) 14876, San Antonio, Bexar County, Texas, being the same tract shown as a Variable Width Drainage Right-of-Way on the subdivision plat of Technology Park-Unit 1, and recorded in Volume 9000, Pages 80 82, Deed and Plat Records, Bexar County, Texas, and more particularly described by metes and bounds as follows:

BEGINNING at a  ¹⁄₂" rebar found on the south right-of-way line of De Zavala Road (R.O.W.-86) at the northeast corner of De Zavala Business Park Subdivision, recorded in Volume 9508, Pages 108 110, Deed and Plat Records, Bexar County, Texas, for the northwest corner of said Technology Park Unit-1 and this parcel;

THENCE N.89º59'40"E., with the common line of the De Zavala Road right-of-way and said Technology Park Unit-1, a distance of 1083.02 feet to a  ¹⁄₂" rebar found at the northwest corner of Lot 1, Block 1, said Technology Park Unit-1, for the northeast corner of this parcel;

THENCE with the northwest line of said Lot 1, the following courses:

S.32º01'56"W., a distance of 230.78 feet to a  ¹⁄₂" rebar with a Castella & Assoc. plastic cap found for an angle point;

S.58º22'00"W., a distance of 712.58 feet to a  ¹⁄₂" rebar found for an angle point;

S.11º13'08"W., a distance of 602.11 feet to a  ¹⁄₂" rebar found for an angle point;

S.31º38'46"W., passing at 270.50 feet, a  ¹⁄₂" rebar found at the common corner of 9.357 acre tract, being a remaining portion of a 145.741 acre tract of land described in Volume 2028, Page 693, Official Public Records of Real Property, Bexar County, Texas, and said Lot 1, and continuing with the northwest line of said 9.357 acre tract, a total distance of 338.45 feet to a  ¹⁄₂" rebar found on the east line of the aforementioned De Zavala Business Park Subdivision for the south corner of this parcel;

THENCE in a northerly direction coincident with said east line the following courses:

N.02º26'35"W., a distance of 123.48 feet to a  ¹⁄₂" rebar found for an angle point;

N.38º17'50"E., a distance of 147.39 feet to a  ¹⁄₂" rebar found for an angle point;

N.01º17'19"W., a distance of 130.94 feet to a 1/2" rebar found for an angle point;

N.47º04'11"W., a distance of 138.85 feet to a 1/2" rebar with a Castella & Assoc. plastic cap set for an angle point;

N.02º22'03"W., a distance of 984.32 feet to the POINT OF BEGINNING and containing 13.696 acres of land more or less.

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EXHIBIT B

SURVEY OR SITE PLAN DEPICTING THE PREMISES

[See Attached]

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EXHIBIT C

SCHEDULE OF BASE RENT

Month 1 (July 24, 2014 – August 31, 2014) (8 days + August):	$	76,931/39-days
Months 2-6 (September 1, 2014 – January 31, 2015):	$	60,000/month
Months 7-18 (February 1, 2015 – January 31, 2016):	$	70,000/month
Months 19-30 (February 1, 2016 – January 31, 2017):	$	80,000/month
Months 31-42 (February 1, 2017 – January 31, 2018):	$	90,000/month
Months 43-54 (February 1, 2018 – January 31, 2019):	$	95,000/month
Months 55-66 (February 1, 2019 – January 31, 2020):	$	100,000/month
Months 67-78 (February 1, 2020 – January 31, 2021):	$	105,000/month
Months 79-90 (February 1, 2021 – January 31, 2022):	$	108,000/month
Months 91-102 (February 1, 2022 – January 31, 2023):	$	111,000/month
Months 103-114 (February 1, 2023 – January 31, 2024):	$	114,000/month
Months 115-126 (February 1, 2024 – January 31, 2025):	$	117,000/month
Months 127-138 (February 1, 2025 – January 31, 2026):	$	120,000/month
Months 139-150 (February 1, 2026 – January 31, 2027):	$	123,000/month
Months 151-162 (February 1, 2027 – January 31, 2028):	$	126,000/month
Months 163-174 (February 1, 2028 – January 31, 2029):	$	129,000/month
Months 175-186 (February 1, 2029 – January 31, 2030):	$	132,000/month

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EXHIBIT D

LANDLORD PERSONALTY

[See Attached]

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EXHIBIT E

RULES AND REGULATIONS

1. Without Landlord’s prior written consent, which will not be unreasonably withheld, Tenant will not place any signs on the Building or on the Premises that are visible from the public street or to adjacent property owners. All signage must comply with the Property Agreements (as defined in Section 7.05 above) and with all applicable laws, codes and regulations, including, without limitation, zoning and building codes. No advertisements, pictures or signs of any sort may be displayed on or outside the Premises without the prior written consent of Landlord. This prohibition includes any portable signs or vehicles placed within the parking lot, sidewalk or driveways, or on streets adjacent thereto for the purpose of advertising or display. Landlord has the right to remove any such unapproved item without notice and at Tenant’s expense.

2. Without the prior written consent of Landlord, Tenant may not use any method of heating or air-conditioning other than the HVAC units installed within the Building, nor cause any substantial changes to the utilities brought in to the Premises.

3. All window coverings and window films or coatings installed by Tenant and visible from outside of the Building require the prior written approval of Landlord. Except for dock shelters and seals as may be expressly permitted by Landlord, no awnings or other projections may be attached to the outside walls of the Building.

4. Tenant may not use, keep or permit to be used or kept any foul or noxious gas or substance on, in or around the Premises unless approved by Landlord. Tenant may not use, keep or permit to be used or kept any flammable or combustible materials without proper governmental permits and approvals.

5. Tenant may not use or permit the use of the Premises for lodging or sleeping, for public assembly, or for any illegal or immoral purpose.

6. Tenant may not alter any lock or install any new locks or bolts on any door at the Premises without the prior written consent of Landlord. Tenant agrees not to make any duplicate keys without the prior consent of Landlord.

7. Storage of propane tanks, whether interior or exterior, will be in secure and protected storage enclosures approved by the local fire department and, if exterior, shall be located in areas specifically designated by Landlord. Safety equipment, including eye wash stations and approved neutralizing agents, will be provided in areas used for the maintenance and charging of lead-acid batteries. Tenant will protect electrical panels and building mechanical equipment from damage from forklift trucks.

8. No person may go on the roof of the Premises without Landlord’s permission, except to perform Tenant’s obligations under this Lease.

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9. Machinery, equipment and apparatus belonging to Tenant which cause noise or vibration that may be transmitted to the structure of the Building to such a degree as to cause harm to the Building will be placed and maintained by Tenant, at Tenant’s expense, on vibration eliminators or other devices sufficient to eliminate the transmission of such noise and vibration. Tenant will cease using any such machinery which causes objectionable noise and vibration which can not be sufficiently mitigated.

10. All goods, including material used to store goods, delivered to the Premises will be immediately moved into the Building and will not be left in parking or exterior loading areas overnight.

11. Tractor trailers which must be unhooked or parked with dolly wheels beyond the concrete loading areas must use steel plates or wood blocks of sufficient size to prevent damage to the asphalt paving surfaces. No parking or storing of such trailers will be permitted in the auto parking areas of the Premises or on streets adjacent to the Premises.

12. Tenant will be responsible for the safe storage and removal of all trash and refuse. All such trash and refuse will be contained in suitable receptacles stored behind screened enclosures at locations approved by Landlord. Landlord reserves the right to remove, at Tenant’s expense and without further notice, any trash or refuse left elsewhere outside of the Building or the Premises.

13. Tenant may not store or permit the storage or placement of goods or merchandise in or around the parking areas surrounding the Premises, nor any displays or sales of merchandise outside of the Building.

14. Tenant will appoint an Emergency Coordinator who shall be responsible for assuring notification of the local fire department in the event of an emergency, assuring that sprinkler valves are kept open and implementing the Factory Mutual “Red Tag Alert” system including weekly visual inspection of all sprinkler system valves on or within the Premises. Tenant will provide Landlord access to fire protection and any related communications equipment in the Premises at all times.

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EXHIBIT F

NO OPTION TO PURCHASE

The Tenant has not negotiated any option to purchase the Premises or the Landlord Personalty. The Landlord explicitly makes no representation as to the possibility or price of any such desire by the Tenant to purchase the Premises or the Landlord Personalty at any time during the term of this Lease or thereafter.

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EXHIBIT G

THIRD PARTY REPORTS

1. Survey prepared by Butz Land Surveying dated June 4, 2010, covering Tract 1

2. Survey prepared by M.D.S. Land Surveying Co., Inc. dated June 9, 2010, covering Tract 2

3. Phase I Environmental Site Assessment dated May 2010 and prepared by Raba-Kistner Consultants, Inc. as Project No. ASF10-083-00

4. Property Condition Report dated June 10, 2010 and prepared by Terracon Consultants, Inc. as Project No. FB108523

5. Association Estoppel Certificate dated May 26, 2010 from the Technology Park Association Inc., to Whataburger Real Estate LP

6. Easement Estoppel Certificate dated May 14, 2010 from Southwest Business Corporation to Whataburger Real Estate LP

7. Reciprocal Easement Estoppel Certificate dated May 14, 2010, from Southwest Business Corporation to Whataburger Real Estate LP

8. Commitment for Title Insurance issued July 10, 2014 (“Commitment”) by Chicago Title Insurance Company, GF # 4311014749, covering the Premises

9. Copies of recorded documents listed in Schedule B of the Commitment as Item 1 and Items 13 through 36

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EXHIBIT H

GUARANTY OF LEASE

THIS GUARANTY OF LEASE (“Guaranty”) is made as of July 24, 2014, by ENOVATION CONTROLS, LLC (p/k/a GLOBAL CONTROLS & INSTRUMENTATION, LLC), an Oklahoma limited liability company (“Guarantor”), to GOLD TOOTH DEVELOPMENT, LLC, a Texas limited liability company (“Landlord”), with reference to the following facts:

(a) Concurrently herewith, Enovation Controls, LLC, an Oklahoma limited liability company (“Tenant”), is entering into an Industrial Lease with Landlord, as landlord (as may be amended from time to time, the “Lease”), for certain premises described therein, including the land and building located at 5757 Farinon Drive, San Antonio, Bexar County, Texas, as more particularly described in the Lease.

(b) Landlord has required that Guarantor guaranty the full and complete performance of the obligations of Tenant under the Lease, and Guarantor has agreed to guaranty the performance of Tenant under the Lease on the terms set forth herein.

NOW, THEREFORE, in consideration of the execution of the Lease by Landlord and for other valuable consideration, the receipt of which is hereby acknowledged, Guarantor hereby agrees as follows:

1. GUARANTY. Guarantor hereby unconditionally guarantees and promises on demand to pay and to perform the following (collectively, the “Tenant’s Obligations”):

a. to pay to Landlord in lawful money of the United States all rents and other sums, including, but not be limited to, all debts, liabilities, and charges, liquidated or unliquidated, due or to become due to Landlord under the Lease, in the amounts, at the times, and in the manner set forth in the Lease;

b. to perform, at the time and in the manner set forth in the Lease, all of the terms, covenants and conditions therein required to be kept, observed, or performed by Tenant;

c. to pay to Landlord in lawful money of the United States all rents and other sums, including, but not be limited to, all debts, liabilities, and charges, liquidated or unliquidated, due or to become due to Landlord under all bills of sale, evidences of indebtedness, contracts, or any other instruments or security to which Landlord and Tenant are parties, if any, or in which obligations run from Tenant to Landlord, or which are delivered to Landlord in connection with the leasing transaction or transactions contemplated by the Lease (all of which bills of sale, evidences of indebtedness, contracts, other instruments, and security are hereinafter collectively called “Other Agreements”), in the amounts, at the times, and in the manner set forth in the Other Agreements; and

d. to perform, at the times and in the manner set forth in the Other Agreements, all of the terms, covenants and conditions therein required to be kept, observed, or performed by Tenant.

This Guaranty is a guaranty of payment and performance of the Tenant’s Obligations, and not of collectability. Guarantor hereby agrees to indemnify, defend and hold Landlord and its employees,

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officers and agents harmless from any and all liabilities, losses, damages, costs and expenses (including but not limited to reasonable attorneys’ fees) incurred by Landlord, by reason of a breach or default under the Lease by Tenant.

2. PAYMENT AND PERFORMANCE OF LEASE OBLIGATIONS. Guarantor shall pay and perform all of the Tenant’s Obligations, notwithstanding that the Lease or any of the Other Agreements shall be void or voidable as against Tenant or any of Tenant’s creditors, including a trustee in bankruptcy of Tenant, by reason of any fact or circumstance including, without limiting the generality of the foregoing, failure by any person to file any document or to take any other action to make the Lease or any of the Other Agreements enforceable in accordance with their terms. Guarantor hereby waives any right it may have to claim that the underlying obligations of Tenant under the Lease are unenforceable.

3. TERM. This Guaranty is a continuing guaranty and shall terminate only on the ninety- fifth (95th) day following the full payment and performance of all of the Tenant’s Obligations, except as to any obligations of Guarantor under Section 6 which may continue past such ninety-fifth (95th) day according to Section 6.

4. AUTHORIZATION. By execution of this Guaranty, Guarantor authorizes Landlord, without Guarantor’s prior or subsequent consent, and without affecting Guarantor’s liability hereunder, from time to time to:

a. change the amount, time, or manner of payment of rent or other sums due under the Lease and Other Agreements;

b. extend, accelerate or otherwise change any of the terms, covenants, conditions, or provisions of the Lease and Other Agreements;

c. amend, modify, change, extend, renew, or supplement the Lease and Other Agreements;

d. assign Landlord’s interest in the Lease and Other Agreements or the rents and other sums payable under the Lease and Other Agreements;

e. consent to Tenant’s assignment of the Lease and Other Agreements or to the sublease of all, or any portion, of the premises covered by the Lease;

f. take and hold security for the payment of this Guaranty or the performance of the Lease and Other Agreements, and exchange, enforce, waive, and release any such security; and

g. apply such security and direct the order or manner of sale thereof as Landlord in its discretion may determine.

5. NO RELEASE. Guarantor shall not be released from its liability under this Guaranty by any act or event which might, but for this provision of this Guaranty, be deemed a legal or equitable discharge of a surety, or by reason of any waiver, extension, modification, forbearance or delay or other act or omission of Landlord or its failure to proceed promptly or otherwise as against Tenant or Guarantor, or by reason of any action taken or omitted or circumstance which may or might vary the risk or affect the rights or remedies of Guarantor as against Tenant, or by reason of any further dealings between Tenant and Landlord, whether relating to the Lease or otherwise, and Guarantor hereby expressly waives and surrenders any defense to its liability hereunder based upon any of the foregoing; it being the purpose and intent of this Guaranty that the obligations of Guarantor hereunder are absolute and unconditional under any and all circumstances.

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6. BANKRUPTCY EVENTS; PREFERENTIAL PAYMENTS. Guarantor agrees that in the event of institution by or against Tenant of bankruptcy, reorganization, readjustment, receivership or insolvency proceedings of any nature, and if in any such proceedings the Lease shall be terminated or rejected, or the obligations of the Tenant thereunder shall be modified, the Guarantor agrees that it will continue to pay and perform all of the Tenant’s Obligations. If, in connection with any of the circumstances referred to in this Section 6, Landlord should request that Guarantor execute a new lease for the balance of the Lease term (unaffected by any “rejection” and/or “termination” in any of such proceedings), but in all other respects identical with the Lease, Guarantor shall do so as the named tenant under such new lease (irrespective of the fact that the Lease may have been “rejected” or “terminated” in connection with any of the proceedings referred to in this Section 6). Should Guarantor fail or refuse to execute such a new lease, without limiting any of the legal or equitable remedies available to Landlord on account of such failure or refusal, Guarantor acknowledges and agrees that Landlord may seek specific performance of the covenant of Guarantor contained in this Section 6 to execute such a new lease. Guarantor’s obligation to make payments in accordance with the terms of this Guaranty shall not be impaired, modified, released or limited in any manner whatsoever by any impairment, modification, release or limitation of the liability of the Tenant or its estate in bankruptcy resulting from the operation of any present or future provision of the Bankruptcy Code or other statute, or from the decision of any court. Guarantor further agrees that to the extent Tenant or Guarantor makes any payment to Landlord in connection with the Tenant’s Obligations and all or any part of such payment is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid by Landlord or paid over to a trustee, receiver or any other entity, whether under any bankruptcy law or otherwise (any such payment is hereinafter referred to as a “Preferential Payment”), then this Guaranty shall continue to be effective or shall be reinstated, as the case may be, and, to the extent of such payment or repayment by Landlord, the Tenant’s Obligations or part thereof intended to be satisfied by such Preferential Payment shall be revived and continued in full force and effect as if said Preferential Payment had not been made.

7. ASSIGNMENT. Landlord may, without notice, and without Guarantor’s consent, assign this Guaranty in whole or in part in conjunction with an assignment of Landlord’s interest in the Lease. Guarantor shall not assign this Guaranty without the prior written consent of Landlord (which consent may be withheld, conditioned or delayed at Landlord’s sole discretion) and no assignment of this Guaranty shall waive or release any obligation of Guarantor hereunder.

8. WAIVER OF DEFENSES. If Tenant does not pay any sum when due under the Lease or the Other Agreements or perform any other obligation Tenant is obligated to perform pursuant to the terms of the Lease or the Other Agreements, Landlord, in its sole discretion, may proceed directly against Guarantor under this Guaranty without first proceeding against Tenant or exhausting any of its rights or remedies against Tenant. Guarantor waives and relinquishes all rights, remedies and defenses accorded by applicable law to guarantors and agrees not to assert or take advantage of any such rights, remedies or defenses including, but not limited to:

a. any right to require Landlord to (i) proceed against Tenant or any person, proceed against or exhaust any security held from Tenant, or pursue any other remedy in Landlord’s power before proceeding against Guarantor, or (ii) notify Guarantor of any default by Tenant in the payment of any rent or other sums which the Lease or Other Agreements requires Tenant to pay or in the performance of any term, covenant, or condition therein required to be kept, observed, or performed by Tenant;

b. any defense arising by reason of any disability or other defense of Tenant or by reason of the cessation from any cause whatsoever of the liability of Tenant, excepting only a termination of Tenant’s obligations under the Lease and Other Agreements with Landlord’s prior written consent;

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c. any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other person or persons or the failure of Landlord to file or enforce a claim against the estate (in administration, bankruptcy or any other proceeding) of any other person or persons;

d. any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal;

e. any right to plead that Guarantor is the alter ego of Tenant as a defense to Guarantor’s liability hereunder or the enforcement of this Guaranty;

f. any duty on the part of Landlord to disclose to Guarantor any facts Landlord may now or hereafter know about Tenant, regardless of whether Landlord has reason to believe that any such facts materially increase the risk beyond that which Guarantor intends to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of the financial condition of Tenant and of all circumstances bearing on the risk of non-payment or non-performance of any obligations hereby guaranteed;

g. any defense arising because of Landlord’s election, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code; and

h. any rights Guarantor may now or hereafter have under Section 17.001 of the Texas Civil Practice and Remedies Code, Texas Rule of Civil Procedure 31 and Chapter 34 of the Texas Business and Commerce Code.

Without limiting the generality of the foregoing or any other provisions hereof, Guarantor expressly waives any and all benefits which might otherwise be available to Guarantor under Texas or federal law, to the extent such waiver is allowable under Texas or federal law. Notwithstanding the foregoing, if and to the extent that Landlord defaults in its obligations to Tenant under the Lease, Guarantor does not waive, and Guarantor may assert as a defense to Guarantor’s obligations under this Guaranty, the defense under the Lease that the Tenant would be able to assert against Landlord with respect to performance of the Tenant’s Obligations under the Lease, if and to the limited extent that such defense arises solely and directly from such Landlord default.

9. WAIVER OF SUBROGATION.

a. Notwithstanding any other provision of this Guaranty to the contrary, until the obligations of Tenant under the Lease are fully performed and paid, Guarantor hereby postpones it rights to enforce any claims or other rights which Guarantor may now have or hereafter acquire against Tenant or any other guarantor of all or any of Tenant’s Obligations, which claims or other rights arise from the existence or performance of Guarantor’s obligations under this Guaranty or the Lease (all such claims and rights are referred to as “Guarantor’s Conditional Rights”), including, without limitation, any right of subrogation, any right of surety, reimbursement, exoneration, contribution, or indemnification, any right to participate in any claim or remedy of Landlord against Tenant or any collateral which Landlord now has or hereafter acquires, including without limitation, the right to take or receive from Tenant payment or security in any form whatsoever on account of such claim or other rights. If, notwithstanding the foregoing provisions, any amount shall be paid to Guarantor on account of any Guarantor’s Conditional Rights and either (i) such amount is paid to Guarantor at any time when Tenant’s Obligations shall not have been paid or performed in full, or (ii) regardless of when such amount is paid to Guarantor, any payment made by Tenant to Landlord is at any time determined to be a Preferential Payment, then such

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amount paid to Guarantor shall be held in trust for the benefit of Landlord and shall forthwith be paid to Landlord upon written request of Landlord, to be credited and applied upon Tenant’s Obligations then owing to Landlord, in such order as Landlord, in its sole and absolute discretion, shall determine. In addition, Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protests, notices of dishonor, and notices of acceptance of this Guaranty, and all diligence in collection or in protection of any security.

b. To the extent that any of the provisions of Section 9.a above shall not be enforceable, Guarantor agrees that until such time as Tenant’s Obligations have been paid and performed in full and the period of time has expired during which any payment made by Tenant or Guarantor to Landlord may be determined to be a Preferential Payment, Guarantor’s Conditional Rights to the extent not validly postponed shall be subordinate to Landlord’s right to full payment and performance of Tenant’s Obligations, and Guarantor shall not enforce Guarantor’s Conditional Rights during such period.

10. JUDGMENTS. Guarantor agrees that any and all judgments resulting from the liabilities, obligations and duties (including, but not limited to, payment of rent) imposed upon the Tenant under the terms of the Lease shall be binding upon Guarantor.

11. FAILURE TO ACT OR DELAY; CUMULATIVE REMEDIES. No failure or delay on Landlord’s part in exercising any power, right or privilege against Tenant or Guarantor shall impair or be construed as a waiver of any such power, right or privilege. All remedies of Landlord against Tenant and Guarantor are cumulative.

12. JOINT LIABILITY. Each party now or hereafter constituting the Guarantor shall be jointly and severally liable for all the obligations of Guarantor hereunder. The obligations of Tenant and Guarantor shall be joint and several and Landlord may enforce this Guaranty against any one or more of Tenant and Guarantor without the joinder of Tenant or Guarantor (hereunder or otherwise). Guarantor represents and warrants to Landlord that Guarantor has the power, capacity and authority to execute and deliver this Guaranty and to perform its obligations pursuant to this Guaranty.

13. AUTHORITY. If Guarantor is a corporation, partnership, or limited liability company, each person signing this Guaranty on behalf of Guarantor represents to Landlord that such person is authorized to execute this Guaranty without the necessity of obtaining any other signature of any other officer, partner, manager or member, that the execution of this Guaranty has been authorized by the board of directors of the corporation, the partners of the partnership, or the members or managers of the limited liability company, as the case may be, that the corporation, partnership, or limited liability company is duly organized and in existence, that the corporation, partnership, or limited liability company has the full right, authority and power to enter into this Guaranty and to perform its obligations hereunder, and that this Guaranty is fully binding on the undersigned Guarantor and has been determined by the board of directors of the corporation, the partners of the partnership, or the members or managers of the limited liability company, as the case may be, to reasonably be expected to benefit such corporation, partnership, or limited liability company.

14. KNOWLEDGE. Guarantor hereby represents and warrants to Landlord that Guarantor has had the opportunity to review the matters discussed and contemplated by the Lease and the Other Agreements, including the remedies Landlord may pursue against Tenant in the event of a default under the Lease and the Other Agreements, and Tenant’s financial condition and ability to perform under the Lease and the Other Agreements. Guarantor agrees to keep itself fully informed on all aspects of Tenant’s financial condition and the performance of Tenant’s obligations to Landlord and acknowledges and agrees that Landlord has no duty to disclose to Guarantor any information pertaining to Tenant.

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15. RELIANCE. Guarantor acknowledges that Landlord is relying upon Guarantor’s covenants herein in entering into the Lease with Tenant, and Guarantor undertakes to perform its obligations hereunder promptly and in good faith. Guarantor further acknowledges that Landlord would not execute the Lease if Guarantor did not execute and deliver to Landlord this Guaranty of Lease, Landlord’s agreement to enter into the Lease is of economic benefit to Guarantor, and Guarantor has a direct or indirect ownership interest in Tenant. Guarantor agrees to provide to Landlord, within fifteen (15) days of written request (which Landlord agrees to limit to once every calendar year if Guarantor has provided the information previously requested for that year), current financial statements for Guarantor or, if available, audited financial statements prepared by an independent certified public accountant with copies of the auditor’s statement.

16. ADDITIONAL GUARANTIES. Landlord, at Landlord’s sole option and discretion, may execute other agreements similar to this Guaranty with other parties with respect to the Lease. This Guaranty shall be cumulative of any such agreements and the liabilities and obligations of the Guarantor under this Guaranty shall not be affected or diminished by reason of any such other agreements.

17. ATTORNEYS’ FEES. Guarantor shall pay reasonable attorney’s fees and all other costs and expenses which may be incurred by Landlord in the enforcement of this Guaranty.

18. INDEPENDENT OBLIGATIONS. The obligations of Guarantor under this Guaranty are independent of the obligations of Tenant. A separate action or actions may be brought and prosecuted against Guarantor, whether or not an action is brought against Tenant or any other guarantor or whether Tenant or any other guarantor is joined in any such action or actions.

19. SUCCESSORS AND ASSIGNS. This Guaranty shall inure to the benefit of Landlord, its successors and assigns, and shall be binding on the heirs, successors and assigns of Guarantor. The term “Tenant” as used herein shall mean Tenant and Tenant’s successors in interest and assigns.

20. CHOICE OF LAW; VENUE. This Guaranty shall be governed by and interpreted according to the laws of the State of Texas. In any action brought under or arising out of this Guaranty, Guarantor hereby consents to the jurisdiction of any competent court within Bexar County, Texas, and consents to service of process by any means authorized by Texas law. Guarantor hereby appoints Tenant as its lawful agent authorized to receive service of process on behalf of Guarantor.

21. SEVERABILITY. If any provision or portion of this Guaranty is declared or found by a court of competent jurisdiction to be unenforceable or null and void, such provision or portion thereof shall be deemed stricken and severed from this Guaranty, and the remaining provisions and portions thereof shall continue in full force and effect.

22. NOTICES. All notices, statements, reports or other communications required or permitted hereunder (individually, a “Notice”) shall be in writing and shall be given to such party at its address set forth below (or such address as such party may hereafter specify in writing for notice purposes), by electronic mail, by personal delivery or courier, or by certified or registered mail, deposited with the United States mail with first-class postage prepaid and with return receipt requested. Each Notice shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by certified or registered mail, return receipt requested, deposited with the United States mail with first-class postage prepaid, the earlier of actual receipt or three (3) business days after such Notice is deposited with the United States mail, whether or not received, (c) if given by overnight courier with courier charges prepaid, twenty-four (24) hours after delivery to said overnight courier, and (d) if sent by electronic mail, upon delivery, provided that the sender retains a computer generated record confirming the addressee’s receipt of such notice.

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If to Landlord:

Gold Tooth Development, LLC

235 Primrose Place

San Antonio, Texas 78209

Email: kgug@econtrols.com

Attn: Kennon Guglielmo, Manager

If to Guarantor:

Enovation Controls, LLC,

5311 S 122nd East Ave

Tulsa, OK 74146

Email: dcrowell@fwmurphy.com

Attn: Dave Crowell

23. ENTIRE AGREEMENT. This Guaranty constitutes the entire agreement between Landlord and Guarantor and may be amended, modified or revoked only by an instrument in writing signed by both Landlord and Guarantor. Landlord and Guarantor agree that all prior or contemporaneous oral understandings, agreements or negotiations relative to this Guaranty are merged into and revoked by this instrument and no representation, understanding, promise or condition concerning the subject matter hereof shall be binding upon Landlord unless expressly stated herein.

24. WAVIER OF JURY TRIAL. GUARANTOR AND LANDLORD WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST THE OTHER PARTY ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS GUARANTY, THE LEASE, OR THE RELATIONSHIP OF THE PARTIES HEREUNDER OR UNDER THE LEASE.

25. REVIEW OF GUARANTY. GUARANTOR HEREBY ACKNOWLEDGES THAT GUARANTOR HAS BEEN AFFORDED THE OPPORTUNITY TO READ THIS DOCUMENT CAREFULLY AND TO REVIEW IT WITH AN ATTORNEY OF GUARANTOR’S CHOICE BEFORE SIGNING IT. GUARANTOR ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING AND EFFECT OF THIS DOCUMENT BEFORE SIGNING IT.

[SIGNATURE PAGE FOLLOWS]

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SIGNATURE PAGE TO GUARANTY OF LEASE

IN WITNESS WHEREOF, the undersigned has duly executed this Guaranty as of July 24, 2014.

GUARANTOR:
ENOVATION CONTROLS, LLC, an Oklahoma limited liability company
By:	/s/ Patrick W. Cavanagh
Name:	Patrick W. Cavanagh
Title:	President & CEO

Date Signed: 7/25/2014

STATE OF OKLAHOMA

COUNTY OF TULSA

On             July 25th            , 2014, before me,                     Margaret Watkins                        , a Notary Public in and for said County and State, personally appeared                     Patrick Cavanagh                                    , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.

Witness my hand and official seal.

                    [Notary Stamp]

/s/ Margaret Watkins

Signature of Notary

[SEAL]

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EXHIBIT I

ROOF RESTRICTIONS

(a) Landlord shall have exclusive control of and the right to use all of the roof of the Building and all parts of the roof (the “Roof”) for any purpose, including but not limited to erecting telecommunications and other equipment or structures on or over all or any part of the same. Except as expressly provided for herein, Tenant shall have no right to access the Roof, to use the Roof, or to install on the Roof any telecommunications or other equipment or structures, or to cause any alterations to the Roof, and there shall be no access, penetrations, additions, or modifications to the Roof or installation of telecommunications or other equipment or structures on the Roof by Tenant or its contractors, without (in each case) the prior written consent of Landlord, which may be withheld, delayed, or conditioned in Landlord’s sole discretion.

(b) The following requirements shall apply to any and all penetrations, additions, or modifications to the Roof authorized in writing by Landlord (“Authorized Roof Improvements”):

(i) All Authorized Roof Improvements shall be conducted, installed, and maintained at Tenant’s sole cost and expense and shall be performed by contractors acceptable to Landlord and to the issuer of any warranty on the Roof, and shall be performed in accordance with the procedures required by such issuer so as not to void such warranty, and shall be performed and installed in such a manner and location as to not interfere with Landlord’s use of the Roof or other equipment or facilities on, or functions performed from, the Roof (for example, repairs);

(ii) Tenant shall not be separately charged for access to the Roof or for the space on the Roof occupied by any Authorized Roof Improvements;

(iii) In connection with the installation of any Authorized Roof Improvements, Tenant shall also install, at Tenant’s sole expense, waterproofing materials around any penetrations of the Roof which are made during the installation, maintenance, repair, replacement or removal of any Authorized Roof Improvements and shall provide waterproofing certification so that Landlord is assured that such penetrations do not void, limit or reduce any roof warranty in effect from time to time, copies of which roof warranties Landlord will provide to Tenant upon written request (Tenant hereby acknowledging that it has received from Landlord a copy of the current roof warranty);

(iv) In no event will Tenant install any Authorized Roof Improvements or place any other equipment or materials on the Roof if the weight thereof (together with the weight of any such items previously installed or placed thereon) would exceed the weight-load capacity of the Roof; and

(v) Tenant shall have the right to access the Roof from time to time during regular business hours and upon not less than two (2) Business Days written notice to Landlord, to perform any such installations and maintenance of Authorized Roof Improvements, provided that no

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Authorized Roof Improvements and no authorized access to the Roof shall occur without a designated representative of Landlord present to observe, inspect and/or supervise the installation thereof. If, in order to maintain the warranty on the Roof, a representative of the issuer of the warranty on the Roof must be present to observe, inspect, or supervise the installation of any Authorized Roof Improvements, Tenant shall reimburse Landlord for the actual cost incurred by Landlord for such representative to be present for such purposes. Landlord shall use reasonable efforts to provide reasonably prompt accompanied access to the Roof in the case of emergencies.

(c) Tenant hereby agrees to protect, indemnify and hold Landlord harmless from and against any and all liabilities, claims and expenses (including reasonable attorneys’ fees) that Landlord incurs for Roof repairs, if any, necessitated as a result of Tenant’s failure to comply with its obligations under this Lease and/or to the extent the warranty of the Roof in effect from time to time is voided, limited or reduced as a result of Tenant’s use of the Roof.

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EXHIBIT J

WORK LETTER EXHIBIT

This Exhibit “J” (the “Work Letter”) describes and specifies the rights of Landlord and the obligations of Tenant with respect to the design, construction and payment for the completion of the Tenant Work (as defined in Section 2.4 below) within the Building. Any capitalized terms not otherwise defined in this Work Letter shall have the same meaning as contained in the Lease.

ARTICLE 1

TENANT’S ACCEPTANCE OF PREMISES “AS IS”

1.1 Delivery and Acceptance of the Premises. Tenant accepts the Premises in their “AS IS” condition on the Effective Date, subject only to those representations and warranties of Landlord specifically contained in the Lease. Landlord shall have no obligation to install or make any improvements to the Premises.

1.2 Initial Improvements. As used in the Lease and this Work Letter, “Initial Improvements” shall mean those improvements to be made by Tenant within the Building according to the Final Plans (as hereinafter defined) approved by Landlord for those improvements.

ARTICLE 2

INITIAL IMPROVEMENTS

2.1 Approval of Design Professionals. The architect selected by Tenant to design the Initial Improvements (“Tenant Architect”) shall be subject to the prior written approval of Landlord, which approval will not be unreasonably withheld. Landlord hereby approves MJD II Architects, Inc., Shawn Kaarlsen & Associates Architects, and Sprinkle Robey Architects as a Tenant Architect. Upon request of Landlord from time to time, Tenant shall promptly provide Landlord with a current written list that identifies all other design professionals engaged by Tenant or Tenant Architect, including, without limitation, sub-contractor architects, engineers and interior designers.

2.2 Approval of Contractor. The general contractor selected by Tenant to complete Tenant Work (“Tenant Contractor”) shall be subject to the prior written approval of Landlord, which approval will not be unreasonably withheld. Upon request of Landlord from time to time, Tenant shall promptly provide Landlord with a current written list that identifies all other contractors and all subcontractors, suppliers and materialmen engaged by Tenant or Tenant Contractor. Landlord hereby approves Mitchell & Phillips, Inc. and D/B Contractors as a Tenant Contractor to perform the Tenant Work within the Building, subject to the terms, conditions, and limitations contained in this Work Letter and the Lease. Notwithstanding the foregoing, all contractors, subcontractors, suppliers and materialmen whose work will interface with or impact the Roof, or any exterior, structural, mechanical, plumbing and/or electrical systems of any portion of the Building shall be subject to Landlord’s approval, which approval may be granted or withheld in Landlord’s sole discretion. Landlord hereby approves Persyn Engineering as a

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structural engineer. All contractors, subcontractors, suppliers, and materialmen whose work will interface with or impact the Roof shall be subject to the terms of Exhibit I of the Lease and any work performed to the Roof shall be conducted under the direct supervision of a representative of Landlord.

2.3 Approval of Final Plans. As of the Effective Date, Tenant has delivered, and Landlord has conditionally approved, the preliminary site plan prepared by the Tenant and attached hereto as Exhibit “J-1” (the “Proposed Premises Layout”). Tenant shall deliver to Landlord complete construction drawings and specifications prepared by Tenant Architect (the “Proposed Tenant Plans”) for the Initial Improvements to be constructed in the Building. Landlord shall thereafter give written notice to Tenant (the “Landlord’s Notice”) of Landlord’s approval of, or objection to, the Proposed Tenant Plans, such approval to not be unreasonably withheld, provided that the Proposed Tenant Plans are substantially consistent with the Proposed Premises Layout. In the event Landlord fails to deliver the Landlord’s Notice within ten (10) business days of Tenant’s delivery of the Proposed Tenant Plans to Landlord, Landlord shall be deemed to have approved those Proposed Tenant Plans. Tenant shall deliver revised Proposed Tenant Plans addressing Landlord’s objections to Landlord promptly after Tenant’s receipt of the Landlord’s Notice, and, provided Landlord’s objections are adequately cured, Landlord shall then approve the revised Proposed Tenant Plans. The Proposed Tenant Plans as revised by the Tenant and approved by Landlord will constitute the “Final Plans” for the Initial Improvements.

2.4 Tenant Work. Upon approval of the Final Plans, and upon Tenant’s receipt of all permits and authorizations required by all applicable governmental agencies or utility providers for commencement of construction, copies of which shall be promptly provided to Landlord, Tenant agrees to commence construction of the Initial Improvements in accordance with the approved Final Plans (the “Tenant Work”), to diligently prosecute the completion of the of Tenant Work thereafter, and to construct and complete all of the Tenant Work in a good and workmanlike manner in compliance with all Legal Requirements. Tenant shall cause the construction of the Initial Improvements to be performed in accordance with the approved Final Plans and all change orders either approved by Landlord or presented to Landlord but not requiring Landlord approval as provided below. Landlord shall have the right at any time and from time to time to inspect the Premises during the course of Tenant Work and to review and inspect the construction of the Initial Improvements by Tenant to ensure compliance with Final Plans (Landlord agrees to use commercially reasonable efforts to minimize any interference with the Tenant’s Work in connection with such inspections), and in the event that Landlord or Landlord’s architect gives notice to the Tenant of noncompliance with the Final Plans, then as long as Landlord and Landlord’s architect are acting in good faith, Tenant shall promptly undertake to correct such deficiencies in order to bring the construction of the Initial Improvements in compliance with Final Plans. If Tenant desires to effect any change or addition to the Final Plans, then prior to implementing the proposed change order, Tenant shall deliver a written request to Landlord that includes a revision to that portion of the Final Plans affected by such proposed change order, a description of the scope of such proposed change, and the cost of such change (the “Change Order Notice”), and if the Change Order is a Material Change Order (as hereinafter defined), the Change Order Notice must state that it is seeking Landlord’s approval of a Material Change Order (a “Material Change Order Request”). Tenant is not required to obtain Landlord’s written consent to any change orders, except for Material Change Orders, but Tenant must timely provide to Landlord a Change Order Notice for all change

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orders. As used herein, a “Material Change Order” is a change order that affects the Roof, foundation, structural walls, the HVAC, mechanical, plumbing and/or electrical systems of any portion of the Premises, or anything that requires Roof, floor, or exterior wall penetrations. If Landlord fails to advise Tenant of its approval or disapproval of a Material Change Order within ten (10) business days of receipt of a Material Change Order Request, Landlord shall be deemed to have approved such Material Change Order as submitted. Landlord’s approval of any proposed Material Change Orders to the Final Plans will not be unreasonably withheld, provided that such Material Change Orders remain consistent with the Proposed Premises Layout. Tenant shall promptly provide to Landlord copies of all change orders when executed by Tenant. Upon Landlord’s request, Tenant shall promptly provide Landlord with revised Final Plans reflecting the changes effected by any change orders, including Material Change Orders.

2.5 Workmanship. Tenant shall use only new materials as specified in the Final Plans in the performance of Tenant Work. Tenant shall cause each Tenant Contractor doing Tenant Work to guarantee and warrant, in writing to Tenant and Landlord, that the work done by it shall be free from any defects in workmanship and materials for a period of not less than one year from the date of its completion.

2.6 Substantial Completion. For purposes of this Work Letter and the Lease, the term “Substantially Complete” or “Substantial Completion” shall mean the date on which (i) the Initial Improvements are completed in all material respects in substantial compliance with the Final Plans (including any Material Change Orders approved by Landlord or any other change orders executed by Tenant pursuant to these provisions), excepting only minor finish and touch- up work and other items customarily considered punch list items that do not interfere in any material respect with the occupancy of the Premises by Tenant, (ii) the Premises may reasonably be used and occupied by Tenant, and (iii) a certificate of occupancy or temporary certificate of occupancy and any other governmental authorizations which are necessary for Tenant’s use and occupancy of the Premises have been obtained. Tenant shall promptly notify Landlord of the Substantial Completion of the Initial Improvements and deliver to Landlord copies of all certificates of occupancy and other approvals from all applicable governmental entities and utility providers, and Landlord shall have the right, but no obligation, to inspect and review Tenant Work for conformity with the Final Plans. Any approval by Landlord of Tenant Work shall in no way be deemed a representation or warranty of the quality or fitness of the Tenant Work and/or the construction by Tenant. Any deficiency in design, materials or construction of the Tenant Work shall be solely the responsibility of Tenant, regardless of whether the Landlord had inspected and approved such work.

2.7 Liens. In the event any liens are asserted against the Building, the Premises, or any portions thereof on account of any labor or materials furnished as a part of, or in connection with, the Tenant Work, Tenant shall give Landlord immediate notice of such lien(s) following Tenant’s receipt of notice thereof. If such liens are not released from the Building, the Premises, and all parts thereof, by bond or otherwise, within thirty (30) days after Tenant receives notice of the filing of same, Landlord may, at its election, require that Tenant furnish bond or other security as Landlord reasonably deems satisfactory to protect Landlord against any such loss, liability or damage, or Landlord may pay all such sums necessary to the obligee asserting such liens and may thereafter charge the Tenant all such sums paid out, to be paid upon demand therefor by Landlord.

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	J-3

EXHIBIT J-1

(Proposed Premises Layout)

[See Attached]

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	J-4

EX-10.16

Exhibit 10.16

EMPLOYMENT TERMS

These Employment Terms (these “Terms”), effective as of September 30, 2009 (the “Effective Date”), are entered into between Frank W. Murphy III (“Employee”) and Global Controls & Instrumentation, LLC, an Oklahoma limited liability company (“Employer”).

WITNESSETH:

WHEREAS, these Terms are entered into in connection with that certain Contribution Agreement (the “Contribution Agreement”) among EControls, LLC, a Texas limited liability company, EControls Group, Inc., a Texas corporation formerly known as EControls, Inc., Murphy Group, Inc., an Oklahoma corporation formerly known as Murphy Industries, Inc. (“Murphy-Inc.”), Murphy Industries, LLC, an Oklahoma limited liability company, and Employer; and

WHEREAS, Employee has been previously employed by Murphy-Inc. and Employer desires the services of Employee;

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1. Employment. Employee shall be employed by Employer on an at will basis. Employee shall be Employers Chief Executive Officer.

2. Compensation. Employee’s salary as an employee of Employer shall be in the amount of $         per annum.

3. Confidentiality; Non-Compete; Non-Solicitation; Inventions.

(a) Confidentiality. Employee will not at any time, whether during or subsequent to employment, directly or indirectly divulge to any other person, firm, partnership, limited liability company, trust corporation or other entity or association (each, a “Person”) any of Employer’s information that is not available to the general public and concerns Employer, its parents, subsidiaries, affiliates or its customer, including, but not limited to, customer lists, employee lists, employee compensation information, customer information, pricing information, business plans, business strategies, trade secrets, or other proprietary information obtained during the course of Employee’s employment other than in the ordinary course of performing Employee’s duties hereunder.

(b) Non-Compete. Employee shall not, directly or indirectly, during the period of Employee’s employment and for the period of three years immediately following the voluntary termination of Employee’s employment without Good Reason (as hereinafter defined) or the involuntary termination of Employee’s employment with Cause (as hereinafter defined) (together, the “Noncompetition Period”): (i) compete with Employer or engage in, own, operate, manage, have a proprietary interest in, extend financial assistance to, solicit, encourage, serve or be employed by any Person (other than Employer), which is then engaged in a business directly

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competitive with Employer’s business in any place where Employer is conducting business on the date hereof or during the Noncompetition Period (which shall include any county in which Employer sells services or products); or (ii) solicit or accept business from, or have a proprietary interest in, extend financial assistance to, serve or be employed by any Person (other than Employer or its affiliates), which solicits or accepts business from, any Person who is a customer of Employer on the date hereof or during the Noncompetition Period. Nothing herein shall prevent Employee from owning up to five percent of the outstanding stock of any publicly traded entity, regardless of the business in which such entity might be engaged.

(c) Non-Solicitation. During the period of Employee’s employment and for the period of three years immediately following the voluntary termination of Employee’s employment without Good Reason or the involuntary termination of Employee’s employment with Cause, Employee shall not in any manner, directly or indirectly:

(i) Entice, encourage or influence, or attempt to entice, encourage or influence, anyone who is an employee of Employer at the time of such termination to quit or leave the employ of Employer; or

(ii) Solicit, induce or attempt to induce any Person who is a customer or supplier of Employer at the time of such termination to cease being a customer or supplier of Employer or divert or take away, or attempt to divert or take away, from Employer the business or patronage of such customers or suppliers.

(d) Defined Terms.

(i) “Cause” means the termination of Employee’s employment by Employer or any of its subsidiaries as a result of (A) a demonstrated and material neglect or continued failure or refusal to perform the material duties of his or her position (other than any such failure resulting from his or her incapacity due to a Disability), (B) a conviction of a felony or a crime involving moral turpitude, other than a traffic offense that is not punished by a sentence of incarceration or a felony related to hunting live game, (C) proven or admitted fraud that is not de minimus and that has caused, is causing, or reasonably is likely to cause harm to Employer, (D) misappropriation, theft or embezzlement, in each case that is not de minimus, that has caused, is causing, or reasonably is likely to cause harm to Employer, (E) willfully, recklessly, or grossly negligently engaging in misconduct that is materially injurious to Employer or any of its subsidiaries, monetarily or otherwise or (F) use of illegal drugs in the course of, related to or connected with the business of Employer or any of its affiliates. For this purpose, no act, or failure to act, on the part of Employee shall be considered “willful” unless done, or omitted, by Employee not in good faith and without reasonable belief that his or her action or omission was in the best interest of Employer or any of its subsidiaries.

(ii) “Disability” means any medically determinable physical or mental impairment of sufficient severity such that, in the opinion of one physician, selected by Employee from a group of three physicians from the Cleveland Clinic or the Mayo Clinic chosen by the Employer, Employee is unable to engage in any substantial gainful activity by reason of such impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or Employee is determined to be totally disabled by the Social Security Administration.

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(iii) “Good Reason” means the occurrence of any one of the following events: (A) any diminution in salary, bonus or benefits of Employee as set forth in these Terms, other than as specifically contemplated by these Terms, (B) a change of the main work location of Employee to a location outside of the greater Tulsa, Oklahoma metropolitan area, or (C) the failure of Employer to pay any compensation in accordance with the terms hereof

4. Inventions. Employee agrees to disclose to Employer any and all inventions, improvements, discoveries, processes, programs, or systems that Employee develops or discovers during the period of time Employee is employed by Employer and that are related to any work or project that Employee works on or has knowledge of while employed at Employer or that Employee develops or discovers either using Employer equipment or resources or while on Employer time whether developed or discovered by Employee alone or with other Persons. Employee agrees that all such inventions, improvements, discoveries, processes, programs and systems and all memoranda, reports, drawings, designs, programs, art work, plans, insertions, processes, formulations, promotions, software and other materials or documents, whether or not confidential, created or developed by Employee (whether alone or with other Persons) pursuant to Employee’s employment are the sole and absolute property of Employer or the customer for whom any such item(s) was/were produced for any and all purposes. Employee agrees that Employee does not have and will not claim to have any right, title or interest of any kind or nature in or to such materials. Such intellectual property will be the sole and absolute property of Employer, and upon request of Employer, Employee will execute and deliver such assignments and other documents as Employer may consider appropriate to properly vest rights, titles and interests in such materials in Employer. Employer acknowledges that this Section 4 does not apply to any invention for which no equipment, supplies, facility or trade secret of Employer was used and which was developed entirely by Employee on his own time, unless (a) the invention relates to a business of Employer, or to Employer actual or demonstrably anticipated research or development, or (b) the invention results from any work performed by Employee for Employer.

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EXECUTED effective as of the day and year first above written.

EMPLOYER:
GLOBAL CONTROLS & INSTRUMENTATION, LLC
By:	/s/ Kennon Guglielmo
Name: Kennon Guglielmo
Title: CTO
EMPLOYEE:
By:	/s/ Frank W. Murphy III
	Frank W. Murphy III

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EX-10.17

Exhibit 10.17

EMPLOYMENT TERMS

These Employment Terms (these “Terms”), effective as of September 30, 2009 (the “Effective Date”), are entered into between Kennon Guglielmo (“Employee”) and Global Controls & Instrumentation, LLC, an Oklahoma limited liability company (“Employer”).

WITNESSETH:

WHEREAS, these Terms are entered into in connection with that certain Contribution Agreement (the “Contribution Agreement”) among EControls, LLC, a Texas limited liability company, EControls Group, Inc., a Texas corporation formerly known as EControls, Inc. (“EControls-Inc.”), Murphy Group, Inc., an Oklahoma corporation formerly known as Murphy Industries, Inc., Murphy Industries, LLC, an Oklahoma limited liability company, and Employer; and

WHEREAS, Employee has been previously employed by EControls-Inc. and Employer desires the services of Employee;

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1. Employment. Employee shall be employed by Employer on an at will basis. Employee shall be Employers Chief Technical Officer.

2. Compensation. Employee’s salary as an employee of Employer shall be in the amount of $ per annum. Prior to the date hereof, EControls-Inc. paid the amount of Employee’s premiums on certain term life insurance policies (the “Term Life Insurance Policies”). Until January 2, 2016, Employer shall pay such premiums, as they come due, on the Term Life Insurance Policies.

3. Confidentiality; Non-Compete; Non-Solicitation; Inventions.

(a) Confidentiality. Employee will not at any time, whether during or subsequent to employment, directly or indirectly divulge to any other person, firm, partnership, limited liability company, trust corporation or other entity or association (each, a “Person”) any of Employer’s information that is not available to the general public and concerns Employer, its parents, subsidiaries, affiliates or its customer, including, but not limited to, customer lists, employee lists, employee compensation information, customer information, pricing information, business plans, business strategies, trade secrets, or other proprietary information obtained during the course of Employee’s employment other than in the ordinary course of performing Employee’s duties hereunder.

(b) Non-Compete. Employee shall not, directly or indirectly, during the period of Employee’s employment and for the period of three years immediately following the voluntary termination of Employee’s employment without Good Reason (as hereinafter defined) or the involuntary termination of Employee’s employment with Cause (as hereinafter defined)

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(together, the “Noncompetition Period”): (i) compete with Employer or engage in, own, operate, manage, have a proprietary interest in, extend financial assistance to, solicit, encourage, serve or be employed by any Person (other than Employer), which is then engaged in a business directly competitive with Employer’s business in any place where Employer is conducting business on the date hereof or during the Noncompetition Period (which shall include any county in which Employer sells services or products); or (ii) solicit or accept business from, or have a proprietary interest in, extend financial assistance to, serve or be employed by any Person (other than Employer or its affiliates), which solicits or accepts business from, any Person who is a customer of Employer on the date hereof or during the Noncompetition Period. Nothing herein shall prevent Employee from owning up to five percent of the outstanding stock of any publicly traded entity, regardless of the business in which such entity might be engaged.

(c) Non-Solicitation. During the period of Employee’s employment and for the period of three years immediately following the voluntary termination of Employee’s employment without Good Reason or the involuntary termination of Employee’s employment with Cause, Employee shall not in any manner, directly or indirectly:

(i) Entice, encourage or influence, or attempt to entice, encourage or influence, anyone who is an employee of Employer at the time of such termination to quit or leave the employ of Employer; or

(ii) Solicit, induce or attempt to induce any Person who is a customer or supplier of Employer at the time of such termination to cease being a customer or supplier of Employer or divert or take away, or attempt to divert or take away, from Employer the business or patronage of such customers or suppliers.

(d) Defined Terms.

(i) “Cause” means the termination of Employee’s employment by Employer or any of its subsidiaries as a result of (A) a demonstrated and material neglect or continued failure or refusal to perform the material duties of his or her position (other than any such failure resulting from his or her incapacity due to a Disability), (B) a conviction of a felony or a crime involving moral turpitude, other than a traffic offense that is not punished by a sentence of incarceration or a felony related to hunting live game, (C) proven or admitted fraud that is not de minimus and that has caused, is causing, or reasonably is likely to cause harm to Employer, (D) misappropriation, theft or embezzlement, in each case that is not de minimus, that has caused, is causing, or reasonably is likely to cause harm to Employer, (E) willfully, recklessly, or grossly negligently engaging in misconduct that is materially injurious to Employer or any of its subsidiaries, monetarily or otherwise or (F) use of illegal drugs in the course of, related to or connected with the business of Employer or any of its affiliates. For this purpose, no act, or failure to act, on the part of Employee shall be considered “willful” unless done, or omitted, by Employee not in good faith and without reasonable belief that his or her action or omission was in the best interest of Employer or any of its subsidiaries.

(ii) “Disability” means any medically determinable physical or mental impairment of sufficient severity such that, in the opinion of one physician, selected by

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Employee from a group of three physicians from the Cleveland Clinic or the Mayo Clinic chosen by the Employer, Employee is unable to engage in any substantial gainful activity by reason of such impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or Employee is determined to be totally disabled by the Social Security Administration

(iii) “Good Reason” means the occurrence of any one of the following events: (A) any diminution in salary, bonus or benefits of Employee as set forth in these Terms, other than as specifically contemplated by these Terms, (B) a change of the main work location of Employee to a location outside of the greater San Antonio, Texas metropolitan area, or (C) the failure of Employer to pay any compensation in accordance with the terms hereof

4. Inventions. Employee agrees to disclose to Employer any and all inventions, improvements, discoveries, processes, programs, or systems that Employee develops or discovers during the period of time Employee is employed by Employer and that are related to any work or project that Employee works on or has knowledge of while employed at Employer or that Employee develops or discovers either using Employer equipment or resources or while on Employer time whether developed or discovered by Employee alone or with other Persons. Employee agrees that all such inventions, improvements, discoveries, processes, programs and systems and all memoranda, reports, drawings, designs, programs, art work, plans, insertions, processes, formulations, promotions, software and other materials or documents, whether or not confidential, created or developed by Employee (whether alone or with other Persons) pursuant to Employee’s employment are the sole and absolute property of Employer or the customer for whom any such item(s) was/were produced for any and all purposes. Employee agrees that Employee does not have and will not claim to have any right, title or interest of any kind or nature in or to such materials. Such intellectual property will be the sole and absolute property of Employer, and upon request of Employer, Employee will execute and deliver such assignments and other documents as Employer may consider appropriate to properly vest rights, titles and interests in such materials in Employer. Employer acknowledges that this Section 4 does not apply to any invention for which no equipment, supplies, facility or trade secret of Employer was used and which was developed entirely by Employee on his own time, unless (a) the invention relates to a business of Employer, or to Employer actual or demonstrably anticipated research or development, or (b) the invention results from any work performed by Employee for Employer.

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EXECUTED effective as of the day and year first above written.

EMPLOYER:
GLOBAL CONTROLS & INSTRUMENTATION, LLC
By:	/s/ Frank W. Murphy III
Name:  Frank W. Murphy III
Title:  CEO
EMPLOYEE:
By:	/s/ Kennon Guglielmo
	Kennon Guglielmo

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EX-10.18

Exhibit 10.18

August 16, 2011

Dear Gary:

This confirms our offer of a position with Global Controls & Instrumentation (GC&I). Your title will be Chief Executive Officer (CEO) at an annual salary of $500,000 paid biweekly reporting to the GC&I Advisory Board. Your effective date of employment will be October 1, 2011.

Following are more details regarding the offer of employment

Ø You will receive $150,000 for relocation assistance included with your first paycheck. Please note that all applicable taxes are your responsibility. This payment requires that you sign a Relocation-Expense Repayment Agreement.

Ø You will be eligible to participate in the applicable employee benefits, including Medical, Dental, Vision and 401(k). The complete employee benefit summary is enclosed with this offer.

Ø Beginning September 1, and for the remainder of 2011, you will receive a monthly bonus in the amount of $20,833.

Ø Beginning January 1, 2012 you will be eligible for a bonus up to 50% of your annual salary. This bonus will consist of two components, structured as follows:

a) You will be eligible to participate in the company’s Incentive Compensation Plan (OVERDRIVE) at a 15% target bonus, paid monthly in accordance with the plan.

b) You will be eligible for an additional bonus outside the company’s Incentive Compensation Plan in the amount of 35% of your annual salary based on specific metrics established by the GC&I Advisory Board.

Ø This offer includes participation in GC&I’s Profits Interest Plan. Specifically, you will be awarded 170,000 Class B Units subject to the terms & conditions outlined in your individual award agreement.

Ø You will be eligible for housing and family commute assistance as follows:

a) Corporate provided housing, condo or apartment. All billing will be arranged and paid for by the company.

b) Car allowance, at a rate of $8700 annually. This allowance will be in addition to your normal salary and included in your biweekly pay.

c) Commute allowance for either you or your spouse to or from Ft. Wayne, Indiana once per month. All charges associated with the commute will be expensed per standard procedures.

Ø You will be eligible for four (4) weeks of vacation.

Ø Beginning in 2012, and thereafter while employed as CEO with GC&I, the company will pay for an annual physical at the Cooper Clinic in Dallas, as well as the associated travel expense.

Ø You will be entitled to a pre-determined severance agreement as outlined below.

This agreement is in effect for the duration (tenure) of your employment with Global Controls & Instrumentation, beginning October 1, 2011. It provides for certain severance benefits in the event that your employment is terminated from the position of CEO with Global Controls & Instrumentation other than for: (a) cause or (b) as a result of a transaction which triggers payout of your Class B Units. As used herein, the term “Cause” is defined as: (i) Fraud or misappropriation with respect to the property or business of the Company or intentional material damage to the property or business of the company. (ii) Willful failure by the Executive to perform his duties and responsibilities and to carry out his authority. (iii) Willful malfeasance or misfeasance or breach of fiduciary duty or representation to the Company or its stockholders. (iv) Willful failure to act in accordance with any specific lawful instructions of the Advisory Board of the company or (v) conviction of the Executive of a felony.

This agreement provides for the following severance benefits:

1. Continuation of full base pay for a period of twelve (12) months after involuntary termination, “the severance period”.

2. Continuation of all company paid insurance benefits until the end of the twelve (12) month severance period or until employee accepts a position with another company offering comparable benefits; whichever comes first.

A. The salary continuation will be paid in bi-weekly installments. In the event that employee leaves the employment of employer voluntarily, he shall accrue no benefits from this policy.

B. In the event of any violation by employee of any of the terms of this agreement, employer may terminate employment without notice and with compensation to employee only to the date of such termination.

C. It is further agreed that any breach or evasion of any of the terms of this agreement by either party will result in immediate and irreparable injury to other party and will authorize recourse to injunction and or specific performance as well as to all other legal or equitable remedies to which such injured party may be entitled under this agreement.

(d) Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(e) Waiver of Rights. No delay or omission by Global Controls & Instrumentation in exercising any right under this Agreement will operate as a waiver of that or any other right. A waiver or consent given by Global Controls & Instrumentation on any one occasion is effective only in that instance and will not be construed as a bar to or waiver of any right on any other occasion.

(f) Equitable Remedies. The restrictions contained in this Agreement are necessary for the protection of the business and goodwill of Global Controls & Instrumentation and its subsidiaries and are considered by the Employee to be reasonable for such purpose. The Employee agrees that any breach of this Agreement is likely to cause Global Controls & Instrumentation substantial and irrevocable damage and therefore, in the event of any such breach, the Employee agrees that Global Controls & Instrumentation, in addition to such other remedies which may be available, shall be entitled to specific performance and other injunctive relief.

(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma. Any action, suit, or other legal proceeding which is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be commenced only in a court of the State of Oklahoma (or, if appropriate, a federal court located within Oklahoma), and Global Controls & Instrumentation and the Employee each consents to the jurisdiction of such a court.

Since your employment is at will, this offer does not create any agreement for employment for any specific period of time. Further, the terms of your employment may change in the future based on many factors including, but not limited to your performance and the performance of the Company.

This offer is contingent on the results of a thorough background investigation and a pre-employment drug screen.

Enclosed is an Application for Employment, Non Disclosure and Confidentiality Agreement, Summary of Employee Benefits, a copy of the Company’s Drug Free Workplace Policy and associated Acknowledgement and Consent form. Please complete the Application for Employment, Non Disclosure and Confidentiality agreement, and Acknowledgement and consent form and return it along with two forms of identification (copy of your driver license and social security card) as soon as possible.

Also included is an authorization for your drug screen at the MedCenter located at 2929 S. Garnett. An appointment is not required. Please have your drug screen prior to reporting to work.

If you are in agreement with the terms and conditions outline above, please sign and return one copy of this letter with the requested information.

Gary, we are looking forward to having you join our Company.

Sincerely,

/s/ Rich Todhunter

Rich Todhunter

Director, Human Resources

/s/ Gary Riley	23-08-11
Accepted:	Date

EX-10.19

Exhibit 10.19

[ENOVATION CONTROLS LETTERHEAD]

July 11, 2014

Dear Pat:

THIS LETTER AGREEMENT (this “Agreement”), made and entered into as of July 11, 2014 (the “Effective Date”), by and between you and Enovation Controls, LLC, an Oklahoma limited liability company (the “Company”), amends and restates in its entirety your original offer letter with the Company dated as of December 4, 2012, as amended on November 1, 2013 and July 11, 2014 (collectively, the “Prior Agreement”).

This Agreement confirms the terms and conditions of your continuing employment with the Company in the position of President & Chief Executive Officer (CEO) at an annual salary of $440,000 paid biweekly, reporting to the Enovation Controls Advisory Board. Your annual salary will be reviewed on an annual basis.

Following are more details regarding the offer of employment:

Ø You are eligible to participate in the applicable employee benefits, including Medical, Dental, Vision and 401(k). Furthermore, you are entitled to receive additional life insurance (above the normal policy) in the amount of $600,000 bringing your total life insurance coverage to $700,000. The Company provides a life insurance policy for your spouse in the amount of $25,000. The complete Summary of Employee Benefits was provided to you with the Prior Agreement.

Ø You are eligible to receive vacation which accrues biweekly at a rate of 6.15 hours. This is the equivalent of 160 hours (4 weeks) of vacation in a full calendar year and is available (vests) immediately.

Ø You are eligible for a bonus of up to 55% of your annual salary. The bonus consists of two components, structured as follows:

a) You are eligible to participate in the Company’s Incentive Compensation Plan (OVERDRIVE) at a 15% target bonus, paid in accordance with the plan.

b) You are eligible for an additional bonus outside the Company’s Incentive Compensation Plan in the amount of 40% of your annual salary based on specific metrics established by the Enovation Controls Advisory Board.

Ø Nothing in this Agreement will affect any existing rights you may have to the Class B Units and Class C Units of the Company that you previously received under the Enovation Controls Profits Interest Plan (herein, the “Prior Awards”). The Prior Awards will continue to be subject to the terms and conditions set forth in the individual award agreements evidencing the Prior Awards and the Enovation Controls Profits Interest Plan.

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Ø While employed as President & CEO with the Company, the Company will pay for an annual physical at the Mayo Clinic in Scottsdale, Arizona, as well as the associated travel expenses.

Ø The Company will provide you a car allowance at a rate of $15,000 per year. This allowance is in addition to your normal salary and included in your biweekly pay.

Ø The Company supports your required travel in the following manner: international air travel will be business class and domestic air travel will be coach class.

Ø The Company supports your participation on the HDMA Board, and will support one or two other corporate boards.

Ø If you terminate your employment with the Company (or its successor) for “Good Reason” (as defined below) within 24 months of a Change in Control (as defined in Appendix A to this Agreement) you will receive (A) continuation of your full base pay for a period of twelve (12) months, payable in biweekly installments in accordance with the normal payroll practices of the Company (or its successor) and (B) continuation of all Company-paid insurance benefits for 12 months or until you accept a position with another company offering comparable benefits, whichever comes first.

Ø As used herein “Good Reason” means, without your express written consent, the occurrence of any of the following events: (A) a material adverse change in your title, the nature or scope of your authority, powers, functions, duties, responsibilities, or reporting relationship; (B) a material reduction in your rate of annual base salary; (C) a change in your primary employment location to a location that is more than 50 miles from its location immediately prior to such relocation; or (D) the failure of the Company to obtain from any successor or transferee of the Company an express written and unconditional assumption of the Company’s obligations under this Agreement.

Ø Your employment may be terminated by you for Good Reason only if (X) you provide the Company (or its successor) with written notice of the event or circumstance giving rise to “Good Reason” within thirty (30) days after you have knowledge of the occurrence or existence of such event or circumstance, which notice shall specifically identify the event or circumstance that you believe constitutes “Good Reason,” (Y) the Company (or its successor) fails to correct the circumstance or event so identified within thirty (30) days after the receipt of such notice, and (Z) you resign within thirty (30) days after the expiration of the cure period referenced in the preceding clause (Y).

Ø The Company will reimburse you for any attorney fees paid for the review of this Agreement and other related documents.

Ø You are entitled to a pre-determined severance as outlined below:

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Ø For the duration (tenure) of your employment with the Company, you will receive certain severance benefits in the event that the Company breaches its obligations under this Agreement or your employment is terminated from the position of President & CEO with the Company other than for cause. As used herein, the term “Cause” means the termination of your employment as a result of (A) a demonstrated and material neglect or continued failure or refusal to perform the material duties of your position (other than any such failure resulting from your incapacity due to a disability), (B) a conviction of a felony or a crime involving moral turpitude, other than a traffic offense that is not punished by a sentence of incarceration or a felony related to hunting live game, (C) proven or admitted fraud that is not de minimis and that has caused, is causing, or reasonably is likely to cause harm to the Company or any of its affiliated or subsidiary entities, (D) misappropriation, theft or embezzlement, in each case that is not de minimis, that has caused, is causing, or reasonably is likely to cause harm to the Company or any of its affiliated or subsidiary entities, (E) willfully, recklessly, or grossly negligently engaging in misconduct that is materially injurious, monetarily or otherwise, to the Company or any of its affiliated or subsidiary entities, or (F) use of illegal drugs in the course of, related to or connected with the business of the Company or any of its affiliated or subsidiary entities. For this purpose, no act, or failure to act, on your part shall be considered “willful” unless done, or omitted, by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Company or any of its affiliated or subsidiary entities.

Ø This Agreement provides for the following severance benefits:

1. Continuation of full base pay for a period of twelve (12) months in the event of the Company’s breach of its obligations under this Agreement or involuntary termination of your employment (the “severance period”).

2. Continuation of all Company-paid insurance benefits for 12 months or until you accept a position with another company offering comparable benefits, whichever comes first.

a. Your salary continuation will be paid in biweekly installments. In the event that you leave the employment of the Company voluntarily, you will not be entitled to any of the foregoing severance benefits.

b. Severability. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

c. Waiver of Rights. No delay or omission by the Company in exercising any right under this Agreement will operate as a waiver of this or any other right. A waiver or consent given by the Company on any one occasion is effective only in that instance and will not be construed as a bar to or waiver of any right on any other occasion.

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d. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma. Any action and or other legal proceeding which is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be commenced only in a court of the State of Oklahoma (or, if appropriate, a federal court located within Oklahoma) and the Company, and you, each consent to the jurisdiction of such a court.

Ø The amounts payable to you pursuant to this Agreement are intended to be exempt from section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and related U.S. treasury regulations or official pronouncements and will be construed in a manner that is compliant with such exemption; provided, however, if and to the extent that any compensation payable to you under this Agreement is determined to be subject to Code section 409A, this Agreement will be construed in a manner that will comply with Code section 409A. Notwithstanding any provision to the contrary in this Agreement, if you are deemed on your termination date to be a “specified employee” within the meaning of Code section 409A, then any payments and benefits under this Agreement that are subject to Code section 409A and payable to you by reason of your termination of employment will be made or provided on the later of (A) the payment date set forth in this Agreement or (B) the date that is the earliest of (1) the expiration of the six-month period measured from the termination date or (2) the date of your death (the “Delay Period”). Payments and benefits subject to the Delay Period will be paid or provided to you without interest for such delay. The phrase “termination of employment” and similar phrases as used throughout this Agreement refer to a “separation from service” within the meaning of Code section 409A. Each payment to you under this Agreement is intended to be a “separate payment” and not a series of payments for purposes of Code section 409A.

You hereby acknowledge and agree that you continue to be bound by and subject to the terms and conditions of the Confidentiality and Noncompetition Agreement, which you entered into in connection with the Prior Agreement, and the Company’s Drug Free Workplace Policy.

If you are in agreement with the terms and conditions outlined above, please sign and return one copy of this Agreement.

Sincerely,

/s/ Justin Bray 7/11/14

Justin Bray

Vice President, Organization Effectiveness & Development

/s/ Patrick W. Cavanagh	7/11/14
Accepted	Date

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Appendix A

“Change in Control” means the occurrence of any of the following:

(a) a transaction or series of related transactions (other than an offering of common stock of Enovation Controls, Inc. (“ECI”) to the general public through a registration statement filed with the Securities and Exchange Commission) whereby a third party directly or indirectly becomes the Beneficial Owner (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of securities of ECI representing fifty percent (50%) or more of the combined voting power of ECI’s then outstanding securities;

(b) during any twenty-four (24) consecutive month period, the individuals who, at the beginning of such period, constitute the board of directors of ECI (the “Incumbent Directors”) cease for any reason other than death to constitute at least a majority of the Board of Directors of ECI; provided, however, that an individual who becomes a member of the Board of Directors of ECI subsequent to the beginning of the twenty-four (24) month period will be deemed to have satisfied such twenty-four (24) month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds (2/3) of the directors who then qualified as Incumbent Directors;

(c) the consummation of a sale or disposition of all or substantially all of ECI’s assets in one or a series of related transactions, other than (i) such a sale, disposition or lease to an entity, fifty percent (50%) or more of the combined voting power of the voting securities of which are owned by stockholders of ECI in substantially the same proportions as their ownership of ECI immediately prior to such sale or disposition or (ii) the distribution directly to ECI’s stockholders (in one distribution or a series of related distributions) of all of the stock of one or more subsidiaries of ECI that represent substantially all of ECI’s assets;

(d) there is consummated a merger or consolidation of ECI or any direct or indirect subsidiary with any other corporation or other entity, other than (i) a merger or consolidation which results in (A) the voting securities of ECI outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary under an employee benefit plan of ECI or any subsidiary of ECI, more than fifty percent (50%) of the combined voting power of the securities of ECI or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and (B) the individuals who comprise the board of directors of ECI immediately prior thereto constituting immediately thereafter at least a majority of the board of directors of ECI, the entity surviving such merger or consolidation or, if ECI or the entity surviving such merger is then a subsidiary, the ultimate parent thereof, or (ii) a merger or consolidation effected to implement a recapitalization of ECI (or similar transaction) in which no third party is or becomes the Beneficial Owner, directly or indirectly, of securities of ECI (not including in the securities Beneficially Owned by such third party any securities acquired directly from ECI or its affiliates) representing fifty percent (50%) or more of the combined voting power of ECI’s then outstanding securities; or

(e) the stockholders of ECI approve a plan of complete liquidation or dissolution of ECI.

EX-10.20

Exhibit 10.20

CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R. SECTIONS 200.80(b)(4), 200.83 AND 230.406.

[*] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

        

SALES AGREEMENT

REGARDING SALE OF HEAVY DUTY ALTERNATE FUEL

MANAGEMENT SYSTEMS

BETWEEN

MURPHY ECONTROLS TECHNOLOGIES (HANGZHOU) CO., LTD.

AND

CHENGDU AMICO TECHNOLOGIES CO., LTD.

August 29, 2013

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SALES AGREEMENT

REGARDING SALE OF HEAVY DUTY ALTERNATE FUEL MANAGEMENT

SYSTEMS

This Sales Agreement regarding Sale of Heavy Duty Alternate Fuel Management Systems (this “Agreement”) is made and executed as of the 29th day of August 2013, by and between MURPHY ECONTROLS TECHNOLOGIES (HANGZHOU) CO., LTD. , a company incorporated under the laws of the People’s Republic of China (the “PRC” or “China”) and having its registered address at 77 23rd Street, Hangzhou Economic & Technological Area, Hangzhou, Zhejiang Province 310018, the PRC (hereinafter referred to as “MET”), and CHENGDU AMICO TECHNOLOGIES CO., LTD. , a company organized under the laws of the PRC and having its registered address at No. 203 North Gangtong Rd, Pixian Industrial Zone, Chengdu 611743, Sichuan Province, the PRC (hereinafter referred to as “AMICO”).

WHEREAS, MET and Enovation Controls, LLC (“ENC”), MET’s ultimate parent company, are engaged in the manufacturing of engine controls, and alternate fuel management systems and components; and

WHEREAS, AMICO is engaged inter alia in the development, engineering and sale of alternate fuel systems in the PRC; and

WHEREAS, the Parties have agreed to enter into this Agreement, subject to obtaining all necessary Approvals, permissions, consents, validations, confirmations, licenses and any other authorizations required to set up a cooperation framework in the PRC with the main object of development, integration and selling electronic controlled alternate fuel management systems, including but not limited to, CNG and LPG Electronic system and components for heavy duty engines and other associated and incidental services, to customers in China; and

WHEREAS, the Parties are ready, willing and able to cooperate in the manner set out hereinafter, to ensure the establishment and success of such a framework; the Parties shall cooperate with each other in the performance of their respective duties and obligations under this Agreement to achieve the terms, purposes and intent of this Agreement; and

WHEREAS, the Parties are satisfied, under a complete review and examination of this Agreement and its performance in the past 8 years, at the cooperation between the two Parties under this Agreement, and willing to extend cooperation to increase and expand mutual benefits; and

WHEREAS, the Parties have reached, under mutually good will and thorough understanding, a consensus that the independent operation of a well-organized and self-reliant MET is essentially required to achieve higher-level customer satisfaction in China.

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NOW THEREFORE, in consideration of the above premises, mutual promises and covenants hereby contained, the Parties hereto have agreed as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

1.1 In this Agreement, unless the context otherwise requires, the following terms shall be defined as provided below:

“Approval(s)” shall mean all governmental, statutory and/or regulatory permissions, consents, validations, confirmations, licenses and any other authorizations required to be obtained in order to give effect to or implement the provisions of this Agreement including, but not limited to, all necessary approvals of the relevant departments in charge of clean auto operation in China.

“Government” shall mean central or local government of the People’s Republic of China or the United States of America.

“Agreement” shall mean this Sales Agreement regarding Sale of Heavy Duty Alternate Fuel Management Systems, along with all attachments annexed hereto, and shall include any subsequent amendments or modifications hereto made in writing and executed by both Parties after the date of execution of this Agreement.

“Intellectual Property” shall mean either Party’s brand names and trademarks which are provided, in the Party’s sole discretion, to the other Party pursuant to the terms of this Agreement (including, without limitation, any of such Party’s trademarks that are registered in China or any other place) and such Party’s technical know-how and certain technology related to the business process, including, without limitation, patents, business secret, commercial information, specialized and proprietary know-how, technical information, drawings, data, charts, graphs, procedure books, operation manuals and data, technical processes and other technical or commercial literature, tangible or intangible, necessary for the promotion and sales of the systems or otherwise related to the Products which is possessed and controlled by such Party at the date of the execution of this Agreement by the Parties.

“Parties” shall mean MET and AMICO, and the term “Party” shall individually refer to MET or AMICO, as the case may be.

“Products” shall mean alternate fuel management systems (HD EPR, D28 EPR, or future injection system like CFV and their control units or components) for diesel-based Heavy-Duty gaseous fueled spark ignited engines, including but not limited to, CNG Kits, LNG Kits, LPG Kits and components for the internal combustion

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engine market to be developed or manufactured by MET or its affiliates and assembled by MET, and any other products that may be mutually agreed from time to time by the Parties to this Agreement.

“OEMs” shall mean Original Equipment Manufacturers such as diesel works in China, including but not limited to, engine manufacturers in China that the Parties are supplying control system parts to, with which a Party and/or Parties have entered into agreement for the development and manufacture of HD CNG, LNG, and LPG engines.

“Project” shall mean joint development programs with OEMs for the development and application of heavy-duty CNG, LNG and LPG turbo lean-burn engines for buses and trucks.

ARTICLE II

GOALS AND SCOPE OF THE COOPERATION

2.1 The Parties hereby agree to extend their successful relationship in accordance with this Agreement, with goals to promote the application of advanced electronic digital controlled fuel management system on dedicated CNG, LNG, LPG and diesel heavy-duty engines in China to help the improvement of local air condition and the restructuring of energy consumption system of China.

2.2 In order to support the Government-sponsored Clean Auto Operation, the Parties agree to cooperate with major diesel engine manufacturers of China in the development of their HD dedicated CNG, LNG and/or LPG engines for buses and trucks. According to an agreed plan, the present four (4) OEM Projects include [*]. The scope of this Agreement is not limited to these four companies, nor does the previous statement prevent the insertion of another interested company in a revised plan.

ARTICLE III

RESPONSIBILITES AND DUTIES OF THE PARTIES

3.1 The duties and obligations of MET are as follows:

(1) Supply, via the factories of MET, with the support of ENC in San Antonio, qualified, durable, cost-effective and sustainable innovative technology and products that shall meet the requirements of OEMs and the Government regulations;

(2) Implement OEM development programs, assisting the OEMs in base engine modification, system application, calibration, and emission test either in the United States of America or in China, according to agreements with the OEMs. To fulfill this goal, set up efficient test platform in AMICO’s Pixian facility or in MET Hangzhou facility;

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

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(3) Participate in and assist AMICO in technical and business negotiations with major OEMs when necessary;

(4) Approve or reject, in MET’s sole discretion, any OEM program and sale price after negotiation with AMICO; and

(5) Inform AMICO of any key employee or significant ownership changes regarding MET within 14 days of occurrence.

3.2 The duties and obligations of AMICO are as follows:

(1) Look for and evaluate realistic and profitable business opportunities for the Products for the benefit of MET and ENC;

(2) Establish or assist MET to establish close business ties with major OEMs in China for the aforesaid Projects for the benefit of MET;

(3) Cooperate with MET in determining sale price to OEM, help negotiate optimal payment terms and approve each OEM program before submitting the OEM program to MET for approval;

(4) Complete, solely or with help from MET, technical and business negotiations with the OEMs and enter into agreements with the written approval of MET; for the avoidance of doubt, AMICO may not create (or hold itself out to third parties as being able to create) any binding obligation on behalf of MET without MET’s written approval;

(5) Design annual sales plan that will be subject to approval by MET; and

(6) Inform MET and ENC of any key employee or significant ownership changes within 14 days of occurrence.

See Appendix A for a complete RASIC of responsibilities.

ARTICLE IV

BUSINESS AND COMMISSION ARRANGEMENT

4.1 MET shall pay AMICO a commission based on the number of Products sold to OEMs utilizing business opportunities introduced by AMICO to MET. The Parties agree that the commission system, as described in Appendix B, is appropriate [*] AMICO shall deliver to MET a consolidated invoice (the summation of Appendix B from this Agreement and Appendix B from the separate Technical Service Agreement between the Parties as of the date hereof). MET shall pay AMICO [*] The Finance Departments of MET and AMICO will work together to develop a Standard Operating Procedure (SOP) to handle the transition of payment from the U.S. to China and to ensure the payment process of MET and AMICO is handled in an efficient manner according to Chinese law. All invoices from AMICO to MET will be “technical services” invoices, provided that all invoices issued by AMICO to MET shall comply with applicable PRC laws and regulations.

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

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4.2 Historically, AMICO bought fuel systems components from ENC for its generator business and payments from AMICO to ENC were netted against payments owed to ENC from AMICO. Going forward, these fuel system components will be supplied to AMICO from MET consistent with its other Chinese customers. [*]

4.3 If there is any price change to the customer(s), Appendix B will not necessarily be revised unless otherwise agreed in writing by both Parties. Such Appendix B change will go into effect after both Parties have signed the revised Appendix.

4.4 In some cases when MET cannot make a business case for small volume business, AMICO will purchase the Products directly from MET and resell to the OEMs, whose gaseous fuel engine production is too small for them to afford the development of its engines and maintenance of a countrywide market. In such cases, AMICO, with the support of MET, will review and approve the development project and the trade terms. MET shall not pay any commissions to AMICO for such sale of Products to AMICO. When the annual purchase of an OEM exceeds 1000 units, MET will take over the project of such OEM and AMICO will support the transition.

ARTICLE V

INDEMNIFICATION

5.1 Indemnification by MET: MET hereby indemnifies AMICO and agrees to defend, and hold it harmless from and against any and all liabilities, damages, losses, claims, costs and expenses (including reasonable attorneys’ fees) arising out of or resulting from any misrepresentation or breach of a covenant made by MET or the non-performance of any obligation to be performed on the part of MET under this Agreement.

5.2 Indemnification by AMICO: AMICO hereby indemnifies MET and its affiliates and agrees to defend and hold each of them harmless from and against any and all liabilities damages, losses, claims, costs and expenses (including reasonable attorneys’ fees) arising out of or resulting from any misrepresentation or breach of a covenant by AMICO or the non-performance of any obligation to be performed on the part of AMICO under this Agreement.

ARTICLE VI

INTELLECTUAL PROPERTY AND CONFIDENTIALITY

6.1 The Parties agree that, except as otherwise provided in this Agreement, terms and conditions in the separate Confidentiality Agreement signed by MET and AMICO on the same date hereof will prevail with regard to the protection of the Intellectual Property rights of either Party. The provisions of the Confidentiality Agreement shall be incorporated in this Agreement by reference and will survive for two years past the expiration or termination of this Agreement and its extensions.

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

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6.2 The Parties agree that in the event of the termination of this Agreement for any reason whatsoever, (i) any license agreements between ENC, MET or their affiliate on the one hand and AMICO and/or the OEMs on the other hand with respect to any Intellectual Property of ENC, MET or their affiliates shall be terminated upon the request of ENC, MET or their affiliates, and (ii) AMICO shall have the right to terminate any license agreements between ENC, MET or their affiliate on the one hand and AMICO and/or the OEMs on the other hand with respect to any of AMICO’s Intellectual Property.

ARTICLE VII

NON-COMPETITION AND EXCLUSIVE RIGHTS

7.1 Under this Agreement and subject to the terms and conditions hereof, MET designates AMICO as its only partner in China with respect to the development and sales of the Products, and in return, AMICO admits that MET is its only partner in China for the development of OEM heavy-duty CNG, LNG and LPG turbo lean-burn engine projects and the only supplier of such Products in AMICO’s dominated markets. In connection therewith, the Parties expressly agree that:

(i) AMICO shall continue its efforts in promoting the Products and their market share towards the target to maintain the dominating position of the EControls brand in China.

(ii) MET guarantees that the Products supplied shall always meet both the Government regulations and standards and the published requirement of the OEMs as known to MET. AMICO shall inform MET, in a timely manner, of any new change or development in the Government regulations and standards and the requirements of OEMs in connection with the Products.

ARTICLE VIII

ANTI-CORRUPTION

8.1 AMICO and its directors, officers and employees (i) are aware of and familiar with the provisions of all relevant laws and regulations relating to anti-bribery and anti-corruption, including, without limitation, the PRC anti-commercial bribery laws and regulations and the U.S. Foreign Corrupt Practices Act, (ii) have not made or authorized and will not make or authorize, directly or indirectly, any payment or any offer or promise to make any payment of money or anything of value to any foreign or domestic government officials or employees or political parties or campaigns, (iii) have not taken and will not take, directly or indirectly, any action (such as entertainment, giving gifts or contributions) in violation of, or that may cause MET or any its affiliates or their respective directors, officers or employees to be in violation of, any such laws or regulations.

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ARTICLE IX

ARBITRATION

9.1 All matters, questions, disputes, differences or claims arising between the Parties as to (i) the effect, interpretation or application of this Agreement, (ii) their respective rights, duties or liabilities hereunder, or (iii) any act, matter or thing arising out of or in connection with this Agreement, shall first be resolved through friendly negotiations between the Parties. Such negotiations shall commence within a period of seven (7) working days of the issue of notice in writing by one Party to the other Party calling for the same.

9.2 In the event that such negotiations fail to resolve the dispute within a period of thirty (30) working days from the date of receipt of the notice by the notified Party, such dispute shall be referred to the China International Economic and Trade Arbitration Commission (the “CIETAC”) for arbitration in Beijing by an arbitration tribunal in accordance with the then effective Arbitration Rules of CIETAC (the “CIETAC Arbitration Rules”), except where this Section 9 provides for procedures or rules which differ from the CIETAC Arbitration Rules, in which case, the procedures and rules provided for in this Section 9 shall be applied.

9.3 The Parties shall be responsible for the payment of their respective costs in connection with any arbitration proceeding.

9.4 The existence of a dispute between the Parties hereto, or the initiation or continuance of any arbitration proceedings referred to above, shall not delay or otherwise postpone the performance of the undisputed obligations of the Parties hereto and the arbitrator shall take full cognizance and give due consideration to such performance, if any, in the making of the final award.

9.5 The arbitration tribunal shall consist of three (3) arbitrators. Each Party shall appoint one (1) arbitrator, whose professional background and experience shall be suitable for the issue in dispute. If either party fails to appoint an arbitrator within fifteen (15) days of the date of its receipt of the arbitration notice from CIETAC, such appointment shall be made by the Chairman of CIETAC. The two (2) arbitrators so appointed by the Parties shall agree upon the third arbitrator, who shall act as the presiding arbitrator of the arbitration tribunal. If the two (2) arbitrators so appointed fail to agree upon on the third arbitrator within fifteen (15) days from the date of the appointment of the second arbitrator, the third arbitrator shall be appointed by the Chairman of CIETAC.

9.6 The arbitral proceedings shall be conducted in English, and the arbitration tribunal shall render a written arbitral award in English. The arbitral award shall be final and binding upon the Parties, and enforcement thereof may be rendered by any court having jurisdiction thereof. The Parties shall use their best efforts to effect the prompt execution or enforcement of any such award and shall render whatever assistance as may be necessary to this end.

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ARTICLE X

FORCE MAJEURE

10.1 No Party shall be held liable or responsible to the other Party for failure or delay in fulfilling or performing any obligation under this Agreement if such failure or delay is caused by actions or events which are beyond the reasonable control of the affected Party, the effect of which is to prevent or interfere with that Party’s performance hereunder, including, without limitation, (i) any natural disasters or public enemy, fire, explosion, accident, embargo, or any other circumstances of like or different character commonly referred to as force majeure; or (ii) interruption of or delay in transportation or shortage or failure of supply of materials or equipment, breakdowns, strikes, or other labor strife from whatever cause arising; or (iii) compliance by either Party with any valid order, action, directive, or request of any Government official, department, agency, or authority. Each Party agrees to give the other Party prompt written notice of the occurrence of any such condition and the extent to which the affected Party will be unable to fully perform its obligations hereunder. Each Party further agrees to use all reasonable efforts to correct such conditions as quickly as possible and to give the other Party prompt written notice when it is again fully able to perform such obligation, provided that, in the event of such prevention or delay as aforesaid, both Parties hereto, instead of exercising the aforesaid option, may consult with each other in order to mutually determine the course of action to be taken, in order to minimize the effects of such prevention or delay and continue the operation of this Agreement.

ARTICLE XI

WAIVER

11.1 Failure or delay by a Party to require the performance of any provision of this Agreement shall not affect or impair that Party’s right to require full performance thereof at any time thereafter. Each Party may specifically waive, in writing, any breach of this Agreement by the other Party, but no such waiver shall constitute a continuing waiver of similar or other breaches by the other Party.

ARTICLE XII

NOTICES

12.1 All notices, requests and other communications under this Agreement shall be in writing and shall be deemed to have been duly given, if delivered by hand, at the time of receipt or, if communicated by email or similar electronic means (such as facsimile), at the time receipt thereof has been confirmed by return electronic communication or signal that the message has been clearly received or, if mailed or sent by courier, seven (7) days after mailing, registered airmail return receipt requested, with postage prepaid or delivery to the courier service agency, provided that, if there is no other changes clarified in this Agreement, notices or other communications between these two persons named below are the only official and final versions between the Parties.

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In case of MET to:
	[*] Enovation Controls 5757 Farinon Drive San Antonio, TX 78249 [*]
In case of AMICO to:
	[*] Chengdu AMICO Technologies Co., LTD. #203 North Gangtong Rd, Pixian Industrial Zone, Chengdu, Sichuan 611743, People’s Republic of China [*]

However, if one or both the above two persons resign or for any other reasons force majeure cannot perform the role as major contacts, the following two persons are assigned as the standby contacts:

In case of MET to:
	[*] Enovation Controls 5757 Farinon Drive San Antonio, TX 78249 [*]
In case of AMICO to:
	[*] Chengdu AMICO Technologies Co., LTD. #203 North Gangtong Rd, Pixian Industrial Zone, Chengdu, Sichuan 611743, People’s Republic of China [*]

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

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ARTICLE XIII

MISCELLANEOUS

13.1 English shall be used in all correspondence and communications between the Parties. This Agreement is written in both English and Chinese languages, and both versions shall be equally valid and binding. In the event of any discrepancy between the two language versions, the English version shall prevail.

13.2 Each of the Appendices or Exhibits (if any) referred to herein and attached hereto are an integral part of this Agreement and made a part hereof.

13.3 This Agreement sets forth the entire agreement between the Parties and supersedes all prior other agreements and understandings between the Parties and their officers, directors, or employees as to the subject matter hereof. Neither Party has relied upon any oral representation or oral information given to it by any representative of the other Party. No change in this Agreement shall be effective either as a result of a course of conduct or oral statements, other than by an agreement in writing signed by the duly authorized representative of each of the Parties hereto.

13.4 This Agreement shall be prepared and executed in five (5) originals. Each Party shall keep two originals, and Fangda Partners shall keep one original.

13.5 The formation, validity, interpretation, execution of this Agreement and settlement of any disputes arising hereunder shall be governed by and in accordance with the laws of the PRC.

ARTICLE XIV

TERM OF AGREEMENT

14.1 The term of this Agreement is 5 (Five) years, effective from September 1, 2013. The Parties may extend the term of this Agreement by mutual agreement in writing before the expiration of the term of this Agreement.

14.2 Either Party may, by prior written notice to the other Party, terminate this Agreement at any time if the other Party violates any provisions of this Agreement.

[Signature Page to Follow]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement and caused their respective corporate seals to be affixed by their officers thereunto duly authorized as of the day and year first written above.

MURPHY ECONTROLS TECHNOLOGIES (HANGZHOU) CO., LTD.
(Corporate Chop)
BY:	/s/ [*]
Name:	[*]
Title:	[*]
CHENGDU AMICO TECHNOLOGIES CO., LTD.
(Corporate Chop)
BY:	/s/ [*]
Name:	[*]
Title:	[*]

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

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Appendix A

[*]

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

13

Appendix B

[*]

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

14

EX-10.21

Exhibit 10.21

CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R. SECTIONS 200.80(b)(4), 200.83 AND 230.406.

[*] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

TECHNICAL SERVICE AGREEMENT

BETWEEN

MURPHY ECONTROLS TECHNOLOGIES (HANGZHOU) CO., LTD.

AND

CHENGDU AMICO TECHNOLOGIES CO., LTD.

August 29, 2013

TECHNICAL SERVICE AGREEMENT

This TECHNICAL SERVICE AGREEMENT, dated this 29th day of August, 2013 (this “Agreement”), is made by and between MURPHY ECONTROLS TECHNOLOGIES (HANGZHOU) CO., LTD. , a company incorporated under the laws of the People’s Republic of China (the “PRC” or “China”) and having its registered address at 77 23^rd Street, Hangzhou Economic & Technological Area, Hangzhou, Zhejiang Province, 310018, the PRC (hereinafter referred to as “MET”), and CHENGDU AMICO TECHNOLOGIES CO., LTD. ,a company organized under the laws of the PRC and having its registered address at No. 203 North Gangtong Rd, Pixian Industrial Zone, Chengdu 611743, Sichuan Province, the PRC (hereinafter referred to as “AMICO”).

WHEREAS, MET and Enovation Controls, LLC (“ENC”), MET’s ultimate parent company, are engaged in the manufacturing of engine controls, and alternate fuel management systems and components;

WHEREAS, AMICO is engaged inter alia in the development, engineering and sale of alternate fuel systems in the PRC; and

WHEREAS, the Parties wish that AMICO provide to MET’s customers certain technical services and support in relation to the Products (as defined below).

NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements and covenants set forth herein, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 As used in this Agreement, the following terms shall have the following meanings:

“Intellectual Property” shall mean either Party’s brand names and trademarks which are provided, in the Party’s sole discretion, to the other Party pursuant to the terms of this Agreement (including, without limitation, any of such Party’s trademarks that are registered in China or any other place) and such Party’s technical know-how and certain technology related to the business process, including, without limitation, patents, business secret, commercial information, specialized and proprietary know-how, technical information, drawings, data, charts, graphs, procedure books, operation manuals and data, technical processes and other technical or commercial literature, tangible or intangible, necessary for the performance or use of, or otherwise related to, the Products, which is possessed and controlled by such Party.

“OEMs” shall mean Original Equipment Manufacturers, such as diesel works in China, including but not limited to, engine manufacturers in China that the Parties are supplying control system parts to, with which a Party and/or Parties have entered into agreement for the development and manufacture of HD CNG, LNG, and LPG engines.

2

“Parties” shall mean MET and AMICO, and the term “Party” shall individually refer to MET or AMICO, as the case may be.

“Products” shall mean alternate fuel management systems (HD EPR, D28 EPR, or future injection system like CFV and their control units or components) for diesel-based Heavy-Duty gaseous fueled spark ignited engines, including but not limited to, CNG Kits, LNG Kits, LPG Kits and components for the internal combustion engine market to be developed or manufactured by MET or its affiliates and assembled by MET, and any other products that may be mutually agreed from time to time by the Parties to this Agreement.

“Project” shall mean joint development programs with OEMs for the development and application of heavy-duty CNG, LNG and LPG turbo lean-burn engines for buses and trucks.

“Technical Services” means the services to be provided by AMICO to MET in relation to the Products, as mutually agreed upon and more specifically set forth in Article 3.1 below.

ARTICLE II

GOALS AND SCOPE

2.1 The Parties agree to significantly improve the customer satisfaction levels of their China customers. AMICO shall provide the Technical Services to MET and the China customers in accordance herewith, until MET achieves fully self-supported operation with respect to technical implementation (field trials, outside durability testing) and after-sale services (customers issues management, warranty field failures) for the Products. A milestone is set up as of the first day of January 2016, on and from which AMICO will initiate the transition of its roles and the performance of the Technical Services to MET over a year long period ending on December 31, 2016. During this one year period, AMICO will provide a supporting role to the customers and MET so that MET can perform such technical implementation and after-sale services independently from January 1, 2017. The primary sales lead, prospecting development projects and corresponding public relations roles (strategic relationship management) AMICO currently provides under the Sales Agreement between the Parties dated as of the same date hereof (the “Sales Agreement”) will continue in accordance with the terms thereof through the end of the Sales Agreement.

ARTICLE III

RESPONSIBILITIES AND DUTIES OF THE PARTIES

3.1 Responsibilities of AMICO

The responsibilities of MET are as follows:

(a) Carry out repair and maintenance for Products in field use and other warranty activities like field campaigns;

3

(b) Carry out field failure analysis at the request of MET or customer;

(c) Build up and maintain a well-founded service capability covering major NG areas of China to support the Projects;

(d) Assist MET, voluntarily or at the request of MET, in recruiting and training of a technical and after-sale service team in MET that is competent to take over and successfully implement, effective from January 1, 2016, the roles and obligations as described in this Section 3.1(a) to (c) above;

(e) Develop and maintain a responsive field service organization that provides timely reports to MET on field issues (see sample Appendix C); and

(f) Inform MET and ENC of any key employee or significant ownership changes within 14 days of occurrence.

See Appendix A for a complete RASIC of responsibilities.

3.2 Responsibilities of MET

The responsibilities of MET are as follows:

(a) Provide adequate spare parts and technical support to assist AMICO to carry out repair and maintenance for Products in field use and other warranty activities like warranty campaigns;

(b) Recruit and train adequate staff in order that they are competent to take over and successfully implement, effective from January 1, 2016, the roles and obligations as described in Section 3.1(a) to (c) above; and

(c) Inform AMICO of any key employee or significant ownership changes regarding MET within 14 days of occurrence.

ARTICLE IV

FEES AND EXPENSES FOR THE TECHNICAL SERVICES

4.1 MET shall pay AMICO a service fee (the “Service Fee”) in accordance with Appendix B for each Products MET sold to OEMs and in respect of which AMICO shall perform the Technical Services in accordance with this Agreement. AMICO shall deliver to MET a consolidated invoice (the summation of Appendix B from this Agreement and Appendix B from the separate Sales Agreement). MET shall pay the Service Fee to AMICO [*]. The Finance Departments of MET and AMICO will

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

4

work together to develop a Standard Operating Procedure (SOP) to handle the transition of payment from the U.S. to China and to ensure the payment process of MET and AMICO is handled in an efficient manner according to Chinese law. All invoices from AMICO to MET will be “technical services” invoices, provided that all invoices issued by AMICO to MET shall comply with applicable PRC laws and regulations.

4.2 Historically, AMICO bought fuel systems components from ENC for its generator business and payments from AMICO to ENC were netted against payments owed to ENC from AMICO. Going forward, these fuel system components will be supplied to AMICO from MET consistent with its other Chinese customers. [*].

4.3 If there is any price change to the customer(s), Appendix B will not necessarily be revised unless otherwise agreed in writing by both Parties. Such Appendix B change will go into effect after both Parties have signed the revised Appendix.

ARTICLE V

INDEMNIFICATION

5.1 Indemnification by MET

MET hereby indemnifies AMICO and agrees to defend, and hold it harmless from and against any and all liabilities, damages, losses, claims, costs and expenses (including reasonable attorneys’ fees) arising out of or resulting from any misrepresentation or breach of a covenant made by MET or the non-performance of any obligation to be performed on the part of MET under this Agreement.

5.2 Indemnification by AMICO

AMICO hereby indemnifies MET and its affiliates and agrees to defend and hold each of them harmless from and against any and all liabilities damages, losses, claims, costs and expenses (including reasonable attorneys’ fees) arising out of or resulting from any misrepresentation or breach of a covenant by AMICO or the non-performance of any obligation to be performed on the part of AMICO under this Agreement.

ARTICLE VI

CONFIDENTIALITY AND INTELLECTUAL PROPERTY

6.1 Confidentiality

The Parties agree that, except as otherwise provided in this Agreement, terms and conditions in the separate Confidentiality Agreement signed by MET and AMICO on the same date hereof will prevail with regard to the protection of the Intellectual

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

5

Property rights of either Party. The provisions of the Confidentiality Agreement shall be incorporated in this Agreement by reference and will survive for two years past the expiration or termination of this Agreement and its extensions.

6.2 Intellectual Property

The Parties agree that in the event of the termination of this Agreement for any reason whatsoever, (i) any license agreements between ENC, MET or their affiliate on the one hand and AMICO and/or the OEMs on the other hand with respect to any Intellectual Property of ENC, MET or their affiliates shall be terminated upon the request of ENC, MET or their affiliates, and (ii) AMICO shall have the right to terminate any license agreements between ENC, MET or their affiliate on the one hand and AMICO and/or the OEMs on the other hand with respect to any of AMICO’s Intellectual Property.

ARTICLE VII

ARBITRATION

7.1 All matters, questions, disputes, differences or claims arising between the Parties as to (i) the effect, interpretation or application of this Agreement, (ii) their respective rights, duties or liabilities hereunder, or (iii) any act, matter or thing arising out of or in connection with this Agreement, shall first be resolved through friendly negotiations between the Parties. Such negotiations shall commence within a period of seven (7) working days of the issue of notice in writing by one Party to the other Party calling for the same.

7.2 In the event that such negotiations fail to resolve the dispute within a period of thirty (30) working days from the date of receipt of the notice by the notified Party, such dispute shall be referred to the China International Economic and Trade Arbitration Commission (the “CIETAC”) for arbitration in Beijing by an arbitration tribunal in accordance with the then effective Arbitration Rules of CIETAC (the “CIETAC Arbitration Rules”), except where this Section 7 provides for procedures or rules which differ from the CIETAC Arbitration Rules, in which case, the procedures and rules provided for in this Section 7 shall be applied.

7.3 The Parties shall be responsible for the payment of their respective costs in connection with any arbitration proceeding.

7.4 The existence of a dispute between the Parties hereto, or the initiation or continuance of any arbitration proceedings referred to above, shall not delay or otherwise postpone the performance of the undisputed obligations of the Parties hereto and the arbitrator shall take full cognizance and give due consideration to such performance, if any, in the making of the final award.

7.5 The arbitration tribunal shall consist of three (3) arbitrators. Each Party shall appoint one (1) arbitrator, whose professional background and experience shall be suitable for the issue in dispute. If either party fails to appoint an arbitrator within fifteen (15) days of the date of its receipt of the arbitration notice from CIETAC,

6

such appointment shall be made by the Chairman of CIETAC. The two (2) arbitrators so appointed by the Parties shall agree upon the third arbitrator, who shall act as the presiding arbitrator of the arbitration tribunal. If the two (2) arbitrators so appointed fail to agree upon on the third arbitrator within fifteen (15) days from the date of the appointment of the second arbitrator, the third arbitrator shall be appointed by the Chairman of CIETAC.

7.6 The arbitral proceedings shall be conducted in English, and the arbitration tribunal shall render a written arbitral award in English. The arbitral award shall be final and binding upon the Parties, and enforcement thereof may be rendered by any court having jurisdiction thereof. The Parties shall use their best efforts to effect the prompt execution or enforcement of any such award and shall render whatever assistance as may be necessary to this end.

ARTICLE VIII

FORCE MAJEURE

8.1 No Party shall be held liable or responsible to the other Party for failure or delay in fulfilling or performing any obligation under this Agreement if such failure or delay is caused by actions or events which are beyond the reasonable control of the affected Party, the effect of which is to prevent or interfere with that Party’s performance hereunder, including, without limitation, (i) any natural disasters or public enemy, fire, explosion, accident, embargo, or any other circumstances of like or different character commonly referred to as force majeure; or (ii) interruption of or delay in transportation or shortage or failure of supply of materials or equipment, breakdowns, strikes, or other labor strife from whatever cause arising; or (iii) compliance by either Party with any valid order, action, directive, or request of any government official, department, agency, or authority. Each Party agrees to give the other Party prompt written notice of the occurrence of any such condition and the extent to which the affected Party will be unable to fully perform its obligations hereunder. Each Party further agrees to use all reasonable efforts to correct such conditions as quickly as possible and to give the other Party prompt written notice when it is again fully able to perform such obligation, provided that, in the event of such prevention or delay as aforesaid, both Parties hereto, instead of exercising the aforesaid option, may consult with each other in order to mutually determine the course of action to be taken, in order to minimize the effects of such prevention or delay and continue the operation of this Agreement.

ARTICLE IX

TERM

9.1 This Agreement shall be effective as of September 1, 2013 and shall continue in full force and effect until December 31, 2016. To the extent necessary, the Parties may extend the term of this Agreement by mutual agreement in writing before the expiration of the term of this Agreement.

7

9.2 Either Party may, by prior written notice to the other Party, terminate this Agreement at any time if the other Party violates any provisions of this Agreement.

9.3 If this Agreement is terminated by AMICO prior to its expiration, then AMICO shall continue to provide the Technical Services in respect of the Products that have already been sold and delivered by MET to OEMs prior to the expiration. Effective January 1, 2017, MET will assume full responsibility for all products under this agreement sold and delivered prior to the termination date of this Agreement. If MET terminates this agreement prior to its expiration, then MET will immediately assume fully responsibility for all products sold and delivered prior to the termination date of this Agreement.

ARTICLE X

MISCELLANEOUS

10.1 Waiver

Failure or delay by a Party to require the performance of any provision of this Agreement shall not affect or impair that Party’s right to require full performance thereof at any time thereafter. Each Party may specifically waive, in writing, any breach of this Agreement by the other Party, but no such waiver shall constitute a continuing waiver of similar or other breaches by the other Party.

10.2 Notices

All notices, requests and other communications under this Agreement shall be in writing and shall be deemed to have been duly given, if delivered by hand, at the time of receipt or, if communicated by email or similar electronic means (such as facsimile), at the time receipt thereof has been confirmed by return electronic communication or signal that the message has been clearly received or, if mailed or sent by courier, seven (7) days after mailing, registered airmail return receipt requested, with postage prepaid or delivery to the courier service agency, provided that, if there is no other changes clarified in this Agreement, notices or other communications between these two persons named below are the only official and final versions between the Parties.

In case of MET to:     [*] Enovation Controls 5757 Farinon Drive San Antonio, TX 78249 [*]

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

8

In case of AMICO to:	[*] Chengdu AMICO Technologies Co., LTD. #203 North Gangtong Rd, Pixian Industrial Zone, Chengdu, Sichuan 611743, People’s Republic of China [*]
However, if one or both the above two persons resign or for any other reasons force majeure cannot perform the role as major contacts, the following two persons are assigned as the standby contacts:
In case of MET to:	[*] Enovation Controls 5757 Farinon Drive San Antonio, TX 78249 [*]
In case of AMICO to:	[*] Chengdu AMICO Technologies Co., LTD. #203 North Gangtong Rd, Pixian Industrial Zone, Chengdu, Sichuan 611743, People’s Republic of China [*]

10.3 Language

English shall be used in all correspondence and communications between the Parties. This Agreement is written in both English and Chinese languages, and both versions shall be equally valid and binding. In the event of any discrepancy between the two language versions, the English version shall prevail.

10.4 Entire Agreement

This Agreement sets forth the entire agreement between the Parties and supersedes all prior other agreements and understandings between the Parties and their officers, directors, or employees as to the subject matter hereof. Neither Party has relied upon any oral representation or oral information given to it by any representative of the other Party. No change in this Agreement shall be effective either as a result of a course of conduct or oral statements, other than by an agreement in writing signed by the duly authorized representative of each of the Parties hereto. Each of the Appendices or Exhibits (if any) referred to herein and attached hereto are an integral part of this Agreement and made a part hereof.

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

9

10.5 No Agency/Partnership

Nothing in this Agreement shall be construed so as to constitute either Party hereto the agent or partner of the other. On no account may a Party create (or hold itself out to third person as being able to create) any binding obligation on behalf of the other without the prior written consent of the other.

10.6 Assignment

Neither this Agreement nor any of the rights and obligations arising hereunder may be assigned or transferred by either Party and any such purported assignment shall be null and void except that MET may assign this Agreement and the rights and obligations arising hereunder to any of its affiliates. Subject to the foregoing, all covenants, agreements, representations and indemnities contained in this Agreement shall bind and inure to the benefit of the successors and permitted assigns.

10.7 Severability

The invalidity of any provision of this Agreement shall not affect the validity of any other provision of this Agreement.

10.8 Number of Copies Executed

This Agreement shall be prepared and executed in five (5) originals. Each Party shall keep two originals, and Fangda Partners shall keep one original.

10.9 Governing Law

The formation, validity, interpretation, execution of this Agreement and settlement of any disputes arising hereunder shall be governed by and in accordance with the laws of the PRC.

[Signature Page to Follow]

10

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement and caused their respective corporate seals to be affixed by their officers thereunto duly authorized as of the day and year first written above.

MURPHY ECONTROLS TECHNOLOGIES (HANGZHOU) CO., LTD.
(Corporate Chop)
BY:	/s/ [*]
Name:	[*]
Title:	[*]

CHENGDU AMICO TECHNOLOGIES CO., LTD.
(Corporate Chop)
BY:	/s/ [*]
Name:	[*]
Title:	[*]

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

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Appendix A

[*]

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

12

Appendix B

[*]

* Confidential information has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to this omitted information.

13

Appendix C

Warranty Field Failure / Defect on Arrival Report
All Items in BOLD print must be filled out before an RMA will be issued
Case Number:
1
Customer Info
Customer 1 Name: Amico Customer 2 Name: Sino
Customer Contact Hu E-mail: Hu@gmail.com
RMA Requested? Yes RMA #: RA1234567
Customer Complaint # / Reference # ref12345
X 1.- Defective on arrival 2.- In Process Failure 3.- Field Failure 4.- Other
Quantities
Customer 1
Defective Quantity: 5 Total Replaced Quantity
Suspect Quantity: 120 7
Logistics
Total Days 7
Date of failure: 15-Aug-13
Date of Request/Complaint: 16-Aug-13
Unit Manufacturing date: 20-Nov-12
Returned to Hangzhou: 16-Aug-13 Engine Mfg Date: 12-Dec-12
Received at Hangzhou: 19-Aug-13 3
Returned to San Antonio: 20-Aug-13
Received at San Antonio: 21-Aug-13 Service Time (Days): 246
Credit or replacements from EC>Cus 22-Aug-13
Reason for return and detailed description of problem:
Pin 84 burn, Code 1131
Customer notes, requirements, expectations / G8D#:
8D 13-074
Part(s) in question
EControls P/N (s): E1234567b OEM’s Part Number: C1234567b
EControls Part Name: GCP 4G
EControls SN(s) : 12345678 Kilometers: 15,000
Current Calibration Model: C12545 Number hours on unit: 0.00
Hangzhou Analysis
Programing error
Analysis By: A. Hu Result: 1.-Confirm defect
Disposition: 4.- Analysis- Return to SAT / Wait for SAT Disposition
San Antonio Analysis
Test sample
Analysis By: M. Marshall Result: 1.-Confirm defect
Disposition: 2.- Confirmed - Scrap/Replacements to customer
Remarks
None
San Antonio Actions
1.- MNJN2.- HGHG

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EX-10.22

Exhibit 10.22

CONFIDENTIAL

Murphy EControls Technologies (Hangzhou) Co., Ltd

26 Jul 2013

Dear Sir.

BANKING FACILITIES(S/N:130709)

With reference to our recent discussion, we are pleased to confirm our agreement to granting you the below uncommitted banking facilities which will be made available on the specific terms and conditions outlined in this Facility Letter and upon the satisfactory completion of the security and conditions precedent detailed below. Notwithstanding anything to the contrary in this Facility Letter, the facilities are subject to:

• our discretion to cancel or suspend any unutilized facilities, or determine whether or not to permit utilization of any facilities;

• our review at any time and in any event at our discretion, at least once a year; and

• our right of repayment on demand at any time including the right to call for cash cover on demand for prospective and contingent liabilities.

This Facility Letter is composed of the main body, the Schedule of Facilities, the General Terms and Conditions for Facilities and the Appendixes (if any) hereof.

Borrower or	:	Murphy EControls Technologies (Hangzhou) Co., Ltd
Customer
Lender	:	HSBC Bank (China) Company Limited, Hangzhou Branch
Facility/ Amount	:	Combined uncommitted revolving facilities comprising of the following for an amount up to USD4,500,000.- or equivalent:
		(1)    RMB/USD Dual Currency Revolving Loan Facility up to USD4,500,000.- or equivalent
		(2)    Bank Acceptance Draft Discounting up to RMB10,000,000.-
		The total outstanding under the above facilities at any time shall not exceed UD4,500,000.- or equivalent in aggregate.

RESTRICTED

		Subject to the Lender’s consent, the Borrower may reset the sublimit of each type of facility above so long that the total outstanding under all facilities shall not at any time exceed the above mentioned total facility limit.
Arrangement Fee	:	An arrangement fee of RMB30,000.- is payable upon your acceptance of this Facility Letter to the debit of your account
Security	:	As security, we shall have:
		110% Corporate Guarantee from Enovation Controls, LLC (“Guarantor”).
		The Borrower acknowledges that its indebtedness hereunder shall remain outstanding unless fully settled in the same currency of such indebtedness. The Borrower also undertakes that:
		(i)     it will promptly inform the Lender of any change to its Certificate of Approval;
		(ii)    it will promptly inform the Lender of any change in the amount of its foreign debt or its other indebtedness backed by a security/guarantee from overseas; and
		(iii)  it will conduct the foreign debt registration promptly (and, in any case, no later than 15 days) after enforcement of the foreign guarantee/security for this Facility Letter.
Conditions Precedent	:	(1)    The Borrower shall present to the Lender its valid Borrowing Card issued by the People’s Bank of China together with the password thereof.
		(2)    Certified true copies of all government approvals and certificates in relation to the establishment of the Borrower shall be submitted to the Lender.
		(3)    The Borrower has provided its internal authorization document approving (or authorizing others to approve) the facilities hereunder and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the facilities hereunder in strict compliance with its articles of association and the applicable laws.
		(4)    In the event that the Lender’s making available any facility hereunder is subject to regulatory approval or the completion of other procedures with the regulator(s), the acquisition of such regulatory approval and the completion of such procedures with regulator(s).

2 RESTRICTED

		(5)    The Lender is satisfied that all the security(ies) stated in the “Security” item above (if any) has/have been established and is/are valid and enforceable. The security provider’s company existence evidence and internal authorization document (where the security provided is a company) or valid ID certificate (where the security provided is an individual) has been duly made and submitted to the Lender.
		(6)    The Borrower has provided the Lender with such other documents or materials as may be reasonably required by the Lender for the utilization under the Facility Letter.
		(7)    The Borrower has opened a loan disbursement account with the Lender.
Undertaking/ Covenants	:	You will be required for so long as this facility is available to you to comply with the following covenants/undertakings. Your compliance or otherwise with the following covenant(s)/undertakings will not in any way prejudice or affect our right to suspend, withdraw or make demand in respect of the whole or any part of the facilities made available to you at any time.
		(1)    Without prejudice to any security or other priority right to which the Lender is entitled (if any), this facility shall rank at least pari-passu with all present and future indebtedness of the Borrower. The Borrower undertakes to advise the Lender in advance of any future borrowing.
		(2)    The Borrower should not create or attempt to create or permit to subsist any mortgage, debenture, charge, pledge, lien or other encumbrance upon, or permit any lien or other encumbrance (save a lien arising by operation of law in the ordinary course of trading) on the whole or any part of present or future assets of the Borrower without Lender’s prior written consent.
		(3)    Half-yearly and audited yearly financial statements of the Borrower and the Guarantor(if any) to be prepared by qualified accountants shall be provided to the Lender whenever available but in any event, no later than 90 days and 120 days from the financial half-year-ends and year-ends respectively.
		(4)    The Borrower shall provide other financial or operational information of the Borrower as from time to time reasonably requested by the Lender.
		(5)    The Borrower shall promptly inform the Lender of any of the Borrower’s inter-group connected transactions which amounts to in aggregate over 10% of its net assets with the details to the satisfaction of the Lender.

3 RESTRICTED

		(6)    The Borrower agrees that all borrower’s undertakings set out in Article 21 of the Interim Measures on Regulation of Working Capital Loans issued by China Banking Regulatory Commission on 12 February 2010 apply to this facility letter.
		(7)    The Borrower shall open an operating account with the Lender or shall upon request provide to the Lender evidence showing its fund flow situation if those operating accounts are opened with a bank other than the Lender.
		(8)    The Borrower shall undertake to seek Lender’s prior consent for any dividend paid out.
		(9)    In order to ensure and monitor the repayment ability of the Borrower, according to relevant regulations on banking facilities and loans issued by China Banking Regulatory Commission, the Borrower shall at least direct 80% sales proceeds to the account opened with the Lender to facilitate the Lender to monitor the fund flow situation.
Governing Law	:	This Facility Letter shall be governed by and construed in accordance with the laws of the People’s Republic of China.
Jurisdiction	:	The Borrower submits to the non-exclusive jurisdiction of the PRC court at the principal office of the Lender. Nothing in this Clause limits the right of the Lender to bring proceedings against the Borrower in connection with this facility in any other court of any competent jurisdiction.

We may provide any information relating to any of your accounts with us and any facilities we may provide to you from time to time or their conduct or any other information concerning your relationship with us to any other company or office which at the relevant time belongs to or is part of the HSBC Group.

The facility offer will remain open for acceptance until the close of business on 26 August 2013 and if not accepted by that date will be deemed to have lapsed (unless otherwise agreed by us in writing).

We shall be grateful if you could arrange for the authorized signatory(ies) of your company in accordance with the terms of the shareholders’ resolution or board resolution (as the case may be) to be given to us, to sign and return to us the duplicate copy of this letter to signify your understanding and acceptance of the terms and conditions under which the facility is granted.

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We look forward to the establishment of our mutually beneficial and lasting relationship.

Yours faithfully,

For and on behalf of HSBC Bank (China) Company Limited Hangzhou Branch	Accepted by Murphy EControls Technologies (Hangzhou) Co., Limited
/s/ Angela Fang Angela Fang Relationship Manager Commercial Banking	/s/ Susan Xu Authorised Signature(s) & Company Chop Date
/s/ Dennis Zhu Dennis Zhu Branch Manager

Ax/rw

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SCHEDULE OF FACILITIES

RMB/USD Dual Currency Revolving Loan Facility

Purpose

To finance the Borrower’s working capital requirement, including (1) purchase of raw materials and other goods, (2) rewards, salaries, fees and other charges, (3) other working capital needs as agreed by the Lender.

Utilization

(a) Drawdown may be made in either RMB or USD provided that USD/RMB equivalent of aggregate outstanding hereunder shall in no time exceed the facility amount. The currency A equivalent of currency B at any time shall be determined based on the buy-in rate of currency B then announced by the Lender.

(b) 3 working days advance drawdown request is given to us.

(c) Each drawdown to be for a period up to 6 months or such other period as agreed by the Lender. The aggregate period of a drawdown and its rollovers shall not exceed 12 months in any case.

(d) Each drawdown to be for a minimum amount of USD 400,000.-/RMB2,000,000.- or its multiples unless the loan proceeds is subject to Disbursed by the Lender.

Interest / Commission

RMB Loan

Interest shall accrue on each RMB loan at a rate equal to the benchmark lending rate effective on the loan drawdown date promulgated by the People’s Bank of China for RMB lending with a tenor corresponding to the term of that loan with 10% mark-up and shall be payable on the maturity date of that loan. If during the term of the loan there is a change to the applicable benchmark lending rate, the applicable interest rate for any outstanding RMB loan will not change until the next roll over date.

Foreign Currency Loan

Interest shall accrue on each USD loan at a rate equal to the Lender’s cost of fund plus 2% per annum and shall be paid on the maturity date of that loan. The Lender has its full discretion in determining its cost of fund for each loan. The Borrower shall confirm its acceptance of the exact interest rate for each loan by specifying such interest rate in the drawdown request/rollover notice of that loan and shall provide such drawdown request/rollover notice to the Lender at least 3 working days before the drawdown/rollover date of that loan.

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Default Interest

Default interest shall accrue on sums which are overdue (as well as amounts not paid on demand) or overlimit or (in relation to RMB loan) used for purposes other than the purpose specified in the Facility Letter and shall be payable upon demand of the Lender.

RMB Loan

For overdue or overlimit sums: default interest rate shall be the stipulated interest rate for respective RMB facilities with 50% mark-up.

For the amount used for purposes other than those stated in this letter: default interest rate shall be the stipulated interest rate for RMB facility with 100% mark-up.

Foreign Currency Loan

Default interest rate shall be 3% per annum over the stipulated interest rate for the USD facility.

Prepayment

With the Lender’s prior approval, during an interest period any part of a drawing may, with 5 working days advance notice to the Lender, be repaid subject to the Break Funding Cost (i.e., the differential between the return the Lender would have received had the loan run to maturity and the return the Lender is able to obtain by the placing of the funds repaid for the remainder of the period in the market). Each partial prepayment shall be in a minimum of USD100,000.- or RMB500,000.- and in an integral multiple of USD100,000.- or RMB500,000.-.

Disbursement of Loan Proceeds

Disbursement of loan proceeds shall follow the provisions under Clause 7 of the General Terms and Conditions for Facilities.

Any payment using the proceeds we provide under the above facility should adopt the “Disbursement by the Lender” approach as provided in the Facility Letter.

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SCHEDULE OF FACILITIES

Bank Acceptance Draft Discounting Facility

The Borrower may from time to time apply to the Bank for discounting of bank acceptance drafts the Borrower obtained in real transactions. Detailed terms and conditions for such discounting are or will be provided in the Master Agreement for Bank Acceptance Draft Discount signed or to be signed between the parties separately.

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GENERAL TERMS AND CONDITIONS FOR FACILITIES

1 Interpretation

These terms and conditions are applicable to banking facilities made available to HSBC Bank (China) Company Limited (the “Bank”) to the Borrower(s) and shall be read as an integral part of the facility letter (inclusive the Schedule of Facilities thereof), as may be amended from time to time, applicable to the Borrower(s) (the “Facility Letter”). In the event of conflict between these terms and conditions and the Facility Letter, the Facility Letter shall prevail for the purposes of the relevant transaction.

2 Accrual of Interest & Other Sums

All interest and other sums expressed to be chargeable or payable on a periodic basis hereunder shall accrue on a 360-day-year basis except for interest on outstanding (if any) denominated in Hong Kong Dollar or Pound Sterling (GBP) which shall accrue on a 365-day-year basis.

3 Availability and Utilisation

3.1 Each and all the facilities under the Facility Letter are of the revolving nature. Subject to the terms and conditions of the Facility Letter, rollover of utilized amount is allowed and any utilized but repaid amount is available for re-utilization starting from the immediately next business day of the repayment.

3.2 With respect to trade related facilities, the Bank may, at its sole discretion, refuse to allow drawings under such facilities if the transaction in question does not meet the Bank’s operational requirements in respect of the facilities.

4 Purpose

The Borrower shall strictly apply the Bank’s funding under the Facility Letter for the purpose set out in the Facility Letter only and shall comply with the requirements of the relevant PRC laws and regulations on use of such proceeds. The Borrower shall not apply the proceeds for any purpose prohibited by PRC laws and regulations which including, without limitation, applying the proceeds for equity investments, applying the proceeds for speculation in the stock market, the futures market, the real estate market or other similar market speculation.

5 Market Disruption / Increased Costs

Without prejudice to our overriding right of suspension, withdrawal and repayment on demand, the Bank would reserve our right to renegotiate any of the interest margins, fees, other charges and the applicable period of PBOC base rate detailed herein (in case there is any Loan denominated in RMB) in the event of any change occurring in any applicable law or regulation (or its interpretation) or in PRC’s financial markets or the need to comply with any requirement of any regulatory/governmental authority (whether or not

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having the force of law), which resulted, in our opinion, in an increase of the cost of advancing, maintaining or funding any facilities, a change on the basis to calculate the interest margins, deviation from the RMB interest rate regime permitted by PRC laws or regulations (or its interpretation), and/or a reduction in the net return to us from the facilities outlined herein. Before the renegotiated interest margins, fees, other charges or applicable base rate is agreed, the Bank has the sole discretion to charge the Borrower the revised interest and fees with a notice to the Borrower. However, if such change in applicable laws and regulations or the requirements of relevant regulatory/governmental authorities have retrospective effect, the Customer shall indemnify the Bank against the increase of cost and/or the reduction in the net return suffered by the Bank in respect of relevant period affected by such retrospective effect within 15 Business Days upon receipt of written notice from the Bank. The Bank’s written notice setting out its claim for such indemnity shall be the conclusive evidence for the indemnity amount payable to the Bank by the Customer, unless the Bank’s claim conflicts with relevant laws, regulations, regulatory/governmental requirements in the PRC.

6 Security Top-up

Without prejudice to our overriding right of suspension, withdrawal and repayment on demand at any time, if as a matter of fact or in the opinion of the Bank, the value of the security provided by the Borrower or other security provider for the facilities under the Facility Letter has depreciated, the Bank may request the Borrower to provide additional security in form and substance satisfactory to the Bank.

The term “security” referred to in this Clause 6 includes both tangible security and guarantee by a third party. The depreciation of security value includes, but is not limited to, decrease of the absolute value of the collateral due to drop in market price, adverse change in the guarantor’s credit standing, and depreciation of the guaranteed credit limit or any form of cash cover security or evaluated value of the collateral when converted into the currency in which the Borrower’s indebtedness is denominated as a result of fluctuation of foreign exchange rate.

7 Disbursement of Loan Proceeds

7.1 Unless otherwise provided in the Schedule of Facilities, disbursement of loan proceeds under the facilities shall follow the provisions of this Clause 7.

7.2 Disbursement of loan proceeds under each facility financing the Borrower’s working capital requirement shall follow the provisions under this Clause 7.2.

Threshold amount of “Disbursement by the Bank” for each working capital facility is provided in the Schedule of Facilities for such facility. The Borrower acknowledges that the Bank may review and revise the threshold amount for “Disbursement by the Bank” from time to time at its full discretion.

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In case of Disbursement by the Bank, if the Bank has received the following documents three business days before the proposed drawdown and is satisfied that the relevant payment under the transaction has become due and conforms to the purpose of the Facility after verification of the transaction materials, the Bank will pay the loan proceeds to the loan disbursement account and forthwith on the same day immediately transfer the loan proceeds to the Borrower’s counterparties under the relevant transaction pursuant to payment instruction(s) from the Borrower:

(a) drawdown request for the proposed loan;

(b) transaction materials evidencing the payment requirement(s) to be funded by the loan proceeds; and

(c) instructions(s) to the Bank for payment of the loan proceeds to relevant third party counterparties.

In case of Disbursement by the Borrower, upon receipt of the drawdown request from the Borrower, the Bank will pay the loan proceeds to the Borrower’s loan disbursement account. The Borrower may disburse such loan proceeds to third parties by itself. The Borrower shall confirm to the Bank the usage of all loan proceeds under Disbursement by the Borrower itself on quarterly basis in form and substance satisfactory to the Bank and shall upon request provide the Bank with evidences and supporting documents in relation to the use of such loan proceeds.

7.3 In relation to any disbursement by the Bank, the Borrower hereby undertakes and warrants to the Bank as follows:

(a) As the payment obligor under the relevant transaction, the Borrower shall be solely liable for the appropriateness and/or correctness of each payment made by the Bank with the Borrower’s authorization. The Bank’s examination of transaction materials and its payment in reliance thereon will not release or mitigate such liability of the Borrower.

(b) The Borrower shall not instruct the Bank to pay any loan proceeds to any of its accounts opened with any other bank except for cases whereunder the Borrower’s payment must be paid through such account opened with another bank and the Borrower provides documentation satisfactory to the Bank to assure the Bank that the disbursement of the loan proceeds to the other bank’s account will not breach the regulatory requirements on the usage of loan proceeds.

(c) The Borrower will not break a large payment into several parts to avoid application of Disbursement by Bank.

8 Expenses, Taxation and Debt Authorization

8.1 All expenses (including without limitation all legal fees) incurred by the Bank as a result of any change to or restructuring of the facilities at the request of the Borrower or any enforcement of the Bank’s right due to the Borrower’s breach, of any of its obligations hereunder shall be fully indemnified by the Borrower.

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8.2 All payments of principal, interest, fees and other expenses shall be made by the Borrower free and clear of taxes, levies, imposts, duties, charges or withholding of whatsoever nature.

8.3 The Bank may debit any of the Borrower’s account with the Bank’s offices for any amount including, without limitation, principal, interest and other fees and charges due and payable by the Borrower to the Bank under or in relation to the Facility Letter without further instruction from the Borrower.

9 Assignment

The Bank may by delivering the Borrower a notice in writing assign all or any part of its rights and/or obligations under or in relation to this Facility Letter to any person without subsequent consent from the Borrower.

10 Connected Transactions

Section 83 of the Hong Kong Banking Ordinance and the CBRC Administration Rules on the Connected Transactions of Commercial Banks with insiders and Shareholders (the “CBRC Rules”) have imposed on the Bank certain limitations on advances to persons related to our directors or employees or advances that are of the “connected transaction” nature. In acknowledging this Facility Letter the Borrower should advise the Bank whether the Borrower in any way related to any director or employee of The Hongkong and Shanghai Banking Corporation Limited or the Bank within the meaning of Section 83 or otherwise are a “connected party” defined in the CBRC Rules and in the absence of such advice the Bank will assume that the Borrower is not so related. The Bank would also ask, should the Borrower become so related subsequent to acknowledging the Facility Letter, that the Borrower immediately advises the Bank in writing.

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EX-10.23

Exhibit 10.23

CONFIDENTIAL

Murphy EControls Technologies (Hangzhou) Co., Ltd

26 July 2013

Dear Sir,

BANKING FACILITY(S/N:130709)

With reference to our recent discussion, we are pleased to confirm our agreement to granting you the below uncommitted banking facility (“Facility”) which will be made available on the specific terms and conditions outlined in this Facility Letter and upon the satisfactory completion of the security and conditions precedent detailed below. Notwithstanding anything to the contrary in this Facility Letter, the Facility is subject to:

• our discretion to cancel or suspend any unutilized facility, or determine whether or not to permit utilization of any facility;

• our review at any time and in any event at our discretion at least once a year; and

• our right of repayment on demand at any time including the right to call for cash cover on demand for prospective and contingent liabilities.

This Facility Letter is composed of the main body, the Schedule of Facility, the General Terms and Conditions for Facilities and the Appendixes (if any) hereof.

Borrower:	Murphy EControls Technologies (Hangzhou) Co., Ltd
Lender/Bank:	HSBC Bank (China) Company Limited, Hangzhou Branch
Obligors	The Borrower and each of the other security providers (if any). “Obligor” refers to each of them.
Facility/ Amount:	RMB/USD Dual Currency Loan Facility up to USD2.500.000.- or equivalent
Finance Document	This Facility Letter and the other security document (if any).

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Term	2 years after the date of first drawdown. For avoidance of doubt, this provision shall not prejudice the Lender’s overriding right of suspension, withdrawal and repayment on demand at any time regarding any part of the Facility and the Lender’s rights to review the Facility at any time.
Final Maturity Date	The expiry date of the Term
Availability Period	6 months from the first drawdown date. The Availability Period will automatically expire when the facility is fully drawn.
Security:	As security, we shall have:
	110% Corporate Guarantee from Enovation Controls, LLC (“Guarantor”).
	The Borrower acknowledges that its indebtedness hereunder shall remain outstanding unless fully settled in the same currency of such indebtedness. The Borrower also undertakes that:
	(1)    it will promptly inform the Lender of any change to its Certificate of Approval;
	(2)    it will promptly inform the Lender of any change in the amount of its foreign debt or. its other indebtedness backed by a Security guarantee from overseas; and
	(3)    it will conduct the foreign debt registration promptly (and, in any case, no later than 15 days) after enforcement of the foreign guarantee/security for this Facility Letter.
Conditions Precedent:	(1)    The Borrower shall present to the Lender its valid Borrowing Card issued by the People’s Bank of China together with the password thereof.
	(2)    Certified true copies of all government approvals and certificates in relation to the establishment of the Borrower shall be submitted to the Lender.
	(3)    The Borrower has provided its internal authorization document approving (or authorizing others to approve) the Facility hereunder and authorizing representative(s) to accept and sign the terms, conditions and documents in connection with the Facility hereunder and in strict compliance with its articles of association and the applicable laws.
	(4)    In the event that the Lender’s making available any Facility hereunder is subject to regulatory approval or the completion of other procedures with the regulator(s), the acquisition of such regulatory approval and the completion of such procedures with regulator(s).

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(5)    The Lender is satisfied that all the security(ies) stated in the “Security” item above (if any) has/have been established and is/are valid and enforceable. The security provider’s company existence evidence and internal authorization document (where the security provider is a company) or valid ID certificate (where the security provider is an individual) has been duly made and submitted to the Lender.

(6)    A tentative schedule of drawdown under the Facility prepared by the Borrower which shall be in form and substance satisfactory to the Lender in all respects.

(7)    Legal opinions, as the Lender may require, from qualified lawyer(s) acceptable to the Lender opining on such matters relevant to this Facility Letter and the security documents in form and substance satisfactory to the Lender in all respects.

(8)    Evidence of payment of all fees, costs and expenses then due and payable from the Borrower under this Facility Letter.

(9)    Documentary evidence satisfactory to the Lender that all stamp duties payable by the Borrower in respect of this Facility Letter have been duly paid by the Borrower.

(10)  Such other documents, evidence and financial and other information relating to any of the matters contemplated under this Facility Letter and the security documents as the Lender shall reasonably require.

(11)  The Borrower has opened a loan disbursement account with the Lender or has designated its existing settlement account with the Lender as loan disbursement account

(12)  The Borrower has opened a settlement account with the Lender.

(13)  The Borrower has provided the Lender with certified true copies of:

(i)     evidences that the Project (defined in the “Schedule of Facility”) has been approved by or (as the case may be) filed with the National Development and Reform Commission or its relevant local office in accordance with law;

(ii)    evidences that the Borrower has obtained the land use right for the Project;

(iii)  evidences that the environmental impact assessment documents of the Project have been examined and approved by competent environmental protection authorities;

(iv)   evidences that the Borrower satisfies the investor’s qualification and business qualification requirements (if any) specified by the State for the investment Project;

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	(v)    evidences that the Project capital meets the State’s requirement on minimum capital ratio (which is 40% for this Project) and that such minimum capital has been injected in accordance with law and/or the requirements of competent authorities;
	(vi)   evidences that after the occurrence of the proposed drawdown the Borrower’s capital injection ratio will not be lower than the ratio of all loans then drawn under this Facility Letter to the total Facility amount hereunder;
	(vii) evidences that after the occurrence of the proposed drawdown the ratio of the Borrower’s utilized capital to the registered capital is not lower than ration of all loans then drawn under this Facility Letter to the total facility amount hereunder.
	(14)  The Borrower has provided the Lender with evidences to the Lender’s reasonable satisfaction that the progress of the Project construction properly reflects the capital investment into the Project to date.
Representation	The Borrower represents and warrants to the Lender that:
	(1)    each Obligor is a company duly formed and validly existing as a separate legal person under its jurisdiction of incorporation, and has full power, authority and legal right to assume civil liability under the Finance Document to which it is a party;
	(2)    each Obligor has full power, authority and legal right to enter into and engage in the transactions contemplated by the Finance Document to which it is a party;
	(3)    each of the Finance Documents constitutes legal, valid and binding obligations of the Obligors enforceable in accordance with its terms;
	(4)    neither the execution of the Finance Document nor the performance by the Obligor of any of its obligations or the exercises of any of its rights thereunder will conflict with or result in a breach of any law or regulation, judgment, order, authorization, agreement or obligation applicable to it;
	(5)    all authorisations required or desirable:
	(i)     to enable an Obligor lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party;
	(ii)    to make the Finance Documents to which an Obligor is a party admissible in evidence in its jurisdiction of incorporation; and
	(iii)  for an Obligor and its subsidiaries to carry on their business, and which are material,
	have been obtained or effected and are in full force and effect;

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(6)    the choice of the governing law as specified in each Finance Document will be recognised and enforced in the jurisdiction of incorporation of the Obligor who is a party to that Finance Document;

(7)    any judgment obtained in a jurisdiction that has been specified in a Finance Document will be recognised and enforced in the jurisdiction of incorporation of the Obligor who is a party to that Finance Document;

(8)    each Obligor is not required under the law applicable where it is incorporated or resident to make any deduction for or on account of tax from any payment it may make under any Finance Document;

(9)    under the law of the jurisdiction of incorporation of the Obligor, it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents, other than the payment of the stamp duty on this Facility Letter;

(10)  all information supplied by Obligor to the Lender is true, complete and accurate in all material respects as at the date it was given and is not misleading in any respect;

(11)  the financial statements of each Obligor supplied to the Lender were prepared in accordance with GAAP consistently applied save to the extent expressly disclosed in such financial statements;

(12)  the financial statements of each Obligor supplied to the Lender give a true and fair view and represent its financial condition and operations during the relevant financial year save to the extent expressly disclosed in such financial statements;

(13)  there has been no material adverse change in the business or financial condition of each Obligor since the date of the latest financial statements supplied to the Lender;

(14)  any person specified as an authorised signatory of an Obligor is authorized to sign the drawdown notice (in the ease of. Borrower only and other notices on its behalf;

(15)  no litigation, arbitration or administrative proceeding is currently taking place or pending or, to the knowledge of the Obligor, threatened against the obligor or its assets;

(16)  no Obligor is in default under any law, regulation, judgment, order, authorisation, agreement or obligation applicable to it or its assets or revenues, the consequences of which default could materially and adversely affect its business or financial condition or its ability to perform its obligations under the Finance Document and no Event of Default or prospective Event of Default, has occurred or is occurring.

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	The Borrower also undertakes with the Lender that the foregoing representations and warranties will be true and accurate throughout the continuance of this Facility Letter with reference to the facts and circumstances subsisting from time to time.
	The Borrower acknowledges that the Lender has entered into this Facility Letter in reliance upon the representations and warranties contained in this Clause.
Undertaking/ Covenants:	You will be required for so long as this Facility is available to you to comply with the following covenants/ undertakings. Your compliance or otherwise with the following covenant(s)/ undertakings will not in any way prejudice or affect our right to suspend, withdraw or make demand in respect of the whole or any part of the Facility made available to you at any time
	(1)    Without prejudice to any security or other priority right to which the Lender is entitled (if any), this Facility shall rank at least pari-passu with all present and future indebtedness of the Borrower. The Borrower undertakes to advise the Lender in advance of any future borrowing.
	(2)    The Borrower should not create or attempt to create or permit to subsist any mortgage, debenture, charge, pledge, lien or other encumbrance upon, or permit any lien or other encumbrance (save a lien arising by operation of law in the ordinary course of trading) on the whole or any part of present or future assets of the Borrower without Lender’s prior written consent.
	(3)    Half-yearly and audited yearly financial statements of the Borrower and the Guarantor (if any) to be prepared by qualified accountants shall be provided to the Lender whenever available but in any event no later than 90 days and 120 days from the financial half-year-ends and year-ends respectively.
	(4)    The Borrower shall provide other financial or operational information of the Borrower as from time to time reasonably requested by the Lender.
	(5)    The Borrower shall promptly inform the Lender of any of the Borrower’s inter-group connected transactions which amounts to in aggregate over 10% of its net assets with the details to the satisfaction of the Lender.
	(6)    The Borrower shall notify the Lender immediately after it becomes aware of any material adverse event which will affect the debt payment ability of the obligor (including the Borrower, guarantor and any other security provider).
	(7)    The Borrower undertakes to cooperate with the relevant on-site inspections to be conducted by the Lender in respect of the loans.

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(8)    The Borrower undertakes to obtain the Lender’s consent prior to the occurrence of any material event such as merger, division, equity transfer, investment or material increase of debt financing.

(9)    The Borrower has in all aspects satisfied the requirements set out in relevant laws and regulations of the state, and will continue to do so. Such requirements include but are not limited to:

(i)     the Project meets the relevant policies of the state regarding industry, land, environmental protection etc. and all administrative procedures for the fixed asset investment project have been fulfilled as required by law.

(ii)    the Project conforms to relevant capital requirements of the state on investment projects (including but without limitation the minimum capital ratio of the Project is in line with relevant provision of the State Council).

(iii)  all approvals, license, authorization, permit in connection with the Borrower and the investment project shall remain in full force and effect from the date of this Facility Letter until the full settlement of all outstanding amount under relevant loans.

(iv)   The Borrower will ensure that the actual total investment amount of the Project does not exceed 110% of the approved total investment amount (if applicable).

(10)  The Borrower shall provide the Lender with a construction progress report in relation to the Project certified by an independent third party to the satisfaction of the Lender on quarterly basis unless the Project has been completed, in which case, evidence of the completion should be provided.

(11)  The Borrower shall ensure that, if calculated on an annual, basis, 50% of the incoming cash flow of the Project will be credited into the above mentioned settlement account with us and the average daily balance of such account will not be lower than RMB200,000.-.

(12)  The Borrower shall undertake to open operating and loan account with the Leader.

(13)  The Borrower shall undertake to seek Lender’s prior consent for any dividend paid out.

(14)  In order to ensure and monitor the repayment ability of the Borrower, according to relevant regulations on banking facilities and loans issued by China Banking Regulatory Commission, the Borrower should at least direct 80% sales proceeds to the account opened with the Lender to facilitate the Lender to monitor the fund flow situation.

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Event of Default	The following shall constitute an Event of Default if at any time and for any reasons:
	(1)    any Obligor fails to pay any amount payable by it under any Finance Document when due;
	(2)    any Obligor fails to duly perform any of its material obligations (other than obligations to pay) or to observe any of the material terms and conditions (including the Borrower’s failure to use the loan for the stated purpose or to utilize the loan proceeds as mutually agreed) imposed on it by any Finance Document;
	(3)    all or a material part of the assets of an Obligor is seized, expropriated, re-entered or resumed or is subject to compulsory purchase or acquisition (whether subject to compensation or not);
	(4)    an Obligor becomes or is declared insolvent or bankrupt, is unable to pay its debts as they fall due, stops, suspends or threatens to stop or suspend payment of all or a material part of its debts or begins negotiations or takes any proceedings or other step with a view to readjustment, rescheduling or deferral of its indebtedness (or of any part of its indebtedness which it will or would otherwise be unable to pay when due) or purposes or makes a general assignment or any arrangement, compromise or composition with or for the benefit of its creditors or a moratorium is agreed or declared in respect of or affecting all or a material part of its indebtedness;
	(5)    any distress, attachment, execution or other legal process (including the taking of possession or appointment of a receiver, manager or similar officer) is levied, enforced or sued out on or against all or a material part of the assets of the Obligor (whether to enforce any encumbrance or otherwise);
	(6)    (i) a proceeding is commenced by an Obligor, a resolution is passed by the Obligor, an order is made by the Obligor or any action is taken by the Obligor for the dissolution of the Obligor or for the appointment of a liquidator, receiver, administrator, trustee or similar officer of the Obligor or of all or a material part of its assets or if the Obligor otherwise becomes insolvent or dissolved under any applicable laws; (ii) a proceeding is commenced, a resolution is passed, an order is made or any action is taken by any person for the dissolution of the Obligor or for the appointment of a liquidator, receiver, administrator, trustee or similar officer of the Obligor or of all or a material part of its assets or if the Obligor otherwise becomes insolvent or dissolved under any applicable laws;
	(7)    any requirement of financial covenants (if any) is not satisfied;

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	(8)    any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made;
	(9)    the Borrower is not or ceases to be a subsidiary of the Guarantor;
	(10)  an Obligor repudiates a Finance Document or evidences an intention to repudiate a Finance Document;
	(11)  if there shall occur a material adverse change in the business, assets, general condition or prospects of an Obligor, which could materially and adversely affect the ability of the Obligor to perform its obligations under the Finance Document;
	(12)  it is or will become unlawful for any Obligor to perform or comply with any material obligations under the Facility;
	(13)  any other financial indebtedness of an Obligor is declared be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
	At any time after any one or more of the Events of Default described above shall, in the Lender’s reasonable opinion, have occurred, the Lender has the right to cancel the Facility, suspend any drawing and/or demand repayment of all monies for the time being (whether by way of principal, interest, fees or otherwise) outstanding hereunder. In addition, the Borrower shall reimburse the Lender all losses and expenses incurred consequent upon termination.
	For avoidance of doubt, the provisions with respect to Representation, Undertakings and Events of Default shall not prejudice the Lender’s overriding right of suspension, withdrawal and repayment on demand at any time regarding any part of the Facility and the Lender’s rights to review the Facility at any time.
Governing Law:	This Facility Letter shall be governed by and construed in accordance with the laws of the People’s Republic of China.
Jurisdiction:	The Borrower submits to the non-exclusive jurisdiction of the PRC court at the principal office of the Lender. Nothing in this Clause limits the right of the Lender to bring proceedings against the Borrower in connection with this Facility in any other court of any competent jurisdiction.

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We may provide any information relating to any of your accounts with us and any facility we may provide to you from time to time or their conduct or any other information concerning your relationship with us to any other company or office which at the relevant time belongs to or is part of the HSBC Group.

The facility offer will remain open for acceptance until the close of business on 26 August 2013 and if not accepted by that date will be deemed to have lapsed (unless otherwise agreed by us in writing).

We shall be grateful if you could arrange for the authorized signatory(ies) of your company in accordance with the terms of the shareholders’ resolution or board resolution (as the case may be) to be given to us, to sign and return to us the duplicate copy of this letter to signify your understanding and acceptance of the terms and conditions under which the Facility is granted.

We look forward to the establishment of our mutually beneficial and lasting relationship.

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Yours faithfully,

For and on behalf of HSBC Bank (China) Company Limited Hangzhou Branch	Accepted by Murphy EControls Technologies (Hangzhou) Co., Ltd.
/s/ Angela Fang	/s/ Susan Xu
Angela Fang Relationship Manager Commercial Banking	Authorised Signatures Company Chop Date
/s/ Dennis Zhu Dennis Zhu Branch Manager

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SCHEDULE OF FACILITY

RMB/USD Dual Currency Loan Facility

Purpose

To finance the Borrower’s following fixed asset investment requirement: to fund Borrower’s plant expansion on the existing land (“Project”).

Utilization

(a) The Facility shall become available for drawdown during the Availability Period upon the signing of all other Finance Documents acceptable to all parties and compliance with all conditions precedent relating thereto provided that there is no Event of Default or potential Event of Default.

(b) Drawdown may be made in either RMB or USD provided that USD/RMB equivalent of aggregate outstanding hereunder shall in no time exceed the Facility amount. The currency A equivalent of currency B at any time shall be determined based on the buy-in rate of currency A then announced by the Lender.

(c) 3 working days advance drawdown request is given to us.

(d) Each drawdown to be for a minimum amount of USD500,000.—or equivalent or its multiples unless the loan proceeds is subject to Disbursed by the Lender.

If as a result of change of exchange rate, the actual balance of the Loan exceeds the Facility amount denominated in the currency set out in the Facility Letter, without prejudice to other rights enjoyed by the Lender under this Facility Letter, upon request by the Lender, the Borrower shall repay the Loan until the balance of the Loan can satisfy the requirement of Facility amount denominated in the currency specified, or unconditionally provide additional security to the satisfaction of the Lender and procure other third party security provider to increase the guarantee limit or increase the value of the security or provide additional security upon request by the Lender, so as to secure the Lender’s rights as creditor to the amount of the Loan which has exceeded Facility amount. The Borrower shall ensure that the excess amount is also a part of the secured monies.

Interest

RMB Loan

Interest shall accrue on each loan for each interest period at a rate equal to the benchmark lending rate effective on the Rate Adjustment Date for that interest period promulgated by the People’s Bank of China for RMB lending with a tenor corresponding to the Term of the Facility with 10% mark-up.

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Foreign Currency Loan

Interest shall accrue on each loan for each interest period at a rate equal to the Lender’s cost of fund plus 2% per annum. The Lender has its full discretion in determining its cost of fund for each loan at each interest period. The Borrower shall confirm its acceptance of the exact interest rate for each interest period by specifying such interest rate in the respective drawdown request or interest review letter and shall provide such drawdown request/interest review letter to the Lender at least 3 working days before the first day of the relevant interest period.

Interest period for loan hereunder shall be 1, 3 or 6 months as selected by the Borrower or, in the absence of the Borrower’s selection, such period as determined by the Lender. provided that the first interest period for each loan shall commence on its drawdown date and end on the last day of the then current interest period (if any) and the last interest period shall end on the Final Maturity Date. For RMB loan, the Rate Adjustment Date for an interest period shall be the first day of the interest period.

Interest shall be payable in arrears at the end of each interest period.

The parties may from time to time agree on alternative interest rate for any one or more interest periods. Such otherwise agreed interest rate shall be specified in the relevant drawdown request or interest review notice of the Borrower.

Default Interest

Default interest shall accrue on sums which are overdue (as well as amounts not paid on demand) or overlimit or (in relation to RMB loan) used for purposes other than the purpose specified in the Facility Letter and shall be payable upon demand of the Lender.

RMB Loan

For overdue or overlimit sums: default interest rate shall be the stipulated interest rate for the RMB facility with 50% mark-up.

For the amount used for purposes other than those stated in this letter: default interest rate shall be the stipulated interest rate for RMB facility with 100% mark-up.

Foreign Currency Loan

Default interest rate shall be 3% per annum over the stipulated interest rate for the USD facility.

Repayment

The provisions with respect to Repayment shall not prejudice the Lender’s overriding right of suspension, withdrawal and repayment on demand at any time regarding any part of the Facility and the Lender’s rights to review the Facility at anytime

The Borrower shall repay all loans hereunder according to following schedule together with all the interest and charges accrued thereon on each respective repayment date:

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	Repayment Date	Amount (in percentage of all outstanding loan balance as at the expiry of the Availability Period)
First Instalment	6 months from 1st drawdown	USD500,000.-
Second Instalment	12 months from 1st drawdown	USD500,000.-
Third Instalment	18 months from 1st drawdown	USD500,000.-
Fourth Instalment	24 months from 1st drawdown	USD1,000,000.-

Any amount of the Loan that is repaid cannot be re-drawn.

Prepayment

With the Lender’s prior approval, the Borrower may prepay the outstanding amount of the Loan in whole or in part, with each prepayment subject to a minimum amount of USD500,000.- or equivalent and in an integral multiple of USD500,000.- or equivalent.

The Borrower shall give the Lender an irrevocable written notice of any prepayment, specifying the principal amount to be prepaid, 30 Business Days prior to such prepayment. Upon such notice for prepayment, the amount of the prepayment shall become due and payable on the expiry of the period

Any amount prepaid shall be applied in discharge of the repayment installments in reverse order of maturity or, at the Lender’s option, pro-rata. Any amount prepaid shall not be re-drawn.

The Borrower shall pay all interest accrued, whether capitalised or not on the Loan and all charges due, up to the date of prepayment, together with such prepayment, on the date of prepayment.

All voluntary prepayment(s) will be subject to Break Funding Costs (i.e., the differential between the return the Lender would have received had the Loan run to maturity and the return the Lender is able to obtain by placing of the funds repaid for the remainder of the period in the market).

Disbursement of Loan Proceeds

Disbursement of loan proceeds shall follow the provisions under Clause 7 of the General Terms and Conditions. for Facilities, Threshold Amount for the purpose of Clause 7.2 of the General Terms and Conditions RMB4,650,000.- or equivalent.

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GENERAL TERMS AND CONDITIONS FOR FACILITIES

1. Interpretation

These terms and conditions are applicable to banking facilities made available by HSBC Bank (China) Company Limited (the “Bank”) to the Borrower(s) and shall be read as an integral part of the facility letter (inclusive the Schedule of Facility thereof), as may be amended from time to time, applicable to the Borrower(s) (the “Facility Letter”). In the event of conflict between these terms and conditions and the Facility Letter, the Facility Letter shall prevail for the purposes of the relevant transaction.

2. Accrual of Interest & Other Sums

All interest and other sums expressed to be chargeable or payable on a periodic basis hereunder shall accrue on a 360-day-year basis except for interest on outstanding (if any) denominated in Hong Kong Dollar or Pond Sterling (GBP) which shall accrue on a 365-day-year-basis.

3. Purpose

The Borrower shall strictly apply the Bank’s funding under the Facility Letter for the purpose set out in the Facility Letter only and shall comply with the requirements of the relevant PRC laws and regulations on use of such proceeds. The Borrower shall not apply the proceeds for any purpose prohibited by PRC laws and regulations which including, without limitation, applying the proceeds for equity investments, applying the proceeds for speculation in the stock market, the futures market, the real estate market or other similar market speculation.

4. Market Disruption / Increased Costs

Without prejudice to our overriding right of suspension, withdrawal and repayment on demand, the Bank would reserve our right to renegotiate any of the interest margins, fees, other charges and the applicable period of PBOC base rate detailed herein (in case there is any Loan denominated in RMB) in the event of any change occurring in any applicable law or regulation (or its interpretation) or in PRC’s financial markets or the need to comply with any requirement of any regulatory/governmental authority (whether or not having the force of law), which resulted, in our opinion, in an increase of the cost of advancing, maintaining or funding any facilities, a change on the basis to calculate the interest margins, deviation from the RMB interest rate regime permitted by PRC laws or regulations (or its interpretation), and/or a reduction in the net return to us from the facilities outlined herein. Before the renegotiated interest margins, fees, other charges or applicable base rate is agreed, the Bank has the sole

15 RESTRICTED

discretion to charge the Borrower the revised interest and fees with a notice to the Borrower. However, if such change in applicable laws and regulations or the requirements of relevant regulatory/governmental authorities have retrospective effect, the Customer shall indemnify the Bank against the increase of cost and/or the reduction in the net return suffered by the Bank in respect of relevant period affected by such retrospective effect within 15 Business Days upon receipt of written notice from the Bank. The Bank’s written notice setting out its claim for such indemnity shall be the conclusive evidence for the indemnity amount payable to the Bank by the Customer, unless the Bank’s claim conflicts with relevant laws, regulations, regulatory/governmental requirements in the PRC.

5. Illegality

If, at any time, it is or will become unlawful for the Bank to perform any of its obligations as contemplated by this Facility Letter or to fund or maintain any facility (for the avoidance of doubt, unlawful refers to the breach of any law, regulation or explicit written or oral instruction from any regulator):

(a) the Bank shall promptly notify the Borrower upon becoming aware of that event;

(b) upon the Bank notifying the Borrower, the facility will be immediately cancelled; and

(c) the Borrower shall repay the loans on the last day of the Interest Period for each loan occurring after the Bank has notified the Borrower or, if earlier, the date specified as such by the Bank (being no earlier than the last day of any applicable grace period permitted by law).

6. Security Top-up

Without prejudice to our overriding right of suspension, withdrawal and repayment on demand at any time, if as a matter of fact or in the opinion of the Bank, the value of the security provided by the Borrower or other security provider for the facilities under the Facility Letter has depreciated, the Bank may request the Borrower to provide additional security in form and substance satisfactory to the Bank.

The term “security” referred to in this Clause 6 includes both tangible security and guarantee by a third party. The depreciation of security value includes, but is not limited to, decrease of the absolute value of the collateral due to drop in market price, adverse change in the guarantor’s credit standing, and depreciation of the guaranteed credit limit or any form of cash cover security or evaluated value of the collateral when converted into the currency in which the Borrower’s indebtedness. is denominated as a result of fluctuation of foreign exchange rate.

7. Disbursement of Loan Proceeds

7.1 Unless otherwise provided in the Schedule of Facility, disbursement of loan proceeds under the facility shall follow the provisions of this Clause 7.

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7.2 Disbursement of loan proceeds under each facility financing the Borrower’s fixed asset investment requirement shall follow the provisions under this Clause 7.2.

If the Borrower has opened a designated loan disbursement account with the Bank for the purpose of this Facility Letter, then sections “Disbursement by the Bank (through designated loan disbursement account)” and ‘‘Disbursement by the Borrower itself” below will apply to loan proceeds disbursement hereunder. If the Borrower has not opened a designated loan disbursement account with the Bank for the purpose of this Facility Letter, then section “Disbursement by the bank (through existing account)” below will apply to loan proceeds disbursement hereunder.

Disbursement by the Bank (through designated loan disbursement account)

The Borrower understands and acknowledges that, in accordance with the Provisional Rules on Administration of Fixed Asset Loans, for any single payment of loan proceeds of more than the Threshold Amount (as defined in the Schedule of Facility), the approach of Disbursement by Bank must be adopted. That is, the Bank will pay the loan proceeds to the designated loan disbursement account opened by the Borrower with the Bank provided that the Bank has received the following documents from the Borrower 3 business days before the proposed drawdown and is satisfied that the relevant payment under the transaction has become due and conforms to the purpose of the facility after verification of the transaction materials. and forthwith immediately transfer the loan proceeds to the Borrower’s counterparties under the relevant transactions pursuant to payment instruction(s) from the Borrower:

(a) drawdown notice for the proposed loan;

(b) transaction materials (which include without limitation contracts and invoices in relation to the payment(s) to be made with the proceeds of the loan to be drawn) evidencing the payment requirement(s) to be funded by the loan proceeds; and

(c) instruction(s) to the Bank for payment of the loan proceeds to relevant third party counterparties.

Disbursement by the Borrower itself

Single payment of loan proceeds no more than the Threshold Amount can be made by means of Disbursement by the Borrower, which means, after loan proceeds are paid by the Bank to the Borrower’s loan disbursement account, the Borrower will disburse such loan proceeds to its counterparty by itself. As a condition precedent for drawdown under such approach, the Borrower shall provide the Bank with a utilization plan regarding the loan proceeds of such drawdown together with the drawdown notice.

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The Borrower undertakes that it will not pay any loan proceeds to any of its accounts opened with any other Bank. The Borrower further undertakes that it will send a summarized report on a quarterly basis in a form and substance to the Bank’s satisfaction, reporting information relating to its payment of loan proceeds by itself and shall provide evidences and supporting documents in relation to relevant transactions promptly upon request by the Bank.

Disbursement by the Bank (through existing account)

The Borrower understands and acknowledges that, for the payment of each loan proceeds, the Bank will make the relevant loan proceeds payment to the designated existing settlement account opened by the Borrower with the Bank provided that the Bank has received the following documents from the Borrower 3 business days before the proposed drawdown and is satisfied that the relevant payment under the transaction has become due and conforms to the purpose of the Facility after verification of the transaction materials, and forthwith immediately transfer the loan proceeds to the Borrower’s counterparty under the relevant transaction pursuant to payment instructions from the Borrower.

(a) drawdown notice for the proposed loan;

(b) transaction materials (which include without limitation contracts and invoices in relation to the payment(s) to be made with the proceeds of the loan to be drawn) evidencing the payment requirement(s) to be funded by the loan proceeds; and

(c) instruction(s) to the Bank for payment of the loan proceeds to relevant third party counterparties.

7.3 In relation to any disbursement by the Bank, the Borrower hereby undertakes and warrants to the Bank as follows:

(a) As the payment obligor under the relevant transaction, the Borrower shall be solely liable for the appropriateness and/or correctness of each payment made by the Bank with the Borrower’s authorization. The Bank’s examination of transaction materials and its payment in reliance thereon will not release or mitigate such liability of the Borrower.

(b) The Borrower shall not instruct the Bank to pay any loan proceeds to any of its accounts opened with any other bank except for cases whereunder the Borrower’s payment must he paid through such account opened with another bank and the Borrower provides documentation satisfactory to the Bank to assure the Bank that the disbursement of the loan proceeds to the other bank’s account will not breach the regulatory requirements on the usage of loan proceeds.

(c) The Borrower will not break a large payment into several parts to avoid application of Disbursement by Bank.

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8. Expenses, Taxation and Debit Authorization

8.1 All expenses (including without limitation all legal fees) incurred by the Bank as a result of any change to or restructuring of the facilities at the request of the Borrower or any enforcement of the Bank’s right due to the Borrower’s breach of any of its obligations hereunder shall be fully indemnified by the Borrower.

8.2 All payments of principal, interest, fees and other expenses shall he made by the Borrower free and clear of taxes, levies, imposts, duties, charges or withholding of whatsoever nature.

8.3 The Bank may debit any of the Borrower’s account with the Bank’s offices for any amount including, without limitation, principal, interest and other fees and charges due and payable by the Borrower to the Bank under or in relation to the Facility Letter without further instruction from the Borrower.

9. Assignment

The Bank may by delivering the Borrower a notice in writing assign all or any part of its rights and/or obligations under or in relation to this Facility Letter to any person without subsequent consent from the Borrower.

10. Connected Transactions

Section 83 of the Hong Kong Banking Ordinance and the CBRC Administration Rules on the Connected Transactions of Commercial Banks with Insiders and Shareholders (the “CBRC Rules”) have imposed on the Bank certain limitations on advances to persons related to our directors or employees or advances that are of the “connected transaction” nature. In acknowledging this Facility Letter the Borrower should advise the Bank whether the Borrower in any way related to any director or employee of The Hongkong and Shanghai Banking Corporation Limited or the Bank within the meaning of Section 83 or otherwise are a “connected party’’ defined in the CBRC Rules and in the absence of such advice the Bank will assume that the Borrower is not so related. The Bank would also ask, should the Borrower become so related subsequent to acknowledging the Facility Letter, that the Borrower immediately advises the Bank in writing.

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EX-21.1

Exhibit 21.1

ENOVATION CONTROLS, INC.

SUBSIDIARIES

Name of Subsidiary	State or other Jurisdiction of Incorporation
Enovation Controls, LLC	Oklahoma
Murphy Industries, LLC	Oklahoma
GC&I Global, Inc.	Texas
EControls, LLC	Texas
Enovation Controls, Ltd.	United Kingdom
Enovation Controls India Private Limited	India
Murphy EControls Technologies (Hangzhou) Co., Ltd.	People’s Republic of China
FW Murphy International Trading (Shanghai) Co., Ltd.	People’s Republic of China

- 1 -

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated August 22, 2014, with respect to the balance sheet of Enovation Controls, Inc. contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

/s/ GRANT THORNTON LLP

Tulsa, Oklahoma

August 29, 2014

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated August 22, 2014, with respect to the financial statements of Enovation Controls, LLC contained in the Registration Statement and Prospectus. We consent to the use of the aforementioned report in the Registration Statement and Prospectus, and to the use of our name as it appears under the caption “Experts.”

/s/ GRANT THORNTON LLP

Tulsa, Oklahoma

August 29, 2014