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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2013
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission file number 1-8267
EMCOR Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware
 
11-2125338
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification Number)
 
 
 
301 Merritt Seven
Norwalk, Connecticut
 
06851-1092
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (203) 849-7800
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Name of each exchange on which registered
Common Stock
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes   x     No   ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act. Yes   ¨     No   x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   x     No   ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   x     No   ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
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
x
Accelerated filer
¨
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
Smaller reporting company
¨
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes   ¨     No   x
The aggregate market value of the common stock held by non-affiliates of the registrant was approximately $1,990,000,000 as of the last business day of the registrant's most recently completed second fiscal quarter, based upon the closing sale price on the New York Stock Exchange reported for such date. Shares of common stock held by each officer and director and by each person who owns 5% or more of the outstanding common stock (based solely on filings of such 5% holders) have been excluded from such calculation as such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
Number of shares of the registrant's common stock outstanding as of the close of business on February 20, 2014 : 66,924,741 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Part III. Portions of the definitive proxy statement for the 2014 Annual Meeting of Stockholders, which document will be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year to which this Form 10-K relates, are incorporated by reference into Items 10 through 14 of Part III of this Form 10-K.
 
 
 
 
 
 
 
 
 
 

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FORWARD-LOOKING STATEMENTS
Certain information included in this report, or in other materials we have filed or will file with the Securities and Exchange Commission (the “SEC”) (as well as information included in oral statements or other written statements made or to be made by us) contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “1995 Act”). Such statements are being made pursuant to the 1995 Act and with the intention of obtaining the benefit of the “Safe Harbor” provisions of the 1995 Act. Forward-looking statements are based on information available to us and our perception of such information as of the date of this report and our current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” variations of such wording and other words or phrases of similar meaning in connection with a discussion of our future operating or financial performance, and other aspects of our business, including market share growth, gross profit, project mix, projects with varying profit margins, selling, general and administrative expenses, and trends in our business and other characterizations of future events or circumstances. From time to time, forward-looking statements also are included in our other periodic reports on Forms 10-Q and 8-K, in press releases, in our presentations, on our web site and in other material released to the public. Any or all of the forward-looking statements included in this report and in any other reports or public statements made by us are only predictions and are subject to risks, uncertainties and assumptions, including those identified below in the “Risk Factors” section, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section, and other sections of this report, and in our Forms 10-Q for the three months ended March 31, 2013, June 30, 2013 and September 30, 2013 and in other reports filed by us from time to time with the SEC as well as in press releases, in our presentations, on our web site and in other material released to the public. Such risks, uncertainties and assumptions are difficult to predict, beyond our control and may turn out to be inaccurate causing actual results to differ materially from those that might be anticipated from our forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent reports on Forms 10-K, 10-Q and 8-K should be consulted.

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PART I

ITEM 1. BUSINESS
References to the “Company,” “EMCOR,” “we,” “us,” “our” and similar words refer to EMCOR Group, Inc. and its consolidated subsidiaries unless the context indicates otherwise.
General
We are one of the largest electrical and mechanical construction and facilities services firms in the United States. In addition, we provide a number of building services and industrial services. In 2013, we had revenues of approximately $6.4 billion. Our services are provided to a broad range of commercial, industrial, utility and institutional customers through approximately 70 operating subsidiaries and joint venture entities. Our executive offices are located at 301 Merritt Seven, Norwalk, Connecticut 06851-1092, and our telephone number at those offices is (203) 849-7800.
We specialize principally in providing construction services relating to electrical and mechanical systems in all types of non-residential facilities and in providing various services relating to the operation, maintenance and management of facilities, including refineries and petrochemical plants.
During the third quarter of 2013, we completed the acquisition of RepconStrickland, Inc. ("RSI"), a leading provider of turnaround and specialty services to the North American refinery and petrochemical markets. In connection with the acquisition of RSI and to reflect changes in our internal reporting structure and the information used by management to make operating decisions and assess performance, we created a new segment that includes RSI and certain businesses that had been part of our United States facilities services segment. The new segment is called the United States industrial services segment and the segment formerly named the United States facilities services segment has been renamed the United States building services segment.
Our reportable segments have been restated in all periods presented to reflect the changes in our segments referred to above. The segment formally named the United Kingdom construction and facilities services segment has been renamed the United Kingdom construction and building services segment. In addition, the results of operations for all periods presented reflect: (a) discontinued operations accounting due to the disposition in August 2011 of our Canadian subsidiary and (b) certain reclassifications of prior period amounts from our United States building services segment to our United States mechanical construction and facilities services segment due to changes in our internal reporting structure.
We design, integrate, install, start-up, operate and maintain various electrical and mechanical systems, including:
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Electric power transmission and distribution systems;
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Premises electrical and lighting systems;
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Low-voltage systems, such as fire alarm, security and process control systems;
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Voice and data communications systems;
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Roadway and transit lighting and fiber optic lines;
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Heating, ventilation, air conditioning, refrigeration and clean-room process ventilation systems;
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Fire protection systems;
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Plumbing, process and high-purity piping systems;
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Controls and filtration systems;
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Water and wastewater treatment systems;
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Central plant heating and cooling systems;
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Crane and rigging services;
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Millwright services; and
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Steel fabrication, erection, and welding services.

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Our building services operations, which are provided to a wide range of facilities, including commercial, utility, institutional and governmental facilities, include:
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Commercial and government site-based operations and maintenance;
•
Facility maintenance and services;
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Outage services to utilities and industrial plants;
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Military base operations support services;
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Mobile mechanical maintenance and services;
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Floor care and janitorial services;
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Landscaping, lot sweeping and snow removal;
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Facilities management;
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Vendor management;
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Call center services;
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Installation and support for building systems;
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Program development, management and maintenance for energy systems;
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Technical consulting and diagnostic services;
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Infrastructure and building projects for federal, state and local governmental agencies and bodies;
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Small modification and retrofit projects; and
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Retrofit projects to comply with clean air laws.
Our industrial services are provided to refineries and petrochemical plants and include:
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On-site repairs, maintenance and service of heat exchangers, towers, vessels and piping;
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Design, manufacturing, repair and hydro blast cleaning of shell and tube heat exchangers and related equipment;
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Refinery turnaround planning and engineering services;
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Specialty welding services;
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Overhaul and maintenance of critical process units in refineries and petrochemical plants; and
•
Specialty technical services for refineries and petrochemical plants.
We provide construction services and building services directly to corporations, municipalities and federal and state governmental entities, owners/developers, and tenants of buildings. We also provide our construction services indirectly by acting as a subcontractor to general contractors, systems suppliers, property managers and other subcontractors. Our industrial services generally are provided directly to refineries and petrochemical plants. Worldwide, as of December 31, 2013, we had over 27,000 employees.
Our revenues are derived from many different customers in numerous industries, which have operations in several different geographical areas. Of our 2013 revenues, approximately 93% were generated in the United States and approximately 7% were generated in foreign countries, substantially all in the United Kingdom. In 2013, approximately 36% of revenues were derived from new construction projects, 19% were derived from renovation and retrofit of customer's existing facilities, 37% were derived from building services operations, and 8% were derived from industrial services operations.
The broad scope of our operations is more particularly described below. For information regarding the revenues, operating income and total assets of each of our segments with respect to each of the last three years, and our revenues and assets attributable to the United States and the United Kingdom for the last three years, see Note 17 - Segment Information of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data.

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Operations
The electrical and mechanical construction services industry has grown over the years due principally to the increased content, complexity and sophistication of electrical and mechanical systems, as well as the installation of more technologically advanced voice and data communications, lighting and environmental control systems in all types of facilities in large part due to the integration of digital processing and information technology. For these reasons, buildings need extensive electrical distribution systems. In addition, advanced voice and data communication systems require sophisticated power supplies and extensive low-voltage and fiber-optic communications cabling. Moreover, the need for substantial environmental controls within a building, due to the heightened need for climate control to maintain extensive computer systems at optimal temperatures, and the demand for energy savings and environmental control in individual spaces have over the years expanded opportunities for our electrical and mechanical services businesses. The demand for these services is typically driven by non-residential construction and renovation activity.
Electrical and mechanical construction services primarily involve the design, integration, installation and start-up and provision of services relating to: (a) electric power transmission and distribution systems, including power cables, conduits, distribution panels, transformers, generators, uninterruptible power supply systems and related switch gear and controls; (b) premises electrical and lighting systems, including fixtures and controls; (c) low-voltage systems, such as fire alarm, security and process control systems; (d) voice and data communications systems, including fiber-optic and low-voltage cabling; (e) roadway and transit lighting and fiber-optic lines; (f) heating, ventilation, air conditioning, refrigeration and clean-room process ventilation systems; (g) fire protection systems; (h) plumbing, process and high-purity piping systems; (i) controls and filtration systems; (j) water and wastewater treatment systems; (k) central plant heating and cooling systems; (l) cranes and rigging; (m) millwrighting; and (n) steel fabrication, erection and welding.
Electrical and mechanical construction services generally fall into one of two categories: (a) large installation projects with contracts often in the multi-million dollar range that involve construction of manufacturing and commercial buildings and institutional and public works projects or the fit-out of large blocks of space within commercial buildings and (b) smaller installation projects typically involving fit-out, renovation and retrofit work.
Our United States electrical and mechanical construction services operations accounted for about 53% of our 2013 revenues, approximately 67% of which were related to new construction and approximately 33% of which were related to renovation and retrofit projects. Our United Kingdom electrical and mechanical construction services operations accounted for approximately 2% of our 2013 revenues, approximately 46% of which were related to new construction and approximately 54% of which were related to renovation and retrofit projects. However, in mid-2013, we announced our decision to end our construction operations in the United Kingdom due to recurring losses over the last several years and our negative assessment of construction market conditions in the United Kingdom. We plan to focus in the United Kingdom solely on building services.
We provide electrical and mechanical construction services for both large and small installation and renovation projects. Our largest projects have included those: (a) for institutional purposes (such as educational and correctional facilities and research laboratories); (b) for manufacturing purposes (such as pharmaceutical plants, steel, pulp and paper mills, chemical, food, automotive and semiconductor manufacturing facilities and power generation); (c) for transportation purposes (such as highways, airports and transit systems); (d) for commercial purposes (such as office buildings, data centers, convention centers, sports stadiums, shopping malls and resorts); (e) for hospitality purposes (such as hotels and casinos); (f) for water and wastewater purposes; and (g) for healthcare purposes. Our largest projects, which typically range in size from $10.0 million up to and occasionally exceeding $150.0 million and are frequently multi-year projects, represented approximately 33% of our worldwide construction services revenues in 2013.
Our projects of less than $10.0 million accounted for approximately 67% of our worldwide construction services revenues in 2013. These projects are typically completed in less than one year. They usually involve electrical and mechanical construction services when an end-user or owner undertakes construction or modification of a facility to accommodate a specific use. These projects frequently require electrical and mechanical systems to meet special needs such as critical systems power supply, fire protection systems, special environmental controls and high-purity air systems, sophisticated electrical and mechanical systems for data centers, new production lines in manufacturing plants and office arrangements in existing office buildings. They are not usually dependent upon the new construction market. Demand for these projects and types of services is often prompted by the expiration of leases, changes in technology, or changes in the customer's plant or office layout in the normal course of a customer's business.
We have a broad customer base with many long-standing relationships. We perform construction services pursuant to contracts with owners, such as corporations, municipalities and other governmental entities, general contractors, systems suppliers, construction managers, developers, other subcontractors and tenants of commercial properties. Institutional and public works

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projects are frequently long-term complex projects that require significant technical and management skills and the financial strength to obtain bid and performance bonds, which are often a condition to bidding for and winning these projects.
We also install and maintain lighting for streets, highways, bridges and tunnels, traffic signals, computerized traffic control systems, and signal and communication systems for mass transit systems in several metropolitan areas. In addition, in the United States, we manufacture and install sheet metal air handling systems for both our own mechanical construction operations and for unrelated mechanical contractors. We also maintain welding and pipe fabrication shops in support of some of our mechanical operations.
Our United States building services segment offers a broad range of services, including operation, maintenance and service of electrical and mechanical systems; commercial and government site-based operations and maintenance; facility maintenance and services, including outage services to utilities and manufacturing facilities; military base operations support services; mobile mechanical maintenance and services; floor care and janitorial services; landscaping, lot sweeping and snow removal; facilities management; vendor management; call center services; installation and support for building systems; program development, management and maintenance with respect to energy systems; technical consulting and diagnostic services; infrastructure and building projects for federal, state and local governmental agencies and bodies; small modification and retrofit projects; and retrofit projects to comply with clean air laws.
These building services, which generated approximately 37% of our 2013 revenues, are provided to owners, operators, tenants and managers of all types of facilities both on a contract basis for a specified period of time and on an individual task order basis. Of our 2013 building services revenues, approximately 88% were generated in the United States and approximately 12% were generated in the United Kingdom.
Our building services operations have built upon our traditional electrical and mechanical services operations, facilities services activities of our electrical and mechanical contracting subsidiaries, and our client relationships, as well as acquisitions, to expand the scope of services being offered and to develop packages of services for customers on a regional and national basis.
Demand for our building services is often driven by customers' decisions to focus on their core competencies, customers' programs to reduce costs, the increasing technical complexity of their facilities and their mechanical, electrical, voice and data and other systems, and the need for increased reliability, especially in electrical and mechanical systems. These trends have led to outsourcing and privatization programs whereby customers in both the private and public sectors seek to contract out those activities that support, but are not directly associated with, the customer's core business. Clients of our building services business include federal and state governments, utilities, independent power producers, pulp and paper producers and major corporations engaged in information technology, telecommunications, pharmaceuticals, financial services, publishing and other manufacturing, and large retailers and other businesses with multiple locations throughout the United States.
We currently provide building services in a majority of the states in the United States to commercial, industrial, institutional and governmental customers and as part of our operations are responsible for: (a) the oversight of all or most of the facilities operations of a business, including operation and maintenance; (b) servicing, upgrade and retrofit of HVAC, electrical, plumbing and industrial piping and sheet metal systems in existing facilities; (c) interior and exterior services, including floor care and janitorial services, landscaping, lot sweeping and snow removal; (d) diagnostic and solution engineering for building systems and their components; and (e) maintenance and support services to manufacturers and power producers.
In the Washington D.C. metropolitan area, we provide building services at a number of preeminent buildings, including those that house the Secret Service, The Federal Deposit Insurance Corporation, the National Foreign Affairs Training Center, and the Department of Health and Human Services, as well as other government facilities including the NASA Jet Propulsion Laboratory in Pasadena, California. We also provide building services to a number of military bases, including base operations support services to the Navy National Capital Region and the Army's Fort Huachuca, Arizona, and are also involved in joint ventures providing building services to the Naval Base Kitsap in the State of Washington. The agreements pursuant to which this division provides services to the federal government are frequently for a term of five years, are subject to renegotiation of terms and prices by the government, and are subject to termination by the government prior to the expiration of the term.
Our United Kingdom subsidiary primarily focuses on building services and currently provides a broad range of services under multi-year agreements to public and private sector customers, including airlines, airports, real estate property managers, manufacturers and governmental agencies.
Our industrial services business is a recognized leader in the refinery turnaround market and has a growing presence in the petrochemical market. In July 2013, we acquired RepconStrickland, Inc. expanding services we provide to our refinery and petrochemical customers and significantly increasing the size of our industrial services business. Our industrial services business: (a) provides after-market maintenance, repair and cleaning services for highly engineered shell and tube heat exchangers for refineries and petrochemical plants both in the field and at our own shops, including tube and shell repairs, bundle repairs, and

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extraction services, and (b) designs and manufactures new highly engineered shell and tube heat exchangers. We also perform a broad range of turnaround and maintenance services for critical units of refineries so as to upgrade, repair and maintain them. Such services include turnaround and maintenance services relating to: (i) engineering and planning services in advance of complex refinery turnarounds, (ii) overhaul and maintenance of critical process units (including hydrofluoric alkylation units, fluid catalytic cracking units, coking units, heaters, heat exchangers and related mechanical equipment) during refinery and petrochemical plant shut downs, (iii) general revamps and capital projects for refineries and petrochemical plants, and (iv) other related specialty technical services such as (a) welding, including pipe welding, and fabrication; heater, boiler, and reformer repairs and revamps; converter repair and revamps; and vessel, exchanger and tower services; (b) tower and column repairs and revamps in refineries; (c) installation and repair of refractory materials for critical units in process plants so as to protect equipment from corrosion, erosion, and extreme temperatures; and (d) acid-proofing services to protect critical components at refineries from chemical exposure.
Competition
In our construction services, building services and industrial services businesses, we compete with national, regional and local companies, many of which are small, owner-operated entities that carry on their businesses in a limited geographic area.
We believe that the electrical and mechanical construction services businesses are highly fragmented and our competition includes thousands of small companies across the United States. In the United States, there are a few public companies focused on providing either electrical and/or mechanical construction services, such as Integrated Electrical Services, Inc., Comfort Systems USA, Inc. and Tutor Perini Corporation. A majority of our revenues are derived from projects requiring competitive bids; however, an invitation to bid is often conditioned upon prior experience, technical capability and financial strength. Because we have total assets, annual revenues, net worth, access to bank credit and surety bonding and expertise significantly greater than most of our competitors, we believe we have a significant competitive advantage over our competitors in providing electrical and mechanical construction services. Competitive factors in the electrical and mechanical construction services business include: (a) the availability of qualified and/or licensed personnel; (b) reputation for integrity and quality; (c) safety record; (d) cost structure; (e) relationships with customers; (f) geographic diversity; (g) the ability to control project costs; (h) experience in specialized markets; (i) the ability to obtain surety bonding; (j) adequate working capital; (k) access to bank credit; and (l) price. However, there are relatively few significant barriers to entry to several types of our construction services business.
While the building services business is also highly fragmented with most competitors operating in a specific geographic region, a number of large United States based corporations such as AECOM Technology Corporation, Johnson Controls, Inc., Fluor Corp., J&J Worldwide Services, DTZ, the Washington Division of URS Corporation, CB Richard Ellis, Inc., Jones Lang LaSalle and ABM Facility Services are engaged in this field, as are large original equipment manufacturers such as Carrier Corp. and Trane Air Conditioning. In addition, we compete with several regional firms serving all or portions of the markets we target, such as FM Facility Maintenance, Bergensons Property Services, Inc., SMS Assist, LLC and Ferandino & Sons, Inc. Our principal services competitors in the United Kingdom include ISS UK Ltd. and MITIE Group plc. The key competitive factors in the building services business include price, service, quality, technical expertise, geographic scope and the availability of qualified personnel and managers. Due to our size, both financial and geographic, and our technical capability and management experience, we believe we are in a strong competitive position in the building services business. However, there are relatively few barriers to entry to most of our building services businesses.
In our industrial services business, we are the leading North American provider of after-market maintenance and repair services for, and manufacturing of, highly engineered shell and tube heat exchangers and related equipment and a leader in providing specialized services to refineries and petrochemical plants. The market for providing these services and products to refineries and petrochemical plants is highly fragmented and includes large national industrial services providers, as well as numerous regional companies, including JV Industrial Companies Ltd., Matrix Service Company, Starcon, Turner Industries, Team, Inc., Cust-O-Fab, Dunn Heat, and Wyatt Field Service Company. In the manufacture of heat exchangers, we compete with both U.S. and foreign manufacturers. The key competitive factors in the industrial services market include service, quality, ability to respond quickly, technical expertise, price, safety record and availability of qualified personnel. Due to our technical capabilities, safety record and skilled workforce, we believe that we are in a strong competitive position in the industrial services market we serve. Because of the complex tasks associated with turnarounds and precision required in the manufacture of heat exchangers, we believe that the barriers to entry in this business are significant.
Employees
At December 31, 2013, we employed over 27,000 people, approximately 57% of whom are represented by various unions pursuant to more than 375 collective bargaining agreements between our individual subsidiaries and local unions. We believe that our employee relations are generally good. Only two of these collective bargaining agreements are national or regional in scope.

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Backlog
Our backlog at December 31, 2013 was $3.36 billion compared to $3.37 billion of backlog at December 31, 2012. Backlog increases with awards of new contracts and decreases as we perform work on existing contracts. Backlog is not a term recognized under United States generally accepted accounting principles; however, it is a common measurement used in our industry. We include a project within our backlog at such time as a contract is awarded. Backlog includes unrecognized revenues to be realized from uncompleted construction contracts plus unrecognized revenues expected to be realized over the remaining term of services contracts. However, we do not include in backlog contracts for which we are paid on a time and material basis, and if the remaining term of a services contract exceeds 12 months, the unrecognized revenues attributable to such contract included in backlog are limited to only the next 12 months of revenues provided for in the initial contract award. Our backlog also includes amounts related to services contracts for which a fixed price contract value is not assigned; however, a reasonable estimate of total revenues can be made from budgeted amounts agreed to with our customer. Our backlog is comprised of: (a) original contract amounts, (b) change orders for which we have received written confirmations from our customers, (c) pending change orders for which we expect to receive confirmations in the ordinary course of business and (d) claim amounts that we have made against customers for which we have determined we have a legal basis under existing contractual arrangements and as to which we consider collection to be probable. Claim amounts recorded were immaterial for all periods presented. Our backlog does not include anticipated revenues from unconsolidated joint ventures or variable interest entities and anticipated revenues from pass-through costs on contracts for which we are acting in the capacity of an agent and which are reported on the net basis. We believe our backlog is firm, although many contracts are subject to cancellation at the election of our customers. Historically, cancellations have not had a material adverse effect on us. We estimate that 84% of our backlog as of December 31, 2013 will be recognized as revenues during 2014.
Available Information
We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission, which we refer to as the “SEC”. These filings are available to the public over the internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC's Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room.
Our Internet address is www.emcorgroup.com. We make available free of charge through www.emcorgroup.com our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Our Board of Directors has an audit committee, a compensation and personnel committee, a nominating and corporate governance committee and a risk oversight committee. Each of these committees has a formal charter. We also have Corporate Governance Guidelines, which include guidelines regarding related party transactions, a Code of Ethics for our Chief Executive Officer and Senior Financial Officers, and a Code of Ethics and Business Conduct for Directors, Officers and Employees. Copies of these charters, guidelines and codes, and any waivers or amendments to such codes which are applicable to our executive officers, senior financial officers or directors, can be obtained free of charge from our web site, www.emcorgroup.com.
You may request a copy of the foregoing filings (excluding exhibits), charters, guidelines and codes and any waivers or amendments to such codes which are applicable to our executive officers, senior financial officers or directors, at no cost by writing to us at EMCOR Group, Inc., 301 Merritt Seven, Norwalk, CT 06851-1092, Attention: Corporate Secretary, or by telephoning us at (203) 849-7800.
ITEM 1A. RISK FACTORS
Our business is subject to a variety of risks, including the risks described below as well as adverse business and market conditions and risks associated with foreign operations. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not known to us or not described below which we have not determined to be material may also impair our business operations. You should carefully consider the risks described below, together with all other information in this report, including information contained in the “Business,” “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures about Market Risk” sections. If any of the following risks actually occur, our business, financial position, results of operations and/or cash flows could be adversely affected, and we may not be able to achieve our goals. Such events may cause actual results to differ materially from expected and historical results, and the trading price of our common stock could decline.
Economic downturns have led to reductions in demand for our services. Negative conditions in the credit markets may adversely impact our ability to operate our business. The level of demand from our clients for our services has been, in the past, adversely impacted by slowdowns in the industries we service, as well as in the economy in general. When the general level of economic

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activity has been reduced from historical levels, certain of our ultimate customers have delayed or cancelled projects or capital spending, especially with respect to more profitable private sector work, and such slowdowns adversely affect our ability to grow, reducing our revenues and profitability. A number of economic factors, including financing conditions for the industries we serve, have, in the past, adversely affected our ultimate customers and their ability or willingness to fund expenditures. General concerns about the fundamental soundness of domestic and foreign economies may cause ultimate customers to defer projects even if they have credit available to them. Worsening of financial and macroeconomic conditions could have a significant adverse effect on our revenues and profitability.
Many of our clients depend on the availability of credit to help finance their capital and maintenance projects. At times, tightened availability of credit has negatively impacted the ability of existing and prospective ultimate customers to fund projects we might otherwise perform, particularly those in the more profitable private sector. As a result, our ultimate customers may defer such projects for an unknown, and perhaps lengthy, period. Any such deferrals would inhibit our growth and would adversely affect our results of operations.
In a weak economic environment, particularly in a period of restrictive credit markets, we may experience greater difficulties in collecting payments from, and negotiating change orders and/or claims with, our clients due to, among other reasons, a diminution in our ultimate customers' access to the credit markets. If clients delay in paying or fail to pay a significant amount of our outstanding receivables, or we fail to successfully negotiate a significant portion of our change orders and/or claims with clients, it could have an adverse effect on our liquidity, results of operations and financial position.
Our business is vulnerable to the cyclical nature of the markets in which our clients operate and is dependent upon the timing and funding of new awards. We provide construction and maintenance services to ultimate customers operating in a number of markets which have been, and we expect will continue to be, cyclical and subject to significant fluctuations due to a variety of factors beyond our control, including economic conditions and changes in client spending.
Regardless of economic or market conditions, investment decisions by our ultimate customers may vary by location or as a result of other factors like the availability of labor, relative construction costs or competitive conditions in their industry. Because we are dependent on the timing and funding of new awards, we are therefore vulnerable to changes in our clients' markets and investment decisions. Our business has traditionally lagged recoveries in the general economy and, therefore, may not recover as quickly as the economy at large.
Our business may be adversely affected by significant delays and reductions in government appropriations. Federal legislation adopted in 2013 aimed at curtailing spending by federal agencies and departments and reducing the federal budget deficit has resulted in federal governmental agencies or departments deferring or canceling projects that we might otherwise have sought to perform. We expect that budgetary constraints and ongoing concerns regarding the U.S. national debt will continue to place downward pressure on spending levels of the U.S. government. In addition, significant budget deficits faced by state and local governments as a result of declining tax and other revenues may result in curtailment of future spending on their government infrastructure projects and/or expenditures. Some of our businesses derive a significant portion of their revenues from federal, state and local governmental bodies.
An increase in the prices of certain materials used in our businesses could adversely affect our businesses. We are exposed to market risk of fluctuations in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in all of our operations. We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet of over 8,500 vehicles. While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable. Additionally, our fixed price contracts do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to such projects.
Our industry is highly competitive. Our industry is served by numerous small, owner-operated private companies, a few public companies and several large regional companies. In addition, relatively few barriers prevent entry into most of our businesses. As a result, any organization that has adequate financial resources and access to technical expertise may become one of our competitors. Competition in our industry depends on numerous factors, including price. Certain of our competitors have lower overhead cost structures and, therefore, are able to provide their services at lower rates than we are currently able to provide. In addition, some of our competitors have greater resources than we do. We cannot be certain that our competitors will not develop the expertise, experience and resources necessary to provide services that are superior in quality and lower in price to ours. Similarly, we cannot be certain that we will be able to maintain or enhance our competitive position within the industry or maintain a customer base at current levels. We may also face competition from the in-house service organizations of existing or prospective customers, particularly with respect to building services. Many of our customers employ personnel who perform some of the same types of building services that we do. We cannot be certain that our existing or prospective customers will continue to outsource building services in the future.

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We are a decentralized company, which presents certain risks. While we believe decentralization has enhanced our growth and enabled us to remain responsive to opportunities and to our customers' needs, it necessarily places significant control and decision-making powers in the hands of local management. This presents various risks, including the risk that we may be slower or less able to identify or react to problems affecting a key business than we would in a more centralized environment.
Our business may also be affected by adverse weather conditions. Adverse weather conditions, particularly during the winter season, could impact our construction services operations as those conditions affect our ability to perform efficient work outdoors in certain regions of the United States and the United Kingdom. However, the absence of snow in the United States during the winter could cause us to experience reduced revenues in our United States building services segment, which has meaningful snow removal operations. In addition, cooler than normal temperatures during the summer months could reduce the need for our services, particularly in our businesses that provide or service air conditioning units, and result in reduced revenues and profitability during the period such unseasonal weather conditions persist.
Our business may be affected by the work environment. We perform our work under a variety of conditions, including but not limited to, difficult terrain, difficult site conditions and busy urban centers where delivery of materials and availability of labor may be impacted, clean-room environments where strict procedures must be followed, and sites which may have been exposed to environmental hazards. Performing work under these conditions can negatively affect efficiency and, therefore, our profitability.
Our dependence upon fixed price contracts could adversely affect our business. We currently generate, and expect to continue to generate, a significant portion of our revenues from fixed price contracts. We must estimate the total costs of a particular project to bid for fixed price contracts. The actual cost of labor and materials, however, may vary from the costs we originally estimated. These variations, along with other risks, inherent in performing fixed price contracts, may cause actual gross profits from projects to differ from those we originally estimated and could result in reduced profitability or losses on projects. Depending upon the size of a particular project, variations from the estimated contract costs can have a significant impact on our operating results for any fiscal quarter or year.
We could incur additional costs to cover guarantees. In some instances, we guarantee completion of a project by a specific date or price, cost savings, achievement of certain performance standards or performance of our services at a certain standard of quality. If we subsequently fail to meet such guarantees, we may be held responsible for costs resulting from such failures. Such a failure could result in our payment of liquidated or other damages. To the extent that any of these events occur, the total costs of a project could exceed the original estimated costs, and we would experience reduced profits or, in some cases, a loss.
Many of our contracts, especially our building services contracts for governmental and non-governmental entities, may be canceled on short notice, and we may be unsuccessful in replacing such contracts if they are canceled or as they are completed or expire. We could experience a decrease in revenues, net income and liquidity if any of the following occur:
•
customers cancel a significant number of contracts;
•
we fail to win a significant number of our existing contracts upon re-bid;
•
we complete a significant number of non-recurring projects and cannot replace them with similar projects; or
•
we fail to reduce operating and overhead expenses consistent with any decrease in our revenues.
We may be unsuccessful in generating internal growth. Our ability to generate internal growth will be affected by, among other factors, our ability to:
•
expand the range of services offered to customers to address their evolving needs;
•
attract new customers; and
•
increase the number of projects performed for existing customers.
In addition, existing and potential customers have reduced, and may continue to reduce, the number or size of projects available to us due to their inability to obtain capital or pay for services provided or because of general economic conditions. Many of the factors affecting our ability to generate internal growth are beyond our control, and we cannot be certain that our strategies will be successful or that we will be able to generate cash flow sufficient to fund our operations and to support internal growth. If we are not successful, we may not be able to achieve internal growth, expand operations or grow our business.
The departure of key personnel could disrupt our business. We depend on the continued efforts of our senior management. The loss of key personnel, or the inability to hire and retain qualified executives, could negatively impact our ability to manage our business. However, we have executive development and management succession plans in place in order to minimize any such negative impact.

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We may be unable to attract and retain skilled employees. Our ability to grow and maintain productivity and profitability will be limited by our ability to employ, train and retain skilled personnel necessary to meet our requirements. We are dependent upon our project managers and field supervisors who are responsible for managing our projects; and there can be no assurance that any individual will continue in his or her capacity for any particular period of time, and the loss of such qualified employees could have an adverse effect on our business. We cannot be certain that we will be able to maintain an adequate skilled labor force necessary to operate efficiently and to support our business strategy or that labor expenses will not increase as a result of a shortage in the supply of these skilled personnel. Labor shortages or increased labor costs could impair our ability to maintain our business or grow our revenues.
Our unionized workforce could adversely affect our operations, and we participate in many multiemployer union pension plans which could result in substantial liabilities being incurred . As of December 31, 2013, approximately 57% of our employees were covered by collective bargaining agreements. Although the majority of these agreements prohibit strikes and work stoppages, we cannot be certain that strikes or work stoppages will not occur in the future. However, only two of our collective bargaining agreements are national or regional in scope, and not all of our collective bargaining agreements expire at the same time. Strikes or work stoppages would adversely impact our relationships with our customers and could have a material adverse effect on our financial position, results of operations and cash flows. We contribute to over 200 multiemployer union pension plans based upon wages paid to our union employees that could result in our being responsible for a portion of the unfunded liabilities under such plans. Our potential liability for unfunded liabilities could be material. Under the Employee Retirement Income Security Act, we may become liable for our proportionate share of a multiemployer pension plan's underfunding, if we cease to contribute to that pension plan or significantly reduce the employees in respect of which we make contributions to that pension plan. See Note 14 - Retirement Plans of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data for additional information regarding multiemployer plans.
Fluctuating foreign currency exchange rates impact our financial results. We have foreign operations in the United Kingdom, which in 2013 accounted for 7% of our revenues. Our reported financial position and results of operations are exposed to the effects (both positive and negative) that fluctuating exchange rates have on the process of translating the financial statements of our United Kingdom operations, which are denominated in local currencies, into the U.S. dollar.
Our failure to comply with environmental laws could result in significant liabilities. Our operations are subject to various laws, including environmental laws and regulations, among which many deal with the handling and disposal of asbestos and other hazardous or universal waste products, PCBs and fuel storage. A violation of such laws and regulations may expose us to various claims, including claims by third parties, as well as remediation costs and fines. We own and lease many facilities. Some of these facilities contain fuel storage tanks, which may be above or below ground. If these tanks were to leak, we could be responsible for the cost of remediation as well as potential fines. As a part of our business, we also install fuel storage tanks and are sometimes required to deal with hazardous materials, all of which may expose us to environmental liability.
In addition, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or leaks, or the imposition of new clean-up requirements could require us to incur significant costs or become the basis for new or increased liabilities that could harm our financial position and results of operations, although certain of these costs might be covered by insurance. In some instances, we have obtained indemnification or covenants from third parties (including predecessors or lessors) for such clean-up and other obligations and liabilities that we believe are adequate to cover such obligations and liabilities. However, such third-party indemnities or covenants may not cover all of such costs or third-party indemnitors may default on their obligations. In addition, unanticipated obligations or liabilities, or future obligations and liabilities, may have a material adverse effect on our business operations. Further, we cannot be certain that we will be able to identify, or be indemnified for, all potential environmental liabilities relating to any acquired business.
Adverse resolution of litigation and other legal proceedings may harm our operating results or financial position. We are a party to lawsuits and other legal proceedings, most of which occur in the normal course of our business. Litigation and other legal proceedings can be expensive, lengthy and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable resolution of a particular legal proceeding could have a material adverse effect on our business, operating results, financial position, and in some cases, on our reputation or our ability to obtain projects from customers, including governmental entities. See Item 3. Legal Proceedings and Note 15 - Commitments and Contingencies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, for more information regarding legal proceedings in which we are involved.
Opportunities within the government sector could lead to increased governmental regulation applicable to us and unrecoverable startup costs. Most government contracts are awarded through a regulated competitive bidding process. As we pursue increased opportunities in the government arena, particularly in our building services segment, management's focus associated with the start-up and bidding process may be diverted away from other opportunities. If we are to be successful in being awarded additional government contracts, a significant amount of costs could be required before any revenues are realized from these contracts. In addition, as a government contractor we are subject to a number of procurement rules and other regulations, any deemed violation of which could lead to fines or penalties or a loss of business. Government agencies routinely audit and investigate government

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contractors. Government agencies may review a contractor's performance under its contracts, cost structure and compliance with applicable laws, regulations and standards. If government agencies determine through these audits or reviews that costs are improperly allocated to specific contracts, they will not reimburse the contractor for those costs or may require the contractor to refund previously reimbursed costs. If government agencies determine that we are engaged in improper activity, we may be subject to civil and criminal penalties and debarment or suspension from doing business with the government. Government contracts are also subject to renegotiation of profit by the government, termination by the government prior to the expiration of the term and non-renewal by the government.
A significant portion of our business depends on our ability to provide surety bonds. We may be unable to compete for or work on certain projects if we are not able to obtain the necessary surety bonds. Our construction contracts frequently require that we obtain from surety companies and provide to our customers payment and performance bonds as a condition to the award of such contracts. Such surety bonds secure our payment and performance obligations. Under standard terms in the surety market, surety companies issue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of additional collateral as a condition to issuing any bonds. Current or future market conditions, as well as changes in our sureties' assessment of our or their own operating and financial risk, could cause our surety companies to decline to issue, or substantially reduce the amount of, bonds for our work and could increase our bonding costs. These actions can be taken on short notice. If our surety companies were to limit or eliminate our access to bonding, our alternatives would include seeking bonding capacity from other surety companies, increasing business with clients that do not require bonds and posting other forms of collateral for project performance, such as letters of credit or cash. We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all. Accordingly, if we were to experience an interruption or reduction in the availability of bonding, we may be unable to compete for or work on certain projects.
We are effectively self-insured against many potential liabilities. Although we maintain insurance policies with respect to a broad range of risks, including automobile liability, general liability, workers' compensation and employee group health, these policies do not cover all possible claims and certain of the policies are subject to large deductibles. Accordingly, we are effectively self-insured for a substantial number of actual and potential claims. In addition, if any of our insurance carriers defaulted on its obligations to provide insurance coverage by reason of its insolvency or for other reasons, our exposure to claims would increase and our profits would be adversely affected. Our estimates for unpaid claims and expenses are based on known facts, historical trends and industry averages, utilizing the assistance of an actuary. We reflect these liabilities in our balance sheet as “Other accrued expenses and liabilities” and “Other long-term obligations.” The determination of such estimated liabilities and their appropriateness are reviewed and updated at least quarterly. However, these liabilities are difficult to assess and estimate due to many relevant factors, the effects of which are often unknown, including the severity of an injury or damage, the determination of liability in proportion to other parties, the timeliness of reported claims, the effectiveness of our risk management and safety programs and the terms and conditions of our insurance policies. Our accruals are based upon known facts, historical trends and our reasonable estimate of future expenses, and we believe such accruals are adequate. However, unknown or changing trends, risks or circumstances, such as increases in claims, a weakening economy, increases in medical costs, changes in case law or legislation or changes in the nature of the work we perform, could render our current estimates and accruals inadequate. In such case, adjustments to our balance sheet may be required and these increased liabilities would be recorded in the period that the experience becomes known. Insurance carriers may be unwilling, in the future, to provide our current levels of coverage without a significant increase in insurance premiums and/or collateral requirements to cover our obligations to them. Increased collateral requirements may be in the form of additional letters of credit, and an increase in collateral requirements could significantly reduce our liquidity. If insurance premiums increase, and/or if insurance claims are higher than our estimates, our profitability could be adversely affected.
Health care reform could adversely affect our operating results. In 2010, the United States government enacted comprehensive health care reform legislation. Due to the breadth and complexity of this legislation, as well as its phased-in nature of implementation, it is difficult for us to predict the overall effects it will have on our business over the coming years. To date, we have not experienced material costs related to the health care reform legislation; however, it is possible that our operating results and/or cash flows could be adversely affected in the future by increased costs, expanded liability exposure and requirements that change the ways we provide healthcare and other benefits to our employees.
We may incur liabilities or suffer negative financial impact relating to occupational, health and safety matters. Our operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace. While we have invested, and will continue to invest, substantial resources in our robust occupational, health and safety programs, our industry involves a high degree of operational risk, and there can be no assurance that we will avoid significant liability exposure. These hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment and other consequential damages and could lead to suspension of operations, large damage claims and, in extreme cases, criminal liability.
Our customers seek to minimize safety risks on their sites and they frequently review the safety records of contractors during the bidding process. If our safety record were to substantially deteriorate over time, we might become ineligible to bid on certain work and our customers could cancel our contracts and/or not award us future business.

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If we fail to integrate future acquisitions successfully, this could adversely affect our business and results of operations. As part of our growth strategy, we acquire companies that expand, complement and/or diversify our business. Realization of the anticipated benefits of an acquisition will depend, among other things, upon our ability to integrate the acquired business successfully with our other operations and gain greater efficiencies and scale that will translate into reduced costs in a timely manner. However, there can be no assurance that an acquisition we may make in the future will provide the benefits anticipated when entering into the transaction. Acquisitions we have made and future acquisitions may expose us to operational challenges and risks, including the diversion of management's attention from our existing business, the failure to retain key personnel or customers of the acquired business, the assumption of unknown liabilities of the acquired business for which there are inadequate reserves and the potential impairment of acquired identifiable intangible assets, including goodwill. Our ability to sustain our growth and maintain our competitive position may be affected by our ability to identify and acquire desirable businesses and successfully integrate any business acquired.
Our results of operations could be adversely affected as a result of goodwill and other identifiable intangible asset impairments. When we acquire a business, we record an asset called “goodwill” equal to the excess amount paid for the business, including liabilities assumed, over the fair value of the tangible and identifiable intangible assets of the business acquired. The Financial Accounting Standards Board (“FASB”) requires that all business combinations be accounted for using the acquisition method of accounting and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. FASB Accounting Standard Codification (“ASC”) Topic 350, “Intangibles-Goodwill and Other” (“ASC 350”) provides that goodwill and other identifiable intangible assets that have indefinite useful lives not be amortized, but instead must be tested at least annually for impairment, and identifiable intangible assets that have finite useful lives should continue to be amortized over their useful lives and be tested for impairment whenever facts and circumstances indicate that the carrying values may not be fully recoverable. ASC 350 also provides specific guidance for testing goodwill and other non-amortized identifiable intangible assets for impairment, which we test annually each October 1. ASC 350 requires management to make certain estimates and assumptions to allocate goodwill to reporting units and to determine the fair value of reporting unit net assets and liabilities. Such fair value is determined using discounted estimated future cash flows. Our development of the present value of future cash flow projections is based upon assumptions and estimates by management from a review of our operating results, business plans, anticipated growth rates and margins and the weighted average cost of capital, among others. Much of the information used in assessing fair value is outside the control of management, such as interest rates, and these assumptions and estimates can change in future periods. There can be no assurance that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset impairment testing will prove to be accurate predictions of the future. If our assumptions regarding business plans or anticipated growth rates and/or margins are not achieved, or there is a rise in interest rates, we may be required to record goodwill and/or identifiable intangible asset impairment charges in future periods, whether in connection with our next annual impairment testing on October 1, 2014 or earlier, if an indicator of an impairment is present prior to the quarter in which the annual goodwill impairment test is to be performed. It is not possible at this time to determine if any such additional impairment charge would result or, if it does, whether such a charge would be material to our results of operations.
We did not record an impairment of our goodwill or identifiable intangible assets for the year ended December 31, 2013.
Amounts included in our backlog may not result in actual revenues or translate into profits. Many contracts are subject to cancellation or suspension on short notice at the discretion of the client, and the contracts in our backlog are subject to changes in the scope of services to be provided as well as adjustments to the costs relating to the contract. We have historically experienced variances in the components of backlog related to project delays or cancellations resulting from weather conditions, external market factors and economic factors beyond our control, and we may experience more delays or cancellations in the future. The risk of contracts in backlog being cancelled or suspended generally increases during periods of widespread slowdowns. Accordingly, there is no assurance that backlog will actually be realized. If our backlog fails to materialize, we could experience a reduction in revenues and a decline in profitability, which could result in a deterioration of our financial position and liquidity.
We account for the majority of our construction projects using the percentage-of-completion method of accounting; therefore, variations of actual results from our assumptions may reduce our profitability. We recognize revenues on construction contracts using the percentage-of-completion method of accounting in accordance with ASC Topic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts”. See Application of Critical Accounting Policies in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Under the percentage-of-completion method of accounting, we record revenue as work on the contract progresses. The cumulative amount of revenues recorded on a contract at a specified point in time is that percentage of total estimated revenues that costs incurred to date bear to estimated total costs. Accordingly, contract revenues and total cost estimates are reviewed and revised as the work progresses. Adjustments are reflected in contract revenues in the period when such estimates are revised. Estimates are based on management's reasonable assumptions and experience, but are only estimates. Variations of actual results from assumptions on an unusually large project or on a number of average size projects could be material. We are also required to immediately recognize the full amount of the estimated loss on a contract when estimates indicate such a loss. Such adjustments and accrued losses could result in reduced profitability, which could negatively impact our cash flow from operations.

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The loss of one or a few customers could have an adverse effect on us. A few clients have in the past and may in the future account for a significant portion of our revenues in any one year or over a period of several consecutive years. Although we have long-standing relationships with many of our significant clients, our clients may unilaterally reduce, fail to renew or terminate their contracts with us at any time. A loss of business from a significant client could have a material adverse effect on our business, financial position, and results of operations.
Certain provisions of our corporate governance documents could make an acquisition of us, or a substantial interest in us, more difficult. The following provisions of our certificate of incorporation and bylaws, as currently in effect, as well as Delaware law, could discourage potential proposals to acquire us, delay or prevent a change in control of us, or limit the price that investors may be willing to pay in the future for shares of our common stock:
•
our certificate of incorporation permits our board of directors to issue “blank check” preferred stock and to adopt amendments to our bylaws;
•
our bylaws contain restrictions regarding the right of our stockholders to nominate directors and to submit proposals to be considered at stockholder meetings;
•
our certificate of incorporation and bylaws limit the right of our stockholders to call a special meeting of stockholders and to act by written consent; and
•
we are subject to provisions of Delaware law, which prohibit us from engaging in any of a broad range of business transactions with an “interested stockholder” for a period of three years following the date such stockholder becomes classified as an interested stockholder.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES                 
Our operations are conducted primarily in leased properties. The following table lists facilities over 50,000 square feet, both leased and owned, and identifies the business segment that is the principal user of each such facility.
 
 
Approximate Square Feet
 
Lease Expiration Date, Unless Owned 
1168 Fesler Street
El Cajon, California (b)
67,560

 
8/31/2020
22302 Hathaway Avenue
Hayward, California (b)
105,000

 
7/31/2016
4462 Corporate Center Drive
Los Alamitos, California (a)
57,863

 
12/31/2019
18111 South Santa Fe Avenue
Rancho Dominguez, California (d)
66,246

 
12/31/2016
940 Remillard Court
San Jose, California (c)
119,560

 
7/31/2017
5101 York Street
Denver, Colorado (b)
77,553

 
2/28/2015
345 Sheridan Boulevard
Lakewood, Colorado (a)
63,000

 
Owned
3100 Woodcreek Drive
Downers Grove, Illinois (a)
56,551

 
7/31/2017
2219 Contractors Drive
Fort Wayne, Indiana (b)
175,000

 
7/31/2023
7614 and 7720 Opportunity Drive
Fort Wayne, Indiana (b)
144,695

 
10/31/2018
2655 Garfield Avenue
Highland, Indiana (a)
57,765

 
6/30/2019
4250 Highway 30
St. Gabriel, Louisiana (d)
90,000

 
Owned
1750 Swisco Road
Sulphur, Louisiana (d)
112,000

 
Owned
111-01 and 111-21 14th Avenue
College Point, New York (a)
72,813

 
2/28/2021
70 Schmitt Boulevard
Farmingdale, New York (b)
76,380

 
7/31/2026
Two Penn Plaza
New York, New York (a)
55,891

 
1/31/2016
2102 Tobacco Road
Durham, North Carolina (b)
55,944

 
9/30/2015
2900 Newpark Drive
Norton, Ohio (b)
91,831

 
11/1/2017
1800 Markley Street
Norristown, Pennsylvania (c)
93,000

 
9/30/2021
227 Trade Court
Aiken, South Carolina (b)
66,000

 
9/30/2016
6045 East Shelby Drive
Memphis, Tennessee (c)
53,618

 
4/30/2018
937 Pine Street
Beaumont, Texas (d)
78,962

 
Owned
895 North Main Street
Beaumont, Texas (d)
75,000

 
Owned
410 Flato Road
Corpus Christi, Texas (d)
57,000

 
Owned

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Approximate Square Feet
 
Lease Expiration Date, Unless Owned 
5550 Airline Drive and 25 Tidwell Road
Houston, Texas (b)
97,936

 
12/31/2014
12415 Highway 225
La Porte, Texas (d)
78,000

 
Owned
2455 West 1500 South
Salt Lake City, Utah (a)
58,339

 
3/31/2018
We believe that our property, plant and equipment are well maintained, in good operating condition and suitable for the purposes for which they are used.
See Note 15 - Commitments and Contingencies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data for additional information regarding lease costs. We utilize substantially all of our leased or owned facilities and believe there will be no difficulty either in negotiating the renewal of our real property leases as they expire or in finding alternative space, if necessary.
 
 
(a)
Principally used by a company engaged in the “United States electrical construction and facilities services” segment.
(b)
Principally used by a company engaged in the “United States mechanical construction and facilities services” segment.
(c)
Principally used by a company engaged in the “United States building services” segment.
(d)
Principally used by a company engaged in the “United States industrial services” segment.
ITEM 3. LEGAL PROCEEDINGS
One of our subsidiaries, USM, Inc. ("USM"), doing business in California provides, among other things, janitorial services to its customers by having those services performed by independent janitorial companies. USM and one of its customers, which owns retail stores (the “Customer”), are co-defendants in a federal class action lawsuit brought by employees of two of USM’s California local janitorial contractors. The action captioned Federico Vilchiz Vasquez, Jesus Vilchiz Vasquez, Francisco Domingo Claudio, for themselves and all others similarly situated vs. USM, Inc. dba USM Services, Inc., a Pennsylvania Corporation, et al., was commenced on September 5, 2013 in a Superior Court of California and was removed by USM on November 22, 2013 to the United States District Court for the Northern District of California. The employees allege in their complaint, among other things, that USM and the Customer violated a California statute that prohibits USM from entering into a contract with a janitorial contractor when it knows or should know that the contract does not include funds sufficient to allow the janitorial contractor to comply with all local, state and federal laws or regulations governing the labor or services to be provided. The employees have asserted that the amounts USM pays to its janitorial contractors are insufficient to allow those janitorial contractors to meet their obligations regarding, among other things, wages due for all hours their employees worked, minimum wages and overtime pay. These employees seek to represent not only themselves, but also all other individuals who provided janitorial services at the Customer’s stores in California during the relevant four year time period. We do not believe USM or the Customer has violated the California statute or that the employees may bring the action as a class action on behalf of other employees of janitorial companies with whom USM contracted for the provision of janitorial services to the Customer. However, if the pending lawsuit is certified as a class action and USM is found to have violated the California statute, USM might have to pay significant damages and might be subject to similar lawsuits regarding the provision of janitorial services to its other customers in California. The plaintiffs seek a declaratory judgment that USM has violated the California statute, monetary damages, including all unpaid wages and thereon, restitution for unpaid wages, and an award of attorney fees and costs.
We are involved in several other proceedings in which damages and claims have been asserted against us. Other potential claims may exist that have not yet been asserted against us. We believe that we have a number of valid defenses to such proceedings and claims and intend to vigorously defend ourselves. We do not believe that any such matters will have a material adverse effect on our financial position, results of operations or liquidity. Litigation is subject to many uncertainties and the outcome of litigation is not predictable with assurance. It is possible that some litigation matters for which reserves have not been established could be decided unfavorably to us, and that any such unfavorable decisions could have a material adverse effect on our financial position, results of operations or liquidity.

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ITEM 4. MINE SAFETY DISCLOSURES
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this Form 10-K.

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EXECUTIVE OFFICERS OF THE REGISTRANT
Anthony J. Guzzi, Age 49; President since October 25, 2004 and Chief Executive Officer since January 3, 2011. From October 25, 2004 to January 2, 2011, Mr. Guzzi served as Chief Operating Officer of the Company. From August 2001, until he joined the Company, Mr. Guzzi served as President of the North American Distribution and Aftermarket Division of Carrier Corporation (“Carrier”). Carrier is a manufacturer and distributor of commercial and residential HVAC and refrigeration systems and equipment and a provider of after-market services and components of its own products and those of other manufacturers in both the HVAC and refrigeration industries. Mr. Guzzi is also a member of our Board of Directors.
Sheldon I. Cammaker, Age 74; Executive Vice President and General Counsel of the Company since September 1987 and Secretary of the Company since May 1997. Prior to September 1987, Mr. Cammaker was a senior partner of the New York City law firm of Botein, Hays & Sklar.
R. Kevin Matz, Age 55; Executive Vice President-Shared Services of the Company since December 2007 and Senior Vice President-Shared Services from June 2003 to December 2007. From April 1996 to June 2003, Mr. Matz served as Vice President and Treasurer of the Company and Staff Vice President-Financial Services of the Company from March 1993 to April 1996.
Mark A. Pompa, Age 49; Executive Vice President and Chief Financial Officer of the Company since April 3, 2006. From June 2003 to April 2, 2006, Mr. Pompa was Senior Vice President-Chief Accounting Officer of the Company, and from June 2003 to January 2007, Mr. Pompa was also Treasurer of the Company. From September 1994 to June 2003, Mr. Pompa was Vice President and Controller of the Company.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information. Our common stock trades on the New York Stock Exchange under the symbol “EME”.
The following table sets forth high and low sales prices for our common stock for the periods indicated as reported by the New York Stock Exchange:
 
2013
High
 
Low
First Quarter
$
42.69

 
$
34.42

Second Quarter
$
42.34

 
$
35.58

Third Quarter
$
43.98

 
$
37.19

Fourth Quarter
$
42.61

 
$
36.26

 
2012
High
 
Low
First Quarter
$
30.91

 
$
26.32

Second Quarter
$
30.52

 
$
25.68

Third Quarter
$
30.52

 
$
25.32

Fourth Quarter
$
34.95

 
$
27.91

Holders. As of February 20, 2014 , there were approximately 151 stockholders of record and, as of that date, we estimate there were approximately 30,769 beneficial owners holding our common stock in nominee or “street” name.
Dividends. We have paid quarterly dividends since October 25, 2011. During 2012, we paid a regular quarterly dividend of $0.05 per common share, and on December 7, 2012, our Board of Directors declared a special dividend of $0.25 per share, payable in December 2012, and announced its intention to increase the regular quarterly dividend to $0.06 per share. In addition, at the December 7, 2012 meeting of our Board of Directors, the regular quarterly dividend that would have been paid in January 2013 was declared, its amount increased to $0.06 per share and its payment date accelerated to December 28, 2012. During 2013, we paid a regular quarterly dividend of $0.06 per share in the second, third and fourth quarters of 2013. In December 2013, our Board of Directors announced its intention to increase the regular quarterly dividend to $0.08 per share commencing with the dividend to be paid in the first quarter of 2014. We expect that such quarterly dividends will be paid in the foreseeable future. Our credit agreement places limitations on the payment of dividends on our common stock. However, we do not believe that the terms of the credit agreement materially limit our ability to pay a quarterly dividend of $0.08 per share for the foreseeable future.











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Securities Authorized for Issuance Under Equity Compensation Plans. The following table summarizes, as of December 31, 2013, certain information regarding equity compensation plans that were approved by stockholders and equity compensation plans that were not approved by stockholders. The information in the table and in the Notes thereto has been adjusted for stock splits.
 
 
Equity Compensation Plan Information
 
 
 
A
 
B
 
C
 
Plan Category
 
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights
 
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights
 
Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column A)
 
Equity Compensation Plans Approved by Security Holders
 
1,917,081

(1)  
$
12.03

(1)  
2,247,362

(2)  
Equity Compensation Plans Not Approved by Security Holders
 
71,000

(3)  
$
9.67

 
—

 
Total
 
1,988,081

 
$
11.94

 
2,247,362

 
_________
 
(1)
Included within this amount are 677,384 restricted stock units awarded to our non-employee directors and employees. The weighted average exercise price would have been $18.60 had the weighted average exercise price calculation excluded such restricted stock units.
(2)
Represents shares of our common stock available for future issuance under our 2010 Incentive Plan (the "2010 Plan"), which may be issuable in respect of options and/or stock appreciation rights granted under the 2010 Plan and/or may also be issued pursuant to the award of restricted stock, unrestricted stock and/or awards that are valued in whole or in part by reference to, or are otherwise based on the fair market value of, our common stock.
(3)
Represents shares of our common stock that may be issued upon the exercise of options to an executive officer.
Stock Options. Certain stock options, which have been adjusted for stock splits, were awarded pursuant to an individual compensation arrangement with Mr. Anthony Guzzi, our President and Chief Executive Officer, when he first joined the Company, that were not approved by stockholders. These options were granted to Mr. Anthony Guzzi on October 25, 2004 and have an exercise price of $9.67 per share. The options have a term of ten years from their grant date, an exercise price per share equal to the fair market value of a share of common stock on their grant date, and are currently exercisable.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
The following table summarizes repurchases of our common stock made during the quarter ended December 31, 2013 by us:  
Period
Total Number of
Shares Purchased (1)
Average Price
Paid Per Share
Total Number of
Shares Purchased as Part
of Publicly Announced
Plans or Programs
Maximum Number
(or Approximate Dollar Value)
of Shares That May Yet be
Purchased Under
the Plan or Programs
 
 
 
 
 
October 1, 2013 to
October 31, 2013
82,486

$37.24
82,486

$40,492,572
November 1, 2013 to
November 30, 2013
484,042

$37.15
484,042

$22,495,025
December 1, 2013 to
December 31, 2013
None

None
None

$122,495,025
_________
 
(1)
On September 26, 2011, we announced that our Board of Directors had authorized us to repurchase up to $100.0 million of our outstanding common stock, and on December 31, 2013, there remained authorization for us to repurchase approximately $22.5 million of our shares under that authorization. On December 5, 2013, we announced that our Board of Directors had authorized us to repurchase up to an additional $100.0 million of our outstanding common stock. As a result, $122.5 million was available for repurchase as of December 31, 2013. No shares have been repurchased since the programs have been announced other than pursuant to these publicly announced programs. Acquisitions under our repurchase programs may be made from time to time as permitted by securities laws and other legal requirements.


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ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data has been derived from our audited financial statements and should be read in conjunction with the consolidated financial statements, the related notes thereto and the report of our independent registered public accounting firm thereon included elsewhere in this and our previously filed annual reports on Form 10-K.
See Note 3 - Acquisitions of Businesses and Note 4 - Disposition of Assets of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data for a discussion regarding acquisitions and dispositions. The results of operations for all periods presented reflect discontinued operations accounting due to the disposition in August 2011 of our Canadian subsidiary.
Income Statement Data
(In thousands, except per share data)
 
 
Years Ended December 31,
 
2013
 
2012
 
2011
 
2010
 
2009
Revenues
$
6,417,158

 
$
6,346,679

 
$
5,613,459

 
$
4,851,953

 
$
5,227,699

Gross profit
813,058

 
806,354

 
733,949

 
693,523

 
784,225

Impairment loss on goodwill and identifiable intangible assets
—

 
—

 
3,795

 
246,081

 
13,526

Operating income (loss)
210,292

 
249,967

 
210,793

 
(26,528
)
 
250,122

Net income (loss) attributable to EMCOR Group, Inc.
$
123,792

 
$
146,584

 
$
130,826

 
$
(86,691
)
 
$
160,756

 
 
 
 

 
 

 
 

 
 

Basic earnings (loss) per common share:
 
 
 

 
 

 
 

 
 

From continuing operations
$
1.85

 
$
2.20

 
$
1.82

 
$
(1.30
)
 
$
2.31

From discontinued operations
—

 
—

 
0.14

 
(0.01
)
 
0.13

 
$
1.85

 
$
2.20

 
$
1.96

 
$
(1.31
)
 
$
2.44

 
 
 
 

 
 

 
 

 
 

Diluted earnings (loss) per common share:
 
 
 

 
 

 
 

 
 

From continuing operations
$
1.82

 
$
2.16

 
$
1.78

 
$
(1.30
)
 
$
2.25

From discontinued operations
—

 
—

 
0.13

 
(0.01
)
 
0.13

 
$
1.82

 
$
2.16

 
$
1.91

 
$
(1.31
)
 
$
2.38

 
 
 
 
 
 
 
 
 
 
Balance Sheet Data
(In thousands) 
 
As of December 31,   
 
2013
 
2012
 
2011
 
2010
 
2009
Equity (1)
$
1,479,626

 
$
1,357,179

 
$
1,245,131

 
$
1,162,845

 
$
1,226,466

Total assets
3,465,915

 
3,107,070

 
3,014,076

 
2,755,542

 
2,981,894

Goodwill
834,825

 
566,588

 
566,805

 
406,804

 
593,628

Borrowings under revolving credit facility
—

 
150,000

 
150,000

 
150,000

 
—

Term loan, including current maturities
350,000

 
—

 
—

 
—

 
194,750

Other long-term debt, including current maturities
11

 
18

 
—

 
24

 
—

Capital lease obligations, including current maturities
$
4,652

 
$
5,881

 
$
4,857

 
$
1,649

 
$
601

 
  _______
(1)
We have paid quarterly dividends since October 25, 2011. During 2012, we paid a regular quarterly dividend of $0.05 per common share, and on December 7, 2012, our Board of Directors declared a special dividend of $0.25 per share, payable in December 2012, and announced its intention to increase the regular quarterly dividend to $0.06 per share. In addition, at the December 7, 2012 meeting of our Board of Directors, the regular quarterly dividend that would have been paid in January 2013 was declared, its amount increased to $0.06 per share and its payment date accelerated to December 28, 2012. During 2013, we paid a regular quarterly dividend of $0.06 per share in the second, third and fourth quarters of 2013. In December 2013, our Board of Directors announced its intention to increase the regular quarterly dividend to $0.08 per share commencing with the dividend to be paid in the first quarter of 2014. Prior to October 25, 2011, no cash dividends had been paid on the Company's common stock.

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Table of Contents

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We are one of the largest electrical and mechanical construction and facilities services firms in the United States. In addition, we provide a number of building services and industrial services. Our services are provided to a broad range of commercial, industrial, utility and institutional customers through approximately 70 operating subsidiaries and joint venture entities. We had conducted business in Canada through an indirect wholly owned subsidiary. We sold our Canadian subsidiary in August 2011.
During the third quarter of 2013, we completed the acquisition of RepconStrickland, Inc. (“RSI”), a leading provider of turnaround and specialty services to the North American refinery and petrochemical markets. In connection with the acquisition of RSI and to reflect changes in our internal reporting structure and the information used by management to make operating decisions and assess performance, we created a new segment that includes RSI and certain businesses that had been part of our United States facilities services segment. The new segment is called the United States industrial services segment and the segment formerly named the United States facilities services segment has been renamed the United States building services segment.
Our reportable segments have been restated in all periods presented to reflect the changes in our segments referred to above. The segment formally named the United Kingdom construction and facilities services segment has been renamed the United Kingdom construction and building services segment. In addition, the results of operations for all periods presented reflect: (a) discontinued operations accounting due to the disposition in August 2011 of our Canadian subsidiary and (b) certain reclassifications of prior period amounts from our United States building services segment to our United States mechanical construction and facilities services segment due to changes in our internal reporting structure.
Overview
The following table presents selected financial data for the fiscal years ended December 31, 2013 and 2012 (in thousands, except percentages and per share data):
 
 
2013
 
2012
Revenues
$
6,417,158

 
$
6,346,679

Revenues increase from prior year
1.1
%
 
13.1
%
Operating income
$
210,292

 
$
249,967

Operating income as a percentage of revenues
3.3
%
 
3.9
%
Income from continuing operations
$
127,354

 
$
148,886

Net income attributable to EMCOR Group, Inc.
$
123,792

 
$
146,584

Diluted earnings per common share from continuing operations
$
1.82

 
$
2.16

During 2013, we made two strategic decisions to position ourselves for long-term growth and improved profitability. We completed the acquisition of RSI during the third quarter of 2013. This acquisition will expand and further strengthen our service offerings to new and existing customers and enhance our position within the industrial services and energy market sectors. In addition, due to recurring losses over the last several years from the construction operations of our United Kingdom construction and building services segment and our negative assessment of construction market conditions in the United Kingdom for the foreseeable future, we announced our decision to withdraw from the construction market in the United Kingdom.
Although revenues for 2013 slightly increased compared to 2012, operating income and operating margin (operating income as a percentage of revenues) decreased in 2013 compared to 2012. The increase in 2013 revenues compared to 2012 was primarily attributable to $133.3 million in revenues from companies acquired in 2013, which are reported in our United States industrial services segment and our United States mechanical construction and facilities services segment. Excluding the impact of these acquisitions, most of our segments reported lower revenues in 2013, with the largest decline in revenues from our United Kingdom construction and building services segment. The decrease in 2013 revenues within the United Kingdom construction and building services segment is due to our decision earlier this year to withdraw from the United Kingdom construction market. These decreases were partially offset by higher revenues from our United States electrical construction and facilities services segment.
Both operating income and operating margin in 2013 were below that of 2012 due to: (a) declines in operating income and operating margin from our United States mechanical construction and facilities services segment, primarily as a result of poor performance by one of our subsidiaries at two projects located in the southeastern United States (resulting in aggregate losses of approximately $24.5 million) and (b) operating losses and restructuring expenses of $30.1 million related to the construction operations reported in our United Kingdom construction and building services segment. Offsetting this unfavorable performance in 2013 were improved operating results in our United States building services segment. Companies acquired in 2013, which are reported in our United States industrial segment and our United States mechanical construction and facilities services segment,

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contributed $2.0 million to operating income, net of $5.8 million of amortization expense associated with identifiable intangible assets.
As previously discussed, we completed the acquisition of RSI during 2013, and its results have been included in our United States industrial services segment since its acquisition. In addition, we completed two other acquisitions during 2013, and their results have been included in our United States mechanical construction and facilities services segment. All of these businesses expand our service capabilities into new technical areas.
Operating Segments
Our reportable segments have been restated in all periods presented to reflect the changes in our segments referred to above. The segment formally named the United Kingdom construction and facilities services segment has been renamed the United Kingdom construction and building services segment. In addition, the results of operations for all periods presented reflect: (a) discontinued operations accounting due to the disposition in August 2011 of our Canadian subsidiary and (b) certain reclassifications of prior period amounts from our United States building services segment to our United States mechanical construction and facilities services segment due to changes in our internal reporting structure.
We have the following reportable segments which provide services associated with the design, integration, installation, start-up, operation and maintenance of various systems: (a) United States electrical construction and facilities services (involving systems for electrical power transmission and distribution; premises electrical and lighting systems; low-voltage systems, such as fire alarm, security and process control; voice and data communication; roadway and transit lighting; and fiber optic lines); (b) United States mechanical construction and facilities services (involving systems for heating, ventilation, air conditioning, refrigeration and clean-room process ventilation; fire protection; plumbing, process and high-purity piping; controls and filtration; water and wastewater treatment; central plant heating and cooling; cranes and rigging; millwrighting; and steel fabrication, erection and welding); (c) United States building services; (d) United States industrial services; and (e) United Kingdom construction and building services. The segment “United States building services” principally consists of those operations which provide a portfolio of services needed to support the operation and maintenance of customers' facilities (commercial and government site-based operations and maintenance; facility maintenance and services; outage services to utilities and industrial plants; military base operations support services; mobile maintenance and services; floor care and janitorial services; landscaping, lot sweeping and snow removal; facilities management; vendor management; call center services; installation and support for building systems; program development, management and maintenance for energy systems; technical consulting and diagnostic services; infrastructure and building projects for federal, state and local governmental agencies and bodies; small modification and retrofit projects; and retrofit projects to comply with clean air laws), which services are not generally related to customers' construction programs. The segment "United States industrial services" principally consists of those operations which provide industrial maintenance and services, mainly for refineries and petrochemical plants, including on-site repairs, maintenance and service of heat exchangers, towers, vessels and piping; design, manufacturing, repair and hydro blast cleaning of shell and tube heat exchangers and related equipment; refinery turnaround planning and engineering services; specialty welding services; overhaul and maintenance of critical process units in refineries and petrochemical plants; and specialty technical services for refineries and petrochemical plants. The United Kingdom construction and building services segment performs electrical construction, mechanical construction and building services. In August 2011, we sold our Canadian subsidiary, which represented our Canada construction segment and which performed electrical construction and mechanical construction.

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Discussion and Analysis of Results of Operations
2013 versus 2012
Revenues
As described in more detail below, revenues for 2013 were $6.4 billion compared to $6.3 billion for 2012. The increase in revenues for 2013 was primarily attributable to: (a) incremental revenues of approximately $133.3 million generated by companies acquired in 2013, which are reported in our United States industrial services segment and our United States mechanical construction and facilities services segment and (b) higher revenues from our United States electrical construction and facilities services segment, partially offset by lower revenues from our United Kingdom construction and building services segment and our United States mechanical construction and facilities services segment, excluding the effect of acquisitions in 2013. We continue to be disciplined by only accepting work in a very competitive marketplace that we believe can be performed at reasonable margins.
The following table presents our revenues for each of our operating segments and the approximate percentages that each segment's revenues were of total revenues for the years ended December 31, 2013 and 2012 (in thousands, except for percentages):
 
 
2013
 
% of
Total  
 
2012
 
% of
Total  
Revenues from unrelated entities:
 
 
 
 
 
 
 
United States electrical construction and facilities services
$
1,345,750

 
21
%
 
$
1,211,692

 
19
%
United States mechanical construction and facilities services
2,329,834

 
36
%
 
2,386,498

 
38
%
United States building services
1,794,978

 
28
%
 
1,807,917

 
28
%
United States industrial services
519,413

 
8
%
 
401,793

 
6
%
Total United States operations
5,989,975

 
93
%
 
5,807,900

 
92
%
United Kingdom construction and building services
427,183

 
7
%
 
538,779

 
8
%
Total worldwide operations
$
6,417,158

 
100
%
 
$
6,346,679

 
100
%
 
 
 
 
 
 
 
 
Revenues of our United States electrical construction and facilities services segment were $1,345.8 million for the year ended December 31, 2013 compared to revenues of $1,211.7 million for the year ended December 31, 2012. This increase in revenues was primarily attributable to higher levels of work from commercial, institutional, manufacturing and transportation construction projects, primarily in the Southern California and New York City markets, partially offset by a decrease in revenues from water and wastewater construction projects.
Our United States mechanical construction and facilities services segment revenues for the year ended December 31, 2013 were $2,329.8 million, a $56.7 million decrease compared to revenues of $2,386.5 million for the year ended December 31, 2012. This decrease in revenues was primarily attributable to declines in revenues from institutional, healthcare and water and wastewater construction projects. In addition, this segment’s results for 2012 included approximately $224.0 million of revenues attributable to a large manufacturing project compared to $23.1 million of revenues recognized on the same project in 2013. These decreases were partially offset by an increase in revenues from other manufacturing construction projects and incremental revenues of approximately $9.7 million generated by companies acquired in 2013.
Revenues of our United States building services segment were $1,795.0 million and $1,807.9 million in 2013 and 2012, respectively. This decrease in revenues was primarily attributable to a reduction in revenues from our government site-based services and our commercial site-based services, partially offset by an increase in revenues from our energy services and our mobile mechanical services. The decrease in revenues from our government site-based services was primarily due to a reduction in discretionary government project spending and the loss in 2012 of certain maintenance contracts, and the decrease in our commercial site-based services was primarily due to the termination of certain unprofitable contracts. The increase in revenues from our energy services was due to large project work, and the increase in revenues from our mobile mechanical services was due to higher project and services revenues.
Revenues of our United States industrial services segment for the year ended December 31, 2013 increased by $117.6 million compared to the year ended December 31, 2012. This increase in revenues was primarily due to the $123.6 million of incremental revenues generated by RSI. Excluding the results of this acquisition, revenues decreased from turnaround and maintenance services work performed compared to revenues in 2012. The results in 2012 benefited from the favorable impact of three large non-recurring turnaround and repair projects.

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Our United Kingdom construction and building services segment revenues were $427.2 million in 2013 compared to $538.8 million in 2012. This decrease in revenues was attributable to a reduction in our construction operations in the United Kingdom, as a consequence of both weak market conditions and our decision earlier this year to withdraw from the construction market in the United Kingdom. This decision was based on recurring losses over the last several years in the construction operations of our United Kingdom segment and our negative assessment of construction market conditions in the United Kingdom for the foreseeable future. This decrease in revenues was also attributable to: (a) lower revenues within this segment’s building services business as a result of reduced activity in the commercial and transportation markets and (b) a decrease of $6.4 million relating to the effect of unfavorable exchange rates for the British pound versus the United States dollar.
Backlog
The following table presents our operating segment backlog from unrelated entities and their respective percentages of total backlog (in thousands, except for percentages):
 
December 31, 2013
 
% of
Total
 
December 31, 2012
 
% of
Total
Backlog:
 
 
 
 
 
 
 
United States electrical construction and facilities services
$
993,919

 
30
%
 
$
831,910

 
25
%
United States mechanical construction and facilities services
1,325,941

 
39
%
 
1,357,892

 
40
%
United States building services
761,855

 
23
%
 
841,882

 
25
%
United States industrial services
94,187

 
3
%
 
99,532

 
3
%
Total United States operations
3,175,902

 
94
%
 
3,131,216

 
93
%
United Kingdom construction and building services
185,220

 
6
%
 
243,169

 
7
%
Total worldwide operations
$
3,361,122

 
100
%
 
$
3,374,385

 
100
%
Our backlog at December 31, 2013 was $3.36 billion compared to $3.37 billion at December 31, 2012. This slight decrease in backlog was primarily attributable to lower backlog within most of our segments, partially offset by an increase in backlog from our United States electrical construction and facilities services segment. Backlog increases with awards of new contracts and decreases as we perform work on existing contracts. Backlog is not a term recognized under United States generally accepted accounting principles; however, it is a common measurement used in our industry. We include a project within our backlog at such time as a contract is awarded. Backlog includes unrecognized revenues to be realized from uncompleted construction contracts plus unrecognized revenues expected to be realized over the remaining term of services contracts. However, we do not include in backlog contracts for which we are paid on a time and material basis, and if the remaining term of a services contract exceeds 12 months, the unrecognized revenues attributable to such contract included in backlog are limited to only the next 12 months of revenues provided for in the initial contract award. Our backlog also includes amounts related to services contracts for which a fixed price contract value is not assigned; however, a reasonable estimate of total revenues can be made from budgeted amounts agreed to with our customer. Our backlog is comprised of: (a) original contract amounts, (b) change orders for which we have received written confirmations from our customers, (c) pending change orders for which we expect to receive confirmations in the ordinary course of business and (d) claim amounts that we have made against customers for which we have determined we have a legal basis under existing contractual arrangements and as to which we consider collection to be probable. Claim amounts recorded were immaterial for all periods presented. Our backlog does not include anticipated revenues from unconsolidated joint ventures or variable interest entities and anticipated revenues from pass-through costs on contracts for which we are acting in the capacity of an agent and which are reported on the net basis. We believe our backlog is firm, although many contracts are subject to cancellation at the election of our customers. Historically, cancellations have not had a material adverse effect on us.
Cost of sales and Gross profit
The following table presents cost of sales, gross profit (revenues less cost of sales), and gross profit margin (gross profit as a percentage of revenues) for the years ended December 31, 2013 and 2012 (in thousands, except for percentages):  
 
2013
 
2012
Cost of sales
$
5,604,100

 
$
5,540,325

Gross profit
$
813,058

 
$
806,354

Gross profit margin
12.7
%
 
12.7
%
Our gross profit for the year ended December 31, 2013 was $813.1 million, a $6.7 million increase compared to the gross profit of $806.4 million for the year ended December 31, 2012. The increase in gross profit was primarily attributable to: (a) increases in gross profit from our United States building services segment and our United States industrial services segment, excluding the

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gross profit from a company acquired in 2013, (b) companies acquired in 2013 reported within our United States industrial services segment and our United States mechanical construction and facilities services segment, which contributed approximately $23.0 million to gross profit, and (c) the receipt of an insurance recovery of approximately $2.6 million during the first quarter of 2013 associated with a previously disposed of operation, which is classified as a component of "Cost of sales" on the Consolidated Statements of Operations. Gross profit was negatively impacted by a decrease in gross profit from: (a) our United States mechanical construction and facilities services segment, as a consequence of aggregate losses of approximately $24.5 million from one of our subsidiaries at two projects located in the southeastern United States and (b) our United Kingdom construction and building services segment.
Our gross profit margin was 12.7% for both 2013 and 2012. Gross profit margin for the year ended December 31, 2013 increased in our United States building services segment and our United States industrial services segment primarily due to improved project execution and the termination of certain unprofitable contracts. Gross profit margin decreased in all our other reportable segments. Gross profit margin declined in our United States mechanical construction and facilities services segment and our United Kingdom construction and building services segment due to construction contract losses, resulting in a 0.8% impact on consolidated gross profit margin. Gross profit margin in 2013 in our United States electrical construction and facilities services segment declined as 2012 gross profit margin had benefited from the resolution of construction claims, resulting in approximately $9.5 million of gross profit.
Selling, general and administrative expenses
The following table presents selling, general and administrative expenses, and selling, general and administrative expenses as a percentage of revenues, for the years ended December 31, 2013 and 2012 (in thousands, except for percentages):  
 
2013
 
2012
Selling, general and administrative expenses
$
591,063

 
$
556,242

Selling, general and administrative expenses as a percentage of revenues
9.2
%
 
8.8
%
Our selling, general and administrative expenses for the year ended December 31, 2013 were $591.1 million, a $34.8 million increase compared to selling, general and administrative expenses of $556.2 million for the year ended December 31, 2012. Selling, general and administrative expenses as a percentage of revenues were 9.2% and 8.8% for the years ended December 31, 2013 and 2012, respectively. This increase in selling, general and administrative expenses primarily resulted from: (a) $21.0 million of expenses directly related to companies acquired in 2013, including amortization expense attributable to identifiable intangible assets of $5.8 million, (b) $6.1 million of transaction costs associated with the acquisition of RSI and (c) higher legal and other professional fees. In addition, we recognized for the years ended December 31, 2013 and 2012, respectively, $6.8 million and $6.4 million of income attributable to the reversal of contingent consideration accruals relating to acquisitions made prior to 2013.
Restructuring expenses
Restructuring expenses, primarily relating to employee severance obligations and/or the termination of leased facilities, were $11.7 million and $0.1 million for 2013 and 2012, respectively. The 2013 restructuring expenses were primarily related to employee severance obligations and the termination of leased facilities in the construction operations of our United Kingdom construction and building services segment. The 2012 restructuring expenses were primarily attributable to employee severance obligations and the termination of leased facilities incurred in our United States building services segment. As of December 31, 2013 and 2012, the balance of restructuring related obligations yet to be paid was $4.9 million and $0.1 million, respectively. The majority of obligations outstanding as of December 31, 2012 were paid during 2013. The majority of obligations outstanding as of December 31, 2013 will be paid during 2014. We expect to incur an additional $1.4 million of expenses in connection with the restructuring of our United Kingdom operations in 2014.
Impairment loss on goodwill and identifiable intangible assets
Based upon our annual impairment testing as of October 1, 2013 and 2012, no impairment of our goodwill or our identifiable intangible assets was recognized for the years ended December 31, 2013 and 2012, respectively.






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Operating income (loss)
The following table presents by segment our operating income (loss) (gross profit less selling, general and administrative expenses and restructuring expenses), and each segment's operating income (loss) as a percentage of such segment's revenues from unrelated entities, for the years ended December 31, 2013 and 2012 (in thousands, except for percentages):
 
 
2013
 
% of
Segment
Revenues 
 
2012
 
% of
Segment
Revenues 
Operating income (loss):
 
 
 
 
 
 
 
United States electrical construction and facilities services
$
98,114

 
7.3
 %
 
$
100,736

 
8.3
%
United States mechanical construction and facilities services
93,765

 
4.0
 %
 
125,261

 
5.2
%
United States building services
67,225

 
3.7
 %
 
43,290

 
2.4
%
United States industrial services
38,763

 
7.5
 %
 
37,241

 
9.3
%
Total United States operations
297,867

 
5.0
 %
 
306,528

 
5.3
%
United Kingdom construction and building services
(5,981
)
 
(1.4
)%
 
7,052

 
1.3
%
Corporate administration
(69,891
)
 
—

 
(63,468
)
 
—

Restructuring expenses
(11,703
)
 
—

 
(145
)
 
—

Total worldwide operations
210,292

 
3.3
 %
 
249,967

 
3.9
%
Other corporate items:
 

 
 

 
 

 
 

Interest expense
(8,769
)
 
 

 
(7,275
)
 
 

Interest income
1,128

 
 

 
1,556

 
 

Income from continuing operations before income taxes
$
202,651

 
 

 
$
244,248

 
 

As described in more detail below, we had operating income of $210.3 million for 2013 compared to operating income of $250.0 million for 2012.
Operating income of our United States electrical construction and facilities services segment for the year ended December 31, 2013 was $98.1 million compared to operating income of $100.7 million for the year ended December 31, 2012. The decrease in operating income for the year ended December 31, 2013 was primarily the result of a reduction in gross profit from water and wastewater construction projects, partially offset by an increase in gross profit attributable to commercial, institutional and manufacturing construction projects. Operating income in 2012 also benefited from the resolution of construction claims on a water and wastewater project and a healthcare project, resulting in approximately $9.5 million of gross profit. Selling, general and administrative expenses slightly increased for the year ended December 31, 2013 compared to 2012. The decrease in operating margin for the year ended December 31, 2013 was primarily the result of a decrease in gross profit margin.
Our United States mechanical construction and facilities services segment operating income for the year ended December 31, 2013 was $93.8 million, a $31.5 million decrease compared to operating income of $125.3 million for the year ended December 31, 2012. The results included aggregate losses of approximately $24.5 million from one of our subsidiaries at two projects located in the southeastern United States, resulting in a 1.1% impact on this segment's operating margin. One of these projects was in progress at the time of acquisition of the subsidiary and will be completed in 2014. The other project, which was contracted for post-acquisition, has incurred losses principally due to poor performance by one of our subcontractors on the project which we have replaced and is substantially complete. In addition to the effect of these two projects, operating income in 2012 was favorably impacted by gross profit of $24.1 million recognized on a large manufacturing project. Companies acquired in 2013 generated operating losses of approximately $1.0 million, including amortization expense of $0.1 million attributable to identifiable intangible assets for the year ended December 31, 2013. The decrease in operating income for the year ended December 31, 2013 was partially offset by higher gross profit from commercial construction projects and a decrease in selling, general and administrative expenses primarily due to lower incentive compensation expense. In addition, we recognized for the years ended December 31, 2013 and 2012, respectively, $6.7 million and $5.4 million of income attributable to the reversal of contingent consideration accruals relating to acquisitions made prior to 2013. The decrease in operating margin was primarily attributable to a reduction in gross profit margin.
Operating income of our United States building services segment was $67.2 million and $43.3 million in 2013 and 2012, respectively. The increase in operating income was primarily attributable to an increase in gross profit from this segment's: (a) commercial site-based services, partially attributable to an increase in revenues from snow removal and the termination of certain unprofitable contracts, (b) mobile mechanical services, partially as a result of greater project and services revenues and improved job execution, and (c) energy services, as a result of increased gross profits on large project work. The increase in operating income

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was partially offset by lower gross profit from our government site-based services as a result of a reduction in discretionary government project spending and the loss in 2012 of certain maintenance contracts. Operating income was negatively impacted by an increase in selling, general and administrative expenses, primarily due to: (a) an increase in employee related costs, such as incentive compensation due to improved operating results within certain subsidiaries, and (b) a higher provision for doubtful accounts. The increase in operating margin was primarily the result of an increase in gross profit margin, primarily due to increased margins from our energy services, mobile mechanical services and commercial site-based services operations.
Operating income of our United States industrial services segment for the year ended December 31, 2013 increased by $1.5 million compared to operating income for the year ended December 31, 2012. RSI contributed $3.0 million to operating income, net of $5.7 million of amortization expense attributable to identifiable intangible assets. This increase in operating income was offset by reduced operating income due to a decrease in demand for our turnaround and maintenance services in the refinery market compared to 2012 due to customer scheduling changes. The results of 2012 benefited from the favorable impact of three large non-recurring turnaround and repair projects. The decrease in operating margin was a result of an increase in the ratio of selling, general and administrative expenses to revenues.
Our United Kingdom construction and building services segment's operating loss for the year ended December 31, 2013 was $6.0 million compared to operating income of $7.1 million for the year ended December 31, 2012. This unfavorable result was due to: (a) an operating loss of $19.0 million for the year ended December 31, 2013 from its construction operations due to lower volume and project write-downs attributable to both weak market conditions and our decision earlier this year to withdraw from the construction market in the United Kingdom and (b) lower volume from its building services operations as a result of reduced project activity, partially offset by lower selling general and administrative expenses predominantly as a result of lower employee related costs. Operating margin in this segment decreased for 2013 compared to 2012 due to operating losses from its construction operations.
Our corporate administration expenses were $69.9 million for 2013 compared to $63.5 million in 2012. The increase in expenses was primarily due to $6.1 million of transaction costs associated with the RSI acquisition. Also, included in our corporate administration expenses for 2013 was the receipt of an insurance recovery during our first quarter of approximately $2.6 million associated with a previously disposed of operation, which is classified as a component of "Cost of sales" on the Consolidated Statements of Operations.
Non-operating items
Interest expense was $8.8 million and $7.3 million for 2013 and 2012, respectively. The $1.5 million increase in interest expense for 2013 compared to 2012 was primarily due to increased borrowings as a result of our acquisition of RSI and the acceleration of expense for debt issuance costs associated with the amendment and restatement of our 2011 Credit Agreement.
Interest income was $1.1 million and $1.6 million for 2013 and 2012, respectively. The decrease in interest income was primarily related to lower invested cash balances.
For joint ventures that have been accounted for using the consolidation method of accounting, noncontrolling interest represents the allocation of earnings to our joint venture partners who either have a minority-ownership interest in the joint venture or are not at risk for the majority of losses of the joint venture.
Our 2013 income tax provision from continuing operations was $75.3 million compared to $95.4 million for 2012. The actual income tax rates on income from continuing operations before income taxes, less amounts attributable to noncontrolling interests, for the years ended December 31, 2013 and 2012, were 37.8% and 39.4%, respectively. The decrease in the 2013 income tax provision compared to 2012 was primarily due to the effect of reduced income before income taxes, a change in the mix of earnings among various jurisdictions and the reversal of previously unrecognized income tax benefits.
2012 versus 2011
Revenues
As described in more detail below, the increase in revenues for 2012 compared to 2011 was primarily attributable to: (a) increased revenues from all of our operating segments, excluding incremental revenues attributable to acquisitions in 2012 and 2011, and (b) incremental revenues of approximately $303.9 million generated by companies acquired in 2012 and 2011, which are reported within our United States mechanical construction and facilities services segment and our United States building services segment. An increase in revenues at our United Kingdom operations was offset by a decrease of $6.5 million relating to the effect of unfavorable exchange rates for the British pound versus the United States dollar.


26
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The following table presents our revenues for each of our operating segments and the approximate percentages that each segment's revenues were of total revenues for the years ended December 31, 2012 and 2011 (in thousands, except for percentages):
 
2012
 
% of
Total  
 
2011
 
% of
Total  
Revenues from unrelated entities:
 
 
 
 
 
 
 
United States electrical construction and facilities services
$
1,211,692

 
19
%
 
$
1,155,079

 
21
%
United States mechanical construction and facilities services
2,386,498

 
38
%
 
2,009,073

 
36
%
United States building services
1,807,917

 
28
%
 
1,602,964

 
29
%
United States industrial services
401,793

 
6
%
 
317,377

 
6
%
Total United States operations
5,807,900

 
92
%
 
5,084,493

 
91
%
United Kingdom construction and building services
538,779

 
8
%
 
528,966

 
9
%
Total worldwide operations
$
6,346,679

 
100
%
 
$
5,613,459

 
100
%
 
 
 
 
 
 
 
 
Revenues of our United States electrical construction and facilities services segment were $1,211.7 million for the year ended December 31, 2012 compared to revenues of $1,155.1 million for the year ended December 31, 2011. This increase in revenues was primarily attributable to higher levels of work from manufacturing, institutional and commercial construction projects, partially offset by a decrease in revenues from healthcare, transportation and hospitality construction projects.
Our United States mechanical construction and facilities services segment revenues for the year ended December 31, 2012 were $2,386.5 million, a $377.4 million increase compared to revenues of $2,009.1 million for the year ended December 31, 2011. This increase in revenues was primarily attributable to: (a) an increase in revenues from manufacturing, commercial and transportation construction projects, excluding the effect of acquisitions made in 2012 and 2011, and (b) incremental revenues of approximately $128.6 million generated by companies acquired in 2012 and 2011, partially offset by a decrease in revenues from healthcare, institutional, hospitality and water and wastewater construction projects.
Revenues of our United States building services segment were $1,807.9 million and $1,603.0 million in 2012 and 2011, respectively. This increase in revenues was primarily attributable to incremental revenues of approximately $175.3 million generated by companies acquired in 2011, which perform building maintenance services and mobile mechanical services, and from an increase in revenues at: (a) our commercial site-based operations, excluding the effect of the acquisition made in 2011, primarily the result of new project awards and (b) our government services operations, primarily due to new contract awards and organic growth in the medical building services portfolio. This increase was partially offset by a decrease in revenues from our energy services operations primarily as a result of the loss of a large contract at the end of 2011.
Revenues of our United States industrial services segment for the year ended December 31, 2012 increased by $84.4 million compared to the year ended December 31, 2011. This increase in revenues was primarily due to an increase in demand for our services in the refinery market and the favorable impact of three large non-recurring turnaround and repair service projects.
Our United Kingdom construction and building services segment revenues were $538.8 million in 2012 compared to $529.0 million in 2011. This increase in revenues was primarily attributable to growth in revenues in our building services business as a result of an expansion in scope of contract activity with our existing customers in the commercial and transportation markets, partially offset by a decrease in revenues from our United Kingdom construction business as a result of lower volume from institutional and healthcare construction projects and a decrease of $6.5 million relating to the effect of unfavorable exchange rates for the British pound versus the United States dollar.
Backlog
The following table presents our operating segment backlog from unrelated entities and their respective percentages of total backlog (in thousands, except for percentages):
 
December 31, 2012
 
% of
Total
 
December 31, 2011
 
% of
Total
Backlog:
 
 
 
 
 
 
 
United States electrical construction and facilities services
$
831,910

 
25
%
 
$
809,952

 
24
%
United States mechanical construction and facilities services
1,357,892

 
40
%
 
1,361,789

 
41
%
United States building services
841,882

 
25
%
 
769,374

 
23
%
United States industrial services
99,532

 
3
%
 
91,632

 
3
%
Total United States operations
3,131,216

 
93
%
 
3,032,747

 
91
%
United Kingdom construction and building services
243,169

 
7
%
 
294,899

 
9
%
Total worldwide operations
$
3,374,385

 
100
%
 
$
3,327,646

 
100
%

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Our backlog at December 31, 2012 was $3.37 billion compared to $3.33 billion of backlog at December 31, 2011. This slight increase in backlog, excluding the effect of acquisitions, was primarily attributable to: (a) an increase in contracts awarded for work in all of our domestic segments and (b) an increase of $27.7 million in backlog associated with a company acquired in 2012, which is included in our United States mechanical construction and facilities services segment. This increase was partially offset by lower backlog within our United Kingdom segment.
Cost of sales and Gross profit
The following table presents cost of sales, gross profit (revenues less cost of sales), and gross profit margin (gross profit as a percentage of revenues) for the years ended December 31, 2012 and 2011 (in thousands, except for percentages):  
 
2012
 
2011
Cost of sales
$
5,540,325

 
$
4,879,510

Gross profit
$
806,354

 
$
733,949

Gross profit margin
12.7
%
 
13.1
%
Our gross profit for the year ended December 31, 2012 was $806.4 million, an increase of $72.4 million compared to the gross profit for the year ended December 31, 2011 of $733.9 million. The increase in gross profit was primarily attributable to: (a) companies acquired in 2012 and 2011 reported within our United States mechanical construction and facilities services segment and our United States building services segment, which contributed approximately $29.2 million to gross profit, net of amortization expense attributable to identifiable intangible assets of $0.2 million, (b) our United States industrial services segment, (c) our United States electrical construction and facilities services segment and (d) our United States mechanical construction and facilities services segment, excluding the gross profit from companies acquired in 2012 and 2011. These increases were partially offset by lower gross profit from our United Kingdom operations, whose construction business experienced several project write-downs. The increase in gross profit was also negatively impacted by changes in the exchange rates for the British pound versus the United States dollar.
Our gross profit margin was 12.7% for 2012 compared to 13.1% for 2011. The decrease in gross profit margin was primarily the result of lower gross profit margin at: (a) our United States mechanical construction and facilities services segment, primarily as a result of the favorable resolution in 2011 of various uncertainties on projects and the settlement of a long outstanding construction claim, (b) our United States building services segment, partially attributable to the margin dilutive impact of an acquisition in 2011, and (c) our United Kingdom operations, as a result of the operating loss from its construction business. The decrease in gross profit margin in 2012 was partially offset by higher gross profit margin at our United States industrial services segment and our United States electrical construction and facilities services segment, primarily as a result of: (a) the favorable resolution of a long outstanding construction claim on a water and wastewater construction project and (b) higher margins from certain other construction projects, as a result of claim settlements and better than anticipated project execution on other contracts.
Selling, general and administrative expenses
The following table presents selling, general and administrative expenses, and selling, general and administrative expenses as a percentage of revenues, for the years ended December 31, 2012 and 2011 (in thousands, except for percentages):  
 
2012
 
2011
Selling, general and administrative expenses
$
556,242

 
$
518,121

Selling, general and administrative expenses as a percentage of revenues
8.8
%
 
9.2
%
Our selling, general and administrative expenses for the year ended December 31, 2012 were $556.2 million, a $38.1 million increase compared to selling, general and administrative expenses of $518.1 million for the year ended December 31, 2011. This increase was primarily attributable to: (a) $26.9 million of incremental expenses directly related to companies acquired in 2012 and 2011, including amortization expense attributable to identifiable intangible assets of $4.9 million, and (b) higher employee related costs such as incentive compensation and employee benefits, partially as a result of improved results and share-based compensation costs, partially offset by a decrease in professional fees, as we had incurred $4.7 million of transaction costs associated with an acquisition made in 2011. In addition, we recognized for the years ended December 31, 2012 and 2011, respectively, $6.4 million and $2.8 million of income attributable to the reversal of contingent consideration accruals relating to acquisitions made prior to 2012. Selling, general and administrative expenses as a percentage of revenues decreased for 2012 compared to 2011, primarily related to our ability to increase revenues at a greater rate than the increase in overhead costs.
Restructuring expenses
Restructuring expenses, primarily relating to employee severance obligations and/or the termination of leased facilities, were $0.1 million and $1.2 million for 2012 and 2011, respectively. The 2012 restructuring expenses were primarily attributable to

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employee severance obligations and the termination of leased facilities incurred in our United States building services segment. In 2011, restructuring expenses were primarily related to employee severance obligations at our corporate headquarters. As of December 31, 2012 and 2011, the balance of restructuring related obligations yet to be paid was $0.1 million and $0.2 million, respectively. The majority of obligations outstanding as of December 31, 2011 were paid during 2012. The majority of obligations outstanding as of December 31, 2012 were paid during 2013.
Impairment loss on goodwill and identifiable intangible assets
In conjunction with our 2011 annual impairment test on October 1, 2011, we recognized a $3.8 million non-cash impairment charge related to customer relationships and trade names within the United States building services segment during the fourth quarter of 2011. This impairment primarily resulted from both lower forecasted revenues from, and lower operating margins at, specific companies within this segment.
Based upon our annual impairment testing as of October 1, 2012, no additional impairment of our goodwill or our identifiable intangible assets was recognized for the year ended December 31, 2012.
Operating income (loss)
The following table presents by segment our operating income (loss) (gross profit less selling, general and administrative expenses, restructuring expenses, and impairment loss on identifiable intangible assets), and each segment's operating income (loss) as a percentage of such segment's revenues from unrelated entities, for the years ended December 31, 2012 and 2011 (in thousands, except for percentages):
 
 
2012
 
% of
Segment
Revenues 
 
2011
 
% of
Segment
Revenues 
Operating income (loss):
 
 
 
 
 
 
 
United States electrical construction and facilities services
$
100,736

 
8.3
%
 
$
84,601

 
7.3
%
United States mechanical construction and facilities services
125,261

 
5.2
%
 
118,529

 
5.9
%
United States building services
43,290

 
2.4
%
 
47,087

 
2.9
%
United States industrial services
37,241

 
9.3
%
 
19,510

 
6.1
%
Total United States operations
306,528

 
5.3
%
 
269,727

 
5.3
%
United Kingdom construction and building services
7,052

 
1.3
%
 
9,225

 
1.7
%
Corporate administration
(63,468
)
 
—

 
(63,124
)
 
—

Restructuring expenses
(145
)
 
—

 
(1,240
)
 
—

Impairment loss on identifiable intangible assets
—

 
—

 
(3,795
)
 
—

Total worldwide operations
249,967

 
3.9
%
 
210,793

 
3.8
%
Other corporate items:
 

 
 

 
 

 
 

Interest expense
(7,275
)
 
 

 
(11,261
)
 
 

Interest income
1,556

 
 

 
1,820

 
 

Income from continuing operations before income taxes
$
244,248

 
 

 
$
201,352

 
 

As described in more detail below, we had operating income of $250.0 million for 2012 compared to operating income of $210.8 million for 2011.
Operating income of our United States electrical construction and facilities services segment was $100.7 million for the year ended December 31, 2012 compared to operating income of $84.6 million for the year ended December 31, 2011. This increase in operating income primarily resulted from an increase in gross profit from: (a) water and wastewater construction projects and (b) manufacturing and institutional construction projects. In addition, operating income in 2012 benefited from the favorable resolution of a construction claim on a healthcare project, as well as from a long outstanding construction claim on a water and wastewater construction project. This increase in operating income was partially offset by a decrease in gross profit attributable to: (a) hospitality construction projects and (b) smaller quick turn project work. Additionally, operating income in 2011 benefited from the favorable resolution of uncertainties on a hospitality construction project and from the favorable resolution of an institutional construction claim. Selling, general and administrative expenses increased for the year ended December 31, 2012, compared to 2011, principally due to higher employee related costs, primarily incentive compensation accruals as a result of improved results, and higher professional fees. The increase in operating margin for the year ended December 31, 2012 was primarily the result of an increase in gross profit margin and a decrease in the ratio of selling, general and administrative expenses to revenues.

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Table of Contents

Our United States mechanical construction and facilities services segment operating income for the year ended December 31, 2012 was $125.3 million, a $6.7 million increase compared to operating income of $118.5 million for the year ended December 31, 2011. This increase in operating income, excluding operating income attributable to the 2012 and 2011 acquisitions in this segment, was primarily due to higher gross profit from manufacturing and commercial construction projects. Additionally, the increase in operating income was partially attributable to companies acquired in 2012 and 2011, which generated approximately $4.2 million of operating income, net of amortization expense attributable to identifiable intangible assets of $0.3 million. This increase was partially offset by a decrease in operating income from hospitality, healthcare and institutional construction projects. Selling, general and administrative expenses increased in 2012 compared to 2011, excluding expenses directly related to the 2012 and 2011 acquisitions in this segment, which added $11.9 million of selling, general and administrative costs, including $0.2 million of amortization expense attributable to identifiable intangible assets, primarily due to an increase in employee related costs, such as salaries and incentive compensation accruals as a result of improved results and a higher provision for doubtful accounts. The decrease in operating margin for the year ended December 31, 2012 was the result of a reduction in gross profit margin, partially offset by a decrease in the ratio of selling, general and administrative expenses to revenues.
Operating income of our United States building services segment was $43.3 million and $47.1 million in 2012 and 2011, respectively. The decrease in operating income was due to lower operating income from our government services operations as a result of several project write-downs, the majority of which were due to difficult job site conditions. Additionally, companies acquired in 2011 negatively impacted operating income by approximately $1.9 million, including $4.8 million of amortization expense attributable to identifiable intangible assets. The decrease in operating income was partially offset by: (a) higher operating income from our mobile mechanical services as a result of improved project performance compared to 2011 and (b) income attributable to the reversal of contingent consideration accruals relating to acquisitions made prior to 2012. Selling, general and administrative expenses increased by $5.5 million for 2012 compared to 2011, excluding the increase of $15.0 million of selling, general and administrative expenses associated with companies acquired in 2011, including amortization expense of $4.7 million. This increase was primarily attributable to an increase in employee related costs such as salaries, incentive compensation and employee benefits, due to higher volume and profitability, and higher depreciation and amortization costs. The increases in selling, general and administrative expenses were partially offset by a reduction in the provision for doubtful accounts due to favorable settlements of amounts previously determined to be uncollectible. The increase in operating margin for 2012 was the result of a decrease in the ratio of selling, general and administrative expenses to revenues, which is related to our ability to increase revenues at a greater rate than the increase in overhead costs, partially offset by a reduction in gross profit margin.
Operating income of our United States industrial services segment for the year ended December 31, 2012 increased by $17.7 million compared to operating income for the year ended December 31, 2011. The increase in operating income was primarily due to higher operating income as a result of an increase in demand for our services in the refinery market and the favorable impact of three large non-recurring turnaround and repair service projects.
Our United Kingdom construction and building services segment operating income was $7.1 million in 2012 compared to $9.2 million in 2011. This decrease in operating income was primarily attributable to an operating loss within our United Kingdom construction business as a result of losses recognized on various hospitality, institutional and commercial construction projects and a decrease of $0.2 million relating to the effect of unfavorable exchange rates for the British pound versus the United States dollar. The decrease in operating income was partially offset by an increase in operating income from its building services business as a result of better performance on its commercial and institutional portfolio of contracts. The decrease in operating margin for 2012 was brought about by a combination of lower gross profit margins, partially offset by a decrease in selling, general and administrative expenses as a percentage of revenues.
Our corporate administration expenses were $63.5 million for 2012 compared to $63.1 million in 2011. This increase in expenses was primarily attributable to higher share-based compensation costs as a result of improved operating performance. This increase was partially offset by: (a) lower transaction costs of approximately $4.7 million associated with an acquisition made in 2011 and (b) reduced salaries at headquarters, as a result of the restructuring at our corporate headquarters earlier in 2011.
Non-operating items
Interest expense was $7.3 million and $11.3 million for 2012 and 2011, respectively. The $4.0 million decrease in interest expense for 2012 compared to 2011 was primarily due to lower borrowing rates under the credit facility that we entered into in late 2011.
Interest income was $1.6 million and $1.8 million for 2012 and 2011, respectively. The decrease in interest income was primarily related to lower invested cash balances in 2012.
For joint ventures that have been accounted for using the consolidation method of accounting, noncontrolling interest represents the allocation of earnings to our joint venture partners who either have a minority-ownership interest in the joint venture or are not at risk for the majority of losses of the joint venture.

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Our 2012 income tax provision from continuing operations was $95.4 million compared to $76.8 million for 2011. The actual income tax rates on income from continuing operations before income taxes, less amounts attributable to noncontrolling interests, for the years ended December 31, 2012 and 2011, were 39.4% and 38.7%, respectively. The increase in the 2012 income tax provision compared to 2011 was primarily due to increased income before income taxes, the effect of a change in the United Kingdom statutory tax rate and a change in the mix of earnings among various jurisdictions.
Discontinued operation
In August 2011, we disposed of our Canadian subsidiary, which represented our Canada construction segment, to a group of investors, including members of the former subsidiary's management team. We received approximately $17.3 million in payment for the shares. In addition, we also received approximately $26.4 million in repayment of indebtedness owed by our Canadian subsidiary to us. Proceeds from the sale of discontinued operation, net of cash sold, totaled $26.6 million. Net income from discontinued operation for the year ended December 31, 2011 was $9.1 million, net of income taxes. Included in the net income from discontinued operation for the year ended December 31, 2011 was a gain on sale of $9.1 million (net of income tax provision of $2.8 million) resulting from the sale of the subsidiary. The gain on sale of discontinued operation includes $15.5 million related to amounts previously reported in the foreign translation adjustment component of accumulated other comprehensive income. Loss from discontinued operation included income tax benefits of $0.4 million for the year ended December 31, 2011.
Liquidity and Capital Resources
The following table presents net cash provided by (used in) operating activities, investing activities and financing activities for the years ended December 31, 2013, 2012 and 2011 (in thousands):

 
2013
 
2012
 
2011
Net cash provided by operating activities
$
150,069

 
$
184,408

 
$
149,425

Net cash used in investing activities
$
(483,422
)
 
$
(42,546
)
 
$
(320,518
)
Net cash provided by (used in) financing activities
$
167,031

 
$
(50,587
)
 
$
(29,288
)
Effect of exchange rate changes on cash and cash equivalents
$
832

 
$
2,706

 
$
867

Our consolidated cash balance decreased by approximately $165.5 million from $605.3 million at December 31, 2012 to $439.8 million at December 31, 2013. Net cash provided by operating activities for 2013 was $150.1 million compared to $184.4 million in net cash provided by operating activities for 2012. The decrease in net cash provided by operating activities, excluding the effect of businesses acquired, was primarily due to: (a) a $32.2 million reduction in other accrued expenses, primarily due to a reduction in federal taxes payable, (b) a $21.5 million reduction in net income and (c) an $18.3 million reduction in accounts payable, partially offset by a $38.4 million increase in net over-billings, related to the timing of customer billings and payments. Net cash used in investing activities was $483.4 million for 2013 compared to net cash used in investing activities of $42.5 million for 2012. The increase in net cash used in investing activities was primarily due to a $435.9 million increase in payments for acquisitions of businesses. Net cash provided by financing activities for 2013 increased by approximately $217.6 million compared to 2012. The increase in net cash provided by financing activities was primarily due to $350.0 million of long-term debt incurred and a $22.0 million decrease in dividends paid to stockholders, partially offset by a $150.0 million net repayment of our revolving credit facility.
Our consolidated cash balance increased by approximately $94.0 million from $511.3 million at December 31, 2011 to $605.3 million at December 31, 2012. Net cash provided by operating activities for 2012 was $184.4 million compared to $149.4 million in net cash provided by operating activities for 2011. The increase was primarily due to improved operating results and changes in our working capital. Net cash used in investing activities was $42.5 million for 2012 compared to $320.5 million used in 2011. The decrease was primarily due to a $281.1 million decrease in payments for businesses acquired, partially offset by an $8.3 million increase in amounts paid for the purchase of property, plant and equipment. Net cash used in financing activities for 2012 was $50.6 million compared to $29.3 million used in 2011. The increase was primarily attributable to the payment of dividends.







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The following is a summary of material contractual obligations and other commercial commitments (in millions):
 
Payments Due by Period
Contractual Obligations  
Total
 
Less
than
1 year  
 
1-3
years
 
3-5
years
 
After
5 years
Term Loan (including interest currently at 1.42%) (1)
$
371.8

 
$
22.4

 
$
44.1

 
$
305.3

 
$
—

Capital lease obligations
4.9

 
2.0

 
2.5

 
0.4

 
—

Operating leases
189.6

 
55.6

 
80.5

 
36.0

 
17.5

Open purchase obligations (2)
783.0

 
690.2

 
86.0

 
6.8

 
—

Other long-term obligations, including current portion (3)
360.4

 
37.9

 
310.5

 
12.0

 
—

Liabilities related to uncertain income tax positions
3.4

 
1.0

 
2.2

 
0.2

 
—

Total Contractual Obligations
$
1,713.1

 
$
809.1

 
$
525.8

 
$
360.7

 
$
17.5

 
 
 
 
 
 
 
 
 
 
 
 
Amount of Commitment Expirations by Period  
Other Commercial Commitments
Total
Amounts
Committed  
 
Less
than
1 year
 
1-3
years  
 
3-5
years
 
After
5 years
Letters of credit
$
83.6

 
$
82.1

 
$
1.5

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
 

_________
 
(1)
On November 25, 2013, we entered into a $1.1 billion credit agreement (the "2013 Credit Agreement"), which is comprised of a $750.0 million revolving credit facility (the “2013 Revolving Credit Facility”) and a $350.0 million term loan (the "Term Loan"). The proceeds of the Term Loan were used to repay amounts drawn under our previous credit agreement. As of December 31, 2013, the amount outstanding under the Term Loan was $350.0 million.
(2)
Represents open purchase orders for material and subcontracting costs related to construction and service contracts. These purchase orders are not reflected in our consolidated balance sheets and should not impact future cash flows, as amounts should be recovered through customer billings.
(3)
Represents primarily insurance related liabilities and liabilities for deferred income taxes, incentive compensation and earn-out arrangements, classified as other long-term liabilities in the consolidated balance sheets. Cash payments for insurance related liabilities may be payable beyond three years, but it is not practical to estimate these payments. We provide funding to our post retirement plans based on at least the minimum funding required by applicable regulations. In determining the minimum required funding, we utilize current actuarial assumptions and exchange rates to forecast estimates of amounts that may be payable for up to five years in the future. In our judgment, minimum funding estimates beyond a five year time horizon cannot be reliably estimated, and therefore, have not been included in the table.
Until November 25, 2013, we had a revolving credit agreement (the “2011 Credit Agreement”) as amended, which provided for a revolving credit facility of $750.0 million. The 2011 Credit Agreement was effective November 21, 2011. Effective November 25, 2013, we amended and restated the 2011 Credit Agreement with a $1.1 billion credit agreement (the "2013 Credit Agreement"), which is comprised of a $750.0 million revolving credit facility (the “2013 Revolving Credit Facility”) and a $350.0 million term loan (the "Term Loan"). The proceeds of the Term Loan were used to repay amounts drawn under the 2011 Credit Agreement. Both facilities expire on November 25, 2018. We may increase the 2013 Revolving Credit Facility to $1.05 billion if additional lenders are identified and/or existing lenders are willing to increase their current commitments; and we may allocate up to $250.0 million of available borrowings under the 2013 Revolving Credit Facility to letters of credit for our account of for the account of any of our subsidiaries. The 2013 Revolving Credit Facility and the Term Loan are both guaranteed by most of our direct and indirect subsidiaries and are secured by substantially all of our assets and most of the assets of most of our subsidiaries. The 2013 Revolving Credit Facility and the Term Loan contain various covenants providing for, among other things, maintenance of certain financial ratios and certain limitations on payment of dividends, common stock repurchases, investments, acquisitions, indebtedness and capital expenditures. A commitment fee is payable on the average daily unused amount under the 2013 Revolving Credit Facility, which ranges from 0.20% to 0.30%, based on certain financial tests. The fee is 0.20% of the unused amount as of December 31, 2013. Borrowings under the 2013 Revolving Credit Facility and the Term Loan bear interest at (1) a rate which is the prime commercial lending rate announced by Bank of Montreal from time to time ( 3.25% at December 31, 2013) plus 0.25% to 0.75%, based on certain financial tests or (2) United States dollar LIBOR ( 0.17% at December 31, 2013) plus 1.25% to 1.75%, based on certain financial tests. The interest rate in effect at December 31, 2013 was 1.42% . Letter of credit fees issued under the

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2013 Revolving Credit Facility range from 1.25% to 1.75% of the respective face amounts of outstanding letters of credit and are charged based on certain financial tests. We capitalized approximately $3.0 million of debt issuance costs associated with the 2013 Credit Agreement. This amount is being amortized over the life of the agreement and is included as part of interest expense. In connection with the amendment and restatement of the 2011 Credit Agreement, $0.3 million attributable to the acceleration of expense for debt issuance costs in connection with the 2011 Credit Agreement was recorded as part of interest expense. We are required to make principal payments on the Term Loan in installments on the last day of March, June, September and December of each year, commencing with the calendar quarter ending March 31, 2014, in the amount of $4.4 million, with a final payment of all principal and interest not yet paid due and payable on November 25, 2018. As of December 31, 2013, the balance on the Term Loan was $350.0 million. As of December 31, 2013 and December 31, 2012, we had approximately $83.3 million and $84.0 million of letters of credit outstanding, respectively. We had borrowings of $150.0 million outstanding under the 2011 Credit Agreement at December 31, 2012. There were no borrowings outstanding under the 2013 Revolving Credit Facility as of December 31, 2013.
On September 26, 2011, our Board of Directors authorized us to repurchase up to $100.0 million of our outstanding common stock. During 2013, we repurchased approximately 0.7 million shares of our common stock for approximately $26.1 million. Since the inception of this repurchase program, we have repurchased 2.8 million shares of our common stock for approximately $77.5 million, and there remains authorization for us to repurchase approximately $22.5 million of our shares under that authorization. On December 5, 2013, our Board of Directors authorized us to repurchase up to an additional $100.0 million of our outstanding common stock. As a result, $122.5 million was available for repurchase as of December 31, 2013. The repurchase program does not obligate us to acquire any particular amount of common stock and may be suspended, recommenced or discontinued at any time or from time to time without prior notice. Acquisitions under our repurchase program may be made from time to time to the extent permitted by securities laws and other legal requirements, including provisions in our credit agreement placing limitations on such repurchases. The repurchase program has been and will be funded from our operations.
The terms of our construction contracts frequently require that we obtain from surety companies (“Surety Companies”) and provide to our customers payment and performance bonds (“Surety Bonds”) as a condition to the award of such contracts. The Surety Bonds secure our payment and performance obligations under such contracts, and we have agreed to indemnify the Surety Companies for amounts, if any, paid by them in respect of Surety Bonds issued on our behalf. In addition, at the request of labor unions representing certain of our employees, Surety Bonds are sometimes provided to secure obligations for wages and benefits payable to or for such employees. Public sector contracts require Surety Bonds more frequently than private sector contracts, and accordingly, our bonding requirements typically increase as the amount of public sector work increases. As of December 31, 2013, based on our percentage-of-completion of our projects covered by Surety Bonds, our aggregate estimated exposure, assuming defaults on all our then existing contractual obligations, was approximately $0.8 billion. The Surety Bonds are issued by Surety Companies in return for premiums, which vary depending on the size and type of bond.
We continually monitor our available limits of Surety Bonds, which we believe to be adequate, and discuss with our current and other Surety Bond providers the amount of Surety Bonds that may be available to us based on our financial strength and the absence of any default by us on any Surety Bond issued on our behalf. However, if we experience changes in our bonding relationships or if there are adverse changes in the surety industry, we may seek to satisfy certain customer requests for Surety Bonds by posting other forms of collateral in lieu of Surety Bonds such as letters of credit or parent company guarantees, seeking to convince customers to forego the requirement for Surety Bonds, by increasing our activities in business segments that rarely require Surety Bonds such as the building and industrial services segments, and/or by refraining from bidding for certain projects that require Surety Bonds. There can be no assurance that we will be able to effectuate alternatives to providing Surety Bonds to our customers or to obtain, on favorable terms, sufficient additional work that does not require Surety Bonds to replace projects requiring Surety Bonds that we may decide not to pursue. Accordingly, if we were to experience a reduction in the availability of Surety Bonds, we could experience a material adverse effect on our financial position, results of operations and/or cash flows.
From time to time in the ordinary course of business, we guarantee obligations of our subsidiaries under certain contracts. Generally, we are liable under such an arrangement only if our subsidiary fails to perform its obligations under the contract. Historically, we have not incurred any substantial liabilities as a consequence of these guarantees.
We do not have any other material financial guarantees or off-balance sheet arrangements other than those disclosed herein.
Our primary source of liquidity has been, and is expected to continue to be, cash generated by operating activities. We also maintain our 2013 Revolving Credit Facility that may be utilized, among other things, to meet short-term liquidity needs in the event cash generated by operating activities is insufficient or to enable us to seize opportunities to participate in joint ventures or to make acquisitions that may require access to cash on short notice or for any other reason. However, negative macroeconomic trends may have an adverse effect on liquidity. Short-term liquidity is also impacted by the type and length of construction contracts in place. During economic downturns, there were typically fewer small discretionary projects from the private sector, and our competitors aggressively bid larger long-term infrastructure and public sector contracts. Performance of long duration contracts typically requires greater amounts of working capital. While we strive to maintain a net over-billed position with our customers,

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there can be no assurance that a net over-billed position can be maintained. Our net over-billings, defined as the balance sheet accounts “Billings in excess of costs and estimated earnings on uncompleted contracts” less “Cost and estimated earnings in excess of billings on uncompleted contracts”, were $290.6 million and $290.5 million as of December 31, 2013 and 2012, respectively.
Long-term liquidity requirements can be expected to be met through cash generated from operating activities and our 2013 Revolving Credit Facility. Based upon our current credit ratings and financial position, we can reasonably expect to be able to incur long-term debt to fund acquisitions. Over the long term, our primary revenue risk factor continues to be the level of demand for non-residential construction services and building and industrial services, which is influenced by macroeconomic trends including interest rates and governmental economic policy. In addition, our ability to perform work is critical to meeting long-term liquidity requirements.
We are a party to lawsuits and other proceedings in which other parties seek to recover from us amounts ranging from a few thousand dollars to over $10.0 million. We do not believe that any such matters will have a materially adverse effect on our financial position, results of operations or liquidity.
We believe that our current cash balances and our borrowing capacity available under our 2013 Revolving Credit Facility or other forms of financing available to us through borrowings, combined with cash expected to be generated from operations, will be sufficient to provide our short-term and foreseeable long-term liquidity and meet our expected capital expenditure requirements.
On September 26, 2011, we announced plans to pay a regular quarterly dividend of $0.05 per common share. We have paid quarterly dividends since October 25, 2011. On December 7, 2012, our Board of Directors declared a special dividend of $0.25 per share, payable in December 2012, and announced its intention to increase the regular quarterly dividend to $0.06 per share. In addition, at the December 7, 2012 meeting of our Board of Directors, the regular quarterly dividend that would have been paid in January 2013 was declared, its amount increased to $0.06 per share and its payment date accelerated to December 28, 2012. In December 2013, our Board of Directors announced its intention to increase the regular quarterly dividend to $0.08 per share commencing with the dividend to be paid in the first quarter of 2014. We expect that such quarterly dividends will be paid in the foreseeable future. Prior to October 25, 2011, no cash dividends had been paid on the Company's common stock. Our credit agreement places limitations on the payment of dividends on our common stock. However, we do not believe that the terms of the credit agreement currently materially limit our ability to pay a quarterly dividend of $0.08 per share for the foreseeable future. The payment of dividends has been and will be funded from our operations.
Certain Insurance Matters
As of December 31, 2013 and 2012, we utilized approximately $83.3 million and $84.0 million, respectively, of letters of credit obtained under our 2013 Revolving Credit Facility and our 2011 Credit Agreement, respectively, as collateral for insurance obligations.
New Accounting Pronouncements
We review new accounting standards to determine the expected financial impact, if any, that the adoption of such standards will have. As of the filing of this Annual Report on Form 10-K, there were no new accounting standards that were projected to have a material impact on our consolidated financial position, results of operations or liquidity. See Note 2 - Summary of Significant Accounting Policies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data for further information regarding new accounting standards recently issued and/or adopted by us.
Application of Critical Accounting Policies
Our consolidated financial statements are based on the application of significant accounting policies, which require management to make significant estimates and assumptions. Our significant accounting policies are described in Note 2 - Summary of Significant Accounting Policies of the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of this Form 10-K. We believe that some of the more critical judgment areas in the application of accounting policies that affect our financial condition and results of operations are the impact of changes in the estimates and judgments pertaining to: (a) revenue recognition from (i) long-term construction contracts for which the percentage-of-completion method of accounting is used and (ii) services contracts; (b) collectibility or valuation of accounts receivable; (c) insurance liabilities; (d) income taxes; and (e) goodwill and identifiable intangible assets.
Revenue Recognition from Long-term Construction Contracts and Services Contracts
We believe our most critical accounting policy is revenue recognition from long-term construction contracts for which we use the percentage-of-completion method of accounting. Percentage-of-completion accounting is the prescribed method of accounting for long-term contracts in accordance with Accounting Standards Codification (“ASC”) Topic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts”, and, accordingly, is the method used for revenue recognition within our

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industry. Percentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract at completion. Certain of our electrical contracting business units measure percentage-of-completion by the percentage of labor costs incurred to date for each contract to the estimated total labor costs for such contract. Pre-contract costs from our construction projects are generally expensed as incurred. Application of percentage-of-completion accounting results in the recognition of costs and estimated earnings in excess of billings on uncompleted contracts in our Consolidated Balance Sheets. Costs and estimated earnings in excess of billings on uncompleted contracts reflected in the Consolidated Balance Sheets arise when revenues have been recognized but the amounts cannot be billed under the terms of contracts. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of a contract.
Costs and estimated earnings in excess of billings on uncompleted contracts also include amounts we seek or will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders in dispute or unapproved as to both scope and price or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Such amounts are recorded at estimated net realizable value and take into account factors that may affect our ability to bill unbilled revenues and collect amounts after billing. The profit associated with claim amounts is not recognized until the claim has been settled and payment has been received. During 2012, we recognized approximately $9.5 million of profit from the settlement and payment of two claims within the United States electrical construction and facilities services segment. There was no significant profit recognized from settlements or payment of claims in 2013. As of December 31, 2013 and 2012, costs and estimated earnings in excess of billings on uncompleted contracts included unbilled revenues for unapproved change orders of approximately $19.2 million and $13.8 million , respectively, and claims of approximately $0.4 million and $0.7 million , respectively. In addition, accounts receivable as of December 31, 2013 and 2012 included claims of approximately $2.9 million and $0.8 million , respectively. In addition, there are contractually billed amounts and retention related to such contracts of approximately $56.1 million and $41.0 million as of December 31, 2013 and 2012, respectively. Generally, contractually billed amounts will not be paid by the customer to us until final resolution of related claims. Due to uncertainties inherent in estimates employed in applying percentage-of-completion accounting, estimates may be revised as project work progresses. Application of percentage-of-completion accounting requires that the impact of revised estimates be reported prospectively in the consolidated financial statements. In addition to revenue recognition for long-term construction contracts, we recognize revenues from the performance of services for maintenance, repair and retrofit work consistent with the performance of the services, which are generally on a pro-rata basis over the life of the contractual arrangement. Expenses related to all services arrangements are recognized as incurred. Revenues related to the engineering, manufacturing and repairing of shell and tube heat exchangers are recognized when the product is shipped and all other revenue recognition criteria have been met. Costs related to this work are included in inventory until the product is shipped. Provisions for the entirety of estimated losses on contracts are made in the period in which such losses are determined. During 2013, we recognized aggregate losses of approximately $24.5 million associated with two contracts within the United States mechanical construction and facilities services segment as a result of a change in contract estimates.
Accounts Receivable
We are required to estimate the collectibility of accounts receivable. A considerable amount of judgment is required in assessing the likelihood of realization of receivables. Relevant assessment factors include the creditworthiness of the customer, our prior collection history with the customer and related aging of past due balances. The provision for doubtful accounts during 2013, 2012 and 2011 amounted to approximately $3.5 million , $1.2 million and $2.2 million , respectively. At December 31, 2013 and 2012, our accounts receivable of $1,268.2 million and $1,222.0 million , respectively, included allowances for doubtful accounts of $11.9 million and $11.5 million , respectively. The increase in our allowance for doubtful accounts was primarily due to the increase in our provision for doubtful accounts, primarily within our United States building services segment. Specific accounts receivable are evaluated when we believe a customer may not be able to meet its financial obligations due to deterioration of its financial condition or its credit ratings. The allowance for doubtful accounts requirements are based on the best facts available and are re-evaluated and adjusted on a regular basis as additional information is received.
Insurance Liabilities
We have loss payment deductibles for certain workers' compensation, automobile liability, general liability and property claims, have self-insured retentions for certain other casualty claims and are self-insured for employee-related health care claims. Losses are recorded based upon estimates of our liability for claims incurred and for claims incurred but not reported. The liabilities are derived from known facts, historical trends and industry averages utilizing the assistance of an actuary to determine the best estimate for the majority of these obligations. We believe the liabilities recognized on our balance sheets for these obligations are adequate. However, such obligations are difficult to assess and estimate due to numerous factors, including severity of injury, determination of liability in proportion to other parties, timely reporting of occurrences and effectiveness of safety and risk management programs. Therefore, if our actual experience differs from the assumptions and estimates used for recording the liabilities, adjustments may be required and will be recorded in the period that the experience becomes known. Our estimated

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insurance liabilities for workers' compensation, automobile liability, general liability and property claims increased by $10.7 million for the year ended December 31, 2013 compared to the year ended December 31, 2012, primarily due to acquisitions. If our estimated insurance liabilities for workers' compensation, automobile liability, general liability and property claims were to increase by 10%, it would have resulted in $13.7 million of additional expense for the year ended December 31, 2013.
Income Taxes
We had net deferred income tax liabilities at December 31, 2013 and 2012 of $126.8 million and $35.6 million, respectively, primarily resulting from differences between the carrying value and income tax basis of certain identifiable intangible assets and depreciable fixed assets, which will impact our taxable income in future periods. A valuation allowance is required when it is more likely than not that all or a portion of a deferred income tax asset will not be realized. As of December 31, 2013 and 2012, the total valuation allowance on deferred income tax assets, related solely to state net operating carryforwards, was approximately $2.2 million and $2.5 million, respectively. We have determined that as of December 31, 2013, a valuation allowance was not required on any of the remaining deferred tax assets because of significant deferred tax liabilities after consideration of the above mentioned deferred tax liabilities related to indefinite-lived intangible assets and projected future income.
Goodwill and Identifiable Intangible Assets
As of December 31, 2013, we had $834.8 million and $541.5 million , respectively, of goodwill and net identifiable intangible assets (primarily consisting of our contract backlog, developed technology/vendor network, customer relationships, non-competition agreements and trade names), primarily arising out of the acquisition of companies. As of December 31, 2012, goodwill and net identifiable intangible assets were $566.6 million and $343.7 million , respectively. The determination of related estimated useful lives for identifiable intangible assets and whether those assets are impaired involves significant judgments based upon short and long-term projections of future performance. These forecasts reflect assumptions regarding the ability to successfully integrate acquired companies, as well as macroeconomic conditions. ASC Topic 350, “Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, but instead must be tested at least annually for impairment (which we test each October 1, absent any impairment indicators), and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives.
We test for impairment of our goodwill at the reporting unit level. Our reporting units are consistent with the reportable segments identified in Note 17, "Segment Information", of the notes to consolidated financial statements. In assessing whether our goodwill is impaired, we first qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount using various factors. If after this assessment we are unable to determine that the fair value of a reporting unit exceeds the carrying amount, we proceed to the two-step process as prescribed by ASC 350. The first step of this test compares the fair value of the reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. If the fair value exceeds the carrying amount, no further work is required and no impairment loss is recognized. If the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is potentially impaired and step two of the goodwill impairment test would need to be performed to measure the amount of an impairment loss, if any. In the second step, the impairment is computed by comparing the implied fair value of the reporting unit's goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting unit's goodwill is greater than the implied fair value of its goodwill, an impairment loss in the amount of the excess is recognized and charged to operations. The weighted average cost of capital used in our annual testing for impairment as of October 1, 2013 was 12.1%, 12.6% and 11.1% for our domestic construction segments, our United States building services segment and our United States industrial services segment, respectively. The perpetual growth rate used for our annual testing was 2.7% for our domestic segments. Unfavorable changes in these key assumptions may affect future testing results and cause us to fail step one of the goodwill impairment testing process. For example, keeping all other assumptions constant, a 50 basis point increase in the weighted average costs of capital would cause the estimated fair value of our United Stated industrial services segment to approach its carrying value. A 50 basis point increase in the weighted average costs of capital would not significantly reduce the excess of the estimated fair value compared to the carrying value for any of our other domestic segments. In addition, keeping all other assumptions constant, a 50 basis point reduction in the perpetual growth rate would not significantly reduce the excess of the estimated fair value compared to the carrying value for any of our domestic segments. For the years ended December 31, 2013, 2012 and 2011, no impairment of our goodwill was recognized.
As of December 31, 2013, we had $834.8 million of goodwill on our balance sheet and, of this amount, approximately 46.1% relates to our United States industrial services segment, approximately 27.4% relates to our United States building services segment, approximately 26.0% relates to our United States mechanical construction and facilities services segment and approximately 0.5% relates to our United States electrical construction and facilities services segment. As of the date of our latest impairment test, the carrying values of our United States industrial services, United States building services, United States mechanical construction and facilities services and United States electrical construction and facilities services segments were approximately $744.9 million, $487.7 million, $237.7 million and $58.7 million, respectively. The fair values of our United States industrial services, United

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States building services, United States mechanical construction and facilities services and United States electrical construction and facilities services segments exceeded their carrying values by approximately $45.0 million, $126.0 million, $519.9 million and $366.8 million, respectively.
We also test for the impairment of trade names that are not subject to amortization by calculating the fair value using the “relief from royalty payments” methodology. This approach involves two steps: (a) estimating reasonable royalty rates for each trade name and (b) applying these royalty rates to a net revenue stream and discounting the resulting cash flows to determine fair value. This fair value is then compared with the carrying value of each trade name. If the carrying amount of the trade name is greater than the implied fair value of the trade name, an impairment in the amount of the excess is recognized and charged to operations. The annual impairment review of our trade names for the year ended December 31, 2011 resulted in a $1.0 million non-cash impairment charge as a result of a change in the fair value of trade names associated with certain prior acquisitions reported within our United States building services segment. This impairment primarily resulted from both lower forecasted revenues from, and operating margins at, specific companies within our United States building services segment. For the years ended December 31, 2013 and 2012, no impairment of our trade names was recognized.
In addition, we review for the impairment of other identifiable intangible assets that are being amortized whenever facts and circumstances indicate that their carrying values may not be fully recoverable. This test compares their carrying values to the undiscounted pre-tax cash flows expected to result from the use of the assets. If the assets are impaired, the assets are written down to their fair values, generally determined based on their future discounted cash flows. Based on facts and circumstances that indicated an impairment may exist, we performed an impairment review of certain of our other identifiable intangible assets for the year ended December 31, 2011. As a result of this review, we recognized a $2.8 million non-cash impairment charge as a result of a change in the fair value of customer relationships associated with certain prior acquisitions reported within our United States building services segment for the year ended December 31, 2011. For the years ended December 31, 2013 and 2012, no impairment of our other identifiable intangible assets was recognized.
We have certain businesses, particularly within our United States industrial services segment, whose results are highly impacted by the demand for some of our offerings within the industrial and oil and gas markets. Future performance of this segment, along with a continued evaluation of the conditions of its end user markets, will be important to ongoing impairment assessments. Should its actual results suffer a decline or expected future results be revised downward, the risk of goodwill impairment or impairment of other identifiable intangible assets would increase.
Our development of the present value of future cash flow projections used in impairment testing is based upon assumptions and estimates by management from a review of our operating results, business plans, anticipated growth rates and margins and weighted average cost of capital, among others. Those assumptions and estimates can change in future periods, and other factors used in assessing fair value are outside the control of management, such as interest rates. There can be no assurances that estimates and assumptions made for purposes of our goodwill and identifiable intangible asset impairment testing will prove to be accurate predictions of the future. If our assumptions regarding future business performance or anticipated growth rates and/or margins are not achieved, or there is a rise in interest rates, we may be required, as we did in 2011, to record further goodwill and/or identifiable intangible asset impairment charges in future periods.
During 2011, we recognized a $3.8 million non-cash impairment charge as discussed above. Of this amount, $2.8 million related to customer relationships and $1.0 million related to trade names. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such a charge would be material.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have not used any derivative financial instruments during the years ended December 31, 2013 and 2012, including trading or speculating on changes in interest rates or commodity prices of materials used in our business.
We are exposed to market risk for changes in interest rates for borrowings under the 2013 Credit Agreement. Borrowings under the 2013 Credit Agreement bear interest at variable rates. For further information on borrowing rates and interest rate sensitivity, refer to the Liquidity and Capital Resources discussion in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. As of December 31, 2013, there were no borrowings outstanding under the 2013 Revolving Credit Facility and the balance on the Term Loan was $350.0 million. Based on the $350.0 million borrowings outstanding on the 2013 Credit Agreement, if overall interest rates were to increase by 25 basis points, interest expense, net of income taxes, would increase by approximately $0.4 million in the next twelve months. Conversely, if overall interest rates were to decrease by 25 basis points, interest expense, net of income taxes, would decrease by approximately $0.4 million in the next twelve months.
We are also exposed to construction market risk and its potential related impact on accounts receivable or costs and estimated earnings in excess of billings on uncompleted contracts. The amounts recorded may be at risk if our customers' ability to pay these obligations is negatively impacted by economic conditions. We continually monitor the creditworthiness of our customers and

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maintain on-going discussions with customers regarding contract status with respect to change orders and billing terms. Therefore, we believe we take appropriate action to manage market and other risks, but there is no assurance that we will be able to reasonably identify all risks with respect to collectibility of these assets. See also the previous discussions of Revenue Recognition from Long-term Construction Contracts and Services Contracts and Accounts Receivable under Application of Critical Accounting Policies in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Amounts invested in our foreign operations are translated into U.S. dollars at the exchange rates in effect at year end. The resulting translation adjustments are recorded as accumulated other comprehensive income (loss), a component of equity, in our Consolidated Balance Sheets. We believe the exposure to the effects that fluctuating foreign currencies may have on our consolidated results of operations is limited because the foreign operations primarily invoice customers and collect obligations in their respective local currencies. Additionally, expenses associated with these transactions are generally contracted and paid for in their same local currencies.
In addition, we are exposed to market risk of fluctuations in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in our construction and building and industrial services operations. We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet of over 8,500 vehicles. While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable. Additionally, our fixed price contracts do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to projects in progress.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
EMCOR Group, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
 
 
December 31,
2013
 
December 31,
2012
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
439,813

 
$
605,303

Accounts receivable, less allowance for doubtful accounts of $11,890 and $11,472, respectively
1,268,226

 
1,221,956

Costs and estimated earnings in excess of billings on uncompleted contracts
90,727

 
93,061

Inventories
52,123

 
50,512

Prepaid expenses and other
79,216

 
73,621

Total current assets
1,930,105

 
2,044,453

Investments, notes and other long-term receivables
6,799

 
4,959

Property, plant and equipment, net
123,414

 
116,631

Goodwill
834,825

 
566,588

Identifiable intangible assets, net
541,497

 
343,748

Other assets
29,275

 
30,691

Total assets
$
3,465,915

 
$
3,107,070

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Borrowings under revolving credit facility
$
—

 
$
—

Current maturities of long-term debt and capital lease obligations
19,332

 
1,787

Accounts payable
487,738

 
490,621

Billings in excess of costs and estimated earnings on uncompleted contracts
381,295

 
383,527

Accrued payroll and benefits
237,779

 
224,555

Other accrued expenses and liabilities
172,599

 
194,029

Total current liabilities
1,298,743

 
1,294,519

Borrowings under revolving credit facility
—

 
150,000

Long-term debt and capital lease obligations
335,331

 
4,112

Other long-term obligations
352,215

 
301,260

Total liabilities
1,986,289

 
1,749,891

Equity:
 
 
 
EMCOR Group, Inc. stockholders' equity:
 
 
 
Preferred stock, $0.01 par value, 1,000,000 shares authorized, zero issued and outstanding
—

 
—

Common stock, $0.01 par value, 200,000,000 shares authorized, 67,627,359 and 68,010,419 shares issued, respectively
676

 
680

Capital surplus
408,083

 
416,104

Accumulated other comprehensive loss
(65,777
)
 
(81,040
)
Retained earnings
1,133,873

 
1,022,239

Treasury stock, at cost 730,841 and 1,046,257 shares, respectively
(10,590
)
 
(11,903
)
Total EMCOR Group, Inc. stockholders’ equity
1,466,265

 
1,346,080

Noncontrolling interests
13,361

 
11,099

Total equity
1,479,626

 
1,357,179

Total liabilities and equity
$
3,465,915

 
$
3,107,070

The accompanying notes to consolidated financial statements are an integral part of these statements.

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EMCOR Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For The Years Ended December 31,
(In thousands, except per share data)

 
2013
 
2012
 
2011
Revenues
$
6,417,158

 
$
6,346,679

 
$
5,613,459

Cost of sales
5,604,100

 
5,540,325

 
4,879,510

Gross profit
813,058

 
806,354

 
733,949

Selling, general and administrative expenses
591,063

 
556,242

 
518,121

Restructuring expenses
11,703

 
145

 
1,240

Impairment loss on identifiable intangible assets
—

 
—

 
3,795

Operating income
210,292

 
249,967

 
210,793

Interest expense
(8,769
)
 
(7,275
)
 
(11,261
)
Interest income
1,128

 
1,556

 
1,820

Income from continuing operations before income taxes
202,651

 
244,248

 
201,352

Income tax provision
75,297

 
95,362

 
76,764

Income from continuing operations
127,354

 
148,886

 
124,588

Income from discontinued operation, net of income taxes
—

 
—

 
9,083

Net income including noncontrolling interests
127,354

 
148,886

 
133,671

Less: Net income attributable to noncontrolling interests
(3,562
)
 
(2,302
)
 
(2,845
)
Net income attributable to EMCOR Group, Inc.
$
123,792

 
$
146,584

 
$
130,826

Basic earnings per common share:
 
 
 
 
 
From continuing operations attributable to EMCOR Group, Inc. common stockholders
$
1.85

 
$
2.20

 
$
1.82

From discontinued operation
—

 
—

 
0.14

Net income attributable to EMCOR Group, Inc. common stockholders
$
1.85

 
$
2.20

 
$
1.96

Diluted earnings per common share:
 
 
 
 
 
From continuing operations attributable to EMCOR Group, Inc. common stockholders
$
1.82

 
$
2.16

 
$
1.78

From discontinued operation
—

 
—

 
0.13

Net income attributable to EMCOR Group, Inc. common stockholders
$
1.82

 
$
2.16

 
$
1.91

Dividends declared per common share
$
0.18

 
$
0.51

 
$
0.05

The accompanying notes to consolidated financial statements are an integral part of these statements.



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EMCOR Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For The Years Ended December 31,
(In thousands)

 
2013
 
2012
 
2011
Net income including noncontrolling interests
$
127,354

 
$
148,886

 
$
133,671

Other comprehensive income (loss), net of tax:
 
 
 
 
 
Foreign currency translation adjustments (1)
(614
)
 
120

 
(14,182
)
Changes in post retirement plans (2)
15,877

 
(2,511
)
 
(22,056
)
Other comprehensive income (loss)
15,263

 
(2,391
)
 
(36,238
)
Comprehensive income
142,617

 
146,495

 
97,433

Less: Comprehensive income attributable to the noncontrolling interests
(3,562
)
 
(2,302
)
 
(2,845
)
Comprehensive income attributable to EMCOR Group, Inc.
$
139,055

 
$
144,193

 
$
94,588

_________________
(1)
Includes a $15.5 million foreign currency translation reversal relating to the disposition of our Canadian subsidiary, which was included as part of the gain on sale of discontinued operation, for the year ended December 31, 2011.
(2)
Net of tax of $4.3 million , $0.8 million and $7.6 million for the years ended December 31, 2013 , 2012 and 2011 , respectively.

The accompanying notes to consolidated financial statements are an integral part of these statements.



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EMCOR Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Years Ended December 31,
(In thousands)
 
2013
 
2012
 
2011
Cash flows - operating activities:
 
 
 
 
 
Net income including noncontrolling interests
$
127,354

 
$
148,886

 
$
133,671

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
36,310

 
31,204

 
27,426

Amortization of identifiable intangible assets
31,028

 
29,762

 
26,350

Provision for doubtful accounts
3,533

 
1,163

 
2,238

Deferred income taxes
11,857

 
6,626

 
8,826

Gain on sale of discontinued operation, net of income taxes
—

 
—

 
(9,127
)
(Gain) loss on sale of property, plant and equipment
(903
)
 
272

 
592

Excess tax benefits from share-based compensation
(4,624
)
 
(7,083
)
 
(3,619
)
Equity income from unconsolidated entities
(1,048
)
 
(930
)
 
(1,301
)
Non-cash expense for amortization of debt issuance costs
1,497

 
1,212

 
2,438

Non-cash income from contingent consideration arrangements
(6,793
)
 
(6,381
)
 
(2,798
)
Non-cash expense for impairment of identifiable intangible assets
—

 
—

 
3,795

Non-cash share-based compensation expense
6,943

 
6,766

 
5,447

Non-cash (income) expense from changes in unrecognized income tax benefits
(10,539
)
 
5,946

 
(870
)
Distributions from unconsolidated entities
679

 
887

 
606

Changes in operating assets and liabilities, excluding the effect of businesses acquired:
 
 
 
 
 
Increase in accounts receivable
(3,221
)
 
(12,852
)
 
(75,529
)
Increase in inventories
(865
)
 
(5,597
)
 
(10,549
)
Decrease (increase) in costs and estimated earnings in excess of billings on uncompleted contracts
2,807

 
24,126

 
(33,816
)
(Decrease) increase in accounts payable
(12,904
)
 
5,425

 
34,727

Decrease in billings in excess of costs and estimated earnings on uncompleted contracts
(2,793
)
 
(62,533
)
 
(16,278
)
(Decrease) increase in accrued payroll and benefits and other accrued expenses and liabilities
(14,761
)
 
24,345

 
49,634

Changes in other assets and liabilities, net
(13,488
)
 
(6,836
)
 
7,562

Net cash provided by operating activities
150,069

 
184,408

 
149,425

Cash flows - investing activities:
 
 
 
 
 
Payments for acquisitions of businesses, net of cash acquired, and related contingent consideration arrangement
(454,671
)
 
(20,613
)
 
(301,306
)
Proceeds from sale of discontinued operation, net of cash sold
—

 
—

 
26,627

Proceeds from sale of property, plant and equipment
2,930

 
3,070

 
1,409

Purchase of property, plant and equipment
(35,497
)
 
(37,875
)
 
(29,581
)
Investments in and advances to unconsolidated entities and joint ventures
(800
)
 
—

 
(28
)
Purchase of short-term investments
—

 
(22,433
)
 
(17,639
)
Maturity of short-term investments
4,616

 
35,305

 
—

Net cash used in investing activities
(483,422
)
 
(42,546
)
 
(320,518
)
Cash flows - financing activities:
 
 
 
 
 
Proceeds from revolving credit facility
250,000

 
—

 
—

Repayments of revolving credit facility
(400,000
)
 
—

 
—

Borrowings from long-term debt
350,000

 
—

 
—

Repayments of long-term debt and debt issuance costs
(3,013
)
 
(40
)
 
(4,147
)
Repayments of capital lease obligations
(1,692
)
 
(1,978
)
 
(1,095
)
Dividends paid to stockholders
(12,080
)
 
(34,073
)
 
(3,336
)
Repurchase of common stock
(26,070
)
 
(23,912
)
 
(27,523
)
Proceeds from exercise of stock options
5,172

 
8,786

 
5,608

Payments to satisfy minimum tax withholding
(927
)
 
(1,654
)
 
(1,256
)
Issuance of common stock under employee stock purchase plan
2,854

 
2,549

 
2,310

Payments for contingent consideration arrangements
(537
)
 
(5,748
)
 
(1,118
)
Distributions to noncontrolling interests
(1,300
)
 
(1,600
)
 
(2,350
)
Excess tax benefits from share-based compensation
4,624

 
7,083

 
3,619

Net cash provided by (used in) financing activities
167,031

 
(50,587
)
 
(29,288
)
Effect of exchange rate changes on cash and cash equivalents
832

 
2,706

 
867

(Decrease) increase in cash and cash equivalents
(165,490
)
 
93,981

 
(199,514
)
Cash and cash equivalents at beginning of year
605,303

 
511,322

 
710,836

Cash and cash equivalents at end of period
$
439,813

 
$
605,303

 
$
511,322

The accompanying notes to consolidated financial statements are an integral part of these statements.

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EMCOR Group, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EQUITY
For The Years Ended December 31,
(In thousands)
 
 
 
EMCOR Group, Inc. Stockholders
 
 
 
Total
 
Common
stock
 
Capital
surplus
 
Accumulated other comprehensive (loss) income (1)
 
Retained
earnings
 
Treasury
stock
 
Noncontrolling
interests
Balance, December 31, 2010
$
1,162,845

 
$
690

 
$
427,613

 
$
(42,411
)
 
$
782,576

 
$
(15,525
)
 
$
9,902

Net income including noncontrolling interests
133,671

 
—

 
—

 
—

 
130,826

 
—

 
2,845

Other comprehensive loss
(36,238
)
 
—

 
—

 
(36,238
)
 
—

 
—

 
—

Treasury stock, at cost (2)
(1,256
)
 
—

 
—

 
—

 
—

 
(1,256
)
 
—

Common stock issued under share-based compensation plans (3)
11,561

 
3

 
9,253

 
—

 
—

 
2,305

 
—

Common stock issued under employee stock purchase plan
2,310

 
—

 
2,310

 
—

 
—

 
—

 
—

Common stock dividends
(3,336
)
 
—

 
24

 
—

 
(3,360
)
 
—

 
—

Repurchase of common stock
(27,523
)
 
(12
)
 
(27,511
)
 
—

 
—

 
—

 
—

Distributions to noncontrolling interests
(2,350
)
 
—

 
—

 
—

 
—

 
—

 
(2,350
)
Share-based compensation expense
5,447

 
—

 
5,447

 
—

 
—

 
—

 
—

Balance, December 31, 2011
$
1,245,131

 
$
681

 
$
417,136

 
$
(78,649
)
 
$
910,042

 
$
(14,476
)
 
$
10,397

Net income including noncontrolling interests
148,886

 
—

 
—

 
—

 
146,584

 
—

 
2,302

Other comprehensive loss
(2,391
)
 
—

 
—

 
(2,391
)
 
—

 
—

 
—

Common stock issued under share-based compensation plans (3)
15,823

 
8

 
13,242

 
—

 
—

 
2,573

 
—

Common stock issued under employee stock purchase plan
2,549

 
—

 
2,549

 
—

 
—

 
—

 
—

Common stock dividends
(34,073
)
 
 
 
314

 
 
 
(34,387
)
 
 
 
 
Repurchase of common stock
(23,912
)
 
(9
)
 
(23,903
)
 
—

 
—

 
—

 
—

Distributions to noncontrolling interests
(1,600
)
 
—

 
—

 
—

 
—

 
—

 
(1,600
)
Share-based compensation expense
6,766

 
—

 
6,766

 
—

 
—

 
—

 
—

Balance, December 31, 2012
$
1,357,179

 
$
680

 
$
416,104

 
$
(81,040
)
 
$
1,022,239

 
$
(11,903
)
 
$
11,099

Net income including noncontrolling interests
127,354

 
—

 
—

 
—

 
123,792

 
—

 
3,562

Other comprehensive income
15,263

 
—

 
—

 
15,263

 
—

 
—

 
—

Common stock issued under share-based compensation plans (3)
9,483

 
3

 
8,167

 
—

 
—

 
1,313

 
—

Common stock issued under employee stock purchase plan
2,854

 
—

 
2,854

 
—

 
—

 
—

 
—

Common stock dividends
(12,080
)
 
—

 
78

 
—

 
(12,158
)
 
—

 
—

Repurchase of common stock
(26,070
)
 
(7
)
 
(26,063
)
 
—

 
—

 
—

 
—

Distributions to noncontrolling interests
(1,300
)
 
—

 
—

 
—

 
—

 
—

 
(1,300
)
Share-based compensation expense
6,943

 
—

 
6,943

 
—

 
—

 
—

 
—

Balance, December 31, 2013
$
1,479,626

 
$
676

 
$
408,083

 
$
(65,777
)
 
$
1,133,873

 
$
(10,590
)
 
$
13,361

_________________
(1)
As of December 31, 2013, represents cumulative foreign currency translation and post retirement liability adjustments of $5.1 million and $(70.9) million , respectively. As of December 31, 2012, represents cumulative foreign currency translation and post retirement liability adjustments of $5.7 million and $(86.7) million , respectively. As of December 31, 2011, represents cumulative foreign currency translation and post retirement liability adjustments of $5.6 million , $(84.2) million , respectively.
(2)
Represents value of shares of common stock withheld by EMCOR for minimum statutory income tax withholding requirements upon the issuance of shares in respect of restricted stock units.
(3)
Includes the tax benefit associated with share-based compensation of $5.2 million in 2013 , $8.7 million in 2012 and $6.2 million in 2011 .
The accompanying notes to consolidated financial statements are an integral part of these statements.

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EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1- NATURE OF OPERATIONS
References to the “Company,” “EMCOR,” “we,” “us,” “our” and similar words refer to EMCOR Group, Inc. and its consolidated subsidiaries unless the context indicates otherwise.
We are one of the largest electrical and mechanical construction and facilities services firms in the United States. In addition, we provide a number of building services and industrial services. We specialize principally in providing construction services relating to electrical and mechanical systems in all types of non-residential facilities and in providing various services relating to the operation, maintenance and management of facilities, including refineries and petrochemical plants.
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated. All investments over which we exercise significant influence, but do not control (a 20% to 50% ownership interest), are accounted for using the equity method of accounting. Additionally, we participate in a joint venture with another company, and we have consolidated this joint venture as we have determined that through our participation we have a variable interest and are the primary beneficiary as defined by the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 810, “Consolidation”.
For joint ventures that have been accounted for using the consolidation method of accounting, noncontrolling interest represents the allocation of earnings to our joint venture partners who either have a minority-ownership interest in the joint venture or are not at risk for the majority of losses of the joint venture.
The results of operations of companies acquired have been included in the results of operations from the date of the respective acquisition.
Principles of Preparation
The preparation of the consolidated financial statements, in conformity with accounting principles generally accepted in the United States, requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
During the third quarter of 2013, we completed the acquisition of RepconStrickland, Inc. (“RSI”), a leading provider of turnaround and specialty services to the North American refinery and petrochemical markets. In connection with the acquisition of RSI and to reflect changes in our internal reporting structure and the information used by management to make operating decisions and assess performance, we created a new segment that includes RSI and certain businesses that had been part of our United States facilities services segment. The new segment is called the United States industrial services segment and the segment formerly named the United States facilities services segment has been renamed the United States building services segment.
Our reportable segments have been restated in all periods presented to reflect the changes in our segments referred to above. The segment formally named the United Kingdom construction and facilities services segment has been renamed the United Kingdom construction and building services segment. In addition, the results of operations for all periods presented reflect: (a) discontinued operations accounting due to the disposition in August 2011 of our Canadian subsidiary and (b) certain reclassifications of prior period amounts from our United States building services segment to our United States mechanical construction and facilities services segment due to changes in our internal reporting structure.
Revenue Recognition
Revenues from long-term construction contracts are recognized on the percentage-of-completion method in accordance with ASC Topic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts”. Percentage-of-completion is measured principally by the percentage of costs incurred to date for each contract to the estimated total costs for such contract at completion. Certain of our electrical contracting business units measure percentage-of-completion by the percentage of labor costs incurred to date for each contract to the estimated total labor costs for such contract. Pre-contract costs from our construction projects are generally expensed as incurred. Revenues from the performance of services for maintenance, repair and retrofit work are recognized consistent with the performance of the services, which are generally on a pro-rata basis over the life of the contractual arrangement. Expenses related to all services arrangements are recognized as incurred. Revenues related to the engineering,

44
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

manufacturing and repairing of shell and tube heat exchangers are recognized when the product is shipped and all other revenue recognition criteria have been met. Costs related to this work are included in inventory until the product is shipped. In the case of customer change orders for uncompleted long-term construction contracts, estimated recoveries are included for work performed in forecasting ultimate profitability on certain contracts. Due to uncertainties inherent in the estimation process, it is possible that completion costs, including those arising from contract penalty provisions and final contract settlements, will be revised in the near-term. Such revisions to costs and income are recognized in the period in which the revisions are determined. Provisions for the entirety of estimated losses on uncompleted contracts are made in the period in which such losses are determined. During 2013, we recognized aggregate losses of approximately $24.5 million associated with two contracts within the United States mechanical construction and facilities services segment as a result of a change in contract estimates.
Costs and estimated earnings on uncompleted contracts
Costs and estimated earnings in excess of billings on uncompleted contracts arise in the consolidated balance sheets when revenues have been recognized but the amounts cannot be billed under the terms of the contracts. Such amounts are recoverable from customers upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. Also included in costs and estimated earnings on uncompleted contracts are amounts we seek or will seek to collect from customers or others for errors or changes in contract specifications or design, contract change orders in dispute or unapproved as to both scope and/or price or other customer-related causes of unanticipated additional contract costs (claims and unapproved change orders). Such amounts are recorded at estimated net realizable value when realization is probable and can be reasonably estimated. No profit is recognized on construction costs incurred in connection with claim amounts. Claims and unapproved change orders made by us involve negotiation and, in certain cases, litigation. In the event litigation costs are incurred by us in connection with claims or unapproved change orders, such litigation costs are expensed as incurred, although we may seek to recover these costs. We believe that we have established legal bases for pursuing recovery of our recorded unapproved change orders and claims, and it is management's intention to pursue and litigate such claims, if necessary, until a determination or settlement is reached. Unapproved change orders and claims also involve the use of estimates, and it is reasonably possible that revisions to the estimated recoverable amounts of recorded claims and unapproved change orders may be made in the near term. If we do not successfully resolve these matters, a net expense (recorded as a reduction in revenues) may be required, in addition to amounts that may have been previously provided for. We record the profit associated with the settlement of claims upon receipt of final payment. During 2012, we recognized approximately $9.5 million of profit from the settlement and payment of two claims within the United States electrical construction and facilities services segment. There was no significant profit recognized from settlements or payment of claims in 2013. Claims against us are recognized when a loss is considered probable and amounts are reasonably determinable.
Costs and estimated earnings on uncompleted contracts and related amounts billed as of December 31, 2013 and 2012 were as follows (in thousands):  
 
2013
 
2012
Costs incurred on uncompleted contracts
$
7,794,620

 
$
7,675,049

Estimated earnings, thereon
835,820

 
876,496

 
8,630,440

 
8,551,545

Less: billings to date
8,921,008

 
8,842,011

 
$
(290,568
)
 
$
(290,466
)
Such amounts were included in the accompanying Consolidated Balance Sheets at December 31, 2013 and 2012 under the following captions (in thousands):  
 
2013
 
2012
Costs and estimated earnings in excess of billings on uncompleted contracts
$
90,727

 
$
93,061

Billings in excess of costs and estimated earnings on uncompleted contracts
(381,295
)
 
(383,527
)
 
$
(290,568
)
 
$
(290,466
)
As of December 31, 2013 and 2012 , costs and estimated earnings in excess of billings on uncompleted contracts included unbilled revenues for unapproved change orders of approximately $19.2 million and $13.8 million , respectively, and claims of approximately $0.4 million and $0.7 million , respectively. In addition, accounts receivable as of December 31, 2013 and 2012 included claims

45
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

of approximately $2.9 million and $0.8 million , respectively. Additionally, there are contractually billed amounts and retention related to such contracts of $56.1 million and $41.0 million as of December 31, 2013 and 2012, respectively. Generally, contractually billed amounts will not be paid by the customer to us until final resolution of related claims.
Classification of Contract Amounts
In accordance with industry practice, we classify as current all assets and liabilities relating to the performance of long-term contracts. The term of our contracts ranges from one month to four years and, accordingly, collection or payment of amounts relating to these contracts may extend beyond one year. Accounts receivable at December 31, 2013 and 2012 included $189.7 million and $178.6 million , respectively, of retainage billed under terms of our contracts. We estimate that approximately 85% of retainage recorded at December 31, 2013 will be collected during 2014. Accounts payable at December 31, 2013 and 2012 included $47.0 million and $39.7 million , respectively, of retainage withheld under terms of the contracts. We estimate that approximately 95% of retainage withheld at December 31, 2013 will be paid during 2014.
Cash and cash equivalents
For purposes of the consolidated financial statements, we consider all highly liquid instruments with original maturities of three months or less to be cash equivalents. We maintain a centralized cash management system whereby our excess cash balances are invested in high quality, short-term money market instruments, which are considered cash equivalents. We have cash balances in certain of our domestic bank accounts that exceed federally insured limits.
Allowance for Doubtful Accounts
Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts. This allowance is based upon the best estimate of the probable losses in existing accounts receivable. The Company determines the allowances based upon individual accounts when information indicates the customers may have an inability to meet their financial obligations, as well as historical collection and write-off experience. These amounts are re-evaluated and adjusted on a regular basis as additional information is received. Actual write-offs are charged against the allowance when collection efforts have been unsuccessful. At December 31, 2013 and 2012 , our accounts receivable of $1,268.2 million and $1,222.0 million , respectively, included allowances for doubtful accounts of $11.9 million and $11.5 million , respectively. The provision for doubtful accounts during 2013 , 2012 and 2011 amounted to approximately $3.5 million , $1.2 million and $2.2 million , respectively.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined principally using the average cost method.
Property, plant and equipment
Property, plant and equipment is stated at cost. Depreciation, including amortization of assets under capital leases, is recorded principally using the straight-line method over estimated useful lives of 3 to 10 years for machinery and equipment, 3 to 7 years for vehicles, furniture and fixtures and computer hardware/software and 25 years for buildings. Leasehold improvements are amortized over the shorter of the remaining life of the lease term or the expected service life of the improvement.
The carrying values of property, plant and equipment are reviewed for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. In performing this review for recoverability, property, plant and equipment is assessed for possible impairment by comparing their carrying values to their undiscounted net pre-tax cash flows expected to result from the use of the asset. Impaired assets are written down to their fair values, generally determined based on their estimated future discounted cash flows. Based on the results of our testing for the years ended December 31, 2013 , 2012 and 2011 , no impairment of property, plant and equipment was recognized.
Goodwill and Identifiable Intangible Assets
Goodwill and other identifiable intangible assets with indefinite lives that are not being amortized, such as trade names, are instead tested at least annually for impairment (which we test each October 1, absent any impairment indicators) and are written down if impaired. Identifiable intangible assets with finite lives are amortized over their useful lives and are reviewed for impairment whenever facts and circumstances indicate that their carrying values may not be fully recoverable. See Note 8 - Goodwill and Identifiable Intangible Assets of the notes to consolidated financial statements for additional information.

46
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

Insurance Liabilities
Our insurance liabilities are determined actuarially based on claims filed and an estimate of claims incurred but not yet reported. At December 31, 2013 and 2012 , the estimated current portion of undiscounted insurance liabilities of $29.2 million and $25.5 million , respectively, were included in “Other accrued expenses and liabilities” in the accompanying Consolidated Balance Sheets. The estimated non-current portion of the undiscounted insurance liabilities included in “Other long-term obligations” at December 31, 2013 and 2012 were $112.8 million and $108.1 million , respectively.
Foreign Operations
The financial statements and transactions of our foreign subsidiaries are maintained in their functional currency and translated into U.S. dollars in accordance with ASC Topic 830, “Foreign Currency Matters”. Translation adjustments have been recorded as “Accumulated other comprehensive loss”, a separate component of “Equity”.
Income Taxes
We account for income taxes in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). ASC 740 requires an asset and liability approach which requires the recognition of deferred income tax assets and deferred income tax liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Valuation allowances are established when necessary to reduce deferred income tax assets when it is more likely than not that a tax benefit will not be realized.
We account for uncertain tax positions in accordance with the provisions of ASC 740. We recognize accruals of interest related to unrecognized tax benefits as a component of the income tax provision.
Valuation of Share-Based Compensation Plans
We have various types of share-based compensation plans and programs, which are administered by our Board of Directors or its Compensation and Personnel Committee. See Note 13 - Share-Based Compensation Plans of the notes to consolidated financial statements for additional information regarding the share-based compensation plans and programs.
We account for share-based payments in accordance with the provision of ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). ASC 718 requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which is generally the vesting period. For shares subject to graded vesting, our policy is to apply the straight-line method in recognizing compensation expense. ASC 718 requires the benefits of tax deductions in excess of recognized compensation expense to be reported as a financing cash inflow, rather than as an operating cash inflow on the Consolidated Statements of Cash Flows. This requirement reduces net operating cash flows and increases net financing cash flows.
New Accounting Pronouncements
On January 1, 2013, we adopted an accounting pronouncement giving companies the option to perform a qualitative impairment assessment for their indefinite-lived intangible assets that may allow them to skip the annual fair value calculation. To perform a qualitative assessment, a company must identify and evaluate changes in economic, industry and company-specific events and circumstances that could affect the significant inputs used to determine the fair value of an indefinite-lived intangible asset. The adoption of this pronouncement did not have any effect on our financial position or results of operations, though it may impact the manner in which we perform future or prospective testing for indefinite-lived intangible asset impairment.
On January 1, 2013, we adopted an accounting pronouncement requiring preparers to report, in one place, information about reclassifications out of accumulated other comprehensive income ("AOCI"). It also required companies to report changes in AOCI balances. Public companies must provide the required information (e.g., changes in AOCI balances and reclassifications out of AOCI) in interim and annual periods. The adoption of this pronouncement did not have any effect on our financial position or results of operations.

47
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - ACQUISITIONS OF BUSINESSES
On July 29, 2013 , we completed the acquisition of RSI. This acquisition will expand and further strengthen our service offerings to new and existing customers and enhance our position within the industrial services and energy market sectors. Under the terms of the transaction, we acquired 100% of RSI's stock for total consideration of $464.3 million . The acquisition was funded with cash on hand and $250.0 million from borrowings under our revolving credit facility. This acquisition was accounted for using the acquisition method of accounting. We acquired working capital of $36.3 million and other net liabilities of $67.1 million , and have preliminarily ascribed $267.7 million to goodwill and $227.4 million to identifiable intangible assets in connection with the acquisition of RSI, which has been included in our United States industrial services segment. We expect that $49.0 million of acquired goodwill will be deductible for tax purposes. We have completed the final allocation of the purchase price related to the RSI acquisition, except for certain tax and contingency matters.
On December 2, 2013 , May 31, 2013 and January 4, 2012 , we acquired three companies, each for an immaterial amount. These companies primarily provide mechanical construction services and have been included in our United States mechanical construction and facilities services segment.
On June 30, 2011 , we completed the acquisition of USM Services Holdings, Inc. (“USM”) from Transfield Services (Delaware), General Partnership. Under the terms of the transaction, we acquired 100% of USM’s stock for total consideration of $251.0 million and utilized cash on hand to fund the purchase. This acquisition has been accounted for using the acquisition method of accounting. We acquired working capital of $5.0 million and other net liabilities of $21.3 million , and have ascribed $130.3 million to goodwill and $137.0 million to identifiable intangible assets in connection with the acquisition of USM, which has been included in our United States building services segment. According to certain provisions of the stock purchase agreement, we are to be indemnified for certain costs.
We acquired two additional companies during 2011, each for an immaterial amount. One of the 2011 acquired companies primarily provides mechanical construction services and has been included in our United States mechanical construction and facilities services reporting segment, and the other primarily provides mobile mechanical services and has been included in our United States building services reporting segment.
The purchase price for the acquisition of the other businesses referred to above was finalized with an insignificant impact. The acquisition of these businesses was accounted for by the acquisition method, and the prices paid for them have been allocated to their respective assets and liabilities, based upon the estimated fair values of their respective assets and liabilities at the dates of their respective acquisitions. We believe these businesses further expand our service capabilities into new geographical and/or technical areas.
During the years ended December 31, 2013 , 2012 and 2011 , respectively, we recorded a net reversal of $6.8 million , $6.4 million and $2.8 million of non-cash income attributable to contingent consideration arrangements relating to prior acquisitions.
NOTE 4 - DISPOSITION OF ASSETS
Results of our Canadian operations for the year ended December 31, 2011 are presented in our Consolidated Financial Statements as discontinued operations.
In August 2011, we disposed of our Canadian subsidiary, which represented our Canada construction segment, to a group of investors, including members of the former subsidiary’s management team. We received approximately $17.3 million in payment for the shares. In addition, we also received approximately $26.4 million in repayment of indebtedness owed by our Canadian subsidiary to us. Proceeds from the sale of discontinued operation, net of cash sold, totaled approximately $26.6 million . Included in net income from discontinued operation for the year ended December 31, 2011 was a gain on sale of $9.1 million (net of income tax provision of $2.8 million ) resulting from the sale of the subsidiary. The gain on sale of discontinued operation included $15.5 million related to amounts previously reported in the foreign translation adjustment component of accumulated other comprehensive income. Loss from discontinued operation included income tax benefits of $0.4 million for the year ended December 31, 2011.





48
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - DISPOSITION OF ASSETS - (Continued)

The components of the results of discontinued operations for the Canada construction segment are as follows (in thousands):
 
2011 (1)
Revenues
$
118,214

Loss from discontinued operation (net of income taxes)
$
(44
)
Gain on sale of discontinued operation (net of income taxes)
$
9,127

Net income from discontinued operation
$
9,083

Diluted earnings per share from discontinued operation
$
0.13

_________________
(1)  Through the date of sale, August 2, 2011.

NOTE 5 - EARNINGS PER SHARE
The following tables summarize our calculation of Basic and Diluted Earnings per Common Share (“EPS”) for the years ended December 31, 2013 , 2012 and 2011 (in thousands, except share and per share data):
 
 
2013
 
2012
 
2011
Numerator:
 
 
 
 
 
Income from continuing operations attributable to EMCOR Group, Inc. common stockholders
$
123,792

 
$
146,584

 
$
121,743

Income from discontinued operation
—

 
—

 
9,083

Net income attributable to EMCOR Group, Inc. common stockholders
$
123,792

 
$
146,584

 
$
130,826

Denominator:
 
 
 
 
 
Weighted average shares outstanding used to compute basic earnings per common share
67,086,299

 
66,701,869

 
66,780,093

Effect of dilutive securities—Share-based awards
990,542

 
1,036,549

 
1,595,409

Shares used to compute diluted earnings per common share
68,076,841

 
67,738,418

 
68,375,502

Basic earnings per common share:
 
 
 
 
 
From continuing operations attributable to EMCOR Group, Inc. common stockholders
$
1.85

 
$
2.20

 
$
1.82

From discontinued operation
—

 
—

 
0.14

Net income attributable to EMCOR Group, Inc. common stockholders
$
1.85

 
$
2.20

 
$
1.96

Diluted earnings per common share:
 
 
 
 
 
From continuing operations attributable to EMCOR Group, Inc. common stockholders
$
1.82

 
$
2.16

 
$
1.78

From discontinued operation
—

 
—

 
0.13

Net income attributable to EMCOR Group, Inc. common stockholders
$
1.82

 
$
2.16

 
$
1.91

The number of options granted to purchase shares of our common stock that were excluded from the computation of diluted EPS for the years ended December 31, 2013 , 2012 and 2011 because they would be anti-dilutive were zero , 140,096 and 321,443 , respectively.

49
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - INVENTORIES
Inventories as of December 31, 2013 and 2012 consist of the following amounts (in thousands):
 
 
2013
 
2012
Raw materials and construction materials
$
32,795

 
$
20,994

Work in process
19,328

 
29,518

 
$
52,123

 
$
50,512


NOTE 7 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment in the accompanying Consolidated Balance Sheets consisted of the following amounts as of December 31, 2013 and 2012 (in thousands):
 
2013
 
2012
Machinery and equipment
$
116,945

 
$
105,559

Vehicles
49,296

 
45,340

Furniture and fixtures
22,036

 
21,353

Computer hardware/software
88,956

 
82,205

Land, buildings and leasehold improvements
78,796

 
69,564

 
356,029

 
324,021

Accumulated depreciation and amortization
(232,615
)
 
(207,390
)
 
$
123,414

 
$
116,631

Depreciation and amortization expense related to property, plant and equipment, including capital leases, was $36.3 million , $31.2 million and $27.4 million for the years ended December 31, 2013 , 2012 and 2011 , respectively.
NOTE 8 - GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS
Goodwill at December 31, 2013 and 2012 was approximately $834.8 million and $566.6 million , respectively, and reflects the excess of cost over fair market value of net identifiable assets of companies acquired. Goodwill attributable to companies acquired in 2013 has been valued at $268.2 million . ASC Topic 805, “Business Combinations” (“ASC 805”) requires that all business combinations be accounted for using the acquisition method and that certain identifiable intangible assets acquired in a business combination be recognized as assets apart from goodwill. ASC Topic 350, “Intangibles-Goodwill and Other” (“ASC 350”) requires goodwill and other identifiable intangible assets with indefinite useful lives not be amortized, such as trade names, but instead must be tested at least annually for impairment (which we test each October 1, absent any impairment indicators) and be written down if impaired. ASC 350 requires that goodwill be allocated to its respective reporting unit and that identifiable intangible assets with finite lives be amortized over their useful lives. As of December 31, 2013 , approximately 46.1% of our goodwill related to our United States industrial services segment, approximately 27.4% of our goodwill related to our United States building services segment, approximately 26.0% related to our United States mechanical construction and facilities services segment and approximately 0.5% related to our United States electrical construction and facilities services segment.
We test for impairment of goodwill at the reporting unit level. Our reporting units are consistent with the reportable segments identified in Note 17, "Segment Information", of the notes to consolidated financial statements. In assessing whether our goodwill is impaired, we first qualitatively assess whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount using various factors. If after this assessment we are unable to determine that the fair value of a reporting unit exceeds the carrying amount, we proceed to the two-step process as prescribed by ASC 350. The first step of this test compares the fair value of the reporting unit, determined based upon discounted estimated future cash flows, to the carrying amount, including goodwill. If the fair value exceeds the carrying amount, no further work is required and no impairment loss is recognized. If the carrying amount of the reporting unit exceeds the fair value, the goodwill of the reporting unit is potentially impaired and step two of the goodwill impairment test would need to be performed to measure the amount of an impairment loss, if any. In the second step, the impairment is computed by comparing the implied fair value of the reporting unit's goodwill with the carrying amount of the goodwill. If the carrying amount of the reporting unit's goodwill is greater than the implied fair value of its goodwill, an impairment loss in the amount of the excess is recognized and charged to operations. The weighted average cost of capital used

50
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS - (Continued)

in our annual testing for impairment as of October 1, 2013 was 12.1% , 12.6% and 11.1% for our domestic construction segments, our United States building services segment and our United States industrial services segment, respectively. The perpetual growth rate used for our annual testing was 2.7% for our domestic segments. Unfavorable changes in these key assumptions may affect future testing results and cause us to fail step one of the goodwill impairment testing process. For example, keeping all other assumptions constant, a 50 basis point increase in the weighted average costs of capital would cause the estimated fair value of our United Stated industrial services segment to approach its carrying value. A 50 basis point increase in the weighted average costs of capital would not significantly reduce the excess of the estimated fair value compared to the carrying value for any of our other domestic segments. In addition, keeping all other assumptions constant, a 50 basis point reduction in the perpetual growth rate would not significantly reduce the excess of the estimated fair value compared to the carrying value for any of our domestic segments. For the years ended December 31, 2013, 2012 and 2011, no impairment of our goodwill was recognized.
We also test for the impairment of trade names that are not subject to amortization by calculating the fair value using the “relief from royalty payments” methodology. This approach involves two steps: (a) estimating reasonable royalty rates for each trade name and (b) applying these royalty rates to a net revenue stream and discounting the resulting cash flows to determine fair value. This fair value is then compared with the carrying value of each trade name. If the carrying amount of the trade name is greater than the implied fair value of the trade name, an impairment in the amount of the excess is recognized and charged to operations. The annual impairment review of our trade names for the year ended December 31, 2011 resulted in a $1.0 million non-cash impairment charge as a result of a change in the fair value of trade names associated with certain prior acquisitions reported within our United States building services segment. This impairment primarily resulted from both lower forecasted revenues from, and lower operating margins at, specific companies within our United States building services segment. For the years ended December 31, 2013 and 2012, no impairment of our trade names was recognized.
In addition, we review for the impairment of other identifiable intangible assets that are being amortized whenever facts and circumstances indicate that their carrying values may not be fully recoverable. This test compares their carrying values to the undiscounted pre-tax cash flows expected to result from the use of the assets. If the assets are impaired, the assets are written down to their fair values, generally determined based on their future discounted cash flows. Based on facts and circumstances that indicated an impairment may exist, we performed an impairment review of certain of our other identifiable intangible assets for the year ended December 31, 2011. As a result of this review, we recognized a $2.8 million non-cash impairment charge as a result of a change in the fair value of customer relationships associated with certain prior acquisitions reported within our United States building services segment for the year ended December 31, 2011. For the years ended December 31, 2013 and 2012, no impairment of our other identifiable intangible assets was recognized.
Our development of the present value of future cash flow projections used in impairment testing is based upon assumptions and estimates by management from a review of our operating results, business plans, anticipated growth rates and margins and weighted average cost of capital, among others. Those assumptions and estimates can change in future periods, and other factors used in assessing fair value are outside the control of management, such as interest rates. There can be no assurances that our estimates and assumptions made for purposes of our goodwill and identifiable intangible asset impairment testing will prove to be accurate predictions of the future. If our assumptions regarding future business performance plans or anticipated growth rates and/or margins are not achieved, or there is a rise in interest rates, we may be required, as we did in 2011 , to record goodwill and/or identifiable intangible asset impairment charges in future periods.
During 2011, we recognized a $3.8 million non-cash impairment charge as discussed above. Of this amount, $2.8 million related to customer relationships and $1.0 million related to trade names. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such a charge would be material.








51
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS - (Continued)

The changes in the carrying amount of goodwill by reportable segments during the years ended December 31, 2013 and 2012 were as follows (in thousands):  
 
United States
electrical
construction
and facilities
services segment
 
United States
mechanical
construction
and facilities
services segment
 
United States
building
services segment
 
United States
industrial services segment
 
Total
Gross balance at December 31, 2011
$
3,823

 
$
198,446

 
$
387,206

 
$
187,932

 
$
777,407

Accumulated impairment charge
—

 
—

 
(139,498
)
 
(71,104
)
 
(210,602
)
Balance at December 31, 2011
3,823

 
198,446

 
247,708

 
116,828

 
566,805

Acquisitions and purchase price adjustments
—

 
2,014

 
(2,231
)
 
—

 
(217
)
Transfers
—

 
690

 
(690
)
 
—

 
—

Balance at December 31, 2012
3,823

 
201,150

 
244,787

 
116,828

 
566,588

Acquisitions and purchase price adjustments
—

 
522

 
—

 
267,715

 
268,237

Transfers
—

 
15,583

 
(15,583
)
 
—

 
—

Balance at December 31, 2013
$
3,823

 
$
217,255

 
$
229,204

 
$
384,543

 
$
834,825

During 2011, pursuant to the purchase method of accounting, we recorded an aggregate of $1.9 million by reason of earn-out obligations in respect of a prior acquisition, which increased goodwill associated with this acquisition.
Identifiable intangible assets as of December 31, 2013 and 2012 consist of the following (in thousands):  
 
December 31, 2013
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Accumulated
Impairment
Charge  
 
Total
Contract backlog
$
47,620

 
$
(47,583
)
 
$
—

 
$
37

Developed technology/Vendor network
95,661

 
(30,212
)
 
—

 
65,449

Customer relationships
425,873

 
(83,391
)
 
(4,834
)
 
337,648

Non-competition agreements
9,980

 
(8,498
)
 
—

 
1,482

Trade names (amortized)
21,248

 
(6,619
)
 
—

 
14,629

Trade names (unamortized)
170,218

 
—

 
(47,966
)
 
122,252

Total
$
770,600

 
$
(176,303
)
 
$
(52,800
)
 
$
541,497

 
December 31, 2012
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Accumulated
Impairment
Charge
 
Total
Contract backlog
$
47,580

 
$
(46,630
)
 
$
—

 
$
950

Developed technology/Vendor network
95,661

 
(25,078
)
 
—

 
70,583

Customer relationships
259,683

 
(61,718
)
 
(4,834
)
 
193,131

Non-competition agreements
8,269

 
(7,898
)
 
—

 
371

Trade names (amortized)
17,521

 
(3,951
)
 
—

 
13,570

Trade names (unamortized)
113,109

 
—

 
(47,966
)
 
65,143

Total
$
541,823

 
$
(145,275
)
 
$
(52,800
)
 
$
343,748




52
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS - (Continued)

Identifiable intangible assets attributable to companies acquired in 2013 have been valued at $228.8 million . Identifiable intangible assets attributable to companies acquired in 2012 have been valued at $0.5 million . See Note 3 - Acquisitions of Businesses of the notes to consolidated financial statements for additional information. The identifiable intangible amounts are amortized on a straight-line basis. The weighted average amortization periods for the unamortized balances remaining are approximately 11 months for contract backlog, 13 years for developed technology/vendor network, 13 years for customer relationships, 2 years for non-competition agreements and 5.5 years for trade names.
Amortization expense related to identifiable intangible assets was $31.0 million , $29.8 million and $26.4 million for the years ended December 31, 2013 , 2012 and 2011 , respectively. The following table presents the estimated future amortization expense of identifiable intangible assets in the following years (in thousands):  
2014
$
37,966

2015
37,565

2016
36,502

2017
34,196

2018
32,070

Thereafter
240,946

 
$
419,245

NOTE 9 - DEBT
Credit Facilities
Until November 25, 2013, we had a revolving credit agreement (the "2011 Credit Agreement") as amended, which provided for a revolving credit facility of $750.0 million . The 2011 Credit Agreement was effective November 21, 2011. Effective November 25, 2013, we amended and restated the 2011 Credit Agreement with a $1.1 billion credit agreement (the "2013 Credit Agreement"), which is comprised of a $750.0 million revolving credit facility (the "2013 Revolving Credit Facility") and a $350.0 million term loan (the "Term Loan"). The proceeds of the Term Loan were used to repay amounts drawn under the 2011 Credit Agreement. Both facilities expire on November 25, 2018 . We may increase the 2013 Revolving Credit Facility to $1.05 billion if additional lenders are identified and/or existing lenders are willing to increase their current commitments; and we may allocate up to $250.0 million of available borrowings under the 2013 Revolving Credit Facility to letters of credit for our account or for the account of any of our subsidiaries. The 2013 Revolving Credit Facility and the Term Loan are both guaranteed by most of our direct and indirect subsidiaries and are secured by substantially all of our assets and most of the assets of most of our subsidiaries. The 2013 Revolving Credit Facility and the Term Loan contain various covenants providing for, among other things, maintenance of certain financial ratios and certain limitations on payment of dividends, common stock repurchases, investments, acquisitions, indebtedness and capital expenditures. A commitment fee is payable on the average daily unused amount under the 2013 Revolving Credit Facility, which ranges from 0.20% to 0.30% , based on certain financial tests. The fee is 0.20% of the unused amount as of December 31, 2013 . Borrowings under the 2013 Revolving Credit Facility and the Term Loan bear interest at (1) a rate which is the prime commercial lending rate announced by Bank of Montreal from time to time ( 3.25% at December 31, 2013 ) plus 0.25% to 0.75% , based on certain financial tests or (2) United States dollar LIBOR ( 0.17% at December 31, 2013 ) plus 1.25% to 1.75% , based on certain financial tests. The interest rate in effect at December 31, 2013 was 1.42% . Letter of credit fees issued under the 2013 Revolving Credit Facility range from 1.25% to 1.75% of the respective face amounts of outstanding letters of credit and are computed based on certain financial tests. We capitalized approximately $3.0 million of debt issuance costs associated with the 2013 Credit Agreement. This amount is being amortized over the life of the agreement and is included as part of interest expense. In connection with the amendment and restatement of the 2011 Credit Agreement, $0.3 million attributable to the acceleration of expense for debt issuance costs in connection with the 2011 Credit Agreement was recorded as part of interest expense. We are required to make principal payments on the Term Loan in installments on the last day of March, June, September and December of each year, commencing with the calendar quarter ending March 31, 2014, in the amount of $4.4 million , with a final payment of all principal and interest not yet paid due and payable on November 25, 2018. As of December 31, 2013, the balance on the Term Loan was $350.0 million . As of December 31, 2013 and December 31, 2012 , we had approximately $83.3 million and $84.0 million of letters of credit outstanding, respectively. We had borrowings of $150.0 million outstanding under the 2011 Credit Agreement at December 31, 2012 . There were no borrowings outstanding under the 2013 Revolving Credit Facility as of December 31, 2013 .


53
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - DEBT - (Continued)

Long-term debt in the accompanying Consolidated Balance Sheets consisted of the following amounts as of December 31, 2013 and 2012 (in thousands):
 
 
2013
 
2012
2011 Credit Agreement
$
—

 
$
150,000

Term Loan, interest payable at varying amounts through 2018
350,000

 
—

Capitalized Lease Obligations, at weighted average interest rates from 0.8% to 8.3% payable in varying amounts through 2018
4,652

 
5,881

Other, payable through 2015
11

 
18

 
354,663

 
155,899

Less: current maturities
19,332

 
1,787

 
$
335,331

 
$
154,112

Capitalized Lease Obligations
See Note 15 - Commitments and Contingencies of the notes to consolidated financial statements for additional information.
NOTE 10 - FAIR VALUE MEASUREMENTS
We use a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy, which gives the highest priority to quoted prices in active markets, is comprised of the following three levels:
Level 1 – Unadjusted quoted market prices in active markets for identical assets and liabilities.
Level 2 – Observable inputs, other than Level 1 inputs. Level 2 inputs would typically include quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.
Level 3 – Prices or valuations that require inputs that are both significant to the measurement and unobservable.
The following tables provide the assets and liabilities carried at fair value measured on a recurring basis as of December 31, 2013 and December 31, 2012 (in thousands):
 
 
Assets at Fair Value as of December 31, 2013
Asset Category
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents (1)
$
439,813

 
—

 
—

 
$
439,813

Restricted cash (2)
6,934

 
—

 
—

 
6,934

Short-term investments (2)
—

 
—

 
—

 
—

Total
$
446,747

 
—

 
—

 
$
446,747

 
 
Assets at Fair Value as of December 31, 2012
Asset Category
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents (1)
$
605,303

 
—

 
—

 
$
605,303

Restricted cash (2)
6,281

 
—

 
—

 
6,281

Short-term investments (2)
4,879

 
—

 
—

 
4,879

Total
$
616,463

 
—

 
—

 
$
616,463

_________________
(1)
Cash and cash equivalents consist primarily of money market funds with original maturity dates of three months or less, which are Level 1 assets. At December 31, 2013 and 2012 , we had $147.7 million and $407.4 million , respectively, in money market funds.
(2)
Restricted cash and short-term investments with original maturities greater than three months are classified as “Prepaid expenses and other” on our consolidated balance sheets.


54
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - FAIR VALUE MEASUREMENTS - (Continued)

We believe that the carrying values of our financial instruments, which include accounts receivable and other financing commitments, approximate their fair values due primarily to their short-term maturities and low risk of counterparty default. The carrying value of our 2013 Credit Agreement approximates the fair value due to the variable rate on such debt.
 
NOTE 11 - INCOME TAXES        
Our 2013 income tax provision from continuing operations was $75.3 million compared to $95.4 million for 2012 and $76.8 million for 2011 . The actual income tax rates on income from continuing operations before income taxes, less amounts attributable to noncontrolling interests, for the years ended December 31, 2013 , 2012 and 2011 , were 37.8% , 39.4% and 38.7% , respectively. The decrease in the 2013 income tax provision compared to 2012 was primarily due to the effect of reduced income before income taxes, a change in the mix of earnings among various jurisdictions and reversal of reserves for previously unrecognized income tax benefits. The increase in the 2012 income tax provision compared to 2011 was primarily due to increased income before income taxes, the effect of a change in the United Kingdom statutory tax rate and a change in the mix of earnings among various jurisdictions.
As of December 31, 2013 and 2012 , the amount of unrecognized income tax benefits was $3.1 million and $11.3 million (of which $1.7 million and $6.6 million , if recognized, would favorably affect our effective income tax rate), respectively. As of December 31, 2013 and 2012 , we had an accrual of $0.2 million and $2.6 million for the payment of interest related to unrecognized income tax benefits included on the Consolidated Balance Sheets, respectively. During the years ended December 31, 2013 and 2012 , we recognized approximately $0.2 million and $0.3 million , respectively, in interest expense related to our unrecognized income tax benefits. In addition, we reversed $2.6 million and less than $0.1 million of accrued interest expense related to our unrecognized income tax benefits for the years ended December 31, 2013 and 2012, respectively. As of December 31, 2013 and 2012 , we had total income tax reserves included in “Other long-term liabilities” of $3.4 million and $13.9 million , respectively.
A reconciliation of the beginning and end of year unrecognized income tax benefits is as follows (in thousands):  
 
2013
 
2012
Balance at beginning of year
$
11,281

 
$
5,661

Additions based on tax positions related to the current year
895

 
5,863

Additions based on tax positions related to prior years
251

 
1,348

Reductions for tax positions of prior years
(6,273
)
 
(1,298
)
Reductions for expired statute of limitations
(3,038
)
 
(293
)
Balance at end of year
$
3,116

 
$
11,281

It is possible that approximately $0.6 million of unrecognized income tax benefits at December 31, 2013 , primarily relating to uncertain tax positions attributable to compensation related accruals, will become recognized income tax benefits in the next twelve months due to the expiration of applicable statutes of limitations.
We file income tax returns with the Internal Revenue Service and various state, local and foreign tax agencies. The Company is currently under examination by various taxing authorities for the years 2008 through 2011. The Internal Revenue Service is currently auditing our 2011 and 2010 federal income tax returns.









55
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 - INCOME TAXES - (Continued)

The income tax provision in the accompanying Consolidated Statements of Operations for the years ended December 31, 2013 , 2012 and 2011 consisted of the following (in thousands):
 
 
2013
 
2012
 
2011
Current:
 
 
 
 
 
Federal provision
$
60,449

 
$
70,019

 
$
54,033

State and local provisions
2,897

 
18,174

 
14,735

Foreign provision (benefit)
94

 
543

 
(350
)
 
63,440

 
88,736

 
68,418

Deferred
11,857

 
6,626

 
8,346

 
$
75,297

 
$
95,362

 
$
76,764


Factors accounting for the variation from U.S. statutory income tax rates from continuing operations for the years ended December 31, 2013 , 2012 and 2011 were as follows (in thousands):
 
 
2013
 
2012
 
2011
Federal income taxes at the statutory rate
$
70,928

 
$
85,487

 
$
70,471

Noncontrolling interests
(1,247
)
 
(806
)
 
(996
)
State and local income taxes, net of federal tax benefits
9,369

 
8,512

 
9,673

State tax reserves
(6,529
)
 
3,927

 
(73
)
Permanent differences
3,226

 
2,605

 
2,468

Domestic manufacturing deduction
(4,778
)
 
(5,559
)
 
(4,048
)
Foreign income taxes (including UK statutory rate changes)
4,831

 
703

 
56

Adjustments to valuation allowance for deferred tax assets
—

 
—

 
172

Federal tax reserves
263

 
(258
)
 
(1,056
)
Other
(766
)
 
751

 
97

 
$
75,297

 
$
95,362

 
$
76,764

The components of the net deferred income tax asset are included in “Prepaid expenses and other” of $32.5 million , “Other assets” of $15.0 million , and “Other long-term obligations” of $174.3 million at December 31, 2013 , and the components of net deferred income tax asset are included in “Prepaid expenses and other” of $35.0 million , “Other assets” of $17.5 million , and "Other long-term obligations" of $88.1 million at December 31, 2012 in the accompanying Consolidated Balance Sheets.










56
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 - INCOME TAXES - (Continued)

The amounts recorded for the years ended December 31, 2013 and 2012 were as follows (in thousands):
 
 
2013
 
2012
Deferred income tax assets:
 
 
 
Excess of amounts expensed for financial statement purposes over amounts deducted for income tax purposes:
 
 
 
Insurance liabilities
$
57,310

 
$
51,348

Pension liability
7,813

 
15,990

Deferred compensation
16,358

 
15,704

Other (including liabilities and reserves)
35,625

 
33,875

Total deferred income tax assets
117,106

 
116,917

Valuation allowance for deferred tax assets
(2,244
)
 
(2,494
)
Net deferred income tax assets
114,862

 
114,423

Deferred income tax liabilities:
 
 
 
Costs capitalized for financial statement purposes and deducted for income tax purposes:
 
 
 
Goodwill and identifiable intangible assets
(214,865
)
 
(133,185
)
Other, primarily depreciation of property, plant and equipment
(26,840
)
 
(16,883
)
Total deferred income tax liabilities
(241,705
)
 
(150,068
)
Net deferred income tax liabilities
$
(126,843
)
 
$
(35,645
)
We file a consolidated federal income tax return including all of our U.S. subsidiaries. As of December 31, 2013 and 2012 , the total valuation allowance on net deferred income tax assets was approximately $2.2 million and $2.5 million , respectively, primarily related to state and local net operating losses. The reason for the net decrease in the valuation allowance for 2012 was related to the expiration of net capital loss carryforwards, partially offset by state and local net operating loss carryforwards. At December 31, 2013, we had trading and capital losses for United Kingdom income tax purposes of approximately $34.7 million , which have no expiration date. Such losses are subject to review by the United Kingdom taxing authority. Realization of the deferred income tax assets is dependent on our generating sufficient taxable income. We believe that the deferred income tax assets will be realized through the future reversal of existing taxable temporary differences and projected future income. Although realization is not assured, we believe it is more likely than not that the deferred income tax asset, net of the valuation allowance discussed above, will be realized. The amount of the deferred income tax asset considered realizable, however, could be reduced if estimates of future income are reduced.
Income before income taxes from continuing operations for the years ended December 31, 2013 , 2012 and 2011 consisted of the following (in thousands):
 
 
2013
 
2012
 
2011
United States
$
219,300

 
$
236,774

 
$
191,154

Foreign
(16,649
)
 
7,474

 
10,198

 
$
202,651

 
$
244,248

 
$
201,352

As of December 31, 2013, we had undistributed foreign earnings from our United Kingdom subsidiary of approximately $5.7 million for which we have not recorded a deferred tax liability, as we have provided taxes on such earnings in prior periods. As of December 31, 2013, the amount of cash held in the United Kingdom was approximately $60.9 million which, if repatriated, should not result in material federal or state income taxes. As of December 31, 2013, we had undistributed foreign earnings from our Puerto Rico subsidiary of approximately $1.4 million for which we have not recorded a deferred tax liability as such earnings are indefinitely reinvested. As of December 31, 2013, the amount of cash held in Puerto Rico was approximately $3.0 million which, if repatriated, may result in federal and state income taxes of approximately $0.5 million .

57
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - COMMON STOCK
As of December 31, 2013 and December 31, 2012 , 66,896,518 and 66,964,162 shares of our common stock were outstanding, respectively.
On December 7, 2012, our Board of Directors declared a special dividend of $0.25 per share, payable in December 2012, and announced its intention to increase the regular quarterly dividend to $0.06 per share. In addition, at the December 7, 2012 meeting of our Board of Directors, the regular quarterly dividend that would have been paid in January 2013 was declared, its amount increased to $0.06 per share and its payment date accelerated to December 28, 2012. During 2013, we paid a regular quarterly dividend of $0.06 per share in the second, third and fourth quarters of 2013. In December 2013, our Board of Directors announced its intention to increase the regular quarterly dividend to $0.08 per share commencing with the dividend to be paid in the first quarter of 2014.
On September 26, 2011, our Board of Directors authorized us to repurchase up to $100.0 million of our outstanding common stock. During 2013, we repurchased approximately 0.7 million shares of our common stock for approximately $26.1 million . Since the inception of this repurchase program, we have repurchased 2.8 million shares of our common stock for approximately $77.5 million through December 31, 2013 , and there remains authorization for us to repurchase approximately $22.5 million of our shares under that authorization. On December 5, 2013, our Board of Directors authorized us to repurchase up to an additional $100.0 million of our outstanding common stock. As a result, $122.5 million was available for repurchase as of December 31, 2013. The repurchase program does not obligate us to acquire any particular amount of common stock and may be suspended, recommenced or discontinued at any time or from time to time without prior notice. Acquisitions under our repurchase program may be made from time to time to the extent permitted by securities laws and other legal requirements, including provisions in our credit agreement placing limitations on such repurchases. The repurchase program has been and will be funded from our operations.
NOTE 13 - SHARE-BASED COMPENSATION PLANS
We have an incentive plan under which stock options, stock awards, stock units and other share-based compensation may be granted to officers, non-employee directors and key employees of the Company. Under the terms of this plan, 3,250,000 shares were authorized and 2,247,362 shares are available for grant or issuance as of December 31, 2013 . Any issuances under this plan are valued at the fair market value of the common stock on the grant date. The vesting and expiration of any stock option grants and the vesting schedule of any stock awards or stock units are determined by the Compensation and Personnel Committee of our Board of Directors at the time of the grant. Additionally, we have outstanding stock options and stock units that were issued under other plans, and no further grants may be made under those plans.
The following table summarizes activity regarding our stock options and awards of shares and stock units since December 31, 2010:
 
Stock Options
 
Restricted Stock Units
 
 
Shares
 
Weighted
Average
Price
 
 
 
Shares
 
Weighted
Average
Price
Balance, December 31, 2010
 
4,416,773

 
$
14.31

 
Balance, December 31, 2010
 
365,188

 
$
24.54

Granted
 
20,096

 
$
29.26

 
Granted
 
258,881

 
$
29.92

Expired
 
—

 
—

 
Forfeited
 
—

 
—

Exercised
 
(1,036,328
)
 
$
11.32

 
Vested
 
(137,219
)
 
$
23.31

Balance, December 31, 2011
 
3,400,541

 
$
15.30

 
Balance, December 31, 2011
 
486,850

 
$
27.75

Granted
 
11,702

 
$
27.39

 
Granted
 
340,518

 
$
27.90

Expired
 
(25,624
)
 
28.13

 
Forfeited
 
—

 
—

Exercised
 
(1,590,242
)
 
$
13.09

 
Vested
 
(238,461
)
 
$
25.96

Balance, December 31, 2012
 
1,796,377

 
$
17.15

 
Balance, December 31, 2012
 
588,907

 
$
28.56

Granted
 
—

 
$
—

 
Granted
 
192,617

 
$
36.26

Expired
 
—

 
$
—

 
Forfeited
 
(15,298
)
 
29.38

Exercised
 
(485,680
)
 
$
14.55

 
Vested
 
(155,423
)
 
$
27.77

Balance, December 31, 2013
 
1,310,697

 
$
18.12

 
Balance, December 31, 2013
 
610,803

 
$
31.17


58
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - SHARE-BASED COMPENSATION PLANS - (Continued)

In addition, 12,264 and 6,560 shares were granted to certain non-employee directors as part of their annual retainer during the years ended December 31, 2012 and 2011 , respectively. No shares were granted to non-employee directors as part of their annual retainer during the year ended December 31, 2013. The shares awarded to non-employee directors and stock units awarded to employees were pursuant to incentive plans for which $6.9 million , $6.7 million and $5.2 million of compensation expense was recognized for the years ended December 31, 2013 , 2012 and 2011 , respectively. We have $5.1 million of compensation expense, net of income taxes, which will be recognized over the remaining vesting periods of up to approximately three years related to the stock units awarded to employees and non-employee directors.
All outstanding stock options were fully vested as of December 31, 2012; therefore, no compensation expense was recognized for the year ended December 31, 2013. Compensation expense of $0.1 million and $0.2 million for the years ended December 31, 2012 and 2011 , respectively, was recognized due to the vesting of stock option grants. In addition, 66,581 restricted stock units granted to our non-employee directors vested as of December 31, 2013, but issuance has been deferred for up to five years. As a result of stock option exercises, $5.2 million , $8.8 million and $5.6 million of proceeds were received during the years ended December 31, 2013 , 2012 and 2011 , respectively. The income tax benefit derived in 2013 , 2012 and 2011 as a result of such exercises and share-based compensation was $5.2 million , $8.7 million and $6.2 million , respectively, of which $4.6 million , $7.1 million and $3.6 million , respectively, represented excess tax benefits.
The total intrinsic value of options (the amounts by which the stock price exceeded the exercise price of the option on the date of exercise) that was exercised during 2013 , 2012 and 2011 was $12.5 million , $25.9 million and $15.1 million , respectively.
At December 31, 2013 , 2012 and 2011 , 1,310,697 options, 1,796,377 options and 3,400,541 options were exercisable, respectively. The weighted average exercise price of exercisable options at December 31, 2013 , 2012 and 2011 was approximately $18.12 , $17.15 and $15.30 , respectively.
The following table summarizes information about our stock options as of December 31, 2013 :  
Stock Options Outstanding and Exercisable
Range of
Exercise Prices
 
Number
 
Weighted Average
Remaining Life
 
Weighted Average
Exercise Price
$9.67 - $11.02
 
91,000
 
0.73 Years
 
$9.97
$11.27 - $12.49
 
617,200
 
1.04 Years
 
$11.39
$20.42 - $22.53
 
210,000
 
3.05 Years
 
$21.23
$24.48 - $29.26
 
292,497
 
4.00 Years
 
$26.49
$36.03
 
100,000
 
1.47 Years
 
$36.03
The total aggregate intrinsic value of options outstanding and exercisable as of December 31, 2013 , 2012 and 2011 were approximately $31.9 million , $31.4 million and $39.1 million , respectively.
The fair value on the date of grant was calculated using the Black-Scholes option pricing model with the following weighted average assumptions used for grants during the periods indicated:  
 
For the Years Ended December 31,
 
2012
 
2011
Dividend yield
0.73
%
 
0
%
Expected volatility
52.6
%
 
56.1
%
Risk-free interest rate
0.5
%
 
1.3
%
Expected life of options in years
3.6

 
3.6

Weighted average grant date fair value
$
10.18

 
$
12.23

There were no stock option grants during 2013. Forfeitures of stock options have been historically insignificant to the calculation and are estimated to be zero in all periods presented.

59
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - SHARE-BASED COMPENSATION PLANS - (Continued)

We have an employee stock purchase plan. Under the terms of this plan, the maximum number of shares of our common stock that may be purchased is 3,000,000 shares. Generally, our employees and non-union employees of our United States subsidiaries are eligible to participate in this plan. Employees covered by collective bargaining agreements generally are not eligible to participate in this plan.
NOTE 14 - RETIREMENT PLANS
Defined Benefit Plans
Our United Kingdom subsidiary has a defined benefit pension plan covering all eligible employees (the “UK Plan”); however, no individual joining the company after October 31, 2001 may participate in the plan. On May 31, 2010, we curtailed the future accrual of benefits for active employees under this plan.
We account for our UK Plan and other defined benefit plans in accordance with ASC 715, “Compensation-Retirement Benefits” (“ASC 715”). ASC 715 requires that (a) the funded status, which is measured as the difference between the fair value of plan assets and the projected benefit obligations, be recorded in our balance sheet with a corresponding adjustment to accumulated other comprehensive income (loss) and (b) gains and losses for the differences between actuarial assumptions and actual results, and unrecognized service costs, be recognized through accumulated other comprehensive income (loss). These amounts will be subsequently recognized as net periodic pension cost.
The change in benefit obligations and assets of the UK Plan for the years ended December 31, 2013 and 2012 consisted of the following components (in thousands):
 
 
2013
 
2012
Change in pension benefit obligation
 
 
 
Benefit obligation at beginning of year
$
302,306

 
$
265,061

Interest cost
12,326

 
12,460

Actuarial (gain) loss
(1,903
)
 
21,642

Benefits paid
(9,663
)
 
(9,543
)
Foreign currency exchange rate changes
5,811

 
12,686

Benefit obligation at end of year
308,877

 
302,306

Change in pension plan assets
 

 
 

Fair value of plan assets at beginning of year
239,650

 
204,080

Actual return on plan assets
27,969

 
29,231

Employer contributions
5,906

 
5,933

Benefits paid
(9,663
)
 
(9,543
)
Foreign currency exchange rate changes
5,949

 
9,949

Fair value of plan assets at end of year
269,811

 
239,650

Funded status at end of year
$
(39,066
)
 
$
(62,656
)
Amounts not yet reflected in net periodic pension cost and included in Accumulated other comprehensive loss:
 
2013
 
2012
Unrecognized losses
$
87,461

 
$
104,556

The underfunded status of the UK Plan of $39.1 million and $62.7 million at December 31, 2013 and 2012 , respectively, is included in “Other long-term obligations” in the accompanying Consolidated Balance Sheets. No plan assets are expected to be returned to us during the year ended December 31, 2014.




60
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - RETIREMENT PLANS - (Continued)

The weighted average assumptions used to determine benefit obligations as of December 31, 2013 and 2012 were as follows:
 
 
2013
 
2012
Discount rate
4.6
%
 
4.3
%
The weighted average assumptions used to determine net periodic pension cost for the years ended December 31, 2013 , 2012 and 2011 were as follows:
 
 
2013
 
2012
 
2011
Discount rate
4.3
%
 
4.7
%
 
5.3
%
Annual rate of return on plan assets
6.7
%
 
6.7
%
 
6.7
%
For 2013 and 2012, the annual rate of return on plan assets has been determined by modeling possible returns using the actuary's portfolio return calculator. This models the long term expected returns of the various asset classes held in the portfolio and allows for the additional benefits of holding a diversified portfolio. The annual rate of return on plan assets for 2011 was based on the yield of risk-free bonds, plus an estimated equity-risk premium, at each year's measurement date. This annual rate approximates the historical annual return on plan assets and considers the expected asset allocation between equity and debt securities. For measurement purposes of the liability, the annual rates of inflation of covered pension benefits assumed for 2013 and 2012 were 2.3% and 2.0% , respectively.
The components of net periodic pension cost of the UK Plan for the years ended December 31, 2013 , 2012 and 2011 were as follows (in thousands):
 
 
2013
 
2012
 
2011
Interest cost
$
12,326

 
$
12,460

 
$
13,286

Expected return on plan assets
(14,369
)
 
(13,058
)
 
(13,454
)
Amortization of unrecognized loss
2,560

 
2,433

 
1,555

Net periodic pension cost
$
517

 
$
1,835

 
$
1,387

The reclassification adjustment for the UK Plan from Accumulated other comprehensive loss into net periodic pension cost for the years ended December 31, 2013, 2012 and 2011 was approximately $2.0 million , $1.9 million and $1.2 million , respectively, which was classified as a component of "Cost of sales" and "Selling, general and administrative expenses" on the Consolidated Statements of Operations. The estimated unrecognized loss for the UK Plan that will be amortized from Accumulated other comprehensive loss into net periodic pension cost over the next year is approximately $2.0 million .
UK Plan Assets
The weighted average asset allocations and weighted average target allocations at December 31, 2013 and 2012 were as follows:
 
Asset Category
Target
Asset
Allocation 
 
December 31,
2013
 
December 31,
2012
Equity securities
45.0
%
 
53.4
%
 
63.8
%
Debt securities
55.0
%
 
46.4
%
 
35.8
%
Cash
—
%
 
0.2
%
 
0.4
%
Total
100.0
%
 
100.0
%
 
100.0
%
Plan assets of our UK Plan are invested in marketable equity and equity like securities through various funds. These funds invest in a diverse geographical range of investments, including the United Kingdom, the United States and other international locations, such as Asia-Pacific and other European locations. Debt securities are invested in funds that invest in UK corporate bonds and UK government bonds.

61
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - RETIREMENT PLANS - (Continued)

The following tables set forth by level, within the fair value hierarchy discussed in Note 10 - Fair Value Measurements, the assets of the UK Plan at fair value as of December 31, 2013 and 2012 (in thousands):
 
 
Assets at Fair Value as of December 31, 2013
Asset Category
    Level 1
 
Level 2
 
Level 3
 
Total
Equity and equity like investments
$
—

 
$
138,908

 
$
5,196

 
$
144,104

Corporate bonds
—

 
101,337

 
—

 
101,337

Government bonds
—

 
23,716

 
—

 
23,716

Cash
654

 
—

 
—

 
654

Total
$
654

 
$
263,961

 
$
5,196

 
$
269,811

 
 
Assets at Fair Value as of December 31, 2012
Asset Category
    Level 1
 
Level 2
 
Level 3
 
Total
Equity and equity like investments
$
—

 
$
147,957

 
$
4,996

 
$
152,953

Corporate bonds
—

 
62,534

 
—

 
62,534

Government bonds
—

 
23,227

 
—

 
23,227

Cash
936

 
—

 
—

 
936

Total
$
936

 
$
233,718

 
$
4,996

 
$
239,650

In regards to the plan assets of our UK Plan, investment amounts have been allocated within the fair value hierarchy across all three levels. The characteristics of the assets that sit within each level are summarized as follows:
Level 1-This asset represents cash.
Level 2-These assets are a combination of the following:
(a)
Assets that are not exchange traded but have a unit price that is based on the net asset value of the fund. The unit prices are not quoted but the underlying assets held by the fund are either:
(i)
held in a variety of listed investments
(ii)
held in UK treasury bonds or corporate bonds with the asset value being based on fixed income streams. Some of the underlying bonds are also listed on regulated markets.
It is the value of the underlying assets that have been used to calculate the unit price of the fund.
(b)
Assets that are not exchange traded but have a unit price that is based on the net asset value of the fund. The unit prices are quoted. The underlying assets within these funds comprise cash or assets that are listed on a regulated market (i.e., the values are based on observable market data) and it is these values that are used to calculate the unit price of the fund.
Level 3-Assets that are not exchange traded but have a unit price that is based on the net asset value of the fund. The unit prices are not quoted and are not available on any market.
The table below sets forth a summary of changes in the fair value of the UK Plan's Level 3 assets for the years ended December 31, 2013 and 2012 (in thousands):  
Equity and Equity Like Investments
2013
 
2012
Start of year balance
$
4,996

 
$
4,690

Actual return on plan assets, relating to assets still held at reporting date
99

 
90

Purchases, sales and settlements, net
—

 
—

Change due to exchange rate changes
101

 
216

End of year balance
$
5,196

 
$
4,996


62
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - RETIREMENT PLANS - (Continued)

The investment policies and strategies for the plan assets are established by the plan trustees (who are independent of the Company) to achieve a reasonable balance between risk, likely return and administration expense, as well as to maintain funds at a level to meet minimum funding requirements. In order to ensure that an appropriate investment strategy is in place, an analysis of the UK Plan's assets and liabilities is completed periodically.
Cash Flows:
Contributions
Our United Kingdom subsidiary expects to contribute approximately $6.0 million to its UK Plan in 2014.
Estimated Future Benefit Payments
The following estimated benefit payments are expected to be paid in the following years (in thousands):
 
Pension
Benefits
2014
$
10,520

2015
10,838

2016
11,166

2017
11,504

2018
11,852

Succeeding five years
64,845

The following table shows certain information for the UK Plan where the accumulated benefit obligation is in excess of plan assets as of December 31, 2013 and 2012 (in thousands):
 
2013
 
2012
Projected benefit obligation
$
308,877

 
$
302,306

Accumulated benefit obligation
$
308,877

 
$
302,306

Fair value of plan assets
$
269,811

 
$
239,650

We also sponsor two U.S. defined benefit plans in which participation by new individuals is frozen. The benefit obligation associated with these plans as of December 31, 2013 and 2012 was approximately $6.6 million and $7.1 million , respectively. The estimated fair value of the plan assets as of December 31, 2013 and 2012 was approximately $4.9 million and $4.5 million , respectively. The plan assets are considered Level 1 assets within the fair value hierarchy and are predominantly invested in cash, equities, and equity and bond funds. The pension liability balances as of December 31, 2013 and 2012 are classified as “Other long-term obligations” on the accompanying Consolidated Balance Sheets. The measurement date for these two plans is December 31 of each year. The major assumptions used in the actuarial valuations to determine benefit obligations as of December 31, 2013 and 2012 included discount rates of 4.50% and 4.30% for the 2013 period and 3.50% and 3.30% for the 2012 period. Also, included was an expected rate of return of 7.00% for the 2013 and 2012 periods, respectively. The reclassification adjustment from Accumulated other comprehensive loss into net periodic pension cost for the years ended December 31, 2013, 2012 and 2011 was approximately $0.3 million , $0.2 million and $0.1 million , respectively, which was classified as a component of "Selling, general and administrative expenses" on the Consolidated Statements of Operations. The estimated loss for these plans that will be amortized from Accumulated other comprehensive loss into net periodic pension cost over the next year is approximately $0.3 million . The future estimated benefit payments expected to be paid from the plans for the next ten years is approximately $0.4 million per year.





63
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - RETIREMENT PLANS - (Continued)

Multiemployer Plans         
We participate in over 200 multiemployer pension plans (“MEPPs”) that provide retirement benefits to certain union employees in accordance with various collective bargaining agreements (“CBAs”). As one of many participating employers in these MEPPs, we are responsible with the other participating employers for any plan underfunding. Our contributions to a particular MEPP are established by the applicable CBAs; however, our required contributions may increase based on the funded status of an MEPP and legal requirements of the Pension Protection Act of 2006 (the “PPA”), which requires substantially underfunded MEPPs to implement a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) to improve their funded status. Factors that could impact funded status of an MEPP include, without limitation, investment performance, changes in the participant demographics, decline in the number of contributing employers, changes in actuarial assumptions and the utilization of extended amortization provisions.
An FIP or RP requires a particular MEPP to adopt measures to correct its underfunding status. These measures may include, but are not limited to: (a) an increase in our contribution rate as a signatory to the applicable CBA, (b) a reallocation of the contributions already being made by participating employers for various benefits to individuals participating in the MEPP and/or (c) a reduction in the benefits to be paid to future and/or current retirees. In addition, the PPA requires that a 5% surcharge be levied on employer contributions for the first year commencing shortly after the date the employer receives notice that the MEPP is in critical status and a 10% surcharge on each succeeding year until a CBA is in place with terms and conditions consistent with the RP.
We could also be obligated to make payments to MEPPs if we either cease to have an obligation to contribute to the MEPP or significantly reduce our contributions to the MEPP because we reduce our number of employees who are covered by the relevant MEPP for various reasons, including, but not limited to, layoffs or closure of a subsidiary assuming the MEPP has unfunded vested benefits. The amount of such payments (known as a complete or partial withdrawal liability) would equal our proportionate share of the MEPPs' unfunded vested benefits. We believe that certain of the MEPPs in which we participate may have unfunded vested benefits. Due to uncertainty regarding future factors that could trigger withdrawal liability, as well as the absence of specific information regarding the MEPP's current financial situation, we are unable to determine (a) the amount and timing of any future withdrawal liability, if any, and (b) whether our participation in these MEPPs could have a material adverse impact on our financial position, results of operations or liquidity. We recorded a withdrawal liability of approximately $0.1 million for the year ended December 31, 2013 . We did not record any withdrawal liability for the years ended December 31, 2012 and 2011 .
The following table lists all domestic MEPPs to which our contributions exceeded $2.0 million in 2013 . Additionally, this table also lists all domestic MEPPs to which we contributed in 2013 in excess of $0.5 million for MEPPs in the critical status, “red zone” and $1.0 million in the endangered status, “orange or yellow zones” , as defined by the PPA (in thousands):     
Pension Fund
 
EIN/Pension Plan
Number
 
PPA Zone Status (1)
 
FIP/RP
Status
 
Contributions  
 
Contributions greater than 5% of total plan contributions (2)
 
Expiration
date of CBA
 
2013
 
2012
 
 
2013
 
2012
 
2011
 
Plumbers & Pipefitters National Pension Fund
 
52-6152779 001
 
Yellow
 
Yellow
 
Implemented
 
$
12,509

 
$
10,999

 
$
12,351

 
No
 
February  2014 to
August 2017
Sheet Metal Workers National Pension Fund
 
52-6112463 001
 
Red
 
Red
 
Implemented (3)
 
9,476

 
9,837

 
9,665

 
No
 
May 2014 to
June 2016
National Electrical Benefit Fund
 
53-0181657 001
 
Green
 
Green
 
N/A
 
7,986

 
7,679

 
8,541

 
No
 
February
2014 to
August 2017
Central Pension Fund of the International Union of Operating Engineers and Participating Employers
 
36-6052390 001
 
Green
 
Green
 
N/A
 
6,296

 
6,076

 
5,392

 
No
 
June 2014 to
December 2016
Pension, Hospitalization & Benefit Plan of the Electrical Industry- Pension Trust Account
 
13-6123601 001
 
Green
 
Green
 
N/A
 
6,189

 
5,722

 
5,364

 
No
 
May 2014 to May 2016
 
 


64
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - RETIREMENT PLANS - (Continued)

Pension Fund
 
EIN/Pension Plan
Number
 
PPA Zone Status (1)
 
FIP/RP
Status
 
Contributions
 
Contributions greater than 5% of total plan contributions (2)
 
Expiration
date of CBA
 
2013
 
2012
 
 
2013
 
2012
 
2011
 
Southern California Pipe Trades Retirement Fund
 
51-6108443 001
 
Green
 
Green
 
N/A
 
5,498

 
3,443

 
2,903

 
No
 
June 2014 to
August 2015
National Automatic Sprinkler Industry Pension Fund
 
52-6054620 001
 
Red
 
Red
 
Implemented (3)
 
4,226

 
4,952

 
5,452

 
No
 
April 2014 to
June 2016
Plumbers Pipefitters & Mechanical Equipment Service Local Union 392 Pension Plan
 
31-0655223 001
 
Red
 
Red
 
Implemented
 
4,128

 
3,848

 
3,332

 
Yes
 
June 2014
Arizona Pipe Trades Pension Plan
 
86-6025734 001
 
Green
 
Green
 
N/A
 
4,108

 
6,871

 
2,877

 
Yes
 
June 2014
Pipefitters Union Local 537 Pension Fund
 
51-6030859 001
 
Green
 
Green
 
N/A
 
3,690

 
2,747

 
2,140

 
Yes
 
February 2014 to
August 2017
Sheet Metal Workers Pension Plan of Northern California
 
51-6115939 001
 
Red
 
Red
 
Implemented
 
3,658

 
3,881

 
2,604

 
No
 
June 2014 to June 2016
Southern California IBEW-NECA Pension Trust Fund
 
95-6392774 001
 
Yellow
 
Yellow
 
Implemented
 
3,215

 
3,266

 
3,345

 
No
 
June 2014 to
May 2015
Eighth District Electrical Pension Fund
 
84-6100393 001
 
Green
 
Green
 
N/A
 
3,005

 
3,890

 
2,159

 
Yes
 
February 2014 to July 2016
Electrical Workers Local No. 26 Pension Trust Fund
 
52-6117919 001
 
Green
 
Green
 
N/A
 
2,878

 
3,049

 
2,244

 
Yes
 
January 2015 to
May 2015
U.A. Local 393 Pension Trust Fund Defined Benefit
 
94-6359772 002
 
Green
 
Green
 
N/A
 
2,811

 
2,181

 
1,877

 
Yes
 
June 2014 to June 2015
Electrical Contractors Association of the City of Chicago Local Union 134, IBEW Joint Pension Trust of Chicago Pension Plan 2
 
51-6030753 002
 
Green
 
Green
 
N/A
 
2,412

 
2,179

 
3,019

 
No
 
June 2014
Northern California Pipe Trades Pension Plan
 
94-3190386 001
 
Green
 
Green
 
N/A
 
2,258

 
3,582

 
2,596

 
Yes
 
May 2014 to
June 2015
San Diego Electrical Pension Trust
 
95-6101801 001
 
Green
 
Green
 
N/A
 
2,162

 
1,846

 
1,629

 
Yes
 
May 2014 to September 2016
Heating, Piping & Refrigeration Pension Fund
 
52-1058013 001
 
Yellow
 
Yellow
 
Implemented
 
2,139

 
2,078

 
2,143

 
No
 
February 2014 to July 2016
Boilermaker-Blacksmith National Pension Trust
 
48-6168020 001
 
Yellow
 
Yellow
 
Implemented
 
1,828

 
2,996

 
1,635

 
No
 
March 2014
to September
2015
U.A. Local 38 Defined Benefit Pension Plan
 
94-3042549 001
 
Yellow
 
Yellow
 
Implemented
 
1,522

 
927

 
333

 
No
 
June 2014 to June 2017
Local No. 697 IBEW and Electrical Industry Pension Fund
 
51-6133048 001
 
Yellow
 
Yellow
 
Implemented
 
1,443

 
1,757

 
1,557

 
Yes
 
May 2014 to August 2014
Sheet Metal Workers Pension Plan of Southern California, Arizona & Nevada
 
95-6052257 001
 
Red
 
Red
 
Implemented (3)
 
1,271

 
1,072

 
1,396

 
No
 
June 2014
Plumbing & Pipe Fitting Local 219 Pension Fund
 
34-6682376 001
 
Red
 
Red
 
Implemented
 
1,142

 
936

 
863

 
Yes
 
May 2014 to May 2015

65
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - RETIREMENT PLANS - (Continued)

Pension Fund
 
EIN/Pension Plan
Number
 
PPA Zone Status (1)
 
FIP/RP
Status
 
Contributions
 
Contributions greater than 5% of total plan contributions (2)
 
Expiration
date of CBA
 
2013
 
2012
 
 
2013
 
2012
 
2011
 
Plumbers & Steamfitters Local 150 Pension Fund
 
58-6116699 001
 
Yellow
 
Yellow
 
Implemented
 
1,011

 
1,036

 
659

 
Yes
 
March 2016
Steamfitters Local Union No. 420 Pension Plan
 
23-2004424 001
 
Red
 
Red
 
Implemented
 
831

 
1,557

 
1,138

 
No
 
April 2014 to
May 2014
Plumbers & Pipefitters Local 162 Pension Fund
 
31-6125999 001
 
Red
 
Red
 
Implemented (3)
 
770

 
737

 
433

 
Yes
 
May 2014
U.A. Local 467 Defined Benefit Plan
 
94-2353807 005
 
Red
 
Red
 
Implemented
 
538

 
534

 
396

 
No
 
June 2014 to June 2015
Other Multiemployer Pension Plans
 
 
 
 
 
 
 
 
 
42,271

 
39,038

 
41,619

 
 
 
Various
Total Contributions
 
 
 
 
 
 
 
 
 
$
141,271

 
$
138,716

 
$
129,662

 
 
 
 
 

_________________
(1)
The zone status represents the most recent available information for the respective MEPP, which may be 2012 or earlier for the 2013 year and 2011 or earlier for the 2012 year.
(2)
This information was obtained from the respective plans' Form 5500 for the most current available filing. These dates may not correspond with our fiscal year contributions. The above noted percentages of contributions are based upon disclosures contained in the plans' Form 5500 filing (“Forms”). Those Forms, among other things, disclose the names of individual participating employers whose annual contributions account for more than 5% of the aggregate annual amount contributed by all participating employers for a plan year. Accordingly, if the annual contribution of two or more of our subsidiaries each accounted for less than 5% of such contributions, but in the aggregate accounted for in excess of 5% of such contributions, that greater percentage is not available and accordingly is not disclosed.
(3)
For these respective plans, a funding surcharge was currently in effect for 2013.
The nature and diversity of our business may result in volatility in the amount of our contributions to a particular MEPP for any given period. That is because, in any given market, we could be working on a significant project and/or projects, which could result in an increase in our direct labor force and a corresponding increase in our contributions to the MEPP(s) dictated by the applicable CBA. When that particular project(s) finishes and is not replaced, the number of participants in the MEPP(s) who are employed by us would also decrease, as would our level of contributions to the particular MEPP(s). Additionally, the amount of contributions to a particular MEPP could also be affected by the terms of the CBA, which could require at a particular time, an increase in the contribution rate and/or surcharges. We have also acquired various companies since 2011, some of which participate in MEPPs, and as a result, our contributions have increased. As a result of acquisitions made in 2011, our contributions to various MEPPs increased by $5.4 million for the year ended December 31, 2011 . No additional contributions were made to MEPPs for the years ended December 31, 2013 and 2012, as a result of acquisitions made in each respective year since the acquired companies were not parties to any MEPPs.
We also participate in two MEPPs that are located within the United Kingdom for which we have contributed $0.3 million for each of the years ended December 31, 2013 , 2012 and 2011 . The information that we have obtained relating to these plans is not as readily available and/or as comparable as the information that has been ascertained in the United States. Based upon the most recently available information, one of the plans is 100% funded, and the other plan is less than 65% funded. A recovery plan has been put in place for the plan that is less than 65% funded, which requires higher contribution amounts to be paid by our UK operations.
Additionally, we contribute to certain multiemployer plans that provide post retirement benefits such as health and welfare benefits and/or defined contribution/annuity plans, among others. Our contributions to these plans approximated $93.5 million , $89.9 million and $76.5 million for the years ended December 31, 2013 , 2012 and 2011 , respectively. Acquisitions made in 2011 accounted for an increase in our contributions to these types of plans of $2.5 million for the year ended December 31, 2011 . No additional contributions were made to other post retirement benefit plans for the years ended December 31, 2013 and 2012, as a result of acquisitions made in each respective year since the acquired companies were not parties to any of these types of plans. The amount of contributions to these plans is also subject for the most part to the factors discussed above in conjunction with the MEPPs.
Defined Contribution Plans
We have defined contribution retirement and savings plans that cover eligible employees in the United States. Contributions to these plans are based on a percentage of the employee's base compensation. The expenses recognized for the years ended

66
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14 - RETIREMENT PLANS - (Continued)

December 31, 2013 , 2012 and 2011 for these plans were $22.6 million , $20.7 million and $12.8 million , respectively. The increase in 2012 compared to 2011 was primarily attributable to an increase in matching contributions for one of these plans. At our discretion, we may make additional supplemental matching contributions to a defined contribution retirement and savings plan. The expenses recognized related to additional supplemental matching for the years ended December 31, 2013 , 2012 and 2011 were $4.0 million , $3.6 million and $3.0 million , respectively.
Our United Kingdom subsidiary has defined contribution retirement plans. The expense recognized for the years ended December 31, 2013 , 2012 and 2011 was $5.0 million , $5.7 million and $6.0 million , respectively.
NOTE 15 - COMMITMENTS AND CONTINGENCIES
Commitments
We lease land, buildings and equipment under various leases. The leases frequently include renewal options and escalation clauses and require us to pay for utilities, taxes, insurance and maintenance expenses.
Future minimum payments, by year and in the aggregate, under capital leases, non-cancelable operating leases and related subleases with initial or remaining terms of one or more years at December 31, 2013 , were as follows (in thousands):
 
 
Capital
Leases
 
Operating
Leases
 
Sublease
Income
2014
$
1,995

 
$
55,640

 
$
1,265

2015
1,653

 
45,291

 
1,124

2016
865

 
35,228

 
188

2017
393

 
23,001

 
63

2018
40

 
12,997

 
—

Thereafter
—

 
17,442

 
—

Total minimum lease payments
4,946

 
$
189,599

 
$
2,640

Amounts representing interest
(294
)
 
 
 
 
Present value of net minimum lease payments
$
4,652

 
 
 
 
Rent expense for operating leases and other rental items, including short-term equipment rentals charged to cost of sales for our construction contracts, for the years ended December 31, 2013 , 2012 and 2011 was $118.6 million , $115.6 million and $103.3 million , respectively. Rent expense for the years ended December 31, 2013 , 2012 and 2011 was reported net of sublease rental income of $1.2 million , $1.0 million and $1.0 million , respectively.
Contractual Guarantees
We have agreements with our executive officers and certain other key management personnel providing for severance benefits for such employees upon termination of their employment under certain circumstances.
From time to time in the ordinary course of business, we guarantee obligations of our subsidiaries under certain contracts. Generally, we are liable under such an arrangement only if our subsidiary fails to perform its obligations under the contract. Historically, we have not incurred any substantial liabilities as a consequence of these guarantees.
The terms of our construction contracts frequently require that we obtain from surety companies (“Surety Companies”) and provide to our customers payment and performance bonds (“Surety Bonds”) as a condition to the award of such contracts. The Surety Bonds secure our payment and performance obligations under such contracts, and we have agreed to indemnify the Surety Companies for amounts, if any, paid by them in respect of Surety Bonds issued on our behalf. In addition, at the request of labor unions representing certain of our employees, Surety Bonds are sometimes provided to secure obligations for wages and benefits payable to or for such employees. Public sector contracts require Surety Bonds more frequently than private sector contracts, and accordingly, our bonding requirements typically increase as the amount of public sector work increases. As of December 31, 2013 , based on our percentage-of-completion of our projects covered by Surety Bonds, our aggregate estimated exposure, had there been

67
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 - COMMITMENTS AND CONTINGENCIES - (Continued)

defaults on all our then existing contractual obligations, was approximately $0.8 billion . The Surety Bonds are issued by Surety Companies in return for premiums, which vary depending on the size and type of bond.
We are subject to regulation with respect to the handling of certain materials used in construction, which are classified as hazardous or toxic by federal, state and local agencies. Our practice is to avoid participation in projects principally involving the remediation or removal of such materials. However, when remediation is required as part of our contract performance, we believe we comply with all applicable regulations governing the discharge of material into the environment or otherwise relating to the protection of the environment.
At December 31, 2013 , we employed over 27,000 people, approximately 57% of whom are represented by various unions pursuant to more than 375 collective bargaining agreements between our individual subsidiaries and local unions. We believe that our employee relations are generally good. Only two of these collective bargaining agreements are national or regional in scope.
Restructuring expenses, primarily relating to employee severance obligations and/or the termination of leased facilities, were $11.7 million , $0.1 million and $1.2 million for 2013 , 2012 and 2011 , respectively. The 2013 restructuring expenses were primarily related to employee severance obligations and the termination of leased facilities in the construction operations of our United Kingdom construction and building services segment. The 2012 restructuring expenses were primarily attributable to employee severance obligations and the termination of leased facilities incurred in our United States building services segment. In 2011, restructuring expenses were primarily related to employee severance obligations at our corporate headquarters. As of December 31, 2013 , 2012 and 2011 , the balance of our restructuring related obligations yet to be paid was $4.9 million , $0.1 million and $0.2 million , respectively. The majority of obligations outstanding as of December 31, 2012 and 2011 were paid during 2013 and 2012 . The majority of obligations outstanding as of December 31, 2013 will be paid during 2014. We expect to incur an additional $1.4 million of expenses in connection with the restructuring of our United Kingdom operations in 2014.
The changes in restructuring activity by reportable segments during the years ended December 31, 2013 and December 31, 2012 were as follows (in thousands):
 
United States
electrical
construction
and facilities
services segment
 
United States
mechanical
construction
and facilities
services segment
 
United States
building
services segment
 
United Kingdom construction
and building
services segment
 
Total
Balance at December 31, 2011
$
76

 
$
—

 
$
140

 
$
—

 
$
216

Charges
—

 
—

 
145

 
—

 
145

Payments
—

 
—

 
(285
)
 
—

 
(285
)
Non-cash items
(23
)
 
—

 
—

 
—

 
(23
)
Balance at December 31, 2012
53

 
—

 
—

 
—

 
53

Charges
—

 
479

 
168

 
11,056

 
11,703

Payments
—

 
(302
)
 
(160
)
 
(6,174
)
 
(6,636
)
Non-cash items
(23
)
 
(13
)
 
(8
)
 
(197
)
 
(241
)
Balance at December 31, 2013
$
30

 
$
164

 
$
—

 
$
4,685

 
$
4,879

A summary of restructuring expenses by reportable segments recognized for the year ended December 31, 2013 was as follows (in thousands):
 
United States
electrical
construction
and facilities
services segment
 
United States
mechanical
construction
and facilities
services segment
 
United States
building
services segment
 
United Kingdom construction
and building
services segment
 
Total
Severance
$
—

 
$
370

 
$
160

 
$
8,794

 
$
9,324

Leased facilities
—

 
109

 
8

 
2,262

 
2,379

Total charges
$
—

 
$
479

 
$
168

 
$
11,056

 
$
11,703


68
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 - COMMITMENTS AND CONTINGENCIES - (Continued)

Government Contracts
As a government contractor, we are subject to U.S. government audits and investigations relating to our operations, fines, penalties and compensatory and treble damages, and possible suspension or debarment from doing business with the government. Based on currently available information, we believe the outcome of ongoing government disputes and investigations will not have a material impact on our financial position, results of operations or liquidity.
Legal Matters
One of our subsidiaries was a subcontractor to a mechanical contractor ("Mechanical Contractor") on a construction project where an explosion occurred. An investigation of the matter could not determine who was responsible for the explosion. As a result of the explosion, lawsuits have been commenced against various parties, but, to date, no lawsuits have been commenced against our subsidiary with respect to personal injury or damage to property as a consequence of the explosion. However, the Mechanical Contractor has asserted claims, in the context of an arbitration proceeding against our subsidiary, alleging that our subsidiary is responsible for a portion of the damages for which the Mechanical Contractor may be liable as a result of: (a) losses asserted by the owner of the project and/or the owner's general contractor because of delays in completion of the project and damages to its property, (b) personal injury suffered by individuals as a result of the explosion and (c) the Mechanical Contractor's legal fees in defending against any and all such claims. We believe, and have been advised by counsel, that we have a number of meritorious defenses to all such matters. We believe that the ultimate outcome of such matters will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. Notwithstanding our assessment of the final impact of this matter, we are not able to estimate with any certainty the amount of loss, if any, which would be associated with an adverse resolution.
One of our subsidiaries, USM, Inc. ("USM"), doing business in California provides, among other things, janitorial services to its customers by having those services performed by independent janitorial companies. USM and one of its customers, which owns retail stores (the “Customer”), are co-defendants in a federal class action lawsuit brought by employees of two of USM’s California local janitorial contractors. The action was commenced on September 5, 2013 in a Superior Court of California and was removed by USM on November 22, 2013 to the United States District Court for the Northern District of California. The employees allege in their complaint, among other things, that USM and the Customer violated a California statute that prohibits USM from entering into a contract with a janitorial contractor when it knows or should know that the contract does not include funds sufficient to allow the janitorial contractor to comply with all local, state and federal laws or regulations governing the labor or services to be provided. The employees have asserted that the amounts USM pays to its janitorial contractors are insufficient to allow those janitorial contractors to meet their obligations regarding, among other things, wages due for all hours their employees worked, minimum wages, overtime pay and meal and rest breaks. These employees seek to represent not only themselves, but also all other individuals who provided janitorial services at the Customer’s stores in California during the relevant four year time period. We do not believe USM or the Customer has violated the California statute or that the employees may bring the action as a class action on behalf of other employees of janitorial companies with whom USM contracted for the provision of janitorial services to the Customer. However, if the pending lawsuit is certified as a class action and USM is found to have violated the California statute, USM might have to pay significant damages and might be subject to similar lawsuits regarding the provision of janitorial services to its other customers in California. The plaintiffs seek a declaratory judgment that USM has violated the California statute, monetary damages, including all unpaid wages and thereon, restitution for unpaid wages, and an award of attorney fees and costs.
We are involved in several other proceedings in which damages and claims have been asserted against us. Other potential claims may exist that have not yet been asserted against us. We believe that we have a number of valid defenses to such proceedings and claims and intend to vigorously defend ourselves. We do not believe that any such matters will have a material adverse effect on our financial position, results of operations or liquidity. Litigation is subject to many uncertainties and the outcome of litigation is not predictable with assurance. It is possible that some litigation matters for which reserves have not been established could be decided unfavorably to us, and that any such unfavorable decisions could have a material adverse effect on our financial position, results of operations or liquidity.

69
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16 - ADDITIONAL CASH FLOW INFORMATION
The following presents information about cash paid for interest, income taxes and other non-cash financing activities for the years ended December 31, 2013 , 2012 and 2011 (in thousands):  
 
2013
 
2012
 
2011
Cash paid during the year for:
 
 
 
 
 
Interest
$
10,568

 
$
5,633

 
$
9,450

Income taxes
$
104,324

 
$
62,824

 
$
72,572

Non-cash financing activities:
 
 
 
 
 
Assets acquired under capital lease obligations
$
414

 
$
1,590

 
$
2,744

NOTE 17 - SEGMENT INFORMATION
We have the following reportable segments: (a) United States electrical construction and facilities services (involving systems for electrical power transmission and distribution; premises electrical and lighting systems; low-voltage systems, such as fire alarm, security and process control; voice and data communication; roadway and transit lighting; and fiber optic lines); (b) United States mechanical construction and facilities services (involving systems for heating, ventilation, air conditioning, refrigeration and clean-room process ventilation; fire protection; plumbing, process and high-purity piping; controls and filtration; water and wastewater treatment and central plant heating and cooling; cranes and rigging; millwrighting; and steel fabrication, erection and welding); (c) United States building services; (d) United States industrial services; and (e) United Kingdom construction and building services. The segment “United States building services” principally consists of those operations which provide a portfolio of services needed to support the operation and maintenance of customers’ facilities. The segment "United States industrial services" principally consists of those operations which provide industrial maintenance and services, mainly for refineries and petrochemical plants. The United Kingdom construction and building services segment performs electrical construction, mechanical construction and building services. In August 2011, we sold our Canadian subsidiary, which represented our Canada construction segment and which performed electrical construction and mechanical construction.
The following tables present information about industry segments and geographic areas for the years ended December 31, 2013 , 2012 and 2011 (in thousands):  
 
2013
 
2012
 
2011
Revenues from unrelated entities:
 
 
 
 
 
United States electrical construction and facilities services
$
1,345,750

 
$
1,211,692

 
$
1,155,079

United States mechanical construction and facilities services
2,329,834

 
2,386,498

 
2,009,073

United States building services
1,794,978

 
1,807,917

 
1,602,964

United States industrial services
519,413

 
401,793

 
317,377

Total United States operations
5,989,975

 
5,807,900

 
5,084,493

Canada construction
—

 
—

 
—

United Kingdom construction and building services
427,183

 
538,779

 
528,966

Total worldwide operations
$
6,417,158

 
$
6,346,679

 
$
5,613,459

 
 
 
 
 
 
Total revenues:
 
 
 
 
 
United States electrical construction and facilities services
$
1,371,979

 
$
1,233,468

 
$
1,161,716

United States mechanical construction and facilities services
2,387,072

 
2,414,296

 
2,017,056

United States building services
1,839,129

 
1,837,995

 
1,629,317

United States industrial services
522,417

 
405,002

 
318,966

Less intersegment revenues
(130,622
)
 
(82,861
)
 
(42,562
)
Total United States operations
5,989,975

 
5,807,900

 
5,084,493

Canada construction
—

 
—

 
—

United Kingdom construction and building services
427,183

 
538,779

 
528,966

Total worldwide operations
$
6,417,158

 
$
6,346,679

 
$
5,613,459


70
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 - SEGMENT INFORMATION - (Continued)

 
2013
 
2012
 
2011
Operating income (loss):
 
 
 
 
 
United States electrical construction and facilities services
$
98,114

 
$
100,736

 
$
84,601

United States mechanical construction and facilities services
93,765

 
125,261

 
118,529

United States building services
67,225

 
43,290

 
47,087

United States industrial services
38,763

 
37,241

 
19,510

Total United States operations
297,867

 
306,528

 
269,727

Canada construction
—

 
—

 
—

United Kingdom construction and building services
(5,981
)
 
7,052

 
9,225

Corporate administration
(69,891
)
 
(63,468
)
 
(63,124
)
Restructuring expenses
(11,703
)
 
(145
)
 
(1,240
)
Impairment loss on identifiable intangible assets
—

 
—

 
(3,795
)
Total worldwide operations
210,292

 
249,967

 
210,793

Other corporate items:
 
 
 
 
 
Interest expense
(8,769
)
 
(7,275
)
 
(11,261
)
Interest income
1,128

 
1,556

 
1,820

Income from continuing operations before income taxes
$
202,651

 
$
244,248

 
$
201,352


Capital expenditures:
 

 
 

 
 

United States electrical construction and facilities services
$
6,164

 
$
3,273

 
$
2,637

United States mechanical construction and facilities services
8,866

 
8,119

 
6,765

United States building services
7,579

 
11,086

 
9,616

United States industrial services
10,281

 
11,124

 
6,499

Total United States operations
32,890

 
33,602

 
25,517

Canada construction
—

 
—

 
100

United Kingdom construction and building services
1,536

 
3,604

 
3,291

Corporate administration
1,071

 
669

 
673

Total worldwide operations
$
35,497

 
$
37,875

 
$
29,581

 
 
 
 
 
 
Depreciation and amortization of Property, plant and equipment:
 
 
 
 
 
United States electrical construction and facilities services
$
3,640

 
$
3,926

 
$
4,088

United States mechanical construction and facilities services
7,280

 
6,768

 
4,904

United States building services
11,288

 
10,584

 
10,193

United States industrial services
8,781

 
6,560

 
5,685

Total United States operations
30,989

 
27,838

 
24,870

Canada construction
—

 
—

 
336

United Kingdom construction and building services
4,477

 
2,594

 
1,529

Corporate administration
844

 
772

 
691

Total worldwide operations
$
36,310

 
$
31,204

 
$
27,426



71
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 - SEGMENT INFORMATION - (Continued)

 
2013
 
2012
 
2011
Costs and estimated earnings in excess of billings on uncompleted contracts:
 

 
 

 
 
United States electrical construction and facilities services
$
28,988

 
$
28,207

 
$
35,845

United States mechanical construction and facilities services
38,804

 
34,084

 
41,964

United States building services
14,957

 
15,528

 
22,574

United States industrial services
5

 
—

 
—

Total United States operations
82,754

 
77,819

 
100,383

Canada construction
—

 
—

 
—

United Kingdom construction and building services
7,973

 
15,242

 
14,453

Total worldwide operations
$
90,727

 
$
93,061

 
$
114,836

 
 
 
 
 
 
Billings in excess of costs and estimated earnings on uncompleted contracts:
 

 
 

 
 
United States electrical construction and facilities services
$
118,458

 
$
89,889

 
$
130,738

United States mechanical construction and facilities services
205,974

 
219,876

 
247,454

United States building services
30,827

 
36,319

 
28,045

United States industrial services
805

 
—

 
—

Total United States operations
356,064

 
346,084

 
406,237

Canada construction
—

 
—

 
—

United Kingdom construction and building services
25,231

 
37,443

 
35,458

Total worldwide operations
$
381,295

 
$
383,527

 
$
441,695

 
 

 
 

 
 
Long-lived assets:
 

 
 

 
 
United States electrical construction and facilities services
$
16,512

 
$
14,146

 
$
14,961

United States mechanical construction and facilities services
293,790

 
269,990

 
261,357

United States building services
406,498

 
449,641

 
469,009

United States industrial services
772,209

 
280,170

 
283,403

Total United States operations
1,489,009

 
1,013,947

 
1,028,730

Canada construction
—

 
—

 
—

United Kingdom construction and building services
8,831

 
11,502

 
8,609

Corporate administration
1,896

 
1,519

 
1,502

Total worldwide operations
$
1,499,736

 
$
1,026,968

 
$
1,038,841

 
 
 
 
 
 
Total assets:
 
 
 
 
 
United States electrical construction and facilities services
$
329,742

 
$
283,997

 
$
277,278

United States mechanical construction and facilities services
795,256

 
785,286

 
778,330

United States building services
756,785

 
800,081

 
816,695

United States industrial services
940,916

 
400,207

 
369,594

Total United States operations
2,822,699

 
2,269,571

 
2,241,897

Canada construction
—

 
—

 
—

United Kingdom construction and building services
160,828

 
214,455

 
227,029

Corporate administration
482,388

 
623,044

 
545,128

Total worldwide operations
$
3,465,915

 
$
3,107,070

 
$
3,014,054


72
EMCOR Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18 - SELECTED UNAUDITED QUARTERLY INFORMATION
(In thousands, except per share data)
Quarterly and year-to-date computations of per share amounts are made independently; therefore, the sum of per share amounts for the quarters may not equal per share amounts for the year.
 
 
March 31
 
June 30
 
Sept. 30
 
Dec. 31
2013 Quarterly Results
 
 
 
 
 
 
 
 
Revenues
 
$
1,568,401

 
$
1,556,753

 
$
1,629,067

 
$
1,662,937

Gross profit
 
191,138

 
181,535

 
206,310

 
234,075

Net income attributable to EMCOR Group, Inc.
 
$
30,167

 
$
21,014

 
$
26,690

 
$
45,921

Basic EPS from continuing operations
 
$
0.45

 
$
0.31

 
$
0.40

 
$
0.69

Diluted EPS from continuing operations
 
$
0.44

 
$
0.31

 
$
0.39

 
$
0.68

 
 
 
March 31
 
June 30
 
Sept. 30
 
Dec. 31
2012 Quarterly Results
 
 
 
 
 
 
 
 
Revenues
 
$
1,538,521

 
$
1,590,035

 
$
1,606,242

 
$
1,611,881

Gross profit
 
180,693

 
193,964

 
203,248

 
228,449

Net income attributable to EMCOR Group, Inc.
 
$
27,145

 
$
33,448

 
$
39,581

 
$
46,410

Basic EPS from continuing operations
 
$
0.41

 
$
0.50

 
$
0.59

 
$
0.69

Diluted EPS from continuing operations
 
$
0.40

 
$
0.49

 
$
0.59

 
$
0.68


73

Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of EMCOR Group, Inc.:
We have audited the accompanying consolidated balance sheets of EMCOR Group, Inc. and subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2013 and 2012, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) and our report dated February 25, 2014 expressed an unqualified opinion thereon.
 
 
 
Stamford, Connecticut
/s/  E RNST  & Y OUNG  LLP
February 25, 2014
 


74

Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of EMCOR Group, Inc.:
We have audited EMCOR Group, Inc. and subsidiaries' (the “Company”) internal control over financial reporting as of December 31, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) (the COSO criteria). The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting 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 effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of RepconStrickland, Inc. ("RSI"), which is included in the 2013 consolidated financial statements of the Company and constituted $560.0 million, or 16.2%, of the Company's total assets as of December 31, 2013 and $123.6 million, or 1.9%, of the Company's revenues for the year then ended. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of RSI.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2013 of the Company and our report dated February 25, 2014 expressed an unqualified opinion thereon.
 
 
Stamford, Connecticut
/s/  E RNST  & Y OUNG  LLP
February 25, 2014
 
 


75

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
Based on an evaluation of our disclosure controls and procedures (as required by Rules 13a-15(b) of the Securities Exchange Act of 1934), our President and Chief Executive Officer, Anthony J. Guzzi, and our Executive Vice President and Chief Financial Officer, Mark A. Pompa, have concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) are effective as of the end of the period covered by this report.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934). Our internal control over financial reporting is a process designed with the participation of our principal executive officer and principal financial officer or persons performing similar functions to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
Our internal control over financial reporting includes policies and procedures that: (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of assets, (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and Board of Directors and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
In July 2013, EMCOR acquired RepconStrickland, Inc. ("RSI"). Since EMCOR has not yet fully incorporated the internal controls and procedures of RSI into EMCOR's internal control over financial reporting as of December 31, 2013, management excluded this business from its assessment of the effectiveness of internal control over financial reporting as of December 31, 2013. RSI accounted for $560.0 million, or 16.2%, of EMCOR's total assets as of December 31, 2013 and $123.6 million of revenues, or 1.9%, of EMCOR's total revenues for the year then ended.
As of December 31, 2013, our management conducted an evaluation of the effectiveness of our internal control over financial reporting, with the exception of the previously mentioned RSI acquisition, based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, management has determined that EMCOR's internal control over financial reporting is effective as of December 31, 2013.
The effectiveness of our internal control over financial reporting as of December 31, 2013 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report appearing in this Annual Report on Form 10-K, which such report expressed an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2013.
Changes in Internal Control over Financial Reporting
In addition, our management with the participation of our principal executive officer and principal financial officer or persons performing similar functions has determined that no change in our internal control over financial reporting (as that term is defined in Rules 13(a)-15(f) and 15(d)-15(f) of the Securities Exchange Act of 1934) occurred during the fourth quarter of our fiscal year ended December 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, aside from the previously mentioned acquisition of RSI. As part of its ongoing integration activities, EMCOR is continuing to incorporate its controls and procedures into RSI.
ITEM 9B. OTHER INFORMATION
Not applicable.


76
Table of Contents

PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item 10 with respect to directors is incorporated herein by reference to the Section of our definitive Proxy Statement for the 2014 Annual Meeting of Stockholders entitled “Election of Directors”, which Proxy Statement is to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year to which this Form 10-K relates (the “Proxy Statement”). The information required by this Item 10 concerning compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated herein by reference to the section of the Proxy Statement entitled “Section 16(a) Beneficial Ownership Reporting Compliance”. The information required by this Item 10 concerning the Audit Committee of our Board of Directors and Audit Committee financial experts is incorporated by reference to the section of the Proxy Statement entitled “Meetings and Committees of the Board of Directors” and “Corporate Governance”. Information regarding our executive officers is contained in Part I of this Form 10-K following Item 4 under the heading “Executive Officers of the Registrant”. We have adopted a Code of Ethics that applies to our Chief Executive Officer and our Senior Financial Officers, a copy of which is an Exhibit hereto.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated herein by reference to the sections of the Proxy Statement entitled “Compensation Discussion and Analysis”, “Executive Compensation and Related Information”, “Potential Post Employment Payments”, “Director Compensation”, “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report”.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this Item 12 (other than the information required by Section 201(d) of Regulation S-K, which is set forth in Part II, Item 5 of this Form 10-K) is incorporated herein by reference to the sections of the Proxy Statement entitled “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Management”.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information required by this Item 13 is incorporated herein by reference to the sections of the Proxy Statement entitled “Compensation Committee Interlocks and Insider Participation” and “Corporate Governance”.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this Item 14 is incorporated herein by reference to the section of the Proxy Statement entitled “Ratification of Appointment of Independent Auditors”.

77
Table of Contents

PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES  
(a)(1)
The following consolidated financial statements of EMCOR Group, Inc. and Subsidiaries are filed as part of this report under Part II, Item 8. Financial Statements and Supplementary Data:
 
 
 
Financial Statements:
 
 
 
Consolidated Balance Sheets - December 31, 2013 and 2012
 
 
 
Consolidated Statements of Operations - Years Ended December 31, 2013, 2012 and 2011
 
 
 
Consolidated Statements Comprehensive Income - Years Ended December 31, 2013, 2012 and 2011
 
 
 
Consolidated Statements of Cash Flows - Years Ended December 31, 2013, 2012 and 2011
 
 
 
Consolidated Statements of Equity - Years Ended December 31, 2013, 2012 and 2011
 
 
 
Notes to Consolidated Financial Statements
 
 
 
Reports of Independent Registered Public Accounting Firm
 
 
(a)(2)
The following financial statement schedule is included in this Form 10-K report: Schedule II - Valuation and Qualifying Accounts
 
 
 
All other schedules are omitted because they are not required, are inapplicable, or the information is otherwise shown in the consolidated financial statements or notes thereto.
 
 
(a)(3)
For the list of exhibits, see the Exhibit Index immediately following the signature page hereof, which Exhibit Index is incorporated herein by reference.

78
Table of Contents

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: February 25, 2014
 
 
EMCOR GROUP, INC.
 
(Registrant)
 
 
B Y :
/s/ ANTHONY J. GUZZI
 
Anthony J. Guzzi
 
President and Chief Executive Officer
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 25, 2014 .
 
/ S /  A NTHONY  J. G UZZI
President, Chief Executive Officer and Director
Anthony J. Guzzi
(Principal Executive Officer)
 
 
/ S /  M ARK  A. P OMPA
Executive Vice President and Chief Financial Officer
Mark A. Pompa
(Principal Financial and Accounting Officer)
 
 
/ S /  S TEPHEN  W. B ERSHAD
Chairman of the Board of Directors
Stephen W. Bershad
 
 
 
/ S /  D AVID  A. B. B ROWN
Director
David A. B. Brown
 
 
 
/ S /  L ARRY  J. B UMP
Director
Larry J. Bump
 
 
 
/ S /  A LBERT  F RIED , J R .
Director
Albert Fried, Jr.
 
 
 
/ S /  R ICHARD  F. H AMM , J R .
Director
Richard F. Hamm, Jr.
 
 
 
/ S /  D AVID  H. L AIDLEY
Director
David H. Laidley
 
 
 
/ S /  F RANK  T. M AC I NNIS
Director
Frank T. MacInnis
 
 
 
/ S /  J ERRY  E. R YAN
Director
Jerry E. Ryan
 
 
 
/ S /  M ICHAEL  T. Y ONKER
Director
Michael T. Yonker
 
 


79

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
 
Description
 
Balance  at
Beginning
of Year  
 
Costs and
Expenses
 
Additions Charged to Other (1)
 
Deductions (2)
 
Balance at  
End  of Year
Allowance for doubtful accounts
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2013
 
$
11,472

 
3,533

 
12

 
(3,127
)
 
$
11,890

Year Ended December 31, 2012
 
$
16,685

 
1,163

 
337

 
(6,713
)
 
$
11,472

Year Ended December 31, 2011
 
$
17,287

 
2,238

 
743

 
(3,583
)
 
$
16,685

_________________
(1)
Amount principally relates to business acquisitions and divestitures, and the effect of exchange rate changes.
(2)
Deductions primarily represent uncollectible balances of accounts receivable written off, net of recoveries.


80
Table of Contents

EXHIBIT INDEX

Exhibit
No.
 
Description
 
Incorporated By Reference to or
Filed Herewith, as Indicated Below
 
 
 
 
 
2(a-1)
 
Purchase Agreement dated as of February 11, 2002 by and among Comfort Systems USA, Inc. and EMCOR-CSI Holding Co.
 
Exhibit 2.1 to EMCOR Group, Inc.’s (“EMCOR”) Report on Form 8-K dated February 14, 2002
2(a-2)
 
Purchase and Sale Agreement dated as of August 20, 2007 between FR X Ohmstede Holdings LLC and EMCOR Group, Inc.
 
Exhibit 2.1 to EMCOR’s Report on Form 8-K (Date of Report August 20, 2007)
2(a-3)
 
Purchase and Sale Agreement, dated as of June 17, 2013 by and among Texas Turnaround LLC, a Delaware limited liability company, Altair Strickland Group, Inc., a Texas corporation, Rep Holdings LLC, a Texas limited liability company, ASG Key Employee LLC, a Texas limited liability company, Repcon Key Employee LLC, a Texas limited liability company, Gulfstar MBII, Ltd., a Texas limited partnership, The Trustee of the James T. Robinson and Diana J. Robinson 2010 Irrevocable Trust, The Trustee of the Steven Rothbauer 2012 Descendant’s Trust, The Co-Trustees of the Patia Strickland 2012 Descendant’s Trust, The Co-Trustees of the Carter Strickland 2012 Descendant’s Trust, and The Co-Trustees of the Walton 2012 Grandchildren’s Trust (collectively, “Sellers”) and EMCOR Group, Inc.
 
Exhibit 2.1 to EMCOR’s Report on Form 8-K (Date of Report June 17, 2013)
3(a-1)
 
Restated Certificate of Incorporation of EMCOR filed December 15, 1994
 
Exhibit 3(a-5) to EMCOR’s Registration Statement on Form 10 as originally filed March 17, 1995 (“Form 10”)
3(a-2)
 
Amendment dated November 28, 1995 to the Restated Certificate of Incorporation of EMCOR
 
Exhibit 3(a-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1995 (“1995 Form
10-K”)
3(a-3)
 
Amendment dated February 12, 1998 to the Restated Certificate of Incorporation of EMCOR
 
Exhibit 3(a-3) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1997 (“1997 Form 10-K”)
3(a-4)
 
Amendment dated January 27, 2006 to the Restated Certificate of Incorporation of EMCOR
 
Exhibit 3(a-4) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2005 (“2005 Form 10-
K”)
3(a-5)
 
Amendment dated September 18, 2007 to the Restated Certificate of Incorporation of EMCOR
 
Exhibit A to EMCOR’s Proxy Statement dated August 17, 2007 for Special Meeting of Stockholders held September 18, 2007
3(b)
 
Amended and Restated By-Laws (the "By-Laws")
 
Exhibit 3(b) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 1998 (“1998 Form 10-K”)
3(c)
 
Amendments to Article I, Sections 6(c) and 6(j) of the By-Laws
 
Exhibit 3.1 to EMCOR's Report on Form 8-K (Date of Report December 5, 2013)
4(a)
 
Fourth Amended and Restated Credit Agreement dated as of November 25, 2013 by and among EMCOR Group, Inc. and a subsidiary and Bank of Montreal, as Agent, and the lenders listed on the signature pages thereof (the “Credit Agreement”)
 
Filed herewith
4(b)
 
Fourth Amended and Restated Security Agreement dated as of November 25, 2013 among EMCOR, certain of its U.S. subsidiaries, and Bank of Montreal, as Agent
 
Filed herewith
4(c)
 
Fourth Amended and Restated Pledge Agreement dated as of November 25, 2013 among EMCOR, certain of its U.S. subsidiaries, and Bank of Montreal, as Agent
 
Filed herewith
4(d)
 
Third Amended and Restated Guaranty Agreement dated as of November 25, 2013 by certain of EMCOR’s U.S. subsidiaries in favor of Bank of Montreal, as Agent
 
Filed herewith


81
Table of Contents

EXHIBIT INDEX

Exhibit
No.
 
Description
 
Incorporated By Reference to or
Filed Herewith, as Indicated Below
 
 
 
 
 
10(a)
 
Form of Severance Agreement (“Severance Agreement”) between EMCOR and each of Sheldon I. Cammaker, R. Kevin Matz and Mark A. Pompa
 
Exhibit 10.1 to the April 2005 Form 8-K
10(b)
 
Form of Amendment to Severance Agreement between EMCOR and each of Sheldon I. Cammaker, R. Kevin Matz and Mark A. Pompa
 
Exhibit 10(c) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (“March 2007 Form 10-Q”)
10(c)
 
Letter Agreement dated October 12, 2004 between Anthony Guzzi and EMCOR (the “Guzzi Letter Agreement”)
 
Exhibit 10.1 to EMCOR’s Report on Form 8-K (Date of Report October 12, 2004)
10(d)
 
Form of Confidentiality Agreement between Anthony Guzzi and EMCOR
 
Exhibit C to the Guzzi Letter Agreement
10(e)
 
Form of Indemnification Agreement between EMCOR and each of its officers and directors
 
Exhibit F to the Guzzi Letter Agreement
10(f-1)
 
Severance Agreement (“Guzzi Severance Agreement”) dated October 25, 2004 between Anthony Guzzi and EMCOR
 
Exhibit D to the Guzzi Letter Agreement
10(f-2)
 
Amendment to Guzzi Severance Agreement
 
Exhibit 10(g-2) to the March 2007 Form 10-Q
10(g-1)
 
Continuity Agreement dated as of June 22, 1998 between Sheldon I. Cammaker and EMCOR (“Cammaker Continuity Agreement”)
 
Exhibit 10(c) to the June 1998 Form 10-Q
10(g-2)
 
Amendment dated as of May 4, 1999 to Cammaker Continuity Agreement
 
Exhibit 10(i) to the June 1999 Form 10-Q
10(g-3)
 
Amendment dated as of March 1, 2007 to Cammaker Continuity Agreement
 
Exhibit 10(m-3) to the March 2007 Form 10-Q
10(h-1)
 
Continuity Agreement dated as of June 22, 1998 between R. Kevin Matz and EMCOR (“Matz Continuity Agreement”)
 
Exhibit 10(f) to the June 1998 Form 10-Q
10(h-2)
 
Amendment dated as of May 4, 1999 to Matz Continuity Agreement
 
Exhibit 10(m) to the June 1999 Form 10-Q
10(h-3)
 
Amendment dated as of January 1, 2002 to Matz Continuity Agreement
 
Exhibit 10(o-3) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 (“March 2002 Form 10-Q”)
10(h-4)
 
Amendment dated as of March 1, 2007 to Matz Continuity Agreement
 
Exhibit 10(n-4) to the March 2007 Form 10-Q
10(i-1)
 
Continuity Agreement dated as of June 22, 1998 between Mark A. Pompa and EMCOR (“Pompa Continuity Agreement”)
 
Exhibit 10(g) to the June 1998 Form 10-Q
10(i-2)
 
Amendment dated as of May 4, 1999 to Pompa Continuity Agreement
 
Exhibit 10(n) to the June 1999 Form 10-Q
10(i-3)
 
Amendment dated as of January 1, 2002 to Pompa Continuity Agreement
 
Exhibit 10(p-3) to the March 2002 Form 10-Q
10(i-4)
 
Amendment dated as of March 1, 2007 to Pompa Continuity Agreement
 
Exhibit 10(o-4) to the March 2007 Form 10-Q
10(j-1)
 
Change of Control Agreement dated as of October 25, 2004 between Anthony Guzzi (“Guzzi”) and EMCOR (“Guzzi Continuity Agreement”)
 
Exhibit E to the Guzzi Letter Agreement
10(j-2)
 
Amendment dated as of March 1, 2007 to Guzzi Continuity Agreement
 
Exhibit 10(p-2) to the March 2007 Form 10-Q
10(j-3)
 
Amendment to Continuity Agreements and Severance Agreements with Sheldon I. Cammaker, Anthony J. Guzzi, R. Kevin Matz and Mark A. Pompa
 
Exhibit 10(q) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2008 (“2008 Form 10-K”)


82
Table of Contents

EXHIBIT INDEX

Exhibit
No.
 
Description
 
Incorporated By Reference to or
Filed Herewith, as Indicated Below
 
 
 
 
 
10(k)
 
Amendment dated as of March 29, 2010 to Severance Agreement with Sheldon I. Cammaker, Anthony J. Guzzi, R. Kevin Matz and Mark A. Pompa
 
Exhibit 10.1 to Form 8-K (Date of Report March 29, 2010) (“March 2010 Form 8-K”)
10(l-1)
 
EMCOR Group, Inc. Long-Term Incentive Plan (“LTIP”)
 
Exhibit 10 to Form 8-K (Date of Report December 15, 2005
10(l-2)
 
First Amendment to LTIP and updated Schedule A to LTIP
 
Exhibit 10(s-2) to 2008 Form 10-K
10(l-3)
 
Second Amendment to LTIP
 
Exhibit 10.2 to March 2010 Form 8-K
10(l-4)
 
Third Amendment to LTIP
 
Exhibit 10(q-4) to EMCOR's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 ("March 2012 Form 10-Q")
10(l-5)
 
Fourth Amendment to LTIP
 
Exhibit 10(l-5) to EMCOR's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013
10(l-6)
 
Form of Certificate Representing Stock Units issued under LTIP
 
Exhibit 10(t-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2007 (“2007 Form 10-K”)
10(m-1)
 
2003 Non-Employee Directors’ Stock Option Plan
 
Exhibit A to EMCOR’s Proxy Statement for its Annual Meeting held on June 12, 2003 (“2003 Proxy Statement”)
10(m-2)
 
First Amendment to 2003 Non-Employee Directors’ Plan
 
Exhibit 10(u-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2006 (“2006 Form 10-K”)
10(n-1)
 
2003 Management Stock Incentive Plan
 
Exhibit B to EMCOR’s 2003 Proxy Statement
10(n-2)
 
Amendments to 2003 Management Stock Incentive Plan
 
Exhibit 10(t-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2003 (“2003 Form 10-K”)
10(n-3)
 
Second Amendment to 2003 Management Stock Incentive Plan
 
Exhibit 10(v-3) to 2006 Form 10-K
10(o)
 
Form of Stock Option Agreement evidencing grant of stock options under the 2003 Management Stock Incentive Plan
 
Exhibit 10.1 to Form 8-K (Date of Report January 3, 2005)
10(p)
 
Key Executive Incentive Bonus Plan, as amended and restated
 
Exhibit B to EMCOR’s Proxy Statement for its Annual Meeting held June 13, 2013
10(q)
 
Consents on December 15, 2009 to Transfer Stock Options by Non-Employee Directors
 
Exhibit 10(z) to 2009 Form 10-K
10(r)
 
Option Agreement dated October 25, 2004 between Guzzi and EMCOR
 
Exhibit A to Guzzi Letter
10(s-1)
 
2007 Incentive Plan
 
Exhibit B to EMCOR’s Proxy Statement for its Annual Meeting held June 20, 2007
10(s-2)
 
Option Agreement dated December 13, 2007 under 2007 Incentive Plan between Jerry E. Ryan and EMCOR
 
Exhibit 10(h)(h-2) to 2007 Form 10-K
10(s-3)
 
Option Agreement dated December 15, 2008 under 2007 Incentive Plan between David Laidley and EMCOR
 
Exhibit 10.1 to Form 8-K (Date of Report December 15, 2008)
10(s-4)
 
Form of Option Agreement under 2007 Incentive Plan between EMCOR and each non-employee director electing to receive options as part of annual retainer
 
Exhibit 10(h)(h-3) to 2007 Form 10-K
10(t-1)
 
2010 Incentive Plan
 
Exhibit B to EMCOR’s Proxy Statement for its Annual Meeting held on June 11, 2010
10(t-2)
 
Amendment No. 1 to 2010 Incentive Plan
 
Exhibit 10(f)(f-2) to EMCOR’s Annual Report on Form 10-K for the year ended December 31, 2011 (“2011 Form 10-K”)




83
Table of Contents

EXHIBIT INDEX

Exhibit
No.
 
Description
 
Incorporated By Reference to or
Filed Herewith, as Indicated Below
 
 
 
 
 
10(t-3)
 
Amendment No. 2 to 2010 Incentive Plan
 
Exhibit 10(t-3) to 2012 Form 10-K
10(t-4)
 
Form of Option Agreement under 2010 Incentive Plan between EMCOR and each non-employee director with respect to grant of options upon re-election at June 11, 2010 Annual Meeting of Stockholders
 
Exhibit 10(i)(i-2) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010
10(t-5)
 
Form of Option Agreement under 2010 Incentive Plan, as amended, between EMCOR and each non-employee director electing to receive options as part of annual retainer
 
Exhibit 10(q)(q) to 2011 Form 10-K
10(u)
 
EMCOR Group, Inc. Employee Stock Purchase Plan
 
Exhibit C to EMCOR’s Proxy Statement for its Annual Meeting held June 18, 2008
10(v)
 
Form of Restricted Stock Award Agreement dated January 3, 2012 between EMCOR and each of Larry J. Bump, Albert Fried, Jr., Richard F. Hamm, Jr., David H. Laidley, Frank T. MacInnis, Jerry E. Ryan and Michael T. Yonker
 
Exhibit 10(m)(m) to 2011 Form 10-K
10(w-1)
 
Director Award Program Adopted May 13, 2011, as amended and restated December 14, 2011
 
Exhibit 10(n)(n) to 2011 Form 10-K
10(w-2)
 
Form of Amended and Restated Restricted Stock Award Agreement dated December 14, 2011 amending and restating restricted stock award agreement dated June 1, 2011 under Director Award Program with each of Stephen W. Bershad, David A.B. Brown, Larry J. Bump, Albert Fried, Jr., Richard F. Hamm, Jr., David H. Laidley, Jerry E. Ryan and Michael T. Yonker
 
Exhibit 10(o)(o) to 2011 Form 10-K
10(x)
 
Restricted Stock Unit Agreement dated May 9, 2011 between EMCOR and Anthony J. Guzzi
 
Exhibit 10(o)(o) to EMCOR’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011
10(y)
 
Amendment to Option Agreements
 
Exhibit 10(r)(r) to 2011 Form 10-K
10(z)
 
Form of Restricted Stock Unit Agreement dated March , 2012 between EMCOR and each of Sheldon I. Cammaker, R. Kevin Matz and Mark A. Pompa
 
Exhibit 10(o)(o) to the March 31, 2012 Form 10-Q
10(a)(a)
 
Form of Non-LTIP Stock Unit Certificate
 
Exhibit 10(p)(p) to the March 31, 2012 Form 10-Q
10(b)(b)
 
Form of Director Restricted Stock Unit Agreement
 
Exhibit 10(k)(k) to EMCOR's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 ("June 2012 Form 10-Q")
10(c)(c)
 
Director Award Program, as Amended and Restated December 6, 2012
 
Exhibit 10(d)(d) to 2012 Form 10-K
10(d)(d)
 
EMCOR Group, Inc. Voluntary Deferral Plan
 
Exhibit 10(e)(e) to 2012 Form 10-K
10(e)(e)
 
First Amendment to EMCOR Group, Inc. Voluntary Deferral Plan
 
Filed herewith
10(f)(f)
 
Form of Executive Restricted Stock Unit Agreement
 
Exhibit 10(f)(f) to 2012 Form 10-K
10(g)(g)
 
Restricted Stock Unit Award Agreement dated October 23, 2013 between EMCOR and Stephen W. Bershad
 
Filed herewith
11
 
Computation of Basic EPS and Diluted EPS for the years ended December 31, 2013 and 2012
 
Note 5 of the Notes to the Consolidated Financial Statements
14
 
Code of Ethics of EMCOR for Chief Executive Officer and Senior Financial Officers
 
Exhibit 14 to 2003 Form 10-K
21
 
List of Significant Subsidiaries
 
Filed herewith
23.1
 
Consent of Ernst & Young LLP
 
Filed herewith


84
Table of Contents

EXHIBIT INDEX

Exhibit
No.
 
Description
 
Incorporated By Reference to or
Filed Herewith, as Indicated Below
 
 
 
 
 
31.1
 
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Anthony J. Guzzi, the President and Chief Executive Officer
 
Filed herewith
31.2
 
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Mark A. Pompa, the Executive Vice President and Chief Financial Officer
 
Filed herewith
32.1
 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the President and Chief Executive Officer
 
Furnished
32.2
 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Executive Vice President and Chief Financial Officer
 
Furnished
95
 
Information concerning mine safety violations or other regulatory matters
 
Filed herewith
101
 
The following materials from EMCOR Group, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Equity and (vi) the Notes to Consolidated Financial Statements.
 
Filed
 
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, upon request of the Securities and Exchange Commission, the Registrant hereby undertakes to furnish a copy of any unfiled instrument which defines the rights of holders of long-term debt of the Registrant's subsidiaries.

85

EXHIBIT 4(a)
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
by and among
EMCOR GROUP, INC.
and
CERTAIN OF ITS SUBSIDIARIES
and
BANK OF MONTREAL,
individually and as Agent
and
the Lenders
which are or become parties hereto
Dated as of November 25, 2013

BMO CAPITAL MARKETS,
BANK OF AMERICA MERRILL LYNCH,
JPMORGAN CHASE BANK, N.A.,
U.S. BANK NATIONAL ASSOCIATION, AND
RBS CITIZENS, N.A.
as Joint Lead Arrangers and Joint Book Runners

BANK OF AMERICA MERRILL LYNCH,
JPMORGAN CHASE BANK, N.A.,
U.S. BANK NATIONAL ASSOCIATION, AND
RBS CITIZENS, N.A.
as Co-Syndication Agents

FIFTH THIRD BANK, AND
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Co-Documentation Agents


1921592

TABLE OF CONTENTS

 
 
PAGE
 
 
 
SECTION 1.
THE CREDITS
1

 
 
 
Section 1.1.
     Total Revolving Commitments
1

Section 1.2.
     Term Loan Commitments
3

Section 1.3.
     Letters of Credit
3

(a)
     General Terms
3

(b)
     Applications
3

(c)
     The Reimbursement Obligation
4

(d)
     The Participating Interests
5

(e)
     Indemnification
6

Section 1.4.
     Manner of Borrowing Loans and Designating Applicable Interest Rates
7

Section 1.5.
     Minimum Borrowing Amounts
9

Section 1.6.
     Maturity of Loans
9

Section 1.7.
     Appointment of Company as Agent for Borrowers; Reliance by Agent
9

(a)
     Appointment
9

(b)
     Reliance
10

Section 1.8.
     Swing Loans
10

Section 1.9.
     Default Rate
11

Section 1.10.
     Increase in Commitment
12

Section 1.11.
     Removal of a Borrower
13

Section 1.12.
     Conversions
13

 
 
 
SECTION 2.
INTEREST
13

 
 
 
Section 2.1.
     Domestic Rate Loans
13

Section 2.2.
     Eurodollar Loans
14

Section 2.3.
     Rate Determinations
14

Section 2.4.
     Computation of Interest, Fees and Charges
14

Section 2.5.
     Funding Indemnity
14

Section 2.6.
     Change of Law
15

Section 2.7.
     Unavailability
15

Section 2.8.
     Increased Cost and Reduced Return
16

Section 2.9.
     Lending Offices; Mitigation Obligations
17

Section 2.10.
     Discretion of Lender as to Manner of Funding
17

Section 2.11.
     Replacement of Lenders
18

Section 2.12.
     Defaulting Lenders
18

Section 2.13.
     Cash Collateral for Fronting Exposure
21

 
 
 
SECTION 3.
FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS
22

Section 3.1.
     Commitment Fee
22


-i-

Section 3.2.
     Other Fees
22

Section 3.3.
     Letter of Credit Fees
22

Section 3.4.
     Voluntary Prepayments
22

Section 3.5.
     Mandatory Prepayments and Commitment Reductions
23

Section 3.6.
     Commitment Terminations
24

Section 3.7.
     Place and Application
25

Section 3.8.
     Evidence of Indebtedness
27

Section 3.9.
     Payments Set Aside
28

 
 
 
SECTION 4.
THE COLLATERAL AND THE GUARANTEES
28

 
 
 
Section 4.1.
     The Collateral
28

Section 4.2.
     The Guarantees
30

 
 
 
SECTION 5.
REPRESENTATIONS AND WARRANTIES
31

 
 
 
Section 5.1.
     Organization and Qualification
31

Section 5.2.
     Subsidiaries
31

Section 5.3.
     Corporate Authority and Validity of Obligations
32

Section 5.4.
     Use of Proceeds; Margin Stock
32

Section 5.5.
     Financial Reports
32

Section 5.6.
     No Material Adverse Change
33

Section 5.7.
     Full Disclosure
33

Section 5.8.
     Good Title
33

Section 5.9.
     Litigation and Other Controversies
33

Section 5.10.
     Taxes
33

Section 5.11.
     Approvals
34

Section 5.12.
     Affiliate Transactions
34

Section 5.13.
     Investment Company
34

Section 5.14.
     ERISA
34

Section 5.15.
     Compliance with Laws
34

Section 5.16.
     Other Agreements
35

Section 5.17.
     No Default
35

Section 5.18.
     Solvency
35

Section 5.19.
     OFAC and Anti-Corruption Laws and Sanctions
35

 
 
 
SECTION 6.
CONDITIONS PREDECENT
35

 
 
 
Section 6.1.
     All Credit Utilizations
36

Section 6.2.
     Initial Credit Utilization for the Company
37

Section 6.3.
     Credit Utilization for the U.K. Borrower
39

 
 
 
SECTION 7.
COVENANTS
40

 
 
 
Section 7.1.
     Maintenance of Business
40

Section 7.2.
     Maintenance of Property
41

Section 7.3.
     Taxes and Assessments
41

Section 7.4.
     Insurance
41


-ii-

Section 7.5.
     Financial Reports and Rights of Inspection
41

Section 7.6.
     No Restrictions
43

Section 7.7.
     Leverage Ratio
43

Section 7.8.
     Interest Coverage Ratio
43

Section 7.9.
Compliance with OFAC Sanctions Programs; Anti-Corruptions Laws and Applicable Sanctions
44

Section 7.10.
     Indebtedness for Borrowed Money
44

Section 7.11.
     Liens
46

Section 7.12.
     Investments, Acquisitions, Loans, Advances and Guarantees
48

Section 7.13.
     Capital and Certain other Restricted Expenditures
51

Section 7.14.
     Mergers, Consolidations and Sales
51

Section 7.15.
     Maintenance of Restricted Subsidiaries
53

Section 7.16.
     Dividends and Certain Other Restricted Payments
53

Section 7.17.
     ERISA
54

Section 7.18.
     Compliance with Laws
54

Section 7.19.
     Burdensome Contracts With Affiliates
55

Section 7.20.
     No Changes in Fiscal Year
55

Section 7.21.
     Formation of Subsidiaries
55

Section 7.22.
     Change in the Nature of Business
55

Section 7.23.
     Use of Proceeds
55

Section 7.24.
     Deposit Accounts
55

 
 
 
SECTION 8.
EVENTS OF DEFAULT AND REMEDIES
56

 
 
 
Section 8.1.
     Events of Default
56

Section 8.2.
     Non-Bankruptcy Defaults
58

Section 8.3.
     Bankruptcy Defaults
58

Section 8.4.
     Collateral for Undrawn Letters of Credit
58

 
 
 
SECTION 9.
DEFINITIONS INTERPRETATIONS
59

 
 
 
Section 9.1.
     Definitions
59

Section 9.2.
     Interpretation
84

Section 9.3.
     Capital Stock
85

Section 9.4.
     Change in Accounting Principles
85

 
 
 
SECTION 10.
THE AGENT
85

 
 
 
Section 10.1.
     Appointment and Authority
85

Section 10.2.
     Rights as a Lender
86

Section 10.3.
     Action by Agent; Exculpatory Provisions
86

Section 10.4.
     Reliance by Administrative Agent
87

Section 10.5.
     Delegation of Duties
87

Section 10.6.
     Resignation of Administrative Agent
88

Section 10.7.
     Non-Reliance on Administrative Agent and Other Lenders
88

Section 10.8.
     L/C Issuer and Swingline Lender
89

Section 10.9.
     Hedging Liability
89


-iii-

Section 10.10.
     Designation of Additional Agents
90

Section 10.11.
Authorization to Enter into, and Enforcement of, the Collateral Documents; Possession of Collateral
90

Section 10.12.
Authorization to Release, Limit or Subordinate Liens or to Release Guaranties
91

Section 10.13.
     Authorization of Administrative Agent to File Proofs of Claim
91

 
 
 
SECTION 11.
MISCELLANEOUS
92

 
 
 
Section 11.1.
     Withholding Taxes
92

Section 11.2.
     Holidays
97

Section 11.3.
     No Waiver, Cumulative Remedies
98

Section 11.4.
     Amendments
98

Section 11.5.
     Costs and Expenses
99

Section 11.6.
     No Waiver, Cumulative Remedies
101

Section 11.7.
     Survival of Representations and Indemnities
101

Section 11.8.
     Construction
101

Section 11.9.
     Notices
101

Section 11.10.
     Obligations Several
102

Section 11.11.
     Headings
102

Section 11.12.
     Severability of Provisions
102

Section 11.13.
     Counterparts
102

Section 11.14.
     Binding Nature and Governing Law
102

Section 11.15.
     Entire Understanding
102

Section 11.16.
     Participations
102

Section 11.17.
     Assignments
103

Section 11.18.
     Terms of Collateral Documents not Superseded
107

Section 11.19.
     PERSONAL JURISDICTION
107

(a)
     Exclusive Jurisdiction
107

(b)
     Other Jurisdictions
107

Section 11.20.
     Currency
107

Section 11.21.
     Currency Equivalence
108

Section 11.22.
     Change in Currency
108

Section 11.23.
     Interest Rate Limitation
109

Section 11.24.
     USA Patriot Act
109

Section 11.25.
     Confidentiality
109

Section 11.26.
     Sharing of Set-Off
110

Section 11.27.
     Set-Off
110

Section 11.28.
     Amendment and Restatement
111

Section 11.29.
Removal of Lenders and Assignment of Interests; Equalization of Loans
111

Section 11.30.
     No Fiduciary Duties
112

 
 
 
Signature Page
 
1



-iv-


EMCOR GROUP, INC.
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This Fourth Amended and Restated Credit Agreement is entered into as of November 25, 2013, by and among EMCOR Group Inc., a Delaware corporation (the “Company” ), and EMCOR Group (UK) plc., a United Kingdom public limited company ( “EMCOR UK” ), the several financial institutions from time to time party to this Agreement, as Lenders, and Bank of Montreal, as Agent as provided herein. All capitalized terms used herein without definition shall have the same meanings herein as such terms are defined in Section 9.1 hereof.
PRELIMINARY STATEMENT
A.    The Borrowers, the Lenders from time to time party thereto and the Agent, are currently party to that certain Third Amended and Restated Credit Agreement dated as of November 21, 2011 (as amended, the “Existing Credit Agreement” ) pursuant to which the Lenders agreed to make a revolving credit available to the Borrowers, all as more fully set forth therein.
B.    The Company and EMCOR UK have requested that certain amendments be made to the Existing Credit Agreement, including, without limitation, to provide for the extension of term loans to the Company, and, for the sake of clarity and convenience, that the Existing Credit Agreement be restated as so amended.
C.    On the date hereof, the Departing Lenders, will assign all of their loans and commitments to the Lenders under this Agreement.
NOW, THEREFORE, in consideration of the recitals set forth above, which by this reference are incorporated into this Agreement set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and subject to the terms and conditions hereof and on the basis of the representations and warranties herein set forth, the Borrowers, the Lenders, the Departing Lenders and the Agent hereby agree that on the Closing Date, the Existing Credit Agreement and all of the Exhibits and Schedules thereto shall be amended and as so amended shall be restated in their entirety to read as follows:
SECTION 1.
THE CREDITS    .
Section 1.1.    Aggregate Revolving Commitments . (a)  U.S. Revolving Loans. Subject to the terms and conditions hereof and as part of the Aggregate Revolving Commitments, each U.S. Lender, by its acceptance hereof, severally agrees to make a loan or loans (individually a “U.S.  Revolving Loan” and collectively the “U.S. Revolving Loans” ) in U.S. Dollars to the U.S. Borrowers from time to time on a revolving basis before the Revolving Credit Termination Date. Each Borrowing of U.S. Revolving Loans shall be made ratably by the U.S. Lenders in proportion to their respective U.S. Revolver Percentages. Subject




to the terms and conditions hereof, U.S. Revolving Loans may be repaid and the principal amount thereof reborrowed before the Revolving Credit Termination Date, subject to the terms and conditions hereof.
(b)     Multicurrency Revolving Loans. Subject to the terms and conditions hereof and as part of the Aggregate Revolving Commitments, each Multicurrency Lender, by its acceptance hereof, severally agrees to make a loan or loans (individually an “Multicurrency Revolving Loan” and collectively the “Multicurrency Revolving Loans” ) in (i) U.S. Dollars or Alternative Currencies to the U.K. Borrowers and (ii) Alternative Currencies to the U.S. Borrowers, in each case from time to time on a revolving basis before the Revolving Credit Termination Date. Each Borrowing of Multicurrency Revolving Loans hereunder shall be made ratably by the Multicurrency Lenders in proportion to their respective Multicurrency Revolver Percentages. Subject to the terms and conditions hereof, Multicurrency Revolving Loans may be repaid and the principal amount thereof reborrowed before the Revolving Credit Termination Date, subject to the terms and conditions hereof.
(c)     General. With respect to each Credit Utilization, after giving effect to such Credit Utilization:
(i)    the sum of the U.S. Dollar Equivalent of the Revolving Credit Exposure for all Lenders at any time outstanding shall not exceed the Aggregate Revolving Commitments in effect at such time;
(ii)    the sum of the U.S. Revolving Credit Exposure for all Lenders at any one time outstanding shall not exceed an amount equal to (A) the U.S. Dollar Commitments in effect at such time minus (B) the U.S. Dollar Equivalent of the aggregate principal amount of Multicurrency Revolving Loans outstanding at such time;
(iii)    the sum of the U.S. Dollar Equivalent of the aggregate principal amount of Multicurrency Revolving Loans at any one time outstanding shall not exceed an amount equal to (A) the Multicurrency Commitments in effect at such time minus (B) the U.S. Revolving Credit Exposure for all Lenders outstanding at such time;
(iv)    the sum of the U.S. Dollar Equivalent of any Lender’s Revolving Credit Exposure shall not at any time exceed such Lender’s Aggregate Revolving Commitment, the sum of any Lender’s U.S. Revolving Credit Exposure shall not exceed such Lender’s U.S. Dollar Commitment, and the sum of any Lender’s Multicurrency Revolving Loans shall not exceed such Lender’s Multicurrency Commitment; and
(v)    the U.S. Dollar Equivalent of the aggregate principal amount of all Multicurrency Revolving Loans made to the U.K. Borrowers when taken together with the aggregate amount of L/C Obligations with respect to Letters of Credit issued for the account of the U.K. Borrowers and their respective Subsidiaries shall in no event exceed the U.S. Dollar Equivalent of $50,000,000 at any one time outstanding (the “UK Borrowers Sublimit” ).
(d)     Several Obligations. The obligations of the Lenders hereunder are several and not joint.

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Section 1.2    Term Loan Commitments.      (a) Subject to the terms and conditions hereof, each Lender, by its acceptance hereof, severally agrees to make a loan (individually a “Term Loan” and collectively for all the Lenders the “Term Loans” ) in U.S. Dollars to the Company in the amount of such Lender’s Term Loan Commitment. The Term Loans shall be advanced in a single Borrowing on the Closing Date and shall be made ratably by the Lenders in proportion to their respective Term Loan Percentages, at which time the Term Loan Commitments shall expire. As provided in Section 1.4, the Company may elect that the Term Loans be outstanding as Domestic Rate Loans or Eurodollar Loans. No amount repaid or prepaid on any Term Loan may be borrowed again.
Section 1.3.    Letters of Credit     .
(a)     General Terms     . Subject to the terms, conditions and limitations hereof (including those set forth in Section 1.1 hereof), as part of the U.S. Revolving Facility, the Applicable Issuer shall issue Financial Letters of Credit or Performance Letters of Credit (each a “Letter of Credit” ) under the U.S. Revolving Facility for the account of a Borrower and/or one or more of its Subsidiaries in U.S. Dollars or Alternative Currencies in an aggregate undrawn face amount up to the L/C Sublimit; provided , no Applicable Issuer shall be required to issue a Letter of Credit hereunder if, after giving effect to such Letter of Credit, the aggregate undrawn face amount of all Letters of Credit issued by such Applicable Issuer and any affiliate of the Applicable Issuer would exceed the Applicable Issuer’s Cap. Each Letter of Credit shall be issued by the Applicable Issuer, but each U.S. Lender shall be obligated to reimburse the Applicable Issuer for such U.S. Lender’s U.S. Revolver Percentage of the amount of each drawing thereunder in accordance with the terms hereof and, accordingly, each Letter of Credit shall constitute usage of the U.S. Dollar Commitment of each U.S. Lender pro rata in an amount equal to its U.S. Revolver Percentage of the U.S. Dollar Equivalent of the L/C Obligations then outstanding. As of the Closing Date, each of the Existing Letters of Credit shall constitute, for all purposes of this Agreement and the other Loan Documents, a Letter of Credit issued and outstanding hereunder. Each Letter of Credit shall conform to the Applicable Issuer’s policies as to form and shall be a Letter of Credit which the Applicable Issuer may lawfully issue. Each Letter of Credit shall support payment of an obligation of the Borrower which applies for such Letter of Credit or an obligation of such Borrower’s Restricted Subsidiary or of a Person described in Sections 7.12(j), (n) or (o) in which the applicant or one of its Restricted Subsidiaries has an equity interest.
(b)     Applications     . At any time before the Revolving Credit Termination Date, the Applicable Issuer shall, subject to all of the terms and conditions hereof, at the request of the Company (which is acting on behalf of the Borrowers pursuant to Section 1.7 hereof), issue one or more Letters of Credit, in a form satisfactory to the Applicable Issuer, in an aggregate face amount not to exceed the L/C Sublimit and the relevant Applicable Issuer’s Cap upon the receipt of an application for the relevant Letter of Credit in the form customarily prescribed by the Applicable Issuer for the type of Letter of Credit in question, duly executed by the Borrower for whose account such Letter of Credit was issued (each an “Application” ). Each Letter of Credit issued hereunder shall (a) be payable, as determined by the Company acting on behalf of the applicable Borrower, in U.S. Dollars or an Alternative Currency and (b) expire not later than (i) the Revolving Credit Termination Date for Letters of Credit issued by Bank of Montreal and (ii) the date which is five days prior to the Revolving Credit Termination Date for Letters of Credit issued by an Applicable Issuer other

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than Bank of Montreal; provided, that in the sole discretion of the Agent and the Applicable Issuer, one or more Letters of Credit may be issued and renewed with an expiration date after the Revolving Credit Termination Date (but no later than one year after the Revolving Credit Termination Date) so long as the applicable Borrower deposits with the Agent at least five (5) Business Days prior to the Revolving Credit Termination Date Cash Collateral to be held in accordance with Section 8.4(b) hereof in an amount not less than 105% of the face amount of such Letters of Credit (it being understood that the participations of the Lenders (other than the Applicable Issuer) in any such Letter of Credit shall terminate on the Revolving Credit Termination Date to the extent such Letter of Credit has been Cash Collateralized in accordance with the foregoing). Notwithstanding anything contained in any Application to the contrary, (i) the applicable Borrower’s obligation to pay fees in connection with each Letter of Credit shall be as exclusively set forth in Section 3.3 hereof, (ii) except as otherwise provided in Section 2.12, 2.13 or Section 3.5 hereof, prior to the existence of an Event of Default, the Applicable Issuer will not call for the funding by such Borrower of any amount under a Letter of Credit, or any other form of collateral security (other than the Collateral, if any, and the Guarantees) for such Borrower’s obligations in connection with such Letter of Credit, before being presented with a drawing thereunder, and (iii) if the Applicable Issuer is not timely reimbursed for the amount of any drawing under a Letter of Credit on the date such drawing is paid, the Borrower’s obligation to reimburse the Applicable Issuer for the amount of such drawing shall bear interest (which the relevant Borrower hereby promises to pay) from and after the date such drawing is paid at a rate per annum equal to the sum of 2% plus the Applicable Margin for Eurodollar Loans from time to time in effect. The Issuer will promptly notify the Agent of each request for a Letter of Credit and of the issuance of a Letter of Credit and the Agent shall promptly thereafter so notify each of the Lenders. If an Applicable Issuer issues any Letters of Credit with expiration dates that are automatically extended unless such Applicable Issuer gives notice that the expiration date will not so extend beyond its then scheduled expiration date, such Applicable Issuer will give such notice of non‑renewal before the time necessary to prevent such automatic extension if before such required notice date (i) the expiration date of such Letter of Credit if so extended would be after the Revolving Credit Termination Date unless the Borrowers provide Cash Collateral in accordance with this Section 1.3(b), (ii) the Aggregate Revolving Commitments have been terminated, or (iii) an Event of Default exists and the Required Lenders have given the Applicable Issuer instructions not to so permit the extension of the expiration date of such Letter of Credit. Without limiting the generality of the foregoing, the parties hereto hereby confirm and agree that each Applicable Issuer’s obligation to issue, amend or extend the expiration date of a Letter of Credit is subject to the conditions of Section 6, the other terms of this Section 1.3 and the other provisions of this Agreement, and such Applicable Issuer will not issue, amend or extend the expiration date of any Letter of Credit if the Agent or the Required Lenders notify in writing such Applicable Issuer of any Default or Event of Default that is continuing and direct the Applicable Issuer not to take such action.
(c)     The Reimbursement Obligation     . (i) Subject to Section 1.3(b) hereof, the obligation of a Borrower to reimburse the Applicable Issuer for all drawings under a Letter of Credit issued for such Borrower’s account (a “Reimbursement Obligation” ) shall be governed by the Application related to such Letter of Credit, except that reimbursement of each drawing shall be made in immediately available funds at the designated office of the Applicable Issuer by no later than 12:00 Noon (local time at the issuing office of the Applicable Issuer) on the date when such drawing is paid. If the relevant Borrower does not make

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any such reimbursement payment on the date due and the applicable Participating Lenders fund their participations therein in the manner set forth in Section 1.3(d) below, then all payments thereafter received by the Applicable Issuer in discharge of any of the relevant Reimbursement Obligations shall be distributed in accordance with Section 1.3(d) below.
(ii)    The Borrower’s obligation to reimburse the Applicable Issuer as provided in subsection (c)(i) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement and the relevant Application under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Applicable Issuer under a Letter of Credit against presentation of a draft or other document that does not strictly comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrowers’ obligations hereunder. None of the Agent, the Lenders, or the Applicable Issuers 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), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Applicable Issuer; provided that the foregoing shall not be construed to excuse the Applicable Issuer from liability to the relevant Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the such Borrower to the extent permitted by applicable law) suffered by such Borrower that are caused by the Applicable Issuer’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Applicable Issuer (as finally determined by a court of competent jurisdiction), the Applicable Issuer shall be deemed to have exercised care in each such determination. 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, the Applicable 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.
(d)     The Participating Interests     . Each U.S. Lender, by its acceptance hereof, severally agrees to purchase from the Applicable Issuer, and the Applicable Issuer hereby agrees to sell to each such U.S. Lender (a “Participating Lender” ), an undivided percentage participating interest (a “Participating Interest” ), to the extent of its U.S. Revolver Percentage, in each Letter of Credit issued by, and each Reimbursement Obligation owed to, the Applicable Issuer. Upon any failure by a Borrower to pay any Reimbursement Obligation in respect of a Letter of Credit issued for such Borrower’s account at the time required on the

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date the related drawing is paid, as set forth in Section 1.3(c) above, or if the Applicable Issuer is required at any time to return to a Borrower or to a trustee, receiver, liquidator, custodian or other Person any portion of any payment of any Reimbursement Obligation, each applicable Participating Lender shall, not later than (i) with respect to payments required to be made in U.S. Dollars, the Business Day it receives a certificate from the Applicable Issuer to such effect, if such certificate is received before 1:00 p.m. (local time at the office of the Issuer), or not later than the following Business Day, if such certificate is received after such time, and (ii) with respect to payments required to be made in an Alternative Currency, not later than three (3) Business Days after receipt of such certificate pay to the Applicable Issuer an amount equal to its U.S. Revolver Percentage, of such unpaid or recaptured Reimbursement Obligation together with interest on such amount accrued from the date such payment is required under this clause (d) to the date of such payment by such Participating Lender at a rate per annum equal to (i) from the date the related payment by such Participating Lender is required to be made under this clause (d) to the date two (2) Business Days after payment by such Participating Lender is due hereunder, the Federal Funds Rate for each such day and (ii) from the date two (2) Business Days after the date such payment is due from such Participating Lender to the date such payment is made by such Participating Lender, the rate per annum determined by adding the Applicable Margin to the Domestic Rate in effect for each such day. Each such Participating Lender shall thereafter be entitled to receive its U.S. Revolver Percentage of each payment received in respect of the relevant Reimbursement Obligation and of interest paid thereon, with the Applicable Issuer retaining its Percentage as a Lender hereunder.
The several obligations of the Participating Lenders to the Issuers under this Section 1.3 shall be absolute, irrevocable and unconditional under any and all circumstances whatsoever (except, to the extent such Borrower is relieved from its obligation to reimburse the Applicable Issuer for a drawing under a Letter of Credit due solely to the Applicable Issuer’s gross negligence or willful misconduct in determining that documents received under the Letter of Credit comply with the terms thereof as determined by a final, non‑appealable judgment of a court of competent jurisdiction) and shall not be subject to any set‑off, counterclaim or defense to payment which any Participating Lender may have or have had against any one or more of the Borrowers, the Agent, any other Lender or any other Person whatsoever. Without limiting the generality of the foregoing, such obligations shall not be affected by any Default or Event of Default or by any reduction or termination of any Aggregate Revolving Commitment of any Lender, and each payment by a Participating Lender under this Section 1.3 shall be made without any offset, abatement, withholding or reduction whatsoever. The Agent shall be entitled to offset amounts received for the account of a Lender under this Agreement against unpaid amounts due from such Lender hereunder (whether as fundings of participations, indemnities or otherwise).
(e)     Indemnification     . Each of the Participating Lenders shall, to the extent of their respective Percentages, indemnify the Applicable Issuers (to the extent not reimbursed by the Borrowers) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result solely from the Applicable Issuer’s gross negligence or willful misconduct as determined by a final, non‑appealable judgment of a court of competent jurisdiction) that the Applicable Issuers may suffer or incur in connection with any Letter of Credit. The obligations of the Participating

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Lenders under this Section 1.3(e) and all other parts of this Section 1.3 shall survive termination of this Agreement and of all other L/C Documents.
Section 1.4.    Manner of Borrowing Loans and Designating Applicable Interest Rates     .
(a)     Notice to the Agent. The Company (which is acting on behalf of the Borrowers pursuant to Section 1.7 hereof) shall give notice to the Agent by no later than 10:00 a.m. (Chicago time): (i) at least three (3) Business Days before the date on which the applicable Borrower requests the Lenders to advance a Borrowing of Eurodollar Loans or a Borrowing in an Alternative Currency and (ii) on the date the applicable Borrower requests the Lenders to advance a Borrowing of Domestic Rate Loans. The Loans included in each Borrowing shall bear interest initially at the type of rate specified in such notice of a new Borrowing. Thereafter, subject to the terms and conditions hereof, the Borrower may from time to time elect to change or continue the type of interest rate borne by each Borrowing or, subject to the minimum amount requirement for each outstanding Borrowing set forth in Section 1.5 hereof, a portion thereof, as follows: (i) if such Borrowing is of Eurodollar Loans, on the last day of the Interest Period applicable thereto, the Borrower may continue part or all of such Borrowing as Eurodollar Loans or, with respect to a Borrowing denominated in U.S. Dollars, convert part or all of such Borrowing into Domestic Rate Loans or (ii) if such Borrowing is of Domestic Rate Loans, on any Business Day, the Company may convert all or part of such Borrowing into Eurodollar Loans for an Interest Period or Interest Periods specified by the Company (acting on behalf of the applicable Borrower). The Borrowers acknowledge that no Multicurrency Revolving Loan may be requested as, or converted into, a Domestic Rate Loan. The Company shall give all such notices requesting the advance, continuation or conversion of a Borrowing to the Agent in accordance with Section 1.7(b) hereof. Notice of the continuation of a Borrowing of Eurodollar Loans for an additional Interest Period or of the conversion of part or all of a Borrowing of Domestic Rate Loans into Eurodollar Loans must be given by no later than 10:00 a.m. (Chicago time) at least three (3) Business Days before the date of the requested continuation or conversion. All such notices concerning the advance, continuation or conversion of a Borrowing shall specify the date of the requested advance, continuation or conversion of a Borrowing (which shall be a Business Day), the amount of the requested Borrowing to be advanced, continued or converted, the type of Loans to comprise such new, continued or converted Borrowing, if such Borrowing is to be comprised of Eurodollar Loans, the Interest Period applicable thereto, if the Borrowing such Borrowing is a Revolving Loan, whether it is under the Multicurrency Revolving Facility or the U.S. Revolving Facility, and if such Borrowing is under the Multicurrency Revolving Facility, the currency (whether in U.S. Dollars or an Alternative Currency) of the Multicurrency Revolving Loan. Upon notice to the Borrower by the Agent or the Required Lenders (or, in the case of an Event of Default under Section 8.1(k) or 8.1(l) hereof with respect to any Borrower, without notice), no Borrowing of Eurodollar Loans shall be advanced, continued, or created by conversion if any Default or Event of Default then exists.
(b)     Notice to the Lenders . The Agent shall give prompt telephonic, facsimile or other telecommunication notice to each Lender of any notice from the Borrower received pursuant to Section 1.4(a) above, and, if such notice requests the Lenders to make Eurodollar Loans, the Agent shall give notice to the Company and each Lender by like means of the interest rate applicable thereto promptly after the Agent has made such determination.

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(c)     Borrower’s Failure to Notify. If the Company fails to give notice pursuant to Section 1.4(a) above of the continuation or conversion of any outstanding principal amount of a Borrowing of Eurodollar Loans before the last day of its then current Interest Period within the period required by Section 1.4(a) and such Borrowing is not prepaid in accordance with Section 3.4, such Borrowing shall automatically be converted into a Borrowing of Domestic Rate Loans (or, if such Borrowing is an Alternative Currency, such Borrowing shall be continued for an Interest Period of one month). In the event the Borrower fails to give notice pursuant to Section 1.4(a) above of a Borrowing equal to the amount of a Reimbursement Obligation and has not notified the Agent by 12:00 noon (Chicago time) on the day such Reimbursement Obligation becomes due that it intends to repay such Reimbursement Obligation through funds not borrowed under this Agreement, the Borrower shall be deemed to have requested a Borrowing of Domestic Rate Loans under the U.S. Revolving Facility (or, at the option of the Swing Line Lender, under the Swing Line) on such day in the amount of the Reimbursement Obligation then due, which Borrowing shall be applied to pay the Reimbursement Obligation then due.
(d)     Disbursement of Loans . Not later than 1:00 p.m. (Chicago time) on the date of any requested advance of a new Borrowing, subject to Section 6 hereof, each Lender shall make available its Loan comprising part of such Borrowing (i) that is denominated in U.S. Dollars in funds immediately available at the principal office of the Agent in Chicago, Illinois (or at such other location as the Agent shall designate) or, (ii) that is denominated in an Alternative Currency at such office as the Agent has previously agreed to with the relevant Borrower, in each case in the currency received by the Agent from the Lenders.
(e)     Agent Reliance on Lender Funding. Unless the Agent shall have been notified by a Lender prior to (or, in the case of a Borrowing of Domestic Rate Loans, by 1:00 p.m. (Chicago time) on) the date on which such Lender is scheduled to make payment to the Agent of the proceeds of a Loan (which notice shall be effective upon receipt) that such Lender does not intend to make such payment, the Agent may assume that such Lender has made such payment when due and the Agent may in reliance upon such assumption (but shall not be required to) make available to the relevant Borrower the proceeds of the Loan to be made by such Lender and, if any Lender has not in fact made such payment to the Agent, such Lender shall, on demand, pay to the Agent the amount made available to such Borrower attributable to such Lender together with interest thereon in respect of each day during the period commencing on the date such amount was made available to such Borrower and ending on (but excluding) the date such Lender pays such amount to the Agent at a rate per annum equal to: (i) from the date the related advance was made by the Agent to the date two (2) Business Days after payment by such Lender is due hereunder, the Federal Funds Rate for each such day, (ii) from the date two (2) Business Days after the date such payment is due from such Lender to the date such payment is made by such Lender, the Domestic Rate in effect for each such day, or (iii) in the case of a Multicurrency Revolving Loan denominated in an Alternative Currency, the cost to the Agent of funding the amount it advanced to fund such Multicurrency Lender’s Revolving Loan, as determined by the Agent. If such amount is not received from such Lender by the Agent immediately upon demand, the applicable Borrower will, on demand, repay to the Agent the proceeds of the Loan attributable to such Lender with interest thereon at a rate per annum equal to the interest rate applicable to the relevant Loan.

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(f)     Availability of Alternative Currency. The Multicurrency Lenders’ obligations to make Multicurrency Revolving Loans in an Alternative Currency or to provide or participate in Letters of Credit payable in an Alternative Currency shall always be subject to such Alternative Currency being freely available to each of them in the relevant market. If any Multicurrency Lender reasonably determines that such currency requested is unavailable to it in the amount and for the term requested it shall so notify the Agent within one Business Day of its receipt of the aforesaid notice and the Agent shall promptly notify the Company and each other Multicurrency Lender of its receipt of such notice and the request of the Company for the Borrowing in the Alternative Currency in question shall otherwise be deemed withdrawn.
Section 1.5.    Minimum Borrowing Amounts     . Each Borrowing of Domestic Rate Loans shall be in an amount not less than $2,000,000, or such greater amount which is an integral multiple of $100,000, and each Borrowing of Eurodollar Loans shall be in an amount not less than $5,000,000, or such greater amount which is an integral multiple of $100,000.
Section 1.6.    Maturity of Loans      .
(a)     Scheduled Payments of Term Loans. The Borrower shall make principal payments on the Term Loans in installments on the last day of each March, June, September, and December in each year, commencing with the calendar quarter ending March 31, 2014, with the amount of each such principal installment to equal $4,375,000, with a final payment of all principal and interest not sooner paid on the Term Loans due and payable on Term Loan Maturity Date. Each such principal payment shall be applied to the Lenders holding the Term Loans pro rata based upon their Term Loan Percentages.
(b)     Revolving Loans. Each Revolving Loan, both for principal and interest not sooner paid, shall mature and be due and payable by the Borrowers on the Revolving Credit Termination Date.
(c)     Swing Loans . Each Swing Loan, both for principal and interest not sooner paid, shall mature and be due and payable by the Borrowers on the Revolving Credit Termination Date.
Section 1.7.    Appointment of Company as Agent for Borrowers; Reliance by Agent      .
(a)     Appointment     . Each Borrower irrevocably appoints the Company as its agent hereunder to make requests on such Borrower’s behalf under Section 1 hereof for Borrowings to be made by such Borrower and for Letters of Credit to be issued for such Borrower’s account and to take any other action contemplated by the Loan Documents with respect to credit extended hereunder to such Borrower. The Agent and the Lenders shall be entitled to conclusively presume that any action by the Company under the Loan Documents is taken on behalf of any one or more of the Borrowers whether or not the Company so indicates.



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(b)     Reliance     . All requests for Borrowings and selection of interest rates, currencies and Interest Periods applicable thereto may be written or oral, including by telephone, facsimile, or other telecommunication device acceptable to the Agent (which notice shall be irrevocable once given). The Borrowers agree that the Agent may rely on any such notice given by any person the Agent in good faith believes is an Authorized Representative without the necessity of independent investigation (the Borrowers hereby indemnifying the Agent and Lenders from any liability or loss ensuing from such reliance), and in the event any such telephonic or other oral notice conflicts with any written confirmation, such oral or telephonic notice shall govern if the Agent has acted in reliance thereon.
Section 1.8.    Swing Loans     . (a)  Generally. Subject to the terms and conditions hereof, as part of the U.S. Revolving Facility, the Swing Line Lender may, in its discretion, make loans in U.S. Dollars to the Company under the Swing Line (individually a “Swing Loan” and collectively the “Swing Loans” ) which shall not in the aggregate at any time outstanding exceed the Swing Line Sublimit. The Swing Loans may be availed of the Company from time to time and Borrowings thereunder may be repaid and used again during the period ending on the Revolving Credit Termination Date; provided that each Swing Loan must be repaid on the last day of the Interest Period applicable thereto. Each Swing Loan shall be in a minimum amount of $250,000 or such greater amount which is an integral multiple of $100,000.
(b)     Interest on Swing Loans . Each Swing Loan shall bear interest until maturity (whether by acceleration or otherwise) at a rate per annum equal to (i) the sum of the Domestic Rate plus the Applicable Margin for Domestic Rate Loans under the U.S. Revolving Facility as from time to time in effect or (ii) the Quoted Rate. Interest on each Swing Loan shall be due and payable prior to such maturity on the last day of each Interest Period applicable thereto.
(c)     Requests for Swing Loans . The Company shall give the Agent prior notice (which may be written or oral) no later than 12:00 Noon (Chicago time) on the date upon which the Company requests that any Swing Loan be made of the amount and date of such Swing Loan, and the Interest Period requested therefor. The Agent shall promptly advise the Swing Line Lender of any such notice received from the Company. Within 30 minutes after receiving such notice, the Swing Line Lender shall in its discretion quote an interest rate to the Company at which the Swing Line Lender would be willing to make such Swing Loan available to the Company for the Interest Period so requested (the rate so quoted for a given Interest Period being herein referred to as “Quoted Rate” ). The Company acknowledges and agrees that the interest rate quote is given for immediate and irrevocable acceptance. If the Company does not so immediately accept the Quoted Rate for the full amount requested by the Company for such Swing Loan, the Quoted Rate shall be deemed immediately withdrawn and such Swing Loan shall bear interest at the rate per annum determined by adding the Applicable Margin for Domestic Rate Loans under the U.S. Revolving Facility to the Domestic Rate as from time to time in effect. Subject to the terms and conditions hereof, the proceeds of such Swing Loan shall be made available to the Company on the date so requested at the offices of the Agent in Chicago, Illinois.
(d)     Refunding Loans . In its sole and absolute discretion, the Swing Line Lender may at any time, on behalf of the Company (which hereby irrevocably authorizes the Swing Line Lender to act on its behalf

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for such purpose) and with notice to the Agent and the Company, request each U.S. Lender to make a U.S. Revolving Loan in the form of a Domestic Rate Loan in an amount equal to such U.S. Lender’s Percentage of the amount of the Swing Loans outstanding on the date such notice is given. Unless an Event of Default described in Section 8.1(k) or 8.1(l) exists with respect to the Company, regardless of the existence of any other Event of Default, each U.S. Lender shall make the proceeds of its requested U.S. Revolving Loan available to the Agent (for the account of the Swing Line Lender), in immediately available funds, at the Agent’s principal office in Chicago, Illinois, before 12:00 Noon (Chicago time) on the Business Day following the day such notice is given. The proceeds of such Borrowing of U.S. Revolving Loans shall be immediately applied to repay the outstanding Swing Loans.
(e)     Participations . If any Lender refuses or otherwise fails to make a U.S. Revolving Loan when requested by the Swing Line Lender pursuant to Section 1.8(d) above (due to the existence of an Event of Default described in Section 8.1(k) or 8.1(l)), such U.S. Lender will, by the time and in the manner such U.S. Revolving Loan was to have been funded to the Swing Line Lender, purchase from the Swing Line Lender an undivided participating interest in the outstanding Swing Loans in an amount equal to its U.S. Revolver Percentage of the aggregate principal amount of Swing Loans that were to have been repaid with such U.S. Revolving Loans. Each U.S. Lender that so purchases a participation in a Swing Loan shall thereafter be entitled to receive its U.S. Revolver Percentage of each payment of principal received on the Swing Loan and of interest received thereon accruing from the date such U.S. Lender funded to the Swing Line Lender its participation in such U.S. Revolving Loan. The several obligations of the U.S. Lenders under this Section shall be absolute, irrevocable, and unconditional under any and all circumstances whatsoever and shall not be subject to any set‑off, counterclaim or defense to payment which any Lender may have or have had against the Company, any other Borrower, any Guarantor, any other Lender or any other Person whatever. Without limiting the generality of the foregoing, such obligations shall not be affected by any Default or Event of Default or by any reduction or termination of the U.S. Dollar Commitments of any U.S. Lender, and each payment made by a U.S. Lender under this Section shall be made without any offset, abatement, withholding or reduction whatsoever.
Section 1.9.    Default Rate     . Notwithstanding anything to the contrary contained herein, while any Event of Default exists or after acceleration, the relevant Borrower shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the principal amount of all Loans owing by it at a rate per annum equal to:
(a)    for any Domestic Rate Loan or any Swing Loan bearing interest based on the Domestic Rate, the sum of 2.0% plus the Applicable Margin plus the Domestic Rate from time to time in effect;
(b)    for any Eurodollar Loan denominated in U.S. Dollars or any Swing Loan bearing interest at the Quoted Rate, the sum of 2.0% plus the rate of interest in effect thereon at the time of such Event of Default until the end of the Interest Period applicable thereto and, thereafter, at a rate per annum equal to the sum of 2.0% plus the Applicable Margin for Domestic Rate Loans plus the Domestic Rate from time to time in effect; and

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(c)    for any Eurodollar Loan denominated in an Alternative Currency, the sum of 2.0% plus the rate of interest in effect thereon at the time of such Event of Default until the end of the Interest Period applicable thereto and, thereafter at a rate per annum equal to the sum of the Applicable Margin, plus a rate of two percent (2.0%) plus the rate of interest per annum as determined by the Agent (rounded upwards, if necessary, to the nearest whole multiple of one‑sixteenth of one percent (1/16%)) at which overnight or weekend deposits of the appropriate currency (or, if such amount due remains unpaid more than three Business Days, then for such other period of time not longer than six months as the Agent may elect in its absolute discretion) for delivery in immediately available and freely transferable funds would be offered by the Agent to major banks in the interbank market upon request of such major banks for the applicable period as determined above and in an amount comparable to the unpaid principal amount of any such Loan (or, if the Agent is not placing deposits in such currency in the interbank market, then the Agent’s cost of funds in such currency for such period).
provided, however, that in the absence of acceleration, any adjustments pursuant to this Section shall be made at the election of the Agent, acting at the request or with the consent of the Required Lenders, with written notice to the Borrowers. While any Event of Default exists or after acceleration, interest shall be paid on demand of the Agent at the request or with the consent of the Required Lenders.
Section 1.10.    Increase in Commitment      . Provided no Default or Event of Default has occurred and is continuing, the Company may, on any Business Day on or prior to the Revolving Credit Termination Date, from time to time, increase the aggregate amount of the U.S. Dollar Commitments and/or the Multicurrency Commitments by delivering a Commitment Amount Increase Request in the form of Exhibit D hereto at least five (5) Business Days prior to the desired effective date of such increase (the “Commitment Amount Increase” ) identifying an additional Lender acceptable to the Agent and each Applicable Issuer in its reasonable discretion or additional U.S. Dollar Commitment and/or Multicurrency Commitment agreed to be made by any existing Lender (each such additional Lender or existing Lender (in its capacity as such) being referred to as an “Additional Lender” ) and the amount of its U.S. Dollar Commitment and/or Multicurrency Commitment (or additional amount of its U.S. Dollar Commitment and/or Multicurrency Commitment). The aggregate amount of all such Commitment Amount Increases shall not exceed $300,000,000. The effective date of the Commitment Amount Increase shall be agreed upon by the Company, such Additional Lender and the Agent (whose agreement shall not be unreasonably withheld, conditioned or delayed). Upon the effectiveness thereof, each Additional Lender shall advance the relevant Revolving Loans and purchase Participating Interests in all then outstanding Letters of Credit in an amount sufficient such that after giving effect to such relevant Revolving Loans and purchases each Lender (including such Additional Lender) shall have outstanding its respective Percentage of the aggregate Revolving Loans and Participating Interests then outstanding. It shall be a condition to such effectiveness that no Eurodollar Loans be outstanding on the date of such effectiveness unless the Borrowers pay all amounts due under Section 2.5 hereof, and that the Company shall not have terminated any portion of the Aggregate Revolving Commitments pursuant to Section 3.5(a) hereof. The Company agrees to pay any reasonable fees or expenses of the Agent (including reasonable fees and disbursements of counsel) relating to any Commitment Amount Increase. Notwithstanding anything herein to the contrary, no Lender shall have any obligation to increase its Aggregate

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Revolving Commitment and no Lender’s Aggregate Revolving Commitment shall be increased without its consent thereto, and each Lender may at its option, unconditionally and without cause, decline to increase its Aggregate Revolving Commitment.
Section 1.11.    Removal of a Borrower     . The Company may remove any Restricted Subsidiary as a Borrower (a “Removed Borrower” ) hereunder so long as (i) the Company has provided the Agent prior written notice at least five (5) Business Days prior to the effective date of such removal, (ii) all Reimbursement Obligations of, all Revolving Loans made to, the Removed Borrower and all accrued interest owing thereon are paid in full on or prior to the effective date of such removal, (iii) no Letters of Credit issued on the account of such Removed Borrower are outstanding unless the Agent has received Cash Collateral in an amount equal to 105% of the face principal amount of such Letters of Credit or such Removed Borrower has entered into other arrangements with the Agent and the Applicable Issuer satisfactory to the Agent and such Applicable Issuer with respect to such Letters of Credit, (iv) no Default or Event of Default has occurred and is continuing or would result from the removal of such Removed Borrower, and (v) the removal of such Removed Borrower does not have a Material Adverse Effect on such Removed Borrower’s ability to continue to provide its Guaranty and pledge Collateral as required hereunder or under any of the other Loan Documents. Upon satisfaction of the foregoing, the Lenders and the Issuers shall not be obligated to make Loans to, or issue Letters of Credit on account of, such Removed Borrower. The Company cannot designate a Restricted Subsidiary as a Borrower hereunder if such Borrower has been a Removed Borrower.
Section 1.12.    Conversions      . For all purposes of this Agreement, where a determination of the used, unused or available amount of the Aggregate Revolving Commitments or of the outstanding amount of Credit Utilizations is necessary, Credit Utilizations payable in an Alternative Currency shall be converted into their U.S. Dollar Equivalent. Such conversions shall be made on the date of each Credit Utilization in an Alternative Currency as to that Credit Utilization and all Credit Utilizations shall be converted into their U.S. Dollar Equivalent as of the last day of each month or at the time of each Credit Utilization should the Agent so elect. If the last day of a month is not a Business Day, such conversion shall be made as of the next Business Day. The Agent shall promptly notify the Company of such determination of a U.S. Dollar Equivalent and of the basis therefor. All Credit Utilizations and interest thereon shall be repaid in the currency in which they were effected.
SECTION 2.
INTEREST    .
Section 2.1.    Domestic Rate Loans     . Each Domestic Rate Loan shall bear interest (which the relevant Borrower promises to pay in arrears at the times herein provided) at the rate per annum determined by adding the Applicable Margin to the Domestic Rate as in effect from time to time, provided that if a Domestic Rate Loan is not paid when due (whether by lapse of time, acceleration or otherwise), such Domestic Rate Loan shall bear interest (which the relevant Borrower promises to pay at the times hereinafter provided), whether before or after judgment, and until payment in full thereof, at the rate per annum specified in Section 1.9 hereof. Interest on the Domestic Rate Loans shall be payable in arrears on the last day of each March, June, September and December of each year (beginning on the first of such dates after the date hereof) and at maturity of the Revolving Loans and interest after maturity shall be due and payable upon demand.

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Section 2.2.    Eurodollar Loans     . Each Eurodollar Loan shall bear interest (which the relevant Borrower promises to pay in arrears at the times herein provided) on the unpaid principal amount thereof from time to time outstanding from the date of the Borrowing of such Eurodollar Loan until maturity (whether by acceleration or otherwise) at a rate per annum equal to the sum of the Applicable Margin plus Adjusted LIBOR, payable on the last day of the applicable Interest Period and at maturity (whether by acceleration or otherwise), and, if the applicable Interest Period is longer than three months, on the date occurring three months after the date of the Borrowing of such Loan; provided that if a Eurodollar Loan is not paid when due (whether by acceleration or otherwise), such Loan shall bear interest (which the relevant Borrower promises to pay at the times herein provided) from the date such payment was due until paid in full, payable on demand, at the rate per annum specified in Section 1.9 hereof.
Section 2.3.    Rate Determinations     . The Agent shall determine each interest rate applicable to the Loans hereunder in accordance herewith, and its determination thereof shall be deemed prima facie correct.
Section 2.4.    Computation of Interest, Fees and Charges     . All interest on Domestic Rate Loans shall be computed on the basis of a year of 365 or 366 days, as the case may be, for the actual number of days elapsed. All interest on Eurodollar Loans and Swing Loans bearing interest at the Quoted Rate (and unless otherwise stated herein, all fees, charges and commissions due hereunder) shall be computed on the basis of a year of 360 days for the actual number of days elapsed, except for Eurodollar Loans denominated in Pounds Sterling which shall be computed on the basis of a year of 365 or 366 days, as the case may be.
Section 2.5.    Funding Indemnity     . If any Lender shall incur any loss, cost or expense (including, without limitation, any loss of profit, and any loss, cost or expense incurred by reason of the liquidation or re‑employment of deposits or other funds acquired by such Lender to fund or maintain any Eurodollar Loan or Swing Loan or the relending or reinvesting of such deposits or amounts paid or prepaid to such Lender) as a result of:
(i)    any payment or prepayment of a Eurodollar Loan or Swing Loan on a date other than the last day of its Interest Period for any reason,
(ii)    any failure (because of a failure to meet the conditions of Borrowing or otherwise) by a Borrower to borrow or continue a Eurodollar Loan or Swing Loan, or to convert a Domestic Rate Loan into a Eurodollar Loan or such Swing Loan, in each case on the date specified in a notice given pursuant to this Agreement,
(iii)    any failure by a Borrower to make any payment of principal on any Eurodollar Loan or Swing Loan when due (whether by acceleration or otherwise),
(iv)    any acceleration of the maturity of a Eurodollar Loan or Swing Loan as a result of the occurrence of any Event of Default hereunder, or

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(v)    any assignment of a Eurodollar Loan other than on the last of the Interest Period applicable thereto as a result of the request of the Company pursuant to Section 2.11 hereof;
then, upon the demand of such Lender, the applicable Borrower shall pay to such Lender such amount as will reimburse such Lender for such loss, cost or expense. If any Lender makes such a claim for compensation, it shall provide to the Company, with a copy to the Agent, a certificate executed by an officer of such Lender setting forth the amount of such loss, cost or expense in reasonable detail (including an explanation of the basis for and the computation of such loss, cost or expense) and the amounts shown on such certificate shall be deemed prima facie correct.
Section 2.6.    Change of Law     . Notwithstanding any other provisions of this Agreement or any other Loan Document, if any Change in Law makes it unlawful for any Lender to make or continue to maintain Loans in an Alternative Currency or Eurodollar Loans or to perform its obligations with respect to such Loans, such Lender shall promptly give notice thereof to the Company and such Lender’s obligations to make or maintain Eurodollar Loans or Loans in an Alternative Currency (as applicable) under this Agreement shall be suspended until it is no longer unlawful for such Lender to make or maintain such Loans. The applicable Borrower shall prepay on demand the outstanding principal amount of any such affected Loans, together with all interest accrued thereon and all other amounts then due and payable to such Lender under this Agreement; provided, however, subject to all of the terms and conditions of this Agreement, the applicable Borrower may then elect to borrow the principal amount of the affected Loans (other than Loans denominated in an Alternative Currency) from such Lender by means of Domestic Rate Loans from such Lender, which Domestic Rate Loans shall not be made ratably by the Lenders but only from such affected Lender.
Section 2.7.    Unavailability     . If prior to the commencement of any Interest Period for any Borrowing of Eurodollar Loans:
(a)    the Agent determines that deposits in the applicable currency (in the applicable amounts) are not being offered to it in the eurocurrency interbank market for such Interest Period, or that by reason of circumstances affecting the interbank eurocurrency market adequate and reasonable means do not exist for ascertaining the applicable LIBOR, or
(b)    the Required Lenders notify the Agent that (i) LIBOR as determined by the Agent will not adequately and fairly reflect the cost to such Lenders of funding their Eurodollar Loans in the currency in question for such Interest Period or (ii) that the making or funding of Eurodollar Loans in the relevant currency has become impracticable, in either case as a result of an event occurring after the date hereof which in the opinion of such Lenders materially adversely affects such Loans,
then and in any such event the Agent shall not less than two days prior to the commencement of such Interest Period, give notice thereof to the Company and the Lenders, whereupon until the Agent notifies the Company that the circumstances giving rise to such suspension no longer exist, the obligations of the Lenders to make Loans in the currency so affected or to make Eurodollar Loans (as applicable) shall be suspended.

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Section 2.8.    Increased Cost     . (a)     Increased Costs Generally. If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Adjusted LIBOR) or any Issuer;
(ii)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii)    impose on any Lender or any Issuer or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, such Issuer or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, Issuer or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, Issuer or other Recipient, the Borrower will pay to such Lender, Issuer or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, Issuer or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
(b)     Capital Requirements. If any Lender or Issuer determines that any Change in Law affecting such Lender or Issuer or any lending office of such Lender or such Lender’s or Issuer’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s or Issuer’s capital or on the capital of such Lender’s or Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swing Loans held by, such Lender, or the Letters of Credit issued by any Issuer, to a level below that which such Lender or Issuer or such Lender’s or Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuer’s policies and the policies of such Lender’s or Issuer’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrowers will pay to such Lender or Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or Issuer or such Lender’s or Issuer’s holding company for any such reduction suffered.



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(c)     Certificates for Reimbursement. A certificate of a Lender or Issuer setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Company, shall be conclusive absent manifest error. The Borrowers shall pay such Lender or Issuer, as the case may be, the amount shown as due on any such certificate within fifteen (15) days after receipt thereof.
(d)     Delay in Requests. Failure or delay on the part of any Lender or Issuer to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or Issuer’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or Issuer pursuant to this Section 2.8 for any increased costs incurred or reductions suffered more than six (6) months prior to the date that such Lender or Issuer, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s or Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six‑month period referred to above shall be extended to include the period of retroactive effect thereof).
Section 2.9.    Lending Offices; Mitigation Obligations     . Each Lender may, at its option, elect to make its Loans hereunder at the branch, office or affiliate specified in its Administrative Questionnaire (each a “Lending Office” ) for each type of Loan available hereunder or at such other of its branches, offices or affiliates as it may from time to time elect and designate in a written notice to the Company and the Agent (but such funds shall in any event be made available to the Company in accordance with Section 1.4(d) hereof); provided that the Company shall not be required to reimburse any Lender under any of the provisions of this Section 2 for any cost which such Lender would not have incurred but for changing its Lending Office unless the Company consented in writing to such change or has requested the change pursuant to this Section 2.9. If any Lender requests compensation under Section 2.8, requires the Borrowers to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 11.1, or gives a notice pursuant to Section 2.6, then such Lender shall (at the request of the Company) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.8 or 11.1, as the case may be, in the future, or eliminate the need for notice pursuant to Section 2.6, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
Section 2.10.    Discretion of Lender as to Manner of Funding     . Notwithstanding any other provision of this Agreement, each Lender shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations under this Agreement shall be made as if each Lender had actually funded and maintained each Eurodollar Loan through the purchase of deposits in the relevant market and in the relevant currency having a maturity corresponding to such Eurodollar Loan’s Interest Period and bearing an interest rate equal to Adjusted LIBOR for the currency in question for such Interest Period.

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Section 2.11.    Replacement of Lenders     . If any Lender requests compensation under Section 2.8, if any Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 11.1, or if any Borrower receives notice from any Lender of any illegality pursuant to Section 2.6 hereof for reasons not generally applicable to the other Lenders, and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 2.9, or if any Lender is a Defaulting Lender or a Non‑Consenting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.17), all of its interests, rights (other than its existing rights to payments pursuant to Section 2.8 or Section 11.1) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:
(i)    the Borrowers shall have paid to the Agent the assignment fee (if any) specified in Section 11.17;
(ii)    such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations in L/C Obligations, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section   2.5 as if the Loans owing to it were prepaid rather than assigned) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts);
(iii)    in the case of any such assignment resulting from a claim for compensation under Section 2.8 or payments required to be made pursuant to Section 11.1, such assignment will result in a reduction in such compensation or payments thereafter;
(iv)    such assignment does not conflict with applicable law; and
(v)    in the case of any assignment resulting from a Lender becoming a Non‑Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.
Section 2.12.    Defaulting Lenders     . (a)  Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until



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such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i)     Waivers and Amendments . Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders.
(ii)     Defaulting Lender Waterfall . Any payment of principal, interest, fees or other amounts received by the Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 8 or otherwise) or received by the Agent from a Defaulting Lender pursuant to Section 11.27 hereto shall be applied at such time or times as may be determined by the Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Agent hereunder; second , to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuer or the Swing Line Lender hereunder; third , to Cash Collateralize such Issuer’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.13; fourth , as the Company may request (so long as no Default or Event of Default exists), 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 Agent; fifth , if so determined by the Agent and the Company, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuers’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.13; sixth , to the payment of any amounts owing to the Lenders, the Issuers or the Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, any Issuer or the Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh , so long as no Default or Event of Default exists, to the payment of any amounts owing to a Borrower as a result of any judgment of a court of competent jurisdiction obtained by such Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Obligations in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 6.1 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non‑Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Loans are held by the Lenders pro rata in accordance with their Percentages of the relevant Commitments without giving effect to Section 2.12(a)(iv) below. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.12(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

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(iii)     Certain Fees .
(A)    No Defaulting Lender shall be entitled to receive any commitment fee for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).
(B)    Each Defaulting Lender shall be entitled to receive L/C Participation Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.13.
(C)    With respect to any L/C Participation Fee not required to be paid to any Defaulting Lender pursuant to clause (B) above, the Borrowers shall (x) pay to each Non‑Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swing Loans that has been reallocated to such Non‑Defaulting Lender pursuant to clause (iv) below, (y) pay to each Issuer and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuer’s or Swing Line Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.
(iv)     Reallocation of Participations to Reduce Fronting Exposure . All or any part of such Defaulting Lender’s participation in L/C Obligations and Swing Loans shall be reallocated among the Non‑Defaulting Lenders in accordance with their respective Percentages of the relevant Commitments (calculated without regard to such Defaulting Lender’s Commitments) but only to the extent that (x) the conditions set forth in Section 6.1 are satisfied at the time of such reallocation (and, unless the Borrowers shall have otherwise notified the Agent at such time, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Loans and interests in L/C Obligations and Swing Loans of any Non‑Defaulting Lender to exceed such Non‑Defaulting Lender’s Aggregate Revolving Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non‑Defaulting Lender as a result of such Non‑Defaulting Lender’s increased exposure following such reallocation.
(v)     Cash Collateral; Repayment of Swing Loans . If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to them hereunder or under law, (x) first, prepay Swing Loans in an amount equal to the Swing Line Lender’s Fronting Exposure and (y) second, Cash Collateralize the Applicable Issuer’s Fronting Exposure in accordance with the procedures set forth in Section 2.13.

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(b)     Defaulting Lender Cure . If the Company, the Agent, the Swing Line Lender and each Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Loans to be held pro rata by the Lenders in accordance with their respective Percentages of the relevant Commitments (without giving effect to Section 2.12(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
(c)     New Swing Loans/Letters of Credit . So long as any Lender is a Defaulting Lender, (i) the Swing Line Lender shall not be required to fund any Swing Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swing Loan and (ii) no Issuer shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.
Section 2.13.    Cash Collateral for Fronting Exposure      At any time that there shall exist a Defaulting Lender, within one (1) Business Day following the written request of the Agent or any Issuer (with a copy to the Agent) the Borrowers shall Cash Collateralize the Issuers’ Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.12(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than 105% of such Fronting Exposure.
(a)     Grant of Security Interest . The Borrowers, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grant to the Agent, for the benefit of the Issuers, and agree to maintain, a first priority security interest in all such Cash Collateral as security for such Defaulting Lender’s obligation to fund participations in respect of L/C Obligations, to be applied pursuant to clause (b) below. If at any time the Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Agent and the Issuers as herein provided, or that the total amount of such Cash Collateral is less than 105% of the Fronting Exposure, the Borrowers shall, promptly upon demand by the Agent, pay or provide to the Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).
(b)     Application . Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.13 or Section 2.12 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

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(c)     Termination of Requirement . Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuer’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.13(c) following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Agent and each Issuer that there exists excess Cash Collateral; provided that, subject to Section 2.13, the Person providing Cash Collateral and each Issuer may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations; and provided further that to the extent that such Cash Collateral was provided by any Borrower or Guarantor, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.
SECTION 3.
FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS    .
Section 3.1.    Commitment Fee     . For the period from the Closing Date to and including the Revolving Credit Termination Date, the Borrowers shall pay to the Agent for the account of the Lenders a non‑refundable commitment fee at the rate per annum equal to the Applicable Margin (computed on the basis of a year of 360 days and actual days elapsed) on the average daily Unused Commitments. Such fee is due and payable in arrears on the last day of each calendar quarter (commencing with the first of such dates after the date hereof) and on the Revolving Credit Termination Date.
Section 3.2.    Other Fees     . The Company shall pay to the Agent such other and additional fees as may from time to time be agreed to between the Company and the Agent.
Section 3.3.    Letter of Credit Fees      . The applicable Borrowers shall pay to the Agent, for the ratable account of the relevant Lenders, a fee on the amount of the L/C Obligations from time to time outstanding (the “L/C Participation Fee” ) computed at the Applicable Margin (computed on the basis of a year of 360 days and actual days elapsed), each such fee to be due and payable quarterly in arrears on the last day of each calendar quarter and on the Revolving Credit Termination Date. In addition, on the date of issuance of each Letter of Credit the applicable Borrower shall pay the Applicable Issuer for its own account an issuance fee of 1/8 of 1% of the face amount of such Letter of Credit, such fee to be retained by the Applicable Issuer for its own account. In addition, the applicable Borrower shall pay to the Applicable Issuer such issuing, processing, drawing, amendment and other fees and charges as the Applicable Issuer customarily imposes in connection with the issuance of letters of credit of the type in question, the payment of drafts thereunder or amendments thereto.
Section 3.4.    Voluntary Prepayments     . The Borrowers shall have the privilege of prepaying without premium or penalty (except as set forth in Section 2.5 above) and in whole or in part (but, if in part, then: (i) in an amount not less than $2,000,000, or such lesser amount as may then be outstanding, and (ii) in each case, in an amount such that the minimum amount required for a Borrowing pursuant to Section 1.5 hereof remains outstanding) any Borrowing of Eurodollar Loans at any time upon three (3) Business Days prior notice by the Borrower to the Agent or, in the case of a Borrowing of Domestic Rate Loans or Swing Loans, notice delivered by the Borrower to the Agent no later than 10:00 a.m. (Chicago time) on the date of prepayment, such prepayment to be made by the payment of the principal amount to be prepaid and, in the

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case of any Term Loans or Eurodollar Loans or Swing Loans, accrued interest thereon to the date fixed for prepayment plus any amounts due the Lenders under Section 2.5 hereof. Prepayments of the Loans shall be applied to the outstanding Obligations in accordance with Section 3.5(e) hereof.
Section 3.5.    Mandatory Prepayments and Commitment Reductions     . (a) Commitments. In the event that (i) the Revolving Credit Exposure for all Lenders shall at any time and for any reason exceed the Aggregate Revolving Commitments; (ii) the U.S. Revolving Credit Exposure for all Lenders shall at any time exceed an amount equal to (A) the U.S. Dollar Commitments minus (B) the U.S. Dollar Equivalent of the aggregate principal amount of Multicurrency Revolving Loans; (iii) the U.S. Dollar Equivalent of the aggregate amount of Multicurrency Revolving Loans shall exceed an amount equal to (A) the Multicurrency Commitments minus (B) the U.S. Revolving Credit Exposure for all Lenders outstanding at such time; or (iv) the aggregate amount of Revolving Loans, Swing Loans and/or L/C Obligations owing from the Borrowers shall exceed any applicable Sublimit, in each case for any reason (including changes in currency rates), the relevant Borrowers shall immediately and without notice or demand pay the amount of the excess to the Agent as and for a mandatory prepayment on the relevant Revolving Loans or, if the Revolving Loans have been paid in full but L/C Obligations are outstanding, then and in any such event, such excess shall be paid over to the Agent to be applied against, or held as Cash Collateral with respect to such L/C Obligations.
(b)    The Borrowers shall, on each date the U.S. Dollar Commitments are reduced pursuant to Section 3.6, prepay the U.S. Revolving Loans, Swing Loans, and, if necessary, prefund the L/C Obligations by the amount, if any, necessary to reduce the sum of the U.S. Revolving Credit Exposure for all Lenders then outstanding to the amount to which the U.S. Dollar Commitments have been so reduced. The Borrowers shall, on each date the Multicurrency Commitments are reduced pursuant to Section 3.6, prepay the Multicurrency Revolving Loans by the amount, if any, necessary to reduce the sum of the aggregate principal amount of Multicurrency Revolving Loans then outstanding to the amount to which the Multicurrency Commitments have been so reduced.
(c)    If any Borrower or any Restricted Subsidiary shall at any time or from time to time make or agree to make a Disposition (other than Dispositions of inventory in the ordinary course of business) or shall suffer an Event of Loss with respect to any Property resulting in Net Cash Proceeds in excess of $100,000,000 individually or on a cumulative basis in any fiscal year of the Borrowers, then the Company shall promptly notify the Agent of such proposed Disposition or Event of Loss (including the amount of the estimated Net Cash Proceeds to be received by such Borrower or Restricted Subsidiary in respect thereof) and, promptly upon receipt by such Borrower or Restricted Subsidiary of the Net Cash Proceeds of such Disposition or Event of Loss, the Borrowers shall prepay the Obligations in an aggregate amount equal to 100% of the amount of all such Net Cash Proceeds; provided that (x) this subsection shall not require any such prepayment for any amount of the Net Cash Proceeds received as a result of Dispositions and Events of Loss from the date of this Agreement through the date of such Disposition or Event of Loss that is less than 10% of the book value of assets of the Borrowers and the Restricted Subsidiaries on the date of such Disposition or Event of Loss, and (y) in the case of any Disposition or Event of Loss not covered by clause (x) above, so long as no Default or Event of Default then exists, if the Company states in its notice of such event that the relevant Borrower or Subsidiary intends to replace, restore or rebuild the relevant Property, or reinvest the

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Net Cash Proceeds in Property similar to the Property which was subject to such Disposition or Event of Loss in accordance with the Collateral Documents within 180 days of the applicable Disposition or Event of Loss, then the Borrowers shall not be required to make a mandatory prepayment under this subsection in respect of such Net Cash Proceeds to the extent such Net Cash Proceeds are actually used to replace, restore or rebuild such Property or actually reinvested in such similar Property within such 180‑day period and further provided, that to the extent that the Company has determined in good faith that repatriation of any of or all the Net Cash Proceeds of any Disposition or Event of Loss attributable to Foreign Subsidiaries, a CFCs or the U.K. Subsidiaries would have material adverse tax consequences with respect to such Net Cash Proceeds, such Net Cash Proceeds so affected will not be required to be applied to repay Obligations at the times provided in this Section 3.5(c) but may be retained by the applicable Foreign Subsidiary, CFC or U.K. Subsidiary. Promptly after the end of such 180‑day period, to the extent such Net Cash Proceeds have not been so reinvested or used to replace, restore or rebuild such Property, the Borrowers shall promptly prepay the Obligations in the amount of such Net Cash Proceeds not so reinvested or used to replace, restore or rebuild such Property. The amount of each such prepayment shall be applied first to the outstanding Term Loans until paid in full and then to the Revolving Facility (to be applied on a ratable basis between the U.S. Revolving Facility and the Multicurrency Revolving Facility based on the outstanding principal amounts or L/C Obligations thereof). If the Agent or the Required Lenders so request, all proceeds of such Disposition or Event of Loss shall be deposited with the Agent (or its agent) and held by it in the Collateral Account. So long as no Default or Event of Default exists, the Agent is authorized to disburse amounts representing such proceeds from the Collateral Account to or at the Company’s direction for application to or reimbursement for the costs of replacing, rebuilding or restoring such Property.
(e)    Unless the Company otherwise directs, prepayments of Loans under Section 3.4 and this Section 3.5 shall be applied first to Borrowings of Domestic Rate Loans until payment in full thereof with any balance applied to Borrowings of Eurodollar Loans in the order in which their Interest Periods expire. No amount of the Term Loans paid or prepaid may be reborrowed, and, in the case of any partial prepayment, such prepayment shall be applied to the remaining payments on the Term Loans on a ratable basis among all such remaining amortization payments based on the principal amounts thereof.
Section 3.6.    Commitment Terminations     .
(a)     Voluntary Terminations. The Borrowers shall have the right at any time and from time to time, upon five (5) Business Days prior written notice to the Agent (or such shorter period of time agreed to by the Agent), to terminate the Aggregate Revolving Commitments without premium or penalty and in whole or in part, any partial termination to be in an amount not less than $5,000,000, provided that the Aggregate Revolving Commitments may not be reduced to an amount less than the sum of the Revolving Credit Exposure for all Lenders then outstanding. Any termination of the Aggregate Revolving Commitments below any Sublimit then in effect shall reduce such Sublimit by a like amount. The Administrative Agent shall give prompt notice to each Lender of any such termination of the Aggregate Revolving Commitments.

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(b)     Mandatory Aggregate Revolving Commitment Termination . If at any time Net Cash Proceeds are required to be applied to the Revolving Facility pursuant to Section 3.5(c) hereof, the Aggregate Revolving Commitments shall ratably terminate by an amount equal to 100% of such excess.
(c)    If a portion of the Aggregate Revolving Commitments are terminated in accordance with this Section 3.6, the U.S. Dollar Commitment and the Multicurrency Commitment shall also terminate by an amount determined by multiplying the amount of the termination of the Aggregate Revolving Commitments by the percentage of the U.S. Dollar Commitment or Multicurrency Commitment, as applicable, to the Aggregate Revolving Commitments in effect immediately prior to such termination; provided that with respect to any voluntary terminations pursuant to clause (a) above, (i) the U.S. Dollar Commitments may not be reduced to an amount less than the sum of the U.S. Revolving Credit Exposure for all Lenders then outstanding, and (ii) the Multicurrency Commitments may not be reduced to an amount less than the aggregate principal amount of all Multicurrency Loans outstanding. Any termination of the Aggregate Revolving Commitments, U.S. Dollar Commitments or the Multicurrency Commitments shall be allocated ratably among the Lenders in proportion to their respective Revolver Percentage, U.S. Dollar Revolver Percentage and Multicurrency Revolver Percentage, as the case may be.
Section 3.7.    Place and Application     . All payments of principal, interest and fees shall be made to the Agent at its office at 111 West Monroe Street, Chicago, Illinois (or at such other place as the Agent may specify) in immediately available and freely transferable funds at the place of payment by no later than 12:00 Noon Central Time on the due date thereof or, if such payment is to be made in an Alternative Currency, by no later than 12:00 Noon local time at the place of payment to such office as the Agent has previously specified; provided however that reimbursements of drawings under Letters of Credit shall be made to the Applicable Issuer. Any payments received by the Agent or such Applicable Issuer after such time shall be deemed received as of the opening of business on the next Business Day. All such payments shall be made (i) in U.S. Dollars, in immediately available funds at the place of payment, or (ii) in the case of Multicurrency Revolving Loans or reimbursement of drawings under a Letter of Credit in an Alternative Currency, in such Alternative Currency then customary for settlement of international transactions in such currency. All such payments shall be made without set‑off or counterclaim and without reduction for, and free from, any and all present or future taxes, levies, imposts, duties, fees, charges, deductions, withholdings, restrictions or conditions of any nature imposed by any Government Authority thereof. Except as herein provided, all payments shall be received for the ratable account of the Lenders and shall be distributed by the Agent to the Lenders in accordance with their Percentages on the date the Agent receives payment, or if the Agent receives payment later than 12:00 Noon Central Time, then no later than the next Business Day. Unless the Agent shall have received notice from the Company prior to the date on which any payment is due to the Agent for the account of the Lenders or the Issuers hereunder that the applicable Borrower will not make such payment, the Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuers, as the case may be, the amount due. In such event, if such Borrower has not in fact made such payment, then each of the Lenders or the Issuers, as the case may be, severally agrees to repay to the Agent forthwith on demand the amount so distributed to such Lender or Issuer, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Agent, at a rate per annum

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equal to: (i) from the date the distribution was made to the date two (2) Business Days after payment by such Lender is due hereunder, at the greater of the Federal Funds Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation for each such day and (ii) from the date two (2) Business Days after the date such payment is due from such Lender to the date such payment is made by such Lender, the Domestic Rate in effect for each such day.
Anything contained herein to the contrary or in the other Loan Documents notwithstanding, all payments and collections received in respect of the Obligations and all proceeds of the Collateral, if any, and payments made under or in respect of the Guarantees received, in each instance, by the Agent or any of the Lenders after acceleration or the final maturity of the Obligations or termination of the Lender’s Commitment to extend credit hereunder as a result of an Event of Default shall be remitted to the Agent and distributed as follows:
(a)    first, to the payment of any outstanding costs and expenses incurred by the Agent in monitoring, verifying, protecting, preserving or enforcing the Liens on the Collateral, if any, or by the Agent in protecting, preserving or enforcing rights under the Loan Documents, and in any event all costs and expenses of a character which the Borrowers have agreed to pay under Section 11.5 hereof (such funds to be retained by the Agent for its own account unless the Agent has previously been reimbursed for such costs and expenses by the Lenders, in which event such amounts shall be remitted to the Lenders to reimburse them for payments theretofore made to the Agent);
(b)    second, to the payment of principal and interest on the Swing Loans until paid in full;
(c)    third, to the payment of any outstanding interest or other fees or amounts due under the Loan Documents, in each case other than for principal or in reimbursement or Cash Collateralization of L/C Obligations, ratably as among the Agent and the Lenders in accordance with the amount of such interest and other fees or amounts owing each;
(d)    fourth, to the payment of the principal of the Loans and any unpaid Reimbursement Obligations and to the Agent to be held as Cash Collateral for any other L/C Obligations (until the Agent is holding an amount of cash equal to the then outstanding amount of all such L/C Obligations), for any principal amounts owing to the Lenders under Section 11.20 hereof, and Hedging Liability, the aggregate amount paid to or held as Cash Collateral for the Lenders and, in the case of Hedging Liability, their Affiliates, to be allocated pro rata in accordance with the then aggregate unpaid amounts owing to each holder thereof;



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(e)    fifth, to the Agent and the Lenders ratably in accordance with the amounts of any other indebtedness, obligations or liabilities of the Borrowers owing to each of them unless and until all such indebtedness, obligations and liabilities have been fully paid and satisfied; and
(f)    sixth, to the Company on behalf of the Borrowers (each Borrower hereby agreeing that its recourse for its share of such payment shall be to the Company and not the Agent or any Lender) or whoever else may be lawfully entitled thereto.
Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or its assets, but appropriate adjustments shall be made with respect to payments from the Borrowers and the other Guarantors to preserve the allocations to the Obligations and Hedging Liability otherwise set forth above in this Section 3.7.
Section 3.8.    Evidence of Indebtedness     . (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b)    The Agent shall also maintain accounts in which it will record (i) the amount of each Loan made hereunder, the type thereof, the Interest Period with respect thereto, and the currency in which such Loan is denominated, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder, and (iii) the amount of any sum received by the Agent hereunder from the Borrowers and each Lender’s share thereof.
(c)    Subject to the provisions of Section 11.17(c), the entries maintained in the accounts maintained pursuant to paragraphs (a) and (b) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided, however, that the failure of the Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Obligations in accordance with their terms.
(d)    Any Lender may request that its Loans be evidenced by a promissory note or notes in the forms of Exhibit A‑1 (in the case of its Term Loans and referred to herein as a “Term Note” ), A‑2 (in the case of its Revolving Loans and referred to herein as a “Revolving Credit Note” ), or A‑3 (in the case of its Swing Loans and referred to herein as a “Swing Note” ), as applicable (the Term Notes, Revolving Credit Notes and Swing Note being hereinafter referred to collectively as the “Notes” and individually as a “Note” ). In such event, the Borrowers shall prepare, execute and deliver to such Lender a Note payable to such Lender or its registered assigns in the amount of the Term Loan Commitment, Aggregate Revolving Commitment or Swing Line Sublimit, as applicable. Thereafter, the Loans evidenced by such Note or Notes and interest thereon shall at all times (including after any assignment pursuant to Section 11.17) be represented by one or more Notes payable to the payee named therein or any assignee pursuant to Section 11.17, except to the extent that any such Lender or assignee subsequently returns any such Note for cancellation and requests that such Loans once again be evidenced as described in subsections (a) and (b) above.

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Section 3.9.    Payments Set Aside     . To the extent that any payment by or on behalf of any Borrower or Guarantor is made to the Agent, any Issuer or any Lender, or the Agent, any Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Agent, such Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and each Issuer severally agrees to pay to the Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation for each such day.
SECTION 4.
THE COLLATERAL AND THE GUARANTEES    .
Section 4.1.    The Collateral     . Upon the Collateral Release Date, the Agent shall terminate and release all Liens securing the Obligations and Hedging Liability. Prior to the Collateral Release Date, the Obligations and Hedging Liability (i) of the U.S. Borrowers shall be secured by valid and perfected first Liens on all inventory, accounts receivable, equipment and other personal property (as further described in the Collateral Documents) of the U.S. Borrowers and the U.S. Subsidiaries which are Guarantors and, subject to the provisions of this Section 4.1, all capital stock of all Guarantors, together with all instruments, securities, chattel paper and intangibles of the U.S. Borrowers and the U.S. Subsidiaries which are Guarantors and all proceeds of the foregoing, and (ii) of the U.K. Borrowers shall be secured by valid and perfected first Liens on all inventory, accounts receivable, equipment and personal property (as further described in the Collateral Documents) of the U.S. Borrowers, U.K. Borrowers, the U.S. Subsidiaries which are Guarantors and the U.K. Subsidiaries which are Guarantors, subject to the provisions of this Section 4.1, all capital stock of all Guarantors, together with all instruments, securities, chattel paper and intangibles of the U.S. Borrowers, the U.K. Borrowers, the U.S. Subsidiaries which are Guarantors and the U.K. Subsidiaries which are Guarantors and all proceeds of the foregoing; provided however that unless and until the Required Lenders otherwise elect; (i) the Borrowers and the Guarantors shall not be required to note the Agent’s Lien on any certificate of title issued for a vehicle or to perfect a Lien on fixtures and (ii) no Guarantor, the fair market value of whose assets aggregate less than $1,000,000 shall be required to grant Liens on its assets to the Agent, further provided that:
(i)    Liens on (a) any contract (or modification thereof) (a “Contract” ) to which any Guarantor is a party ( “Contractor” ), the performance of which is guaranteed by any bond, undertaking, instrument of guarantee or any continuation, extension, alteration, renewal or substitution thereof, executed by any bonding company of a Contractor; (b) any subcontract or purchase order and against any legal entity and its bonding company which has contracted with a Contractor to furnish labor, materials, equipment, and supplies in connection with any Contract; (c) monies, Contract balances, due or to become due any Contractor on any Contract, including all

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monies earned or unearned which are unpaid at the time of notification by a bonding company to the obligee of the bonding company’s rights under any agreement of indemnity with a Contractor; (d) any actions, causes of action, claims or demands whatsoever which a Contractor may have or acquire against any party to a Contract or arising out of or in connection with any Contract, including but not limited to those against obligees and design professionals any bonding company or bonding companies of any obligee; (e) any and all rights, title, interest in, or use of any patent, copyright or trade secret which is or may be necessary for the completion of any bonded work; (f) all monies due or to become due to a Contractor on any policy of insurance relating to any claims arising out of the performance of any Contract or to premium refunds, including, but not limited to, builders risk, fire, employee dishonesty or workers’ compensation policies; (g) all supplies, tools, plants, material, inventory, and equipment (whether completely manufactured or not), wherever located, which have been or hereafter may be purchased, used, or acquired for use, entirely or partly, in connection with or to be incorporated into the matter that is the subject of any Contract; and (h) all amounts that may be owing from time to time by a bonding company to a Contractor or any Guarantor in any capacity including, without limitation, any balance or share belonging to such Contractor or Guarantor or any deposit or other account with a bonding company, may be subject to prior Liens in favor of bonding companies to secure obligations in connection with such payment and performance bonds;
(ii)    no Lien need be granted on any asset subject to a lien permitted by Section 7.11(e), (i), (l) (as to Liens on fixed assets only) or (m);
(iii)    no Lien need be granted on the capital stock of an Unrestricted Subsidiary or on the capital stock or assets of a corporation identified on Schedule 5.2 as a designated Foreign Subsidiary;
(iv)    no Liens need be granted on real property unless and until the Required Lenders so require;
(v)    Liens granted may be subject and subordinate to Liens permitted by Sections 7.11(a), (b), (c), (e), (f), (g), (h), (j), (k), and (n) hereof;
(vi)    Liens need not be perfected by possession or control (but may be perfected by the filing of a financing statement) on notes receivable having a fair value of less than $2,000,000 in any instance and $10,000,000 in the aggregate or on bonds or notes pledged to the City of New York in lieu of retainage;
(vii)    Liens need not be perfected by possession or control (but may be perfected by the filing of a financing statement) on equity securities (other than capital stock of Restricted Subsidiaries to the extent required hereby) having a fair value of less than $2,000,000 in any instance and $10,000,000 in the aggregate;


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(viii)    no Lien need be granted on any contract, license, permit or franchise, that validly prohibits the creation, attachment, or perfection of a security interest in favor of the Agent of a security interest in such contract, license, permit or franchise (or in any rights or property obtained by such Person under such contract, license, permit or franchise);
(ix)    no Lien need be granted on any rights or property to the extent that any valid and enforceable law or regulation applicable to such rights or property prohibits the creation of a security interest therein;
(x)    no Lien need be granted on any rights or property to the extent that such rights or property secure purchase money financing therefor permitted by this Credit Agreement and the agreements providing such purchase money financing prohibit the creation of a further security interest therein; and
(xi)    Liens on deposit accounts, securities accounts and commodity accounts maintained by the Borrowers and the Guarantors need not be perfected by entering into a control agreement or otherwise.
The Borrowers agree that they will, and will cause the Guarantors to, from time to time at the request of the Agent or the Required Lenders execute and deliver such documents, security agreements, assignments, pledges, hypothecs or charges and do such acts and things as the Agent or the Required Lenders may reasonably request in order to provide for or perfect such Liens on the Collateral. Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Collateral owned by the U.K. Subsidiaries and any other CFC whose assets are included as part of the Collateral (including without limitation equity interests in other U.K. Subsidiaries) shall secure solely the indebtedness, liabilities and obligations of the U.K. Subsidiaries and any CFC hereunder and under the other Loan Documents and not the indebtedness, liabilities and obligations of the U.S. Borrowers and the U.S. Subsidiaries hereunder and under the other Loan Documents. Notwithstanding the foregoing, the portion of the capital stock of each U.K. Subsidiary and any other CFC owned by a U.S. Corporation and constituting Collateral in excess of 65% of the total issued and outstanding capital stock of such Subsidiary (herein, the “Excess Stock Collateral” ) shall secure only the indebtedness liabilities and obligations of U.K. Subsidiaries and/or any other CFC hereunder and under the other Loan Documents. In no event shall the Excess Stock Collateral secure the indebtedness, liabilities and obligations of the U.S. Borrowers or the U.S. Subsidiaries hereunder or under the other Loan Documents. Notwithstanding the foregoing, no Lien need be granted on the capital stock of a captive insurance company or captive surety company if the granting of such Lien would violate applicable law or require the consent of any applicable regulatory body.
Section 4.2.    The Guarantees     . The Obligations and Hedging Liability (i) of the U.S. Borrowers shall be fully guaranteed by the Company and the U.S. Subsidiaries which are Guarantors and (ii) of the U.K. Borrowers shall be fully guaranteed by the Company, the U.S. Subsidiaries and the U.K. Subsidiaries in each case which are Guarantors. Subject to Section 4.1 and except as otherwise required in Section 4.1, the Required Lenders may from time to time require any Restricted Subsidiary (other than any Restricted

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Subsidiary (i) which is not a Wholly‑Owned Subsidiary, (ii) which is a CFC but not a UK Subsidiary or (iii) which is a captive insurance company or captive surety company) to provide a Guarantee and Liens on its assets in which event the Company shall within 30 days of request cause such Restricted Subsidiary to execute and deliver a Guarantee to the Agent together with such supporting resolutions, opinions and other showings as the Agent may reasonably require. Notwithstanding anything herein to the contrary, no guarantee delivered by any U.K. Subsidiary shall guaranty, and no U.K. Subsidiary shall be obligated to make any payment in respect of, the Obligations and Hedging Liability of the U.S. Borrower and the U.S. Subsidiaries which are Guarantors.
SECTION 5.
REPRESENTATIONS AND WARRANTIES    .
Each Borrower represents and warrants to the Agent and the Lenders as follows:
Section 5.1.    Organization and Qualification     . Each Borrower is duly organized, validly existing and in good standing (or their equivalents under applicable local law) as a corporation, limited liability company or partnership under the laws of the jurisdiction in which it is incorporated or organized, as the case may be, has full and adequate power to own its Property and conduct its business as now conducted, and is duly licensed or qualified and in good standing in each jurisdiction in which the failure to be so qualified would have a Material Adverse Effect.
Section 5.2.    Subsidiaries     . Except as set forth in the Side Letter, each Restricted Subsidiary is duly organized, validly existing and in good standing (or their equivalents under applicable local law) under the laws of the jurisdiction in which it is incorporated or organized, as the case may be, has full and adequate power to own its Property and conduct its business as now conducted, and is duly licensed or qualified and in good standing in each jurisdiction in which the failure to be so qualified or in good standing would have a Material Adverse Effect. As of the date hereof, Schedule 5.2 hereto identifies each Restricted Subsidiary, the jurisdiction of its incorporation or organization, as the case may be, the percentage of issued and outstanding shares of each class of its capital stock or other equity interests owned by the Company and the Restricted Subsidiaries and, if such percentage is not 100% (excluding directors’ qualifying shares as required by law), a description of each class of its authorized capital stock and other equity interests and the number of shares of each class issued and outstanding and the Company will notify the Agent of any material changes in such information. All of the outstanding shares of capital stock and other equity interests of each such Subsidiary are validly issued and outstanding and fully paid and nonassessable (except for the provisions of Section 630 of the Business Corporation Law of the State of New York, as to New York Corporations) and as of the date hereof all such shares and other equity interests indicated on Schedule 5.2 as owned by the Company or a Restricted Subsidiary are as of the date hereof owned, beneficially and of record, by the Company or such Restricted Subsidiary free and clear of all Liens not permitted hereby. There are no outstanding commitments or other obligations of any Restricted Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of any Restricted Subsidiary except in favor of the Company or a Restricted Subsidiary.

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Section 5.3.    Corporate Authority and Validity of Obligations     . Each Borrower has full right and authority to enter into this Agreement and the other Loan Documents to which it is a party, to make the borrowings herein provided for, to grant to the Agent the Liens provided for in the Collateral Documents being executed by it, and to perform all of its obligations hereunder and under the other Loan Documents to which it is a party. Each Guarantor has full right and authority to enter into the Loan Documents to which it is a party, to grant to the Agent the Liens provided for in the Collateral Documents executed by it and to perform all of its obligations under such Loan Documents. The Loan Documents have been duly authorized, executed and delivered by the Borrowers and Guarantors and constitute valid and binding obligations of the Borrowers and Guarantors enforceable in accordance with their terms except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law); and this Agreement and the other Loan Documents do not, nor does the performance or observance by any Borrower or Guarantor of any of the matters and things herein or therein provided for, contravene or constitute a default under any provision of law or any judgment, injunction, order or decree binding upon any Borrower or Guarantor or any provision of the charter, articles of incorporation or organization or by‑laws of any Borrower or Guarantor or any covenant, indenture or agreement of the Borrowers or Guarantors or affecting any of their Properties, or result in the creation or imposition of any Lien on any Property of the Borrowers or Guarantors.
Section 5.4.    Use of Proceeds; Margin Stock     . The Borrowers shall use the proceeds of the Loans and other extensions of credit made available hereunder to refinance existing indebtedness including indebtedness, obligations (other than Existing Letters of Credit) and liabilities under the Existing Credit Agreement, to finance Permitted Acquisitions and Capital Expenditures, and for their working capital and general corporate purposes. Neither the Borrowers nor any Subsidiary is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Revolving Loan or any other extension of credit made hereunder will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock.
Section 5.5.    Financial Reports     . The consolidated balance sheet of the Company and its Subsidiaries as at December 31, 2012 and the related consolidated statements of operations, cash flows and shareholder’s equity of the Company and its Subsidiaries for the fiscal year then ended, and accompanying notes thereto, which consolidated financial statements are accompanied by the audit report of Ernst & Young LLP, an independent registered public accounting firm, and the unaudited interim condensed consolidated balance sheet of the Company and its Subsidiaries as at September 30, 2013 and the related interim condensed consolidated statements of operations, cash flows and shareholder’s equity of the Company and its Subsidiaries for the nine (9) months then ended heretofore furnished to the Lenders, fairly present the consolidated financial condition of the Company and its Subsidiaries as at said dates and the results of their operations and cash flows for the periods then ended in conformity with generally accepted accounting principles applied on a consistent basis, but subject, in the case of such interim condensed financial statements on the related notes thereto, to year end audit adjustments which are not expected to be material. Except as disclosed in the Side Letter, neither the Company nor any Restricted Subsidiary has, to the best of its

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knowledge, contingent liabilities which could reasonably be expected to have a Material Adverse Effect other than as indicated on such financial statements or, as to each reaffirmation of this sentence’s representation and warranty in the future, on the most recent financial statements or the related notes thereto which are to be provided to the Lenders pursuant to Section 7.5 hereof.
Section 5.6.    No Material Adverse Change      . Since September 30, 2013, there has been no change in the condition (financial or otherwise) or business prospects of the Company and its Restricted Subsidiaries which could reasonably be expected to have a Material Adverse Effect.
Section 5.7.    Full Disclosure     . The written statements and written information furnished by or on behalf of the Borrowers to the Agent and the Lenders through the date hereof in connection with the negotiation of this Agreement and the other Loan Documents and the commitments by the Lenders to provide all or part of the financing contemplated hereby do not, taken as a whole, contain any untrue statements of a material fact or omit a material fact necessary to make the material statements contained herein or therein not misleading, the Lenders acknowledging that as to any projections furnished to the Lenders by or on behalf of the Borrowers, the Borrowers only represent that the same were prepared on the basis of information and estimates the Borrowers believed to be reasonable.
Section 5.8.    Good Title     . Except to the extent heretofore disclosed on the Schedules to this Agreement or in the Side Letter, as of the date hereof the Company and the Restricted Subsidiaries have in all material respects good and marketable title to their real property and good and merchantable title to the balance of their assets as reflected on the most recent balance sheets of the Company and its Restricted Subsidiaries furnished to the Lenders (except for sales of assets by the Borrowers and their Restricted Subsidiaries in the ordinary course of business), subject to no Liens other than such thereof as are permitted by Section 7.11 hereof.
Section 5.9.    Litigation and Other Controversies      . Except as disclosed in the Side Letter, there is no litigation or governmental proceeding or labor controversy pending, nor to the knowledge of any Borrower threatened, against any Borrower or Restricted Subsidiary which if adversely determined would (a) impair the validity or enforceability of, or impair the ability of any Borrower or Guarantor to perform its obligations under, this Agreement or any other Loan Document or (b) have a Material Adverse Effect.
Section 5.10.    Taxes     . All tax returns which, to the best knowledge of the Company, are required to be filed by the Company or any Restricted Subsidiary in any jurisdiction have, in fact, been filed, and all taxes, assessments, fees and other governmental charges upon the Company or any Restricted Subsidiary or upon any of their respective Properties, income or franchises, which are shown to be due and payable in such returns, have been paid to the extent due, in each case except where the failure to do so would not cause a Material Adverse Effect. The Borrowers do not know of any material proposed additional tax assessment against them or the Restricted Subsidiaries for which adequate provision in accordance with GAAP has not been made in their respective financial statements. Adequate provisions in accordance with GAAP for taxes on the books of the Company, each other Borrower and each Restricted Subsidiary have been made for all open years, and for its current fiscal period.

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Section 5.11.    Approvals     . No authorization, consent, license, or exemption from, or filing or registration with, any court or governmental department, agency or instrumentality, nor any approval or consent of the stockholders of the Borrowers or any other Person, is or will be necessary to the valid execution, delivery or performance by the Borrowers or Guarantors of this Agreement or any other Loan Document, other than the stockholders of the Guarantors.
Section 5.12.    Affiliate Transactions      . No Borrower nor any Restricted Subsidiary is a party to any contract or agreement with any of its Affiliates (other than contracts and agreements between and among the Borrowers and Restricted Subsidiaries) on terms and conditions which are less favorable to such Borrower or such Restricted Subsidiary than would be usual and customary in similar contracts or agreements between Persons not affiliated with each other than any such contract or agreement which could not reasonably be expected to have a Material Adverse Effect.
Section 5.13.    Investment Company      . No Borrower nor any Subsidiary is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
Section 5.14.    ERISA     . Except to the extent heretofore disclosed in writing to the Lenders, to the best of the Company’s knowledge, each Borrower and each other member of its Controlled Group has fulfilled its obligations under the minimum funding standards of and is in compliance in all material respects with ERISA and the Code to the extent applicable to it and has not incurred any material liability to the PBGC or a Plan (other than material liabilities arising in the future under a multiemployer plan as defined in Section 4001(c)(3) of ERISA which could not reasonably be expected to have a Material Adverse Effect) under Title IV of ERISA other than a material liability to the PBGC for premiums under Section 4007 of ERISA. Except as set forth in the Side Letter, as of the date hereof no Borrower nor any Restricted Subsidiary has any contingent liabilities with respect to any post‑retirement benefits under a Welfare Plan, other than liability for continuation coverage described in Article 6 of Title I of ERISA.
Section 5.15.    Compliance with Laws     . Each Borrower and each Restricted Subsidiary is in compliance with the requirements of all federal, governmental (whether national, supra‑national or otherwise), state, provincial and local laws, rules and regulations applicable to or pertaining to their Properties or business operations (including, without limitation, the Occupational Safety and Health Act of 1970, the Americans with Disabilities Act of 1990, and laws and regulations establishing quality criteria and standards for air, water, land and toxic or hazardous wastes and substances), except for such non‑compliance with the same which could not reasonably be expected to have any Material Adverse Effect. No Borrower nor any Restricted Subsidiary has received notice to the effect that its operations are not in compliance with any of the requirements of applicable federal, governmental (whether national, supra‑national or otherwise), state, provincial or local environmental, health and safety statutes and regulations or are the subject of any governmental investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, which non‑compliance or remedial action could reasonably be expected to have a Material Adverse Effect.

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Section 5.16.    Other Agreements     . No Borrower nor any Restricted Subsidiary is in default under the terms of any covenant, indenture or agreement of or affecting any Borrower, any Restricted Subsidiary or any of their Properties, which default if uncured could reasonably be expected to have a Material Adverse Effect.
Section 5.17.    No Default      . No Default or Event of Default has occurred and is continuing.
Section 5.18.    Solvency     . Each Borrower is solvent, able to pay its debts as they become due, and has sufficient capital to carry on its business and all businesses in which it is about to engage.
Section 5.19.    OFAC; Anti-Corruption Laws and Sanctions     . (a) OFAC . (i) Each Borrower is in compliance with the requirements of all OFAC Sanctions Programs applicable to it, (ii) each Restricted Subsidiary is in compliance with the requirements of all OFAC Sanctions Programs applicable to such Subsidiary, (iii) the Borrowers have provided to the Agent, the Issuers, and the Lenders all information requested in writing by the Agent regarding the Borrowers, their Affiliates and the Restricted Subsidiaries necessary for the Agent, the Issuer, and the Lenders to comply with all applicable OFAC Sanctions Programs, and (iv) to the best of the Company’s knowledge, no Borrower or any Affiliates or Restricted Subsidiaries is, as of the date hereof, named on the current OFAC SDN List.
(b)     Anti-Corruption Laws and Sanctions. The Company has implemented and maintains in effect policies and procedures designed to ensure compliance by the Company, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions, and the Company, its Subsidiaries and their respective directors, officers and employees are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of the Company, any Subsidiary or any of their respective directors, officers or employees is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by the Credit Agreement will violate Anti-Corruption Laws or applicable Sanctions.
SECTION 6.
CONDITIONS PRECEDENT    .
The obligation of each Lender to advance a Borrowing or of the Issuer to issue, extend the expiration date (including by not giving notice of non‑renewal) of or increase the amount of any Letter of Credit under this Agreement, shall be subject to the following conditions precedent:



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Section 6.1.    All Credit Utilizations     . The obligation of the Lenders to provide any Borrower with any Credit Utilization (including the first such Credit Utilization) shall be subject to the conditions precedent that as of the time of each such Credit Utilization:
(a)    each of the representations and warranties set forth herein and in the other Loan Documents shall be and remain true and correct as of said time, except to the extent the same expressly relate to an earlier date (in which case such representation and/or warranty shall be true and correct as of such earlier date);
(b)    the Borrowers and Guarantors shall be in compliance with all of the terms and conditions hereof and of the other Loan Documents, and no Default or Event of Default shall have occurred and be continuing or would occur as a result of such Credit Utilization;
(c)    after giving effect to such Credit Utilization, (i) the Revolving Credit Exposure for all Lenders shall not exceed the Aggregate Revolving Commitments then in effect, (ii) the U.S. Revolving Credit Exposure for all Lenders shall not exceed the U.S. Dollar Commitments then in effect, (iii) the aggregate principal amount of all Multicurrency Revolving Loans shall not exceed the Multicurrency Commitments then in effect, (iv) the aggregate principal amount of the Loans made to any Borrower and of L/C Obligations in respect of Letters of Credit issued for such Borrower’s account shall not exceed any applicable Sublimit, (v) the aggregate principal amount of Swing Loans outstanding to the Company shall not exceed the Swing Line Sublimit and (vi) the aggregate outstanding amount of the L/C Obligations shall not exceed the lesser of the Aggregate Revolving Commitments or the applicable L/C Sublimit;
(d)    such Credit Utilization shall not violate any order, judgment or decree of any court or other authority or any provision of law or regulation applicable to the Agent or any Lender (including, without limitation, Regulation U of the Board of Governors of the Federal Reserve System) as then in effect (the Lenders acknowledging that as of the date hereof they know of none of such other than the restrictions of Regulation U);
(e)    in the case of the issuance of any Letter of Credit, the Applicable Issuer shall have received a properly completed Application therefor and, in the case of an extension or increase in the amount of the Letter of Credit, the Applicable Issuer shall have received a written request therefor, in a form acceptable to the Applicable Issuer, with such Application or written request, in each case to be accompanied by the fees required by this Agreement; and
(f)    in any case in which a Revolving Loan is to be made available to a Borrower to enable the acquisition of shares in a company incorporated in England and Wales, the applicable Borrower shall have complied with the provisions of Chapter VI of the Companies Act 1985 (or any statutory re‑enactment of that Act) and obtained all such approvals and other matters as are required by that chapter to the satisfaction of the Agent.

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Each request for a Credit Utilization hereunder shall be deemed to be a representation and warranty by the Borrowers on the date of such Credit Utilization as to the facts specified in this Section 6.1 (other than Subsection (d) or (e) above).
Section 6.2.    Initial Credit Utilization for the Company.      Before or concurrently with the initial Credit Utilization:
(a)    the Agent shall have received for each Lender this Agreement duly executed by the Borrowers and the Lenders;
(b)    to the extent requested by a Lender, the Agent shall have received such Lender’s duly executed Notes of the Borrowers dated the date hereof and otherwise in compliance with the provisions hereof;
(c)    the Agent shall have received that certain Fourth Amended and Restated Security Agreement, that certain Fourth Amended and Restated Pledge Agreement, and that certain Third Amended and Restated Guaranty Agreement, in each case duly executed by the Company and the applicable Guarantors, together with (to the extent not already on file with the Agent) (i) original stock certificates or other similar instruments or securities representing substantially all of the issued and outstanding shares of capital stock or other equity interests in the Restricted Subsidiaries (other than the Company’s Subsidiary organized under the laws of the Commonwealth of Puerto Rico) as of the date hereof, (ii) stock powers for the Collateral consisting of the stock or other equity interest in each Restricted Subsidiary executed in blank and undated, (iii) UCC financing statements to be filed against the Company and each Subsidiary that is party to a Collateral Document, as debtor, in favor of the Agent, as secured party, and (iv) patent, trademark, and copyright collateral agreements, to the extent requested by the Agent;
(d)    to the extent not currently on file with the Agent, the Agent shall have received evidence of insurance required to be maintained under the Loan Documents, naming the Agent as additional insured and lender’s loss payee with respect to policies covering insurable Property;
(e)    the Agent shall have received for each Lender copies of the Company’s and each applicable Guarantor’s articles of incorporation and bylaws (or comparable organizational documents) and any amendments thereto, certified in each instance by its Secretary or Clerk or Assistant Secretary or Assistant Clerk;
(f)    the Agent shall have received for each Lender copies of resolutions of the Company’s and each applicable Guarantor’s Board of Directors (or similar governing body) authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, together with specimen signatures of the persons authorized to execute such documents on the Company’s and each applicable Guarantor’s behalf, all certified in each instance by its Secretary or Clerk or Assistant Secretary or Assistant Clerk;

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(g)    the Agent shall have received for each Lender copies of the certificates of good standing for the Company and each applicable Guarantor (dated no earlier than 30 days prior to the date hereof) from the office of the secretary of the state or other applicable governmental office in its incorporation or organization;
(h)    the Agent shall have received for each Lender a list of the Company’s Authorized Representatives;
(i)    the Agent shall have received for itself and for the Lenders the initial fees called for by Section 3.2 hereof;
(j)    each Lender shall have received such evaluations and certifications as it may reasonably require in order to satisfy itself as to the value of the Collateral, the financial condition of the Company and the Guarantors, and the lack of material contingent liabilities of the Company and the Guarantors;
(k)    the Agent shall have received financing statement search results against the personal Property of the Company and each applicable Guarantor evidencing the absence of Liens on their personal Property except as permitted by Section 7.11 hereof and searches (in form and substance satisfactory to the Agent) conducted at all relevant registries affecting the Company, such Guarantors or their respective personal Property and all registrations reasonably required by the Agent in respect of the Liens created under the Collateral Documents shall have been completed;
(l)    [Intentionally Omitted];
(m)    the Agent shall have received for each Lender the favorable written opinion of counsel to the Company and each applicable Guarantor, in form and substance satisfactory to the Agent;
(n)    the Agent shall have received for the account of the Lenders such other agreements, instruments, documents, certificates, and opinions as the Agent may reasonably request;
(o)    the Agent shall have received (i) the audited consolidated balance sheet of the Company and its Restricted Subsidiaries as of December 31, 2012, December 31, 2011 and December 31, 2010 and the related audited statements of income and retained earnings and cash flows for the fiscal years of the Company ended December 31, 2012, December 31, 2011 and December 31, 2010, (ii) unaudited consolidated balance sheet of the Company and its Restricted Subsidiaries as of September 30, 2013 and related unaudited interim statements of income and retained earnings for the nine (9) months ended September 30, 2013 and (iii) the consolidated five‑year projected financial statements of the Company and its Restricted Subsidiaries;

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(p)    except as disclosed in the Side Letter, since September 30, 2013, no material adverse change in the business, condition (financial or otherwise), operations, performance, Properties or prospects of the Company and its Restricted Subsidiaries, taken as a whole, shall have occurred;
(q)    each of the Lenders shall have received, sufficiently in advance of the Closing Date, all documentation and other information requested by any such Lender required by bank regulatory authorities under applicable “know your customer” and anti‑money laundering rules and regulations, including without limitation, the United States Patriot Act (Title III of Pub. L. 107‑56 (signed into law October 26, 2001)) including, without limitation, the information described in Section 13.24; and the Agent shall have received a fully executed Internal Revenue Service Form W‑9 (or its equivalent) for the Borrowers and the Guarantors; and
(r)    the Agent shall have received the executed Side Letter.
Section 6.3.    Credit Utilization for the U.K. Borrower      . In the event a Loan is advanced to or a Letter of Credit is issued on account of the U.K. Borrower, the U.K. Borrower shall, not later than 60 days after the date of the initial advance of such Loan or the initial issuance of such Letter of Credit (whichever occurs first), the U.K. Borrower shall deliver to the Agent, in form and substance satisfactory to the Agent, the following:
(a)    the Agent shall have received the Guaranties and Collateral Documents from the U.K. Borrower and applicable Guarantors required by Section 4.1 and 4.2 hereof together with: (i) original stock certificates or other similar instruments or securities representing substantially all of the issued and outstanding shares of capital stock or other equity interests in the Restricted Subsidiaries that are not U.S. Subsidiaries and otherwise required to be pledged, (ii) stock powers for the Collateral consisting of the stock or other equity interest in each such Restricted Subsidiary executed in blank and undated, (iii) UCC financing statements (or similar filings) to be filed against the U.K. Borrower and each Subsidiary that is party to a Collateral Document, as debtor, in favor of the Agent, as secured party, and (iv) patent, trademark, and copyright collateral agreements, to the extent requested by the Agent;
(b)    to the extent not currently on file with the Agent, the Agent shall have received evidence of insurance required to be maintained under the Loan Documents, naming the Agent as additional insured and lender’s loss payee with respect to policies covering insurable Property of the U.K. Borrower and the applicable Guarantors;
(c)    the Agent shall have received for each Lender copies of the U.K. Borrower’s and, if applicable, such Guarantor’s articles of incorporation and bylaws (or comparable organizational documents) and any amendments thereto, certified in each instance by its Secretary or Clerk or Assistant Secretary or Assistant Clerk;
(d)    the Agent shall have received for each Lender copies of resolutions of the U.K. Borrower’s and, if applicable, each applicable Guarantor’s Board of Directors (or similar governing

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body) authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby, together with specimen signatures of the persons authorized to execute such documents on each of the U.K. Borrower’s and Guarantor’s behalf, all certified in each instance by its Secretary or Clerk or Assistant Secretary or Assistant Clerk;
(e)    the Agent shall have received for each Lender copies of the certificates of good standing (or comparable certificates) for the U.K. Borrower and, if applicable, such Guarantor (dated no earlier than 30 days prior to the date hereof) from the office of the secretary of the state or other applicable governmental office in its incorporation or organization;
(f)    the Agent shall have received for each Lender a list of the U.K. Borrower’s Authorized Representatives;
(g)    the Agent shall have received for each Lender the favorable written opinion of counsel to the U.K. Borrower and, if applicable each Guarantor, in form and substance satisfactory to the Agent, and, if applicable, legal opinions of foreign counsel and supporting documentation therefor with respect to, among other things, the liens on capital stock or other equity interests of Foreign Subsidiaries required by Section 4.1 hereof;
(h)    the Agent shall have received financing statement search results against the personal Property of the U.K. Borrower and the applicable Guarantors evidencing the absence of Liens on their personal Property except as permitted by Section 7.11 hereof and searches (in form and substance satisfactory to the Agent) conducted at all relevant registries affecting the U.K. Borrower, the applicable Guarantors or their respective personal Property and all registrations reasonably required by the Agent in respect of the Liens created under the Collateral Documents shall have been completed; and
(i)    the Agent shall have received for the account of the Lenders such other agreements, instruments, documents, certificates, and opinions as the Agent may reasonably request.
SECTION 7.
COVENANTS    .
The Borrowers agree that, so long as any credit is available to or in use by or any amount is owing by the Borrowers hereunder, except to the extent compliance in any case or cases is waived in writing by the Required Lenders:
Section 7.1.    Maintenance of Business     . The Borrowers shall, and shall cause each Restricted Subsidiary to, preserve and keep in force and effect its existence and all leases, licenses and permits necessary to the proper conduct of its and their respective businesses except with respect to any Restricted Subsidiary to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect, provided that the foregoing shall not preclude the termination or discontinuance of any of such in connection

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with a sale or other disposition of substantially all of the assets of the Restricted Subsidiary in question or the merger or dissolution of same in each instance to the extent permitted by Section 7.14 hereof.
Section 7.2.    Maintenance of Property     . The Borrowers shall maintain, preserve and keep their material plant, Properties and equipment used in the conduct of their respective businesses in good repair, working order and condition (ordinary wear and tear excepted), shall from time to time make all needful and proper repairs, renewals, replacements, additions and betterments thereto so that at all times the overall efficiency thereof shall be preserved and maintained in all material respects, and shall cause each Restricted Subsidiary so to do in respect of its material plant, Properties and equipment.
Section 7.3.    Taxes and Assessments     . The Borrowers shall duly pay and discharge, and shall cause each Restricted Subsidiary to duly pay and discharge, all taxes, rates, assessments, fees and governmental charges upon or against the Borrowers or any Restricted Subsidiary or against their respective Properties, in each case before the same become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith and by appropriate proceedings which prevent enforcement of the matter under contest and adequate reserves are provided therefor.
Section 7.4.    Insurance     . The Borrowers shall insure and keep insured, and shall cause each Restricted Subsidiary to insure and keep insured, with insurance companies reasonably believed by them to be good and responsible, all insurable Property owned by them which is of a character usually insured by Persons similarly situated and operating like Properties against loss or damage from such hazards and risks, and in such amounts, as are insured by Persons similarly situated and operating like Properties, and the Borrowers shall insure, and cause each Restricted Subsidiary to insure, such other hazards and risks (including employers’ and public liability risks) with insurance companies reasonably believed by them to be good and responsible as and to the extent usually insured by Persons similarly situated and conducting similar businesses, it being agreed that the foregoing shall not preclude the Borrowers and the Restricted Subsidiaries from directly or indirectly self insuring risks as and to the extent prudent and customary for companies similarly situated. The Borrowers shall in any event maintain insurance on the Collateral to the extent required by the Collateral Documents. The Borrowers shall upon request of the Agent furnish a certificate setting forth in summary form the nature and extent of the insurance maintained pursuant to this Section 7.4.
Section 7.5.    Financial Reports and Rights of Inspection     . The Borrowers shall, and shall cause each Restricted Subsidiary to, maintain a system of accounting in accordance with GAAP and shall furnish to the Agent, each Lender and each of their duly authorized representatives such information respecting the business and financial condition of the Borrowers and their Restricted Subsidiaries as the Agent or such Lender may reasonably request; and without any request, shall furnish to the Lenders:
(a)    as soon as available, and in any event within forty‑five (45) days after the close of each of the first three quarterly accounting periods of each fiscal year of the Company, a copy of the condensed consolidated balance sheet of the Company and its Subsidiaries as of the last day of such period and the condensed consolidated (and consolidating in the case of the statement of operations only) statements of operations for such period and for the fiscal year to date and statements

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of cash flows and shareholder’s equity of the Company and its Subsidiaries for the fiscal year to date, each in reasonable detail and showing in comparative form the figures for the corresponding date and period in the previous fiscal year, in the case of the condensed consolidated financial statements only, prepared by the Company in accordance with GAAP (subject to year end audit adjustments which are not expected to be material and to the absence of footnotes);
(b)    as soon as available, and in any event within ninety (90) days after the close of each annual accounting period of the Company, a copy of the consolidated balance sheet of the Company and its Subsidiaries as of the last day of the period then ended and the consolidated statements of operations, cash flows and shareholder’s equity of the Company and its Subsidiaries for the period then ended, and accompanying notes thereto, each in reasonable detail showing in comparative form the figures for the previous fiscal year, accompanied by an unqualified opinion, in accordance with generally accepted auditing standards, of Ernst & Young LLP or another independent registered public accounting firm of national standing, selected by the Company and reasonably satisfactory to the Required Lenders;
(c)    within the period provided in subsection (b) above, the written statement of the accountants who certified the audit report thereby required that in the course of their audit they have obtained no knowledge of any Default or Event of Default, or, if such accountants have obtained knowledge of any such Default or Event of Default, they shall disclose in such statement the nature and period of existence thereof;
(d)    (i) as soon as available, and in any event within forty‑five (45) days after the close of each quarterly accounting period of the Company, a backlog or work‑in‑progress report in reasonable detailed prepared by the Company;
(ii)    promptly upon the request of any Lender, an accounts receivable and accounts payable aging together with a claims report (detailing individual claims for which the amount recorded on books of the Company is in excess of $10,000,000), each in reasonable detail prepared by the Company;
(e)    promptly after receipt of final copies thereof, any additional written reports, or other detailed information contained in writing concerning significant aspects of any Borrower’s or any Restricted Subsidiary’s operations and financial affairs given to it by its independent public accountants;
(f)    as soon as available, and in any event within ninety (90) days following the end of each fiscal year of the Company, a copy of the Company’s consolidated and consolidating operating budget for the following fiscal year, such operating budget to show the Company’s projected consolidated and consolidating revenues, expenses and net income and to be in reasonable detail prepared by the Company and in form reasonably satisfactory to the Agent; and

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(g)    promptly after knowledge thereof shall have come to the attention of the chief executive or chief financial officer of any Borrower, written notice of (i) any pending litigation or governmental proceeding or labor controversy against any Borrower or Restricted Subsidiary which could reasonably be expected to have a Material Adverse Effect or (ii) any threatened litigation, governmental proceeding or labor controversy against any Borrower or Restricted Subsidiary which the Company or such Borrower or Restricted Subsidiary in good faith believes could reasonably be expected to have a Material Adverse Effect or (iii) the occurrence of any Default or Event of Default hereunder.
Each of the financial statements furnished to the Lenders pursuant to subsections (a) and (b) of this Section 7.5 shall be accompanied by a written certificate in the form attached hereto as Exhibit B signed by an Authorized Representative of the Company to the effect that, to the best of such officer’s knowledge and belief, no Default or Event of Default has occurred during the period covered by such statements or, if any such Default or Event of Default has occurred during such period, setting forth a description of such Default or Event of Default and specifying the action, if any, taken by the Company to remedy the same. Such certificate submitted as of the last day of a calendar quarter shall also set forth the calculations supporting such statements in respect of Sections 7.7, 7.8 and 7.13 of this Agreement as well as the calculation of the Applicable Margins.
The Borrowers shall, and shall cause each Restricted Subsidiary to, permit the Agent, the Lenders and their duly authorized representatives to visit and inspect any of the Properties of the Borrowers and Restricted Subsidiaries, to examine all of their books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers, employees and independent public accountants (and by this provision the Borrowers authorize such accountants to discuss with the Lenders (and such Persons as any Lender may designate, subject to reasonable arrangements for confidentiality) the finances and affairs of the Borrowers and the Restricted Subsidiaries) all upon reasonable notice at such reasonable times and as often as may be reasonably requested.
Section 7.6.    No Restrictions     . The Borrowers shall not permit any Restricted Subsidiary to enter into any contract or agreement after the date hereof prohibiting or restricting such Restricted Subsidiary from paying dividends or making loans and advances to the Company except in the case of a Restricted Subsidiary formed or acquired to be a captive insurer or a captive surety or where the amount of such dividends, loans or advances subject to such prohibitions and restrictions does not exceed $5,000,000 in the aggregate at any one time.
Section 7.7.    Leverage Ratio      . The Company shall as of the last day of each calendar quarter maintain the Leverage Ratio of not more than the Maximum Leverage Ratio in effect at such time.
Section 7.8.    Interest Coverage Ratio      . The Company shall as of the last day of each calendar quarter maintain the Interest Coverage Ratio of not less than 3.50 to 1.


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Section 7.9.    Compliance with OFAC Sanctions Programs; Anti-Corruption Laws and Application Sanctions      . (a) The Borrowers shall at all times comply with the requirements of all OFAC Sanctions Programs applicable to the Borrowers and shall cause each of the Restricted Subsidiaries to comply with the requirements of all OFAC Sanctions Programs applicable to such Restricted Subsidiary.
(b)    The Borrowers shall provide the Agent, the Issuer, and the Lenders any information requested in writing by the Agent regarding the Borrowers, their Affiliates, and the Restricted Subsidiaries necessary for the Agent, the Issuer, and the Lenders to comply with all applicable OFAC Sanctions Programs; subject however, in the case of Affiliates, to such Borrower’s ability to provide information applicable to them.
(c)    If any Borrower obtains actual knowledge or receives any written notice that such Borrower, any Affiliate or any Restricted Subsidiary is named on the then current OFAC SDN List (such occurrence, an “OFAC Event” ), such Borrower shall promptly (i) give written notice to the Agent, the Issuer, and the Lenders of such OFAC Event, and (ii) comply with all applicable laws with respect to such OFAC Event (regardless of whether the party included on the OFAC SDN List is located within the jurisdiction of the United States of America), including the OFAC Sanctions Programs, and the Borrowers hereby authorize and consent to the Agent, the Issuer, and the Lenders taking any and all steps the Agent, the Issuer, or the Lenders deem necessary, in their sole but reasonable discretion, to avoid violation of all applicable laws with respect to any such OFAC Event, including the requirements of the OFAC Sanctions Programs (including the freezing and/or blocking of assets and reporting such action to OFAC).
(d)    The Company will maintain in effect and enforce policies and procedures designed to ensure compliance by the Company, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions.
Section 7.10.      Indebtedness for Borrowed Money      . The Borrowers shall not, nor shall they permit any of the Restricted Subsidiaries to, issue, incur, assume, create or have outstanding any Indebtedness for Borrowed Money; provided, however, that the foregoing shall not restrict nor operate to prevent:
(a)    the Obligations and Hedging Liability of the Borrowers and Restricted Subsidiaries owing to the Agent and the Lenders (and their Affiliates);
(b)    the obligations listed and described on Schedule 7.10 attached hereto and guarantees specifically permitted by Section 7.12 hereof;
(c)    Indebtedness of the Company to Restricted Subsidiaries, of Restricted Subsidiaries to the Company and of Restricted Subsidiaries to Restricted Subsidiaries provided that the aggregate amount of such indebtedness of EMCOR U.K. Limited and its Restricted Subsidiaries shall be limited to $50,000,000 at any one time outstanding;
(d)    obligations consisting of deferred payment obligations of the Company and any of the Restricted Subsidiaries for insurance premiums or incurred by Company or any of its Restricted

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Subsidiaries in respect of funds borrowed for the payment of such premiums in either case in the ordinary course of business and consistent with past practices;
(e)    guarantees of Indebtedness for Borrowed Money of, or Performance Guarantees given by, Foreign Subsidiaries and Nesma EMCOR Company Ltd. and guarantees of or incurrence of liability for letters of credit supporting Indebtedness for Borrowed Money of Persons in which the Company and the Restricted Subsidiaries are permitted to invest pursuant to subsections (n) and (o) of Section 7.12; provided that the aggregate amount of Indebtedness for Borrowed Money and of Performance Guarantees so permitted to be incurred, guaranteed or supported pursuant to the provisions of this subsection (e) shall not exceed $50,000,000 at any one time outstanding less the amount invested pursuant to Section 7.12(q) hereof;
(f)    Indebtedness for Borrowed Money of the Company and its Restricted Subsidiaries not otherwise permitted by this Section in an amount not to exceed $300,000,000 in the aggregate at any one time outstanding;
(g)    liabilities in respect of letters of credit not otherwise permitted by this Section 7.10 if payment of such letters of credit is fully supported by a Letter of Credit;
(h)    indebtedness under Interest Rate Protection and Other Hedging Agreements entered into to hedge a risk of the Company and/or its Restricted Subsidiaries and not for speculation;
(i)    indebtedness of any Person existing at the time such Person becomes a Restricted Subsidiary or assumed in connection with the acquisition of assets of such Person and not incurred in contemplation of such Person being acquired or becoming a Restricted Subsidiary or such assets being acquired provided the aggregate amount of such indebtedness permitted pursuant to this Section 7.10(i) shall not exceed $20,000,000 at any one time outstanding;
(j)    any renewals, extensions or replacements of Indebtedness for Borrowed Money permitted under this Section 7.10 in an aggregate amount not in excess of the Indebtedness for Borrowed Money being renewed, extended or replaced;
(k)    obligations arising out of agreements with respect to the issuance of credit cards or debit cards to employees of the Company or any Restricted Subsidiary for use in connection with the business and affairs of such entities;
(l)    obligations arising out of agreements with respect to the execution or processing of electronic transfer of funds by automatic clearing house transfer, wire transfer, or otherwise to or from any deposit account of the Company or any Restricted Subsidiary, the acceptance for deposit or the honoring for payment of any check, draft, or other item with respect to any such deposit accounts, and other deposit disbursement, and cash management services afforded to the Company and/or any Restricted Subsidiary; and

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(m)    indebtedness resulting from a change in GAAP, if any, that requires real estate and equipment leases of the Company and its Restricted Subsidiaries to be reclassified from operating leases to Capital Leases.
Section 7.11.    Liens      . The Borrowers shall not, nor shall they permit the Restricted Subsidiaries to, create, incur or permit to exist any Lien of any kind on any Property owned by any Borrower or Restricted Subsidiary; provided, however, that the foregoing shall not apply to nor operate to prevent:
(a)    Liens arising by statute in connection with worker’s compensation, unemployment insurance, old age benefits, social security obligations, taxes, assessments, statutory obligations or other similar charges, good faith cash deposits in connection with the foregoing or in connection with tenders, contracts or leases to which the Borrowers or any of their Restricted Subsidiaries are a party or other cash deposits required to be made in the ordinary course of business, provided in each case that the obligation is not for borrowed money and that the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate proceedings which prevent enforcement of the matter under contest and adequate reserves have been established therefor;
(b)    mechanics’, workmen’s, materialmen’s, landlords’, carriers’, or other similar Liens arising in the ordinary course of business with respect to obligations which are not due or which are being contested in good faith by appropriate proceedings which prevent enforcement of the matter under contest;
(c)    judgment liens and judicial attachment liens not constituting an Event of Default under Section 8.1(h) hereof and the pledge of assets for the purpose of securing an appeal, stay or discharge in the course of any legal proceeding, provided that the aggregate amount of such judgment liens and attachments and liabilities of the Borrowers and their Restricted Subsidiaries secured by a pledge of assets permitted under this subsection, including interest and penalties thereon, if any, shall not be in excess of $30,000,000 at any one time outstanding;
(d)    the Liens granted in favor of the Agent for the benefit of the Lenders pursuant to the Collateral Documents;
(e)    Liens on Property of the Borrowers or of any Restricted Subsidiaries created solely for the purpose of securing indebtedness permitted by Section 7.10(f) hereof representing or incurred to finance, refinance or refund the purchase price of such Property or representing the interest of the lessor under a Capital Lease, provided that (i) no such Lien shall extend to or cover other Property of the Borrowers or any Restricted Subsidiary other than the respective Property so acquired, and the principal amount of indebtedness secured by any such Lien shall at no time exceed the original purchase price of such Property and (ii) the aggregate principal amount of such indebtedness does not exceed $150,000,000 at any one time;

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(f)    liens on deposits provided in connection with long‑term maintenance contracts of facilities of the Borrowers and the Restricted Subsidiaries located in the United Kingdom relating to United Kingdom private finance initiatives;
(g)    Liens in favor of bonding companies and their affiliates (a) to the extent described in clause (i) of the second proviso of Section 4.1 hereof and (b) to secure indemnification obligations under surety bonds issued for the benefit of Comstock Canada Ltd. prior to the disposition (the “Comstock Sale” ) of the Company’s equity ownership interest in Comstock Canada ( “Comstock Surety Bonds” );
(h)    rights of subrogation and similar rights of issuers of surety bonds and unperfected lien rights of such issuers to assets associated with projects which they have bonded;
(i)    restrictions on the disbursement or withdrawal of funds deposited by Restricted Subsidiaries in bank accounts maintained by them in the ordinary course of business consistent with past practice which are maintained in connection with specific construction projects or contracts from which payments and disbursements with respect to such contracts or projects are to be made;
(j)    Liens on insurance policies arising in connection with the deferred payment of premiums or the financing thereof in the ordinary course of business;
(k)    Liens consisting of cash collateral deposits made in connection with the insurance programs of the Company and its Restricted Subsidiaries and rights of a depository bank to offset balances in any account maintained with it by a Subsidiary incorporated under the laws of the United Kingdom against debit balances in any other account maintained with it by such Subsidiary or any other U.K. Subsidiary (it being acknowledged by the Lenders that such rights of offset shall be superior to any rights they may have in and to such accounts or the balances as are from time to time standing on deposit therein);
(l)    Liens existing on any property of a Person at the time such Person becomes a Restricted Subsidiary which Liens were not created, incurred or assumed in contemplation thereof, provided that no such Liens shall extend to or cover any other property of the Company or any Restricted Subsidiary;
(m)    the Liens listed and described on Schedule 7.11 attached hereto;
(n)    any extension, renewal or replacement (or successive extensions, renewals or replacements) of Liens permitted by this Section 7.11 without any increase in the amount of indebtedness secured thereby or in the assets subject to such Liens;


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(o)    Liens on Property of Restricted Subsidiaries securing miscellaneous obligations up to, but not to exceed, $5,000,000.
Section 7.12.    Investments, Acquisitions, Loans, Advances and Guarantees     . The Borrowers shall not, nor shall they permit any of the Restricted Subsidiaries to, directly or indirectly, make, retain or have outstanding any investments (whether through purchase of stock or obligations or otherwise) in, or loans or advances (other than for relocation and travel advances and other loans made to employees in the ordinary course of business) to, any other Person, or acquire all or any substantial part of the assets or business of any other Person or division thereof, or be or become liable as endorser, guarantor, surety or otherwise for any debt, obligation or undertaking of any other Person, or otherwise agree to provide funds for payment of the obligations of another, or supply funds thereto or invest therein or otherwise assure a creditor of another against loss, or apply for or become liable to the issuer of a letter of credit which supports an obligation of another, or subordinate any claim or demand it may have to the claim or demand of any other Person (other than of the Company or any Restricted Subsidiary); provided, however, that the foregoing shall not apply to nor operate to prevent:
(a)    investments in direct obligations of the United States of America or of any agency or instrumentality thereof whose obligations constitute full faith and credit obligations of the United States of America, provided that any such obligations shall mature within one year of the date of issuance thereof;
(b)    investments in commercial paper maturing within 270 days of the date of issuance thereof which has been accorded one of the two highest ratings available from the S&P, Moody’s or any other nationally recognized credit rating agency of similar standing providing similar ratings;
(c)    investments in money market funds which in turn invest primarily in investments of the types described in clauses (a), (b) and (d) of this Section 7.12;
(d)    investments in certificates of deposit issued by any commercial bank organized under the laws of Canada or the United States or (as to investments of EMCOR U.K. Limited and its Subsidiaries) the United Kingdom in each case having capital, surplus and undivided profits of not less than $500,000,000 or by any Lender in each case maturing within one year from the date of issuance thereof or in Eurodollar time deposits maturing not more than one year from the date of acquisition thereof placed with any Lender or other such commercial bank (to the extent investments in certificates of deposit issued by such other bank are permitted by this subsection) or in banker’s acceptances endorsed by any Lender or other such commercial bank (to the extent investments in certificates of deposit issued by such other bank are permitted by this subsection) and maturing within nine months of the date of acceptance;
(e)    endorsement of items for deposit or collection of commercial paper received in the ordinary course of business;

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(f)    the investments, loans, advances and guarantees listed and described on Schedule 7.12 attached hereto;
(g)    the Guarantees, guarantees referred to in and permitted by Section 7.10 hereof, and indemnification obligations in respect to Comstock Surety Bonds;
(h)    (i) an amount equal to all investments of the Company and Restricted Subsidiaries as of the date hereof in, and present loans and advances by the Company and Restricted Subsidiaries to, Unrestricted Subsidiaries and (ii) future investments in, and loans and advances, (including subordinated loans) to, Unrestricted Subsidiaries for asset preservation and to preserve existing operations aggregating not more than $1,500,000 at any one time outstanding;
(i)    Loans and advances (including subordinated loans and advances) between the Company and its Restricted Subsidiaries if and to the extent that the corresponding indebtedness is permitted by Section 7.10 hereof; provided, however , that the aggregate principal amount of loans and advances by the Company and its Restricted Subsidiaries to Restricted Subsidiaries which are not Guarantors shall not exceed $50,000,000 in the aggregate at any one time outstanding;
(j)    Permitted Acquisitions and Permitted Investments in Domestic Strategic Ventures;
(k)    acquisitions of assets (including stock, notes and other evidences of indebtedness) and subordinations of claims as a part of good faith collection efforts on doubtful accounts;
(l)    Performance Guarantees and performance guarantees of Comstock Canada Ltd. made prior to the Comstock Sale;
(m)    notes and other deferred payment obligations (other than general partnership and similar interests) acquired by the Company or any Restricted Subsidiary in connection with the sale or other disposition of assets permitted hereby;
(n)    investments of the Company or any Restricted Subsidiary made in the ordinary course of business in connection with joint ventures, Persons or other similar pooling of efforts in respect to a specific project or series of related specific projects for a limited or fixed duration and formed to conduct business of the type in which the Company or such Restricted Subsidiary is presently engaged and guarantees of obligations of, and incurrence of liabilities in respect of letters of credit for, such joint ventures or Persons;
(o)    investments or acquisitions of interests in Strategic Ventures organized outside of the United States of America and conducting more than 50% of their business outside of the United States ( “Foreign Strategic Ventures” ), provided that the aggregate amount so invested or expended subsequent to the date hereof in connection with any given Foreign Strategic Venture shall not exceed $20,000,000 unless the Required Lenders otherwise agree in writing;

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(p)    the present investment of the Company and Restricted Subsidiaries in Restricted Subsidiaries, the present and future investment of Restricted Subsidiaries in the Company and future investments by the Company and Restricted Subsidiaries in Restricted Subsidiaries or, in a Restricted Subsidiary formed as a captive insurer or surety company; provided, however , that the aggregate amount of investments by the Company and its Restricted Subsidiaries in Restricted Subsidiaries which are not Guarantors shall not exceed $25,000,000 at any one time outstanding;
(q)    investments in Foreign Subsidiaries, provided that the aggregate amount so invested or expended subsequent to the date hereof shall not exceed $50,000,000 at any one time outstanding less the amount of Indebtedness for Borrowed Money guaranteed pursuant to Section 7.10(e) hereof;
(r)    guarantees by any Person outstanding at the time such Person becomes a Restricted Subsidiary or in connection with the acquisition of assets of such Person and outstanding at the time such Person becomes a Restricted Subsidiary and not in either case incurred in contemplation of such Person being acquired or becoming a Restricted Subsidiary or such assets being acquired; provided that the aggregate amount of indebtedness guaranteed by such Person pursuant to guarantees permitted solely by this Section 7.12(r) when aggregated with the amount of indebtedness permitted solely by Section 7.10(i) hereof shall not exceed $20,000,000 at any one time outstanding;
(s)    contingent obligations arising from the issuance of Performance Guarantees, assurances, indemnities, bonds, letters of credit, or similar agreements in the ordinary course of business in respect of the contracts (other than contracts for Indebtedness for Borrowed Money) of Nesma EMCOR Company Ltd. for the benefit of surety companies or for the benefit of others to induce such others to forgo the issuance of a surety bond in their favor;
(t)    investments made pursuant to and in accordance with the Company’s Voluntary Deferral Plan.
(u)    Guarantees by the Company and/or its Restricted Subsidiaries of the Indebtedness for Borrowed Money permitted by Section 7.10(k) hereof in an aggregate principal amount not in excess of $75,000,000 at any one time outstanding;
(v)    loans and advances made by the Company or any Restricted Subsidiary to employees, vendors, suppliers and contractors in the ordinary course of its business in an aggregate amount not in excess of $15,000,000 at any one time outstanding;
(w)    lease, utility and other similar deposits arising in the ordinary course of the Company’s or any Restricted Subsidiary’s business; and



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(x)    investments not otherwise permitted by this Section 7.12 in an aggregate amount not in excess of $25,000,000 at any one time outstanding.
In determining the amount of investments, acquisitions, loans, advances and guarantees permitted under this Section 7.12, investments and acquisitions shall always be taken at the original cost thereof (regardless of any subsequent appreciation or depreciation therein), loans and advances shall be taken at the principal amount thereof then remaining unpaid, and guarantees shall be taken at the amount of obligations guaranteed thereby.
Section 7.13.    Capital and Certain other Restricted Expenditures     . The Borrowers shall not, nor shall they permit any Restricted Subsidiary to, make or (without duplication) become obligated to make, any Capital Expenditure or apply for a letter of credit (whether hereunder or otherwise) supporting an obligation of any Foreign Strategic Venture or guarantee any Indebtedness for Borrowed Money of any such Foreign Strategic Venture, if after giving effect thereto the aggregate amount expended (other than in the form of capital stock of the Company) for such purposes during the twelve‑month period ending on the date of the expenditure in question when taken together with the face amount of such letters of credit issued during such period and such indebtedness so guaranteed incurred during such period, would exceed the sum of (i) 2.00% of the arithmetic average of the unrealized revenue from contracts in progress of the Company and its Restricted Subsidiaries (computed in accord with the past practice of the Company) as of the last day of each of the four calendar quarters most recently completed prior to the computation in question, (ii) the Net Cash Proceeds received by the Company and the Restricted Subsidiaries during the same period from Disposition of assets (including stock of Restricted Subsidiaries permitted by Sections 7.14 and/or 7.15 hereof but excluding Disposition of inventory in the ordinary course of business) and (iii) the maximum amount of dividends which the Company could pay under Section 7.16 as of the date of the expenditure or application in question.
Section 7.14.    Mergers, Consolidations and Sales      . The Company shall not, nor shall it permit any of its Restricted Subsidiaries to, be a party to any merger, consolidation or dissolution, or sell, transfer, lease or otherwise dispose of all or any substantial part of the Property of the Company and the Restricted Subsidiaries, taken as a whole, including any disposition of Property as part of a sale and leaseback transaction, or in any event sell or discount (with or without recourse) any of its notes or accounts receivable; provided, however, that this Section 7.14 shall not apply to nor operate to prevent:
(a)    the Borrowers or any of the Restricted Subsidiaries from selling their inventory in the ordinary course of its business or from selling equipment which is obsolete, worn out, or no longer needed for the operation of the business of the Company and the Restricted Subsidiaries or which is promptly replaced with equipment of at least equal utility;
(b)    (i) the merger of a Restricted Subsidiary with and into the Company and sales by a Restricted Subsidiary of all or substantially all of its assets to the Company, and (ii) the merger of a Restricted Subsidiary with and into another Restricted Subsidiary and the sale of all or substantially all of the assets of a Restricted Subsidiary to another Restricted Subsidiary; provided in each case

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that if either of the two Restricted Subsidiaries in question is or becomes a Guarantor, the survivor of the transaction in question remains or becomes a Guarantor and, prior to the Collateral Release Date, all such actions are taken as the Agent requires to preserve its Liens on the Collateral;
(c)    any disposition of Property as part of a sale and leaseback transaction so long as (i) such transaction would be permitted had it been structured as a purchase money mortgage or Capital Lease and is treated as such for purposes of this Agreement or (ii) such sale and leaseback transaction is between the Company or any of its Restricted Subsidiaries and a Restricted Subsidiary;
(d)    the sale or discount (with or without recourse) of any of the Company’s or any Restricted Subsidiary’s notes or accounts receivable so long as (i) such sale by the Company or any Restricted Subsidiary of notes or accounts receivable is to the Company or another Restricted Subsidiary, (ii) such notes or accounts receivable are delinquent and such sale is in the ordinary course of business for purposes of collection only or (iii) the original amount of such notes or accounts receivable sold during any fiscal year of the Company does not exceed $20,000,000 in the aggregate;
(e)    the dissolution or liquidation of any Restricted Subsidiary whose activities are no longer, in the opinion of the Chief Executive Officer or the Board of Directors of the Company, necessary for the operation of the business of the Company and its Restricted Subsidiaries taken as a whole, provided that (i) no Default or Event of Default has occurred and is continuing or will result therefrom and (ii) if the Restricted Subsidiary to be dissolved or liquidated is a Guarantor, all of its assets remaining after the dissolution or liquidation in question are transferred to another Guarantor and, prior to the Collateral Release Date, all such actions, if any, are taken as the Agent may reasonably require in order to insure that it has a Lien on the assets so transferred of the priority required by Section 4.1 hereof;
(f)    any assignment or sale of transfer of shares in the capital stock of a Restricted Subsidiary permitted by Section 7.15 hereof.
For purposes of this Section 7.14 and Section 7.15 hereof, the term “substantial” means the Disposition of assets of the Company or the Restricted Subsidiaries, whether in one or a series of transactions, having a value when aggregated with the value of assets of all other such Dispositions during the period from and including the date hereof to and including the date of such Disposition, would exceed 10% of the book value of assets of the Company and the Restricted Subsidiaries as of such date. Prior to the Collateral Release Date, the Agent shall release its Lien on any Property sold pursuant to the foregoing provisions if no Default or Event of Default has occurred and is continuing or would result therefrom.

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Section 7.15.    Maintenance of Restricted Subsidiaries      . The Borrowers shall not assign, sell or transfer, or permit any Restricted Subsidiary to issue, assign, sell or transfer, any shares of capital stock of a Restricted Subsidiary (other than to the Company or another Restricted Subsidiary); provided that the foregoing shall not operate to prevent:
(a)    the issuance, sale and transfer to any person of any shares of capital stock of a Restricted Subsidiary for the purpose of (i) qualifying, and to the extent legally necessary to qualify, such person as a director of such Subsidiary or (ii) solely for the purpose of permitting such Subsidiary to carry on a licensed business;
(b)    the sale of all or a minority interest in the capital stock of a Restricted Subsidiary so long as the following conditions have been satisfied:
(i)    no Default or Event of Default has occurred and is continuing or will result from the sale of same;
(ii)    the sale of such capital stock is not a sale of a substantial part of the assets of the Company and the Restricted Subsidiaries taken as a whole (as the term “substantial” is defined in Section 7.14 hereof);
(iii)    the Chief Executive Officer, the President or the Board of Directors of the Company has determined that the continued ownership of the Restricted Subsidiary (or the minority interest therein to be disposed of) in question is no longer appropriate in light of the then needs and strategic objectives of the Company and its Restricted Subsidiaries taken as a whole; and
(iv)    in the case of the sale of all the Capital Stock of a Restricted Subsidiary all indebtedness of such Restricted Subsidiary to the Company or any other Restricted Subsidiary is paid in full, and all guarantees or other support undertakings provided by the Company or other Restricted Subsidiaries in respect of such disposed Restricted Subsidiary are discharged, concurrently with the sale in question, provided that then existing Performance Guarantees or guaranties in respect of surety bonds with respect to such a Restricted Subsidiary need not be so discharged as to jobs which commenced prior to the completion of such sale.
Concurrently with the sale of all of the capital stock of a Restricted Subsidiary permitted hereby, the Agent is authorized and directed to release any Guarantee provided by such Restricted Subsidiary and, if prior to the Collateral Release Date, any Lien on the stock or assets of such Restricted Subsidiary and such entity shall no longer constitute a Restricted Subsidiary hereunder.
Section 7.16.    Dividends and Certain Other Restricted Payments      . The Company shall not during any fiscal year (a) declare or pay any dividends on or make any other distributions in respect of any class or series of its capital stock (except for dividends payable solely in its capital stock) or (b) directly or indirectly

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purchase, redeem or otherwise acquire or retire any of its capital stock or any options or warrants therefor except out of the net proceeds of a substantially concurrent issuance and sale of capital stock or options or warrants therefor (collectively, “Restricted Payments” ) if after giving effect thereto (i) the aggregate amount expended for all such purposes subsequent to the date hereof would exceed (x)   $750,000,000 plus (but not minus in the case of a deficit) 50% of Net Income for the period (taken as a single accounting period) from January 1, 2013 to the last day of the calendar quarter most recently completed prior to the Restricted Payment in question minus (y) any portion of the amount computed pursuant to clause (x) hereof which was used to justify a transaction under Section 7.13(iii); (ii) a Default or Event of Default shall have occurred and be continuing; (iii) the Leverage Ratio is more than or equal to 2.50 to 1.0 on a pro forma basis; and (iv) the Borrowers have Unused Commitments of less than $100,000,000. The foregoing notwithstanding, there shall not be included in determining the amount set forth in clause (i) of this Section 7.16 (A) amounts paid by the Company in satisfaction of withholding taxes for the account of participants in the Company’s equity-based benefit plans in connection with the surrender to the Company of such participants’ restricted stock units in respect of which shares of the Company’s capital stock are issuable, or such participants’ shares of the Company’s capital stock or stock options to acquire shares of the Company’s capital stock, in each case in lieu of paying to the Company such withholding taxes in cash by reason of the issuance of such shares in respect of such restricted stock units, the acquisition of such shares or the exercise of such stock options and (B) the value of stock options to acquire shares of the Company’s capital stock or the shares underlying such stock options upon surrender to the Company of stock options in connection with payment of such stock option exercise price by way of a “net settlement” of such stock options.
Section 7.17.    ERISA      . The Borrowers shall, and shall cause each of the Restricted Subsidiaries to, promptly pay and discharge all obligations and liabilities arising under ERISA of a character which if unpaid or unperformed might result in the imposition of a Lien against any of their Properties. The Borrowers shall, and shall cause each of the Restricted Subsidiaries to, promptly notify the Agent and each Lender of (i) the occurrence of any reportable event (as defined in ERISA) with respect to any employee benefit plan subject to Title IV of ERISA (other than a multiemployer plan) sponsored or contributed to by either of the Borrowers or any member of the Controlled Group (a “Plan” ) with respect to which the PBGC has neither waived the 30 day reporting requirement nor issued a public announcement that the penalty applicable to a failure to report will not apply, (ii) receipt of any notice from the PBGC of its intention to seek termination of any Plan or appointment of a trustee therefor, (iii) its intention to terminate any Plan or withdraw from any multiemployer plan if such termination or withdrawal could reasonably be expected to have a Material Adverse Effect, and (iv) the occurrence of any other event with respect to any Plan which would result in the incurrence by the Borrowers or any of their Restricted Subsidiaries of any material liability, fine or penalty, or any material increase in the contingent liability of the Borrowers or any of the Restricted Subsidiaries with respect to any post‑retirement Welfare Plan benefit which could reasonably be expected to have a Material Adverse Effect.
Section 7.18.    Compliance with Laws      . The Company shall, and shall cause each of its Restricted Subsidiaries to, comply in all respects with the requirements of all foreign (whether national, supra‑national or otherwise), federal, state, provincial, and local laws, rules, regulations, ordinances and orders applicable to or pertaining to their Properties or business operations, non‑compliance with which could have a Material

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Adverse Effect or could result in a Lien upon any of their Property material to the Company and the Restricted Subsidiaries taken as a whole.
Section 7.19.    Burdensome Contracts With Affiliates      . The Company shall not, nor shall it permit any of its Restricted Subsidiaries to, enter into any contract, agreement or business arrangement with any of its Affiliates (other than with or among Restricted Subsidiaries and the Company) on terms and conditions which are less favorable to the Company or any such Restricted Subsidiary than would be usual and customary in similar contracts, agreements or business arrangements between Persons not affiliated with each other.
Section 7.20.    No Changes in Fiscal Year      . The Company shall not change its fiscal year from its present basis without the prior written consent of the Required Lenders.
Section 7.21.    Formation of Subsidiaries      . The Company shall not, nor shall it permit any Restricted Subsidiary to, form or acquire any Subsidiary unless the newly formed or acquired Subsidiary shall, if the Required Lenders so request and to the extent required by this Agreement, execute and deliver a Guarantee and grant Liens on its assets of the priority required by Section 4.1 hereof (and provide the Agent with such documentation therefore and such supporting documentation, including opinions of counsel, as it may reasonably request). Each Subsidiary acquired or formed pursuant hereto shall constitute a Restricted Subsidiary unless the Required Lenders otherwise agree in writing.
Section 7.22.    Change in the Nature of Business      . The Company shall not, nor shall it permit any of the Restricted Subsidiaries to, engage in any business or activity if as a result the general nature of the business of the Company and the Restricted Subsidiaries, taken as a whole, would be materially changed from the general nature of the business engaged in by the Company and the Restricted Subsidiaries, taken as a whole, on the date of this Agreement. For purpose of this Section 7.22, a material change from the general nature of the business of the Company and its Restricted Subsidiaries shall not have occurred if the aggregate consideration (including as such consideration any indebtedness of the Acquired Business assumed or guaranteed by the Company or a Restricted Subsidiary) for any Permitted Acquisition that is not an Eligible Line of Business is $500,000,000 or less.
Section 7.23.    Use of Proceeds      . The Borrowers shall use the proceeds of the Credit Utilizations (including the initial Credit Utilization) hereunder for the purposes set forth in, or otherwise permitted by, Section 5.4 hereof. No Borrower will request any Borrowing or Letter of Credit, and no Borrower shall use, and shall procure that its Subsidiaries and its or their respective directors, officers and employees shall not use, the proceeds of any Borrowing or Letter of Credit in violation of any Anti-Corruption Laws.
Section 7.24.    Deposit Accounts. The Borrowers shall, and shall cause each Restricted Subsidiary to, maintain all deposit accounts with the Agent, the Lenders, or with any Affiliate of the Agent or the Lenders, or with any other financial institution selected by the Company and reasonably acceptable to the Agent; provided , that the Borrower and its Restricted Subsidiaries may maintain deposit accounts with financial institutions other than the Agent, a Lender (or one of their Affiliates) or another institution not approved by

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the Agent so long as the aggregate amount in all such deposit accounts does not exceed $50,000,000 at any one time.
SECTION 8.
EVENTS OF DEFAULT AND REMEDIES    .
Section 8.1.      Events of Default .     Any one or more of the following shall constitute an Event of Default hereunder:
(a)    default in the payment when due of all or any part of the principal of the Loans (whether at the stated maturity thereof or at any other time provided for in this Agreement) or of any Reimbursement Obligation and any such default continues for one (1) Business Day after notice thereof from the Agent (acting at the direction of any Lender) to the Company;
(b)    default in the payment when due of all or part of the interest on any Loan (whether the stated maturity thereof or at any other time provided for in this Agreement) or of any fee or other amount payable hereunder or under any other Loan Document and any such default continues for five (5) Business Days after notice thereof from the Agent (acting at the direction of any Lender) to the Company;
(c)    (i) default in the observance or performance of any covenant set forth in Sections 7.6, 7.7, 7.8, 7.13, 7.14, 7.15, or 7.16 hereof or of any provision in any Loan Document dealing with the maintenance of insurance on the Collateral, or (ii) default in the observance or performance of any covenant set forth in Section 7.10 or Section 7.12 which is not remedied within fifteen (15) days after the earlier of (A) the date on which such failure shall first become known to any officer of the Company or (B) written notice thereof to the Company by the Agent;
(d)    default in the observance or performance of any other provision hereof or of any other Loan Document which is not remedied within thirty (30) days after the earlier of (i) the date on which such failure shall first become known to any officer of the Company or (ii) written notice thereof to the Company by the Agent;
(e)    any representation or warranty made herein or in any of the other Loan Document or in any certificate furnished to the Agent or the Lenders pursuant hereto or thereto or in connection with any transaction contemplated hereby or thereby proves untrue in any material respect as of the date of the issuance or making thereof;
(f)    any event occurs or condition exists (other than those described in subsections (a) through (e) above) which is specified as an event of default under any of the other Loan Documents and any period of grace applicable thereto shall have elapsed, or any of the Loan Documents shall for any reason not be or shall cease to be in full force and effect, or any of the Loan Documents is declared to be null and void, or, prior to the Collateral Release Date, any of the Collateral Documents shall for any reason fail to create a valid and perfected Lien in favor of the Agent in any material amount of Collateral purported to be covered thereby of the priority required by Section 4.1 hereof;

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(g)    default shall occur under any evidence of Indebtedness for Borrowed Money aggregating in excess of $15,000,000 issued, assumed or guaranteed by any of the Borrowers or any Restricted Subsidiary or under any indenture, agreement or other instrument under which the same may be issued, and such default shall continue for a period of time sufficient to permit the acceleration of the maturity of any such Indebtedness for Borrowed Money (whether or not such maturity is in fact accelerated) without being waived or any such Indebtedness for Borrowed Money shall not be paid when due (whether by demand, lapse of time, acceleration or otherwise);
(h)    any judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes in an aggregate amount in excess of $1,000,000 (provided, that in determining such $1,000,000 amount there shall be deducted therefrom the amount which is covered by insurance from any insurer which has acknowledged its liability thereon) shall be entered or filed against the Borrowers or any of the Material Restricted Subsidiaries or against any of the Property or assets of any of them and remains undischarged, unvacated, unbonded or unstayed for a period of thirty days;
(i)    any party obligated on any Guarantee shall purport to disavow, revoke, discontinue, repudiate or terminate such Guarantee or such Guarantee shall otherwise cease to have force or effect;
(j)    any Change in Control occurs;
(k)    any Borrower or Material Restricted Subsidiary shall (i) have entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended or any analogous action is taken under any other applicable law relating to bankruptcy or insolvency, (ii) not pay, admit in writing its inability to pay, or be deemed under applicable law not to be able to pay, its debts generally as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, receiver‑manager, receiver and manager, interim receiver, administrative receiver, administrator, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institute any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended or any foreign insolvency or bankruptcy laws to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, or (vi) fail to contest in good faith any appointment or proceeding described in Section 8.1(l) hereof; or
(l)    a custodian, receiver, receiver‑manager, receiver and manager, interim receiver, administrative receiver, administrator, trustee, examiner, liquidator or similar official shall be appointed for any Borrower or Material Restricted Subsidiary or any substantial part of any of their Property, or a proceeding described in Section 8.1(k)(v) shall be instituted against any Borrower or

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Material Restricted Subsidiary, and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of sixty days.
Section 8.2.      Non‑Bankruptcy Defaults     ‑ . When any Event of Default described in subsections 8.1(a) to 8.1(j), both inclusive, has occurred and is continuing, the Agent shall, upon request of the Required Lenders by notice to the Company, take any or all of the following actions:
(a)    terminate the obligation of the Lenders to extend any further credit hereunder on the date (which may be the date thereof) stated in such notice; and
(b)    declare the principal of and the accrued interest on the Loans to be forthwith due and payable and thereupon the Loans, including both principal and interest, and all fees, charges, commissions and other Obligations payable hereunder, shall be and become immediately due and payable without further demand, presentment, protest or notice of any kind.
Without limiting the generality of the foregoing, the Agent, upon request of the Required Lenders, shall be entitled to realize upon and enforce all of its rights and remedies under the Collateral Documents and proceed by any other action, suit, remedy or proceeding as authorized or permitted by this Agreement, the Collateral Documents or at law or in equity.
Section 8.3.      Bankruptcy Defaults .     When any Event of Default described in subsection 8.1(k) or 8.1(l) has occurred and is continuing, then the unpaid balance of the Loans, including both principal and interest, and all fees, charges, commissions and other Obligations payable hereunder, shall immediately become due and payable without presentment, demand, protest or notice of any kind, and the obligation of the Lenders to extend further credit pursuant to any of the terms hereof shall immediately terminate. Without limiting the generality of the foregoing, the Agent, upon request of the Required Lenders, shall be entitled to realize upon and enforce all of its rights and remedies under the Collateral Documents and proceed by any other action, suit, remedy or proceeding and authorized or permitted by this Agreement, the Collateral Documents or at law or in equity.
Section 8.4.    Collateral for Undrawn Letters of Credit .     (a) If and when (w) any Event of Default, other than an Event of Default described in subsections (k) or (l) of Section 8.1, has occurred and is continuing, the Borrowers shall, upon demand of the Agent, or (x) any Event of Default described in subsections (k) or (l) of Section 8.1 has occurred, or (y) prepayment of the Letters of Credit as required by Section 2.12, Section 2.13 or Section 3.5 hereof; or (z) any Letter of Credit is outstanding on the Revolving Credit Termination Date (whether or not any Event of Default has occurred), the Borrowers shall, without notice or demand from the Agent, either (i) immediately pay to the Agent the full amount of each Letter of Credit to be held by the Agent as provided in subsection (b) below or (ii) provide a back‑up letter of credit for the benefit of the Applicable Issuer in a stated amount equal to the full amount of all Letters of Credit then outstanding which letter of credit shall give the Applicable Issuer the unconditional right to make drawings thereunder upon receipt of a drawing request under any Letter of Credit and otherwise be in form and substance satisfactory to the Applicable Issuer and issued by an issuer satisfactory to the Applicable Issuer in its sole discretion, the Borrowers agreeing to immediately make each such payment or provide such back‑up letter

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of credit and acknowledging and agreeing the Agent and the Applicable Issuers would not have an adequate remedy at law for failure of the Borrowers to honor any such demand and that the Agent shall have the right to require the Borrowers to specifically perform such undertaking whether or not any draws had been made under the Letters of Credit.
(b)    All amounts prepaid pursuant to subsection (a) above or paid over to the Agent pursuant to Section 1.3(b) shall be held by the Agent in one or more separate collateral accounts (each such account, and the credit balances, properties, and any investments from time to time held therein, and any substitutions for such account, any certificate of deposit or other instrument evidencing any of the foregoing and all proceeds of and earnings on any of the foregoing being collectively called the “Collateral Account” ) as security for, and for application by the Agent (to the extent available) to, the reimbursement of any payment under any Letter of Credit then or thereafter made by the Applicable Issuer, and to the payment of the unpaid balance of all other Obligations and Hedging Liability. The Collateral Account shall be held in the name of and subject to the exclusive dominion and control of the Agent for the benefit of the Agent, the Lenders, and the Applicable Issuers. If and when requested by the Company, the Agent shall invest funds held in the Collateral Account from time to time in direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America with a remaining maturity of one year or less, provided that the Agent is irrevocably authorized to sell investments held in the Collateral Account when and as required to make payments out of the Collateral Account for application to amounts due and owing from the Borrower to the Applicable Issuer, the Agent or the Lenders. Subject to the terms of Sections 2.12 and 2.13, if the Borrowers shall have made payment of all obligations referred to in subsection (a) above, at the request of the Company the Agent shall release to the Company amounts held in the Collateral Account so long as at the time of the release and after giving effect thereto no Default or Event of Default exists. After all Letters of Credit have expired or been cancelled and the expiration or termination of all Commitments, at the request of the Company, the Agent shall release any remaining amounts held in the Collateral Account following payment in full in cash of all Obligations and Hedging Liability.
SECTION 9.
DEFINITIONS INTERPRETATIONS    .
Section 9.1.    Definitions     . The following terms when used herein have the following meanings:
“Acquired Business” means the entity or assets acquired by a Borrower or Restricted Subsidiary in an Acquisition after the date hereof.
“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person (other than a Person that is a Subsidiary), or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with

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another Person (other than a Person that is a Subsidiary) provided that a Borrower or Restricted Subsidiary is the surviving entity.
“Additional Lender” is defined in Section 1.11 hereof.
“Adjusted EBIT” means, with reference to any period, EBIT for such period calculated on a pro forma basis in good faith by the Company and established to the reasonable satisfaction of the Agent as if each Acquisition which occurred during such period had taken place on the first day of such period (including adjustments for non‑recurring expenses and income reasonably determined by the Company in good faith and established to the reasonable satisfaction of the Agent).
“Adjusted EBITDA” means, with reference to any period, EBITDA for such period calculated on a pro forma basis in good faith by the Company and established to the reasonable satisfaction of the Agent as if each Acquisition which occurred during such period had taken place on the first day of such period (including adjustments for non‑recurring expenses and income reasonably determined by the Company in good faith and established to the reasonable satisfaction of the Agent).
“Adjusted LIBOR” means, for any Interest Period, a rate per annum determined in accordance with the following formula:
Adjusted LIBOR =     ______________LIBOR__________
1 ‑ Eurocurrency Reserve Percentage
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Agent.
“Affiliate” means any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, another Person. A Person shall be deemed to control another Person for the purposes of this definition if such Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the other Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise; provided that, in any event for purposes of this definition, any Person that owns, directly or indirectly, 41% or more of the securities having ordinary voting power for the election of directors or governing body of a corporation or 41% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.
“Agent” shall mean Bank of Montreal and any successor thereto appointed pursuant to Section 10.1 hereof.
“Aggregate Revolving Commitment” means, as to any Lender, the amount set forth on Schedule 1.1 opposite such Lender under the heading “Aggregate Revolving Commitments”, and reference to the term “Aggregate Revolving Commitments” shall mean the aggregate of each Lender’s Aggregate Revolving Commitment.

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“Agreement” means this Fourth Amended and Restated Credit Agreement, as the same may be amended, modified or restated from time to time in accordance with the terms hereof.
“Alternative Currency” means pounds sterling, Euro and any other currency (other than United States Dollars) approved as such in writing by all Multicurrency Lenders, in each case for so long as such currency is readily available to all the Multicurrency Lenders and is freely transferable and freely convertible to U.S. Dollars and Reuters Monitor Money Rates Service (or any successor thereto) reports a LIBOR for such currency for interest periods of one, two, three and six calendar months ; provided that if any Multicurrency Lender provides written notice to the Company (with a copy to the Agent) that any currency control or other exchange regulations are imposed in the country in which any such Alternative Currency is issued and that in the reasonable opinion of such Lender funding a Loan in such currency is impractical, then such currency shall cease to be an Alternative Currency hereunder until such time as all the Lenders reinstate such country’s currency as an Alternative Currency.
“ Anti-Corruption Laws ” means the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010, and all rules and regulations promulgated thereunder. 
“Applicable Issuer” means the Issuer of Letters of Credit for the account of a particular Borrower or Borrowers or in a particular jurisdiction or jurisdictions.
“Applicable Issuer’s Cap” means the U.S. Dollar Equivalent of $125,000,000 with respect to any Applicable Issuer and any affiliate of such Applicable Issuer that is an Issuer hereunder.
“Applicable Margin” shall mean the rate per annum specified below for the Leverage Ratio and type of Loan or fee for which the Applicable Margin is being determined:
 
Level I
Level II
Level III
Leverage Ratio
<1.00x
≥1.00x and <2.00x
≥2.00x
Domestic Rate
Loan Margin
0.25%
0.50%
0.75%
Eurodollar Loan
Margin and L/C Participation Fee
1.25%
1.50%
1.75%
Commitment Fee
0.20%
0.25%
0.30%
provided, however , that the foregoing is subject to the following:
(i)    the Leverage Ratio, and Adjusted EBITDA shall be determined as at the last day of each fiscal quarter of the Company commencing with the fiscal quarter ending December 31, 2013, with any adjustment in the Applicable Margins resulting from a change therein to be effective five (5) Business Days after receipt by the Agent of the financial statements for such quarter called for

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by Section 7.5(a) and 7.5(b) hereof (provided that if such financial statements are not submitted within the time limitations of Section 7.5(a) and Section 7.5(b) hereof and would result in an increase in the Applicable Margins, then such Applicable Margins shall be increased to the appropriate level effective five (5) Business Days after the last date when such financial statements should have been submitted in compliance with Section 7.5(a) or 7.5(b) hereof);
(ii)    if the financial statements are not submitted within the time limitations of Section 7.5(a) and 7.5(b), then, at the request of the Required Lenders, the Applicable Margin shall be set at Level III until receipt of such financial statements, and any adjustments to the Applicable Margin after receipt of such financial statements shall be made in accordance with clause (i) above;
(iii)    the Applicable Margins for the period from the Closing Date through the first redetermination pursuant to clause (i) above shall be those set forth above for Level I; and
(iv)    each determination of the Applicable Margins pursuant to the foregoing shall remain in effect until the Applicable Margins are next redetermined pursuant to the foregoing.
“Application” is defined in Section 1.3(b) hereof and shall include Applications executed by the Borrowers with respect to Existing Letters of Credit.
“Approved Fund” means any Fund 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.
“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.17 hereof), and accepted by the Agent, in substantially the form of Exhibit C or any other form approved by the Agent.
“Authorized Representative ” means the Chief Executive Officer, the President, the Chief Financial Officer, the Controller, the Treasurer, the Assistant Treasurer or any further or different persons so named by any Authorized Representative in a written notice to the Agent.
“Borrower DTTP Filing” means a filing to notify HM Revenue & Customs about the U.K. Borrower’s passported loan.
“Borrowers” means (a) the U.S. Borrowers and (b) the U.K. Borrowers, with (i) the term “Borrowers” to mean the Borrowers, collectively, and, also each individually, and (ii) all promises and covenants (including promises to pay) and representations and warranties of and by the Borrowers made in the Loan Documents or any instruments or documents delivered pursuant thereto to be and constitute the several promises, covenants, representations and warranties of and by each and all of such corporations, except to the extent explicitly otherwise provided. The term “Borrower” appearing in such singular form shall be deemed a reference to any of the Borrowers unless the context in which such term is used shall otherwise require.

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“Borrowing” means the total of Loans of a single type in a single currency advanced, continued for an additional Interest Period, or converted from a different type into such type by the Lenders under a Facility on a single date and, in the case of Eurodollar Loans, for a single Interest Period. Borrowings of Loans are made and maintained ratably from each of the Lenders under a Facility according to their Percentages of such Facility. A Borrowing is “advanced” on the day Lenders advance funds comprising such Borrowing to the Borrower, is “continued” on the date a new Interest Period for the same type of Loans commences for such Borrowing, and is “converted” when such Borrowing is changed from one type of Loans to the other, all as determined pursuant to Section 1.4. Borrowings of Swing Loans are made by the Swing Line Lender in accordance with the procedures set forth in Section 1.8 hereof.
“Business Day” means any day other than a Saturday or Sunday on which banks are not authorized or required to close in Chicago, Illinois and, if the applicable Business Day relates to a Borrowing or payment in an Alternative Currency or to a conversion of a Credit Utilization into U.S. Dollars, a day on which banks and foreign exchange markets are open for business in the city where disbursements of, conversions of, or payments on such Borrowings are to be made.
“Capital Expenditures” means, for any period, capital expenditures of the Company and its Restricted Subsidiaries during such period as defined and classified in accordance with GAAP consistently applied. For purposes hereof, Permitted Acquisitions, Permitted Investments in Domestic Strategic Ventures, and investments permitted by Sections 7.12(n) and (o) hereof shall not be deemed Capital Expenditures.
“Capital Lease” means any lease of Property (whether real or personal) which in accordance with GAAP is required to be capitalized on the balance sheet of the lessee.
“Capitalized Lease Obligation” means the amount of the liability shown on the balance sheet of any Person in respect of a Capital Lease determined in accordance with GAAP.
“Cash Collateralize” means, to pledge and deposit with or deliver to the Agent or the Applicable Issuer, as the case may be, for the benefit of one or more of the Issuers or Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances subject to a first priority perfected security interest in favor of the Agent or, if the Agent and each Applicable Issuer shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Agent and each Applicable Issuer. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“CFC” shall mean (i) a “controlled foreign corporation” within the meaning of Section 957(a) of the Code or (ii) any Domestic Subsidiary that is treated as a disregarded entity for United States federal income tax purposes that has no material assets other than the capital stock of one or more direct or indirect Subsidiaries that are described in subparagraph (i) hereto.


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“Change in Control” means that (i) more than 25% of the Voting Stock of the Company shall at any time and for any reason be owned, either legally or beneficially, by any Person or group of Persons acting in concert or (ii) (1) another Person merges into the Company or the Company consolidates with or merges into any other Person or (2) the Company conveys, transfers or leases all or substantially all its assets to any person or group, in one transaction or a series of transactions other than any conveyance, transfer or lease between the Company and a wholly owned subsidiary of the Company, in each case, in one transaction or a series of related transactions with the effect that a Person or group becomes the beneficial owner of more than 25% of the Voting Stock of the surviving or transferee Person of such transaction or series; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Company’s Board of Directors (together with any new directors whose election by the Company’s Board of Directors, or whose nomination for election was previously so approved) cease for any reason to constitute a majority of the Directors then in office.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority, or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd‑Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines or directives thereunder or issued in connection therewith and (y) 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 or foreign 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.
“Closing Date” means the date upon which all the conditions set forth in Sections 6.1 and 6.2 of this Agreement have been satisfied.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means all Properties, rights, interests and privileges from time to time subject to the Liens granted to the Agent by the Collateral Documents or required so to be by the terms hereof.
“Collateral Account” is defined in Section 8.4(b) hereof.
“Collateral Documents” means all security agreements, pledge agreements, hypothecs, assignments, financing statements, debentures and other documents as shall from time to time secure the Loans or any other Obligations.
“Collateral Release Conditions” means the satisfaction of the following: (i) the Company shall have obtained a Corporate Credit Rating of at least BBB- from S&P and a Corporate Family Rating of at least Baa3 from Moody’s and (ii) no Default or Event of Default has occurred and is continuing.

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“Collateral Release Date” means the date on which the Company (a) satisfies the Collateral Release Conditions and (b) provides written notice to the Agent requesting that the Liens on all Collateral of the Company and its Restricted Subsidiaries which are Guarantors granted to or held by the Agent (for the benefit of the Lenders) pursuant to the Collateral Documents be released.
“Commitments” means the Multicurrency Commitments, U.S. Dollar Commitments and the Term Loan Commitments.
“ 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.
“Company” is defined in the introductory paragraph hereof.
“Comstock Sale” is defined in Section 7.11(g).
“Comstock Surety Bonds” is defined in Section 7.11(g).
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profit Taxes.
“Controlled Group ” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Company or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.
“Credit Utilization ” means the advancing of any Loan, or the issuance of, or extensions of the expiration date or in the increase in the amount of any Letter of Credit.
“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
“Default” means any event or condition the occurrence of which would, with the passage of time or the giving of notice, or both, constitute an Event of Default.
“Defaulting Lender” means, subject to Section 2.12(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Agent and the Company in writing that such failure is the result of such Lender’s good faith and reasonable determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Agent, any Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Loans) within two (2) Business Days of the date when due, (b) has notified the Company, the Agent or any Issuer or the Swing Line Lender in writing that it does not intend to comply with

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its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s good faith and reasonable determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Agent or the Company, to confirm in writing to the Agent and the Company that it will comply with its prospective funding obligations hereunder ( provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Company), or (d) has, or has a direct or indirect parent company that has, at any time after the Closing Date (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.13(b)) upon delivery of written notice of such determination to the Company, each Issuer, the Swing Line Lender and each Lender.
“Departing Lenders” is defined in Section 11.29 hereof.
“Disposition” means the sale, lease, conveyance or other disposition of Property.
“Domestic Rate” means, for any day, the rate per annum equal to the greatest of:
(a)    the rate of interest announced or otherwise established by the Agent from time to time as its prime commercial rate, or its equivalent, for U.S. Dollar loans to borrowers located in the United States as in effect on such day, with any change in the Domestic Rate resulting from a change in said prime commercial rate to be effective as of the date of the relevant change in said prime commercial rate (it being acknowledged and agreed that such rate may not be the Agent’s best or lowest rate),
(b)    the sum of (i) the rate determined by the Agent to be the average (rounded upward, if necessary, to the next higher 1/100 of 1%) of the rates per annum quoted to the Agent at approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is practicable) on such day (or, if such day is not a Business Day, on the immediately preceding Business Day) by two or more Federal funds brokers selected by the Agent for sale to the Agent at face value of Federal funds in

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the secondary market in an amount equal or comparable to the principal amount for which such rate is being determined, plus (ii) 1/2 of 1%, and
(c)    the LIBOR Quoted Rate for such day plus 1.00%.
“Domestic Rate Loan” means a U.S. Revolving Loan or Term Loan bearing interest as specified in Section 2.1 hereof.
“Earn‑Out Obligations” means an obligation the payment of which is dependent upon the future performance of an asset or assets the sale of which gave rise to such obligation.
“EBIT” means, with reference to any period, as determined for the Company and its Restricted Subsidiaries on a consolidated basis in accordance with GAAP, Net Income for such period plus all amounts deducted in arriving at such Net Income amount in respect of (i) Interest Expense for such period, (ii) federal, state, provincial, foreign and local income taxes for such period, (iii) other non-cash charges of the Company and its Restricted Subsidiaries during such period, and (iv) extraordinary, non-recurring cash charges reasonably acceptable to the Agent not to exceed $50,000,000 in the aggregate during the term of this Agreement.
“EBITDA” means, with reference to any period, as determined for the Company and its Restricted Subsidiaries on a consolidated basis in accordance with GAAP, Net Income for such period plus all amounts deducted in arriving at such Net Income amount in respect of (i) Interest Expense for such period, (ii) federal, state, provincial, foreign and local income taxes for such period, (iii) all amounts properly charged for depreciation of fixed assets and amortization of intangible assets during such period on the books of the Company and its Restricted Subsidiaries, (iv) other non-cash charges of the Company and its Restricted Subsidiaries during such period, and (v) extraordinary, non-recurring cash charges reasonably acceptable to the Agent not to exceed $50,000,000 in the aggregate during the term of this Agreement.
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by (i) the Agent, (ii) the Issuers, and (iii) unless an Event of Default has occurred and is continuing, the Company (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include any Borrower or Guarantor or any of such Borrower’s or such Guarantor’s Affiliates or Subsidiaries.
“Eligible Line of Business” means any business engaged in as of the date of this Agreement by any Borrower or any Restricted Subsidiary or any other business line reasonably related thereto or any reasonable extensions thereof or a business complimentary or ancillary to such existing businesses.
“EMCOR UK” is defined in the introductory paragraph hereof.
“EMU Legislation” means the legislative measures of the European Council for the introduction of, changeover to, or operation of a single or unified European currency being part of the implementation of the Third Stage.

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute.
“ERISA Affiliate” means any (i) corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Company, (ii) partnership or other trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with any Borrower, and (iii) member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Company, any corporation described in clause (i) above or any partnership or trade or business described in clause (ii) above.
“Euro” means the single lawful currency for the time being of the Participating Member States.
“Eurocurrency Reserve Percentage” means, for any Borrowing in a currency, the daily average for the applicable Interest Period of the maximum rate, expressed as a decimal, at which reserves (including, without limitation, any supplemental, marginal and emergency reserves) are imposed during such Interest Period by the Board of Governors of the Federal Reserve System (or any successor) on “eurocurrency liabilities” , as defined in such Board’s Regulation D (or in respect of any other category of liabilities that includes deposits by reference to which the interest rate on Loans in the relevant currency is determined or any category of extensions of credit or other assets that include loans by non‑United States offices of any Lender to United States residents), subject to any amendments of such reserve requirement by such Board or its successor, taking into account any transitional adjustments thereto. For purposes of this definition, the Loans shall be deemed to be “eurocurrency liabilities” as defined in Regulation D without benefit or credit for any prorations, exemptions or offsets under Regulation D.
“Eurodollar Loan” means a Revolving Loan or Term Loan bearing interest as specified in Section 2.2 hereof.
“Event of Default” means any event or condition specified as such in Section 8.1 hereof.
“Event of Loss” means, with respect to any Property, any of the following: (a) any loss, destruction or damage of such Property or (b) any condemnation, seizure, or taking, by exercise of the power of eminent domain or otherwise, of such Property, or confiscation of such Property or the requisition of the use of such Property.
“Excess Cash” means, at any time the same is to be determined, the amount by which all cash, cash equivalents and marketable securities held by the Company and the U.S. Subsidiaries which are Guarantors in accounts maintained with the Agent or any Lender in the United States exceeds $25,000,000.
“ Excluded Swap Obligation ” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, 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) by virtue of such Guarantor’s failure for any

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reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such related Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or its applicable lending office (or relevant office for receiving payments from or on account of the Borrower or making funds available to or for the benefit of the Borrower) located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. Federal and United Kingdom withholding Taxes that are or would be required to be withheld pursuant to a law in effect on the date on which (i) such Recipient acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.11) or (ii) such Recipient changes its office for receiving payments by or on account of the Borrower or making funds available to or for the benefit of the Borrower), except in each case to the extent that, pursuant to Section 11.1 amounts with respect to such Taxes were payable either to such Recipient’s assignor immediately before such Recipient became a party hereto or to such Recipient immediately before it changed its office for receiving payments by or on account of the Borrower or making funds available to or for the benefit of the Borrower, (c) Taxes attributable to such Recipient’s failure to comply with Section 11.1(g) and Section 11.1(l), (d) any U.S. federal withholding Taxes imposed under FATCA, and (e) any U.S. backup withholding Taxes.
“Existing Credit Agreement” is defined in the introductory paragraph hereof.
“Existing Letters of Credit” means those certain Letters of Credit issued at the Company’s request for the account of the applicable Borrowers by the Applicable Issuer and listed on Schedule 1.3 hereof.
“Facility” means any of any Revolving Facility or the Term Loan Facility.
“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) of the Code.
“Federal Funds Rate” means the fluctuating interest rate per annum described in part (x) of clause (b) of the definition of Domestic Rate.



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“Financial Letter of Credit” means a Letter of Credit (whether standby or commercial) that is not, as reasonably determined by the Agent, a Performance Letter of Credit.
“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes.
“Foreign Subsidiary” means as to any particular corporation or other entity, any other corporation or limited liability company organized under the laws of and conducting business primarily in a jurisdiction which is not part of the United States, the Commonwealth of Puerto Rico or the United Kingdom and (i) at least 39% of the outstanding Voting Stock of which is at the time directly or indirectly owned by such parent corporation or limited liability company or by one or more other corporations or limited liability companies or other entities which are themselves subsidiaries of such parent corporation or limited liability company, (ii) the Company or a Subsidiary of the Company has effective control over such corporation or limited liability company, and (iii) is not designated as an “Unrestricted Subsidiary”. Foreign Subsidiaries include those Subsidiaries set forth on Schedule 5.2 under the heading “Foreign Subsidiaries.”
“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Applicable Issuer, such Defaulting Lender’s Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Applicable Issuer other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s Percentage of outstanding Swing Loans made by the Swing Line Lender other than Swing Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“GAAP” means generally accepted accounting principles as in effect from time to time.
“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantees” means instruments of guarantee from the Guarantors of the Obligations satisfactory in form and substance to the Agent.
“Guarantors” means those entities listed on Schedule 4.2 hereto and such other Restricted Subsidiaries (other than Restricted Subsidiaries which are not Wholly‑Owned Subsidiaries and any captive insurance company or captive surety company which is a Restricted Subsidiary) as the Required Lenders

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may from time to time designate as Guarantors in a written notice to the Company provided that such Subsidiary has assets in excess of $10,000,000 or such other Restricted Subsidiaries as the Company may from time to time designate.
“Hedging Liability” means the liability of any Borrower or any Subsidiary to any of the Lenders, or any Affiliates of such Lenders, in respect of any Interest Rate Protection and Other Hedging Agreement as such Borrower or such Subsidiary, as the case may be, may from time to time enter into with any one or more of the Lenders party to this Agreement or their Affiliates; provided, however, that, with respect to any Guarantor, Hedging Liability Guaranteed by such Guarantor shall exclude all Excluded Swap Obligations.
“HM Revenue & Customs” means the HM Revenue & Customs agency of the United Kingdom.
“Hostile Acquisition” means the acquisition of the capital stock or other equity interests of a Person through a tender offer or similar solicitation of the owners of such capital stock or other equity interests which has not been approved (prior to such acquisition) by resolutions of the Board of Directors of such Person or by similar action if such Person is not a corporation, and as to which such approval has not been withdrawn.
“Indebtedness for Borrowed Money” means for any Person (without duplication) all indebtedness created, assumed or incurred in any manner by such Person or in respect of which such Person is directly or indirectly liable, whether by guarantee, commitment to purchase, undertaking to maintain the solvency, liquidity or a balance sheet condition of the obligor, or otherwise representing (i) money borrowed (including by the issuance of debt securities), (ii) indebtedness for the deferred purchase price of property or services (other than trade accounts payable arising in the ordinary course of business and Earn‑Out Obligations), (iii) indebtedness secured by any Lien upon Property of such Person, whether or not such Person has assumed or become liable for the payment of such indebtedness but if such Person is not liable then such indebtedness shall be included at the lesser of the amount thereof or the fair market value of the Property securing same, (iv) Capitalized Lease Obligations of such Person and (v) all obligations of such Person on or with respect to letters of credit (other than letters of credit which support payment of obligations which do not constitute Indebtedness for Borrowed Money of any Person), and bankers’ acceptances. Neither obligations for the payment of deferred compensation benefits contemplated by the Company’s Voluntary Deferral Plan nor Performance Guarantees shall constitute Indebtedness for Borrowed Money.
“Indemnified Taxes” means (a) all Taxes other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Borrower or Guarantor under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Interest Coverage Ratio” means as at any date the same is to be determined the ratio of (i) Adjusted EBIT for the period of twelve calendar months then ending to (ii) Net Interest Expense for the same period.


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“Interest Expense” means, with reference to any period, the sum of all interest charges (including imputed interest charges with respect to Capitalized Lease Obligations and all amortization of debt discount and expense but excluding fees payable under Sections 3.1 and 3.2 hereof) and letter of credit fees and commissions of the Borrowers and the Restricted Subsidiaries for such period determined in accordance with GAAP, but interest paid through the issuance of securities to the holders of the indebtedness in question having a maturity of more than one year from the date of issuance and being of no higher ranking or priority than the indebtedness in question shall not be included in Interest Expense.
“Interest Period” means the period commencing on the date a Borrowing is advanced or continued through a new Interest Period and ending: (a) in the case of a Eurodollar Loan, 1, 2, 3, or 6 months thereafter and (b) in the case of a Swing Loan, on the date 1 to 5 Business Days thereafter as mutually agreed to by the Company and the Agent; provided, however, that:
(i)    no Interest Period shall extend beyond the final maturity date of the relevant Loans;
(ii)    no Interest Period with respect to any portion of the Term Loans shall extend beyond a date on which the Company is required to make a scheduled payment of principal on the Term Loans unless the sum of (a) the aggregate principal amount of Term Loans that are Domestic Rate Loans plus (b) the aggregate principal amount of Term Loans that are Eurodollar Loans with Interest Periods expiring on or before such date equals or exceeds the principal amount to be paid on the Term Loans on such payment date;
(iii)    whenever the last day of any Interest Period would otherwise be a day that is not a Business Day, the last day of such Interest Period shall be extended to the next succeeding Business Day, provided that, if such extension would cause the last day of an Interest Period for a Borrowing of Eurodollar Loans to occur in the following calendar month, the last day of such Interest Period shall be the immediately preceding Business Day; and
(iv)    for purposes of determining an Interest Period for a Borrowing of Eurodollar Loans, a month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month; provided, however, that if there is no numerically corresponding day in the month in which such an Interest Period is to end or if such an Interest Period begins on the last Business Day of a calendar month, then such Interest Period shall end on the last Business Day of the calendar month in which such Interest Period is to end.
“Interest Rate Protection and Other Hedging Agreements” means one or more of the following agreements entered into by one or more financial institutions:
(a)    interest rate protection agreements (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements),


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(b)    foreign exchange contracts, currency swap agreements or other, similar agreements or arrangements designed to protect against fluctuations in currency values and/or
(c)    other types of hedging agreements from time to time.
“Issuer” means (i) BMO Harris Bank N.A. and any lender party to the Existing Credit Agreement who issued an Existing Letter of Credit, (ii) Bank of Montreal, Bank of America, N.A., JPMorgan Chase Bank, N.A. and US Bank National Association, and (iii) any other Lender who agrees in writing to be an Issuer and is approved by the Required Lenders and the Company as an issuer of Letters of Credit to a particular Borrower or Borrowers hereunder or for use in a particular jurisdiction.
“L/C Documents” means the Letters of Credit, any draft or other document presented in connection with a drawing thereunder, the Applications and this Agreement.
“L/C Obligations” means the aggregate undrawn face amounts of all outstanding Letters of Credit and all unpaid Reimbursement Obligations.
“L/C Participation Fee” is defined in Section 3.3.
“L/C Sublimit” means $250,000,000, as may be reduced pursuant to the terms hereof.
““Lenders” means and includes Bank of Montreal and the other Persons listed on Schedule 1.1. and any other Person that shall have become party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance. Unless the context requires otherwise, the term “Lenders” includes the Swing Line Lender.
“Letter of Credit” is defined in Section 1.3(a) hereof and shall include Existing Letters of Credit.
“Leverage Ratio” means, as of any time the same is to be determined, the ratio of (x) Total Funded Debt minus Excess Cash as of such date, to (y) Adjusted EBITDA for the period of twelve calendar months then ending.
“LIBOR” means, for an Interest Period, (a) the LIBOR Index Rate for such Interest Period, if such rate is available, and (b) if the LIBOR Index Rate cannot be determined, the average rate of interest per annum (rounded upwards, if necessary, to the nearest one hundred‑thousandth of a percentage point) at which deposits in the relevant currency in immediately available funds are offered to the Agent at 11:00 a.m. (London, England time) two (2) Business Days before the beginning of such Interest Period by major banks in the interbank eurocurrency market for delivery on the first day of and for a period equal to such Interest Period in an amount equal or comparable to the principal amount of the Borrowing in such currency scheduled to be made by the Agent. The Agent will provide the Company with evidence of such rate upon its request.


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“LIBOR Index Rate” means, for any Interest Period, the rate per annum (rounded upwards, if necessary, to the next higher one hundred‑thousandth of a percentage point) for deposits in the relevant currency for a period equal to such Interest Period, which appears on the LIBOR01 Page (or any other appropriate page for the applicable currency) as of 11:00 a.m. (London, England time) on the day two (2) Business Days before the commencement of such Interest Period.
“LIBOR01 Page” means the display designated as “LIBOR01 Page” on the Reuters Service (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as reasonably determined by the Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market).
“LIBOR Quoted Rate” means, for any day, the rate per annum equal to the quotient of (i) the rate per annum (rounded upwards, if necessary, to the next higher one hundred‑thousandth of a percentage point) for deposits in the relevant currency for a one‑month interest period which appears on the LIBOR01 Page (or any other appropriate page for the applicable currency) as of 11:00 a.m. (London, England time) on such day (or, if such day is not a Business Day, on the immediately preceding Business Day) divided by (ii) one (1) minus the Eurocurrency Reserve Percentage.
“Lien” means any mortgage, lien, pledge, charge, hypothec or security interest of any kind or nature (whether fixed or floating or of any ambulatory or non‑crystallized nature or otherwise) in respect of any Property, including the interest of a vendor or lessor under any conditional sale, Capital Lease or other title retention arrangement.
“Loan” means any Revolving Loan, Swing Loan or Term Loan, whether outstanding as a Domestic Rate Loans or Eurodollar Loans or otherwise, each of which is a “type” of Loan hereunder.
“Loan Documents” means this Agreement, the Notes (if any), the L/C Documents, the Guarantees, the Collateral Documents, and each other instrument or document to be delivered hereunder or thereunder or otherwise in connection therewith and any reference to any of the foregoing shall be deemed to include any amendment, novation, supplement substitution or replacement from time to time of any of the foregoing, however fundamental.
“Material Adverse Effect” means, with respect to any act, omission or occurrence, any of the following consequences:
(a)    the material impairment of the ability of the Company or of the Company and the Guarantors taken as a whole to pay or perform their obligations under or pursuant to the Loan Documents;


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(b)    any material adverse change in the assets, liabilities, financial condition, operations or business prospects of the Company and its Restricted Subsidiaries taken as whole, or
(c)    any material impairment in the right of the Company and its Restricted Subsidiaries taken as whole to carry on their business substantially as now conducted.
“Material Restricted Subsidiary” means, as of any date of determination, any Restricted Subsidiary with a Net Worth at such time greater than $10,000,000.
“Maximum Leverage Ratio” means 3.0 to 1.0; provided, that in the event that the Company and/or any Restricted Subsidiary consummates a Permitted Acquisition where the total amount expended by the Company and the Restricted Subsidiaries exceed $100,000,000, then, the Maximum Leverage Ratio shall be 3.25 to 1.0 as of the last day of the fiscal quarter in which the Permitted Acquisition is consummated and as of last day of the immediately three (3) fiscal quarters following the consummation of such Permitted Acquisition.
“Multicurrency Commitment” means, as to any Multicurrency Lender and subject to Section 1.1(c) hereof, the obligation of such Multicurrency Lender to make Multicurrency Revolving Loans in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Multicurrency Lender’s name on Schedule 1.1 attached hereto and made a part hereof, as the same may be increased, reduced or modified at any time or from time to time pursuant to the terms hereof. The Borrowers and the Multicurrency Lenders acknowledge and agree that the Multicurrency Commitments of the Multicurrency Lenders aggregate the U.S. Dollar Equivalent of $710,454,545.46 on the date hereof.
“Multicurrency Lenders” means and includes Bank of Montreal and each financial institution from time to time party to this agreement with a Multicurrency Commitment as set forth on Schedule 1.1 attached hereto, including each assignee Lender of a Multicurrency Lender pursuant to Section 11.17 hereof.
“Multicurrency Revolving Facility” means the credit facility for making Multicurrency Revolving Loans as set forth herein.
“Multicurrency Revolver Percentage” means, for each Multicurrency Lender, the percentage of the Multicurrency Commitments represented by such Multicurrency Lender’s Multicurrency Commitment or, if the Multicurrency Commitments have been terminated, the percentage held by such Multicurrency Lender of the aggregate principal amount of all Multicurrency Revolving Loans.
“Multicurrency Revolving Loan” is defined in Section 1.1(b) hereof and, as so defined, includes a Eurodollar Loan made to a Borrower, which is a “type” of Revolving Loan hereunder.
“Moody’s” means Moody’s Investors Service, Inc.


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“Net Cash Proceeds” means, as applicable, (a) with respect to any Disposition by a Person, cash and cash equivalent proceeds received by or for such Person’s account, net of (i) reasonable direct costs relating to such Disposition and (ii) sale, use or other transactional taxes paid or payable by such Person as a direct result of such Disposition and (b) with respect to any Event of Loss of a Person, cash and cash equivalent proceeds received by or for such Person’s account (whether as a result of payments made under any applicable insurance policy therefor or in connection with condemnation proceedings or otherwise), net of reasonable direct costs incurred in connection with the collection of such proceeds, awards or other payments.
“Net Income” for any period means the net income of the Company and the Restricted Subsidiaries for such period computed on a consolidated basis in accordance with GAAP and, without limiting the foregoing, after deduction from gross income of all expenses and provisions, including provisions for taxes on or measured by income, but excluding any gains or losses on the sale or other disposition of investments or fixed or capital assets, any extraordinary gains and losses, the cumulative effect of accounting changes (as that term is defined under GAAP) any taxes on such excluded gains, and any tax deductions or credits on account of any such excluded losses.
“Net Interest Expense” means, for any period, Interest Expense less all interest income received by the Company and its Restricted Subsidiaries during such period, as determined on a consolidated basis in accordance with GAAP.
“Net Worth” means, as of any time the same is to be determined, the total shareholders’ equity (including capital stock, additional paid‑in‑capital, warrants, accumulated other comprehensive income (as defined under GAAP) and retained earnings but after deducting treasury stock and, excluding minority interests in Restricted Subsidiaries) which would appear on the balance sheet of a Restricted Subsidiary or of the Company and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP.
“Non‑Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all affected Lenders in accordance with the terms of Section 11.4 and (b) has been approved by the Required Lenders.
“Non‑Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
“Notes” is defined in Section 3.8(d) hereof.
“Obligations” shall mean all obligations of the Borrowers to pay principal and interest on the Loans, all Reimbursement Obligations owing under the Applications, all fees and charges payable hereunder, and all other payment obligations of the Borrowers or any Guarantor arising under or in relation to any Loan Document, in each case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired (including interest and fees accruing during the pendency of any proceeding under any Debtor Relief Law, regardless of whether allowed or allowable in such proceeding).

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“OFAC” means the United States Department of Treasury Office of Foreign Assets Control.
“OFAC Event” means the event specified in Section 7.9(c) hereof.
“OFAC Sanctions Programs” means all laws, regulations, and Executive Orders administered by OFAC, including without limitation, the Bank Secrecy Act, anti‑money laundering laws (including, without limitation, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107‑56 (a/k/a the USA Patriot Act)), and all economic and trade sanction programs administered by OFAC, any and all similar United States federal laws, regulations or Executive Orders, and any similar laws, regulators or orders adopted by any State within the United States.
“OFAC SDN List” means the list of the Specially Designated Nationals and Blocked Persons maintained by OFAC.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment, grant of a participation, designation of a new office for receiving payments by or on account of the Borrower or other transfer (other than an assignment made pursuant to Section 2.11).
“Participant” has the meaning assigned to such term in clause (d) of Section 11.16.
“Participant Register” has the meaning specified in clause (d) of Section 11.16.
“Participating Interest” is defined in Section 1.3(d) hereof.
“Participating Lender” is defined in Section 1.3(d) hereof.
“Participating Member State” means each State so described in any EMU Legislation.
“Percentage” means for any Lender its Multicurrency Percentage, Revolver Percentage, Term Loan or U.S. Revolver Percentage, as applicable; and where the term “Percentage” is applied on an aggregate basis, such aggregate percentage shall be calculated by aggregating the separate components of the Revolver Percentage and Term Loan Percentage, and expressing such components on a single percentage basis.

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“Performance Guarantees” means, in respect of the Company or any of the Restricted Subsidiaries, contingent obligations arising from the issuance of performance guarantees, assurances, indemnities, bonds, letters of credit, or similar agreements in the ordinary course of business in respect of the contracts (other than contracts for Indebtedness for Borrowed Money) of the Company, any Restricted Subsidiary, any Person in which the Company or a Restricted Subsidiary has an equity interest.
“Performance Letters of Credit” means a Letter of Credit that, as reasonably determined by the Agent, assures that the applicable Borrower or Subsidiary will fulfill a contractual non‑financial obligation.
“Permitted Acquisition” means any Acquisition with respect to which all of the following conditions shall have been satisfied:
(a)    the Acquired Business has its primary operations within the United States of America, Canada or Europe;
(b)    the Acquired Business is in an Eligible Line of Business or, if such Acquired Business is not in an Eligible Line of Business, then the aggregate consideration (including as such consideration any indebtedness of the Acquired Business assumed or guaranteed by the Company or a Restricted Subsidiary and deferred payment obligations) for such Acquired Business shall not exceed $250,000,000;
(c)    the Acquisition shall not be a Hostile Acquisition;
(d)    if the aggregate consideration for such Acquisition is greater than or equal to $75,000,000 (including as consideration all deferred payment obligations but excluding any related Earn‑Out Obligations), the financial statements of the Acquired Business for the most recently completed fiscal year of such Acquired Business shall have been audited or reviewed by one of the “Big Four” accounting firms or by another independent accounting firm of national or regional repute or otherwise reasonably satisfactory to the Agent, or if such financial statements have not been audited by such an accounting firm, (i) such financial statements shall have been approved by the Agent and (ii) the Acquired Business has undergone a successful so called businessman’s review by one of the “Big Four” accounting firms as part of the Company’s due diligence on the Acquisition;
(e)    if the aggregate consideration (including as such consideration any indebtedness of the Acquired Business assumed or guaranteed by the Company or a Restricted Subsidiary) for such Acquisition is greater than or equal to $50,000,000 (including as consideration all deferred payment obligations and a reasonable estimate (satisfactory to the Agent) of any related Earn‑Out Obligations), after giving effect to the Acquisition the Borrowers shall have Unused Commitments of not less than $100,000,000; and


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(f)    after giving effect to the Acquisition, (i) no Default or Event of Default shall exist, including with respect to the covenants contained in Sections 7.8 hereof on a pro forma basis, and (ii) the Company’s Leverage Ratio on a pro forma basis as of the last day of the last fiscal quarter for which financial statements have been delivered is at least 0.25 to 1.0 below the Maximum Leverage Ratio in effect at the time of such Acquisition (including any increases to the Maximum Leverage Ratio as a result of such Acquisition). Such Acquisition shall be deemed to have occurred as of the date the Company enters into a definite agreement with respect to such Acquisition.
“Permitted Investments in Domestic Strategic Ventures” means any investment by the Company or any Restricted Subsidiary in a Strategic Venture so long as all the following conditions have been satisfied:
(a)    such investment is in a Strategic Venture organized within and conducting more than fifty percent of its business in the United States of America;
(b)    no Default or Event of Default exists or would exist after giving effect to such investment; and
(c)    the total amount expended by the Company and its Restricted Subsidiaries for any such investment does not exceed the greater of (i) $100,000,000 and (ii) 20% of Tangible Net Worth determined at the time the Company or such Restricted Subsidiary enters into a definitive agreement for such investment unless the Required Lenders otherwise agree in writing.
“Person” shall mean any person, firm, corporation, limited liability company, partnership, joint venture or other entity.
“Property” shall mean, as to any Person, all types of real, personal, tangible, intangible or mixed property owned by such Person whether or not included in the most recent balance sheet of such Person and its subsidiaries under GAAP.
“Quoted Rate” is defined in Section 1.8(c) hereof.
“Recipient ” means (a) the Agent, (b) any Lender, and (c) any Issuer, as applicable.
“Reimbursement Obligations” is defined in Section 1.3(c) hereof.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.
“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders. To the extent provided in the last paragraph of Section 11.4, the Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

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“Restricted Payments” is defined in Section 7.16 hereof.
“Restricted Subsidiaries ” means those Subsidiaries designated as such on Schedule 5.2 hereof and all other Subsidiaries becoming Restricted Subsidiaries pursuant hereto. Any corporation or other entity which is a Subsidiary but which is not organized under the laws of, and conducts business primarily in a jurisdiction which is not part of, a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or the United Kingdom is not a Restricted Subsidiary.
“Revolver Percentage” means, for each Lender, the percentage of the total Aggregate Revolving Commitments represented by such Lender’s Aggregate Revolving Commitment or, if the Aggregate Revolving Commitments have been terminated or expired, the percentage of the total Revolving Credit Exposure then outstanding held by such Lender.
“Revolving Credit Exposure” means, at any time, the aggregate principal amount of Revolving Loans, Swing Loans and L/C Obligations outstanding at such time to all Lenders; and

“Revolving Credit Exposure” , as to any Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Loans and such Lender’s participation in L/C Obligations and Swing Loans at such time.
“Revolving Credit Notes” is defined in Section 3.8(d) hereof.
“Revolving Credit Termination Date” means the date that is five (5) years from the Closing Date or such earlier date on which the Aggregate Revolving Commitments are terminated in whole pursuant to Sections 3.5, 3.6, 8.2 or 8.3 hereof.
“Revolving Facility” means either the Multicurrency Credit Facility or the U.S. Dollar Credit Facility; and “Revolving Facilities” means both the Multicurrency Credit Facility and the U.S. Dollar Credit Facility.
“Revolving Loans” means collectively Multicurrency Revolving Loans and a U.S. Revolving Loans.
“ Sanctions ” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
“ Sanctioned Country ” means, at any time, a country or territory which is the subject or target of any Sanctions.
“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, by the United Nations Security

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Council, the European Union or any EU member state, or (b) any Person operating, organized or resident in a Sanctioned Country.
“Side Letter” means that certain letter dated the date hereof from the Company to the Agent, as the same may be supplemented or amended from time to time.
“S&P” means Standard & Poor’s Ratings Services Group, a division of The McGraw‑Hill Companies, Inc.
“Strategic Ventures” means joint ventures, limited liability companies, partnerships, corporations or similar pooling of efforts entered into for the purpose of expanding the mechanical, electrical, industrial and/or facilities services (or natural extensions thereof) businesses of the Company or any Restricted Subsidiary or entering or expanding a business related to such businesses and includes Restricted Subsidiaries that are not Guarantors. A Restricted Subsidiary which is a Guarantor is not a Strategic Venture.
“Sublimits” means the L/C Sublimit, the Swing Sublimit and the UK Borrowers Sublimit.
“Subsidiary” means, as to any particular parent corporation or other entity, any other entity at least 50.1% of the outstanding Voting Stock of which is at the time directly or indirectly owned by such parent corporation or limited liability company or by any one or more other corporations or limited liability companies or other entities which are themselves subsidiaries of such parent corporation or limited liability company.
“Swap Obligation ” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
“Swing Line” means the credit facility for making one or more Swing Loans described in Section 1.8 hereof.
“Swing Line Lender” means Bank of Montreal, acting in its capacity as the Lender of Swing Loans hereunder, or any successor Lender acting in such capacity appointed pursuant to Section 11.17 hereof.
“Swing Line Sublimit” means $35,000,000, as reduced pursuant to the terms hereof.
“Swing Loan” and “Swing Loans” each is defined in Section 1.8 hereof.
“Swing Note” is defined in Section 3.8(d) hereof.
“Tangible Net Worth” means, at any time the same is to be determined, the Net Worth of the Company and its Restricted Subsidiaries determined on a consolidated basis less the sum of (a) all notes receivable from officers and employees of the Company and its Restricted Subsidiaries, (b) the aggregate book value of all assets which would be classified as intangible assets under GAAP, including, without limitation,

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goodwill, patents, trademarks, trade names, copyrights, franchises and deferred charges (including, without limitation, unamortized debt discount and expense, organization costs and deferred research and development expense) and similar assets and (c) the write‑up of assets above cost.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Loan” is defined in Section 1.1 and, as so defined, includes a Domestic Rate Loan or a Eurodollar Loan in each case made to the Company, each of which is a “type” of Term Loan hereunder.
“Term Loan Commitment” means, as to any Lender, the obligation of such Lender to make its Term Loan on the Closing Date in the principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 1.1 attached hereto and made a part hereof. The Company and the Lenders acknowledge and agree that the Term Loan Commitments of the Lenders aggregate $350,000,000 on the date hereof.
“Term Loan Facility”  means the credit facility for the Term Loans described in Section 1.2.
“Term Loan Maturity Date” means the date that is five (5) years from the Closing Date.
“Term Loan Percentage” means, for each Lender, the percentage of the Term Loan Commitments represented by such Lender’s Term Loan Commitment or, if the Term Loan Commitments have been terminated or have expired, the percentage held by such Lender of the aggregate principal amount of all Term Loans then outstanding.
“Term Note” is defined in Section 3.8(d).
“Third Stage” means third stage of European economic and monetary union pursuant to the Treaty on European Union.
“Total Credit Exposure” means, as to any Lender at any time, the unused Commitments, Revolving Credit Exposure and outstanding Term Loans of such Lender at such time.
“Total Funded Debt” means, at any time the same is to be determined, the aggregate of all Indebtedness for Borrowed Money of the Company and its Restricted Subsidiaries at such time, including all Indebtedness for Borrowed Money of any other Person which is directly or indirectly guaranteed by the Company or any of its Restricted Subsidiaries or which the Company or any of its Restricted Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which the Company or any of its Restricted Subsidiaries has otherwise assured a creditor against loss, it being understood that pursuant to Section 9.4 hereof, Total Funded Debt shall not include Indebtedness for Borrowed Money relating to Capital Leases as permitted by Section 7.10(m) hereof unless the parties agree to accommodate a change in GAAP.

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“Treaty on European Union” means the Treaty of Rome of March 25, 1957, as amended by the Single European Act of 1986 and the Maastricht Treaty (which was signed at Maastricht on February 7, 1992, and came into force on November 1, 1993, as amended from time to time).
“U.K. Borrowers” means and includes EMCOR UK and such other Restricted Subsidiaries organized under the laws of the United Kingdom as may from time to time be designated as such in writing by the Company and approved as such in writing by all Lenders (but subject to such conditions and limitations as either the Company or the Lenders may impose).
“U.K. Borrowers Sublimit” is defined in Section 1.1(c)(v) hereof.
“U.K. Subsidiaries” means the U.K. Borrowers and such other Subsidiaries organized under the laws of the United Kingdom.
“U.S. Borrowers” mean the Company and such other Restricted Subsidiaries organized under the laws of a state of the United States of America, the District of Columbia or the Commonwealth of Puerto Rico as may from time to time be designated as such in writing by the Company and approved as such in writing by all Lenders (but subject to such conditions and limitations as either the Company or Lenders may impose).
“U.S. Dollars” or “$” means lawful currency of the United States of America.
“U.S. Dollar Commitment” means, as to any U.S. Lender and subject to Section 1.1(c) hereof, the obligation of such U.S. Lender to make U.S. Revolving Loans, and to participate in Swing Loans and Letters of Credit issued for the account of a U.S. Borrower hereunder in an aggregate principal or face amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 1.1 attached hereto and made a part hereof, as the same may be increased, reduced or modified at any time or from time to time pursuant to the terms hereof. The Company and the U.S. Lenders acknowledge and agree that the U.S. Dollar Commitments of the U.S. Lenders aggregate $750,000,000 on the date hereof.
“U.S. Dollar Equivalent” means the amount of U.S. Dollars which would be realized by converting an Alternative Currency into U.S. Dollars in the spot market at the exchange rate quoted by the Agent, at approximately 11:00 a.m. (London time) on the date on which a computation thereof is to be made, to major banks in the interbank foreign exchange market for the purchase of U.S. Dollars for such Alternative Currency.
“U.S. Lenders” means and includes Bank of Montreal and the other financial institutions from time to time party to this agreement with a U.S. Dollar Commitment as set forth on Schedule 1.1 attached hereto, including each assignee Lender of a U.S. Lender pursuant to Section 11.17 hereof, and unless the context otherwise requires, the Swing Line Lender.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

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“U.S. Revolving Facility” means the credit facility for making U.S. Revolving Loans and Swing Loans and issuing Letters of Credit as set forth herein.
“U.S. Revolving Credit Exposure” means, at any time, the aggregate principal amount of U.S. Revolving Loans, Swing Loans and L/C Obligations for all U.S. Lenders outstanding at such time; and the “U.S. Revolving Credit Exposure” for any U.S. Lender at any time means the aggregate principal amount of such Lender’s outstanding U.S. Revolving Loans and its participation in L/C Obligations and Swing Loans at such time.
“U.S. Revolving Loan” is defined in Section 1.1(a) hereof and, as so defined, includes a Domestic Rate Loan or a Eurodollar Loan in each case made to the U.S. Borrower, each of which is a “type” of Revolving Loan hereunder.
“U.S. Revolver Percentage” means, for each U.S. Lender, the percentage of the U.S. Dollar Commitments represented by such U.S. Lender’s U.S. Dollar Commitment or, if the U.S. Dollar Commitments have been terminated, the percentage held by such U.S. Lender (including through participation interests in Reimbursement Obligations) of the aggregate principal amount of all U.S. Revolving Loans and L/C Obligations then outstanding.
“U.S. Subsidiaries” means the Subsidiaries of the Company organized under the laws of a state of the United States of America or under the laws of the District of Columbia as may from time to time be designated as such in writing by the Company and approved as such in writing by all Lenders (but subject to such conditions and limitations as either the Company or Lenders may impose); provided, that U.S. Subsidiaries shall exclude Subsidiaries described in clause (ii) of the definition of CFC.
“U.S. Tax Compliance Certificate” has the meaning assigned to such term in subsection (f) of Section 11.1.
“Unrestricted Subsidiaries ” means those Subsidiaries designated as such on Schedule 5.2 hereof.
“Unused Commitments” means, at any time, the difference between the Aggregate Revolving Commitments then in effect and the aggregate outstanding principal amount of Revolving Loans and L/C Obligations.
“Voluntary Deferral Plan” means the Company’s deferred compensation plan for employees of the Company and its Subsidiaries that are eligible to participate in such plan and includes, in certain circumstances, matching contributions from the Company.
“Voting Stock” of any Person means capital stock or other equity interests of any class or classes (however designated) having ordinary power for the election of directors of such Person, other than stock having such power only by reason of the happening of a contingency.
“Welfare Plan” means a “welfare plan” as defined in Section 3(l) of ERISA.

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“Wholly‑Owned Subsidiary” means a Subsidiary of which all of the issued and outstanding shares of capital stock (other than directors’ qualifying shares as required by law and other than shares held by others for licensing purposes) or other equity interests are owned by the Company and/or one or more wholly‑owned subsidiaries within the meaning of this definition.
“Withholding Agent” means any Borrower or Guarantor and the Agent.
Section 9.2.      Interpretation .     The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined. The words “hereof” , “herein” , and “hereunder” and words of like import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All references to time of day herein are references to Chicago, Illinois time unless otherwise specifically provided. Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent with the specific provisions of this Agreement.
Section 9.3.      Capital Stock     . All references in this Agreement to “capital stock” shall be deemed to include a reference to shares and all references to “stockholders” shall be deemed to include references to shareholders (where appropriate).
Section 9.4.    Change in Accounting Principles     . If, after the date of this Agreement, there shall occur any change in GAAP from those used in the preparation of the financial statements referred to in Section 5.5 hereof and such change shall result in a change in the method of calculation of any financial covenant, standard or term found in this Agreement, either the Company or the Required Lenders may by notice to the Lenders and the Company, respectively, require that the Lenders and the Company negotiate in good faith to amend such covenants, standards, and terms so as equitably to reflect such change in accounting principles, with the desired result being that the criteria for evaluating the financial condition of the Company and its Subsidiaries shall be the same as if such change had not been made (it being understood that the refusal by the Company to pay a fee in connection with an amendment to the financial covenants resulting solely from a change in GAAP pursuant to this Section 9.4 shall not be deemed to be in bad faith). No delay by the Company or the Required Lenders in requiring such negotiation shall limit their right to so require such a negotiation at any time after such a change in accounting principles. Until any such covenant, standard, or term is amended in accordance with this Section 9.4, such covenants, standard or terms shall be computed and determined in accordance with GAAP in effect prior to such change in accounting principles. Without limiting the generality of the foregoing, the Company shall neither be deemed to be in compliance with any financial covenant hereunder nor out of compliance with any financial covenant hereunder if such state of compliance or noncompliance, as the case may be, would not exist but for the occurrence of a change in accounting principles after the date hereof.
SECTION 10.
THE AGENT    .
Section 10.1.
Appointment and Authority     . Each of the Lenders and the Issuers hereby

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irrevocably appoints Bank of Montreal to act on its behalf as the Agent hereunder and under the other Loan Documents and authorizes the Agent to take such actions on its behalf and to exercise such powers as are delegated to the Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Section 10 (other than Section 10.6 with respect to appointing a successor Agent as described therein and Section 10.12) are solely for the benefit of the Agent, the Lenders and the Issuers, and no Borrower or any Restricted Subsidiary shall have rights as a third‑party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
Section 10.2.    Rights as a Lender     . The Person serving as the Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Agent hereunder and without any duty to account therefor to the Lenders.
Section 10.3.    Action by Agent; Exculpatory Provisions. (a) The Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Agent and its Related Parties:
(i)    shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(ii)    shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law. The Agent shall in all cases be fully justified in failing or refusing to act hereunder or under any other Loan Document unless it first receives any further assurances of its indemnification from the Lenders that it may require, including prepayment of any related expenses and any other

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protection it requires against any and all costs, expense, and liability which may be incurred by it by reason of taking or continuing to take any such action; and
(iii)    shall not, except as expressly set forth herein and in the other Loan Documents, have any duty or responsibility to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower, Restricted Subsidiary or any of their Affiliates that is communicated to or obtained by the Person serving as the Agent or any of its Affiliates in any capacity.
(b)    Neither the Agent nor any of its Related Parties shall be liable for any action taken or not taken by the Agent under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby or thereby (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 3.7 (with respect to application of proceeds), 8.2, 8.3, 8.4, and 11.4), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. Any such action taken or failure to act pursuant to the foregoing shall be binding on all Lenders. The Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Agent in writing by a Borrower, a Lender, or an Issuer.
(c)    Neither the Agent nor any of its Related Parties shall be responsible for or have any duty or obligation to any Lender or Issuer or participant or any other Person to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Section 6.1 or 6.2 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agent.
Section 10.4.    Reliance by Agent     . The Agent shall be entitled to rely upon, and shall be fully protected in relying and shall not incur any liability for relying upon, any notice, request, certificate, communication, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall be fully protected in relying and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuer, the Agent may presume that such condition is satisfactory to such Lender or Issuer unless the Agent shall

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have received notice to the contrary from such Lender or Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
Section 10.5.    Delegation of Duties     . The Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub‑agents appointed by the Agent. The Agent and any such sub‑agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Section shall apply to any such sub‑agent and to the Related Parties of the Agent and any such sub‑agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided hereby as well as activities as Agent. The Agent shall not be responsible for the negligence or misconduct of any sub‑agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Agent acted with gross negligence or willful misconduct in the selection of such sub‑agents.
Section 10.6.    Resignation of Agent     . (a) The Agent may at any time give notice of its resignation to the Lenders, the Issuers and the Company. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Company, to appoint a successor, which shall be a bank with an office in the United States of America, or an Affiliate of any such bank with an office in the United States of America. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date” ), then the retiring Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuers, appoint a successor Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.
(b)    With effect from the Resignation Effective Date, (i) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents, and (ii) except for any indemnity payments owed to the retiring or removed Agent, all payments, communications and determinations provided to be made by, to or through the Agent shall instead be made by or to each Lender and Issuer directly, until such time, if any, as the Required Lenders appoint a successor Agent as provided for above. If on the Resignation Effective Date no successor has been appointed and accepted such appointment, the Agent’s rights in the Collateral Documents shall be assigned without representation, recourse or warranty to the Lenders and Issuer as their interests may appear. Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Agent (other than any rights to indemnity payments or other amounts owed to the retiring Agent), and the retiring Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrowers to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After the retiring Agent’s resignation hereunder and under the other Loan Documents, the provisions of this

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Section 10 and Section 11.5 shall continue in effect for the benefit of such retiring Agent, its sub‑agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Agent was acting as Agent.
Section 10.7.    Non‑Reliance on Agent and Other Lenders     . Each Lender and Issuer acknowledges that it has, independently and without reliance upon the Agent or any other Lender or any of their Related Parties 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 and Issuer also acknowledges that it will, independently and without reliance upon the Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
Section 10.8.    Issuer and Swing Line Lender.      The Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the Swing Line Lender shall act on behalf of the Lenders with respect to the Swing Loans made hereunder. The Issuers and the Swing Line Lender shall each have all of the benefits and immunities (i) provided to the Agent in this Section 10 with respect to any acts taken or omissions suffered by such Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the Applications pertaining to such Letters of Credit or by the Swing Line Lender in connection with Swing Loans made or to be made hereunder as fully as if the term “Agent”, as used in this Section 10, included the Issuers and the Swing Line Lender with respect to such acts or omissions and (ii) as additionally provided in this Agreement with respect to such Issuer or Swing Line Lender, as applicable. Any resignation by the Person then acting as Agent pursuant to Section 10.6 shall also constitute its resignation or the resignation of its Affiliate as Issuer and Swing Line Lender except as it may otherwise agree. If such Person then acting as an Issuer so resigns, it shall retain all the rights, powers, privileges and duties of an Issuer hereunder with respect to all Letters of Credit outstanding that have been issued by such Issuer as of the effective date of its resignation as Issuer and all L/C Obligations with respect thereto, including the right to require the Lenders to make Loans or fund risk participations in Reimbursement Obligations pursuant to Section 1.8. If such Person then acting as Swing Line Lender resigns, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Loans or fund risk participations in outstanding Swing Loans pursuant to Section 1.8. Upon the appointment by the Company of a successor Issuer or Swing Line Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuer or Swing Line Lender, as applicable (other than any rights to indemnity payments or other amounts that remain owing to the retiring Issuer or Swing Line Lender), and (ii) the retiring Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents other than with respect to its outstanding Letters of Credit and Swing Loans, and (iii) upon the request of the resigning Issuer, the successor Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the resigning Issuer to effectively assume the obligations of the resigning Issuer with respect to such Letters of Credit.

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Section 10.9.    Hedging Liability     . By virtue of a Lender’s execution of this Agreement or an Assignment and Acceptance pursuant to Section 11.17, as the case may be, any Affiliate of such Lender with whom any Borrower or any Subsidiary has entered into an agreement creating Hedging Liability shall be deemed a Lender party hereto for purposes of any reference in a Loan Document to the parties for whom the Agent is acting, it being understood and agreed that the rights and benefits of such Affiliate under the Loan Documents consist exclusively of such Affiliate’s right to share in payments and collections out of the Collateral and the Guarantees as more fully set forth in Section 3.7. In connection with any such distribution of payments and collections, or any request for the release of the Guarantees and the Agent’s Liens in connection with the termination of the Commitments and the payment in full of the Obligations, the Agent shall be entitled to assume no amounts are due to any Lender or its Affiliate with respect to Hedging Liability unless such Lender has notified the Agent in writing of the amount of any such liability owed to it or its Affiliate prior to such distribution or payment or release of Guarantees and Liens.
Section 10.10.    Designation of Additional Agents     . The Agent shall have the continuing right, with the consent of the Company (such consent not to be unreasonably withheld or delayed) for purposes hereof, at any time and from time to time to designate one or more of the Lenders (and/or its or their Affiliates) as “syndication agents,” “documentation agents,” “book runners,” “lead arrangers,” “arrangers,” or other designations for purposes hereto, but such designation shall have no substantive effect, and such Lenders and their Affiliates shall have no additional powers, duties or responsibilities as a result thereof.
Section 10.11.    Authorization to Enter into, and Enforcement of, the Collateral Documents; Possession of Collateral     . The Agent is hereby irrevocably authorized by each of the Lenders and the Issuers to execute and deliver the Collateral Documents on behalf of each of the Lenders, the Issuers, and their Affiliates and to take such action and exercise such powers under the Collateral Documents as the Agent considers appropriate; provided that subject to the last paragraph of Section 11.4, the Agent shall not amend the Collateral Documents unless such amendment is agreed to in writing by the Required Lenders. Upon the occurrence of an Event of Default, the Agent shall take such action to enforce its Lien on the Collateral and to preserve and protect the Collateral as may be directed by the Required Lenders. Unless and until the Required Lenders give such direction, the Agent may (but shall not be obligated to) take or refrain from taking such actions as it deems appropriate and in the best interest of all the Lenders and Issuers. Each Lender and Issuer acknowledges and agrees that it will be bound by the terms and conditions of the Collateral Documents upon the execution and delivery thereof by the Agent. The Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Agent’s Lien thereon, or any certificate prepared by any Borrower or Restricted Subsidiary in connection therewith, nor shall the Agent be responsible or liable to the Lenders, the Issuers or their Affiliates for any failure to monitor or maintain any portion of the Collateral. The Lenders and Issuers hereby irrevocably authorize (and each of their Affiliates holding any Hedging Liability entitled to the benefits of the Collateral shall be deemed to authorize) the Agent, based upon the instruction of the Required Lenders, to credit bid and purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any sale thereof conducted by the Agent (or any security trustee therefore) under the provisions of the Uniform Commercial Code, including pursuant to Sections 9‑610 or 9‑620 of the Uniform Commercial Code, at any sale thereof

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conducted under the provisions of the United States Bankruptcy Code, including Section 363 of the United States Bankruptcy Code, or at any sale or foreclosure conducted by the Agent or any security trustee therefore (whether by judicial action or otherwise) in accordance with applicable law. Except as otherwise specifically provided for herein, no Lender, Issuer, or their Affiliates, other than the Agent, shall have the right to institute any suit, action or proceeding in equity or at law for the foreclosure or other realization upon any Collateral or for the execution of any trust or power in respect of the Collateral or for the appointment of a receiver or for the enforcement of any other remedy under the Collateral Documents; it being understood and intended that no one or more of the Lenders or Issuers or their Affiliates shall have any right in any manner whatsoever to affect, disturb or prejudice the Lien of the Agent (or any security trustee therefor) under the Collateral Documents by its or their action or to enforce any right thereunder, and that all proceedings at law or in equity shall be instituted, had, and maintained by the Agent (or its security trustee) in the manner provided for in the relevant Collateral Documents for the benefit of the Lenders, the Issuers, and their Affiliates. Each Lender and Issuer is hereby appointed agent for the purpose of perfecting the Agent’s security interest in assets which, in accordance with Article 9 of the Uniform Commercial Code or other applicable law can be perfected only by possession. Should any Lender or Issuer (other than the Agent) obtain possession of any Collateral, such Lender or Issuer shall notify the Agent thereof, and, promptly upon the Agent’s request therefor shall deliver such Collateral to the Agent or in accordance with the Agent’s instructions.
Section 10.12.    Authorization to Release, Limit or Subordinate Liens or to Release Guaranties      . The Agent is hereby irrevocably authorized by each of the Lenders, the Issuers, and their Affiliates to (a) release any Lien covering any Collateral that is sold, transferred, or otherwise disposed of in accordance with the terms and conditions of this Agreement and the relevant Collateral Documents (including a sale, transfer, or disposition permitted by the terms of Section 7.14 or Section 7.15 or which has otherwise been consented to in accordance with Section 11.4), (b) release or subordinate any Lien on Collateral consisting of goods financed with purchase money indebtedness or under a Capital Lease to the extent such purchase money indebtedness or Capitalized Lease Obligation, and the Lien securing the same, are permitted by Sections 7.10 and 7.11, (c) reduce or limit the amount of the indebtedness secured by any particular item of Collateral to an amount not less than the estimated value thereof to the extent necessary to reduce mortgage registry, filing and similar tax, (d) release Liens on the Collateral following the Collateral Release Date or the termination or expiration of the Commitments and payment in full in cash of the Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit (other than Letters of Credit that have been Cash Collateralized to the reasonable satisfaction of the Agent and the relevant Issuer) and, if then due, Hedging Liability (other than Hedging Liability under any Interest Rate Protection and other Hedging Agreements as to which arrangements shall have been made that are reasonably satisfactory to the Lender (or such Lender’s Affiliate, if applicable) to which such Hedging Liability is owed), and (e) release any Restricted Subsidiary from its obligations as a Guarantor if such Person ceases to be a Restricted Subsidiary as a result of a transaction permitted under the Loan Documents. Upon the Agent’s request, the Required Lenders will confirm in writing the Agent’s authority to release or subordinate its interest in particular types or items of Property or to release any Person form its obligations as a Guarantor under the Loan Documents.

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Section 10.13.    Authorization of Agent to File Proofs of Claim      In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Borrower or Material Restricted Subsidiary, the Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a)    to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders, the Issuers and the Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuers and the Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuers and the Agent under the Loan Documents including, but not limited to, Sections 2.5, 2.8, 3.1, 3.3, and 11.5) allowed in such judicial proceeding; and
(b)    to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuer to make such payments to the Agent and, in the event that the Agent shall consent to the making of such payments directly to the Lenders and the Issuers, to pay to the Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agent and its agents and counsel, and any other amounts due the Agent under Sections 3.1, 3.3 and 11.5. Nothing contained herein shall be deemed to authorize the Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or Issuer or to authorize the Agent to vote in respect of the claim of any Lender or Issuer in any such proceeding.
SECTION 11.
MISCELLANEOUS    .
Section 11.1.    Withholding Taxes     .     (a)     Certain Defined Terms. For purposes of this Section, the term “Lender” includes any Issuer and the term “applicable law” includes FATCA.
(b)     Payments Free of Taxes. Any and all payments by or on account of any obligation of any Borrower or Guarantor under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Borrower or Guarantor shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under

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this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c)     Payment of Other Taxes by the Borrowers and Guarantors. The Borrowers and Guarantors shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Agent timely reimburse it for the payment of, any Other Taxes.
(d)     Indemnification by the Borrowers and Guarantors. The Borrowers and Guarantors shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail a description of such Indemnified Taxes and the amount of such payment or liability delivered to the Company by a Lender (with a copy to the Agent), or by the Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(e)     Indemnification by the Lenders. Each Lender shall severally indemnify the Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Borrower or Guarantor has not already indemnified the Agent for such Indemnified Taxes and without limiting the obligation of the Borrowers and Guarantors to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.16 relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Agent to the Lender from any other source against any amount due to the Agent under this subsection (e).
(f)     Evidence of Payments. As soon as practicable after any payment of Taxes by any Borrower or Guarantor to a Governmental Authority pursuant to this Section, such Borrower or Guarantor shall deliver to the Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Agent.
(g)     Status of Lenders. (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Company and the Agent, at the time or times reasonably requested by the Company or the Agent, such properly completed and executed documentation reasonably requested by the Company or the Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender,

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if reasonably requested by the Company or the Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Company or the Agent as will enable the Company or the Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 11.1(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender, (it being understood that providing any information currently required by any U.S. federal income tax withholding form shall not be considered prejudicial to the position of a Lender).
(ii)    Without limiting the generality of the foregoing,
(A)    any Lender that is a U.S. Person shall deliver to the Company and the Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Agent), executed originals of IRS Form W‑9 (or successor form) certifying that such Lender is exempt from U.S. federal backup withholding tax; provided , however, that if the Lender is a disregarded entity for U.S. federal income tax purposes, it shall provide the appropriate withholding form of its owner (together with appropriate supporting documentation);
(B)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Agent), whichever of the following is applicable:
(i)    in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W‑8BEN (or successor form) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W‑8BEN (or successor form) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(ii)    executed originals of IRS Form W‑8ECI (or successor form);
(iii)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate in a form acceptable to the Agent to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Company within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in

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Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate” ) and (y) executed originals of IRS Form W‑8BEN (or successor form); or
(iv)    to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W‑8IMY, accompanied by IRS Form W‑8ECI, IRS Form W‑8BEN, a U.S. Tax Compliance Certificate acceptable to the Agent, IRS Form W‑9, and/or other certification documents from each beneficial owner, as applicable (or successor form); provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate acceptable to the Agent on behalf of each such direct and indirect partner;
(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Company or the Agent to determine the withholding or deduction required to be made; and
(D)    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 Company and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Company or the 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 Company or the Agent as may be necessary for the Company and the 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 (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Agent in writing of its legal inability to do so.
(h)     Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out‑of‑pocket expenses (including Taxes) of

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such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this subsection (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this subsection (h) the payment of which would place the indemnified party in a less favorable net after‑Tax position than the indemnified party would have been in if the Tax subject to indemnification had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid. This subsection shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(i)     Agent. The Agent shall provide to the Company two duly‑signed, properly completed copies of the documentation prescribed in clause (i) or (ii) below, as applicable (together with all required attachments thereto): (i) IRS Form W‑9 or any successor thereto, or (ii) (A) IRS Form W‑8ECI or any successor thereto, and (B) with respect to payments received on account of any Lender, a U.S. branch withholding certificate on IRS Form W‑8IMY or any successor thereto evidencing its agreement with the Borrower to be treated as U.S. Person for U.S. federal withholding purposes. At any time thereafter, the Agent shall provide updated documentation previously provided (or a successor form thereto) when any documentation previously delivered has expired or become obsolete or invalid or otherwise upon the reasonable request of the Company.
(j)     Survival. Each party’s obligations under this Section shall survive the resignation or replacement of the Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
(k)     Timely Notification. With respect to a claim by a Recipient for indemnification or payment of additional amounts pursuant to this Section 11.1, the Borrower shall not be required to compensate such Recipient for any amount in respect of which the Recipient has received notice of claim, adjustment or assessment more than six (6) months prior to the date that such person notifies the Borrower of the event that gives rise to such claim; provided that, if the circumstance giving rise to such claim is retroactive, then such 6‑month period referred to above shall be extended to include the period of retroactive effect thereof.
(l)     Additional United Kingdom Withholding Tax Matters . (i) Subject to (ii) below, each Lender and each UK Borrower which makes a payment to such Lender shall cooperate in completing any procedural formalities necessary for such UK Borrower to obtain authorization to make such payment without withholding or deduction for Taxes imposed under the laws of the United Kingdom.



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(ii)    (A) A Lender on the day on which the U.K. Borrower initially requests a Borrowing hereunder or the issuance of a Letter of Credit that (x) holds a passport under the HMRC DT Treaty Passport scheme and (y) wishes such scheme to apply to this Agreement, shall promptly provide its scheme reference number and its jurisdiction of tax residence to each UK Borrower and the Agent; and
(B) a Lender which becomes a Lender hereunder after the date the U.K. Borrower requests the initial Borrowing or issuance of a Letter of Credit that (x) holds a passport under the HMRC DT Treaty Passport scheme and (y) wishes such scheme to apply to this Agreement, shall, upon becoming a Lender, provide its scheme reference number and its jurisdiction of tax residence to each UK Borrower and the Agent, and
(C) Upon satisfying either clause (A) or (B) above, such Lender shall have satisfied its obligation under paragraph (l)(i) above
(iii) If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with paragraph (l)(ii) above, the UK Borrower shall make a Borrower DTTP Filing with respect to such Lender, and shall promptly provide such Lender with a copy of such filing; provided that, if:
(A) each UK Borrower making a payment to such Lender has not made a Borrower DTTP Filing in respect of such Lender; or
(B) each UK Borrower making a payment to such Lender has made a Borrower DTTP Filing in respect of such Lender but:
(1) such Borrower DTTP Filing has been rejected by HM Revenue & Customs; or
(2) HM Revenue & Customs has not given such UK Borrower authority to make payments to such Lender without a deduction for tax within 60 days of the date of such Borrower DTTP Filing;
and in each case, such UK Borrower has notified that Lender in writing of either (1) or (2) above, then such Lender and such UK Borrower shall co-operate in completing any additional procedural formalities necessary for such UK Borrower to obtain authorization to make that payment without withholding or deduction for Taxes imposed under the laws of the United Kingdom.
(iv) If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with paragraph (l)(ii) above, no UK Borrower shall make a Borrower DTTP Filing or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment(s) or its participation in any Loan unless the Lender otherwise agrees.

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(v) Each UK Borrower shall, promptly on making a Borrower DTTP Filing, deliver a copy of such Borrower DTTP Filing to the Agent for delivery to the relevant Lender.
(vi) Each Lender shall notify the Borrower and Agent if it determines in its sole discretion that it is ceases to be entitled to claim the benefits of an income tax treaty to which the United Kingdom is a party with respect to payments made by any U.K. Borrower hereunder.
Section 11.2.    Holidays     . If any payment of principal or interest on any of the Loans or any fees shall fall due on a Saturday, Sunday or on another day which is a legal holiday for lenders in the State of Illinois, (i) interest at the rates such Loans bear for the period prior to maturity shall continue to accrue on such principal from the stated due date thereof to and including the next succeeding Business Day and (ii) such principal, interest and fees shall be payable on such succeeding Business Day.
Section 11.3.    No Waiver, Cumulative Remedies     . No delay or failure on the part of the Agent, any Issuer or any Lender or on the part of the Agent, any Issuer or any holder of any of the Obligations in the exercise of any power or right shall operate as a waiver thereof, nor as an acquiescence in any default nor shall any single or partial exercise of any power or right preclude any other or further exercise of any other power or right. The rights and remedies hereunder of the Agent, the Issuers, Lenders and of the holders of any of the Obligations are cumulative to, and not exclusive of, any rights or remedies which any of them would otherwise have.
Section 11.4.    Amendments.      Any provision of this Agreement or the other Loan Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by (a) the Borrowers, (b) the Required Lenders (except as otherwise stated below to require only the consent of the Lenders affected thereby), and (c) if the rights or duties of the Agent, the Issuers, or the Swing Line Lender are affected thereby, the Agent, the Issuers, or the Swing Line Lender, as applicable; provided that:
(i)    no amendment or waiver pursuant to this Section 11.4 shall (A) increase any Commitment of any Lender without the consent of such Lender or (B) reduce the amount of or postpone the date for any scheduled payment of any principal of (excluding any mandatory prepayments set forth in Section 3.5 herein) or interest on any Loan or of any Reimbursement Obligation or of any fee payable hereunder without the consent of the Lender to which such payment is owing or which has committed to make such Loan or Letter of Credit (or participate therein) hereunder; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the default rate provided in Section 1.9 or to waive any obligation of the Borrowers to pay interest or fees at the default rate as set forth therein or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest or any fee payable hereunder;



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(ii)    no amendment or waiver pursuant to this Section 11.4 shall, unless signed by each Lender, change the definition of Required Lenders, Collateral Release Conditions or Collateral Release Date, change the provisions of this Section 11.4, change Section 11.26 in a manner that would affect the ratable sharing of setoffs required thereby, change the application of payments contained in Section 3.7, release any material Guarantor or all or substantially all of the Collateral (except as otherwise provided for in the Loan Documents), or affect the number of Lenders required to take any action hereunder or under any other Loan Document;
(iii)    no amendment or waiver pursuant to this Section 11.4 shall, unless signed by (A) each Lender under the Revolving Facilities directly affected thereby, extend the Revolving Credit Termination Date, or (B) the Applicable Issuer, extend the stated expiration date of any Letter of Credit beyond the Revolving Credit Termination Date.
Notwithstanding anything to the contrary herein, (1) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender, (2) if the Agent and the Company have jointly identified an obvious error or any error or omission of a technical nature, in each case, in any provision of the Loan Documents, then the Agent and the Company shall be permitted to amend such provision, (3) guarantees, collateral security documents and related documents executed by the Borrowers or any other Restricted Subsidiary in connection with this Agreement may be in a form reasonably determined by the Agent and may be amended, supplemented or waived without the consent of any Lender if such amendment, supplement or waiver is delivered in order to (x) comply with local law or advice of local counsel, (y) cure ambiguities, omissions, mistakes or defects or (z) cause such guarantee, collateral security document or other document to be consistent with this Agreement and the other Loan Documents, and (4) the Company and the Agent may, without the input or consent of any other Lender, effect amendments to this Agreement and the other Loan Documents as may be necessary in the reasonable opinion of the Company and the Agent to effect the provisions of Section 1.10.
Section 11.5.    Costs and Expenses     . (a) The Borrowers agree to pay on demand all reasonable costs and expenses of the Agent in connection with the negotiation, preparation, execution, delivery, recording or filing or release of the Loan Documents or in connection with any consents hereunder or thereunder or waivers or amendments hereto or thereto or assignments pursuant hereto, including the reasonable fees and expenses of counsel for the Agent with respect to all of the foregoing, and all recording, filing, insurance or other fees, costs and taxes incident to perfecting a Lien upon the collateral security for the Loans and the other Obligations, and all reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the Agent, the Issuers, the Lenders or any other holders of the Obligations in connection with any Default or Event of Default or in connection with the enforcement of the Loan Documents, and all reasonable costs, fees and taxes of the types enumerated above incurred in supplementing (and recording or filing supplements

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to) the Collateral Documents in connection with assignments contemplated by Section 11.17 hereof if counsel to the Agent believes such supplements to be appropriate or desirable. The Borrowers agree to indemnify and save the Lenders, the Issuers, the Agent and any of their respective Related Parties and any security trustee for the Agent or the Lenders harmless from any and all liabilities, losses, reasonable costs and reasonable expenses incurred by the Lenders, the Issuers or the Agent or any of their respective Related Parties in connection with any action, suit or proceeding brought against the Agent, or the Issuers, any security trustee or any Lender or any of their respective Related Parties by any Person which arises out of the transactions contemplated or financed by any of the Loan Documents or out of any action or inaction by the Agent, any security trustee or any Lender thereunder or any of their respective Related Parties, except for liabilities, losses, costs and expenses (x) caused by the gross negligence or willful misconduct of the party seeking to be indemnified as determined by a final, nonappealable judgment of a court of competent jurisdiction or (y) incurred by such Affiliate to the extent any such liability, loss, cost or expense does not directly relate to or arise from the transactions contemplated by the Loan Documents. Other than with respect to Taxes resulting from Change in Law, this Section 11.5 (a) shall not apply with respect to Taxes other than any Taxes that represent losses, claims or damages arising from any non‑Tax claim.
(b)     Reimbursement by Lenders. To the extent that (i) the Borrowers for any reason fail to indefeasibly pay any amount required under subsection (a) of this Section to be paid by any of them to the Agent (or any sub‑agent thereof), any Issuer, any Swing Line Lender or any Related Party or (ii) any liabilities, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever are imposed on, incurred by, or asserted against, Agent, the Issuer, any Swing Line Lender or a Related Party in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted to be taken by Agent, the Issuer, any Swing Line Lender or a Related Party in connection therewith, then, in each case, each Lender severally agrees to pay to the Agent (or any such sub‑agent), such Issuer, such Swing Line Lender or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the Total Credit Exposure at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that with respect to such unpaid amounts owed to any Issuer or Swing Line Lender solely in its capacity as such, only the Lenders party to the Revolving Facility shall be required to pay such unpaid amounts, such payment to be made severally among them based on such Lenders’ pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each such Lender’s share of the Revolving Credit Exposure at such time); and provided, further, that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Agent (or any such sub‑agent), such Issuer or such Swing Line Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Agent (or any such sub‑agent), such Issuer or any such Swing Line Lender in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 11.10.


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(c)     Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, the Borrowers shall not assert, and hereby waive, any claim against any 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, any Loan or Letter of Credit, or the use of the proceeds thereof. None of the Agent, any Issuer, Lender or any of their Related Parties shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
(d)     Survival. Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment of the obligations hereunder.
Section 11.6.    No Waiver, Cumulative Remedies.      No delay or failure on the part of the Agent, any Issuer, or any Lender, or on the part of the holder or holders of any of the Obligations, in the exercise of any power or right under any Loan Document shall operate as a waiver thereof or as an acquiescence in any default, nor shall any single or partial exercise of any power or right preclude any other or further exercise thereof or the exercise of any other power or right. The rights and remedies hereunder of the Agent, the Issuers, the Lenders, and of the holder or holders of any of the Obligations are cumulative to, and not exclusive of, any rights or remedies which any of them would otherwise have.
Section 11.7.    Survival of Representations and Indemnities     . All representations and warranties made herein or in any of the other Loan Documents or in certificates given pursuant hereto or thereto shall survive the execution and delivery of this Agreement and the other Loan Documents, and shall continue in full force and effect with respect to the date as of which they were made as long as any credit is in use or available hereunder. All indemnities and other provisions relative to reimbursement to the Agent, the Issuers and the Lenders of amounts sufficient to protect the yield of the Agent, the Issuers and the Lenders with respect to the Loans and Letters of Credit, shall survive the termination of this Agreement and the payment of the Obligations.
Section 11.8.    Construction     . The parties hereto acknowledge and agree that this Agreement shall not be construed more favorably in favor of one than the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the negotiation and preparation of this Agreement.
Section 11.9.    Notices     . Except as otherwise specified herein, all notices hereunder and under the other Loan Documents shall be in writing (including, without limitation, notice by facsimile) and shall be given to the relevant party at its address or telecopier number set forth below, or such other address or telecopier number as such party may hereafter specify by notice to the Agent and the Company given by courier, by United States certified or registered mail, by facsimile or by other telecommunication device capable of creating a written record of such notice and its receipt. Notices under the Loan Documents to

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the Agent, any Lender or Issuer shall be addressed to its address or telecopier number set forth on its Administrative Questionnaire or such other addressed as shall be designated by such party in a written notice given to each other party pursuant to this Section 11.9; and notices under the Loan Documents to any Borrower shall be addressed to the Company at 301 Merritt Seven Corporate Park, Norwalk, Connecticut, 06851, Attention: Chief Executive Officer, Facsimile: (203) 849-7850. Each such notice, request or other communication shall be effective (i) if given by telecopier, when such facsimile is transmitted to the facsimile number specified in this Section or in the relevant Administrative Questionnaire and a confirmation of such facsimile has been received by the sender, (ii) if given by mail, seven days after such communication is deposited in the mail, certified or registered with return receipt requested, addressed as aforesaid or (iii) if given by any other means, when delivered at the addresses specified in this Section or in the relevant Administrative Questionnaire; provided that any notice given pursuant to Section 1 hereof shall be effective only upon receipt. Upon the Company’s request, the Agent shall provide the Company with a copy of each Lender’s Administrative Questionnaire within two Business Days of Company’s request therefor.
Section 11.10.    Obligations Several     . The obligations of the Lenders and Issuers hereunder are several and not joint. Nothing contained in this Agreement and no action taken by the Lenders or Issuers pursuant hereto shall be deemed to constitute the Lenders and Issuers a partnership, association, joint venture or other entity.
Section 11.11.    Headings     . Article and Section headings used in this Agreement are for convenience of reference only and are not a part of this Agreement for any other purpose.
Section 11.12.    Severability of Provisions     . Any provision of this Agreement which is unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. All rights, remedies and powers provided in this Agreement and other Loan Documents may be exercised only to the extent that the exercise thereof does not violate any applicable mandatory provisions of law, and all the provisions of this Agreement and other Loan Documents are intended to be subject to all applicable mandatory provisions of law which may be controlling and to be limited to the extent necessary so that they will not render this Agreement or other Loan Documents invalid or unenforceable.
Section 11.13.    Counterparts     . This Agreement may be executed in any number of counterparts, and by different parties hereto on separate counterparts, and all such counterparts taken together shall be deemed to constitute one and the same instrument.
Section 11.14.    Binding Nature and Governing Law     . This Agreement shall be binding upon the Borrowers and their successors and assigns, and shall inure to the benefit of the Lenders and the benefit of their successors and assigns, including any subsequent holder of an interest in the Obligations. This Agreement and the rights and duties of the parties hereto shall be construed and determined in accordance with, and shall be governed by the internal laws of the State of Illinois without regard to principles of conflicts of law. No Borrower may assign its rights or obligations hereunder without the written consent of all of the Lenders.

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Section 11.15.    Entire Understanding     . This Agreement, together with the other Loan Documents and any agreements between the Company and the Agent concerning fees, constitute the entire understanding of the parties with respect to the subject matter hereof and any prior agreements, whether written or oral, with respect thereto are superseded hereby.
Section 11.16.    Participations     . Any Lender may at any time, without the consent of, or notice to, the Company or the Agent, sell participations to any Person (other than a natural Person or the Company or any Guarantor or any their Affiliates or Subsidiaries) (each, a “Participant” ) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitments and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrowers, the Agent, the Issuers and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 10.8 with respect to any payments made by such Lender to its Participant(s).
Any agreement or instrument 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 or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that would reduce the amount of or postpone any fixed date for payment of any Obligation in which such participant has an interest. The Company agrees that each Participant shall be entitled to the benefits of Sections 2.5, 2.8, and 11.1 (subject to the requirements and limitations therein, including the requirements under Section 11.1(g) (it being understood that the documentation required under Section 11.1(g) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.17(b); provided that such Participant (A) agrees to be subject to the provisions of Sections 1.1, 1.8 and 2.9 as if it were an assignee under Section 11.7(b); and (B) shall not be entitled to receive any greater payment under Sections 11.1 or 2.8, with respect to any participation, than its participating Lender would have been entitled to receive, except, in the case of a Participant to which the Company has consented, to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Company’s request and expense, to use reasonable efforts to cooperate with the Company to effectuate the provisions of Section 2.11 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.27 (Right of Setoff) as though it were a Lender; provided that such Participant agrees to be subject to Section 11.26 (Sharing of Payments by Lenders) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers (but subject to Section 11.30 hereof), 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 the Loan Documents (the “Participant Register” ); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to

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any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103‑1(c) of the United States Treasury Regulations or as otherwise required under applicable law. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.
Section 11.17.    Assignments     . (a)     Successors and Assigns Generally. 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 no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Agent, each Issuer and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of Section 11.16, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (d) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in Section 11.16 and, to the extent expressly contemplated hereby, the Related Parties of each of the Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)     Assignments by Lenders. Any Lender may at any time assign to one or more assignees 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); provided that (in each case with respect to any Facility) any such assignment shall be subject to the following conditions:
(i)     Minimum Amounts. (A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitments and the Loans at the time owing to it (in each case with respect to any Facility) or contemporaneous assignments to related Approved Funds that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B)    in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the relevant Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than $5,000,000 in the case of any assignment in respect of any Facility, unless each of the Agent and, so long as no Event

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of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed).
(ii)     Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non‑pro rata basis.
(iii)     Required Consents. No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:
(A)    the consent of the Company (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment, or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Company shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agent within five (5) Business Days after having received written notice thereof;
(B)    the consent of the Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) the Revolving Facility if such assignment is to a Person that is not a Lender with a Commitment in respect of such Facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender, or (ii) any Term Loans to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund; and
(C)    the consent of the Issuers (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and
(D)    the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Swing Loans (whether or not then outstanding).
(iv)     Assignment and Acceptance. The parties to each assignment shall execute and deliver to the Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500; provided that the Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment . The assignee, if it is not a Lender, shall deliver to the Agent an Administrative Questionnaire.
(v)     No Assignment to Certain Persons. No such assignment shall be made to (A) the

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Borrowers or any of their Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).
(vi)     No Assignment to Natural Persons. No such assignment shall be made to a natural Person.
(vii)     Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Company and the Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Agent, each Issuer, the Swing Line Lender and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Loans in accordance with its Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Acceptance, 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 Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance 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 11.5 and 11.27 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph 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 Section 11.16.
(c)     Register. The Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices in Chicago, Illinois a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal

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amounts (and stated interest) 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 absent manifest error, and the Borrowers, the Agent 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. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d)     Certain Pledges. 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; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto; provided further, however, the right of any such pledgee or grantee (other than any Federal Reserve Bank) to further transfer all or any portion of the rights pledged or granted to it, whether by means of foreclosure or otherwise, shall be at all times subject to the terms of this Agreement.
Section 11.18.    Terms of Collateral Documents not Superseded     . Subject to Section 10.7 hereof, nothing contained herein shall be deemed or construed to permit any act or omission which is prohibited by the terms of any Collateral Document, the covenants and agreements contained herein being in addition to and not in substitution for the covenants and agreements contained in the Collateral Documents.
Section 11.19.    PERSONAL JURISDICTION and Jury Trial Waivers .
(a)     EXCLUSIVE JURISDICTION . EXCEPT AS PROVIDED IN SUBSECTION (b), THE AGENT, THE LENDERS AND THE BORROWERS AGREE THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY (AND EACH OF THEM FOR THE BENEFIT OF THE OTHERS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF) THE STATE OR FEDERAL COURTS LOCATED IN COOK COUNTY, ILLINOIS, BUT EACH OF THE AGENT, THE LENDERS AND THE BORROWERS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF COOK COUNTY, ILLINOIS. THE BORROWERS WAIVE IN ALL DISPUTES ANY OBJECTION THAT THEY MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(b)     OTHER JURISDICTIONS . THE BORROWERS AGREE THAT THE AGENT, AND EACH OF THE LENDERS SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWERS OR THEIR PROPERTY ( “PROPERTY” ) IN A COURT IN ANY LOCATION OR JURISDICTION TO ENABLE THE AGENT OR ANY LENDER TO REALIZE ON PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY LENDER AND, WITHOUT PREJUDICE TO THE GENERALITY OF THE FOREGOING, EACH BORROWER AGREES THAT THE AGENT OR ANY LENDER SHALL BE ENTITLED TO COMMENCE PROCEEDINGS (WHETHER FOR THE PURPOSE OF OBTAINING OR ENFORCING ANY ORDER

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OR JUDGMENT OR OTHERWISE HOWSOEVER) IN THE COURTS OF THE JURISDICTIONS WHERE SUCH BORROWER OR ANY OF ITS PROPERTY IS LOCATED.
(c)     Jury Trial Waiver. The Borrowers, the Agent, and each Lender hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to any Loan Document or the transactions contemplated thereby.
Section 11.20.    Currency      . Each reference in this Agreement to U.S. Dollars or to an Alternative Currency (the “relevant currency” ) is of the essence. To the fullest extent permitted by law, the obligation of each Borrower in respect of any amount due in the relevant currency under this Agreement or any Loan Document shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the relevant currency that the Agent, Issuer or Lender entitled to receive such payment may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and costs of exchange) on the Business Day immediately following the day on which such party receives such payment. If the amount in the relevant currency so purchased for any reason falls short of the amount originally due in the relevant currency, the Borrowers shall pay such additional amounts, in the relevant currency, as may be necessary to compensate for the shortfall. Any obligations of the Borrowers not discharged by such payment shall, to the fullest extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided herein, shall continue in full force and effect.
Section 11.21.    Currency Equivalence      . If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from any Borrower on the Obligations in the currency expressed to be payable herein or in an Application or under any other Loan Documents (the “specified currency” ) into another currency, the parties agree that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase the specified currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of each Borrower in respect of any such sum due to the Agent, any Issuer or any Lender on the Obligations shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by the Agent, such Issuer or such Lender, as applicable, of any sum adjudged to be so due in such other currency, the Agent, such Issuers or such Lender, as applicable, may in accordance with normal banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to the Agent, such Issuers or such Lender in the specified currency, the Borrowers agree, as a separate obligation and notwithstanding any such judgment, to indemnify the Agent, such Issuers or such Lender, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds the amount originally due to the Agent, such Issuer or such Lender in the specified currency, the Agent, such Issuer or such Lender, as the case may be, agrees to remit such excess to the Borrowers.
Section 11.22.    Change in Currency      . (a) If more than one currency or currency unit are at the same time recognized by the central bank of any country as the lawful currency of that country, (i) any reference in any Loan Documents to, and any obligations arising under any Loan Documents in, the currency of that country shall be translated into, and paid in, the currency or currency unit designated by the Agent,

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after consultation with the Borrowers and the Lenders and (ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognized by the central bank of that country for the conversion of that currency or currency unit into the other, rounded up or down by the Agent, acting reasonably.
(b)    If a change in any currency of a country occurs, the Loan Documents will, to the extent the Agent (acting reasonably) specifies is necessary, be amended to comply with any generally accepted conventions and market practice in any relevant interbank market and otherwise to reflect the change in currency and, if there is no generally accepted convention or market practice, or the Agent considers, in its absolute discretion, that there is no generally accepted convention or market practice, in such manner and to such extent as the Agent specifies. The Agent will notify the other parties to the relevant Loan Documents of any such amendment, which shall be binding on all the parties to that Loan Document.
(c)    The Borrowers shall, from time to time immediately on demand by the Agent, pay to the Agent for the account of any Lender the amount of any costs or increased costs incurred by, or of any reduction in any amount payable to or in the effective return on its capital pursuant to, or of interest or other return foregone by, such Lender or any holding company of such Lender as a result of any change in the currency of a country.
Section 11.23.    Interest Rate Limitation     . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan to any Borrower, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively, the “Charges” ), shall exceed the maximum lawful rate permitted by applicable law (the “Maximum Rate” ) which may be contracted for, charged, taken, received or reserved by any one or more of the Lenders holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable with respect to such Loan but were not payable as a result of the operation of this Section 11.23 shall be cumulated and the interest and Charges payable to such Lender or Lenders in respect of other Loans shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the rate set out herein, to the date of repayment, shall be have been received by such Lender or Lenders.
Section 11.24.    USA Patriot Act . Each Lender and Issuer that is subject to the requirements of the USA Patriot Act hereby notifies the Borrowers that pursuant to the requirements of such Act, it is required to obtain, verify, and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender or Issuer to identify the Borrowers in accordance with the USA Patriot Act.
Section 11.25.     Confidentiality     . Each of the Agent, the Lenders and the Issuers severally agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors to the extent any such Person has a need to know such Information (it being understood

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that the Persons to whom such disclosure is made will first be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority (including any self‑regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights or obligations under this Agreement; provided, however, that under no circumstances shall Information be disclosed to a participant or prospective participant whose primary business is in direct competition with the business of the Company and its Subsidiaries or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Company or any of its Subsidiary and its obligations, (g) with the prior written consent of the Company, (h) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section or (B) becomes available to the Agent, any Lender or Issuer on a non‑confidential basis from a source other than the Company or any of its Subsidiaries or any of their directors, officers, employees or agents, including accountants, legal counsel and other advisors, (i) with the prior consent of the Company, to rating agencies if requested or required by such agencies in connection with a rating relating to the Loans, Aggregate Revolving Commitments or Term Loan Commitments hereunder, or (j) to entities which compile and publish information about the syndicated loan market, provided that only basic information about the pricing and structure of the transaction evidenced hereby may be disclosed pursuant to this subsection (j). For purposes of this Section, “Information” means all information received from any Borrower or any Subsidiary or from any other Person on behalf of the Borrowers or Subsidiaries relating to any Borrower or Subsidiary or any of their respective businesses, other than any such information that is available to the Agent, any Lender or Issuer on a nonconfidential basis prior to disclosure by any Borrower or Subsidiary or from any other Person on behalf of the Company or any of its Subsidiaries.
Section 11.26.    Sharing of Set‑Off.     ‑ If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:
(a)    if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(b)    the provisions of this Section shall not be construed to apply to (x) any payment

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made by the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Obligations to any assignee or participant, other than to any Borrower or any Restricted Subsidiary thereof (as to which the provisions of this Section shall apply).
Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Borrower or any Restricted Subsidiary rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Borrower and Restricted Subsidiary in the amount of such participation.
Section 11.27.    Set‑off     ‑. In addition to any rights now or hereafter granted under the Loan Documents or applicable law and not by way of limitation of any such rights, if an Event of Default shall have occurred and be continuing, each Lender, each Issuer, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by such Lender, such Issuer or any such Affiliate, to or for the credit or the account of the Borrowers or any other Restricted Subsidiary against any and all of the obligations of the Borrowers or such Restricted Subsidiary now or hereafter existing under this Agreement or any other Loan Document to such Lender or such Issuer or their respective Affiliates, irrespective of whether or not such Lender, Issuer or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrowers or such Restricted Subsidiary may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or such Issuer different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Agent for further application in accordance with the provisions of Section 2.12 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Agent, the Issuers, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, each Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuer or their respective Affiliates may have. Each Lender and Issuer agrees to notify the Company and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.
Section 11.28.    Amendment and Restatement     . This Agreement amends and restates the Existing Credit Agreement and is not intended to be or operate as a novation or an accord and satisfaction of the Existing Credit Agreement or the Obligations of the Borrowers evidenced or provided for thereunder. Without limiting the generality of the foregoing, the Borrowers agree that notwithstanding the execution and delivery of this Agreement and the Collateral Documents, the Liens previously granted to the Agent pursuant to the

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Collateral Documents shall be and remain in full force and effect and that any rights and remedies of the Agent thereunder and obligations of the Borrowers and the Guarantors thereunder shall be and remain in full force and effect, shall not be affected, impaired or discharged thereby and shall secure all of the Borrowers’ and the Guarantors’ indebtedness, Obligations and liabilities to the Agent and the Lenders under the Existing Credit Agreement as amended and restated hereby. Nothing herein contained shall in any manner affect or impair the priority of the Liens created and provided for by the Collateral Documents as to the indebtedness, Obligations and liabilities that would be secured thereby prior to giving effect hereto.
Section 11.29.    Removal of Lenders and Assignment of Interests; Equalization of Loans      .
(a)     Removal of Lenders and Assignment of Interests. Each of the Lenders listed under the heading “Departing Lenders” , as Departing Lenders, hereby agrees to sell and assign without representation, recourse, or warranty (except that each Departing Lender represents it has authority to execute and deliver this Agreement and sell its Obligations contemplated hereby, which Obligations are owned by such Departing Lender free and clear of all Liens), and upon the satisfaction of the conditions precedent set forth in Section 6.2 hereof (A) the Lenders hereby agree to purchase, 100% of such Departing Lender’s outstanding Obligations under the Existing Credit Agreement and the Loan Documents (including, without limitation, all of the Obligations held by such Departing Lender, together with all of its interests in outstanding Letters of Credit) for a purchase price equal to the outstanding principal balance of Loans and accrued but unpaid interest and fees owed to such Departing Lender under the Existing Credit Agreement as of the Closing Date, which purchase price shall be paid in immediately available funds on the Closing Date (B) to the extent such Departing Lender is a Participating Lender in an Existing Letter of Credit, its Participating Interest shall be deemed reduced to zero and reallocated to the Lenders as contemplated in Section 11.29(b) herein and (C) the Borrowers shall pay to such Departing Lender any amounts otherwise owing to such Departing Lender not payable by the Lenders pursuant to subclause (A) hereof including, but not limited to, those arising under Section 2.5 hereof. Such purchases and sales shall be arranged through the Agent and each Departing Lender hereby agrees to execute such further instruments and documents, if any, as the Agent may reasonably request in connection therewith. Upon the execution and delivery of this Agreement by the Departing Lenders, the Lenders, and the Borrowers and the payment of the Obligations owing to the Departing Lenders, each Departing Lender shall cease to be a Lender under the Credit Agreement and the other Loan Documents and (i) the Lenders shall have the rights of the Departing Lenders thereunder subject to the terms and conditions hereof and (ii) each Departing Lender shall have relinquished its rights (other than rights to indemnification and reimbursements referred to in the Existing Credit Agreement which survive the repayment of the Obligations owed to such Departing Lender in accordance with its terms, including Section   11.5 and 11.7 thereof) and be released from their obligations under the Existing Credit Agreement. The parties hereto agree that, except as provided for in the preceding sentence, all references in the Loan Documents to the Lenders or any Lender shall from and after the date hereof no longer include the Departing Lenders and the Departing Lenders shall have no obligations under this Agreement other than those set out in this Section 11.29.
(b)     Equalization of Loans. Upon the satisfaction of the conditions precedent set forth in Section 6.2 hereof, all loans and letters of credit outstanding under the Existing Credit Agreement shall remain outstanding

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as the initial Borrowing of Loans and Letters of Credit under this Agreement and, in connection therewith, the Borrowers shall be deemed to have prepaid all outstanding Eurodollar Loans on the Closing Date. On the Closing Date, the Lenders each agree to make such purchases and sales of interests in the outstanding Loans and interests in outstanding Letters of Credit between themselves so that each Lender is then holding its relevant Percentage of outstanding Loans and L/C Obligations. Such purchases and sales shall be arranged through the Agent and each Lender hereby agrees to execute such further instruments and documents, if any, as the Agent may reasonably request in connection therewith.
Section 11.30.    No Fiduciary Duties      . Each Borrower agrees that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, such Borrower and its Subsidiaries, on the one hand, and the Agent, the Lead Arrangers, Bookrunners, the Co-Documentation Agents, the Co-Syndication Agents, each Issuer, each Lender and their respective Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the Agent, the Lead Arrangers, Bookrunners, the Co-Documentation Agents, the Co-Syndication Agents, each Issuer, each Lender or their respective Affiliates and no such duty will be deemed to have arisen in connection with such transactions or communications.
[SIGNATURE PAGES TO FOLLOW]



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Upon your acceptance hereof in the manner hereinafter set forth, this Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of the date first written above.
EMCOR GROUP, INC.
By
    
Name:    Anthony J. Guzzi
Title:    President and Chief Executive Officer
        
EMCOR GROUP (UK) plc.
By

Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]


Accepted and Agreed to at Chicago, Illinois as of the day and year last above written.

BANK OF MONTREAL, as Agent, an Issuer and a Lender

    
By    
Name: John A. Armstrong
Title: Director

BMO HARRIS BANK N.A, as an Issuer of an Existing L/C
    
    
By    
Name: John A. Armstrong
Title: Director

[Signature Page to Fourth Amended and Restated Credit Agreement]


BANK OF AMERICA, N.A.


By    
Name    
Title    



[Signature Page to Fourth Amended and Restated Credit Agreement]


JPMORGAN CHASE BANK, N.A.


By    
Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]


U.S. BANK NATIONAL ASSOCIATION
    

By    
Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]


FIFTH THIRD BANK


By    
Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]


PEOPLE’S UNITED BANK


By    
Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]


PNC BANK, NATIONAL ASSOCIATION


By    
Name    
Title    


[Signature Page to Fourth Amended and Restated Credit Agreement]



WELLS FARGO BANK, N.A.


By    
Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]


RBS CITIZENS, N.A.


By    
Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]


BRANCH BANKING AND TRUST COMPANY


By    
Name    
Title    


[Signature Page to Fourth Amended and Restated Credit Agreement]


THE NORTHERN TRUST COMPANY


By    
Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]


FIRST NIAGARA BANK, N.A.


By    
Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]


WEBSTER BANK, NA


By    
Name    
Title    

[Signature Page to Fourth Amended and Restated Credit Agreement]





TD BANK, N.A.


By    
Name    
Title    



[Signature Page to Fourth Amended and Restated Credit Agreement]


“DEPARTING LENDER”


LLOYDS TSB BANK PLC


By    
Name    
Title    


[Signature Page to Fourth Amended and Restated Credit Agreement]


EXHIBIT A-1
TERM A NOTE
November 25, 2013
FOR VALUE RECEIVED, the undersigned, EMCOR GROUP, INC., a Delaware corporation (the “Company” ), hereby promises to pay to _________________________ (the “Lender” ) or its registered assigns at the principal office of the Agent in Chicago, Illinois (or such other location as the Agent may designate to the Company), in immediately available funds, the unpaid principal amount of Term Loan made or maintained by the Lender to the Company pursuant to the Credit Agreement, in installments in the amounts called for by Section 1.6(a) of the Credit Agreement, together with interest on the principal amount of such Term Loan from time to time outstanding hereunder at the rates, and payable in the manner and on the dates, specified in the Credit Agreement.
This Note is one of the Term Notes referred to in the Fourth Amended and Restated Credit Agreement dated as of November 25, 2013 among the Company, the other Borrowers party thereto, the Lenders and Issuers party thereto, and Bank of Montreal, as Administrative Agent (as extended, renewed, amended or restated from time to time, the “Credit Agreement” ), and this Note and the holder hereof are entitled to all the benefits and security provided for thereby or referred to therein, to which Credit Agreement reference is hereby made for a statement thereof. All defined terms used in this Note, except terms otherwise defined herein, shall have the same meaning as in the Credit Agreement. This Note shall be governed by and construed in accordance with the internal laws of the State of ILLINOIS.
Voluntary prepayments may be made hereon, certain prepayments are required to be made hereon, and this Note may be declared due prior to the expressed maturity hereof, all in the events, on the terms and in the manner as provided for in the Credit Agreement.
The Company hereby waives demand, presentment, protest or notice of any kind hereunder.
EMCOR GROUP, INC.
By        
Name    
Title    



A-1


EXHIBIT A-2
REVOLVING CREDIT NOTE
November 25, 2013
For value received, the undersigned, _____________________, a ________________ corporation ( “Borrower” ), hereby promises to pay to ________________________ ______________________ (the “Lender” ), at the principal office of Bank of Montreal in Chicago, Illinois, in the currency of each Revolving Loan evidenced hereby in accordance with Section 1 of the Credit Agreement, the aggregate unpaid principal amount of each Revolving Loans made by the Lender to the Borrower pursuant to the Credit Agreement on the due date therefore as specified in the Credit Agreement, together with interest on the principal amount of each Revolving Loan from time to time outstanding hereunder at the rates, and payable in the manner and on the dates specified in the Credit Agreement.
The Lender shall record on its books or records or on a schedule attached to this Note, which is a part hereof, each Revolving Loan made by it pursuant to the Credit Agreement, any repayment of principal and interest and the principal balances from time to time outstanding hereon, and the currency in which made, provided that prior to the transfer of this Note all such amounts shall be recorded on a schedule attached to this Note. The record thereof, whether shown on such books or records or on a schedule to this Note, shall be prima facie evidence of the same, provided, however, that the failure of the Lender to record any of the foregoing or any error in any such record shall not limit or otherwise affect the obligation of the Borrowers to repay all Revolving Loans made to them pursuant to the Credit Agreement together with accrued interest thereon.
This Note is one of the Revolving Credit Notes referred to in the Fourth Amended and Restated Credit Agreement dated as of November 25, 2013, among the Borrowers, Bank of Montreal, as Agent, and the Lenders from time to time party thereto (the “Credit Agreement” ), and this Note and the holder hereof are entitled to all the benefits provided for thereby or referred to therein, to which Credit Agreement reference is hereby made for a statement thereof. All defined terms used in this Note, except terms otherwise defined herein, shall have the same meaning as in the Credit Agreement.
This Note is issued by the Borrower under the terms and provisions of the Credit Agreement and is secured by the Collateral Documents, and this Note and the holder hereof are entitled to all of the benefits and security provided for thereby or referred to therein, to which reference is hereby made for a statement thereof. This Note may be declared to be, or be and become, due prior to its expressed maturity, voluntary prepayments may be made hereon, and certain prepayments are required to be made hereon, all in the events, on the terms and with the effects provided in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the internal laws of the State of Illinois without regard to principles of conflicts of law.

A-2-1


The Borrower hereby promises to pay all costs and expenses (including attorneys’ fees) suffered or incurred by the holder hereof in collecting this Note or enforcing any rights in any collateral herefor. The Borrower hereby waives presentment for payment and demand.
    
By        
Its    



A-2-2


EXHIBIT A-3
SWING NOTE
November 25, 2013
For value received, the undersigned, EMCOR Group, Inc., a Delaware corporation ( “Borrower” ), hereby promises to pay to Bank of Montreal (the “Lender” ), at the principal office of Bank of Montreal in Chicago, Illinois, in the currency of each Swing Loan evidenced hereby in accordance with Section 1 of the Credit Agreement, the aggregate unpaid principal amount of each Swing Loans made by the Lender to the Borrower pursuant to the Credit Agreement on the due date therefore as specified in the Credit Agreement, together with interest on the principal amount of each Swing Loan from time to time outstanding hereunder at the rates, and payable in the manner and on the dates specified in the Credit Agreement.
The Lender shall record on its books or records or on a schedule attached to this Note, which is a part hereof, each Swing Loan made by it pursuant to the Credit Agreement, any repayment of principal and interest and the principal balances from time to time outstanding hereon, and the currency in which made, provided that prior to the transfer of this Note all such amounts shall be recorded on a schedule attached to this Note. The record thereof, whether shown on such books or records or on a schedule to this Note, shall be prima facie evidence of the same, provided, however, that the failure of the Lender to record any of the foregoing or any error in any such record shall not limit or otherwise affect the obligation of the Borrowers to repay all Swing Loans made to them pursuant to the Credit Agreement together with accrued interest thereon.
This Note is one of the Swing Notes referred to in the Fourth Amended and Restated Credit Agreement dated as of November 25, 2013, among the Borrowers, Bank of Montreal, as Agent, and the Lenders from time to time party thereto (the “Credit Agreement” ), and this Note and the holder hereof are entitled to all the benefits provided for thereby or referred to therein, to which Credit Agreement reference is hereby made for a statement thereof. All defined terms used in this Note, except terms otherwise defined herein, shall have the same meaning as in the Credit Agreement.
This Note is issued by the Borrower under the terms and provisions of the Credit Agreement and is secured by the Collateral Documents, and this Note and the holder hereof are entitled to all of the benefits and security provided for thereby or referred to therein, to which reference is hereby made for a statement thereof. This Note may be declared to be, or be and become, due prior to its expressed maturity, voluntary prepayments may be made hereon, and certain prepayments are required to be made hereon, all in the events, on the terms and with the effects provided in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the internal laws of the State of Illinois without regard to principles of conflicts of law.

A-3-1


The Borrower hereby promises to pay all costs and expenses (including attorneys’ fees) suffered or incurred by the holder hereof in collecting this Note or enforcing any rights in any collateral herefor. The Borrower hereby waives presentment for payment and demand.
EMCOR GROUP, INC.
By        
Its    



A-3-2


EXHIBIT B

EMCOR GROUP, INC.
COMPLIANCE CERTIFICATE
FOR THE MONTH ENDING __________
To:    Bank of Montreal
as Agent under, and the Lenders
party to the Amended and Restated
Credit Agreement described below
This Compliance Certificate is furnished to the Lenders pursuant to the requirements of Section 7.5 of the Fourth Amended and Restated Credit Agreement dated as of November 25, 2013, by and among EMCOR Group, Inc., a Delaware corporation (the “Company” ), EMCOR Group (UK) plc, a United Kingdom public limited company and Bank of Montreal, as agent thereunder (the “Agent” ) and the Lenders named therein (the “Credit Agreement” ). Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1.    I am the duly elected ______________ of the Company;
2.    I have reviewed the terms of the Credit Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrowers and Restricted Subsidiaries during the accounting period covered by the financial statements being furnished concurrently with this Certificate;
3.    The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default or an Event of Default at any time during or at the end of the accounting period covered by the accompanying financial statements or as of the date of this Certificate, except as set forth immediately below;
4.    The financial statements required by Section 7.5 of the Credit Agreement and being furnished to you concurrently with this Certificate are true, correct and complete as of the dates and for the periods covered thereby; and
5.    Schedule I attached hereto sets forth financial data and computations evidencing the Borrowers’ compliance with certain covenants of the Credit Agreement, all of which data and computations are true, complete and correct and have been made in accordance with the relevant Sections of the Credit Agreement.*




6.    Also attached hereto is a summary of claims with a recorded value of over $10,000,000 in litigation, mediation or arbitration.*
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrowers have taken, is taking, or proposes to take with respect to each such condition or event:
    
    
    
    
The foregoing certifications, together with the computations set forth in Schedule I attached hereto and the financial statements furnished concurrently with this Certificate in support hereof, are made and delivered as of this ______ day of _______________, 20___.
EMCOR GROUP, INC.
By:    
Title:    
(Type or Print Name)






* Include only quarterly.


B-2


SCHEDULE I
EMCOR GROUP, INC.
COMPLIANCE CALCULATIONS
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF NOVEMBER 25, 2013
CALCULATIONS AS OF _______________, 20__

A.
LEVERAGE RATIO (SECTION 7.7)
1.    Total Funded Debt    $________
2.    Excess Cash    $________
3.    Line A1 minus A2    $________
4.    Net Income for past 12 calendar months     $________
5.    Interest Expense for past 12 calendar months    $________
6.    Income taxes for past 12 calendar months    $________
7.    Depreciation of fixed assets for past 12 calendar months    $________
8.    Amortization of intangible assets during past 12 calendar months    $________

9.    Non-cash charges of the Company and     

its Restricted Subsidiaries for past 12 calendar months
$________
10.    One-time extraordinary cash charges acceptable to the    

        Agent not to exceed $50.0 million during the term of this Agreement    $________
11.    Sum of Lines A4, A5, A6, A7, A8, A9 and A10    $________




12.    Adjustments resulting from Acquisitions during past
12 calendar months (including adjustments for non‑recurring
expenses and income reasonably determined by the Company
in good faith and established to the reasonable satisfaction
of the Agent)    $________
13.    Sum of Lines A11 and A12    $________
14.    Ratio of Line A3 to Line A13    ________
15.    Ratio of Line A14 shall not be more than    3.00/3.25 to 1.0
16.    Company is in Compliance    Yes/No
B.
INTEREST COVERAGE RATIO (SECTION 7.8)
1.    Net Income for past 12 calendar months    $________
2.    Interest Expenses for past 12 calendar months    $________
3.    Income taxes for past 12 calendar months    $________
4.    Non-cash charges of the Company and     

        its Restricted Subsidiaries for past 12 calendar months    $________
5.    One-time extraordinary cash charges acceptable    
        to the Agent not to exceed $50.0 million during the term        of this Agreement    $________
6.    Sum of Lines B1, B2, B3, B4 and B5    $________
7.    Adjustments resulting from Acquisitions during past
12 calendar months (including adjustments for non‑recurring
    expenses and income reasonably determined by the Company
in good faith and established to the reasonable satisfaction
of the Agent)    $________
8.    Sum of Line B6 and B7    $________
9.    Interest Expense for past 12 calendar months    $________

-2-


10.    All interest income received during past 12 calendar months     $________
11.    Line B9 minus Line B10    $________
12.    Ratio of Line B8 to Line B11    $________
13.    B12 shall not be less than    3.50 to 1
14.    Company is in Compliance    Yes/No
C.
CAPITAL AND OTHER RESTRICTED EXPENDITURES (SECTION 7.13)
1.    Capital Expenditures    $________
2.    Face amount of Letters of Credit issued during
past 12 calendar months    $________
3.    Aggregate amount expended to guarantee Indebtedness for
Money Borrowed for any Strategic Venture (not including
capital stock of the Company)    $________
4.    Sum of Lines C1, C2 and C3    $________
5.    2.00% of the arithmetic average of unrealized revenue
from contracts in progress as of last day of past four
calendar quarters then ended     $________
6.    Net Cash Proceeds from the Disposition of assets for past four
calendar quarters then ended    $________
7.    Maximum amount of dividends which company could pay
as of date of expenditure or application in question    $________
8.    Sum of Lines C5, C6 and C7    $________
9.    Line C4 shall not exceed Line C8
10.    Company is in Compliance    Yes/No



-3-


EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
This Assignment and Acceptance (the “Assignment and Acceptance” ) is dated as of the Effective Date set forth below and is entered into by and between [the][each] 1 Assignor identified in item 1 below ( [the][each, an] “Assignor” ) and [the][each] 2 Assignee identified in item 2 below ([the][each, an] “Assignee” ). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] 3 hereunder are several and not joint.] 4 Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement” ), receipt of a copy of which is hereby acknowledged by [the][each] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.
For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees] , and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors] , subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including without limitation any letters of credit, guarantees, and swing loans included in such facilities), and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee

1
For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.
2
For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.
3
Select as appropriate.
4
Include bracketed language if there are either multiple Assignors or multiple Assignees.




pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest” ). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by [the][any] Assignor.

1.    Assignor [s] :    ________________________________
________________________________
[Assignor [is] [is not] a Defaulting Lender]
2.
Assignee [s] :    ________________________________
________________________________
[for each Assignee, indicate [Affiliate][Approved Fund] of [ identify Lender ]
3.
Borrower(s):    EMCOR Group, Inc.
4.
Agent:    Bank of Montreal, as the Agent under the Credit Agreement
5.
Credit Agreement:    Fourth Amended and Restated Credit Agreement dated as of November 25, 2013 among EMCOR Group, Inc., certain of its Subsidiaries, as Borrowers, the Lenders parties thereto, Bank of Montreal, as Agent, and the other agents parties thereto
6.
Assigned Interest[s]:
Assignor[s] 5
Assignee[s] 6
Facility Assigned 7
Aggregate Amount of Commitment/Loans for all Lenders 8
Amount of Commitment/Loans Assigned 8
Percentage Assigned of Commitment/
Loans 9
 
 
 
$
$
%
 
 
 
$
$
%
 
 
 
$
$
%
    

5
List each Assignor, as appropriate.
6
List each Assignee, as appropriate.
7
Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., “Revolving Credit Commitment,” “Term Loan Commitment,” etc.)
8
Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.
9
Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.


C‑2



[ 7.    Trade Date:    ______________] 10  
    






















10
To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.


C‑3


Effective Date: ________________, 20___ [To be inserted by Agent and which shall be the effective date of recordation of transfer in the register therefor.]
The terms set forth in this Assignment and Acceptance are hereby agreed to:
ASSIGNOR[S] 11  
[NAME OF ASSIGNOR]
By:    
Name:    
Title:    
[NAME OF ASSIGNOR]
By:    
Name:    
Title:    
ASSIGNEE[S] 12  
[NAME OF ASSIGNEE]
By:    
Name:    
Title:    
[NAME OF ASSIGNEE]
By:    
Name:    
Title:    


11
Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).
12
Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).

C‑4


[Consented to and] 13 Accepted:
BANK OF MONTREAL, as
Agent
By:    
Name:    
Title:    
[Consented to:] 14  
[NAME OF RELEVANT PARTY]
By:    
Name:    
Title:    


















13
To be added only if the consent of the Agent is required by the terms of the Credit Agreement.
14
To be added only if the consent of the Company and/or other parties (e.g. Swing Line Lender, Issuer) is required by the terms of the Credit Agreement.


C‑5


ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE
SECTION 1.
REPRESENTATIONS AND WARRANTIES.
Section 1.1.      Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii)  [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrowers, any of their Restricted Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrowers, any of their Restricted Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
Section 1.2.    Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 11.17(b)(iii), (v) and (vi) of the Credit Agreement (subject to such consents, if any, as may be required under Section 11.17(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 7.5 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the 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 Assignment and Acceptance and to purchase [the][such] Assigned Interest, and (vii) attached to the Assignment and Acceptance is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance on the Agent, [the][any] Assignor 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 action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

C-6


SECTION 2.
PAYMENTS.
From and after the Effective Date, the Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignee whether such amounts have accrued prior to, on or after the Effective Date. The Assignor [s] and the Assignee [s] shall make all appropriate adjustments in payments by the Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. Notwithstanding the foregoing, the Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to [the][the relevant] Assignee.
SECTION 3.
GENERAL PROVISIONS.
This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by facsimile shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be governed by, and construed in accordance with, the law of the State of Illinois.



C-7


EXHIBIT D
COMMITMENT AMOUNT INCREASE REQUEST
_______________, 20__
Bank of Montreal
as Agent (the “Agent” )
for the Lenders referred to below
111 West Monroe Street
Chicago, Illinois 60603
Attention: John Armstrong, Director
Re:    Fourth Amended and Restated Credit Agreement    dated as of November 25, 2013    among EMCOR Group, Inc., the Lenders party thereto and    Bank of Montreal, as Agent
(as amended, modified or supplemented from
time to time, the “Credit Agreement” ),

Ladies and Gentlemen:
In accordance with the Credit Agreement, the Company hereby requests that the Agent consent to an increase in the Aggregate Revolving Commitments (the “Commitment Amount Increase” ), in accordance with Section 1.11 of the Credit Agreement, to be effected by [an increase in the Aggregate Revolving Commitment of [name of existing Lender] the addition of [name of Additional Lender] (the “Additional Lender” ) as a Lender under the terms of the Credit Agreement] . Capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.
After giving effect to such Commitment Amount Increase, and upon the effectiveness of the Commitment Amount Increase, the U.S. Dollar Commitment and/or Multicurrency Commitment of [the Lender increasing its relevant Commitment] [the Additional Lender] will be as set forth on Attachment I hereto.
[Include paragraphs 1‑3 for an Additional Lender]
1.    The Additional Lender hereby confirms that it has received a copy of the Credit Agreement and the exhibits and schedules related thereto, together with copies of the documents which were required to be delivered under the Credit Agreement as a condition to the making of the Loans and other extensions of credit thereunder. The Additional Lender acknowledges and agrees that it has made and will continue to




make, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it has deemed appropriate, its own credit analysis and decisions relating to the Credit Agreement. The Additional Lender further acknowledges and agrees that the Agent has not made any representations or warranties about the credit worthiness of the Company or any other party to the Credit Agreement or with respect to the legality, validity, sufficiency or enforceability of the Credit Agreement or the value of any security #PageNum#
2.    Except as otherwise provided in the Credit Agreement, effective as of the date of acceptance hereof by the Agent, the Additional Lender agrees to be bound by the terms and conditions set forth in the Credit Agreement as if it were an original signatory thereto.
3.    The Additional Lender hereby advises you of the following administrative details with respect to its Loans and Aggregate Revolving Commitment:
(A)    Notices:
Institution Name:_________________
Address: _______________________
_______________________
Telephone: ______________________
Facsimile: ______________________
(B)    Payment Instructions:
4.    This Agreement shall be deemed to be a contractual obligation under, and shall be governed by and construed in accordance with, the laws of the state of Illinois.
The Commitment Amount Increase shall be effective when the executed consent of the Agent is received or otherwise in accordance with Section 1.11 of the Credit Agreement, but not in any case prior to ___________________, ____. It shall be a condition to the effectiveness of the Commitment Amount Increase that (i) all fees and expenses referred to in Section 1.11 of the Credit Agreement shall have been paid and (ii) no Eurodollar Loans shall be outstanding on the date of such effectiveness.
The Company hereby certifies that no Default or Event of Default has occurred and is continuing.

Please indicate the Agent’s consent to such Commitment Amount Increase by signing the enclosed copy of this letter in the space provided below.

Very truly yours,

EMCOR GROUP, INC.

D-2




By        
Name:    
Title:    


[ADDITIONAL LENDER/LENDER INCREASING COMMITMENTS]

By:    
Name:    
Title:    

The undersigned hereby consents
on this __ day of _____________,
___ to the above‑requested Commitment
Amount Increase.
BANK OF MONTREAL,
as Agent
By:    
Name:    
Title:    

D-3


ATTACHMENT I

Lender
U.S. Dollar Commitment
Multicurrency Commitment



D-4


EXHIBIT E
NOTICE OF BORROWING
Date:    , ____
To:
Bank of Montreal, as Agent for the Lenders parties to the Fourth Amended and Restated Credit Agreement dated as of November 25, 2013 (as extended, renewed, amended or restated from time to time, the “Credit Agreement” ), among EMCOR Group, Inc. (the “Company” ), the other Borrowers party thereto, the Lenders party thereto, and Bank of Montreal, as Agent
Ladies and Gentlemen:
The Company, individually and in its capacity as agent for the Borrowers, refers to the Credit Agreement, the terms defined therein being used herein as therein defined, and hereby gives you notice irrevocably, pursuant to Section 1.4 of the Credit Agreement, of the Borrowing specified below:
1.    The name of Borrower on whose behalf such Borrowing is being                 requested _________________________
2.    The Business Day of the proposed Borrowing is ___________, ____.
3.    The aggregate amount of the proposed Borrowing is $______________.
4.    The Borrowing is being advanced under the [Multicurrency] [U.S. Revolving Facility] [Term Loan] Facility.
5.    The currency of such Borrowing under the Multicurrency Facility _______________.
6.    The Borrowing is to be comprised of $___________ of [Domestic Rate] [Eurodollar] Loans.
[7.    The duration of the Interest Period for the Eurodollar Loans included in the Borrowing shall be ____________ months.]
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the proposed Borrowing, before and after giving effect thereto and to the application of the proceeds therefrom:
(a)    the representations and warranties of the Borrowers contained in Section 5 of the Credit Agreement are true and correct as though made on and as of such date (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date); and




(b)    no Default or Event of Default has occurred and is continuing or would result from such proposed Borrowing.
EMCOR GROUP, INC.
By        
Name    
Title    


E-2


SCHEDULE 1.1
COMMITMENTS
REVOLVING FACILITY
Lender
U.S. Dollar Commitment
U.S. Dollar
Percentage
Multicurrency
Commitment
Multicurrency
Percentage
Aggregate Revolving
Commitment
Percentage
Bank of Montreal

$83,454,545.46

11.1273%

$83,454,545.46

11.74664%
$ 83,454,545.46

11.12727%
Bank of America, N.A.
83,454,545.46

11.1273%
83,454,545.46

11.74664%
83,454,545.46

11.12727%
JPMorgan Chase Bank, N.A.
83,454,545.46

11.1273%
83,454,545.46

11.74664%
83,454,545.46

11.12727%
U.S. Bank National Association
83,454,545.46

11.1273%
83,454,545.46

11.74664%
83,454,545.46

11.12727%
RBS Citizens, N.A.
83,454,545.46

11.1273%
83,454,545.46

11.74664%
83,454,545.46

11.12727%
Fifth Third Bank
61,363,636.36

8.1818%
61,363,636.36

8.63724%
61,363,636.36

8.18182%
Wells Fargo Bank, N.A.
61,363,636.36

8.1818%
61,363,636.36

8.63724%
61,363,636.36

8.18182%
PNC Bank, National Association
51,136,363.63

6.8182%
51,136,363.63

7.19770%
51,136,363.63

6.81818%
Branch Banking and Trust Company
34,090,909.09

4.5455%
34,090,909.09

4.79846%
34,090,909.09

4.54545%
TD Bank, N.A.
34,090,909.09

4.5455%
34,090,909.09

4.79846%
34,090,909.09

4.54545%
Webster Bank, N.A.
27,272,727.27

3.6364%
27,272,727.27

3.83877%
27,272,727.27

3.63636%
The Northern Trust Company
23,863,636.36

3.1818%
23,863,636.36

3.35893%
23,863,636.36

3.18182%
People’s United Bank
20,454,545.45

2.7273%
0.00

0%
20,454,545.45

2.72727%
First Niagara Bank, N.A.
19,090,909.09

2.5455%
0.00

0%
19,090,909.09

2.54545%
Total

$750,000,000.00

100.0000%

$710,454,545.46

100.00%

$750,000,000.00

100.00%





 
Term Loan Facility

 
LENDER
Term Loan Commitment
Percentage
Bank of Montreal

$38,945,454.54

11.12727%
Bank of America, N.A.
38,945,454.54

11.12727%
JPMorgan Chase Bank, N.A.
38,945,454.54

11.12727%
U.S. Bank National Association
38,945,454.54

11.12727%
RBS Citizens, N.A.
38,945,454.54

11.12727%
Fifth Third Bank
28,636,363.64

8.18182%
Wells Fargo Bank, N.A.
28,636,363.64

8.18182%
PNC Bank, National Association
23,863,636.37

6.81818%
Branch Banking and Trust Company
15,909,090.91

4.54545%
TD Bank, N.A.
15,909,090.91

4.54545%
Webster Bank, N.A.
12,727,272.73

3.63636%
The Northern Trust Company
11,136,363.64

3.18182%
People’s United Bank
9,545,454.55

2.72727%
First Niagara Bank, N.A.
8,909,090.91

2.54545%
Total

$350,000,000.00

100.00%


E-2


SCHEDULE 1.3

EXISTING LETTERS OF CREDIT
Number
Issuer
Beneficiary
Amount
Expiry Date
HACH196240S
BMO Harris Bank N.A.
Indemnity Insurance Companies of North America
ACE American Ins.
$258,081
10/01/14
HACH19637QS
BMO Harris Bank N.A.
ACE Property & Casualty Insurance Company,
Pacific Employers Insurance Company
185,43
09/30/14
HACH196380S
BMO Harris Bank N.A.
Transportation Insurance Company and/or
Continental Casualty Company and/or American
Casualty Company of Reading, Pennsylvania
16,00
10/01/14
HACH196440S
BMO Harris Bank N.A.
Continental Casualty Company and/or American
Casualty Company of Reading, Pennsylvania and/or
Transportation Insurance Company
$90,000
09/01/14
HACH196460S
BMO Harris Bank N.A.
Continental Casualty Company and/or American
Casualty Company of Reading, Pennsylvania
$168,000
09/01/14
HACH196470S
BMO Harris Bank N.A.
Continental Casualty Company and/or American
Casualty Company of Reading, Pennsylvania
$239,000
09/01/14
HACH1965lOS
BMO Harris Bank N.A.
American Casualty Company of Reading, PA and/or Transportation Insurance Company and/or Continental Casualty Company
$114,000
10/01/14
HACH270301OS
BMO Harris Bank N.A.
American Casualty Company of Reading, Pennsylvania and/or Transportation Insurance Company and/or Continental Casualty Company
$9,471,000
10/01/14
HACH3111780S
BMO Harris Bank N.A.
American Casualty Company of Reading, Pennsylvania and/or Transportation Insurance Company and/or Continental Casualty Company
$10,604,000
10/22/14
HACH3492680S
BMO Harris Bank N.A.
American Casualty Company of Reading, Pennsylvania and/or Transportation Insurance Company and/or Continental Casualty Company
$17,362,000
10/01/14
HACH3861870S
BMO Harris Bank N.A.
American Casualty Company of Reading, Pennsylvania and/or Transportation Insurance Company and/or Continental Casualty Company
$18,950,000
10/01/14
HACH4186960S
BMO Harris Bank N.A.
American Casualty Company of Reading, Pennsylvania and/or Transportation Insurance Company and/or Continental Casualty Company
$1,525,000
10/01/14
S559178
Bank of America Merrill Lynch
American Casualty Company of Reading, PA and Continental Casualty Company and Transportation Insurance Company
$170,000
10/01/14
S574136
Bank of America Merrill Lynch
Transportation Insurance Company and American Casualty Company of Reading, PA and Continental Casualty Company
$667,000
10/01/14




Number
Issuer
Beneficiary
Amount
Expiry Date
S584572
Bank of America Merrill Lynch
American Casualty Company of Reading, Pennsylvania and Transportation Insurance Company and Continental Casualty Company
$1,283,000
10/01/14
S593655
Bank of America Merrill Lynch
Transportation Insurance Company and/or American Casualty Company of Reading, Pennsylvania and/or Continental Casualty Company
$2,330,000
10/01/14
S602687
Bank of America Merrill Lynch
Transportation Insurance Company and/or American Casualty Company of Reading, PA and/or Continental Casualty Company
$3,712,000
10/01/14
S608276
Bank of America Merrill Lynch
American Casualty Company of Reading, Pennsylvania and Transportation Insurance Company and Continental Casualty Company
$7,399,000
10/01/14
S594132
Bank of America Merrill Lynch
The Travelers Indemnity Company
$90,000
10/12/14
S602275
Bank of America Merrill Lynch
SeaBright Insurance Company
$482,549
10/12/14
HACH2349520S
BMO Harris Bank N.A.
Zurich American Insurance Company
$650,000
10/12/14
HACH320408OS
BMO Harris Bank N.A.
The Travelers Indemnity Company
$400,000
01/31/14
HACH230412OS
BMO Harris Bank N.A.
Hartford Fire Insurance Company
$150,000
01/31/14
BMCH3578850S
BMO Harris Bank N.A.
The Travelers Indemnity Company
$25,000
01/10/14
BMCH3578930S
BMO Harris Bank N.A.
Argonaut Insurance Co.
$57,000
01/10/14
BMCH3578380S
BMO Harris Bank N.A.
Zurich American Insurance Company
$905,000
01/10/14
HACH408922OS
BMO Harris Bank N.A.
ACE American Insurance Company
$1,313,391
07/31/14
HACH408906OS
BMO Harris Bank N.A.
National Union Fire Insurance Co. of Pittsburgh, PA and American Home Assurance Company
$1,788,600
07/31/14







-2-


SCHEDULE 4.2
GUARANTORS
NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
EMCOR Group, Inc.
Delaware
 
 
EMCOR Government Services, Inc.
Maryland
100%
EMCOR Facilities Services, Inc.
Aircond Corporation
Georgia
100%
EMCOR Facilities Services, Inc.
The Betlem Service Corporation
New York
100%
EMCOR Facilities Services, Inc.
CES Facilities Management Services, Inc.
Maryland
100%
EMCOR Government Services, Inc.
Combustioneer Corporation
Maryland
100%
EMCOR Facilities Services, Inc.
EMCOR Services Team Mechanical, Inc.
Delaware
100%
EMCOR Facilities Services, Inc.
Viox Services, Inc.
Ohio
100%
EMCOR Facilities Services, Inc.
Harry Pepper & Associates, Inc.
Florida
100%
EMCOR Construction Services, Inc.
Dyn Specialty Contracting, Inc.
Virginia
100%
EMCOR Construction Services, Inc.
Concor Networks, Inc.
Delaware
100%
EMCOR Construction Services, Inc.
SIC International LLC
 
100%
Southern Industrial Constructors, Inc.
Southern Industrial Constructors, Inc.
North Carolina
100%
EMCOR Construction Services, Inc.
Dynalectric Company
Delaware
100%
DYN Specialty Contracting, Inc.
Dynalectric Company of Nevada
Nevada
100%
DYN Specialty Contracting, Inc.




NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Contra Costa Electric
California
100%
DYN Specialty Contracting, Inc.
KDC Inc.
California
100%
DYN Specialty Contracting, Inc.
EMCOR Construction Services, Inc.
Delaware
100%
MES Holdings Corp.
EMCOR Mechanical/Electrical Services (East), Inc.
Delaware
100%
EMCOR Construction Services, Inc.
Heritage Mechanical Services, Inc.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Welsbach Electric Corp.
Delaware
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Forest Electric Corp.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Welsbach Electric Corp. of L.I.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Penguin Maintenance and Services, Inc.
Delaware
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Penguin Air Conditioning Corp.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Inte‑Fac Corp.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
R.S. Harritan & Company, Inc.
Virginia
100%
EMCOR Mechanical/Electrical Services (East), Inc.
J.C. Higgins Corp.
Delaware
100%
EMCOR Mechanical/Electrical Services (East), Inc.

-2-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
New England Mechanical Services of Massachusetts, Inc.
Massachusetts
100%
New England Mechanical Services, Inc.
New England Mechanical Services, Inc.
Connecticut
100%
EMCOR Facilities Services, Inc.
Midland Fire Protection, Inc.
Rhode Island
100%
J.C. Higgins Corp.
Professional Mechanical Contractors, LLC
Connecticut
100%
J.C. Higgins Corp.
Duffy Mechanical Corp.
Maryland
100%
EMCOR Construction Services, Inc.
EMCOR Hyre Electric Co. of Indiana, Inc.
Delaware
100%
EMCOR Construction Services, Inc.
Dynalectric Company of Ohio
Ohio
100%
EMCOR Construction Services, Inc.
Gibson Electric Co., Inc.
New Jersey
100%
EMCOR Construction Services, Inc.
Dynalectric of Michigan II, Inc.
Delaware
100%
EMCOR Construction Services, Inc.
University Mechanical & Engineering Contractors, Inc.
California
100%
EMCOR Construction Services, Inc.
Pace Mechanical Services II, Inc.
Michigan
100%
University Mechanical & Engineering Contractors, Inc.
DeBra‑Kuempel Inc.
Delaware
100%
EMCOR Construction Services, Inc.
University Mechanical & Engineering Contractors, Inc.
Arizona
100%
University Mechanical & Engineering Contractors, Inc., a California corporation
Hansen Mechanical Contractors, Inc.
Nevada
100%
University Mechanical & Engineering Contractors, Inc., a California corporation

-3-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Trautman & Shreve, Inc.
Colorado
100%
University Mechanical & Engineering Contractors, Inc., a California corporation
EMCOR Gowan, Inc.
Texas
100%
EMCOR Construction Services, Inc.
EMCOR International, Inc.
Delaware
100%
MES Holdings Corporation
Marelich Mechanical Co., Inc.
California
100%
EMCOR Construction Services, Inc.
Design Air, Limited
Washington
100%
EMCOR Construction Services, Inc.
S.A. Comunale Co., Inc.
Ohio
100%
EMCOR Construction Services, Inc.
Performance Mechanical, Inc.
California
100%
EMCOR Construction Services, Inc.
Bahnson Holdings, Inc.
North Carolina
100%
EMCOR Construction Services, Inc.
Bahnson, Inc.
North Carolina
100%
Bahnson Holdings, Inc.
Mechanical Specialties Contractors, Inc.
North Carolina
100%
Bahnson, Inc.
Bahnson Environmental Specialties, LLC
North Carolina
100%
Bahnson, Inc.
Intermech, Inc.
Delaware
100%
Bahnson, Inc.
University Marelich Mechanical, Inc.
California
100%
EMCOR Construction Services, Inc.
EMCOR Facilities Services, Inc.
Delaware
100%
MES Holdings Corporation
Mesa Energy Systems, Inc.
California
100%
EMCOR Facilities Services, Inc.
MOR PPM, Inc.
South Carolina
100%
EMCOR Facilities Services, Inc.

-4-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
EMCOR Services Northeast, Inc.
Massachusetts
100%
EMCOR Facilities Services, Inc.
Mechanical Services of Central Florida, Inc.
Florida
100%
EMCOR Facilities Services, Inc.
EMCOR Services New York/New Jersey, Inc.
New York
100%
EMCOR Facilities Services, Inc.
Building Technology Engineers, Inc.
Massachusetts
100%
EMCOR Facilities Services, Inc.
Fluidics, Inc.
Pennsylvania
100%
EMCOR Facilities Services, Inc.
Scalise Industries Corporation
Pennsylvania
100%
EMCOR Facilities Services, Inc.
EMCOR Services CES, Inc.
Delaware
100%
EMCOR Facilities Services, Inc.
Air Systems, Inc.
California
100%
EMCOR Facilities Services, Inc.
Repcon Strickland, Inc.
Delaware
100%
EMCOR Facilities Services, Inc.
USM Services Holdings, Inc.
Delaware
100%
EMCOR Facilities Services, Inc.
USM (Delaware) Inc.
Delaware
100%
USM Services Holdings, Inc.
USM, Inc.
Pennsylvania
100%
USM (Delaware) Inc.
Monumental Investment Corporation
Maryland
100%
MES Holdings Corporation
The Poole and Kent Corporation
Maryland
100%
Monumental Investment Corporation
Poole and Kent - Connecticut, Inc.
Maryland
100%
Monumental Investment Corporation
Poole and Kent - New England, Inc.
Maryland
100%
Monumental Investment Corporation

-5-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Monumental Heating, Ventilating and Air Conditioning Contractors, Inc.
Maryland
100%
Monumental Investment Corporation
Forti/Poole and Kent, L.L.C.
Maryland
100%
Monumental Heating, Ventilating and Air Conditioning Contractors, Inc.
HVAC, Ltd.
Maryland
100%
Monumental Investment Corporation
Great Monument Construction Company
Maryland
100%
HVAC, Ltd.
Atlantic Coast Mechanical, Inc.
Maryland
100%
HVAC, Ltd.
The Poole and Kent Company
Maryland
100%
Monumental Investment Corporation
Poole & Kent Company of Florida
Delaware
100%
MES Holdings Corporation
EMCOR-CSI Holding Co.
Delaware
100%
MES Holdings Corporation
CSUSA Holdings, L. L. C.
Delaware
100%
EMCOR CSI Holding Co.
CS48 Acquisition Corp.
Delaware
100%
CSUSA Holdings, LLC
Shambaugh & Son, L.P.
Texas
Limited Partner
CS48 Acquisition Corp.
 
Texas
General Partner
CSUSA Holdings, LLC
Border Electric Co., L.P.
Texas
Limited Partner
CS48 Acquisition Corp.
 
Texas
General Partner
CSUSA Holdings, LLC
Border Mechanical Co., L.P.
Texas
Limited Partner
CS48 Acquisition Corp.
 
Texas
General Partner
CSUSA Holdings, LLC
Central Mechanical Construction Co., Inc.
Delaware
100%
EMCOR CSI Holding Co.
F & G Mechanical Corporation
Delaware
90%
EMCOR CSI Holding Co.

-6-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
F & G Plumbing, Inc.
New Jersey
100%
F & G Mechanical Corporation
F & G Management, Inc.
Delaware
100%
EMCOR CSI Holding Co.
Food Tech, Inc.
New York
100%
EMCOR CSI Holding Co.
Hillcrest Sheet Metal, Inc.
Delaware
100%
EMCOR CSI Holding Co.
Illingworth-Kilgust Mechanical, Inc.
Delaware
100%
EMCOR CSI Holding Co.
Kuempel Service, Inc.
Ohio
100%
EMCOR CSI Holding Co.
Lowrie Electric Company
Tennessee
100%
EMCOR CSI Holding Co.
Mandell Mechanical Corporation
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Meadowlands Fire Protection Corp.
New Jersey
100%
EMCOR CSI Holding Co.
North Jersey Mechanical Contractors, Inc.
New Jersey
100%
EMCOR CSI Holding Co.
Nogle & Black Mechanical, Inc.
Delaware
100%
EMCOR CSI Holding Co.
The Fagan Company
Kansas
100%
EMCOR CSI Holding Co.
Walker J Walker, Inc.
Tennessee
100%
EMCOR CSI Holding Co.
MES Holdings Corporation
Delaware
100%
EMCOR Group, Inc.
FR X Ohmstede Acquisitions Co.
Delaware
100%
EMCOR Facilities Services, Inc.
HNT Holdings Inc.
Delaware
100%
FR X Ohmstede Acquisitions Co.
Ohmstede Partners LLC
Delaware
100%
HNT Holdings Inc.
Ohmstede Holdings LLC
Delaware
100%
HNT Holdings Inc.
Ohmstede Ltd.
Texas
General Partner
Limited Partner
Ohmstede Partners LLC
Ohmstede Holdings LLC
Ohmstede Industrial Services, Inc.
Texas
100%
Ohmstede Ltd.

-7-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Beaumont Real Estate Holding Company
Texas
100%
Ohmstede Ltd.
Redman Equipment & Manufacturing Company
California
100%
Ohmstede Ltd.
AltairStrickland Holdings LLC
California
100%
Repcon Strickland
ASG Diamond, LLC
Texas
100%
AltairStrickland Holdings LLC
ASI Industrial Services, LLC
Texas
100%
ASG Diamond, LLC
Diamond Refractory Services, LLC
Texas
100%
ASI Industrial Services, LLC
Mercury Industrial Materials, LLC
Texas
100%
ASI Industrial Services, LLC
Turnaround Welding Services, LLC
Texas
100%
AltairStrickland Holdings LLC
Turnaround Welding Services California, L.P.
California
Limited Partner
Turnaround Welding Services, LLC
Turnaround Welding Services California, L.P.
California
General Partner
AltairStrickland Holdings California, Inc.
AltairStrickland California, L.P.
California
Limited Partner
AltairStrickland Holdings, LLC
AltairStrickland California, L.P.
California
General Partner
AltairStrickland Holdings California, Inc.
AltairStrickland, LLC
Texas
100%
AltairStrickland Holdings LLC
Tiger Tower Services, LLC
Texas
100%
AltairStrickland, LLC
AltairStrickland International LLC
Texas
100%
AltairStrickland, LLC
AltairStrickland Holdings California, Inc.
California
100%
AltairStrickland Holdings LLC
Tiger Tower Services California, L.P.
California
Limited Partner
Tiger Tower Services, LLC

-8-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Tiger Tower Services California, L.P.
California
General Partner
AltairStrickland Holdings California, Inc.
Diamond Refractory Services California, L.P.
California
Limited Partner
ASI Industrial Services, LLC
Diamond Refractory Services California, L.P.
California
General Partner
AltairStrickland Holdings California, Inc.
Repcon, Inc.
Texas
100%
RepconStrickland, Inc.
Repcon Equipment Co.
Texas
100%
Repcon, Inc.
Repcon International, Inc.
Texas
100%
Repcon, Inc.
Repcon Properties, LLC
Texas
100%
RepconStrickland, Inc.



-9-


SCHEDULE 5.2

RESTRICTED SUBSIDIARIES

NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Aircond Corporation
Georgia
100%
EMCOR Facilities Services, Inc.
AltairStickland Holdings LLC
California
100%
Repcon Stickland, Inc.
ASG Diamond, LLC
Texas
100%
AltairStrickland Holdings LLC
ASI Industrial Services, LLC
Texas
100%
ASG Diamond, LLC
AltairStrickland California, L.P.
California
Limited Partner
AltairStrickland Holdings, LLC
AltairStrickland California, L.P.
California
General Partner
AltairStrickland Holdings California, Inc.
AltairStrickland, LLC
Texas
100%
AltairStrickland Holdings, LLC
AltairStrickland International LLC
Texas
100%
AltairStrickland, LLC
AltairStrickland Holdings California, Inc.
California
100%
AltairStrickland , LLC
The Betlem Service Corporation
New York
100%
EMCOR Facilities Services, Inc.
CES Facilities Management Services, Inc.
Maryland
100%
EMCOR Government Services, Inc.
Combustioneer Corporation
Maryland
100%
EMCOR Facilities Services, Inc.
Diamond Refractory Services, LLC
Texas
100%
ASI Industrial Services, LLC
Tiger Tower Services California, L.P.
California
Limited Partner
Tiger Tower Services, LLC
Tiger Tower Services California, L.P.
California
General Partner
AltairStrickland Holdings California, Inc.
Diamond Refractory Services California, L.P.
California
Limited Partner
ASI Industrial Services, LLC




NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Diamond Refractory Services California, L.P.
California
General Partner
AltairStrickland Holdings California, Inc.
ConCor Networks, Inc.
Delaware
100%
EMCOR Construction Services, Inc.
EMCOR Services Team Mechanical, Inc.
Delaware
100%
EMCOR Facilities Services, Inc.
Food Tech, Inc.
New York
100%
EMCOR CSI-Holding Co.
Harry Pepper & Associates, Inc.
Florida
100%
EMCOR Construction Services, Inc.
Illingworth Corporation
Wisconsin
100%
EMCOR CSI Holding Co.
New England Mechanical Services of Massachusetts, Inc.
Massachusetts
100%
New England Mechanical Services, Inc.
New England Mechanical Services, Inc.
Connecticut
100%
EMCOR Facilities Services, Inc.
Viox Services, Inc.
Ohio
100%
EMCOR Facilities Services, Inc.
DYN Specialty Contracting, Inc.
Virginia
100%
EMCOR Construction Services, Inc.
Dynalectric Company
Delaware
100%
DYN Specialty Contracting, Inc.
Dynalectric Company of Nevada
Nevada
100%
DYN Specialty Contracting, Inc.
Contra Costa Electric, Inc.
California
100%
DYN Specialty Contracting, Inc.
KDC Inc.
California
100%
DYN Specialty Contracting, Inc.
EMCOR Construction Services, Inc.
Delaware
100%
MES Holdings Corp.
Defender Indemnity, Ltd.
Vermont
100%
EMCOR Risk Holdings, Inc.
EMCOR Risk Holdings, Inc.
Delaware
100%
MES Holdings Corp.
EMCOR Mechanical/Electrical Services, (East), Inc.
Delaware
100%
EMCOR Construction Services, Inc.

-2-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Heritage Mechanical Services, Inc.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Welsbach Electric Corp.
Delaware
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Welsbach Electric Corp. of L.I.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Forest Electric Corp.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Penguin Maintenance and Services, Inc.
Delaware
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Inte-Fac Corp.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Penguin Air Conditioning Corp.
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
R.S. Harritan & Company, Inc.
Virginia
100%
EMCOR Mechanical/Electrical Services (East), Inc.
J.C. Higgins Corp.
Delaware
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Tucker Mechanical, Inc.
Connecticut
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Midland Fire Protection, Inc.
Rhode Island
100%
J. C. Higgins Corp.
Professional Mechanical Contractors, LLC
Connecticut
100%
J.C. Higgins Corp.
Duffy Mechanical Corp.
Maryland
100%
EMCOR Construction Services, Inc.
EMCOR Facilities Services, Inc.
Delaware
100%
MES Holdings Corp.

-3-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Mesa Energy Systems, Inc.
California
100%
EMCOR Facilities Services, Inc.
EMCOR Services Northeast, Inc.
Massachusetts
100%
EMCOR Facilities Services, Inc.
EMCOR Government Services, Inc.
Maryland
100%
EMCOR Facilities Services, Inc.
EMCOR Services New York/New Jersey, Inc.
New York
100%
EMCOR Facilities Services, Inc.
Consolidated Engineering Services, Inc.
Maryland
100%
EMCOR Facilities Services, Inc.
Building Technology Engineers, Inc.
Massachusetts
100%
EMCOR Facilities Services, Inc.
Fluidics, Inc.
Pennsylvania
100%
EMCOR Facilities Services, Inc.
Air Systems, Inc.
California
100%
EMCOR Facilities Services, Inc.
Trimech Corporation
New Jersey
100%
EMCOR Facilities Services, Inc.
Gotham Air Conditioning Service, Inc.
New York
100%
EMCOR Facilities Services, Inc.
Dynalectric Company of Ohio
Ohio
100%
EMCOR Construction Services, Inc.
Mechanical Services of Central Florida, Inc.
Florida
100%
EMCOR Facilities Services, Inc.
Scalise Industries Corporation
Pennsylvania
100%
EMCOR Facilities Services, Inc.
EMCOR Services CES, Inc.
Delaware
100%
EMCOR Facilities Services, Inc.
MOR PPM, Inc.
South Carolina
100%
EMCOR Facilities Services, Inc.
USM Services Holdings, Inc.
Delaware
100%
EMCOR Facilities Services, Inc.
USM (Delaware) Inc.
Delaware
100%
USM Services Holdings, Inc.

-4-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
USM, Inc.
Pennsylvania
100%
USM (Delaware) Inc.
Dynalectric of Michigan II, Inc.
Delaware
100%
EMCOR Construction Services, Inc.
Gibson Electric Co., Inc.
New Jersey
100%
EMCOR Construction Services, Inc.
EMCOR Hyre Electric Co. of Indiana, Inc.
Delaware
100%
EMCOR Construction Services, Inc.
DeBra‑Kuempel Inc.
Delaware
100%
EMCOR Construction Services, Inc.
University Mechanical & Engineering Contractors, Inc.
California
100%
EMCOR Construction Services, Inc.
S. A. Comunale Co., Inc.
Ohio
100%
EMCOR Construction Services, Inc.
Performance Mechanical, Inc.
California
100%
EMCOR Construction Services, Inc.
Bahnson Holdings, Inc.
North Carolina
100%
EMCOR Construction Services, Inc.
Bahnson, Inc.
North Carolina
100%
Bahnson Holdings, Inc.
Mechanical Specialties Contractors, Inc.
North Carolina
100%
Bahnson, Inc.
Bahnson Environmental Specialties, LLC
North Carolina
100%
Bahnson, Inc.
Intermech, Inc.
North Carolina
100%
Bahnson, Inc.
BALCO, Inc.
Massachusetts
100%
EMCOR Construction Services, Inc.
Commonwealth Air Conditioning and Heating, Inc.
Massachusetts
100%
EMCOR Construction Services, Inc.
CommAir, Inc.
Massachusetts
100%
EMCOR Construction Services, Inc.
Pace Mechanical Services II, Inc.
Michigan
100%
University Mechanical & Engineering Contractors, Inc.

-5-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
University Mechanical & Engineering Contractors, Inc.
Arizona
100%
University Mechanical & Engineering Contractors, Inc., a California corporation
MES Holdings Corporation
Delaware
100%
EMCOR Group, Inc.
Hansen Mechanical Contractors, Inc.
Nevada
100%
University Mechanical & Engineering Contractors, Inc., a California corporation
Trautman & Shreve, Inc.
Colorado
100%
University Mechanical & Engineering Contractors, Inc., a California corporation
Marelich Mechanical Co., Inc.
California
100%
EMCOR Construction Services, Inc.
Design Air, Limited
Washington
100%
EMCOR Construction Services, Inc.
EMCOR Gowan, Inc.
Texas
100%
EMCOR Construction Services, Inc.
University Marelich Mechanical, Inc.
Delaware
100%
EMCOR Construction Services, Inc.
EMCOR Energy Services, Inc.
Delaware
100%
EMCOR Mechanical/Electrical Services (East), Inc.
EMCOR International, Inc.
Delaware
100%
MES Holdings Corp.
Monumental Investment Corporation
Maryland
100%
MES Holdings Corporation
The Poole and Kent Corporation
Maryland
100%
Monumental Investment Corporation
Poole and Kent – Connecticut, Inc.
Maryland
100%
Monumental Investment Corporation
Poole and Kent – New England, Inc.
Maryland
100%
Monumental Investment Corporation
Poole & Kent Company of Florida
Delaware
100%
MES Holdings Corporation
Monumental Heating, Ventilating and Air Conditioning Contractors, Inc.
Maryland
100%
Monumental Investment Corporation

-6-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Forti/Poole and Kent L.L.C.
Maryland
100%
Monumental Heating, Ventilating and Air Conditioning Contractors, Inc.
HVAC, Ltd.
Maryland
100%
Monumental Investment Corporation
Atlantic Coast Mechanical, Inc.
Maryland
100%
HVAC, Ltd.
Great Monument Construction Company
Maryland
100%
HVAC, Ltd.
The Poole and Kent Company
Maryland
100%
Monumental Investment Corporation
EMCOR-CSI Holdings Co.
Delaware
100%
MES Holdings Corporation
CSUSA Holdings L.L.C.
Delaware
100%
EMCOR CSI Holding Co.
CS48 Acquisition Corp.
Delaware
100%
CSUSA Holdings L.L.C.
Shambaugh & Son, L.P.
Texas
Limited Partner
CS48 Acquisition Corp.
Shambaugh & Son, L.P.
Texas
General Partner
CSUSA Holdings, LLC
Border Electric Co., L.P.
Texas
Limited Partner
CS48 Acquisition Corp.
Border Electric Co., L.P.
Texas
General Partner
CSUSA Holdings, LLC
Border Mechanical Co., L.P.
Texas
Limited Partner
CS48 Acquisition Corp.
Border Mechanical Co., L.P.
Texas
General Partner
CSUSA Holdings, LLC
AM Contractors 1, Inc.
Michigan
100%
EMCOR CSI Holding Co.
Central Mechanical Construction Co., Inc.
Delaware
100%
EMCOR CSI Holding Co.
F & G Mechanical Corporation
Delaware
90%
EMCOR CSI Holding Co.
F & G Plumbing, Inc.
Delaware
100%
F & G Mechanical Corporation
F & G Management, Inc.
Delaware
100%
EMCOR CSI Holdings, L.L.C.
Hillcrest Sheet Metal, Inc.
Delaware
100%
EMCOR CSI Holding Co.

-7-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Illingworth-Kilgust Mechanical, Inc.
Delaware
100%
EMCOR CSI Holding Co.
Kilgust Mechanical, Inc.
Wisconsin
100%
EMCOR CSI Holding Co.
Kuempel Service, Inc.
Ohio
100%
EMCOR CSI Holding Co.
Lowrie Electric Company, Inc.
Tennessee
100%
EMCOR CSI Holding Co.
Mandell Mechanical Corporation
New York
100%
EMCOR Mechanical/Electrical Services (East), Inc.
Meadowlands Fire Protection Corp.
New Jersey
100%
EMCOR CSI Holding Co.
Nogle & Black Mechanical, Inc.
Delaware
100%
EMCOR CSI Holding Co.
North Jersey Mechanical Contractors, Inc.
New Jersey
100%
EMCOR CSI Holding Co.
The Fagan Company
Kansas
100%
EMCOR CSI Holding Co.
Walker-J-Walker, Inc.
Tennessee
100%
EMCOR CSI Holding Co.
FR X Ohmstede Acquisitions Co
Delaware
100%
EMCOR Facilities Services, Inc.
HNT Holdings Inc.
Delaware
100%
FR X Ohmstede Acquisitions Co.
Ohmstede Partners LLC
Delaware
100%
HNT Holdings Inc.
Ohmstede Holdings LLC
Delaware
100%
HNT Holdings Inc.
Ohmstede Ltd.
Texas
General Partner
Limited Partner
Ohmstede Partners LLC
Ohmstede Holdings LLC
Ohmstede Industrial Services, Inc
Texas
100%
Ohmstede Ltd.
Beaumont Real Estate Holding Company
Texas
100%
Ohmstede Ltd.
Redman Equipment & Manufacturing Company
California
100%
Ohmstede Ltd.
Ohmstede Columbia, LLC
Delaware
100%
Ohmstede, Ltd.
Tiger Tower Services, LLC
Texas
100%
AltairStrickland, LLC
Repcon, Inc.
Texas
100%
RepconStrickland, Inc.

-8-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Repcon Equipment Co.
Texas
100%
Repcon, Inc.
Repcon International, Inc.
Texas
100%
Repcon, Inc.
Repcon Properties, LLC
Texas
100%
Repcon Strickland, Inc.
RepconStrickland, Inc.
Delaware
100%
EMCOR Facilities Services, Inc.
Southern Industrial Constructors, Inc.
North Carolina
100%
EMCOR Construction Services, Inc.
SIC International, LLC
North Carolina
100%
Southern Industrial Constructors, Inc.
Southern Crane Corporation
North Carolina
100%
EMCOR Construction Services, Inc.
Mercury Industrial Materials, LLC
Texas
100%
ASI Industrial Services, LLC
Turnaround Welding Services, LLC
Texas
100%
AltairStrickland Holdings LLC
Turnaround Welding Services California, L.P.
California
Limited Partner
Turnaround Welding Services, LLC
Turnaround Welding Services California, L.P.
California
General Partner
AltairStrickland Holdings California, Inc.
EMCOR Facilities Services (PR), Inc.*
Puerto Rico
100%
EMCOR International, Inc.
EMCOR (UK) Limited
UK
100%
EMCOR International, Inc.
EMCOR Group (UK) plc
UK
100%
EMCOR (UK) Limited
EMCOR Facilities Services Ltd.
UK
100%
EMCOR Group (UK) plc
Drake & Scull Airport Services, Ltd.
UK
100%
EMCOR Group (UK) plc
EMCOR Energy Services, Ltd.
UK
100%
EMCOR Group (UK) plc
Drake & Scull International, Ltd.
UK
100%
EMCOR Group (UK) plc
EMCOR Rail Ltd.
UK
100%
EMCOR Group (UK) plc
EMCOR Energy Services, Ltd.
UK
100%
EMCOR Group (UK) plc

-9-


NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Drake &Scull Holdings Ltd.
UK
100%
EMCOR Group (UK) plc
Delcommerce (Contract Services) Ltd.
UK
100%
EMCOR (UK) Limited
Drake & Scull (Scotland) Ltd.
UK
100%
EMCOR (UK) Limited
DSE (Far East) Ltd.
UK
100%
EMCOR Group (UK) plc
BL Distribution Ltd.
UK
100%
EMCOR (UK) Limited
Drake & Scull Properties Ltd.
UK
100%
EMCOR (UK) Limited
Businessland Holdings Ltd.
UK
100%
EMCOR Group (UK) plc

*
designated foreign subsidiary.


-10-


FOREIGN SUBSIDIARIES

NAME
JURISDICTION OF INCORPORATION
PERCENTAGE OWNERSHIP
OWNER
Emcor (Cayman Islands) Ltd.*
Cayman Islands
100%
EMCOR International Inc.
EMCOR (Cayman Islands) No. 2 Limited*
Cayman Islands
100%
EMCOR International Inc.
EMCOR Drake & Scull International Limited*
Jebel Ali Free Zone
100%
Drake & Scull (Cayman Islands) Ltd.
JWP Technical Services (Malaysia) Sdn Bhd*
Malaysia
100%
EMCOR International Inc.
Drake & Scull France EURL*
France
100%
EMCOR Group (UK) plc
Langgit Tinggi Sdn Bhd*
Malaysia
100%
EMCOR (UK) Ltd.
Poole and Kent, Ltd.*
Bermuda
100%
Monumental Investment Corporation
Atlas Indemnity, Ltd.*
Bermuda
100%
EMCOR Risk Holdings, Inc.
University Mechanical de Mexico S.A. Dec.V.*
Mexico
98%
University Mechanical & Engineering Contractors, Inc.


*
designated foreign subsidiary.


-11-


UNRESTRICTED SUBSIDIARIES
 
Name
Jurisdiction of
Incorporation
Percentage
Ownership
Owner
Afgo Engineering Corp. of Washington
Delaware
100%
Sellco Corporation
Businessland Canada Ltd.
Canada
100%
JWP Information Services, Inc.
Businessland (Hong Kong) Limited
Hong Kong
100%
JWP Information Services, Inc.
Drake & Scull France SARL
France
100%
Sellco Corporation
Jamaica Water Securities Corp.
New York
100%
Sellco Corporation
JWP Espana SA
Spain
100%
Sellco Corporation
JWP/HCII Corp.
Delaware
100%
Sellco Corporation
JWP Information Services SARL
France
100%
Sellco Corporation
JWP TS Corp.
New Jersey
100%
Sellco Corporation
Sivea Benelux
Belgium
100%
Sellco Corporation
SLR Constructors Inc.
New York
100%
Sellco Corporation
Teletime Limited
Ontario
100%
Sellco Corporation
Sellco Corporation
Delaware
100%
EMCOR Group, Inc.
JWP Telecom, Inc.
Delaware
100%
EMCOR Group, Inc.
MEC Constructors, Inc.
Delaware
100%
MEC Constructors, Inc.
JWP Technical Services (C.N.M.I.), Inc.
Northern Marianas
100%
MEC Constructors, Inc.



-12-


SCHEDULE 7.10
INDEBTEDNESS
1.    EMCOR Group, Inc. and various EMCOR Subsidiaries
a.    $4.0 million payable under finance leases and purchase money mortgages.
b.    EMCOR and its subsidiaries have guaranteed the obligations of one another in respect of bonds issued by surety companies. Certain of these obligations are secured by a lien upon the assets of each guarantor.
2.    The information contained in Schedules 7.11 and 7.12 is hereby incorporated by reference thereto.







SCHEDULE 7.11

LIENS

1.
EMCOR and various EMCOR Subsidiaries

a.
EMCOR subsidiaries have obtained bonds from surety companies. The agreements pursuant to which the bonds were issued and will be issued in the future provide that EMCOR and most EMCOR subsidiaries agree to hold such surety companies harmless in respect of such bonds and grant liens upon certain of their assets in favor of the bonding companies to secure such “hold harmless” obligations.

b.
Miscellaneous finance leases, purchase money mortgages and other liens relating EMCOR subsidiaries securing obligations approximating $4.0 million.

2.
UK Companies

a.
Rent Deposit Deed granted by EMCOR Group (UK) plc dated August 19, 2005 in favor Zurich Assurance Limited.

c.
Bank Account Security Deed relating to Peacehaven Schools PFI Project in favor of ING Bank by EMCOR Facilities Services Limited.







SCHEDULE 7.12

INVESTMENTS, LOANS, ADVANCES AND GUARANTIES

Investments
Amount of investment
Payee or holder
1. Colony Holdings Ltd. (Bermuda)
60,000 shares —12% interest
Monumental Investment Corp.
2. Baltimore Ravens
License (right) for 16 seats
The Poole & Kent Corporation
3. Cash Surrender Value of split dollar insurance policy
$830,000
Penguin Air Condition Corp.
4. Cash Surrender Value of split dollar life insurance policy
$709,000
Shambaugh & Son, LP
5. F&G Mechanical Inc. (New York)
90 shares – 45% interest
F&G Mechanical Corp. (New York)
6. C & H Services LLC
50% Interest
Ohmstede Ltd.
7. Start 2 Finish LLC
45% Interest
Viox
8. DATSU
35% Interest
Altair Strickland Holdings, LLC
9. CTSI-CES Facility Services Millington LLC
40% Interest
EMCOR Government Services Inc.
10. E-Star LLC
49% Interest
EMCOR Government Services Inc.
Guaranties
The information contained in Schedules 7.11 and 7.12 is hereby incorporated herein by reference thereto.



EXHIBIT 4(b)

FOURTH AMENDED AND RESTATED SECURITY AGREEMENT
This Fourth Amended and Restated Security Agreement (the “Agreement” ) is dated as of November 25, 2013, by and among the parties executing this Agreement under the heading “Debtors” on the signature pages hereto (such parties, along with any parties who execute and deliver to the Agent an agreement in the form attached hereto as Schedule H, being hereinafter referred to collectively as the “Debtors” and individually as a “Debtor” ) and Bank of Montreal, a Canadian chartered bank acting through its Chicago branch ( “BMO” ), with its mailing address at 111 West Monroe Street, Chicago, Illinois 60603, acting as administrative agent hereunder for the Secured Creditors hereinafter identified and defined (BMO acting as such administrative agent and any successor or successors to BMO acting in such capacity being hereinafter referred to as the “Agent” );
WITNESSETH THAT:
WHEREAS, EMCOR Group, Inc., a Delaware corporation (the “Company” ) and certain of its subsidiaries, as Debtors, heretofore executed and delivered to Bank of Montreal ( “BMO” ) that certain Third Amended and Restated Security Agreement dated as of February 10, 2010 (such Third Amended and Restated Security Agreement, as the same has been amended and supplemented, being hereinafter referred to as the “Prior Security Agreement” ) pursuant to which certain Debtors granted BMO a lien on and continuing security interest in certain personal property of such Debtors described therein as collateral security for, among other things, all indebtedness, obligations and liabilities of the Borrowers (as hereinafter defined) under that certain Third Amended and Restated Credit Agreement dated as of November 21, 2011, as amended, by and among the Borrowers, BMO, individually and in its capacity as agent thereunder, and the lenders party thereto (the “Prior Credit Agreement” );
WHEREAS, the Company and EMCOR Group (UK) plc, a United Kingdom public limited company ( “EMCOR UK”; the Company and EMCOR UK being hereinafter referred to collectively as the “Borrowers” ) and BMO, individually and as Agent, have entered into a Fourth Amended and Restated Credit Agreement dated as of November 25, 2013 (such Fourth Amended and Restated Credit Agreement, as the same may be amended, modified or restated from time to time, being hereinafter referred to as the “Credit Agreement” ), pursuant to which BMO and other banks and financial institutions and letter of credit issuers from time to time party to the Credit Agreement (BMO, in its individual capacity, and such other banks and financial institutions being hereinafter referred to collectively as the “Lenders” and individually as a “Lender” , and such letter of credit issuers being hereinafter referred to collectively as the “Issuers” and individually as an “Issuer” ) have agreed, subject to certain terms and conditions, to extend credit and make certain other financial accommodations available to the Borrowers (the Agent, the Issuers, and the Lenders, together with affiliates of the Lenders with respect to Hedging Liability referred to below, being hereinafter referred to collectively as the “Secured Creditors” and individually as a “Secured Creditor” );
WHEREAS, in addition, one or more of the Debtors may from time to time be liable to the Lenders and/or their affiliates with respect to Hedging Liability (as such term is defined in the Credit Agreement);


1921592

WHEREAS, as a condition precedent to extending credit or otherwise making financial accommodations available to the Borrowers under the Credit Agreement, the Secured Creditors require, among other things, that each Debtor grant to the Agent for the benefit of the Secured Creditors a lien on and security interest in certain personal property of such Debtor pursuant to this Agreement, and, in connection therewith, that the Prior Security Agreement be amended and restated in its entirety to read as set forth in this Agreement;
WHEREAS, the Company owns, directly or indirectly, all or substantially all of the equity interests in each other Debtor, and the Borrowers provide each Debtor with financial, management, administrative, and technical support which enables such Debtor to conduct its business in an orderly and efficient manner in the ordinary course; and
WHEREAS, each Debtor will benefit, directly and indirectly, from credit and other financial accommodations extended by the relevant Secured Creditors to the Borrowers.
NOW, THEREFORE, for and in consideration of, among other things, the execution and delivery by the Lenders and the Agent of the Credit Agreement, and other good and valuable consideration, receipt whereof is hereby acknowledged, the parties hereto hereby agree as follows:
Section 1.    Terms Defined in Credit Agreement. All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement. The term “Debtor” and “Debtors” as used herein shall mean and include the Debtors collectively and also each individually, with all grants, representations, warranties and covenants of and by the Debtors, or any of them, herein contained to constitute joint and several grants, representations, warranties and covenants of and by the Debtors; provided, however, that unless the context in which the same is used shall otherwise require, any grant, representation, warranty or covenant contained herein related to the Collateral shall be made by each Debtor only with respect to the Collateral owned by it or represented by such Debtor as owned by it.
Section 2.    Grant of Security Interest in the Collateral; Obligations Secured.
(a)    As collateral security for the Obligations defined below, each Debtor hereby grants to the Agent for the benefit of the Secured Creditors a lien on and security interest in, and right of set‑off against , and acknowledges and agrees that the Agent has and shall continue to have for the benefit of the Secured Creditors a continuing lien on and security interest in, and right of set‑off against, all right, title, and interest of each Debtor, wherever located and whether now owned or existing or hereafter created, acquired or arising, in and to all of the following:
(i)    Accounts (including Health‑Care‑Insurance Receivables, if any);
(ii)    Chattel Paper;
(iii)    Instruments (including Promissory Notes);

- 2 -

(iv)    Documents;
(v)    General Intangibles (including Payment Intangibles and Software, patents, trademarks, tradestyles, copyrights, and all other intellectual property rights, including all applications, registration, and licenses therefor, and all goodwill of the business connected therewith or represented thereby);
(vi)    Letter‑of‑Credit Rights;
(vii)    Supporting Obligations;
(viii)    Deposit Accounts;
(ix)    Investment Property (including certificated and uncertificated Securities, Securities Accounts, Security Entitlements, Commodity Accounts, and Commodity Contracts);
(x)    Inventory;
(xi)    Equipment (including all software, whether or not the same constitutes embedded software, used in the operation thereof);
(xii)    Fixtures;
(xiii)    Commercial Tort Claims (as described on Schedule F hereto or on one or more supplements to this Agreement);
(xiv)    Rights to merchandise and other Goods (including rights to returned or repossessed Goods and rights of stoppage in transit) which is represented by, arises from, or relates to any of the foregoing;
(xv)    Monies, personal property, and interests in personal property of such Debtor of any kind or description now held by any Secured Creditor or at any time hereafter transferred or delivered to, or coming into the possession, custody or control of, any Secured Creditor, or any agent or affiliate of any Secured Creditor, whether expressly as collateral security or for any other purpose (whether for safekeeping, custody, collection or otherwise), and all dividends and distributions on or other rights in connection with any such property;
(xvi)    Supporting evidence and documents relating to any of the above‑described property, including, without limitation, computer programs, disks, tapes and related electronic data processing media, and all rights of such Debtor to retrieve the same from third parties, written applications, credit information, account cards, payment records, correspondence, delivery and installation certificates, invoice copies, delivery receipts, notes and other evidences of indebtedness, insurance

- 3 -

certificates and the like, together with all books of account, ledgers, and cabinets in which the same are reflected or maintained;
(xvii)    Accessions and additions to, and substitutions and replacements of, any and all of the foregoing; and
(xviii)    Proceeds and products of the foregoing, and all insurance of the foregoing and proceeds thereof;
(all of the foregoing being herein referred to as the “Collateral” ); provided, however, that:
(A)     no lien is granted on any asset subject to a lien permitted by clause (e), (i), (l) (as to liens on fixed assets only) or (m) of Section 7.11 of the Credit Agreement,
(B)     no lien is granted on the capital stock of any Unrestricted Subsidiary or on the capital stock or assets of any designated Foreign Restricted Subsidiary identified on Schedule 5.2 of the Credit Agreement;
(C)     no lien is granted on any contract, license, permit or franchise that validly prohibits the creation, attachment, or perfection of a security interest in favor of the Agent in such contract, license, permit or franchise (or in any rights or property obtained by such Debtor under such contract, license, permit or franchise);
(D)     no lien is granted on any rights or property to the extent that any valid and enforceable law or regulation applicable to such rights or property prohibits the creation of a security interest therein;
(E)     no lien is granted on any rights or property to the extent that such rights or property secure purchase money financing therefor permitted by the Credit Agreement and the agreements providing such purchase money financing prohibit the creation of a further security interest therein;
(F)     liens granted may be subject and subordinate to liens permitted by clauses (a), (b), (c), (e), (f), (g), (h), (j), (k) and (n) of Section 7.11 of the Credit Agreement;
(G)     liens need not be perfected by possession or control (but may be perfected by the filing of a financing statement) on notes receivable having a fair value of less than $2,000,000 in any instance and $10,000,000 in the aggregate or on bonds or notes of the City of New York pledged to the City of New York in lieu of retainage; and
(H)     liens need not be perfected by possession or control (but may be perfected by the filing of a financing statement) on equity securities (other than capital stock of Restricted Subsidiaries required to be pledged by the other provisions of the Credit

- 4 -

Agreement) having a fair value of less than $1,000,000 in any instance and $5,000,000 in the aggregate;
provided further , that (x) notwithstanding anything set forth above to the contrary, to the extent not prohibited by law, the Agent has and shall at all times have a security interest in all rights to payments of money due or to become due under any such contract, contract right, or similar general intangible and all other proceeds thereof and (y) if and when the prohibition which prevents the granting of a security interest in any such Property is removed, terminated or otherwise becomes unenforceable as a matter of law, the Agent will be deemed to have, and at all times to have had, a security interest in such Property and the Collateral will be deemed to include, and at all times to have included, such Property. Notwithstanding anything to the contrary contained herein, the requirement of the Debtors to grant any liens or security interests shall remain subject in all respects to the provisions of Section 4.1 of the Credit Agreement. All terms which are used herein which are defined in the Uniform Commercial Code of the State of Illinois as in effect from time to time ( “UCC” ) shall have the same meanings herein as such terms are defined in the UCC, unless this Agreement shall otherwise specifically provide. For purposes of this Agreement, the term “Receivables” means all rights to the payment of a monetary obligation, whether or not earned by performance, and whether evidenced by an Account, Chattel Paper, Instrument, General Intangible, or otherwise.
(b)    This Agreement is made and given to secure, and shall secure, the prompt payment and performance of (i) all “Obligations,” and all “Hedging Liability,” as such terms are defined in the Credit Agreement, including, without limitation, all obligations with respect to Loans made and to be made under the Credit Agreement (whether or not evidenced by Notes issued thereunder), all obligations of the Borrowers, or any of them individually, to reimburse the Secured Creditors for the amount of all drawings on all Letters of Credit issued pursuant to the Credit Agreement and all other obligations of the Borrowers, or any of them individually, under all Applications for Letters of Credit, all other obligations of the Borrowers and the other Debtors under the Loan Documents, all obligations of the Debtors, and of any of them individually, with respect to any Hedging Liability and the agreements relating thereto, and all obligations of the Debtors, and of any of them individually, arising under any guaranty issued by it relating to the foregoing or any part thereof, in each case whether now existing or hereafter arising (and whether arising before or after the filing of a petition in bankruptcy and including all interest, costs, fees, and charges after the entry of an order for relief against a Debtor in a case under Title 11 of the United States Bankruptcy Code or any similar proceeding, whether or not such interest, costs, fees and charges would be an allowed claim against such Debtor in such proceeding), due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired, and owing in any currency and (ii) any and all expenses and charges, legal or otherwise, suffered or incurred by the Secured Creditors, and any of them individually, in collecting or enforcing any of such indebtedness, obligations, and liabilities or in realizing on or protecting or preserving any security therefor, including, without limitation, the lien and security interest granted hereby (all of the indebtedness, obligations, liabilities, expenses, and charges described above being hereinafter referred to as the “Obligations” ). Notwithstanding anything in this Agreement to the contrary, the right of recovery against any Debtor under this Agreement (other than the Company to which this limitation shall not apply) shall not exceed $1.00 less than the lowest amount that would render such Debtor’s obligations under this Agreement void or voidable under applicable law, including fraudulent conveyance law.

- 5 -

Section 3.    Covenants, Agreements, Representations and Warranties.  Each Debtor hereby covenants and agrees with, and represents and warrants to, the Agent and each Secured Creditor that:
(a)    Each Debtor is duly organized and validly existing in good standing under the laws of the state of its organization. No Debtor shall change its state of organization without the Agent’s prior written consent (which consent shall not be unreasonably withheld or delayed). Each Debtor’s chief executive office and principal place of business is at the location listed opposite such Debtor’s name under column 2 on Schedule A attached hereto; and such Debtor has no other executive offices or places of business (other than operating job sites in the ordinary course of such Debtor’s business) other than those listed opposite such Debtor’s name under column 3 on Schedule A attached hereto. Each Debtor’s organizational identification number is set forth under its name in column 1 on Schedule A attached hereto. The Collateral owned or leased by each Debtor is and shall remain in such Debtor’s possession or control at the locations listed opposite such Debtor’s name under column 4 on Schedule A attached hereto opposite such Debtors’ name, or is or shall be located at such Debtor’s then operating job sites in the ordinary course of its business, or is or shall be in transit to or between any of the foregoing locations (collectively, the “Permitted Collateral Locations” ) in the ordinary course of business. If for any reason any Collateral is at any time kept or located at a location other than a Permitted Collateral Location, the Agent shall nevertheless have and retain a lien on and security interest in such Collateral. No Debtor shall move its chief executive office or maintain a place of business at a location other than those specified under columns 2 and/or 3 on Schedule A attached hereto other than temporarily in the ordinary course of business or permit any Collateral in excess of $1,000,000 to be located at a location other than a Permitted Collateral Location other than temporarily in the ordinary course of business or at a job site, in each case without first providing the Agent 30 days prior written notice of such Debtor’s intent to do so; provided, however, that each Debtor shall at all times maintain its chief executive office and places of business in the United States of America and, with respect to any new chief executive office or place of business or location of Collateral, such Debtor shall have taken all action reasonably requested by the Agent or any Secured Creditor to maintain the lien and security interest of the Agent in the Collateral at all times fully perfected and in full force and effect. The execution and delivery of this Agreement, and the observance and performance of each of the matters and things herein set forth, will not (i) contravene or constitute a default under any provision of law or any judgment, injunction, order or decree binding upon any Debtor or any provision of any Debtor’s organizational documents ( e.g. certificate of incorporation, articles of incorporation, by‑laws, certificate of formation, limited liability company operating agreement or partnership agreement, as applicable) or any covenant, indenture or agreement of or affecting any Debtor or any of its property or (ii) result in the creation or imposition of any lien or encumbrance on any property of any Debtor except for the lien and security interest granted to the Agent in the Collateral hereunder. Each Debtor’s organizational registration number (if any) is set forth on Schedule A attached hereto.
(b)    The Collateral and every part thereof is and shall be free and clear of all security interests, liens (including, without limitation, mechanics’, laborers’ and statutory liens), attachments, levies and encumbrances of every kind, nature and description and whether voluntary or involuntary,

- 6 -

except for the lien and security interest of the Agent therein and other liens permitted by the Credit Agreement (herein, the “Permitted Encumbrances” ).
(c)    Subject to Sections 4(a), 6(c) and 7(a) hereof, no Debtor shall without the Agent’s prior written consent, sell, assign, mortgage, lease or otherwise dispose of the Collateral or any interest therein, except that (i) until an Event of Default has occurred and is continuing and thereafter until notified by the Agent that it intends to foreclose or otherwise realize upon such Collateral, each Debtor may use and lease its Collateral to the extent not prohibited by the terms of the Credit Agreement (including, without limitation, Section 7.14 of the Credit Agreement), and (ii) until an Event of Default has occurred and is continuing, the Debtor may sell or otherwise dispose of Collateral to the extent not prohibited by the terms of the Credit Agreement (including, without limitation, Sections 7.14 and 7.15 of the Credit Agreement), and may grant liens on Collateral to the extent permitted by Sections 4.1 and/or 7.11 of the Credit Agreement, provided that a sale, lease or other disposition in the ordinary course of business shall not under any circumstance include a transfer, sale or lease in satisfaction, partial or complete, of a debt owing by such Debtor unless the debt so satisfied is secured with a lien on or ownership right in the goods in question which is prior to the security interest of the Agent therein and is a Permitted Encumbrance.
(d)    Each Debtor shall at all times insure the Collateral consisting of tangible personal property against such risks and hazards as other persons or entities similarly situated insure against, and including in any event loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards as the Agent may reasonably specify, in amounts and under policies containing lenders loss payable clauses to the Agent as its interest may appear (and, if the Agent requests, naming the Agent and the Secured Creditors as additional insureds therein) and by insurers reasonably acceptable to the Agent, it being agreed that the foregoing shall not preclude any Debtor from directly or indirectly self insuring risks as and to the extent prudent and customary for companies similarly situated and then to the extent permitted by the Credit Agreement. All premiums on such insurance shall be paid by the Debtors and, upon the Agent’s request, the policies of such insurance (or certificates therefor) shall be delivered by the Debtors to the Agent. All insurance required hereby shall provide to the extent commercially reasonably available that any loss shall be payable notwithstanding any act or negligence of the relevant Debtor, shall provide that no cancellation thereof shall be effective until at least 30 days after receipt by the relevant Debtor and the Agent of written notice thereof, and shall be reasonably satisfactory to the Agent in all other respects. Each Debtor may retain any proceeds of such insurance arising out of the loss, damage or destruction of the Collateral owned or leased by such Debtor so long as no Event of Default shall have occurred and be continuing or shall arise and be continuing after giving effect to such loss, damage or destruction. After the occurrence and during the continuance of any Event of Default, each Debtor will immediately pay over such proceeds of insurance to the Agent which shall thereafter be applied to the reduction of the Obligations (whether or not then due) or held as collateral security therefore, as the Agent may then determine. All insurance proceeds shall be subject to the lien and security interest of the Agent in the Collateral. Each Debtor hereby authorizes the Agent, at the Agent’s option, to adjust, compromise and settle any losses under any insurance afforded at any time after

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the occurrence and during the continuance of any Event of Default, and such Debtor does hereby irrevocably constitute the Agent, its officers, agents and attorneys, in such case as such Debtor’s attorneys-in-fact, with full power and authority to effect such adjustment, compromise and/or settlement and to endorse any drafts drawn by an insurer of the Collateral or any part thereof and to do everything necessary to carry out such purposes and to receive and receipt for any unearned premiums due under policies of such insurance.
(e)    Each Debtor shall, at all reasonable times upon reasonable prior notice, allow the Agent, any Secured Creditor, and their respective representatives free access to and right of inspection of the Collateral during such Debtor’s normal business hours. Upon the occurrence and during the continuance of any Event of Default, the Agent shall have the right to verify all or any part of the Collateral in any manner, and through any medium, which the Agent considers appropriate, and each Debtor agrees to furnish all assistance and information, and perform any acts, which the Agent may reasonably require in connection therewith.
(f)    Each Debtor’s legal name and state of organization is correctly set forth in Schedule A attached hereto. No Debtor has transacted business at any time during the immediately preceding five‑year period, and does not currently transact business, under any other legal names or trade names other than the prior legal names and trade names (if any) set forth on Schedule B attached hereto. No Debtor shall change its legal name or transact business under any other trade name without first giving 30 days’ prior written notice of its intent to do so to the Agent.
(g)    Schedule C attached hereto contains a true, complete, and current listing of all copyrights, copyright applications, trademarks, trademark rights, tradenames, patents, patent rights and licenses, patent applications and other intellectual property rights that are owned by the Debtors and are registered with any governmental authority. The relevant Debtor shall promptly notify the Agent in writing of any such additional intellectual property rights acquired or arising after the date hereof, and shall submit to the Agent a supplement to Schedule C attached hereto to reflect such additional rights (provided such Debtor’s failure to do so shall not impair the Agent’s security interest therein). The Debtors own or possess rights to use all franchises, licenses, copyrights, copyright applications, patents, patent rights and licenses, patent applications, trademarks, trademark rights, trade names, trade name rights, copyrights and rights with respect to the foregoing which are required to conduct their business. To the best of the Debtors’ knowledge, no event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and no Debtor is liable to any person for infringement under applicable law with respect to any such rights as a result of its business operations.
(h)    Schedule F attached hereto contains a true, complete and current listing of all Commercial Tort Claims held or maintained by the Debtors as of the date hereof for an amount equal to or greater than $1,000,000, each described by reference to the specific incident giving rise to the applicable claim. Each Debtor agrees to execute and deliver to the Agent a supplement to this Agreement in the form attached hereto as Schedule G, or in such other form reasonably acceptable

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to the Agent, promptly upon becoming aware of any other Commercial Tort Claim in an amount equal to or greater than $1,000,000 held or maintained by any Debtor arising after the date hereof.
(i)    Each Debtor agrees to execute and deliver to the Agent such further agreements, assignments, instruments and documents, and to do all such other things, as the Agent may reasonably deem necessary or appropriate to assure the lien and security interest of the Agent in the Collateral granted hereby, including, without limitation, (i) the execution and delivery of such financing statements and amendments thereof and supplements thereto or other instruments and documents as the Agent may from time to time reasonably require to comply with the UCC and any other applicable law, (ii) the execution and delivery of such patent, trademark and copyright assignment agreements as the Agent may from time to time reasonably require to comply with the filing requirements of the United States Patent and Trademark Office and the United States Copyright Office, and (iii) the execution and delivery of and the use of commercially reasonable efforts to cause the relevant depository institutions, financial intermediaries and letter of credit issuers to execute and deliver such control agreements with respect to all Letter-of-Credit Rights and electronic Chattel Paper as the Agent may from time to time reasonably require in accordance with the terms hereof. Each Debtor hereby agrees that a carbon, photographic or other reproduction of this Agreement or any such financing statement is sufficient for filing as a financing statement by the Agent without notice thereof to such Debtor wherever the Agent in its sole discretion desires to file the same. Each Debtor hereby authorizes the Agent to file any and all financing statements covering the Collateral or any part thereof as the Agent may require, including financing statements describing the Collateral as “all assets” or “all personal property” or words of like meaning. The Agent may order lien searches from time to time against any Debtor and the Collateral, and the Debtors shall promptly reimburse the Agent for all reasonable costs and expenses incurred in connection with such lien searches; provided, however, that prior to the occurrence of any Event of Default the Debtors shall not have any obligation to reimburse the Agent for the reasonable costs and expenses of more than one lien search during any calendar year. In the event for any reason the law of any jurisdiction other than Illinois becomes or is applicable to the Collateral or any part thereof, or to any of the Obligations, each Debtor agrees to execute and deliver all such instruments and documents and to do all such other things as the Agent reasonably deems necessary or appropriate to preserve, protect and enforce the security interest of the Agent under the law of such other jurisdiction.
(j)    Upon the occurrence and during the continuance of any Event of Default, on failure of any Debtor to perform any of its covenants and agreements herein contained, the Agent may at its option perform the same and in so doing may expend such sums as the Agent may reasonably deem advisable in the performance thereof, including, without limitation, (i) payment of any insurance premiums, (ii) payment of any taxes, liens and encumbrances, (iii) expenditures made in defending against any adverse claims, and (iv) all other expenditures which the Agent may be compelled to make by operation of law or which the Agent may make by agreement or otherwise for the protection of the Collateral. All such sums and amounts so expended shall be repayable by such Debtor immediately without notice or demand, shall constitute additional Obligations secured hereunder, and shall bear interest from the date said amounts are expended at the rate per annum

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(computed on the basis of a 360-day year for the actual number of days elapsed) equal to the sum of 2% plus the rate otherwise applicable to Domestic Rate Loans under the Revolving Facility in effect from time to time (such rate per annum as so determined being hereinafter referred to as the “Reimbursement Rate” ). No such performance of any covenant or agreement by the Agent on behalf of any Debtor, and no such advancement or expenditure therefor, shall relieve any Debtor of any default under the terms of this Agreement or in any way obligate the Agent or any Secured Creditor to take any further or future action with respect thereto. The Agent is hereby authorized to charge any depository or other account of any Debtor maintained with the Agent for the amount of such sums and amounts so expended.
Section 4.    Special Provisions Re: Receivables.
(a)    So long as no Event of Default shall have occurred and be continuing, any merchandise or other goods which are returned by a customer or account debtor to any Debtor or are otherwise recovered by such Debtor, may be resold by such Debtor in the ordinary course of its business in accordance with Section 3(c) hereof; and after the occurrence and during the continuance of any Event of Default, at the request of the Agent, such merchandise and other goods shall be set aside and held by such Debtor as trustee for the Agent and the Secured Creditors and shall remain part of the Collateral. So long as no Event of Default shall have occurred and be continuing, each Debtor may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries and grant discounts, credits and allowances, in each case in the ordinary course of its business and otherwise for amounts and on terms which such Debtor considers advisable. However, after the occurrence and during the continuance of any Event of Default, at the request of the Agent, each Debtor shall notify the Agent promptly of all returns and recoveries and shall deliver the merchandise or other returned goods to the Agent. After the occurrence and during the continuance of any Event of Default, at the request of the Agent each Debtor shall also notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent or the Secured Creditors, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business shall be granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times after the occurrence and during the continuance of any Event of Default, settle or adjust disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisable.
(b)    If any Receivable arises out of a contract with the United States of America or any of its departments, agencies or instrumentalities, upon the Agent’s request after the occurrence and during the continuance of an Event of Default, each Debtor agrees to so notify the Agent and execute whatever instruments and documents are reasonably required by the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute).

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Section 5.    Special Provisions Re: Instrument or Chattel Paper.
(a)    To the extent any Pledged Note or other item of Collateral is evidenced by an Instrument or Chattel Paper, the applicable Debtor shall cause such Instrument or Chattel Paper to be pledged and delivered to the Agent; provided, however, that, unless (i) an Event of Default shall have occurred and be continuing and (ii) the Agent or the Required Lenders shall have otherwise required, a Debtor shall not be required to deliver any such Instrument or Chattel Paper if and only so long as (A) the fair market value of any such Instrument or Chattel Paper held by such Debtor is less than $1,000,000 and (B) the aggregate fair market value of all such Instruments or Chattel Paper held by the Borrowers, the Debtors and the other Guarantors and not delivered to the Agent under the Collateral Documents is less than $5,000,000 at any one time outstanding.
(b)    To the extent required to be delivered under Section 5(a) above, the relevant Debtor shall endorse all Instruments and Chattel Paper or other item of Collateral in blank and deliver the same to the Agent in a form sufficient to transfer title thereto and shall also duly execute and deliver such other Instruments and Chattel Paper of transfer or assignment as to any other Collateral granted pursuant hereto, all in form and substance reasonably satisfactory to the Agent. To the extent required to be delivered under Section 5(a) above, the relevant Debtor shall deliver to the Agent true and correct copies of all Instruments and Chattel Paper and documents securing each item of Collateral or setting forth terms and conditions applicable thereto. After the occurrence and during the continuance of an Event of Default, upon request by the Agent, all tangible Chattel Paper and Instruments shall, unless delivered to the Agent or its agent, contain a legend reasonably acceptable to the Agent indicating that such Chattel Paper or Instrument is subject to the security interest of the Agent contemplated by this Agreement; provided, however, that unless the Agent or the Required Lenders shall have required otherwise, a Debtor shall not be required to so legend any such Instrument or Chattel Paper if and only so long as (i) the fair market value of any such Instrument or Chattel Paper held by such Debtor is less than $1,000,000 and (ii) the aggregate fair market value of all such Instruments or Chattel Paper held by the Borrowers, the Debtors and the other Guarantors and not delivered to the Agent under the Collateral Documents is less than $5,000,000 at any one time outstanding.
(c)    After the occurrence and during the continuance of any Event of Default, no Debtor shall, without the prior written consent of the Agent, release any collateral or guarantors of the Instruments or Chattel Paper or amend, modify, waive or otherwise take any action which would materially impair the value or collectability of all or any part thereof. At the request of the Agent, each Debtor further agrees to promptly deliver to the Agent copies of all statements, reports and other information and data submitted by any obligor of an Instrument or Chattel Paper to such Debtor.
(d)    Each Debtor hereby authorizes and directs each obligor of an Instrument or Chattel Paper, upon receipt of notice from the Agent that an Event of Default has occurred and is continuing, to make all distributions and payments now due or hereafter to become due to such Debtor in respect of such Instrument or Chattel Paper directly to the Agent, and such Debtor agrees that such payments or distributions to the Agent as aforesaid shall be a good receipt and acquittance to such Debtor to the extent so made.

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Section 6.    Special Provisions Re: Investment Property and Deposits.
(a)    Unless and until an Event of Default has occurred and is continuing and thereafter until notified to the contrary by the Agent pursuant to Section 10(e) hereof:
(i)    each Debtor shall be entitled to exercise all voting and/or consensual powers pertaining to the Investment Property or any part thereof owned or held by it, for all purposes not inconsistent with the terms of this Agreement, the Credit Agreement, or any other document evidencing or otherwise relating to any Obligations; and
(ii)    each Debtor shall be entitled to receive and retain all cash dividends paid upon or in respect of the Investment Property owned or held by it.
(b)    Except for equity interests in direct or indirect Subsidiaries, all Investment Property of each Debtor (including all securities, certificated or uncertificated, securities accounts, and commodity accounts but excluding any split-dollar insurance policies) having a fair market value of $1,000,000 or more maintained by such Debtor on the date hereof is listed and identified on Schedule D attached hereto. Each Debtor shall promptly notify the Agent of any other such Investment Property with a fair market value of $1,000,000 or more acquired or maintained by such Debtor after the date hereof, and shall submit to the Agent a supplement to Schedule D attached hereto to reflect such additional Investment Property (provided such Debtor’s failure to do so shall not impair the Agent’s security interest therein). Certificates for all certificated securities now or at any time constituting such Investment Property hereunder shall be promptly delivered by the relevant Debtor to the Agent duly endorsed in blank for transfer or accompanied by an appropriate assignment or assignments or an appropriate undated stock power or powers, in every case sufficient to transfer title thereto, and, with respect to any such uncertificated securities or any such Investment Property held by a securities issuer or intermediary, commodity issuer or intermediary, or other issuer or financial intermediary of any kind, the relevant Debtor shall execute and deliver, and shall cause any such issuer or intermediary to execute and deliver, an agreement among such Debtor, the Agent and such issuer or intermediary in form and substance satisfactory to the Agent which provides, among other things, for the issuer’s or intermediary’s agreement that it will comply with such entitlement orders, and apply any value distributed on account of any such Investment Property, as directed by the Agent without further consent by such Debtor at any time after the occurrence and during the continuance of any Event of Default; provided, however, that, unless (i) an Event of Default shall have occurred and be continuing and (ii) the Agent or the Required Lenders shall have otherwise required, a Debtor shall not be required to deliver any such certificates or cause any such agreement to be entered into with the relevant issuer or financial intermediary with respect to (A) Investment Property having a final maturity date not in excess of 90 days from the date the relevant Debtor obtains such Investment Property or (B) other Investment Property if and so long as (x) the fair market value of any such other Investment Property held by such Debtor is less than $1,000,000 and (y) the aggregate fair market value of all such other Investment Property held by the Borrowers, the Debtors and the other Guarantors and not subject to the control (as such term is defined in the UCC) of the Agent under the Collateral Documents is less than $5,000,000 at any one time outstanding. The Agent may at any time after the occurrence and during

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the continuance of an Event of Default cause to be transferred into its name or the name of its nominee or nominees any and all of the Investment Property hereunder.
(c)    Unless and until an Event of Default has occurred and is continuing, each Debtor may sell or otherwise dispose of any Investment Property to the extent permitted by the Credit Agreement. During the existence of any Event of Default, no Debtor shall sell or otherwise dispose of all or any part of the Investment Property without the prior written consent of the Agent.
(d)    Each Debtor represents that on the date of this Agreement, to the best of its knowledge, none of the Investment Property consists of margin stock (as such term is defined in Regulation U of the Board of Governors of the Federal Reserve System) except to the extent such Debtor has delivered to the Agent a duly executed and completed Form U‑1 with respect to such margin stock. If at any time the Investment Property or any part thereof consists of margin stock and the relevant Debtor has knowledge of the same, such Debtor shall promptly so notify the Agent and deliver to the Agent a duly executed and completed Form U‑1 and such other instruments and documents as (i) are necessary to satisfy the applicable requirements of Regulations T, U and X of the Board of Governors of the Federal Reserve System with respect to such margin stock and (ii) are reasonably requested by the Agent in form and substance reasonably satisfactory to the Agent.
(e)    Notwithstanding anything to the contrary contained herein, in the event any Investment Property is subject to the terms of a separate security agreement (including, without limitation, the Fourth Amended and Restated Pledge Agreement bearing even date herewith relating to the stock of certain of the Debtors hereunder) in favor of the Agent, the terms of such separate security agreement shall govern and control unless otherwise agreed to in writing by the Agent and the Secured Creditors.
(f)    All Deposit Accounts of the Debtors on the date hereof are listed and identified (by account number and depository institution) in the Side Letter (other than Deposit Accounts constituting payroll accounts). Each Debtor shall promptly notify the Agent of any other Deposit Account opened or maintained by such Debtor after the date hereof (other than Deposit Accounts constituting payroll accounts) and shall submit to the Agent a supplement to the Side Letter to reflect such additional accounts (provided any Debtor’s failure to do so shall not impair the Agent’s security interest therein). With respect to any Deposit Account maintained by a depository institution other than the Agent, and as a condition to the establishment and maintenance of any such Deposit Account except as otherwise permitted by the Credit Agreement, such Debtor, the depository institution, and the Agent shall execute and deliver an account control agreement in form and substance reasonably satisfactory to the Agent which provides, among other things, for the depository institution’s agreement that it will comply with instructions originated by the Agent directing the disposition of the funds in the Deposit Account without further consent by such Debtor.
Section 7.    Collection of Receivables Instruments and Chattel Paper.
(a)    Except as otherwise provided in this Agreement, each Debtor shall make collection of all Receivables, Instruments and Chattel Paper and may use the same to carry on its business in accordance with sound business practice and otherwise subject to the terms hereof.

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(b)    If any Event of Default has occurred and is continuing, in the event the Agent requests a Debtor to do so: (i) all Instruments and Chattel Paper at any time constituting part of the Collateral (including any postdated checks) shall, upon receipt by the relevant Debtor, be immediately endorsed to and deposited with Agent; and/or (ii) such Debtor shall instruct all customers and account debtors and any other obligor of any of the Collateral to remit all payments in respect of the Collateral to a lockbox or lockboxes under the sole custody and control of Agent and which are maintained at post offices selected by the Agent.
(c)    If any Event of Default has occurred and is continuing, the Agent or its designee may notify each Debtor’s customers or account debtors or any other obligor at any time that the Collateral has been assigned to the Agent or that the Agent has a security interest therein, and either in its own name, or such Debtor’s name, or both, demand, collect (including, without limitation, through a lockbox analogous to that described in Section 7(b)(ii) hereof), receive, receipt for, sue for, compound and give acquittance for any or all amounts due or to become due on the Collateral, and in the Agent’s discretion file any claim or take any other action or proceeding which the Agent may deem reasonably necessary or appropriate to protect and realize upon the security interest of the Agent in the Collateral or any part thereof.
(d)    Any proceeds of Collateral transmitted to or otherwise received by the Agent pursuant to any of the provisions of Sections 7(b) or 7(c) hereof may be handled and administered by the Agent in and through a remittance account or accounts maintained at the Agent or by the Agent at a commercial bank or banks selected by the Agent (each a “Depositary Bank” ), and each Debtor acknowledges that the maintenance of such remittance accounts by the Agent is solely for the Agent’s convenience. The Agent need not apply or give credit for any item included in proceeds of Receivables, Instruments, Chattel Paper or other Collateral until the relevant Depositary Bank has received final payment therefor at its office in cash or final solvent credits current at the site of deposit acceptable to the Agent and the relevant Depositary Bank as such. However, if the Agent does permit credit to be given for any item prior to a Depositary Bank receiving final payment therefor and such Depositary Bank fails to receive such final payment or an item is charged back to the Agent or any Depositary Bank for any reason, the Agent may at its election in either instance charge the amount of such item back against any such remittance account or any depository account of a Debtor maintained with the Agent. Each Debtor hereby indemnifies the Agent and the Secured Creditors from and against all liabilities, damages, losses, actions, claims, judgments, costs, expenses, charges and attorneys’ fees suffered or incurred by the Agent or any Secured Creditor because of the maintenance of the foregoing arrangements; provided, however, that no Debtor shall be required to indemnify the Agent or any Secured Creditor for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the person seeking to be indemnified. The Agent and the Secured Creditors shall have no liability or responsibility to any Debtor for the Agent or any other Depositary Bank accepting any check, draft or other order for payment of money bearing the legend “payment in full” or words of similar import or any other restrictive legend or endorsement whatsoever or be responsible for determining the correctness of any remittance.

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Section 8.    Special Provisions Re: Inventory and Equipment.
(a)    Each Debtor shall at its own cost and expense maintain, keep and preserve all material portions of the Inventory in good and merchantable condition and keep and preserve all material portions of the Equipment in good repair, working order and condition, ordinary wear and tear excepted, and, without limiting the foregoing, will from time to time make all necessary and proper repairs, replacements and additions to the Equipment so that the overall efficiency of the Equipment taken as a whole shall be fully preserved and maintained.
(b)    Each Debtor warrants and agrees that no Inventory is or will be consigned to any other person or entity without the Agent’s prior written consent.
(c)    At the Agent’s request, each Debtor shall at its own cost and expense cause the lien of the Agent in and to any portion of the Collateral subject to a certificate of title law to be duly noted on such certificate of title or to be otherwise filed in such manner as is prescribed by law in order to perfect such lien and will cause all such certificates of title and evidences of lien to be deposited with the Agent.
(d)    In the event the Equipment, or any part thereof, is or may be attached to real estate in such a manner that the same may become a fixture, at the Agent’s request after the occurrence and during the continuance of an Event of Default, the relevant Debtor shall take all action reasonably requested by the Agent to maintain the lien and security interest of the Agent in such Collateral at all times fully perfected and in full force and effect, including, without limitation, such fixture financing statements as the Agent may require and, in the event any other person has any right, title or interest in, or lien upon, any such real estate, such Debtor shall use commercially reasonable efforts to cause such person to enter an agreement (i) pursuant to which such person disclaims any right, title and interest in, or lien on, such Equipment, (ii) which allows for the removal of such Equipment by the Agent and (iii) which is otherwise in form and substance reasonably satisfactory to the Agent.
(e)    If any of the Inventory is at any time evidenced by a negotiable document of title, at the Agent’s request after the occurrence and during the continuance of an Event of Default, such document shall be promptly delivered by the relevant Debtor to the Agent.
Section 9.      Power of Attorney. In addition to any other powers of attorney contained herein, each Debtor hereby appoints the Agent, its nominee, or any other person whom the Agent may designate as such Debtor’s attorney-in-fact, with full power after the occurrence and during the continuance of any Event of Default: (i) to sign such Debtor’s name on verifications of Receivables and other Collateral; (ii) to send requests for verification of Collateral to such Debtor’s customers, account debtors and other obligors; (iii) to endorse such Debtor’s name on any checks, notes, acceptances, money orders, drafts and any other forms of payment or security that may come into the Agent’s possession; (iv) to endorse the Collateral in blank or to the order of the Agent or its nominee; (v) to sign such Debtor’s name on any invoice or bill of lading relating to any Collateral, on claims to enforce collection of any Collateral, on notices to and drafts against customers and account debtors and other obligors, on schedules and assignments of Collateral, on notices of assignment and on public records; (vi) to notify the post office authorities to change the address for delivery

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of such Debtor’s mail to an address designated by the Agent; (vii) to receive and open all mail addressed to such Debtor; and (viii) to do all things necessary to carry out this Agreement. Each Debtor hereby ratifies and approves all acts of any such attorney and agrees that neither the Agent nor any such attorney will be liable for any acts or omissions nor for any error of judgment or mistake of fact or law other than such person’s gross negligence or willful misconduct. The Agent may file one or more financing statements disclosing its security interest in any or all of the Collateral without any Debtor’s signature appearing thereon. Each Debtor also hereby grants the Agent a power of attorney to execute any such financing statements, or amendments and supplements to financing statements, on behalf of such Debtor without prior notice thereof to any Debtor. The foregoing powers of attorney, being coupled with an interest, are irrevocable until the Obligations have been fully paid and satisfied and the commitments of the Secured Creditors to extend credit to or for the account of the Borrowers have expired or otherwise been terminated (including Cash Collateralization of Letters of Credit).
Section 10.    Defaults and Remedies.
(a)    The occurrence of any event or the existence of any condition specified as an “Event of Default” under the Credit Agreement shall constitute an “Event of Default” hereunder.
(b)    During the existence of any Event of Default, the Agent shall have, in addition to all other rights provided herein or by law, the rights and remedies of a secured party under the UCC (regardless of whether the UCC is the law of the jurisdiction where the rights or remedies are asserted and regardless of whether the UCC applies to the affected Collateral), and further the Agent may, without demand and without advertisement, notice, hearing or process of law to the extent permitted by law, all of which each Debtor hereby waives to the extent permitted by law, at any time or times, sell and deliver any or all Collateral held by or for it at public or private sale, at any securities exchange or broker’s board or at any of the Agent’s offices or elsewhere, for cash, upon credit or otherwise, at such prices and upon such terms as the Agent deems advisable, in its sole discretion. Also, if less than all the Collateral is sold, the Agent shall have no duty to marshall or apportion the part of the Collateral sold as between the Debtors, or any of them, but may sell and deliver any or all of the Collateral without regard to which of the Debtors are the owners thereof. In the exercise of any such remedies, the Agent may sell all the Collateral as a unit even though the sales price thereof may be in excess of the amount remaining unpaid on the Obligations. The Agent is authorized at any sale or other disposition of the Collateral or any part thereof, if it deems it advisable so to do, to restrict the prospective bidders or purchasers to persons who will represent and agree that they are purchasing for their own account for investment, and not with a view to the distribution or resale of any of the Collateral. In addition to all other sums due the Agent or any Secured Creditor hereunder, each Debtor shall pay the Agent and the Secured Creditors all reasonable costs and expenses incurred by the Agent and such Secured Creditors, including reasonable attorneys’ fees and court costs, in obtaining, liquidating or enforcing payment of Collateral or the Obligations or in the prosecution or defense of any action or proceeding by or against the Agent, such Secured Creditor or any Debtor concerning any matter arising out of or connected with this Agreement or the Collateral or the Obligations, including, without limitation, any of the foregoing arising in, arising under or related to a case under the United States Bankruptcy Code (or any successor statute). Any requirement of reasonable notice shall be met if such notice is personally served on or mailed, postage

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prepaid, to the Debtors in accordance with Section 16(b) hereof at least 10 days before the time of sale or other event giving rise to the requirement of such notice; provided however, that during the existence of any Event of Default, no notification need be given to a Debtor if such Debtor has signed, after the occurrence of such Event of Default, a statement renouncing any right to notification of sale or other intended disposition. The Agent shall not be obligated to make any sale or other disposition of the Collateral regardless of notice having been given. The Agent or any Secured Creditor may be the purchaser at any such sale. Each Debtor hereby waives to the extent permitted by law all of its rights of redemption from any such sale. The Agent may postpone or cause the postponement of the sale of all or any portion of the Collateral by announcement at the time and place of such sale, and such sale may, without further notice, be made at the time and place to which the sale was postponed or the Agent may further postpone such sale by announcement made at such time and place. The Agent has no obligation to prepare the Collateral for sale. The Agent may sell or otherwise dispose of the Collateral without giving any warranties as to the Collateral or any part thereof, including disclaimers of any warranties of title or the like, and each Debtor acknowledges and agrees that the absence of such warranties shall not render the disposition commercially unreasonable.
(c)    Without in any way limiting the foregoing, if any Event of Default has occurred and is continuing, the Agent shall have the right, in addition to all other rights provided herein or by law, to take physical possession of any and all of the Collateral and anything found therein, the right for that purpose to enter without legal process any premises where the Collateral may be found (provided such entry be done lawfully), and the right to maintain such possession on each Debtor’s premises (the Debtors hereby agreeing to lease such premises without cost or expense to the Agent or its designee if the Agent so requests) or to remove the Collateral or any part thereof to such other places as the Agent may desire. If any Event of Default has occurred and is continuing, the Agent shall have the right to exercise any and all rights with respect to all Deposit Accounts of each Debtor, the right to direct the disposition of the funds in each Deposit Account and to collect, withdraw and receive all amounts due or to become due or payable under each such Deposit Account. If any Event of Default has occurred and is continuing, each Debtor shall, upon the Agent’s demand, assemble the Collateral and make it available to the Agent at a place designated by the Agent. If the Agent exercises its right to take possession of the Collateral, each Debtor shall also at its expense perform any and all other steps requested by the Agent to preserve and protect the security interest hereby granted in the Collateral, such as placing and maintaining signs indicating the security interest of the Agent, appointing overseers for the Collateral and maintaining Collateral records.
(d)    Without in any way limiting the foregoing, if any Event of Default has occurred and is continuing, each Debtor hereby grants to the Agent and the Secured Creditors a royalty-free irrevocable license and right to use all of such Debtor’s patents, patent applications, patent licenses, trademarks, trademark registrations, trademark licenses, trade names, trade styles, and similar intangibles in connection with any foreclosure or other realization by the Agent or the Secured Creditors on all or any part of the Collateral, provided that the license granted hereunder shall not include any rights in any license agreement under which the relevant Debtor is licensee which, by its terms, prohibits the license contemplated by this Section 10(d). The license and right granted the Agent and the Secured Creditors hereby shall be without any royalty or fee or charge whatsoever.

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(e)    Without in any way limiting the foregoing, if any Event of Default has occurred and is continuing, all rights of a Debtor to exercise the voting and/or consensual powers which it is entitled to exercise pursuant to Section 6(a)(i) hereof and/or to receive and retain the distributions which it is entitled to receive and retain pursuant to Section 6(a)(ii) hereof, shall, at the option of the Agent, cease and thereupon become vested in the Agent, which, in addition to all other rights provided herein or by law, shall then be entitled solely and exclusively to exercise all voting and other consensual powers pertaining to the Investment Property (including, without limitation, the right to deliver notice of control with respect to any Investment Property held in a securities account or commodity account and deliver all entitlement orders with respect thereto) and/or to receive and retain the distributions which such Debtor would otherwise have been authorized to retain pursuant to Section 6(a)(ii) hereof and shall then be entitled solely and exclusively to exercise any and all rights of conversion, exchange or subscription or any other rights, privileges or options pertaining to any Investment Property as if the Agent were the absolute owner thereof including, without limitation, the rights to exchange, at its discretion, any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other readjustment of the respective issuer thereof or upon the exercise by or on behalf of any such issuer or the Agent of any right, privilege or option pertaining to any Investment Property and, in connection therewith, to deposit and deliver any and all of the Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Agent may determine. In the event any of the Collateral shall constitute restricted securities within the meaning of any applicable securities laws, any disposition thereof in compliance with such laws shall not render the disposition commercially unreasonable.
(f)    The powers conferred upon the Agent hereunder are solely to protect its interest in the Collateral and shall not impose on it any duty to exercise such powers. The Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession or control if such Collateral is accorded treatment substantially equivalent to that which the Agent accords its own property, consisting of similar type assets, it being understood, however, that the Agent shall have no responsibility for ascertaining or taking any action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any such Collateral, whether or not the Agent has or is deemed to have knowledge of such matters. This Agreement constitutes an assignment of rights only and not an assignment of any duties or obligations of the Debtors in any way related to the Collateral, and the Agent shall have no duty or obligation to discharge any such duty or obligation. The Agent shall have no responsibility for taking any necessary steps to preserve rights against any parties with respect to any Collateral or initiating any action to protect the Collateral against the possibility of a decline in market value. Neither the Agent nor any party acting as attorney for the Agent shall be liable for any acts or omissions or for any error of judgment or mistake of fact or law other than their gross negligence or willful misconduct, as determined by a non‑appealable court of competent jurisdiction.
(g)    Failure by the Agent to exercise any right, remedy or option under this Agreement or any other agreement between any Debtor and the Agent or provided by law, or delay by the Agent in exercising the same, shall not operate as a waiver; and no waiver shall be effective unless it is in writing, signed by the party against whom such waiver is sought to be enforced and then only to the extent specifically stated. Neither the Agent or any Secured Creditor, nor any party acting as attorney for the Agent or any Secured

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Creditor, shall be liable hereunder for any acts or omissions or for any error of judgment or mistake of fact or law other than such person’s gross negligence or willful misconduct, as determined by a non‑appealable court of competent jurisdiction. The rights and remedies of the Agent and the Secured Creditors under this Agreement shall be cumulative and not exclusive of any other right or remedy which the Agent or the Secured Creditors may have. For purposes of this Agreement, an Event of Default shall be construed as continuing after its occurrence until the same is waived or cured in writing by the Required Lenders in accordance with the Credit Agreement.
Section 11.      Application of Proceeds . The proceeds and avails of the Collateral at any time received by the Agent during the existence of any Event of Default hereunder shall, when received by the Agent in cash or its equivalent, be applied by the Agent in reduction of, or as collateral security for, the Obligations in accordance with the terms of the Credit Agreement. Each Debtor shall remain liable to the Agent and the Secured Creditors for any deficiency. Any surplus remaining after the full payment and satisfaction of the Obligations shall be returned to the Debtors or to whomsoever the Agent reasonably determines is lawfully entitled thereto.
Section 12.    Continuing Agreement. This Agreement shall be a continuing agreement in every respect and shall remain in full force and effect until all of the Obligations, both for principal and interest, have been fully paid and satisfied and the commitments of the Secured Creditors to extend credit or otherwise make financial accommodations available to the Borrowers under the Credit Agreement have expired or otherwise been terminated (including Cash Collateralization of Letters of Credit). Upon each such termination of this Agreement, the Agent shall, upon the request and at the expense of the Debtors, forthwith release its security interest hereunder.
Section 13.    Primary Security; Obligations Absolute. The lien and security herein created and provided for stand as direct and primary security for the Obligations. No application of any sums received by the Agent in respect of the Collateral or any disposition thereof to the reduction of the Obligations or any portion thereof shall in any manner entitle any Debtor to any right, title or interest in or to the Obligations or any collateral security therefor, whether by subrogation or otherwise, unless and until all Obligations have been fully paid and satisfied and the commitments of the Secured Creditors to extend credit or otherwise make financial accommodations available to the Borrowers, or any one of them, under the Credit Agreement have expired or otherwise have been terminated (including Cash Collateralization of Letters of Credit). Each Debtor acknowledges and agrees that the lien and security hereby created and provided for are absolute and unconditional and shall not in any manner be affected or impaired by any acts or omissions whatsoever of the Agent, any Secured Creditor or any other holder of any of the Obligations, and without limiting the generality of the foregoing, the lien and security hereof shall not be impaired by any acceptance by the Agent, any Secured Creditor or any holder of any of the Obligations of any other security for or guarantors upon any of the Obligations or by any failure, neglect or omission on the part of the Agent, any Secured Creditor or any other holder of any of the Obligations to realize upon or protect any of the Obligations or any collateral security therefor. The lien and security hereof shall not in any manner be impaired or affected by (and the Agent and the Secured Creditors, without notice to anyone, are hereby authorized to make from time to time) any sale, pledge, surrender, compromise, settlement, release, renewal, extension, indulgence, alteration,

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substitution, exchange, change in, modification or disposition of any of the Obligations, or of any collateral security therefor, or of any guaranty thereof or of any obligor thereon. The Secured Creditors may at their discretion at any time grant credit to the Borrowers, or any of them individually, without notice to any Debtor in such amounts and on such terms as the Secured Creditors may elect without in any manner impairing the lien and security hereby created and provided for. No release, compromise or discharge of any Debtor hereunder or with respect to any of the Obligations or any Collateral provided by such Debtor shall release or discharge, or impair the agreements of, any other Debtor hereunder or in any manner impair the liens and security interests granted by any other Debtor hereunder; and the Agent may proceed against the Collateral provided hereunder by any one or more of the Debtors without proceeding against the other Debtors, their respective properties or any other security or guaranty whatsoever. Without limiting the generality of the foregoing, the requisite number of Secured Creditors (as determined in accordance with the terms of the Credit Agreement) may at any time or from time to time release any Debtor from its obligations hereunder or release any Collateral or effect any compromise with any Debtor, and no such release or compromise shall in any manner impair or otherwise effect the liens granted by, or the obligations of, the other Debtors hereunder. In order to foreclose or otherwise realize hereon and to exercise the rights granted the Agent hereunder and under applicable law, there shall be no obligation on the part of the Agent, any Secured Creditor or any other holder of any of the Obligations at any time to first resort for payment to any Borrower or any other obligor on any of the Obligations or to any guaranty of the Obligations or any portion thereof or to resort to any other collateral security, property, liens or any other rights or remedies whatsoever, and the Agent shall have the right to enforce this instrument irrespective of whether or not other proceedings or steps are pending seeking resort to or realization upon or from any of the foregoing.
Section 14.      The Agent. In acting under or by virtue of this Agreement, the Agent shall be entitled to all the rights, authority, privileges and immunities provided in the Credit Agreement, all of which provisions of the Credit Agreement (including, without limitation, Section 10 of the Credit Agreement) are incorporated by reference herein with the same force and effect as if set forth herein in their entirety. The Agent hereby disclaims any representation or warranty to the Secured Creditors concerning the perfection of the security interest granted hereunder or in the value of any of the Collateral.
SECTION 15.      PERSONAL JURISDICTION.
(a)     EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SECTION 15(b), THE AGENT, THE SECURED CREDITORS AND THE DEBTORS AGREE THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN COOK COUNTY, ILLINOIS, BUT EACH OF THE AGENT, THE SECURED CREDITORS AND THE DEBTORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF COOK COUNTY, ILLINOIS. EACH OF THE DEBTORS WAIVES IN ALL DISPUTES ANY OBJECTION THAT SUCH DEBTOR MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE

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OR ANY OBJECTION THAT SUCH DEBTOR MAY HAVE THAT ANY OTHER PARTY HAS NOT BEEN JOINED IN SUCH PROCEEDING.
(b)     OTHER JURISDICTIONS . EACH OF THE DEBTORS AGREES THAT THE AGENT AND THE SECURED CREDITORS SHALL HAVE THE RIGHT TO PROCEED AGAINST EACH OF THE DEBTORS OR THEIR COLLATERAL IN A COURT IN ANY LOCATION TO ENABLE THE AGENT OR ANY SECURED CREDITOR TO REALIZE ON THE COLLATERAL, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY SECURED CREDITOR, WHETHER OR NOT PROCEEDING SEPARATELY AGAINST ANY DEBTOR AND ITS PROPERTY OR JOINTLY AGAINST ANY BORROWER AND ANY ONE OR MORE OF THE DEBTORS AND THEIR PROPERTY. EACH OF THE DEBTORS AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS PROVISION BY THE AGENT OR ANY SECURED CREDITOR TO REALIZE ON COLLATERAL, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT OR ANY SECURED CREDITOR. EACH OF THE DEBTORS WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR ANY SECURED CREDITOR HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION.
Section 16.    Miscellaneous.
(a)    This Agreement cannot be changed or terminated orally. This Agreement shall create a continuing lien on and security interest in the Collateral to the extent set forth herein and shall be binding upon each Debtor and its successors and assigns and shall inure, together with the rights and remedies of the Agent and the Secured Creditors hereunder, to the benefit of the Agent, the Secured Creditors and their successors and assigns; provided, however , that no Debtor may assign its rights or delegate its duties hereunder without the prior written consent of the Agent and the Secured Creditors. Without limiting the generality of the foregoing, and subject to the provisions of the Credit Agreement any Secured Creditor as a lender may assign or otherwise transfer any indebtedness held by it secured by this Agreement to any other person or entity, and such other person or entity shall thereupon become vested with all the benefits in respect thereof granted to such Secured Creditor herein or otherwise.
(b)    Except as otherwise specified herein, all notices hereunder shall be in writing (including, without limitation, notice by telecopy) and shall be given to the relevant party, and shall be deemed to have been made when given to the relevant party, in accordance with Section 11.9 of the Credit Agreement. All notices to the Debtors hereunder shall be made to the Company, as their agent, in accordance with Section 11.9 of the Credit Agreement.
(c)    No Secured Creditor shall have the right to institute any suit, action or proceeding in equity or at law for the foreclosure or other realization upon any Collateral subject to this Agreement or for the execution of any trust or power hereof or for the appointment of a receiver, or for the enforcement of any other remedy under or upon this Agreement; it being understood and intended that no one or more of the Secured Creditors shall have any right in any manner whatsoever to affect, disturb or prejudice the lien and

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security interest of this Agreement by its or their action or to enforce any right hereunder, and that all proceedings at law or in equity shall be instituted, had and maintained by the Agent in the manner herein provided for the benefit of the Secured Creditors.
(d)    In the event that any provision hereof shall be deemed to be invalid or unenforceable by reason of the operation of any law or by reason of the interpretation placed thereon by any court, this Agreement shall be construed as not containing such provision, but only as to such jurisdictions where such law or interpretation is operative, and the invalidity or unenforceability of such provision shall not affect the validity of any remaining provisions hereof, and any and all other provisions hereof which are otherwise lawful and valid shall remain in full force and effect.
(e)    This Agreement shall be deemed to have been made in the State of Illinois and shall be governed by, and construed in accordance with, the laws of the State of Illinois. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of any provision hereof.
(f)    This Agreement constitutes an assignment of rights only and not an assignment of any duties or obligations of any Debtor in any way related to the Collateral and that the Agent and the Secured Creditors shall have no duty or obligation to perform or discharge any such duty or obligation.
(g)    In the event the Secured Creditors shall at any time in their discretion permit a substitution of Debtors hereunder or a party shall wish to become Debtor hereunder, such substituted or additional Debtor shall, upon executing an agreement in the form attached hereto as Schedule H, become a party hereto and be bound by all the terms and conditions hereof to the same extent as though such Debtor had originally executed this Agreement and in the case of a substitution, in lieu of the Debtor being replaced. No such substitution shall be effective absent the written consent of the Secured Creditors nor shall it in any manner affect the obligations of the other Debtors hereunder.
(h)    This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterpart signature pages, each constituting an original, but all together one and the same agreement.
(i)    EACH DEBTOR, THE AGENT, AND EACH SECURED CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(j)    In the event of any inconsistency between this Agreement or the Credit Agreement, the terms of the Credit Agreement, as applicable, shall govern.
(k)    Upon the execution and delivery of this Agreement by the Company, the other Debtors and the Agent, this Agreement shall supersede all provisions of the Prior Security Agreement as of such date. Each Debtor hereby agrees that, notwithstanding the execution and delivery of this Agreement, the liens and security interests created and provided for under the Prior Security Agreement continue in effect under and

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pursuant to the terms of this Agreement for the benefit of all of the Obligations secured hereby. Nothing herein contained shall in any manner affect or impair the priority of the liens and security interests created and provided for by the Prior Security Agreement as to the indebtedness and obligations which would otherwise be secured thereby prior to giving effect to this Agreement.
[SIGNATURE PAGES TO FOLLOW]


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IN WITNESS WHEREOF, each Debtor has caused this Agreement to be duly executed and delivered as of the date first above written.
“DEBTORS”
EMCOR GROUP, INC.
By:     
Name:    Anthony J. Guzzi
Title:    President and    Chief Executive Officer
FORTI/POOLE AND KENT, L.L.C.
By:    
Name:    R. Kevin Matz
Title:    Manager
CSUSA HOLDINGS L.L.C.
By:    
Name:    R. Kevin Matz
Title:     Manager
SHAMBAUGH & SON, L.P.
By: CSUSA Holdings L.L.C., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
BORDER ELECTRIC CO., L.P.
By: CSUSA Holdings L.L.C., its General Partner
By:    

Signature Page to Fourth Amended and Restated Security Agreement
S- 1


Name:    R. Kevin Matz
Title:    Vice President
BORDER MECHANICAL CO., L.P.
By: CSUSA Holdings L.L.C., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
TURNAROUND WELDING SERVICES CALIFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
ALTAIRSTRICKLAND CALIFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
PROFESSIONAL MECHANICAL CONTRACTORS, L.L.C.
By:    
Name:    R. Kevin Matz
Title:    Vice President
WELSBACH ELECTRIC CORP.
By:    

Signature Page to Fourth Amended and Restated Security Agreement
S- 2


Name:     Kenneth W. Brouwer
Title:    President / Chief Executive Officer
TIGER TOWER SERVICES CALIFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
DIAMOND REFRACTORY SERVICES CALFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President


Signature Page to Fourth Amended and Restated Security Agreement
S- 3


AIR SYSTEMS, INC.
ALTAIRSTRICKLAND HOLDINGS CALIFORNIA INC.
ATLANTIC COAST MECHANICAL, INC.
BAHNSON HOLDINGS, INC.
BEAUMONT REAL ESTATE HOLDING COMPANY
BUILDING TECHNOLOGY ENGINEERS, INC.
CENTRAL MECHANICAL CONSTRUCTION CO., INC.
CES FACILITIES MANAGEMENT SERVICES, INC.
COMBUSTIONEER CORPORATION
CONTRA COSTA ELECTRIC, INC.
CS48 ACQUISITION CORP.
DEBRA-KUEMPEL INC. (f/k/a The Fred B. DeBra Co.)
DESIGN AIR, LIMITED
DUFFY MECHANICAL CORP.
DYN SPECIALTY CONTRACTING, INC.
DYNALECTRIC COMPANY
DYNALECTRIC COMPANY OF NEVADA
DYNALECTRIC COMPANY OF OHIO
DYNALECTRIC OF MICHIGAN II, INC.
EMCOR CONSTRUCTION SERVICES, INC.
EMCOR-CSI HOLDING CO.
EMCOR FACILITIES SERVICES, INC.
EMCOR GOVERNMENT SERVICES, INC.
EMCOR GOWAN, INC.
EMCOR HYRE ELECTRIC CO. OF INDIANA, INC.
EMCOR INTERNATIONAL INC.
EMCOR MECHANICAL/ELECTRICAL SERVICES (EAST), INC.
EMCOR SERVICES NORTHEAST, INC.
EMCOR SERVICES NEW YORK/NEW JERSEY, INC.
EMCOR SERVICES TEAM MECHANICAL, INC.
F & G MANAGEMENT, INC.
F & G PLUMBING, INC.
FLUIDICS, INC.
FOOD TECH, INC.
FOREST ELECTRIC CORP.
FR X OHMSTEDE ACQUISITIONS CO.
GIBSON ELECTRIC CO., INC.
GREAT MONUMENT CONSTRUCTION COMPANY

Signature Page to Fourth Amended and Restated Security Agreement
S- 4


HANSEN MECHANICAL CONTRACTORS, INC.
HERITAGE MECHANICAL SERVICES, INC.
HILLCREST SHEET METAL, INC.
HNT HOLDINGS INC.
HVAC, LTD.
ILLINGWORTH-KILGUST MECHANICAL, INC.
INTE-FAC CORP.
INTERMECH, INC.
J.C. HIGGINS CORP.
KDC INC.
KUEMPEL SERVICE, INC.
LOWRIE ELECTRIC COMPANY, INC.
MANDELL MECHANICAL CORPORATION
MARELICH MECHANICAL CO., INC.
MEADOWLANDS FIRE PROTECTION CORP.
MECHANICAL SERVICES OF CENTRAL FLORIDA, INC.
MECHANICAL SPECIALTIES CONTRACTORS, INC.
MES HOLDINGS CORPORATION
MESA ENERGY SYSTEMS, INC.
MIDLAND FIRE PROTECTION, INC.
MONUMENTAL HEATING, VENTILATING AND AIR CONDITIONING CONTRACTORS, INC.
MONUMENTAL INVESTMENT CORPORATION
NOGLE & BLACK MECHANICAL, INC.
NORTH JERSEY MECHANICAL CONTRACTORS, INC.
OHMSTEDE INDUSTRIAL SERVICES INC.
PACE MECHANICAL SERVICES II, INC.
PENGUIN AIR CONDITIONING CORP.
PENGUIN MAINTENANCE AND SERVICES INC.
PERFORMANCE MECHANICAL, INC.
POOLE & KENT COMPANY OF FLORIDA
POOLE AND KENT‑NEW ENGLAND, INC.

Signature Page to Fourth Amended and Restated Security Agreement
S- 5


POOLE AND KENT-CONNECTICUT, INC.
R. S. HARRITAN & COMPANY, INC.
REDMAN EQUIPMENT & MANUFACTURING COMPANY
REPCON, INC.
REPCON EQUIPMENT CO.
REPCON INTERNATIONAL, INC.
REPCONSTRICKLAND, INC.
S. A. COMUNALE CO., INC.
SCALISE INDUSTRIES CORPORATION
THE BETLEM SERVICE CORPORATION
THE FAGAN COMPANY
THE POOLE AND KENT COMPANY
THE POOLE AND KENT CORPORATION
TRAUTMAN & SHREVE, INC.
UNIVERSITY MARELICH MECHANICAL, INC.
UNIVERSITY MECHANICAL & ENGINEERING CONTRACTORS, INC., A CALIFORNIA CORPORATION
UNIVERSITY MECHANICAL & ENGINEERING CONTRACTORS, INC., AN ARIZONA CORPORATION
WALKER‑J‑WALKER, INC.
WELSBACH ELECTRIC CORP. OF L.I.
By:    
Name:     R. Kevin Matz
Title:    Vice President

F & G MECHANICAL CORPORATION
By:    
Name:     Salvatore Fichera
Title:    President

AIRCOND CORPORATION
BAHNSON, INC.
CONCOR NETWORKS, INC.
EMCOR SERVICES CES, INC.
HARRY PEPPER & ASSOCIATES, INC.
MOR PPM, INC.

Signature Page to Fourth Amended and Restated Security Agreement
S- 6


NEW ENGLAND MECHANICAL SERVICES, INC.
NEW ENGLAND MECHANICAL SERVICES OF MASSACHUSETTS, INC.
SOUTHERN INDUSTRIAL CONSTRUCTORS, INC.
USM, INC.
USM (DELAWARE) INC.
USU SERVICES HOLDINGS, INC.
VIOX SERVICES, INC.
By:    
Name:     Douglas Myers
Title:    Vice President
BAHNSON ENVIRONMENTAL SPECIALTIES, LLC
OHMSTEDE HOLDINGS LLC
OHMSTEDE PARTNERS LLC
By:    
Name:    R. Kevin Matz
Title:    Manager
OHMSTEDE LTD.
By: Ohmstede Partners LLC, its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
ALTAIRSTRICKLAND HOLDINGS LLC
ALTAIRSTRICKLAND INTERNATIONAL LLC
ALTAIRSTRICKLAND, LLC
ASG DIAMOND, LLC
ASI INDUSTRIAL SERVICES, LLC
DIAMOND REFRACTORY SERVICES, LLC
MERCURY INDUSTRIAL MATERIALS, LLC
REPCON PROPERTIES, LLC
TIGER TOWER SERVICES, LLC
TURNAROUND WELDING SERVICES, LLC

Signature Page to Fourth Amended and Restated Security Agreement
S- 7


By:    
Name:    R. Kevin Matz
Title:    Vice President
SIC INTERNATIONAL, LLC
By: Southern Industrial Constructors, Inc., its Sole Member
By:    
Name:    Douglas Myers
Title:    Vice President






Accepted and agreed to in Chicago, Illinois, as of the date first above written.
BANK OF MONTREAL, as Agent
By        
Name: John A. Armstrong
Title: Director


Signature Page to Fourth Amended and Restated Security Agreement
S- 8


SCHEDULE A

Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor

EMCOR Group, Inc.
(Delaware Corporation)
Org. No. 2120222


301 Merritt Seven
Norwalk, CT 06851

 

See Column 2


EMCOR Construction
Services, Inc . (Delaware Corporation)
Org. No. 2295158

301 Merritt Seven
Norwalk, CT 06851
1420 Spring Hill Road
Suite 500
McLean, VA 22102
See Columns 2 & 3
EMCOR Facilities Services, Inc .
(Delaware Corporation)
Org. No. 2625001

301 Merritt Seven
Norwalk, CT 06851
555 Anton Blvd.
Costa Mesa, CA 92626

4125 East Madison St.
Phoenix, AZ 85034

3100 Woodcreek Dr.
Downers Grove, IL 60515

2 Cromwell
Irvine, CA 92618

790 Township Rd.
Yardley, PA

105 Central St.
Stoneham, MA 02180

See Columns 2 & 3
EMCOR Services CES, Inc.
(Delaware corporation)
Org. No. 5014397

2800 Crystal Dr., Suite 600
Arlington, VA 22202
 
See Column 2


1921592


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
Mesa Energy Systems, Inc.
(California Corporation)
Org. No.1281860

5 Vanderbilt
Irvine, CA 92618
2865 Progress Place #A
Escondido, CA 92029

24051 Amador Street
Hayward, CA 94544





EMCOR Services Mesa
900 Vernon Way
Suite 100
El Cajon, CA 92020

4668 No. Sonora Avenue
Fresno, CA 93722

7060 Koll Center Parkway
Pleasanton, CA

16250 Railroad Avenue
Morgan Hill, CA 95037

d/b/a EMCOR Services Hillcrest
2324 Perseus Ct
Bakersfield, CA 93308

EMCOR Services Arizona
4125 E. Madison St.
Phoenix, AZ 85034

31332 Via Colinas
Unit #105
Westlake Village, CA 91362

EMCOR Services Nevada
75 Bank St. #2
Sparks, NV 89431

11295 Sunrise Gold Circle #D
Rancho Cordova, CA 95742

EMCOR Services Nevada
6255 McLeod Dr. #8
Las Vegas, NV 89120
See Columns 2 & 3

A-2


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor



Scalise Industries Corporation
(Pennsylvania Corporation)
Org. No. 647338



108 Commerce Blvd.
Lawrence, PA 15055



91 Mayview Rd
Lawrence, PA 15055



See Column 2

EMCOR International Inc.
(Delaware Corporation)
Org. No. 2184202

301 Merritt Seven
Norwalk, CT 06851
 

See Column 2

EMCOR Mechanical/Electrical
Services (East), Inc.  
(Delaware Corporation)
Org. No. 2293360

301 Merritt Seven
Norwalk, CT 06851
 

See Column 2

Heritage Mechanical Services, Inc.
(New York Corporation)
None


70 Schmitt Blvd.
Farmingdale, NY 11735



See Column 2
Welsbach Electric Corp .
(Delaware Corporation)
Org. No.0780011

111-01 14th Avenue
College Point, NY 11356-0252
 
See Column 2
Forest Electric Corp.
(New York Corporation)
Org. No. None

2 Penn Plaza, Fl. 4
New York, NY 30121

160 Rarritan Ctr. Parkway, Suite 18
Edison, NJ 08837
See Columns 2 & 3
Welsbach Electric Corp. of L.I.
(New York Corporation)
Org. No. None

300 Newtown Road
Plainview, NY 11803

 

See Column 2
Penguin Maintenance and
Services Inc  (Delaware Corporation)
Org. No. 2251604

Penguin Air Conditioning Corp .
 (New York Corporation)
Org. No. None

26 West Street
Brooklyn, NY 112221



26 West Street
Brooklyn, NY 11222
 
See Column 2




See Column 2

A-3


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor

J.C. Higgins Corp .
(Delaware Corporation)
Org. No. 2232450


70 Hawes Way, Fl. 2
Stoughton, MA 02072



d/b/a Tucker Mechanical
367 Research Parkway
Meriden, CT 06450

See Columns 2 & 3
Duffy Mechanical Corp.
(Maryland Corporation)
Org. No. D03916020

301 Merritt Seven
Norwalk, CT 06851
 
See Column 2
EMCOR Hyre Electric Co. of Indiana, Inc.
(Delaware Corporation)
Org. No. 2267293

2655 Garfield Avenue
Highland, IN 46322
 
See Column 2
Gibson Electric Co., Inc .
(New Jersey Corporation)
Org. No. 0100081753

3100 Woodcreek Drive
Downers Grove, IL 60515
 
See Column 2
University Mechanical & Engineering
Contractors, Inc .
(California Corporation)
Org. No. 527647

1168 Fesler Street
El Cajon, CA 92020
 
See Column 2
Pace Mechanical Services II, Inc.
(Michigan Corporation)
Org. No. 488043

301 Merritt Seven
Norwalk, CT 06851
 
See Column 2
University Mechanical & Engineering
Contractors, Inc.  
(Arizona Corporation)
Org. No. 0059955-4

1200 North Sickles Road
Tempe, AZ 85281






See Column 2
Hansen Mechanical Contractors, Inc .
(Nevada Corporation)
Org. No. C324-1971

4580 West Post Road
Las Vegas, NV 89118




See Column 2
Design Air, Limited
(Washington Corporation)
Org. No. 600314241

8657 South 190 th  Street
Kent, WA 98031-1270
 
See Column 2

A-4


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor

Trautman & Shreve, Inc.
(Colorado Corporation)
Org. No. 19911078279


4406 Race Street
Denver, CO 80216

322 Juanita Street
Colorado Springs, CO 80909

See Columns 2 & 3
EMCOR Gowan, Inc.
(Texas Corporation)
Org. No.0022008300

5550 Airline Drive
Houston, TX 77076
 
See Column 2
Inte-Fac Corp.
(New York Corporation)
Org. No. None


26 West Street
Brooklyn, NY 11222
 

See Column 2
MES Holdings Corporation
(Delaware Corporation)
Org. No. 2441388

301 Merritt Seven
Norwalk, CT 06851
 
See Column 2
R. S. Harritan & Company, Inc.
(Virginia Corporation)
Org. No. 179532

3280 Formex Road
Richmond, VA 23224
 
See Column 2
Dynalectric Company of Ohio
(Ohio Corporation)
Org. No. 807660
301 Merritt Seven
Norwalk, CT 06851
 
See Column 2

Dynalectric of Michigan II, Inc.
(Delaware Corporation)
Org. No. 2822379

301 Merritt Seven
Norwalk CT 06851



See Column 2

DeBra-Kuempel Inc.
(Delaware Corporation)
Org. No. 2945595

3876 Southern Avenue
Cincinnati, OH 45227

1948 W. Dorothy Lane
Dayton, OH 45439

702 Parker Drive
Maysville, KY 41056

d/b/a Dynaelectric Ohio
5130 Transamerica Dr.
Columbus, OH 43228

See Columns 2 & 3

A-5


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor

Marelich Mechanical Co., Inc.
(California Corporation)
Org. No. C2114848

24041 Amador
Hayward, CA 94544

1000 North Kraemer Place
Anaheim, CA 92806



6001 Midway Street
Sacramento, CA 95826

1679 Enterprise Blvd.
Sacramento, CA 95691


See Columns 2 & 3
Dynalectric Company
(Delaware Corporation)
Org. No. 2722041

1420 Spring Hill Road, #500
McLean, VA 22102
3145 Northwoods Parkway, Suite 800
Norcross, GA 30071

See Columns 2 & 3
 
 
d/b/a Ferguson Dynalectric of Colorado
1410 Ford Street
Colorado Springs, CO 80915

345 Sheridan Boulevard
Denver, Co 80226

5277 Cameron St.
Suite 100
Las Vegas, NV 89118

 

A-6


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
 
 
9505 Chesapeake Drive
San Diego, CA 92123

22930 Shaw Road
Dulles, VA 20166

2904 Southwest First Avenue
Portland, OR 97201

497 Mueller Lane
Newport News, VA 23606

2501 SW 160 th  
Miramar, FL 33027

 
 
 
4462 Corporate Center Dr.
Los Alamitos, CA 90702


2904 SW First Avenue
Portland, OR 97201

2455 West 1500 South
Suite A
Salt Lake City, UT 84104

 
Dyn Specialty Contracting, Inc .
(Virginia Corporation)
Org. No. 295431
1420 Spring Hill Road, #500
McLean, VA 22102

 
See Column 2
KDC Inc.
(California Corporation)
Org. No. 770706
4462 Corporate Center Drive
Los Alamitos, CA 90720






d/b/a KDC Systems
4462 Corporate Center Drive
Los Alamitos, CA 90720

d/b/a KDC Systems
2904 S. W. First Avenue
Portland, OR 97201

See Columns 2 & 3

A-7


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
Contra Costa Electric, Inc.
(California Corporation)
Org. No. C0273069

825 Howe Road
Martinez, CA 94553

3208 Landco Drive
Bakersfield, CA 93308

4688 N. Sonora Ave.
Suite 102
Fresno, CA 93722

See Columns 2 & 3
Dynalectric Company of Nevada
(Nevada Corporation)
Org. No. C238-1958

3555 West Oquendo Rd
Las Vegas, NV 89118
 
See Column 2
EMCOR Services Northeast, Inc.
(Massachusetts Corporation)
Org. No. None

80 Hawes Way
Stoughton, MA 02072


See Column 2
Building Technology Engineers, Inc.
(Massachusetts Corporation)
Org. No. None



Poole & Kent Company of Florida
(Delaware Corporation)
Org. No. 3818963
105 Central Street, Suite 2100
Stoneham, MA 02180

 

1781 N.W. North River Drive
Miami, FL 33125
555 Anton Blvd.
Costa Mesa, CA 92626





1715 Lemon Street
Tampa, FL 33606

901 North Point Parkway, Suite 104
West Palm Beach, FL 33407
See Columns 2 & 3






See Columns 2 & 3

Monumental Investment Corporation
(Maryland Corporation)
Org. No. D01289180


301 Merritt Seven
Norwalk, CT 06851
 

See Column 2
The Poole and Kent Company
(Maryland Corporation)
Tax I.D. 52-0017984
Org. No. D00174458

4530 Hollins Ferry Road
Baltimore, MD 21227
 
See Column 2


A-8


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
The Poole and Kent Corporation
(Maryland Corporation)
Org. No. D00174466

4530 Hollins Ferry Road
Baltimore, MD 21227

d/b/a Poole and Kent Construction Services
643 Lofstrand Lane
Rockville, MD 20850

 
See Column 2

S. A. Comunale Co., Inc.
(Ohio Corporation)
Org. No. 437451
2900 Newpark Drive
Barberton, OH 44203
5270 Oakwood Boulevard
Mays Landing, NJ
See Columns 2 & 3
 
 
3007 Harding Highway East
Mario, OH 43302
 
 
 

1002 International Boulevard
Cincinnati, OH 45246
 
 
 

145 Shaffer Drive NE
Warren, OH 44484
 
 
 

1200 E. 55 th  Street, Unit B
Cleveland, OH 44103
 
 
 

23042 Commerce Drive
Farmington Hills, MI 48335
 

Air Systems, Inc.
(California Corporation)
Org. No.C2497209


940 Remillard Court
San Jose, CA 95122
 

See Column 2
Fluidics, Inc.
(Pennsylvania Corporation)
Org. No. 766706
9815 Roosevelt Blvd., Suite A
Philadelphia, PA 19114
 
See Column 2

University Marelich Mechanical, Inc.
(Delaware Corporation)
Org. No. 4047723

1000 N. Kraemer Place
Anaheim, CA 92806
 

See Column 2

Midland Fire Protection, Inc.
(Rhode Island Corporation)
Org. No. 56289

70 Hawes Way
R.2
Stoughton, MA 02072
 

See Column 2

A-9


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor

Poole and Kent-Connecticut, Inc.
(Maryland Corporation)
Org. No. D04800199


4530 Hollins Ferry Road
Baltimore, MD 21227

 

See Column 2
Poole and Kent – New England, Inc.
(Maryland Corporation)
Org. No.D03688207

4530 Hollins Ferry Road
Baltimore, MD 21227

 
See Column 2
Monumental Heating, Ventilating and Air Conditioning Contractors, Inc.
(Maryland Corporation)
Org. No. D04254868

4530 Hollins Ferry Road
Baltimore, MD 21227


See Column 2
Forti/Poole and Kent, L. L. C. (Maryland LLC)
Org. No. W04265096

4530 Hollins Ferry Road
Baltimore, MD 21227
 
See Column 2

HVAC, Ltd.
(Maryland Corporation)
Org. No. D00816884


4530 Hollins Ferry Road
Baltimore, MD 21227



See Column 2
Atlantic Coast Mechanical, Inc.
(Maryland Corporation)
Org. No. D01557800

4530 Hollins Ferry Road
Baltimore, MD 21227
 
See Column 2
Great Monument Construction Company
(Maryland Corporation)
Org. No. D01495571

301 Merritt Seven
Norwalk, CT 06851
 
See Column 2
EMCOR- CSI Holding Co.
(Delaware Corporation)
Org. No. 3486633

301 Merritt Seven
Norwalk, CT 06851
 
See Column 2
Border Electric Co., L.P.
(Texas Limited Partnership)
Org. No. 0012427910

6939 Commerce Avenue
El Paso, TX 79915
 
See Column 2
Border Mechanical Co., L.P.
(Texas Limited Partnership)
Org. No. 0012428010

6939 Commerce Avenue
El Paso, TX 79915


See Column 2

A-10


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
Central Mechanical Construction Co., Inc.
(Delaware Corporation)
Org. No. 2892099

631 Pecan Circle
Manhattan, KS 66502
725 NE Highway 24
Topeka, KS 66608

506 East 23 rd  
Lawrence, KS 66046

See Columns 2 & 3
CS48 Acquisition Corp.
(Delaware Corporation)
Org. No. 2955782

301 Merritt Seven
Norwalk, CT 06851

 
See Column 2

CSUSA Holdings L.L.C.
(Delaware Corporation)
disregarded entity
Org. No. 3467627


301 Merritt Seven
Norwalk, CT 06851

 

See Column 2
F & G Mechanical Corporation
(Delaware Corporation)
Org. No. 2850884

348 New County Road
Secaucus, NJ 07094


See Column 2
F & G Plumbing, Inc.
(New Jersey Corporation)
Org. No. 0100873145

348 New County Road
Secaucus, NJ 07094

 
See Column 2

EMCOR Services New York/
New Jersey, Inc.
(Delaware Corporation)
Org. No. 2930475

24-37 46 th  Street
Long Island City, NY 11103
231 West Parkway
Pompton Plains, NJ 07444
See Columns 2 & 3
Hillcrest Sheet Metal, Inc.
(Delaware Corporation)
Org. No. 2788607

4540 Easton Drive
Bakersfield, CA 93309
 
See Column 2
Illingworth-Kilgust Mechanical, Inc.
(Delaware Corporation)
Org. No. 2913106

6950 Gisholt Drive
Madison, WI 53713
615 South 89th Street
Milwaukee, WI 53214
See Columns 2 and 3
Kuempel Service, Inc.
(Ohio Corporation)
Org. No. 581186

3876 Southern Avenue
Cincinnati, OH 45227
 
See Column 2
Lowrie Electric Company, Inc.
(Tennessee Corporation)
Org. No. 0154850

7520 Bartlett Corporate Cove, East
Bartlett, TN 38133
 
See Column 2

A-11


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
Mandell Mechanical Corporation
(New York Corporation)
Org. No. None

301 Merritt Seven
Norwalk, CT 06851

 
See Column 2

Meadowlands Fire Protection Corp.
(New Jersey Corporation)
Org. No. 0100215829


348 New County Rd
Secaucus, NJ 07094



See Column 2
Nogle & Black Mechanical, Inc.
(Delaware Corporation)
Org. No. 0100076108

431 Lexington Drive
Buffalo Grove, IL 60089
 
See Column 2
North Jersey Mechanical Contractors, Inc.
(New Jersey Corporation)
Org. No. 0100076108

2 North Street, Suite 2B
Waldwick, NJ 07463
 
See Column 2
Shambaugh & Son, L.P.
(Texas Limited Partnership)
Org. No. 002169710
7614 Opportunity Drive
Fort Wayne, IN 46825
Shambaugh & Son, L.P.
Detroit Fire Protection
21667 Melrose Avenue
Southfield, MI 48075

Shambaugh & Son, L.P.
South Bend Mechanical
13738 E. Jefferson Blvd.
Mishawaka, IN 46545

See Columns 2 & 3
 
 
Shambaugh & Son, L.P.
Ed Grace Division
2600 Duncan Road
Lafayette, IN 47904

Advanced Systems Computer Consultants
4711 Speedway Drive
Fort Wayne, IN 46825

 

A-12


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
 
 
Advanced Systems Group, Inc.
4711 Speedway Drive
Fort Wayne, IN 46825

Shambaugh & Son, L.P.
Lafayette Electric Division
2600 Duncan Road
Lafayette, IN 47904

Shambaugh & Son, L.P.
Toledo Fire Protection
212 West Wayne Street
Maumee, OH 43537

d/b/a Dynalectric Michigan
d/b/a Pace Mechanical
Services
25701 Commerce Dr.
Madison Heights, MI 48071

 
 
 
Shambaugh & Son, L.P.
Indianapolis Electric Division
1010 E. Summer Avenue
Indianapolis, IN 46227

d/b/a Havel Brothers
7525 DiSalle Blvd.
Fort Wayne, IN 46825

d/b/a Havel Brothers
Sugar Maple Court
South Bend, IN 46628

 

A-13


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
 
 
d/b/a Havel Brothers
5128 W 79 th  Street
Indianapolis, IN 46268

Shambaugh & Son, L.P.
South Bend Fire Protection
13738 E. Jefferson Blvd.
Mishawaka, IN 46545

Shambaugh & Son, L.P.
2820 Thatcher Road
Downers Grove, IL 60515

d/b/a Havel Brothers
8233 Neptune, Suite 1
Kalamazoo, MI 49009

 
The Fagan Company
(Kansas Corporation)
Org. No. 630954

3125 Brinkerhoff Road
Kansas City, KS 66115
14 E. 1st
Fort Scott, KS 66701


See Columns 2 & 3
Walker-J-Walker, Inc.
(Tennessee Corporation)
Org. No. 0033339

6045 E. Shelby Dr. #3
Memphis, TN 38141
 
See Column 2
EMCOR Government Services, Inc.
(Maryland Corporation)
Org. No. D03903283
2800 Crystal Dr., Suite 600
Arlington, VA 22202





See Column 2

A-14


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
Aircond Corporation
(Georgia Corporation)
Org No. J202485



















400 Lake Ridge Drive, S.E.
Smyrna, GA 30082



















485 Buford Drive
Lawrenceville, GA 30045

4480 Riverside Drive
Macon, GA 31210

2770 West Point Road
Lagrange, GA 30240

158 Lott Court
West Columbia, SC 29169

8810 Westgate Park Drive
Suite 104
Raleigh, NC 27617

3644 Vann Road
Building 1, Suite 120
Birmingham, AL 35235

11521 Reames Road
Suite 103
Charlotte, NC 28269

120 Old Mill Road
Suite G
Greenville, SC 29607



2917 River West Drive
Suite 301
Augusta, GA 30907

5901-G Northwoods Parkway
Charlotte, NC 28269

2450 Lakeland Rd.
Suite 1
Dalton, GA 30721

See Columns 2 & 3






















A-15


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
The Betlem Service Corporation
(New York Corporation)
Org. No. None
704 Clinton Avenue, South
Rochester, NY 14620


 
See Column 2

CES Facilities Management Services, Inc.
(Maryland Corporation)
Org. No. D05515994

2800 Crystal Drive, Suite 600
Arlington, VA 22202




See Column 2

Combustioneer Corporation
(Maryland Corporation)
Org. No. D03050507

643 Lofstrand Lane
Rockville, MD 20850



See Column 2

EMCOR Services Team Mechanical, Inc.
(Delaware Corporation)
Org No. 4026937

431 Lexington Drive
Buffalo Grove, IL 60089


 
See Column 2
New England Mechanical Services of Massachusetts, Inc.
(Massachusetts Corporation)
Org. No. None

17 Third Street
Palmer, MA 01069





See Column 2


A-16


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
New England Mechanical Services, Inc.
(Connecticut Corporation)
Org. No. 0033131











166 Tunnel Road
Vernon, CT 06066

30 Linden Drive
Trumbull, CT 06611

690 Asylum Avenue
Hartford, CT 06105



3 Shaw’s Cove
New London, CT 06320

17 Third Street
Palmer, MA 01069

d/b/a EMCOR Services Tri-Tech
4 Airport Park Blvd.
Latham, NY 12110

203 Concord Street
Pawtucket, RI 02860

See Columns 2 & 3

Viox Services, Inc.
(Ohio Corporation)
Org. No. 470852
15 W. Voorhees Street
Cincinnati, OH 07444

2020 15th Street
Columbus, IN 47201

1144 East Market Street
Akron, OH 44316

9655 Reading Rd.
Cincinnati, OH 45215

See Columns 2 & 3

F & G Management, Inc.
(Delaware Corporation)
Org. No. 3581028

301 Merritt Seven
Norwalk, CT 06851
 
See Column 2
FR X Ohmstede Acquisitions Co.
(Delaware Corporation)
Org. No. 4168905

937 Pine St.
Beaumont, TX 77701
 
See Column 2
HNT Holdings Inc.
(Delaware Corporation)
Org. No. 3372290

937 Pine St.
Beaumont, TX 77701
 
See Column 2

A-17


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
Ohmstede Partners LLC
(Delaware LLC)
Org. No. 3388080

937 Pine St.
Beaumont, TX 77701
 
See Column 2
Ohmstede Holdings LLC
(Delaware LLC)
Org. No. 3388083

937 Pine St.
Beaumont, TX 77701
 
See Column 2
Ohmstede Ltd.
(Texas Limited Partnership)
Org. No. 00151033-10

937 Pine St.
Beaumont, TX 77701
895 N. Main Street
Beaumont, TX 77701


410 Flato Rd.
Corpus Christi, TX 78405

12415 Highway 225
LaPorte, TX 77571

4250 Highway 30
St. Gabriel, LA 70776

420545 Belshaw Avenue
Carson, CA 90745

1750 Swisco Rd.
Sulphur, LA 70665

See Columns 2 & 3
Ohmstede Industrial Services Inc.
(Texas Corporation)
Org. No. 117921700

937 Pine St.
Beaumont, TX 77701
 
See Column 2
Beaumont Real Estate Holding Company
(Texas Corporation)
Org. No. 800104306
937 Pine St.
Beaumont, TX 77701
 
See Column 2

Performance Mechanical, Inc.
(California Corporation)
Org. No. C1186280

701 Willowpass Road
Pittsburg, CA 94565

6001 Midway St.
Sacramento, CA 95828

17925 S. Broadway
Gardena, CA 90248

See Columns 2 & 3

A-18


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor

Redman Equipment & Manufacturing Company  
(California Corporation)
Org. No. C0431393

19800 S. Normandie Avenue
Torrance, CA 90502-1182
 

See Column 2

Professional Mechanical Contractors, L.L.C.
(Connecticut Corporation)
Org. No. 0516430

367 Research Parkway
Meriden, CT 06450-7148
 

See Column 2

Mechanical Services of Central Florida, Inc.
(Florida Corporation)
Document No. P03000008527

9820 Satelite Blvd.
Orlando, FL 32837
 

See Column 2

MOR PPM, Inc.  
(South Carolina Company)
Org No. None

1127 South Main Street
Society Hill, NC 29593
 

See Column 2

Bahnson Holdings, Inc.
(North Carolina Corporation)
Org. No. 0800684

3901 Westpoint Blvd.
Winston-Salem, NC 27105
 

See Column 2

Bahnson, Inc.
   (North Carolina Corporation)
Org. No. 0287987


3901 Westpoint Blvd.
Winston-Salem, NC 27105

555 Birch Creek Road
McLeansville, NC 27301

See ColumnS 2 & 3
Bahnson Environmental
Specialties, LLC  
   (North Carolina limited liability
company)
Org. no. 0571969
4412 Tryon Road
Raleigh, NC 27606
 
See Column 2

Mechanical Specialties
Contractors, Inc.  
   (North Carolina Corporation)
Org. No. 0406593

100 Forsyth Hall Drive
Suite D
Charlotte, NC 28273

2274 Azalea Dr.
Suite B
Lawrenceville, GA 30043

See Columns 2 & 3


Intermech, Inc.  
(Delaware Corporation)
Org. No. 0894383

3909 Westpoint Dr.
Winston-Salem, NC 27103

1380 Enterprise St.
Idaho Falls, ID 83402

227 Trade Court
Aikem, SC 29805

654 Truman Ave.
Richland, WA 99352

See Columns 2 & 3

A-19


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor

Harry Pepper & Associates, Inc.
(Florida Corporation)
Org. No. 238126

9000 Regency Square Blvd.
Suite 100
Jacksonville, FL 32211

8233 Gator Lane
Suite No. 1
West Palm Beach, FL 33411

6706 N. 9th Ave.
Suite No. A7
Pensacola, FL 3250

See Columns 2 & 3

USM Services Holdings, Inc.
(Delaware Corporation)
Org. No. 4927170


1880 Markley St.
Norristown, PA 19401
 

See Column 2
USM (Delaware) Inc.
(Delaware Corporation)
Org. No. 4435782
1880 Markley St.
Norristown, PA 19401
 
See Column 2

USM, Inc.
(Pennsylvania Corporation)
Org. No. 1048528

1880 Markley St.
Norristown, PA 19401

260 Maple Court
Suite 210
Ventura, CA 93003

151 Bodman
Red Bank, NJ 07701

See Columns 2 & 3

Southern Industrial Constructors, Inc.
(North Carolina Corporation)
Org. No. 0022587

6101 Triangle Drive
Raleigh, NC 27617

200 Planters Drive
Columbia, SC 29209

136 Roymac Drive
Wilmington, NC 28401

See Columns 2 & 3

SIC International, LLC
(North Carolina limited liability company)
Org. No. 1225911

6101 Triangle Drive
Raleigh, NC 27617
 

See Column 2

ConCor Networks, Inc.
(Delaware corporation)
Org. No. 5080692

1954 Halethrop Farms Rd.
Suite 400
Baltimore, MD 21227
 

See Column 2

Food Tech, Inc.
(New York corporation)
Org. No. 4357341

300 Ledgewood
Rockland, MA 02370
 

See Column 2

Repcon, Inc.
(Texas corporation)
Org. No. 67311600

7502 Up River Road
Corpus Christi, TX 78409



See Column 2


A-20


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor

ASG Diamond, LLC
(Texas limited liability company)
Org. No. 800751921

8412 Mosley
Houston, TX 77075



See Column 2

Diamond Refractory Services, LLC
(Texas limited liability company)
Org. No. 800751228

8412 Mosley
Houston, TX 77075
 

See Column 2

Diamond Refractory Services California, L.P.
(California limited partnership)
Org. No. 200706800040

8412 Mosley
Houston, TX 77075
 

See Column 2

Mercury Industrial Materials, LLC
(Texas limited liability company)
Org. No. 800752723

8412 Mosley
Houston, TX 77075
 

See Column 2

ASI Industrial Services, LLC
(Texas limited liability company)
Org. No. 800752151

8412 Mosley
Houston, TX 77075
 

See Column 2

Turnaround Welding Services, LLC
(Texas limited liability company)
Org. No. 800752133  

29371 Frost Road
Livingston, LA 70754
 

See Column 2

Turnaround Welding Services California, L.P.
(California limited partnership)
Org. No. 200715200011

29371 Frost Road
Livingston, LA 70754
 

See Column 2

AltairStrickland California, L.P.
(California limited partnership)
Org. No. 200706800039

29371 Frost Road
Livingston, LA 70754
 

See Column 2

Tiger Tower Services, LLC
(Texas limited liability company)
Org. No. 800751217

874 Fawn Trail
Conroe, TX 77385
 

See Column 2

Tiger Tower Services California, L.P.
(California limited partnership)
Org. No. 200719700017  


874 Fawn Trail
Conroe, TX 77385
 

See Column 2

RepconStrickland, Inc.
(Delaware corporation)
Org. No. 4495072

1605 S. Battleground Road
LaPorte, TX 77571
 

See Column 2

A-21


Name of Debtor
(And Organizational No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor

AltairStrickland, LLC
(Texas limited liability company)
Org. No. 800752148

1605 S. Battleground Road
LaPorte, TX 77571
 

See Column 2

AltairStrickland Holdings LLC
(Delaware limited liability company)
Org. No. 4273945

1605 S. Battleground Road
LaPorte, TX 77571
 

See Column 2

AltairStrickland Holdings California Inc.
(California corporation)
Org. No. C3045881

1605 S. Battleground Road
LaPorte, TX 77571
 

See Column 2

AltairStrickland International LLC
(Texas limited liability company)
Org. No. 801324660

1605 S. Battleground Road
LaPorte, TX 77571
 

See Column 2

Repcon Equipment Co.
(Texas corporation)
Org. No. 100961400

1605 S. Battleground Road
LaPorte, TX 77571
 

See Column 2

Repcon International, Inc.
(Texas corporation)
Org. No. 800310007

1605 S. Battleground Road
LaPorte, TX 77571
 

See Column 2

Repcon Properties, LLC
(Texas limited liability company)
Org. No. 800917753

1605 S. Battleground Road
LaPorte, TX 77571
 

See Column 2


A-22


SCHEDULE B
TRADE NAMES
Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
 
 
 
EMCOR Group, Inc.
None
None
 
 
 
EMCOR Construction Services, Inc.
EMCOR Construction Holding Services, Inc.
(DE)
None
 
EMCOR Mechanical/Electrical Services (Midwest), Inc.; EMCOR Mechanical/Electrical Services (South), Inc.; EMCOR Mechanical/Electrical Services (West), Inc. - each in DE
 
 
 
 
EMCOR Facilities Services, Inc.
None
EMCOR Energy Services
 
 
EMCOR Industrial Services Consulting Group
 
 
Efacilities
 
 
Chicago Fire Protection Group
 
 
Facilities Knowledge Center (with respect to the Phoenix, AZ property)
EMCOR Customer Solutions Center
EMCOR Mobile Services
EMCOR Mechanical Services
EMCOR Services
 
 
 
Mesa Energy Systems, Inc.
EMCOR Services Arizona, Inc.
EMCOR Services Integrated Solutions
 
 
EMCOR Service VSD
 
 
EMCOR Services
 
 
   Fuller Air Conditioning
 
 
EMCOR Services ARC





Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
 
 
EMCOR Services Fuller (re the Lemon Grove, CA property)
EMCOR Service Fuller Air
EMCOR Services Mesa
Hillcrest Air Conditioning
Hillcrest Sheet Metal
EMCOR Service Mesa
EMCOR Services Nevada
EMCOR Services Arizona
EMCOR International Inc.
None
None
 
 
 
EMCOR Mechanical/
Electrical Services (East), Inc.
None
None
 
 
 
Heritage Mechanical Services, Inc.
Heritage Mandell Mechanical Services, Inc. (NY)
EMCOR Service Heritage Air Systems
Heritage Air Systems
Heritage Mechanical Services
 
 
 
Welsbach Electric Corp.
None
Tech Serv
Broadway Maintenance
Serota Signs
AZCO Modular Structures
 
 
 
Forest Electric Corp.
None
Forest Datacom Services
 
 
Forest Electric NY
 
 
Forest Electric NJ
 
 
 
Welsbach Electric Corp. of L.I.
None
Broadway Maintenance Forest/Welsbach Technical Services
 
 
 
Penguin Maintenance and Services Inc.
None
Broadway Electrical Maintenance
 
 
 
Penguin Air Conditioning Corp.
None
Penguin Broadway Electrical Maintenance
EMCOR Service Penguin Air
Penguin Broadway Maintenace & Service
 
 
 
J. C. Higgins Corp.
None
Tucker Mechanical
 
 
EMCOR Service Tucker Mechanical
J.C. Higgins
J.C. Higgins Service Company
Gibbs-McAllister

B-2


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
 
 
 
Duffy Mechanical Corp.
None
Duffy Mechanical
 
 
 
EMCOR Hyre Electric Co. of Indiana, Inc.
JWP/Hyre Electric Co. of Indiana, Inc.
(DE)
JWP Electrical Services Co. of Ohio
JWP Hyre Electric of Ohio
JWP/Hyre Electric of Ohio
Gibson Electric Co., Inc.
None
EMCOR Technologies
 
 
Gibson Electric and Technologies
Communication and Data Services
Gibson Electric & Technology Solutions
 
 
 
University Mechanical & Engineering Contractors, Inc. (California Corporation)
None
Spira-Loc
University Industrial Services
 
 
University Marelich Mechanical
 
 
 
Pace Mechanical Services II, Inc.
Pace Mechanical Services, Inc.
EMCOR Service Pace Mechanical
 
 
EMCOR Pace Mechanical Services, Inc.
Pace Mechanical Services
 
 
 
University Mechanical & Engineering Contractors, Inc. (Arizona Corporation)
None
None
 
 
 
Hansen Mechanical Contractors, Inc.
None
None
 
 
 
Design Air, Limited
None
None
 
 
 
Trautman & Shreve, Inc.
None
None
 
 
 
EMCOR Gowan, Inc.
None
Gowan, Inc.
 
 
The Warren Company
 
 
Gowco
Gowco, Inc.
 
 
Systems Commissioning
 
 
Gowan Sheet Metal
Gowan Sheet Metal, Inc.
 
 
EMCOR Service Gowan
 
 
EMCOR Service Gowan, Inc.
 
 
 

B-3


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
Inte-Fac Corp.
None
None
 
 
 
MES Holdings Corporation
None
None
 
 
 
R. S. Harritan & Company, Inc.
None
None
 
 
 
Dynalectric Company of Ohio
None
None
 
 
 
Dynalectric of Michigan II, Inc.
Dynalectric of Michigan, Inc.
John Miller Electric & Technologies
Dynalectric Michigan


 
 
DeBra-Kuempel Inc.
The Fred B. DeBra Co.
DeBra Kuempel
 
 
EMCOR Service DeBra- Kuempel
 
 
EMCOR Service Automated Controls
 
 
Dynalectric Ohio
 
 
 
Marelich Mechanical Co., Inc.
None
Control Systems Specialist
 
 
University Marelich Mechanical
 
 
 
Dynalectric Company
None
Dynatran
 
 
Ferguson Dynalectric of Colorado
 
 
Wasatch
Wasatch Electric
 
 
Dynalectric Information Technologies
 
 
Dynalectric Service & Systems Group
 
 
EMCOR Construction Services
 
 
Dynatechnologies
 
 
 
DYN Specialty Contracting, Inc.
None
None
 
 
 
KDC Inc.
None
KDC Systems
 
 
Dynalectric
IDMA
 
 
 
Contra Costa Electric, Inc.
None
None
 
 
 
Dynalectric Company of Nevada
None
None
 
 
 

B-4


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
EMCOR Services Northeast, Inc.
Balco, Inc.
(MA)
EMCOR Services Balco/
   J.C. Higgins
 
Commonwealth Air Conditioning and Heating, Inc.
(MA)
EMCOR Services CommAir
 
 
EMCOR Services CommAir/Balco
 
 
EMCOR Services Northeast Balco/J.C. Higgins
 
 
EMCOR Services Northeast CommAir
 
 
EMCOR Services Northeast CommAir Balco
EMCOR Services Balco
 
 
 





Building Technology Engineers, Inc.





None





BTE (Massachusetts), Inc.
 
 
BTE of Massachusetts
 
 
Building Operations Technologies of Mass
 
 
Building Technology, Inc.
 
 
Building Technology
 
 
 
Poole & Kent Company of Florida
None
None
 
 
 
Monumental Investment Corporation
None
None
 
 
 
The Poole and Kent Corporation
None
Duffy Mechanical
EMCOR Services Poole and Kent
 
 
Poole and Kent Construction Services
 
 
 
The Poole and Kent Company
None
EMCOR Service Poole and Kent
 
 
EMCOR Service Poole and Kent Northern Operations
 
 
EMCOR Service Poole and Kent Southern Operations
 
 
The Poole and Kent Company of Maryland
 
 
 
S. A. Comunale Co., Inc.
None
None

B-5


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
 
 
 
Air Systems, Inc.
Air Systems Acquisition, Inc.
EMCOR Services Air Systems
 
San Jose Air Systems, Inc.
EMCOR Services
 
 
 
Fluidics, Inc.
Wredna, Inc. (DE) and QLR Corporation (DE)
EMCOR Services Fluidics
EMCOR Services Integrated Solutions
 
 
 
University Marelich Mechanical Co., Inc.
None
None
 
 
 
Midland Fire Protection, Inc.
None
None
 
 
 
Poole and Kent-Connecticut, Inc.
Environmental Engineering Company (MD)
None
 
Poole and Kent Distributors, Inc. (MD)
 
 
 
 
Poole and Kent - New England, Inc.
None
None
 
 
 
Monumental Heating, Ventilating and Air Conditioning Contractors, Inc.
None
None
 
 
 
Forti/Poole and Kent, LLC
None
None
 
 
 
HVAC, Ltd.
None
None
 
 
 
Atlantic Coast Mechanical, Inc.
None
None
 
 
 
Great Monument Construction Company
None
None
 
 
 
EMCOR-CSI Holding Co.
None
None
 
 
 
Border Electric Co., L.P.
None
None
 
 
 
Border Mechanical Co., L.P.
None
None
 
 
 
Central Mechanical Construction Co., Inc.
None
None.
 
 
 
CS48 Acquisition Corp.
None
None
 
 
 
CSUSA Holdings L.L.C.
None
None

B-6


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
 
 
 
F & G Mechanical Corporation
None
EMCOR Services F & G Mechanical
 
 
 
F & G Plumbing, Inc.
None
None
 
 
 
EMCOR Services New York/
New Jersey, Inc.
Gotham Air Conditioning Service, Inc. (DE)
EMCOR Services Gotham Air
Gotham Air Conditioning  
   Services
 
 
 
 
Trimech Corporation (NJ)
EMCOR Services Trimech
 
 
 
Hillcrest Sheet Metal, Inc.
None
Healthy Air Ducts
 
 
Hillcrest Air Conditioning
EMCOR Services Hillcrest
 
 
 
Illingworth-Kilgust Mechanical, Inc.
Kilgust Mechanical, Inc.

Illingworth-Kilgust Mechanical
EMCOR Services Integrated
   Solutions
 
 
 
Kuempel Service, Inc.
None
EMCOR Service DeBra Kuempel
 
 
DeBra Kuempel
 
 
 
Lowrie Electric Company, Inc.
None
None
 
 
 
Mandell Mechanical Corporation
None
Heritage Mandell
Heritage Mechanical
 
 
 
Meadowlands Fire Protection Corp.
None
None
 
 
 
Nogle & Black Mechanical, Inc.
None
EMCOR Services Nogle & Black
 
 
 
North Jersey Mechanical Contractors, Inc.
None
NJM Service
 
 
North Jersey Maximum Mechanical
 
 
 
Shambaugh & Son, L.P.
None
 
 
 
Ed Grace
 
 
Advanced Systems Group

B-7


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
 
 
Advanced Systems Computer Consultants
Chicago Fire Protection
Havel
Guardian Fire Protection Systems
Pace Mechanical Services
EMCOR Facility Services
EMCOR Construction Services
Shambaugh Fire Protection
Dynalectric Michigan
Advanced Systems Computer Consulting
 
 
 
The Fagan Company
None
KC Fab
 
 
Fagan Supermarket Refrigeration
 
 
 
Walker-J-Walker, Inc.
None
EMCOR Service Walker
 
 
EMCOR Services Walker J. Walker
EMCOR Services Integrated Solutions
 
 
 
EMCOR Government Services, Inc.
Consolidated Engineering Services, Inc. (MD)
Consolidated Services, Inc.
EMCOR Services
Consolidated Services of Maryland, Inc.
 
 
Consolidated Engineering Services, Inc.
Consolidated Engineering Services


 
EMCOR Medical Facilities Services



Aircond Corporation


L.T. Mechanical, Inc.


EMCOR Services Aircond
EMCOR Services Integrated Solutions
EMCOR Service Integrated Services
 
 
EMCOR Services LT Mechanical
LT Mechanical
 
 
 

B-8


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
The Betlem Service Corporation
None
EMCOR Services Betlem Residential
EMCOR Services Betlem Home Energy
Betlem Heating and Air
   Conditioning
 
 
EMCOR Services Betlem Service
EMCOR Services Betlem
 
 
Betlem Home Energy

CES Facilities Management Services, Inc.
None
None
 
 
 
Combustioneer Corporation
None
EMCOR Services Combustioneer
EMCOR Services Mid-Atlantic
 
 
 
EMCOR Services Team Mechanical, Inc.
EMCOR Services Midwest, inc.
EMCOR Services Hayes Mechanical
Midwesco Services
EMCOR Midwesco Services
Team Mechanical
EMCOR Services Midwest
 
 
 
New England Mechanical Services of Massachusetts, Inc.
None
None
 
 
 
New England Mechanical Services, Inc.
None
NEMSI
EMCOR Services Tri-Tech
 
 
EMCOR Services New England Mechanical
 
 
 
Viox Services, Inc.
None
None
 
 
 
F & G Management, Inc.
None
None
 
 
 
FR X Ohmstede Acquisitions Co.
None
None
 
 
 
Ohmstede Partners LLC
None
None
 
 
 
Beaumont Real Estate Holding Company
None
None
 
 
 
HNT Holdings Inc.
None
None
 
 
 

B-9


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
Ohmstede Industrial Services Inc.
Hydraulic Extractor Services, Inc.
United Industrial Services- Beaumont
Ohmstede United Industrial  
   Services Divison
Elite Project Planning
 
 
 
Ohmstede Holdings LLC
None
None
 
 
 
Ohmstede Ltd.



Performance Mechanical, Inc.

Redman Equipment and Manufacturing Company

Professional Mechanical Contractors, LLC

Mechanical Services of Central Florida, Inc.



MOR PPM, Inc.


Ohmstede LP



None

None


None


None




None

Ohmstede Ltd., LP
Ohmstede Ltd., Limited Partnership

None

None


None


EMCOR Services Integrated Solutions of Florida
EMCOR Services MSI – Mechanical Services

PPM


USM, Inc.
Tower Cleaning
Systems, Inc.

US Maintenance Inc.

 
Bahnson, Inc.
Luwa, Inc.

Bahnson Mechanical Systems
Mechanical Specialties Contractors
Bahnson Environmental Specialties

Bahnson Environmental Specialties, LLC
Luwa Environmental Specialties
 
 
 
 
Food Tech, Inc.
FT Constructors, Inc.
Technology Food Systems, Inc.
 
 
 
Scalise Industries Corporation
Scalise Industries Corp.
EMCOR Services Scalise Industries
SI Technologies
 
 
 

B-10


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
Southern Industrial Constructors, Inc.
None
Southern Crane
 
 
 
RepconStrickland, Inc.
None
None
 
 
 
AltairStrickland Holdings LLC
None
None
 
 
 
ASG Diamond LLC
None
None
 
 
 
ASI Industrial Services, LLC
None
None
 
 
 
Diamond Refractory Services, LLC
None
None
 
 
 
Mercury Industrial Materials, LLC
None
None
 
 
 
Turnaround Welding Services, LLC
None
None
 
 
 
Turnaround Welding Services California L.P.
None
None
 
 
 
AltairStrickland California, L.P.
None
None
 
 
 
AltairStrickland, LLC
None
None
 
 
 
Tiger Tower Services, LLC
None
None
 
 
 
AltairStrickland International, LLC
None
None
 
 
 
Diamond Refractory Services California, L.P.
None
None
 
 
 
AltairStrickland Holdings California, Inc.
None
None
 
 
 
Tiger Tower Services California, L.P.
None
None
 
 
 
Repcon, Inc.
None
None
 
 
 
Repcon Equipment Co.
None
None
 
 
 
Repcon International, Inc.
None
None
 
 
 
Repcon Properties, LLC
None
None
 
 
 

B-11


Debtor’s Name
Prior Legal Name in Past 5 Years
Trade Names/Names in Past 5 Years
SIC International, Inc.
None
None




B-12


SCHEDULE C
INTELLECTUAL PROPERTY











See attached Schedule C.


No other Debtor owns any intellectual property rights.




C-1



SCHEDULE D
INVESTMENT PROPERTY

Investments
Amount of investment
Payee or holder
1. Colony Holdings Ltd.
(Bermuda)
60,000 shares —12% interest
Monumental Investment Corporation

2. Baltimore Ravens
License (right) for 16 seats

The Poole and Kent Corporation
3. Cash Surrender Value of
split dollar insurance policy

$830,000
Penguin Air Condition Corp.
4. Cash Surrender Value of
split dollar life insurance
policy

$709,000
Shambaugh & Son, L.P.
5. F & G Mechanical Inc.

90 shares – 45% interest
F & G Mechanical Corporation (New York)
6. C & H Services LLC
50% Interest
Ohmstede Ltd.
7. Start 2 Finish LLC
45% Interest
Viox Services, Inc.
8. DATSU
35% Interest
AltairStrickland Holdings LLC
9. CTSI-CES Facility Services Millington LLC
40% Interest
EMCOR Government Services, Inc.
10. E-Star LLC
49% Interest
EMCOR Government Services, Inc.






SCHEDULE E

DEPOSIT ACCOUNTS
Deposit Accounts are set forth in the Side Letter.






SCHEDULE F
COMMERCIAL TORT CLAIMS
NONE


F-2


SCHEDULE G
SUPPLEMENT TO SECURITY AGREEMENT
THIS SUPPLEMENT TO SECURITY AGREEMENT (the "Supplement" ) is dated as of this _____ day of _____________, 20__ from _________________________, a(n) _____________ corporation/limited liability company/partnership (the “Debtor” ), to Bank of Montreal, in its capacity as administrative agent for itself and certain other lenders (the “Agent” ).
PRELIMINARY STATEMENTS
A.    The Debtors and the Agent are parties to that certain Fourth Amended and Restated Security Agreement dated as of November 25, 2013 (such Fourth Amended and Restated Security Agreement, as the same may from time to time be amended, modified or restated, being hereinafter referred to as the “Security Agreement” ). All capitalized terms used herein without definition shall have the same meanings herein as such terms are defined in the Security Agreement.
B.    Pursuant to the Security Agreement, the Debtors granted to the Agent, among other things, a continuing security interest in all Commercial Tort Claims.
C.    The Debtor has acquired a Commercial Tort Claim, and executes and delivers this Supplement to confirm and assure the Agent's security interest therein.
NOW, THEREFORE, in consideration of the benefits accruing to the Debtors, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Debtor agrees as follows:
1.    In order to secure payment of the Obligations, whether now existing or hereafter arising, the Debtor does hereby grant to the Agent a continuing lien on and security interest in the Commercial Tort Claim described below:
____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
2.    Schedule F (Commercial Tort Claims) to the Security Agreement is hereby amended to include reference to the Commercial Tort Claim referred to in Section 1 above. The Commercial Tort Claim described herein is in addition to, and not in substitution or replacement for, the




Commercial Tort Claims heretofore described in and subject to the Security Agreement, and nothing contained herein shall in any manner impair the priority of the liens and security interests heretofore granted by the Debtors in favor of the Agent under the Security Agreement.
3.    The Debtor agrees to execute and deliver such further instruments and documents and do such further acts and things as the Agent may deem necessary or proper to carry out more effectively the purposes of this Supplement.
4.    No reference to this Supplement need be made in the Security Agreement or in any other document or instrument making reference to the Security Agreement, any reference to the Security Agreement in any of such items to be deemed a reference to the Security Agreement as supplemented hereby. The Debtor acknowledges that this Supplement shall be effective upon its execution and delivery by the Debtor to the Agent, and it shall not be necessary for the Agent to execute this Supplement or any other acceptance hereof or otherwise to signify or express its acceptance hereof.
5.    This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois (without regard to principles of conflicts of law).
[INSERT NAME OF DEBTOR]
By        
Name    
Title ________________________________
    



G-2


SCHEDULE H
ASSUMPTION AND SUPPLEMENTAL SECURITY AGREEMENT
THIS AGREEMENT dated as of this _____ day of ______________, 200__ from [new debtor] , a __________ corporation/limited liability company/partnership (the “New Debtor” ), to Bank of Montreal ( “BMO” ), as administrative agent for the Secured Creditors (defined in the Security Agreement hereinafter identified and defined) (BMO acting as such administrative agent and any successor or successors to BMO in such capacity being hereinafter referred to as the “Agent” );
WITNESSETH THAT:
WHEREAS, EMCOR Group, Inc. (the “ Company ”) and certain other parties have executed and delivered to the Agent that certain Fourth Amended and Restated Security Agreement dated as of November 25, 2013 or supplements thereto (such Fourth Amended and Restated Security Agreement, as the same may from time to time be modified or amended, including supplements thereto which add additional parties as Debtors thereunder, being hereinafter referred to as the “Security Agreement” ) pursuant to which such parties (the “Existing Debtors” ) have granted to the Agent for the benefit of the Secured Creditors a lien on and security interest in such Existing Debtors’ Collateral (as such term is defined in the Security Agreement) to secure the Obligations (as such term is defined in the Security Agreement) of the Borrowers referred to therein owing to the Agent and the Secured Creditors arising out of or related to the Credit Agreement referred to therein; and
WHEREAS, the Borrowers provide the New Debtor with substantial financial, managerial, administrative, technical and design support and the New Debtor will directly and substantially benefit from credit and other financial accommodations extended and to be extended by the Secured Creditors to the Borrowers;
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances made or to be made, or credit accommodations given or to be given, to the Borrowers by the Secured Creditors from time to time, the New Debtor hereby agrees as follows:
1.    The New Debtor acknowledges and agrees that it shall become a “Debtor” party to the Security Agreement effective upon the date the New Debtor’s execution of this Agreement and the delivery of this Agreement to the Agent, and that upon such execution and delivery, all references in the Security Agreement to the terms “Debtor” or “Debtors” shall be deemed to include the New Debtor. Without limiting the generality of the foregoing, the New Debtor hereby repeats and reaffirms all grants (including the grant of a lien and security interest), covenants, agreements, representations and warranties contained in the Security Agreement as amended hereby, each and all of which are




and shall remain applicable to the Collateral from time to time owned by the New Debtor or in which the New Debtor from time to time has any rights. Without limiting the foregoing, in order to secure payment of the Obligations, whether now existing or hereafter arising, the New Debtor does hereby grant to the Agent for the benefit of the Secured Creditors, and hereby agrees that the Agent has and shall continue to have for the benefit of the Secured Creditors a continuing security interest in, among other things, all of the New Debtor’s Collateral (as such term is defined in the Security Agreement), including, without limitation, all of the New Debtor’s Receivables, Leases, General Intangibles, Inventory, Equipment, Investment Property, Pledged Notes, and all of the other Collateral described in , and subject to the limitations set forth in, Section 2 of the Security Agreement, each and all of such granting clauses being incorporated herein by reference with the same force and effect as if set forth in their entirety except that all references in such clauses to the Existing Debtors or any of them shall be deemed to include references to the New Debtor. Nothing contained herein shall in any manner impair the priority of the liens and security interests heretofore granted in favor of the Agent under the Security Agreement.
2.    Schedules A-F to the Security Agreement shall be supplemented by the information stated below with respect to the New Debtor:
SUPPLEMENT TO SCHEDULE A
Name of Debtor
(And Organization No.)
Chief Executive Office
Additional
Places of Business
Location of
Collateral Held
by Debtor
 
 
 
 
SUPPLEMENT TO SCHEDULE B
Debtor’s Name
Prior Legal Name
Trade Names/
Names in Past 5 Years
 
 
 
SUPPLEMENT TO SCHEDULE C
INTELLECTUAL PROPERTY RIGHTS
__________________________________
__________________________________

H-2


SUPPLEMENT TO SCHEDULE D
Investment Property
__________________________________
__________________________________
SUPPLEMENT TO SCHEDULE E
Deposit Accounts
__________________________________
__________________________________
SUPPLEMENT TO SCHEDULE F
Commercial Tort Claims
_________________________
_________________________
3.    The New Debtor hereby acknowledges and agrees that the Obligations are secured by all of the Collateral according to, and otherwise on and subject to, the terms and conditions of the Security Agreement to the same extent and with the same force and effect as if the New Debtor had originally been one of the Existing Debtors under the Security Agreement and had originally executed the same as such an Existing Debtor.
4.    All capitalized terms used in this Agreement without definition shall have the same meaning herein as such terms have in the Security Agreement, except that any reference to the term “Debtor” or “Debtors” and any provision of the Security Agreement providing meaning to such term shall be deemed a reference to the Existing Debtors and the New Debtor. Except as specifically modified hereby, all of the terms and conditions of the Security Agreement shall stand and remain unchanged and in full force and effect.

H-3


5.    The New Debtor agrees to execute and deliver such further instruments and documents and do such further acts and things as the Agent may reasonably deem necessary or proper to carry out more effectively the purposes of this Agreement.
6.    No reference to this Agreement need be made in the Security Agreement or in any other document or instrument making reference to the Security Agreement, any reference to the Security Agreement in any of such to be deemed a reference to the Security Agreement as modified hereby.
7.    This Agreement shall be governed by and construed in accordance with the State of Illinois (without regard to principles of conflicts of law).
[NEW DEBTOR]
By
    
Name    
Title ________________________________







H-4

EXHIBIT 4(c)

FOURTH AMENDED AND RESTATED PLEDGE AGREEMENT
This Fourth Amended and Restated Pledge Agreement (the “Agreement” ) is dated as of November 25, 2013, by and among the parties executing this Agreement under the heading “Pledgors” on the signature pages hereto (such parties, along with any parties who execute and deliver to the Agent an agreement in the form attached hereto as Schedule C, being hereinafter referred to collectively as the “Pledgors” and individually as a “Pledgor” ) and Bank of Montreal, a Canadian chartered bank acting through its Chicago branch ( “BMO” ), with its mailing address at 111 West Monroe Street, Chicago, Illinois 60603, acting as administrative agent hereunder for the Secured Creditors hereinafter identified and defined (BMO acting as such administrative agent and any successor or successors to BMO acting in such capacity being hereinafter referred to as the “Agent” );
WITNESSETH THAT:
WHEREAS, EMCOR Group, Inc., a Delaware corporation (the “Company” ) and certain of its subsidiaries, as Pledgors, heretofore executed and delivered to BMO that certain Third Amended and Restated Pledge Agreement dated as of February 4, 2010 (such Third Amended and Restated Pledge Agreement, as the same has been amended and supplemented, being hereinafter referred to as the “Prior Pledge Agreement” ) pursuant to which certain Pledgors granted BMO a lien on and continuing security interest in certain personal property of such Pledgors described therein as collateral security for, among other things, all indebtedness, obligations and liabilities of the Borrowers (as hereinafter defined) under that certain Third Amended and Restated Credit Agreement dated as of November 21, 2011, as amended, by and among the Borrowers, BMO, individually and in its capacity as agent thereunder, and the lenders party thereto (the “Prior Credit Agreement” ); and
WHEREAS, the Company and EMCOR Group (UK) plc, a United Kingdom public limited company ( “EMCOR UK”; the Company and EMCOR UK being hereinafter referred to collectively as the “Borrowers” ) and BMO, individually and as Agent, have entered into a Fourth Amended and Restated Credit Agreement dated as of November 25, 2013 (such Fourth Amended and Restated Credit Agreement, as the same may be amended, modified or restated from time to time, being hereinafter referred to as the “Credit Agreement” ), pursuant to which BMO and other banks and financial institutions and letter of credit issuers from time to time party to the Credit Agreement (BMO, in its individual capacity, and such other banks and financial institutions being hereinafter referred to collectively as the “Lenders” and individually as a “Lender” , and such letter of credit issuers being hereinafter referred to collectively as the “Issuers” and individually as an “Issuer” ) have agreed, subject to certain terms and conditions, to extend credit and make certain other financial accommodations available to the Borrowers (the Agent, the Issuers, and the Lenders, together with affiliates of the Lenders with respect to Hedging Liability referred to below, being hereinafter referred to collectively as the “Secured Creditors” and individually as a “Secured Creditor” ); and
WHEREAS, in addition, one or more of the Pledgors may from time to time be liable to the Lenders and/or their affiliates with respect to Hedging Liability (as such term is defined in the Credit Agreement);
WHEREAS, as a condition precedent to extending credit or otherwise making financial accommodations available to the Borrowers under the Credit Agreement, the Secured Creditors require, among other things, that


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each Pledgor grant to the Agent for the benefit of the Secured Creditors a lien on and security interest in certain personal property of such Pledgor pursuant to this Agreement, and, in connection therewith, that the Prior Pledge Agreement be amended and restated in its entirety to read as set forth in this Agreement;
WHEREAS, except as indicated on Schedule A attached hereto, the Company owns, directly or indirectly, all or substantially all of the equity interests in each Pledgor (other than the Company), and the Borrowers provide each Pledgor with financial, management, administrative, and technical support which enables such Pledgor to conduct its business in an orderly and efficient manner in the ordinary course; and
WHEREAS, each Pledgor will benefit, directly and indirectly, from credit and other financial accommodations extended by the Secured Creditors to the Borrowers.
NOW, THEREFORE, for and in consideration of the execution and delivery by the Lenders and the Agent of the Credit Agreement, and other good and valuable consideration, receipt whereof is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1.
TERMS DEFINED IN CREDIT AGREEMENT.
All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement, except terms which are defined in the Uniform Commercial Code of the State of Illinois as in effect from time to time ( “UCC” ) shall have the same meanings herein as such terms are defined in the UCC, unless this Agreement shall otherwise specifically provide. The term “Pledgor” and “Pledgors” as used herein shall mean and include the Pledgors collectively and also each individually, with all grants, representations, warranties and covenants of and by the Pledgors, or any of them, herein contained to constitute joint and several grants, representations, warranties and covenants of and by the Pledgors; provided, however, that unless the context in which the same is used shall otherwise require, any grant, representation, warranty or covenant contained herein related to the Pledged Securities shall be made by each Pledgor only with respect to the Pledged Securities owned by it or represented by such Pledgor as owned by it.
Section 2.    Grant of Security Interest in the Pledged Securities; Obligations Secured.
(a)    Subject to the terms of the Credit Agreement, each Pledgor hereby pledges and deposits with the Agent, and grants to the Agent a security interest in, in each case for the benefit of the Secured Creditors, and acknowledges and agrees that the Agent has and shall continue to have for the benefit of the Secured Creditors a continuing security interest in, any and all right, title and interest of such Pledgor, whether now existing or hereafter acquired or arising, in and to (i) all shares of the capital stock or other equity interests of each Restricted Subsidiary owned or held by such Pledgor, whether now existing or hereafter formed or acquired (those of such shares delivered to and deposited with the Agent concurrently herewith being listed and described on Schedule A as of the date hereof), (ii) all substitutions and additions to such shares or other equity interests, (iii) all dividends, distributions and sums distributable or payable from, upon or in respect of such shares or other equity interests, (iv) all other rights or privileges incident to such shares or other equity interests, and (v) all proceeds and products of any of the foregoing (such shares, equity interests and all other of the foregoing being hereinafter sometimes referred to as the “Pledged Securities” ); provided, however, that the Pledged Securities hereunder shall not include any interest held by a Pledgor in the capital stock of any of its Unrestricted Subsidiaries or any of its Foreign

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Subsidiaries; provided further however that the pledge and security interest created hereby shall remain subject in all respects to the provisions of Section 4.1 of the Credit Agreement.
(b)    This Agreement is made and given to secure, and shall secure, the prompt payment and performance of (i) all “Obligations,” and “Hedging Liability,” as such terms are defined in the Credit Agreement, including, without limitation, all obligations with respect to Loans made and to be made under the Credit Agreement (whether or not evidenced by Notes issued thereunder), all obligations of the Borrowers to reimburse the Secured Creditors for the amount of all drawings on all Letters of Credit issued pursuant to the Credit Agreement and all other obligations of the Borrowers under all Applications for Letters of Credit, all other obligations of the Borrowers and the other Pledgors under the Loan Documents, all obligations of the Borrowers and the other Pledgors, and of any of them individually, with respect to any Hedging Liability and the agreements relating thereto, and all obligations of the Pledgors, and of any of them individually, arising under any guaranty issued by it relating to the foregoing or any part thereof, in each case whether now existing or hereafter arising (and whether arising before or after the filing of a petition in bankruptcy and including all interest, costs, fees, and charges after the entry of an order for relief against a Pledgor in a case under Title 11 of the United States Bankruptcy Code or any similar proceeding, whether or not such interest, costs, fees and charges would be an allowed claim against such Pledgor in such proceeding), due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired, and owing in any currency and (ii) any and all expenses and charges, legal or otherwise, suffered or incurred by the Agent or the Secured Creditors, and any of them individually, in collecting or enforcing any of such indebtedness, obligations, and liabilities or in realizing on or protecting or preserving any security therefor, including, without limitation, the lien and security interest granted to the Agent in the Pledged Securities hereby (all of the indebtedness, obligations, liabilities, expenses, and charges described above being hereinafter referred to as the “Obligations” ). Notwithstanding anything in this Agreement to the contrary, the right of recovery against any Pledgor under this Agreement shall not exceed $1.00 less than the lowest amount which would render such Pledgor’s obligations under this Agreement void or voidable under applicable law, including fraudulent conveyance law.
SECTION 3.
COVENANTS, REPRESENTATIONS AND WARRANTIES.
Subject to the terms of the Credit Agreement, each Pledgor hereby covenants and agrees with, and represents and warrants to, the Agent and the Secured Creditors as follows:
(a)    The certificates for all shares of stock, equity interests and other securities owned by each Pledgor (other than securities evidencing an ownership interest in any entity whose total assets are less than or equal to $5,000,000) in each case to the extent certificated now or at any time constituting the Pledged Securities shall be delivered to the Agent duly endorsed in blank for transfer or accompanied by an appropriate assignment or assignments or an appropriate undated stock power or powers, in every case sufficient to transfer title thereto. The Agent may at any time after the occurrence of an Event of Default and during the continuance thereof cause to be transferred into its name or the name of its nominee or nominees any and all of the Pledged Securities hereunder. The Agent shall at all times have the right to exchange the certificates representing the Pledged Securities for certificates of smaller or larger denominations.

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(b)    Each Pledgor is and will be the sole and lawful legal and beneficial owner of all of the Pledged Securities deposited by such Pledgor hereunder. Each Pledgor agrees not to sell, assign, pledge or otherwise dispose of any of such Pledgor’s Pledged Securities or any interest therein except for the security interest granted to the Agent hereunder and liens permitted by Sections 4.1 and 7.11 of the Credit Agreement and except for the sale or other disposition of Pledged Securities permitted by the Credit Agreement (including, without limitation, Sections 7.14 and 7.15 of the Credit Agreement). In the case of such permitted sale, disposition or dissolution, the Agent shall release the lien upon such Pledged Securities and deliver such Pledged Securities to the relevant Pledgor. The Pledged Securities are and will be free and clear of all security interests, Liens, rights, claims, attachments, levies and encumbrances of every kind, nature and description and whether voluntary or involuntary except for the pledge to the Agent hereunder and for other Liens permitted by the Credit Agreement, and each Pledgor will warrant and defend all Pledged Securities which such Pledgor has deposited with the Agent against any claims and demands of all other persons at any time claiming the same or any interest therein adverse to the Agent and the Secured Creditors. Each Pledgor has the right to vote the Pledged Securities (except as set forth herein) and there are no restrictions upon the voting rights associated with, or the transfer of, any of the Pledged Securities, except as provided by any law applicable to the sale of securities generally or the terms and provisions of this Agreement.
(c)    The Pledged Securities have been validly issued and are fully paid and non-assessable (except for the provisions of Section 630 of the Business Corporation Law of the State of New York as to New York corporations). There are no outstanding commitments or other obligations of the issuers of the Pledged Securities to issue, and no options, warrants or other rights of any individual or entity to acquire, any share of any class or series of capital stock or other equity interests of such issuers. Except otherwise indicated on Schedule A, the Pledged Securities listed and described on Schedule A attached hereto constitute all of the issued and outstanding capital stock or other equity interests of every series and class of each issuer thereof. Each Pledgor further agrees that in the event any such issuer shall issue any additional capital stock of any series or class, each Pledgor will forthwith pledge and deposit hereunder, or cause to be pledged and deposited hereunder, all such additional shares of such capital stock.
(d)    On failure of any Pledgor to perform any of the agreements and covenants herein contained, the Agent may perform the same and in so doing may expend such sums as the Agent may deem advisable in the performance thereof, including without limitation the payment of any taxes, liens and encumbrances, expenditures made in defending against any adverse claim or demand and all other expenditures which the Agent may be compelled to make by operation of law or which Agent may make by agreement or otherwise for the protection of the security hereof. All such sums and amounts so expended shall be due and payable, immediately without notice or demand, shall constitute additional Obligations hereby secured together with interest thereon at the rate per annum (computed on the basis of a year of 360 days) determined by adding 2% to the interest rate otherwise applicable to Domestic Rate Loans under the Revolving Facility from time to time in effect (such rate per annum as so determined being hereinafter referred to as the “Reimbursement Rate” ). No such performance of any covenant or agreement by the Agent on behalf of such Pledgor, and no such advancement or expenditure therefor, shall relieve such Pledgor of any default under the terms of this Agreement or in any way obligate the Agent or any Secured Creditor to take any further or future action with respect thereto. The Agent is

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authorized to charge any depository account of any Pledgor maintained with the Agent for the amount of such sums and amounts so expended.
(e)    Each Pledgor represents that this Agreement, together with its delivery to the Agent of the certificates evidencing the Pledged Securities and stock powers therefor, creates a valid security interest securing payment and performance of the Obligations and that no other action is necessary to perfect such security interest. Each Pledgor agrees to execute and deliver to the Agent such further agreements and assignments or other instruments and to do all such other things as the Agent may deem reasonably necessary or appropriate to assure the Agent of such Pledgor’s pledge of the Pledged Securities hereunder.
(f)    If, as and when any Pledgor delivers any securities for pledge hereunder in addition to those listed on Schedule A hereto, the Pledgors shall furnish the Agent a duly completed and executed amendment to such Schedule in substantially the form (with appropriate insertions) of Schedule B hereto reflecting the securities pledged hereunder after giving effect to such addition.
SECTION 4.
VOTING RIGHTS AND DIVIDENDS.
Unless and until an Event of Default hereunder has occurred and is continuing:
(a)    Each Pledgor shall be entitled to exercise all voting and/or consensual powers pertaining to such Pledgor’s Pledged Securities or any part thereof, for all purposes not inconsistent with the terms of this Agreement, the Credit Agreement, or any other document evidencing or otherwise relating to any Obligations.
(b)    To the extent not prohibited by the terms of the Credit Agreement, each Pledgor shall be entitled to receive and retain all dividends and distributions in respect of the Pledged Securities which are paid in cash or other property of whatsoever nature.
(c)    In order to permit each Pledgor to exercise such voting and/or consensual powers which he is entitled to exercise under clause (a) above and to receive such distributions which such Pledgor is entitled to receive and retain under clause (b) above, the Agent shall, if necessary, upon the written request of such Pledgor, from time to time execute and deliver to such Pledgor appropriate proxies and dividend orders.
SECTION 5.
POWER OF ATTORNEY.
In addition to any other powers of attorney contained herein, each Pledgor hereby appoints the Agent, its nominee, or any other person whom the Agent may designate as such Pledgor’s attorney‑in‑fact, with full power and authority upon the occurrence and during the continuation of any Event of Default to ask, demand, collect, receive, receipt for, sue for, compound and give acquittance for any and all sums or properties which may be or become due, payable or distributable in respect of the Pledged Securities or any part thereof, with full power to settle, adjust or compromise any claim thereunder or therefor as fully as such Pledgor could itself do, to exercise all voting rights with respect to the Pledged Securities or any part thereof, to endorse or sign the Pledgor’s name

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on any assignments, stock powers or other instruments of transfer and on any checks, notes, acceptances, money orders, drafts, and any other forms of payment or security that may come into the Agent’s possession and on all documents of satisfaction, discharge or receipt required or requested in connection therewith, and, in its discretion, to file any claim or take any other action or proceeding, either in its own name or in the name of such Pledgor, or otherwise, which the Agent deems necessary or appropriate to collect or otherwise realize upon all or any part of the Pledged Securities, or effect a transfer thereof, or which may be necessary or appropriate to protect and preserve the right, title, and interest of the Agent in and to such Pledged Securities and the security intended to be afforded hereby. Each Pledgor hereby ratifies and approves all acts of any such attorney and agrees that neither the Agent nor any such attorney will be liable for any such acts or omissions nor for any error of judgment or mistake of fact or law other than such person’s gross negligence or willful misconduct as finally determined by a court of competent jurisdiction; provided that, in no event shall they be liable for any punitive, exemplary, indirect or consequential damages. The foregoing powers of attorney, being coupled with an interest, are irrevocable until the Obligations have been fully paid and satisfied and all commitments of the Lenders to extend credit to or for the account of the Borrowers under the Credit Agreement have expired or otherwise terminated (including Cash Collateralization of Letters of Credit).
SECTION 6.
DEFAULTS AND REMEDIES.
(a)     The occurrence of any event or the existence of any condition which is specified as an “Event of Default” under the Credit Agreement shall constitute an “Event of Default” hereunder.
(b)    Upon the occurrence and during the continuance of any Event of Default hereunder, all rights of the Pledgors to exercise the voting and/or consensual powers which they are entitled to exercise pursuant to Section 4(a) hereof and/or to receive and retain the distributions which they are entitled to receive and retain pursuant to Section 4(b) hereof, shall, at the option of the Agent, cease and thereupon become vested in the Agent, which, in addition to all other rights provided herein or by law, shall then be entitled solely and exclusively to exercise all voting and other consensual powers pertaining to the Pledged Securities and/or to receive and retain the distributions which the Pledgors would otherwise have been authorized to retain pursuant to Section 4(b) hereof and shall then be entitled solely and exclusively to exercise any and all rights of conversion, exchange or subscription or any other rights, privileges or options pertaining to the Pledged Securities as if the Agent were the absolute owner thereof including, without limitation, the rights to exchange, at its discretion, any and all of the Pledged Securities upon the merger, consolidation, reorganization, recapitalization or other readjustment of the respective issuer thereof or upon the exercise by or on behalf of any such issuer or the Agent of any right, privilege or option pertaining to the Pledged Securities and, in connection therewith, to deposit and deliver any and all of the Pledged Securities with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Agent may determine.
(c)    Upon the occurrence and during the continuance of any Event of Default hereunder, the Agent shall have, in addition to all other rights provided herein or by law, the rights and remedies of a secured party under the Uniform Commercial Code of Illinois in respect to the Pledged Securities (regardless of whether such Uniform Commercial Code is the law of the jurisdiction where the rights or remedies are asserted and regardless of whether such Code applies to the affected Pledged Securities) and further the Agent may, without demand and without advertisement or notice, all of which the Pledgors waive to the extent permitted by law, at any time or times, sell and deliver any or all of the Pledged Securities held by or for it at public or private sale, at any securities exchange

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or broker’s board or at any of the Agent’s offices or elsewhere, for cash, upon credit or otherwise, at such prices and upon such terms as the Agent deems advisable, in its sole discretion. In the exercise of any such remedies, the Agent may sell all the Pledged Securities as a unit even though the sales price thereof may be in excess of the amount remaining unpaid on the Obligations. Also, if less than all the Pledged Securities are sold, the Agent shall have no duty to marshal or apportion the part of the Pledged Securities so sold as between the Pledgors, or any of them, but may sell and deliver any or all of the Pledged Securities without regard to which of the Pledgors are the owners thereof. The Agent is authorized at any sale or other disposition of the Pledged Securities, if it deems it advisable so to do, to restrict the prospective bidders or purchasers to persons who will represent and agree that they are purchasing for their own account for investment, and not with a view to the distribution or resale of any of the Pledged Securities. The Agent or any Secured Creditor may be the purchaser at any sale or other disposition of the Pledged Securities. The Pledgors hereby waive all of their rights of redemption from any sale or other disposition of the Pledged Securities. Any requirement of reasonable notice shall be met if such notice is personally served on or mailed, postage prepaid, to the Pledgors in accordance with Section 11(h) hereof at least 10 days before the time of sale or other event giving rise to the requirement of such notice; provided, however, no notification need be given to a Pledgor if such Pledgor has signed, after an Event of Default hereunder has occurred, a statement renouncing any right to notification of sale or other intended disposition. The Agent shall not be obligated to make any sale or other disposition of the Pledged Securities regardless of notice having been given. The Agent may postpone or cause the postponement of the sale of all or any portion of the Pledged Securities by announcement at the time and place of such sale, and such sale may, without further notice, be made at the time and place to which the sale was postponed or the Agent may further postpone such sale by announcement made at such time and place. The proceeds of sale shall be applied first to all costs and expenses of sale, including attorney’s fees and court costs, and second to the payment of the Obligations in accordance with the terms of the Intercreditor Agreement.
(d)    No delay or omission on the part of the Agent in the exercise of any right or remedy hereunder shall operate as a waiver of such right or remedy, nor shall the exercise of any such right or remedy preclude the later or further exercise thereof. All rights or remedies of the Agent on account of the collateral or on account of any of the indebtedness hereby secured, whether arising under this Agreement, any other instrument or document, or at law or in equity, shall be cumulative and not exclusive of each other, and may be exercised by the Agent at such times and in such order as the Agent may determine. The Pledgors agree to pay all costs and expenses (including court costs and reasonable attorney’s fees) incurred by the Agent in enforcing or collecting any of the Obligations secured hereunder, in enforcing any of the terms hereof or in retaking, holding, preparing for sale, selling, collecting or otherwise realizing upon any Pledged Securities, including, without limitation, any of the foregoing arising in, arising under or related to a case under the United States Bankruptcy Code or any successor statute(s) thereto; and all such costs and expenses shall constitute additional Obligations hereby secured which shall be payable on demand together with interest thereon at the Reimbursement Rate. Neither the Agent nor any Secured Creditor, nor any party acting as its attorney, shall be liable for any acts or omissions or for any error of judgment or mistake of fact or law other than such person’s gross negligence or willful misconduct as finally determined by a court of competent jurisdiction.
(e)    EACH PLEDGOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE AGENT AS ITS PROXY AND ATTORNEY-IN-FACT WITH RESPECT TO ITS PLEDGED SECURITIES, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED SECURITIES, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO THE RIGHT TO VOTE ANY SUCH PLEDGED

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SECURITIES, THE APPOINTMENT OF THE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF SUCH PLEDGED SECURITIES WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS OR OTHER EQUITY HOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS OR OTHER EQUITY HOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY SUCH PLEDGED SECURITIES ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED SECURITIES OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT. EACH PLEDGOR HEREBY RATIFIES AND APPROVES ALL ACTS OF ANY SUCH ATTORNEY AND AGREES THAT NEITHER THE AGENT NOR ANY SUCH ATTORNEY WILL BE LIABLE FOR ANY SUCH ACTS OR OMISSIONS NOR FOR ANY ERROR OF JUDGMENT OR MISTAKE OF FACT OR LAW OTHER THAN SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES. THE FOREGOING POWERS OF ATTORNEY AND PROXY, BEING COUPLED WITH AN INTEREST, ARE IRREVOCABLE UNTIL THE OBLIGATIONS HAVE BEEN FULLY PAID AND SATISFIED AND ALL COMMITMENTS OF THE LENDERS TO EXTEND CREDIT TO OR FOR THE ACCOUNT OF THE BORROWERS UNDER THE CREDIT AGREEMENT HAVE EXPIRED OR OTHERWISE TERMINATED (INCLUDING CASH COLLATERALIZATION OF LETTERS OF CREDIT).
SECTION 7.
PRIMARY SECURITY; OBLIGATIONS ABSOLUTE.
The pledge and security herein created and provided for stand as direct and primary security for the Obligations. No application of any sums received by the Agent in respect of the Pledged Securities or any disposition thereof to the reduction of the Obligations or any portion thereof shall in any manner entitle any Pledgor to any right, title or interest in or to the Obligations or any collateral security therefor, whether by subrogation or otherwise, unless and until all Obligations have been fully paid and satisfied and each of the commitments of the Secured Creditors to extend credit or otherwise make financial accommodations available to the Borrowers, or any one of them, under the Credit Agreement have expired or otherwise have been terminated (including Cash Collateralization of Letters of Credit). The Pledgors acknowledge and agree that the pledge and security hereby created and provided for are absolute and unconditional and shall not in any manner be affected or impaired by any acts or omissions whatsoever of the Agent, the Secured Creditors or any other holder of any Obligations, and without limiting the generality of the foregoing, the pledge and security hereof shall not be impaired by any acceptance by the Agent, the Secured Creditors or any other holder of any Obligations of any other security for or guarantors upon any Obligations or by any failure, neglect or omission on the part of the Agent, any Secured Creditor or any other holder of any Obligations to realize upon or protect any Obligations or any collateral security therefor. The pledge and security hereof shall not in any manner be impaired or affected by (and the Agent and the Secured Creditors, without notice to anyone, are hereby authorized to make from time to time) any sale, pledge, surrender, compromise, settlement, release, renewal, extension, indulgence, alteration, substitution, exchange, change in, modification or disposition of any Obligations, or of any collateral security therefor, or of any guaranty thereof, or of the Credit Agreement, or any other instrument or document delivered in connection therewith. The Secured Creditors may at their discretion at any time grant credit to the Borrowers,

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or any of them, without notice to the Pledgors in such amounts and on such terms as the Secured Creditors may elect without in any manner impairing the pledge and security hereby created and provided for. In order to foreclose or otherwise realize hereon and to exercise the rights granted the Agent hereunder and under applicable law, there shall be no obligation on the part of the Agent or the Secured Creditors or any other holder of any Obligations at any time to first resort for payment to the Borrowers or to any other obligor on any Obligations or to any guaranty of the Obligations or any portion thereof or to resort to any other collateral security, property, liens or any other rights or remedies whatsoever, and the Agent shall have the right to enforce this instrument irrespective of whether or not other proceedings or steps are pending seeking resort to or realization upon or from any of the foregoing.
SECTION 8.
APPLICATION OF PROCEEDS.
The proceeds and avails of the Pledged Securities at any time received by the Agent after the occurrence and during the continuance of any Event of Default hereunder shall, when received by the Agent in cash or its equivalent, be applied by the Agent in reduction of the Obligations as set forth in the Credit Agreement. The Pledgors shall remain liable to the Agent and the Secured Creditors for any deficiency. Any surplus remaining after the full payment and satisfaction of the Obligations shall be returned to the Borrowers on behalf of the Pledgors or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto.
SECTION 9.
CONTINUING AGREEMENT.
This Agreement shall be a continuing agreement in every respect and shall remain in full force and effect until all of the Obligations, both for principal and interest, have been fully paid and satisfied and each of the commitments by the Secured Creditors to extend credit or otherwise make financial accommodations available to the Borrowers under the Credit Agreement have expired or otherwise have been terminated (including Cash Collateralization of Letters of Credit). Upon such termination of this Agreement, the Agent shall, upon the request and at the expense of the Pledgors, forthwith release all its liens and security interests hereunder.
SECTION 10.
THE AGENT.
In acting under or by virtue of this Agreement, the Agent shall be entitled to all the rights, authority, privileges and immunities provided in the Credit Agreement, all of which provisions of the Credit Agreement (including, without limitation, Section 10 of the Credit Agreement) are incorporated by reference herein with the same force and effect as if set forth herein. The Agent hereby disclaims any representation or warranty to the Secured Creditors concerning the perfection of the security interest granted hereunder or the value of the Pledged Securities.
SECTION 11.
MISCELLANEOUS.
(a)    Each Pledgor agrees to pay to the Agent upon demand the cost and expenses incurred by the Agent in connection with the filing of any financing statements or any other steps taken by the Agent in connection with the perfection or protection of such Pledgor’s Pledged Securities hereunder and in connection with releasing such pledge and security interest herein granted and provided for upon termination hereof.

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(b)    No waiver or modification or amendment to the terms of this Agreement shall be effective as against the Agent and the Secured Creditors unless the same is in writing and signed by an officer of the Agent. No such waiver, modification or amendment shall in any way affect any of the rights or remedies of the Agent and the Secured Creditors hereunder except to the extent that such waiver, modification or amendment specifically provides.
(c)    This Agreement and all of the rights, privileges, remedies and options given to the Agent and the Secured Creditors hereunder and in and to any of the Pledged Securities hereunder shall inure to the benefit of the Agent and the Secured Creditors and their successors and assigns; and all the terms, conditions, promises, covenants, representations and warranties of and in this Agreement shall bind each Pledgor and its successors and assigns, provided that no Pledgor may assign its rights or delegate its duties hereunder without the Agent’s prior written consent.
(d)    In the event that any provision hereof shall be deemed to be invalid by reason of the operation of any law or by reason of the interpretation placed thereon by any court, this Agreement shall be construed as not containing such provision, but only as to such locations where such law or interpretation is operative, and the invalidity of such provision shall not affect the validity of any remaining provision hereof, and any and all other provisions hereof which are otherwise lawful and valid shall remain in full force and effect.
(e)    No Secured Creditor shall have the right to institute any suit, action or proceeding in equity or at law for the enforcement of any remedy under or upon this Agreement; it being understood and intended that no one or more of the Secured Creditors shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Agreement by its or their action or to enforce any right hereunder, and that all proceedings at law or in equity shall be instituted, had and maintained by the Agent in the manner herein provided and for the benefit of the Secured Creditors.
(f)    This Agreement shall be deemed to have been made in the State of Illinois. This Agreement and all rights and obligations hereunder, including matters of construction, validity and performance shall be governed by the internal laws of the State of Illinois. All terms which are used in this Agreement which are defined in the Uniform Commercial Code of Illinois shall have the same meanings herein as said terms do in such Uniform Commercial Code unless this Agreement shall otherwise specifically provide. The headings in this instrument are for convenience of reference only and shall not limit or otherwise affect the meaning of any provision hereof.
(g)    This Agreement may be executed in any number of counterparts, each constituting an original, but all together one and the same instrument. Each Pledgor acknowledges that this Agreement is and shall be effective upon its execution and delivery by such Pledgor to the Agent, and it shall not be necessary for the Agent to execute this Agreement or any other acceptance hereof or otherwise to signify or express its acceptance hereof.
(h)    Except as otherwise specified herein, all notices hereunder shall be in writing (including, without limitation, notice by telecopy) and shall be given to the relevant party, and shall be deemed to have been made when given to the relevant party, in accordance with Section 8 of the Intercreditor Agreement. All notices to the Pledgors hereunder shall be made to the Company, as their agent, in accordance with Section 11.9 of the Credit Agreement.

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(i)    In the event the Secured Creditors shall at any time in their discretion permit a substitution of Pledgors hereunder or a party shall wish to become a Pledgor hereunder, such substituted or additional Pledgor shall, upon executing an agreement in the form attached hereto as Schedule C, become a party hereto and be bound by all the terms and conditions hereof to the same extent as though such Pledgor had originally executed this Agreement and, in the case of a substitution, in lieu of the Pledgor being replaced. No such substitution shall be effective absent the written consent of Secured Creditors nor shall it in any manner affect the obligations of the other Debtors hereunder.
(j)     JURY TRIAL WAIVER. EACH PLEDGOR, THE AGENT, AND EACH SECURED CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(k)     PERSONAL JURISDICTION . (i) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (ii), EACH PLEDGOR, THE AGENT AND THE SECURED CREDITORS AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN COOK COUNTY, ILLINOIS, BUT EACH OF THE PLEDGORS, THE AGENT AND THE SECURED CREDITORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF COOK COUNTY, ILLINOIS. EACH PLEDGOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii)     OTHER JURISDICTIONS. EACH PLEDGOR AGREES THAT THE AGENT AND THE SECURED CREDITORS SHALL HAVE THE RIGHT TO PROCEED AGAINST SUCH PLEDGOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE THE AGENT OR ANY SECURED CREDITOR TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY SECURED CREDITOR. EACH PLEDGOR AGREES THAT IT SHALL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS PROVISION BY THE AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT OR ANY SECURED CREDITOR. EACH PLEDGOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR ANY SECURED CREDITOR HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION.
(l)    In the event of any inconsistency between this Agreement or the Credit Agreement, the terms of the Credit Agreement shall govern.
(m)    Upon the execution and delivery of this Agreement by the Company, the other Pledgors and the Agent, this Agreement shall supersede all provisions of the Prior Pledge Agreement as of such date. Each Pledgor hereby agrees that, notwithstanding the execution and delivery of this Agreement, the liens and security interests created and provided for under the Prior Pledge Agreement continue in effect under and pursuant to the terms of this Agreement for the benefit of all of the Obligations secured hereby. Nothing herein contained shall in any

- 11 -

manner affect or impair the priority of the liens and security interests created and provided for by the Prior Pledge Agreement as to the indebtedness and obligations which would otherwise be secured thereby prior to giving effect to this Agreement.
[SIGNATURE PAGES TO FOLLOW]


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I N WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly executed and delivered as of the date first above written.
“PLEDGORS”
EMCOR GROUP, INC.
By:     
Name:    Anthony J. Guzzi
Title:    President and    Chief Executive Officer
FORTI/POOLE AND KENT, L.L.C.
By:    
Name:    R. Kevin Matz
Title:    Manager
CSUSA HOLDINGS L.L.C.
By:    
Name:    R. Kevin Matz
Title:     Manager
SHAMBAUGH & SON, L.P.
By: CSUSA Holdings L.L.C., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
BORDER ELECTRIC CO., L.P.
By: CSUSA Holdings L.L.C., its General Partner


S-1


By:    
Name:    R. Kevin Matz
Title:    Vice President
BORDER MECHANICAL CO., L.P.
By: CSUSA Holdings L.L.C., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
TURNAROUND WELDING SERVICES CALIFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
ALTAIRSTRICKLAND CALIFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
PROFESSIONAL MECHANICAL CONTRACTORS, L.L.C.
By:    
Name:    R. Kevin Matz
Title:    Vice President
WELSBACH ELECTRIC CORP.


S-2

By:    
Name:     Kenneth W. Brouwer
Title:    President / Chief Executive Officer
TIGER TOWER SERVICES CALIFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
DIAMOND REFRACTORY SERVICES CALFORNIA, L.P.
By: AltairStrickland Holdings California, Inc. its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President


S-3

AIR SYSTEMS, INC.
ALTAIRSTRICKLAND HOLDINGS CALIFORNIA INC.
ATLANTIC COAST MECHANICAL, INC.
BAHNSON HOLDINGS, INC.
BEAUMONT REAL ESTATE HOLDING COMPANY
BUILDING TECHNOLOGY ENGINEERS, INC.
CENTRAL MECHANICAL CONSTRUCTION CO., INC.
CES FACILITIES MANAGEMENT SERVICES, INC.
COMBUSTIONEER CORPORATION
CONTRA COSTA ELECTRIC, INC.
CS48 ACQUISITION CORP.
DEBRA-KUEMPEL INC. (f/k/a The Fred B. DeBra Co.)
DESIGN AIR, LIMITED
DUFFY MECHANICAL CORP.
DYN SPECIALTY CONTRACTING, INC.
DYNALECTRIC COMPANY
DYNALECTRIC COMPANY OF NEVADA
DYNALECTRIC COMPANY OF OHIO
DYNALECTRIC OF MICHIGAN II, INC.
EMCOR CONSTRUCTION SERVICES, INC.
EMCOR-CSI HOLDING CO.
EMCOR FACILITIES SERVICES, INC.
EMCOR GOVERNMENT SERVICES, INC.
EMCOR GOWAN, INC.
EMCOR HYRE ELECTRIC CO. OF INDIANA, INC.
EMCOR INTERNATIONAL INC.
EMCOR MECHANICAL/ELECTRICAL SERVICES (EAST), INC.
EMCOR SERVICES NORTHEAST, INC.
EMCOR SERVICES NEW YORK/NEW JERSEY, INC.
EMCOR SERVICES TEAM MECHANICAL, INC.
F & G MANAGEMENT, INC.
F & G PLUMBING, INC.

S-4

FLUIDICS, INC.
FOOD TECH, INC.
FOREST ELECTRIC CORP.
FR X OHMSTEDE ACQUISITIONS CO.
GIBSON ELECTRIC CO., INC.
GREAT MONUMENT CONSTRUCTION COMPANY
HANSEN MECHANICAL CONTRACTORS, INC.
HERITAGE MECHANICAL SERVICES, INC.
HILLCREST SHEET METAL, INC.
HNT HOLDINGS INC.
HVAC, LTD.
ILLINGWORTH-KILGUST MECHANICAL, INC.
INTE-FAC CORP.
INTERMECH, INC.
J.C. HIGGINS CORP.
KDC INC.
KUEMPEL SERVICE, INC.
LOWRIE ELECTRIC COMPANY, INC.
MANDELL MECHANICAL CORPORATION
MARELICH MECHANICAL CO., INC.
MEADOWLANDS FIRE PROTECTION CORP.
MECHANICAL SERVICES OF CENTRAL FLORIDA, INC.
MECHANICAL SPECIALTIES CONTRACTORS, INC.
MES HOLDINGS CORPORATION
MESA ENERGY SYSTEMS, INC.
MIDLAND FIRE PROTECTION, INC.
MONUMENTAL HEATING, VENTILATING AND AIR CONDITIONING CONTRACTORS, INC.
MONUMENTAL INVESTMENT CORPORATION
NOGLE & BLACK MECHANICAL, INC.
NORTH JERSEY MECHANICAL CONTRACTORS, INC.
OHMSTEDE INDUSTRIAL SERVICES INC.
PACE MECHANICAL SERVICES II, INC.
PENGUIN AIR CONDITIONING CORP.
PENGUIN MAINTENANCE AND SERVICES INC.
PERFORMANCE MECHANICAL, INC.
POOLE & KENT COMPANY OF FLORIDA

S-5

POOLE AND KENT‑NEW ENGLAND, INC.
POOLE AND KENT-CONNECTICUT, INC.
R. S. HARRITAN & COMPANY, INC.
REDMAN EQUIPMENT & MANUFACTURING COMPANY
REPCON, INC.
REPCON EQUIPMENT CO.
REPCON INTERNATIONAL, INC.
REPCONSTRICKLAND, INC.
S. A. COMUNALE CO., INC.
SCALISE INDUSTRIES CORPORATION
THE BETLEM SERVICE CORPORATION
THE FAGAN COMPANY
THE POOLE AND KENT COMPANY
THE POOLE AND KENT CORPORATION
TRAUTMAN & SHREVE, INC.
UNIVERSITY MARELICH MECHANICAL, INC.
UNIVERSITY MECHANICAL & ENGINEERING CONTRACTORS, INC., A CALIFORNIA CORPORATION
UNIVERSITY MECHANICAL & ENGINEERING CONTRACTORS, INC., AN ARIZONA CORPORATION
WALKER‑J‑WALKER, INC.
WELSBACH ELECTRIC CORP. OF L.I.
By:    
Name:     R. Kevin Matz
Title:    Vice President

F & G MECHANICAL CORPORATION
By:    
Name:     Salvatore Fichera
Title:    President

AIRCOND CORPORATION
BAHNSON, INC.
CONCOR NETWORKS, INC.
EMCOR SERVICES CES, INC.
HARRY PEPPER & ASSOCIATES, INC.

S-6

MOR PPM, INC.
NEW ENGLAND MECHANICAL SERVICES, INC.
NEW ENGLAND MECHANICAL SERVICES OF MASSACHUSETTS, INC.
SOUTHERN INDUSTRIAL CONSTRUCTORS, INC.
USM, INC.
USM (DELAWARE) INC.
USM SERVICES HOLDINGS, INC.
VIOX SERVICES, INC.
By:    
Name:     Douglas Myers
Title:    Vice President
BAHNSON ENVIRONMENTAL SPECIALTIES, LLC
OHMSTEDE HOLDINGS LLC
OHMSTEDE PARTNERS LLC
By:    
Name:    R. Kevin Matz
Title:    Manager
OHMSTEDE LTD.
By: Ohmstede Partners LLC, its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
ALTAIRSTRICKLAND HOLDINGS LLC
ALTAIRSTRICKLAND INTERNATIONAL LLC
ALTAIRSTRICKLAND, LLC
ASG DIAMOND, LLC
ASI INDUSTRIAL SERVICES, LLC

S-7

DIAMOND REFRACTORY SERVICES, LLC
MERCURY INDUSTRIAL MATERIALS, LLC
REPCON PROPERTIES, LLC
TIGER TOWER SERVICES, LLC
TURNAROUND WELDING SERVICES, LLC
By:    
Name:    R. Kevin Matz
Title:    Vice President
SIC INTERNATIONAL, LLC
By: Southern Industrial Constructors, Inc., its Sole Member
By:    
Name:    Douglas Myers
Title:    Vice President




Acknowledged and agreed to as of the date first above written.
BANK OF MONTREAL, as Agent
By:    
Name:    
Title:    



S-8

SCHEDULE A
THE PLEDGED SECURITIES
Pledgor
Pledged Securities
Certif. No./No. of Shares
AltairStrickland Holdings California Inc.
AltairStrickland California, L.P.
Diamond Refractory Services California, L.P.
Tiger Tower Services California, L.P.
Turnaround Welding Services California, L.P.
N/A N/A
N/A N/A
N/A N/A
N/A N/A
AltairStrickland Holdings LLC
AltairStrickland Holdings California, Inc.
AltairStrickland, LLC
ASG Diamond, LLC
Turnaround Welding Services, LLC
No. 1 1,000 shares
N/A N/A
N/A N/A
N/A N/A
AltairStrickland, LLC
AltairStrickland International LLC
Tiger Tower Services, LLC
N/A N/A
N/A N/A
ASG Diamond, LLC
ASI Industrial Services, LLC
N/A N/A
ASI Industrial Services, LLC
Diamond Refractory Services, LLC
Mercury Industrial Materials, LLC
N/A N/A
N/A N/A
Bahnson Holdings, Inc.
Bahnson, Inc.
No. 1-A 4,000 shares
Bahnson, Inc.
Mechanical Specialties Contractors, Inc.
Intermech, Inc.
No. 7 2000 shares
No. 2 5000 shares
CSUSA Holdings L.L.C.
Shambaugh & Son, L.P.
Border Electric Co., L.P.
Border Mechanical Co., L.P.
CS48 Acquisition Corp.
General Partnership Interest
General Partnership Interest
General Partnership Interest
CS-3 100 shares
CS48 Acquisition Corp.
Shambaugh & Son, L.P.
Border Electric Co., L.P.
Border Mechanical Co., L.P.
Limited Partnership Interest
Limited Partnership Interest
Limited Partnership Interest
Dyn Specialty Contracting, Inc.
Dynalectric Company
Dynalectric Company of Nevada
Contra Costa Electric, Inc.
KDC Inc.
No. 1 100 shares
No. 13 166 1/2 shares
No. 39 100 shares
No. 16 8,333 shares



Pledgor
Pledged Securities
Certif. No./No. of Shares
EMCOR Construction Services, Inc.
EMCOR Mechanical/Electrical Services (East), Inc.
EMCOR Hyre Electric Co. of Indiana, Inc.
Dyn Specialty Contracting, Inc.
University Mechanical & Engineering Contractors, Inc.
Marelich Mechanical Co., Inc.
University Marelich Mechanical, Inc.
Design Air, Limited
EMCOR Gowan, Inc.
Duffy Mechanical Corp.
Dynalectric Company of Ohio
Dynalectric of Michigan II, Inc.
DeBra-Kuempel Inc. (f/k/a The Fred B. DeBra Co.)

Gibson Electric Co., Inc.
S. A. Comunale Co., Inc.

Bahnson Holdings, Inc.

Performance Mechanical, Inc.
Harry Pepper & Associates, Inc.
Concor Networks, Inc.
Southern Industrial Constructors, Inc.
No. 3 100 shares
No. 1 100 shares
No. 8 100 shares
No. 2021 20 shares
No. 2 100 shares
No. 1 100 shares
No. 6 550 shares
No. 4 100 shares
No. 20 100 shares
No. 2 100 shares
No. 3 100 shares
No. 2-A 100 shares
No. 4 1,000 shares
No. 64B 100 shares
No. 67 100 shares
No. 21 100 shares
No. 7 10,000 shares
No. P-5 2,000 shares
No. 21 100 shares
No. 25 2,010 shares
No. 1 100 shares
No. 46 100 shares

-2-

Pledgor
Pledged Securities
Certif. No./No. of Shares
EMCOR Facilities Services, Inc.
Building Technology Engineers, Inc.
Mesa Energy Systems, Inc.
EMCOR Government Services, Inc.
Air Systems, Inc.
EMCOR Services Northeast, Inc.
EMCOR Services New York/New Jersey, Inc.
Fluidics, Inc.
FR X Ohmstede Acquisitions Co.
Mechanical Services of Central Florida, Inc.
MOR PPM, Inc.
EMCOR Services CES, Inc.
Scalise Industries Corporation
USM Services Holdings, Inc.
Aircond Corporation
The Betlem Service Corporation
Combustioneer Corporation
EMCOR Services Team Mechanical, Inc.
New England Mechanical Services, Inc.

Viox Services, Inc.



RepconStrickland, Inc.
No. 4 11,000 shares
No. 23 100 shares
No. A8 13,585,000 shares
No. 7 100 shares
No. 51 2,500 shares
No. CS4 100 shares
No. 13 99 shares
No. 3 1,000 shares
No. 4 100 shares
No. 5 100 shares
No. 1 100 shares
No. 5 100 shares
No. 3 1,000 shares
No. 3 5,000 shares
No. 40 640 shares
No. 12 2,500 shares
No. 4 100 shares
No. 31 54 shares (non-voting)
No. 32 559 shares (voting)
No. 5 1620 shares Class B non‑voting common
No. 6 180 shares Class A voting common
No. 15 1,000 shares
EMCOR Government Services, Inc.
CES Facilities Management Services, Inc.
No. 2 1,000 shares
EMCOR Group, Inc.
MES Holdings Corporation
No. 1 100 shares
EMCOR International Inc.
EMCOR (UK) Limited
No. 10 2,600,000 shares

-3-

Pledgor
Pledged Securities
Certif. No./No. of Shares
EMCOR Mechanical/Electrical Services (East), Inc.
Inte-Fac Corp.
Forest Electric Corp.
J.C. Higgins Corp.
Penguin Maintenance and Services Inc.
Penguin Air Conditioning Corp.
 
Welsbach Electric Corp.
Welsbach Electric Corp. of L.I.
R. S. Harritan & Company, Inc.
Mandell Mechanical Corporation
Heritage Mechanical Services, Inc.
No. 2 200 shares
No. 2 100 shares
No. 2 100 shares
No. 2 100 shares
No. A-5 100 shares
No. B-4 500 shares
No. 3 100 shares
No. 5 10 shares
No. 2 100 shares
CS4 100 shares
No. 2 100 shares
EMCOR (UK) Limited
EMCOR Group (UK) plc
No. 11 1,400,000
EMCOR-CSI Holding Co.
CSUSA Holdings L.L.C.
Central Mechanical Construction Co., Inc.
F & G Mechanical Corporation
F & G Management, Inc.
Hillcrest Sheet Metal, Inc.
Illingworth-Kilgust Mechanical, Inc.
Kuempel Service, Inc.
Lowrie Electric Company, Inc.
Meadowlands Fire Protection Corp.
Nogle & Black Mechanical, Inc.
North Jersey Mechanical Contractors, Inc.
The Fagan Company
FoodTech, Inc.
Walker-J-Walker, Inc.
NA NA
No. CS3 100 shares
No. CS3 100 shares
No. 2 100 shares
No. CS3 100 shares
No. CS4 100 shares
No. CS3 100 shares
No. CS3 100 shares
No. CS3 100 shares
No. CS3 100 shares
No. CS3 100 shares
No. CS3 100 shares
No. 1 100 shares
No. CS3 100 shares
F & G Mechanical Corporation
F & G Plumbing, Inc.
No. 1 100 shares
FR X Ohmstede Acquisitions Co.
HNT Holdings Inc.
No. 12 238,799 shares
HNT Holdings Inc.
Ohmstede Partners LLC
Ohmstede Holdings LLC
No. 1 100 units
No. 1 100 units
HVAC, Ltd.
Atlantic Coast Mechanical, Inc.
Great Monument Construction Company
No. 2 50 shares
No. 2 5,000 shares
J.C. Higgins Corp.
Midland Fire Protection, Inc.
Professional Mechanical Contractors, LLC
No. 3 100 shares
N/A N/A

-4-

Pledgor
Pledged Securities
Certif. No./No. of Shares
MES Holdings Corporation
EMCOR Construction Services, Inc.
EMCOR Facilities Services, Inc.
EMCOR International, Inc.
Monumental Investment Corporation
EMCOR-CSI Holding Co.
Poole & Kent Company of Florida
No. 1 100 shares
No. 1 100 shares
No. 7 100 shares
No. AC14 100 shares
No. 2 100 shares
No. 1 100 shares
Monumental Heating, Ventilating and Air Conditioning Contractors, Inc.
Forti/Poole and Kent LLC
NA NA
Monumental Investment Corporation
The Poole and Kent Corporation
Poole and Kent Connecticut, Inc.
Poole and Kent New England, Inc.
Monumental Heating, Ventilating and Air Conditioning Contractors, Inc.
HVAC, Ltd.
The Poole and Kent Company
No. 4 5,000 shares
No. 1 10,000 shares
No. 4 10,000 shares
No. 2 1,000 shares

No. 2 5,000 shares
No. 1 5,000 shares
New England Mechanical Services, Inc.
New England Mechanical Services of Massachusetts, Inc.
No. 1 100 shares
Ohmstede Holdings LLC
Ohmstede Ltd.
No. 2 99 units
Ohmstede Ltd.
Ohmstede Industrial Services Inc.
Beaumont Real Estate Holding Company
Redman Equipment & Manufacturing Company
No. 19 400 shares
No. 1 1000 shares
No. 87 100 shares
Ohmstede Partners LLC
Ohmstede Ltd.
No. 1 1 unit
Repcon, Inc.
Repcon International, Inc.
Repcon Equipment Co.
No. 1 1,000 shares
No. 6 200 shares
RepconStrickland Inc.
Repcon, Inc.
AltairStrickland Holdings LLC
Repcon Properties, LLC
No. 9 1450 shares
N/A N/A
N/A N/A
Southern Industrial Constructors, Inc.
SIC International, LLC
N/A N/A
University Mechanical & Engineering Contractors, Inc., a California corporation
Hansen Mechanical Contractors, Inc.
Pace Mechanical Services II, Inc.
Trautman & Shreve, Inc.
University Mechanical & Engineering Contractors, Inc., an Arizona corporation
No. 33 1,539 shares
No. 5 100 shares
No. 3 100 shares
No. 5 30,000 shares
USM (Delaware) Inc.
USM, Inc.
No. 1 1176 shares

-5-

Pledgor
Pledged Securities
Certif. No./No. of Shares
USM Services Holdings, Inc.
USM (Delaware) Inc.
No. 2 1000 shares
Such Securities represent all of the issued and outstanding capital stock of each series and class of each issuer hereof and other equity interests of each issuer hereof except that EMCOR-CSI Holding Co. owns only 90% of the outstanding stock of F & G Mechanical Corporation.



-6-

SCHEDULE B
AMENDMENT TO THIRD AMENDED AND RESTATED PLEDGE AGREEMENT
Reference is hereby made to that certain Fourth Amended and Restated Pledge Agreement dated as of November 25, 2013, as heretofore amended (the “Pledge Agreement” ), from the Pledgors signatory thereto to Bank of Montreal ( “BMO” ), as administrative agent for the Secured Creditors (BMO acting as such administrative agent and any successor or successors to BMO in such capacity being hereinafter referred to as the “Agent” ). Capitalized terms not otherwise defined herein shall have the meaning set forth in the Pledge Agreement.
Subsequent to the Pledgors’ delivery of the Pledge Agreement, certain shares of stock have been added as Pledged Securities under the Pledge Agreement. As a result of such addition, Schedule A of the Pledge Agreement does not accurately describe the shares of capital stock currently held by the Agent as collateral under the Pledge Agreement.
The Pledgors now desire to amend Schedule A to the Pledge Agreement to reflect such addition, and this instrument shall constitute an agreement between the Pledgors and the Agent amending the Pledge Agreement in the respects, but only in the respects, hereinafter set forth:
1.    Schedule A of the Pledge Agreement shall be and hereby is amended and as so amended shall be restated in its entirety to read as Annex A attached hereto.
2.    As collateral security for the Obligations, each Pledgor hereby grants to the Agent a continuing security interest in, and acknowledges and agrees that the Agent has and shall continue to have a continuing security interest in, all the shares of capital stock of each issuer listed and described on Annex A attached hereto and all the other properties, rights, interests and privileges comprising the Pledged Securities (as such term is defined in the Pledge Agreement after giving effect to this Amendment), to the same extent and with the same force and effect as if the shares of stock described on Annex A had originally been included on Schedule A to the Pledge Agreement. The foregoing granting clause is in addition to and supplemental of and not in substitution for the granting clause contained in the Pledge Agreement. Neither the Pledgors nor the Agent intend by this Amendment to in any way impair or otherwise affect the lien of the Pledge Agreement on such of the Pledged Securities which were subject to the Pledge Agreement prior to giving effect to this Amendment.
3.    Each Pledgor hereby repeats and reaffirms all of its covenants, agreements, representations and warranties contained in the Pledge Agreement, each and all of which shall be applicable to all of the stock and other properties, rights, interests and privileges subject to the lien of the Pledge Agreement after giving effect to this Amendment. Each Pledgor hereby certifies that no Event of Default or event which, with notice or lapse of time or both, would



constitute an Event of Default exists under the Pledge Agreement after giving effect to this Amendment.
4.    No reference to this Amendment need be made in any note, instrument or other document at any time referring to the Pledge Agreement, any reference in any of such to the Pledge Agreement to be deemed to reference to the Pledge Agreement as modified hereby. All references in the Pledge Agreement to the term “Pledged Securities” shall be deemed a reference to such term as defined in the Pledge Agreement after giving effect to this Amendment.
5.    Except as specifically modified hereby, all the terms and conditions of the Pledge Agreement shall stand and remain unchanged and in full force and effect. This Amendment shall be effective upon the Pledgors’ execution and delivery thereof to the Agent, no acceptance by the Agent being required.
Dated as of __________, 201_.
PLEDGORS:
[INSERT NAMES OF EXISTING PLEDGORS]
By:    
Name:     
Title:    
Acknowledged and agreed to as of the date first above written.
BANK OF MONTREAL, as Agent
By:    
Name:     
Title:    



-2-

ANNEX A
TO AMENDMENT TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES

Name of
Pledgor
Name of
Issuer
No. of Shares
Percentage of Issuer’s Stock




SCHEDULE C
ASSUMPTION AND SUPPLEMENTAL PLEDGE AGREEMENT
THIS AGREEMENT dated as of this _____ day of ______________, 201_ from [ new pledgor ], a __________ corporation (the “New Pledgor” ), to Bank of Montreal ( “BMO” ), as administrative agent for the Secured Creditors (defined in the Pledge Agreement hereinafter identified and defined) (BMO acting as such administrative agent and any successor or successors to BMO in such capacity being hereinafter referred to as the “Agent” );
WITNESSETH THAT:
WHEREAS, EMCOR Group, Inc. and certain other parties have executed and delivered to the Agent that certain Fourth Amended and Restated Pledge Agreement dated as of November 25, 2013 or supplements thereto (such Third Amended and Restated Pledge Agreement, as the same may from time to time be modified or amended, including supplements thereto which add additional parties as Pledgors thereunder, being hereinafter referred to as the “Pledge Agreement” ) pursuant to which such parties (the “Existing Pledgors” ) have granted to the Agent for the benefit of the Secured Creditors a lien on and security interest in such Existing Pledgors’ Pledged Securities (as such term is defined in the Pledge Agreement) to secure the Obligations (as such term is defined in the Pledge Agreement) of the Borrowers referred to therein owing to the Agent and the Secured Creditors arising out of or related to the Credit Agreement referred to therein; and
WHEREAS, the Borrowers provide the New Pledgor with substantial financial, managerial, administrative, technical and design support and the New Pledgor will directly and substantially benefit from credit and other financial accommodations extended and to be extended by the Secured Creditors to the Borrowers;
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances made or to be made, or credit accommodations given or to be given, to the Borrowers by the Secured Creditors from time to time, the New Pledgor hereby agrees as follows:
1.    The New Pledgor acknowledges and agrees that it shall become a “Pledgor” party to the Pledge Agreement effective upon the date the New Pledgor’s execution of this Agreement and the delivery of this Agreement to the Agent, and that upon such execution and delivery, all references in the Pledge Agreement to the terms “Pledgor” or “Pledgors” shall be deemed to include the New Pledgor. Without limiting the generality of the foregoing, the New Pledgor hereby repeats and reaffirms all grants (including the grant of a lien and security interest), covenants, agreements, representations and warranties contained in the Pledge Agreement as amended hereby, each and all of which are and shall remain applicable to the Pledged Securities from time to time owned by the New Pledgor or in which the New Pledgor from time to time has any rights. Without limiting the foregoing, in order to secure payment of the Obligations, whether now existing or hereafter arising, the New Pledgor does hereby grant to the Agent for the benefit of the Secured Creditors,



and hereby agrees that the Agent has and shall continue to have for the benefit of the Secured Creditors a continuing security interest in, among other things, all of the New Pledgor’s Pledged Securities (as such term is defined in the Pledge Agreement) described in, and subject to the limitations set forth in, Section 2 of the Pledge Agreement, each and all of such granting clauses being incorporated herein by reference with the same force and effect as if set forth in their entirety except that all references in such clauses to the Existing Pledgor or any of them shall be deemed to include references to the New Pledgor. Nothing contained herein shall in any manner impair the priority of the liens and security interests heretofore granted in favor of the Agent under the Pledge Agreement.
2.    The New Pledgor hereby acknowledges and agrees that the Obligations are secured by all of the Pledged Securities according to, and otherwise on and subject to, the terms and conditions of the Pledge Agreement to the same extent and with the same force and effect as if the New Pledgor had originally been one of the Existing Pledgors under the Pledge Agreement and had originally executed the same as such an Existing Pledgor.
3.    All capitalized terms used in this Agreement without definition shall have the same meaning herein as such terms have in the Pledge Agreement, except that any reference to the term “Pledgor” or “Pledgors” and any provision of the Pledge Agreement providing meaning to such term shall be deemed a reference to the Existing Pledgors and the New Pledgor. Except as specifically modified hereby, all of the terms and conditions of the Pledge Agreement shall stand and remain unchanged and in full force and effect.
4.    The New Pledgor agrees to execute and deliver such further instruments and documents and do such further acts and things as the Agent may reasonably deem necessary or proper to carry out more effectively the purposes of this Agreement.
5.    No reference to this Agreement need be made in the Pledge Agreement or in any other document or instrument making reference to the Pledge Agreement, any reference to the Pledge Agreement in any of such to be deemed a reference to the Pledge Agreement as modified hereby.
6.    This Agreement shall be governed by and construed in accordance with the State of Illinois (without regard to principles of conflicts of law).
[NEW PLEDGOR]
By:    
Name:     
Title:    


C-2

EXHIBIT 4(d)

THIRD AMENDED AND RESTATED GUARANTY AGREEMENT
This Third Amended and Restated Guaranty Agreement (the “Guaranty” ) is dated as of November 25, 2013, by the parties executing this Guaranty under the heading “Guarantors” (such parties, along with any other parties who execute and deliver to the Agent hereinafter identified and defined an agreement in the form attached hereto as Exhibit A, being hereinafter referred to collectively as the “Guarantors” and individually as a “Guarantor” ) in favor of the Guaranteed Creditors referred to below.
WITNESSETH:
WHEREAS, EMCOR Group, Inc., a Delaware corporation (the “Company” ) and certain of its subsidiaries, as Guarantors, heretofore executed and delivered to the Agent that certain Guaranty Agreement dated as of February 4, 2010 (such Guaranty Agreement, as the same has been amended and supplemented, being hereinafter referred to as the “Prior Guaranty Agreement” ) pursuant to which such Guarantors guaranteed the payment and performance of all indebtedness, obligations and liabilities of the Borrowers (as hereinafter defined) under that certain Third Amended and Restated Credit Agreement dated as of November 21, 2011, as amended, by and among the Borrowers, Bank of Montreal ( “BMO” ), individually and as agent and the lenders party thereto (the “Prior Credit Agreement” ) and all Hedging Liability (as hereinafter defined) of the Borrowers; and
WHEREAS, EMCOR Group, Inc., a Delaware corporation (the “Company” ) and EMCOR Group (UK) plc, a United Kingdom public limited company ( “EMCOR UK” ; and the Company and EMCOR UK being hereinafter referred to collectively as the “Borrowers” ) and BMO, individually and as agent, have entered into a Fourth Amended and Restated Credit Agreement dated as of November 25, 2013 (such Credit Agreement, as the same may be amended, modified or restated from time to time, being hereinafter referred to as the “Credit Agreement” ), pursuant to which BMO and other banks and financial institutions and letter of credit issuers from time to time party to the Credit Agreement (BMO, in its individual capacity, and such other banks and financial institutions being hereinafter referred to collectively as the “Lenders” and individually as a “Lender” and such letter of credit issuers being hereinafter referred to collectively as the “Issuers” and individually as a “Issuer” ) have agreed, subject to certain terms and conditions, to extend credit and make certain other financial accommodations available to the Borrowers (BMO, in its capacity as agent (the “Agent” ), the Issuers, and the Lenders, together with affiliates of the Lenders with respect to Hedging Liability referred to below, being hereinafter referred to collectively as the “Guaranteed Creditors” and individually as a “Guaranteed Creditor” );
WHEREAS, in addition, the Borrowers and the Guarantors may from time to time be liable to the Guaranteed Creditors with respect to Hedging Liability (as such term is defined in the Credit Agreement);
WHEREAS, As a condition to extending credit to the Borrower as aforesaid, the Guaranteed Creditors have required, among other things, that the Guarantors execute and deliver this Guaranty;
WHEREAS, the Company owns, directly or indirectly, all or substantially all of the equity interests in each Guarantor (other than the Company), and the Borrowers provide each Guarantor with financial, management, administrative, and technical support which enables such Guarantor to conduct its business in an orderly and efficient manner in the ordinary course;


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WHEREAS, each Guarantor will benefit, directly and indirectly, from credit and other financial accommodations extended by the Lenders to the Borrowers.
WHEREAS, under the terms of the Prior Guaranty Agreement, the Guarantors guaranty the same indebtedness, obligations and liabilities of the Borrowers as are intended to be guaranteed hereby; and
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances made or to be made, or credit accommodations given or to be given, to the Borrowers by the Lenders from time to time, each Guarantor hereby makes the following representations and warranties to the Guaranteed Creditors, and hereby covenants and agrees with the Guaranteed Creditors, as follows:
1.    All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.
2.    Each Guarantor hereby jointly and severally guarantees to the Guaranteed Creditors, the due and punctual payment of all present and future Obligations and Hedging Liability, including, but not limited to, the due and punctual payment of principal of and interest on the Loans, the Reimbursement Obligations, and the due and punctual payment of all other Obligations now or hereafter owed by the Borrowers under the Loan Documents and the due and punctual payment of all Hedging Liability, in each case as and when the same shall become due and payable, whether at stated maturity, by acceleration, or otherwise, according to the terms hereof and thereof (including all interest, costs, fees, and charges after the entry of an order for relief against a Borrower or such other obligor in a case under the United States Bankruptcy Code or any similar proceeding, whether or not such interest, costs, fees and charges would be an allowed claim against the Borrower or any such obligor in any such proceeding); provided, however, that, with respect to any Guarantor, Hedging Liability guaranteed by such Guarantor shall exclude all Excluded Swap Obligations (all of the foregoing hereinafter referred to as the “indebtedness hereby guaranteed” ) and provided further that, notwithstanding anything to the contrary contained herein, the requirements of the Guarantors to guarantee the Guaranteed Creditors as provided herein shall remain subject in all respects to the provisions of Section 4.2 of the Credit Agreement. In case of failure by any Borrower or other obligor punctually to pay any indebtedness hereby guaranteed, each Guarantor hereby jointly and severally unconditionally agrees to make such payment or to cause such payment to be made punctually as and when the same shall become due and payable, whether at stated maturity, by acceleration, or otherwise, and as if such payment were made by such Borrower or such obligor.
3.    Each Guarantor further jointly and severally agrees to pay all expenses, legal and/or otherwise (including court costs and reasonable attorneys’ fees), paid or incurred by any Guaranteed Creditor in endeavoring to collect the indebtedness hereby guaranteed, or any part thereof, and in protecting, defending or enforcing this Guaranty in any litigation, bankruptcy or insolvency proceedings or otherwise.
4.    Each Guarantor hereby agrees that this Guaranty is a guaranty of payment and not collection, and until the indebtedness hereby guaranteed is paid and satisfied in full and each of the commitments by the Guaranteed Creditors to extend any indebtedness hereby guaranteed have expired or otherwise have terminated, each Guarantor agrees that, upon demand, such Guarantor will then pay to the Agent for the benefit of the Guaranteed Creditors the full amount of the indebtedness hereby guaranteed whether or not any proceedings or steps are pending seeking payment of the indebtedness hereby guaranteed from any one or more of the other Guarantors.

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5.    Each Guarantor agrees that such Guarantor will not exercise or enforce any right of exoneration, contribution, reimbursement, recourse or subrogation available to such Guarantor against any person liable for payment of the indebtedness hereby guaranteed, or as to any security therefor, unless and until the full amount owing to the Guaranteed Creditors of the indebtedness hereby guaranteed has been fully paid and satisfied and each of the commitments by the Guaranteed Creditors to extend any indebtedness hereby guaranteed to the Borrowers shall have expired or otherwise shall have terminated. The payment by any Guarantor of any amount or amounts to the Guaranteed Creditors pursuant hereto shall not in any way entitle any such Guarantor, either at law, in equity or otherwise, to any right, title or interest (whether by way of subrogation or otherwise) in and to the indebtedness hereby guaranteed or any part thereof or any collateral security therefor or any other rights or remedies in any way relating thereto or in and to any amounts theretofore, then or thereafter paid or applicable to the payment thereof howsoever such payment may be made and from whatsoever source such payment may be derived unless and until all of the indebtedness hereby guaranteed and all costs and expenses suffered or incurred by the Guaranteed Creditors in enforcing this Guaranty have been paid and satisfied in full and each of the commitments by the Guaranteed Creditors to extend any indebtedness hereby guaranteed to the Borrowers shall have expired or otherwise shall have terminated and unless and until such payment in full and termination, any payments made by any Guarantor hereunder and any other payments from whatsoever source derived on account of or applicable to the indebtedness hereby guaranteed or any part thereof shall be held and taken to be merely payments in gross to the Guaranteed Creditors reducing pro tanto the indebtedness hereby guaranteed.
6.    To the extent permitted by the Credit Agreement, each Guaranteed Creditor may, without any notice whatsoever to any of the Guarantors, sell, assign, or transfer all of the indebtedness hereby guaranteed, or any part thereof, or grant participations therein, and in that event each and every immediate and successive assignee, transferee, or holder of all or any part of the indebtedness hereby guaranteed, shall have the right through the Agent pursuant to Section 20 hereof to enforce this Guaranty, by suit or otherwise, for the benefit of such assignee, transferee, or holder as fully as if such assignee, transferee, or holder were herein by name specifically given such rights, powers and benefits; but each Guaranteed Creditor through the Agent pursuant to Section 20 hereof shall have an unimpaired right to enforce this Guaranty for its own benefit, as to so much of the indebtedness hereby guaranteed that it has not sold, assigned or transferred.
7.    This Guaranty is a continuing, absolute and unconditional Guaranty, and shall remain in full force and effect until written notice of its discontinuance executed by the Borrowers and all the Guarantors shall be actually received by the Guaranteed Creditors, and also until any and all of the indebtedness hereby guaranteed which was created or existing before receipt of such notice shall be fully paid and satisfied and each of the commitments by the Guaranteed Creditors to extend any indebtedness hereby guaranteed to the Borrowers shall have expired or otherwise shall have terminated. The dissolution of any Guarantor shall not terminate this Guaranty as to such Guarantor until notice of such dissolution shall have been actually received by the Guaranteed Creditors, nor until all of the indebtedness hereby guaranteed, created or existing or committed to be extended in each case before receipt of such notice shall be fully paid and satisfied. The Guaranteed Creditors may at any time or from time to time release any Guarantor from its obligations hereunder or effect any compromise with any Guarantor and no such release or compromise shall in any manner impair or otherwise affect the obligations hereunder of the other Guarantors. The Guaranteed Creditors shall release a Guarantor from its obligations hereunder upon a sale of all the outstanding capital stock owned by the Company and any Subsidiary as permitted by Sections 7.14 or 7.15 of the Credit Agreement. No release, compromise, or discharge of any one or more of the Guarantors shall release, compromise or discharge the obligations of the other Guarantors hereunder.

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8.    In case of the dissolution, liquidation (except as permitted by the Credit Agreement) or insolvency (howsoever evidenced) of, or the institution of bankruptcy or receivership proceedings against, any Borrower or any Material Restricted Subsidiary, all of the indebtedness hereby guaranteed which is then existing shall, at the option of the Lenders (as determined in accordance with the terms of the Credit Agreement), immediately become due or accrued and payable from the Material Restricted Subsidiary. All payments received from any Borrower or on account of the indebtedness hereby guaranteed from whatsoever source, shall be taken and applied as payment in gross, and this Guaranty shall apply to and secure any ultimate balance that shall remain owing to the Guaranteed Creditors.
9.    The liability hereunder shall in no way be affected or impaired by (and the Guaranteed Creditors are hereby expressly authorized to make from time to time, without notice to any of the Guarantors) any sale, pledge, surrender, compromise, settlement, release, renewal, extension, indulgence, alteration, substitution, exchange, change in, modification or other disposition of any of the indebtedness hereby guaranteed, either express or implied, or of any Loan Document or any other contract or contracts evidencing any thereof, or of any security or collateral therefor or any guaranty thereof. The liability hereunder shall in no way be affected or impaired by any acceptance by the Guaranteed Creditors of any security for or other guarantors upon any of the indebtedness hereby guaranteed, or by any failure, neglect or omission on the part of the Guaranteed Creditors to realize upon or protect any of the indebtedness hereby guaranteed, or any collateral or security therefor, or to exercise any lien upon or right of appropriation of any moneys, credits or property of any Borrower, possessed by the Guaranteed Creditors, toward the liquidation of the indebtedness hereby guaranteed, or by any application of payments or credits thereon. The Guaranteed Creditors shall have the exclusive right to determine how, when and what application of payments and credits, if any, shall be made on said indebtedness hereby guaranteed, or any part of same. In order to hold any Guarantor liable hereunder, there shall be no obligation on the part of the Guaranteed Creditors at any time, to resort for payment to the Borrowers or to any other Guarantor, or to any other person or entity, their properties or estate, or resort to any collateral, security, property, liens or other rights or remedies whatsoever, and the Guaranteed Creditors shall have the right to enforce this Guaranty against any Guarantor irrespective of whether or not other proceedings or steps are pending seeking resort to or realization upon or from any of the foregoing.
10.    In the event the Guaranteed Creditors shall at any time in their discretion permit a substitution of Guarantors hereunder or a party shall wish to become Guarantor hereunder, such substituted or additional Guarantor shall, upon executing an agreement in the form attached hereto as Exhibit A, become a party hereto and be bound by all the terms and conditions hereof to the same extent as though such Guarantor had originally executed this Guaranty and, in the case of a substitution, in lieu of the Guarantor being replaced. No such substitution shall be effective absent the written consent of the Guaranteed Creditors nor shall it in any manner affect the obligations of the other Guarantors hereunder.
11.    All diligence in collection or protection, and all presentment, demand, protest and/or notice, as to any and everyone, whether or not the Borrowers or the Guarantors or others, of dishonor and of default and of non-payment and of the creation and existence of any and all of said indebtedness hereby guaranteed, and of any security and collateral therefor, and of the acceptance of this Guaranty, and of any and all extensions of credit and indulgence hereunder, are expressly waived.

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12.    No act of commission or omission of any kind, or at any time, upon the part of the Guaranteed Creditors in respect to any matter whatsoever, shall in any way affect or impair this Guaranty.
13.    The Guarantors waive any and all defenses, claims and discharges of the Borrowers, or any other obligor, pertaining to the indebtedness hereby guaranteed, except the defense of discharge by payment in full. Without limiting the generality of the foregoing, the Guarantors will not assert, plead or enforce against the Guaranteed Creditors any defense of waiver, release, discharge in bankruptcy, statute of limitations, res judicata, statute of frauds, anti‑deficiency statute, fraud, incapacity, minority, usury, illegality or unenforceability which may be available to the Borrowers or any other person liable in respect of any of the indebtedness hereby guaranteed, or any set-off available against the Guaranteed Creditors to the Borrowers or any such other person, whether or not on account of a related transaction. The Guarantors agree that the Guarantors shall be and remain jointly and severally liable for any deficiency remaining after foreclosure or other realization on any lien or security interest securing the indebtedness hereby guaranteed, whether or not the liability of the Borrowers or any other obligor for such deficiency is discharged pursuant to statute or judicial decision.
14.    If any payment applied by the Guaranteed Creditors to the indebtedness hereby guaranteed is thereafter set aside, recovered, rescinded or required to be returned for any reason (including, without limitation, the bankruptcy, insolvency or reorganization of any Borrower or any other obligor), the indebtedness hereby guaranteed to which such payment was applied shall for the purposes of this Guaranty be deemed to have continued in existence, notwithstanding such application, and this Guaranty shall be enforceable as to such of the indebtedness hereby guaranteed as fully as if such application had never been made.
15.    The liability of the Guarantors under this Guaranty is in addition to and shall be cumulative with all other liabilities of the Guarantors after the date hereof to the Guaranteed Creditors as a Guarantor of the indebtedness hereby guaranteed, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.
16.    Each Qualified ECP Guarantor (as hereinafter defined) 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 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, 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 the indebtedness hereby guaranteed is paid in full and each of the Commitments by the Guaranteed Creditors to extend any indebtedness hereby guaranteed to the Borrowers shall have expired or otherwise shall have terminated. 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 Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
For purposes hereof, “Qualified ECP Guarantor ” means, in respect of any Swap Obligation, each 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

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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
17.    Any invalidity or unenforceability of any provision or application of this Guaranty shall not affect other lawful provisions and applications hereof, and to this end the provisions of this Guaranty are declared to be severable. Without limiting the generality of the foregoing, any invalidity or unenforceability against any Guarantor of any provision or application of the Guaranty shall not affect the validity or enforceability of the provisions or application of this Guaranty as against the other Guarantors.
18.    Notwithstanding anything herein to the contrary, the right of recovery against any Guarantor under this Guaranty shall not exceed $l less than the lowest amount which would render such Guarantor’s obligations under this Guaranty void or voidable under applicable law, including fraudulent conveyance law.
19.    Any demand for payment on this Guaranty or any other notice required or desired to be given hereunder to any Guarantor shall be deemed to have been validly served, given or delivered to such Guarantor when given to such Guarantor or when given to the Company in accordance with the Credit Agreement.
20.    No Lender shall have the right to institute any suit, action or proceeding in equity or at law in connection with this Guaranty for the enforcement of any remedy under or upon this Guaranty; it being understood and intended that no one or more of the Lenders shall have any right in any manner whatsoever to enforce any right hereunder, and that all proceedings at law or in equity shall be instituted, had and maintained by the Agent in the manner herein provided and for the benefit of the Lenders.
21.    The payment by any Guarantor of any amount or amounts due the Guaranteed Creditors hereunder shall be made in the same currency (the “relevant currency” ) and funds in which the underlying indebtedness hereby guaranteed is payable. To the fullest extent permitted by law, the obligation of each Guarantor in respect of any amount due in the relevant currency under this Guaranty shall, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the relevant currency that the Guaranteed Creditors may, in accordance with normal banking procedures, purchase with the sum paid in such other currency (after any premium and costs of exchange) on the business day immediately following the day on which the Guaranteed Creditors receive such payment. If the amount in the relevant currency that may be so purchased for any reason falls short of the amount originally due, the Guarantors shall pay such additional amounts, in the relevant currency, as may be necessary to compensate for the shortfall. Any obligation of the Guarantors not discharged by such payment shall, to the fullest extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided herein, shall continue in full force and effect.
22.     JURY TRIAL WAIVER. EACH GUARANTOR AND EACH GUARANTEED CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
23.    PERSONAL JURISDICTION. (a)  EXCLUSIVE JURISDICTION . EXCEPT AS PROVIDED IN SUBSECTION (b), THE GUARANTEED CREDITORS AND THE GUARANTORS AGREE THAT ALL

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DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS GUARANTY, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN COOK COUNTY, ILLINOIS BUT EACH OF THE GUARANTEED CREDITORS AND THE GUARANTORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF COOK COUNTY, ILLINOIS. EACH GUARANTOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT SUCH GUARANTOR MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE OR ANY OBJECTION THAT SUCH GUARANTOR MAY HAVE THAT ANY ONE OR MORE OF THE OTHER GUARANTORS HAVE NOT BEEN JOINED IN SUCH PROCEEDING.
(b)     OTHER JURISDICTIONS . EACH GUARANTOR AGREES THAT THE GUARANTEED CREDITORS SHALL HAVE THE RIGHT TO PROCEED AGAINST EACH OF THE GUARANTORS OR THEIR PROPERTY ( “PROPERTY” ) IN A COURT IN ANY LOCATION TO ENABLE THE GUARANTEED CREDITORS TO REALIZE ON PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE GUARANTEED CREDITORS, WHETHER OR NOT PROCEEDING SEPARATELY AGAINST A GUARANTOR OR ITS PROPERTY OR JOINTLY AGAINST ANY ONE OR MORE OTHER GUARANTORS OR THEIR PROPERTY. EACH GUARANTOR AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THIS PROVISION BY THE GUARANTEED CREDITORS TO REALIZE ON PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE GUARANTEED CREDITORS. EACH GUARANTOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE GUARANTEED CREDITORS HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION.
24.    THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE OF ILLINOIS (without regard to principles of conflicts of laws) in which state it shall be performed by the Guarantors and may not be waived, amended, released or otherwise changed except by a writing signed by the Agent on behalf of the Guaranteed Creditors. This Guaranty and every part thereof shall be effective upon delivery to the Agent, without further act, condition or acceptance by the Guaranteed Creditors, shall be binding upon the Guarantors and upon the legal representatives, successors and assigns of the Guarantors, and shall inure to the benefit of the Guaranteed Creditors, their successors, legal representatives and assigns. The Guarantors waive notice of the Guaranteed Creditors’ acceptance hereof. This Guaranty may be executed in counterparts and by different parties hereto on separate counterparts each of which shall be an original, but all together to be one and the same instrument.
25.    In the event of any inconsistency between this Agreement and the Credit Agreement, the terms of the Credit Agreement shall govern.
[SIGNATURE PAGES TO FOLLOW]


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IN WITNESS WHEREOF, each Guarantor has caused this Agreement to be executed and delivered as of the date first above written.
“GUARANTORS”
EMCOR GROUP, INC.
By:     
Name:    Anthony J. Guzzi
Title:    President and    Chief Executive Officer
FORTI/POOLE AND KENT, L.L.C.
By:    
Name:    R. Kevin Matz
Title:    Manager
CSUSA HOLDINGS L.L.C.
By:    
Name:    R. Kevin Matz
Title:     Manager
SHAMBAUGH & SON, L.P.
By: CSUSA Holdings L.L.C., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
BORDER ELECTRIC CO., L.P.
By: CSUSA Holdings L.L.C., its General Partner
By:    

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Name:    R. Kevin Matz
Title:    Vice President
BORDER MECHANICAL CO., L.P.
By: CSUSA Holdings L.L.C., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
TURNAROUND WELDING SERVICES CALIFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
ALTAIRSTRICKLAND CALIFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
PROFESSIONAL MECHANICAL CONTRACTORS, L.L.C.
By:    
Name:    R. Kevin Matz
Title:    Vice President
WELSBACH ELECTRIC CORP.


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By:    
Name:     Kenneth W. Brouwer
Title:    President / Chief Executive Officer
TIGER TOWER SERVICES CALIFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
DIAMOND REFRACTORY SERVICES CALFORNIA, L.P.
By: AltairStrickland Holdings California Inc., its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President


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AIR SYSTEMS, INC.
ALTAIRSTRICKLAND HOLDINGS CALIFORNIA INC.
ATLANTIC COAST MECHANICAL, INC.
BAHNSON HOLDINGS, INC.
BEAUMONT REAL ESTATE HOLDING COMPANY
BUILDING TECHNOLOGY ENGINEERS, INC.
CENTRAL MECHANICAL CONSTRUCTION CO., INC.
CES FACILITIES MANAGEMENT SERVICES, INC.
COMBUSTIONEER CORPORATION
CONTRA COSTA ELECTRIC, INC.
CS48 ACQUISITION CORP.
DEBRA-KUEMPEL INC. (f/k/a The Fred B. DeBra Co.)
DESIGN AIR, LIMITED
DUFFY MECHANICAL CORP.
DYN SPECIALTY CONTRACTING, INC.
DYNALECTRIC COMPANY
DYNALECTRIC COMPANY OF NEVADA
DYNALECTRIC COMPANY OF OHIO
DYNALECTRIC OF MICHIGAN II, INC.
EMCOR CONSTRUCTION SERVICES, INC.
EMCOR-CSI HOLDING CO.
EMCOR FACILITIES SERVICES, INC.
EMCOR GOVERNMENT SERVICES, INC.
EMCOR GOWAN, INC.
EMCOR HYRE ELECTRIC CO. OF INDIANA, INC.
EMCOR INTERNATIONAL INC.
EMCOR MECHANICAL/ELECTRICAL SERVICES (EAST), INC.
EMCOR SERVICES NORTHEAST, INC.
EMCOR SERVICES NEW YORK/NEW JERSEY, INC.
EMCOR SERVICES TEAM MECHANICAL, INC.
F & G MANAGEMENT, INC.
F & G PLUMBING, INC.
FLUIDICS, INC.
FOOD TECH, INC.
FOREST ELECTRIC CORP.
FR X OHMSTEDE ACQUISITIONS CO.
GIBSON ELECTRIC CO., INC.
GREAT MONUMENT CONSTRUCTION COMPANY

S-4


HANSEN MECHANICAL CONTRACTORS, INC.
HERITAGE MECHANICAL SERVICES, INC.
HILLCREST SHEET METAL, INC.
HNT HOLDINGS INC.
HVAC, LTD.
ILLINGWORTH-KILGUST MECHANICAL, INC.
INTE-FAC CORP.
INTERMECH, INC.
J.C. HIGGINS CORP.
KDC INC.
KUEMPEL SERVICE, INC.
LOWRIE ELECTRIC COMPANY, INC.
MANDELL MECHANICAL CORPORATION
MARELICH MECHANICAL CO., INC.
MEADOWLANDS FIRE PROTECTION CORP.
MECHANICAL SERVICES OF CENTRAL FLORIDA, INC.
MECHANICAL SPECIALTIES CONTRACTORS, INC.
MES HOLDINGS CORPORATION
MESA ENERGY SYSTEMS, INC.
MIDLAND FIRE PROTECTION, INC.
MONUMENTAL HEATING, VENTILATING AND AIR CONDITIONING CONTRACTORS, INC.
MONUMENTAL INVESTMENT CORPORATION
NOGLE & BLACK MECHANICAL, INC.
NORTH JERSEY MECHANICAL CONTRACTORS, INC.
OHMSTEDE INDUSTRIAL SERVICES INC.
PACE MECHANICAL SERVICES II, INC.
PENGUIN AIR CONDITIONING CORP.
PENGUIN MAINTENANCE AND SERVICES INC.
PERFORMANCE MECHANICAL, INC.
POOLE & KENT COMPANY OF FLORIDA
POOLE AND KENT‑NEW ENGLAND, INC.

S-5


POOLE AND KENT-CONNECTICUT, INC.
R. S. HARRITAN & COMPANY, INC.
REDMAN EQUIPMENT & MANUFACTURING COMPANY
REPCON, INC.
REPCON EQUIPMENT CO.
REPCON INTERNATIONAL, INC.
REPCONSTRICKLAND, INC.
S. A. COMUNALE CO., INC.
SCALISE INDUSTRIES CORPORATION
THE BETLEM SERVICE CORPORATION
THE FAGAN COMPANY
THE POOLE AND KENT COMPANY
THE POOLE AND KENT CORPORATION
TRAUTMAN & SHREVE, INC.
UNIVERSITY MARELICH MECHANICAL, INC.
UNIVERSITY MECHANICAL & ENGINEERING CONTRACTORS, INC., A CALIFORNIA CORPORATION
UNIVERSITY MECHANICAL & ENGINEERING CONTRACTORS, INC., AN ARIZONA CORPORATION
WALKER‑J‑WALKER, INC.
WELSBACH ELECTRIC CORP. OF L.I.


By:    
Name:     R. Kevin Matz
Title:    Vice President

F & G MECHANICAL CORPORATION
By:    
Name:     Salvatore Fichera
Title:    President

AIRCOND CORPORATION
BAHNSON, INC.

S-6


CONCOR NETWORKS, INC.
EMCOR SERVICES CES, INC.
HARRY PEPPER & ASSOCIATES, INC.
MOR PPM, INC.
NEW ENGLAND MECHANICAL SERVICES, INC.
NEW ENGLAND MECHANICAL SERVICES OF MASSACHUSETTS, INC.
SOUTHERN INDUSTRIAL CONSTRUCTORS, INC.
USM, INC.
USM (DELAWARE) INC.
USU SERVICES HOLDINGS, INC.
VIOX SERVICES, INC.
By:    
Name:     Douglas Myers
Title:    Vice President
BAHNSON ENVIRONMENTAL SPECIALTIES, LLC
OHMSTEDE HOLDINGS LLC
OHMSTEDE PARTNERS LLC

By:    
Name:    R. Kevin Matz
Title:    Manager
OHMSTEDE LTD.
By: Ohmstede Partners LLC, its General Partner
By:    
Name:    R. Kevin Matz
Title:    Vice President
ALTAIRSTRICKLAND HOLDINGS LLC
ALTAIRSTRICKLAND INTERNATIONAL LLC
ALTAIRSTRICKLAND, LLC

S-7


ASG DIAMOND, LLC
ASI INDUSTRIAL SERVICES, LLC
DIAMOND REFRACTORY SERVICES, LLC
MERCURY INDUSTRIAL MATERIALS, LLC
REPCON PROPERTIES, LLC
TIGER TOWER SERVICES, LLC
TURNAROUND WELDING SERVICES, LLC
By:    
Name:    R. Kevin Matz
Title:    Vice President
SIC INTERNATIONAL, LLC
By: Southern Industrial Constructors, Inc., its Sole Member
By:    
Name:    Douglas Myers
Title:    Vice President









Acknowledged and agreed to as of the date first above written.
BANK OF MONTREAL, as Agent


By
    
Its    



S-8


EXHIBIT A
TO
GUARANTY AGREEMENT
ASSUMPTION AND SUPPLEMENTAL GUARANTY AGREEMENT
This Assumption and Supplemental Guaranty Agreement is dated as of this _____ day of _________, 201_, made by [ new guarantor ], a __________ corporation (the “New Guarantor” );
WITNESSETH THAT:
WHEREAS, EMCOR Group, Inc. and certain other parties have executed and delivered to the Guaranteed Creditors that certain Third Amended and Restated Guaranty Agreement dated as of ___________, 2013, or supplements thereto (such Third Amended and Restated Guaranty Agreement, as the same may from time to time be modified or amended, including supplements thereto which add or substitute parties as Guarantors thereunder, being hereinafter referred to as the “Guaranty” ) pursuant to which such parties (the “Existing Guarantors” ) have guaranteed to the Guaranteed Creditors referred to therein the full and prompt payment of, among other things, any and all indebtedness, obligations and liabilities of EMCOR Group, Inc. (the “Company” ) and EMCOR Group (UK) plc ( “EMCOR UK” ; the Company and EMCOR UK being referred to herein collectively as the “Borrowers” ) arising under or relating to the Credit Agreement and the other Loan Documents described therein; and
WHEREAS, the Borrowers provide the New Guarantor with substantial financial, managerial, administrative, technical and design support and the New Guarantor will directly and substantially benefit from credit and other financial accommodations extended and to be extended by the Lenders to the Borrowers;
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances made or to be made, or credit accommodations given or to be given, to the Borrowers by the Lenders from time to time, the New Guarantor hereby agrees as follows:
1.    The New Guarantor acknowledges and agrees that it shall become a “Guarantor” party to the Guaranty effective upon the date the New Guarantor’s execution of this Agreement and the delivery of this Agreement to the Agent on behalf of the Guaranteed Creditors, and that upon such execution and delivery, all references in the Guaranty to the terms “Guarantor” or “Guarantors” shall be deemed to include the New Guarantor.
2.    The New Guarantor hereby assumes and becomes liable (jointly and severally with all the other Guarantors) for the indebtedness hereby guaranteed (as defined in the Guaranty) and agrees to pay and otherwise perform all of the obligations of a Guarantor under the Guaranty according to, and otherwise on and subject to, the terms and conditions of the Guaranty to the same extent and with the same force and effect as if the New Guarantor had originally been one of the Existing Guarantors under the Guaranty and had originally executed the same as such an Existing Guarantor.
3.    All capitalized terms used in this Agreement without definition shall have the same meaning herein as such terms have in the Guaranty, except that any reference to the term “Guarantor” or “Guarantors” and any provision of the Guaranty providing meaning to such term shall be deemed a reference to the Existing Guarantors




and the New Guarantor. Except as specifically modified hereby, all of the terms and conditions of the Guaranty shall stand and remain unchanged and in full force and effect.
4.    The New Guarantor agrees to execute and deliver such further instruments and documents and do such further acts and things as the Agent or any other Guaranteed Creditor may deem necessary or proper to carry out more effectively the purposes of this Agreement.
5.    No reference to this Agreement need be made in the Guaranty or in any other document or instrument making reference to the Guaranty, any reference to the Guaranty in any of such to be deemed a reference to the Guaranty as modified hereby.
6.    This Agreement shall be governed by and construed in accordance with the State of Illinois (without regard to principles of conflicts of law) in which state it shall performed by the New Guarantor.
GUARANTOR:
[ NEW GUARANTOR ]

By
    
Its    
Acknowledged and agreed to in Chicago, Illinois as of the date first above written.
BANK OF MONTREAL, as Agent


By
    
Its    

-2-



EXHIBIT 10(e)(e)



EMCOR GROUP, INC.
VOLUNTARY DEFERRAL PLAN
First Amendment

Pursuant to Section 7.1 of the EMCOR Group, Inc. Voluntary Deferral Plan (the "Plan"), the Company hereby amends the Plan, effective with respect to deferrals for Plan Years commencing on or after January 1, 2014, as follows:
1.
Section 3.1(a) is hereby amended to read in its entirety as follows:
"Deferred Compensation Agreement. For each Plan Year, an Eligible Employee may elect to defer up to 50% of the amount by which his or her Base Pay exceeds the dollar limitation in effect for the Plan Year under Section 401(a)(17) of the Code and up to 100% of his or her Bonus Compensation for the Plan Year, by entering into a Deferred Compensation Agreement with the Company in accordance with this Section 3.1. Elective Credits equal to the amounts, if any, deferred from Base Pay or Bonus Compensation, as the case may be, shall be credited to the Participant's Account as soon as practicable after the deferral is withheld. Each such election with respect to a Plan Year beginning on or after January 1, 2014 shall also specify a payment option from among the choices described in Section 5.1(a) of the Plan."
2.
Section 3.1(b) is hereby amended by inserting the words "(including, for deferral elections with respect to Plan Years beginning on or after January 1, 2014, any provisions thereof specifying a payment method)" immediately after the words "Deferral elections under Section 3.1(a)."
3.
Section 5.1 is hereby amended to read in its entirety as follows:
"Time and form of payment. Subject to Section 5.4, each Account shall be paid to the Participant (or, in the event of the Participant's death, to his or her Beneficiary) in accordance with this Section 5.1 following the earlier to occur of the Participant's Separation from Service (a "payment on account of Separation from Service") or the occurrence of a Change in Control (a "payment on account of a Change in Control").
(a)      Payment on account of Separation from Service. A payment on account of a
Participant's Separation from Service shall be made as follows, subject in each case to Section 5.4 below:
(i) If the Participant's Separation from Service occurs after the Participant has attained age 59%, payment will be made pursuant to whichever of payment option 1 or payment option 2 below the Participant elected under
Section 3.1(a) at the time of initial deferral:
•
Option 1: payment shall be made in a single lump-sum cash payment to the Participant on the first business day of the month following the end of the six-month period following the Separation from Service (or, if earlier, upon the death of the Participant).












•
Option 2: payment shall be made in five (5) annual installments, with the first installment to be paid on the first business day of the month following the end of the six-month period following the Separation from Service, the second installment to be paid on July 1 of the calendar year following the calendar year in which the first installment is paid, and the third through fifth installments to be paid on the first, second and third anniversaries, respectively, of the July 1 payment date for the second installment. Each installment payment shall be in an amount determined by dividing (i) the balance of the Participant's account as of the last day of the month immediately preceding the payment date by (ii) the number of remaining scheduled installments.
(ii) If the Participant's Separation from Service occurs prior to the date the Participant attains age 59 1 ,4 payment shall be made in a single lump-sum cash payment to the Participant on the first business day of the month following the end of the six-month period following the Separation from Service (or, if earlier, upon the death of the Participant).
(b)      Payment on account of a Change in Control. If a Change in Control occurs prior
to a Participant's Separation from Service, payment shall be made at or within thirty (30) days prior to the Change in Control. If a Change in Control occurs at any later time and before the Participant's vested Account is fully distributed, any remaining portion of the Participant's vested Account shall be distributed in accordance with the immediately preceding sentence; provided, that if the Change in Control occurs prior to the end of the six-month period following the Separation from Service, any such accelerated payment shall, to the extent, if any, required by Section 409A and the regulations thereunder, as determined by the Administrator, be made on the first business day following the expiration of such six-month period."
[The remainder of this page is intentionally left blank]





























IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly
authorized officer as of the      day of      , 2013.
EMCOR GROUP, INC.
By:
Name:
Title:







EXHIBIT 10(g)(g)

Restricted Stock Unit Award Agreement
October 23, 2013


EMCOR GROUP, INC.
301 Merritt Seven
Norwalk, Connecticut 06851-1092

Agreement made this 23rd day of October, 2013, between EMCOR GROUP, INC., a Delaware corporation (the “Company”), and Stephen W. Bershad (“Bershad”).
1.      Restricted Stock Unit Award .
Bershad is hereby awarded, pursuant to the Company’s 2010 Incentive Plan (the “Plan”) and subject to its terms, a Restricted Stock Unit (“RSU”) award (the “Award”) as hereinafter described. The Award gives Bershad the conditional right to receive, without payment but subject to the conditions and limitations set forth in this Agreement and the Plan, (i) 1,881 Shares (the “Basic Shares”) and (ii) an additional whole number of Shares (rounded down to the nearest whole number) (the “Dividend Equivalent Shares”) equal in value (determined as hereinafter provided) to the dividends, if any, that would have been paid with respect to the Basic Shares had the Basic Shares been issued to Bershad on the date hereof. For purposes of (ii), the number of Dividend Equivalent Shares with respect to any dividend shall be calculated as of the date on which the dividend is paid to holders of Company common stock. For the avoidance of doubt, no Shares (including Dividend Equivalent Shares) shall be payable in respect of the Award if the Award is forfeited, as hereafter provided, and no Dividend Equivalent Shares shall be payable in respect of any dividend for which the record date falls on or after the date on which Bershad or any other person entitled to the Basic Shares becomes the record owner of such Shares for dividend record-date purposes. Except as otherwise expressly provided, all terms used herein shall have the same meaning as in the Plan.
2.      Vesting .
One-half of Award shall vest on the date hereof, one-fourth of the Award shall vest on January 1, 2014 and the balance of the Award shall vest on April 1, 2014.
Upon any termination of Bershad’s services as Chairman of the Board of Directors of the Company, all RSUs then held by him that have not previously vested (determined after taking into account the previous paragraph) shall be immediately forfeited.











3.      Delivery of Shares .
Subject to Section 4 below, the Company shall effect delivery of the Shares with respect to this Award to Bershad (or, in the event of Bershad’s death, to the person to whom the Award has passed by will or the laws of descent and distribution) on the date Bershad ceases to be a director of the Company. No Shares will be issued pursuant to this Award unless and until all legal requirements applicable to the issuance or transfer of such Shares have been complied with to the satisfaction of the Board of Directors of the Company.
4.      Dividends; Other Rights .
The Award shall not be interpreted to bestow upon Bershad any equity interest or ownership in the Company or any Affiliate prior to the date on which the Company delivers Shares to Bershad. Bershad is not entitled to vote any Shares by reason of the granting of this Award or to receive or be credited (other than as provided in Section 1 above) with any dividends declared and payable on any Share prior to the delivery of such Shares.
5.      Certain Tax Matters .
Bershad expressly acknowledges that because this Award consists of an unfunded and unsecured conditional promise by the Company to deliver Shares in the future, subject to the terms hereof, it is not possible to make a so-called “83(b) election” with respect to the Award. By accepting this Award, Bershad agrees to be responsible for all taxes (including any withholding taxes) to which he may be subject by reason of the vesting of or payment under the Award.
6.      Nontransferability .
Neither this Award nor any rights with respect thereto may be sold, assigned, transferred (other than by will or the laws of descent and distribution), pledged or otherwise encumbered, except as the Board of Directors of the Company may otherwise determine.
7.      Effect on Right to Be Continued as a Director .
This Award shall not confer upon Bershad any right to be continued as Chairman of the Board or as a director of the Company or derogate from any right of the Company or its stockholders to decline to nominate Bershad for election as a director, to decline to elect Bershad as a director, or, subject to the provisions of the bylaws of the Company and applicable law, to remove Bershad as a director, with or without cause.
8.      Amendments .
No amendment of any provision of this Agreement shall be valid unless the same shall be in writing.













9.      Governing Law .
This Agreement shall be governed and construed by and determined in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

The Company, by its duly authorized officer, and Bershad have executed this Agreement as of the date first set forth above.
                            
EMCOR GROUP, INC.

By:_____________________________
Anthony J. Guzzi
Title: President and Chief Executive Officer

Agreed and Accepted:

_______________________________
Stephen W. Bershad





EXHIBIT 11
SEE NOTE 5 TO THE ACCOMPANYING CONSOLIDATED FINANCIAL STATEMENTS FOR INFORMATION RELATING TO THE CALCULATION OF BASIC EPS AND DILUTED EPS.
 




EXHIBIT 21
LIST OF SIGNIFICANT SUBSIDIARIES
Dyn Specialty Contracting, Inc.
MES Holdings Corporation
EMCOR Construction Services, Inc.
EMCOR International, Inc.
EMCOR Mechanical/Electrical Services (East), Inc.
EMCOR (UK) Limited
EMCOR Group (UK) plc
EMCOR Facilities Services, Inc.
EMCOR-CSI Holding Co.
FR X Ohmstede Acquisitions Co.
RepconStrickland, Inc.
 




EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement (Form S-8 No. 333-168503) pertaining to the 2010 Incentive Plan of EMCOR Group, Inc.,
(2) Registration Statement (Form S-8 No. 333-152764) pertaining to the EMCOR Group, Inc. Employee Stock Purchase Plan,
(3) Registration Statement (Form S-8 No. 333-147015) pertaining to the 2007 Incentive Plan of EMCOR Group, Inc.,
(4) Registration Statement (Form S-8 No. 333-120078) pertaining to the EMCOR Group, Inc. Stock Option Agreement dated as of October 25, 2004 and the EMCOR Group, Inc. Restricted Share Unit Agreement dated as of October 25, 2004,
(5) Registration Statement (Form S-8 No. 333-112940) pertaining to the EMCOR Group, Inc. Stock Option Agreements dated as of January 4, 1999, May 5, 1999, January 3, 2000, January 2, 2001, December 14, 2001, January 2, 2002, June 19, 2002, October 25, 2002, January 2, 2003, February 27, 2003, and January 2, 2004, the EMCOR Group, Inc. 2003 Non-Employee Directors' Stock Option Plan and the EMCOR Group, Inc. 2003 Management Stock Incentive Plan, and
(6) Registration Statement (Form S-8 No. 333-186926) pertaining to the EMCOR Group, Inc Voluntary Deferral Plan;
of our reports dated February 25, 2014 , with respect to the consolidated financial statements and schedule of EMCOR Group, Inc. and subsidiaries, and the effectiveness of internal control over financial reporting of EMCOR Group, Inc. and subsidiaries, included in this Annual Report (Form 10-K) of EMCOR Group Inc. for the year ended December 31, 2013.
 
 
Stamford, Connecticut
/s/ E RNST  & Y OUNG  LLP
February 25, 2014
 

 




EXHIBIT 31.1
CERTIFICATION
I, Anthony J. Guzzi, certify that:
1.
I have reviewed this annual report on Form 10-K of EMCOR Group, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:
February 25, 2014
 
/s/ ANTHONY J. GUZZI
 
 
 
Anthony J. Guzzi
President and
Chief Executive Officer



EXHIBIT 31.2
CERTIFICATION
I, Mark A. Pompa, certify that:
1.
I have reviewed this annual report on Form 10-K of EMCOR Group, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:
February 25, 2014
 
/s/ MARK A. POMPA
 
 
 
Mark A. Pompa
Executive Vice President
and Chief Financial Officer




EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of EMCOR Group, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony J. Guzzi, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date:
February 25, 2014
 
/s/ ANTHONY J. GUZZI
 
 
 
Anthony J. Guzzi
President and
Chief Executive Officer





EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of EMCOR Group, Inc. (the “Company”) on Form 10-K for the period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark A. Pompa, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date:
February 25, 2014
 
/s/ MARK A. POMPA
 
 
 
Mark A. Pompa
Executive Vice President
and Chief Financial Officer






EXHIBIT 95


MINE SAFETY DISCLOSURES

In February 2013, our subsidiary DeBra-Kuempel Inc. received an imminent danger order under Section 107(a) of the Mine Safety and Health Act of 1977 and a related “Significant and Substantial” (“S&S”) citation in the course of performing work at the Maysville Kiln plant in Maysville, Kentucky. However, after conferring with Debra-Kuempel Inc. about the matter, the Mine Safety and Health Administration (“MSHA”) of the U.S. Department of Labor determined that no imminent danger had occurred and the cited violation was not S&S. Accordingly, in March 2013, MSHA vacated the imminent danger order and modified the citation to non-S&S.
In October 2013, our subsidiary MOR PPM, Inc. received a S&S citation in the course of performing work at the Kasota Pit & Plant in Mankato, Minnesota.