ASSET ACQUISITION AGREEMENT

between

THE CITY OF NEW YORK,

JAMAICA WATER SUPPLY COMPANY

and

EMCOR GROUP, INC.

Dated February 9, 1996

[Conformed]

                        Table of Contents
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                                                               Page
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ARTICLE I: ACQUISITION.......................................    2
1.1  Acquisition.............................................    3
1.2  Excluded Assets.........................................    3
1.3  Acquisition Price; Adjustments..........................    3
1.4  Excluded Liabilities....................................   14
1.5  Assignment of Contracts and Rights......................   15
1.6  Apportionment of Expenses...............................   16

ARTICLE II: CLOSING..........................................   17
2.1  The Closing.............................................   17
2.2  Deliveries by the City..................................   18
2.3  Deliveries by JWS.......................................   18
2.4  Additional Transactions At or Following the
      Closing................................................   18
2.5  Allocation of the Acquisition Price.....................   19

ARTICLE III: REPRESENTATIONS AND WARRANTIES..................   19
3.1  Representations and Warranties of JWS and
      the Parent.............................................   19
     (a) Due Organization....................................   19
     (b) Authorization and Validity of Agreement.............   20
     (c) No Conflict; Consents...............................   20
     (d) Title to Acquired Assets; Liens and
          Encumbrances.......................................   22
     (e) Agreements and Contracts............................   22
     (f) Legal Proceedings...................................   23
     (g) Government Licenses, Permits and Related
          Approvals..........................................   23
     (h) Conduct of the System in Compliance with
          Regulatory Requirements............................   24
     (i) Environmental Matters...............................   24
     (j) Financial Statements................................   25
     (k) Absence of Certain Liabilities and Changes..........   25
     (l) Receivables.........................................   27
3.2  Representations and Warranties of the City..............   28
     (a) Due Organization and Power of the City..............   28
     (b) Authorization and Validity of Agreement.............   28
     (c) No Conflict; Consents...............................   29

     (d) Disclosure..........................................   30
     (e) Financing...........................................   31

                                      -ii-

                                                               Page
                                                               ----
3.3  Survival of Representations and Warranties..............   31
3.4  Schedules...............................................   31
3.5  No Implied Representation...............................   31

ARTICLE IV: COVENANTS AND TRANSACTIONS PRIOR TO CLOSING......   32
4.1  Access to Information Concerning Properties and
      Records; Confidentiality...............................   32
4.2  Conduct of the System Prior to the Closing Date.........   33
4.3  Shareholders' Meeting; Approval.........................   35
4.4  Cooperation.............................................   35
4.5  PSC Approval............................................   36
4.6  DEC and Department of Health Approval...................   36
4.7  Condemnation Proceeding.................................   37
4.8  Non-Solicitation........................................   38
4.9  Retained Employees......................................   38
4.10 Compliance with WARN....................................   39
4.11 Meter Leases............................................   39
4.12 Further Actions.........................................   39
4.13 Nassau Agreement........................................   39

ARTICLE V: CONDITIONS PRECEDENT..............................   40

5.1  Conditions Precedent to Obligations of the Parties......   40
     (a) No Injunction.......................................   40
     (b) Regulatory Approvals................................   40
     (c) Condemnation Proceeding.............................   40
5.2  Conditions Precedent to Obligation of the City..........   41
     (a) Accuracy of Representations and Warranties..........   41
     (b) Performance of Agreement............................   41
     (c) Certificate.........................................   41
     (d) Burdensome Condition................................   41
     (e) No Action Pending...................................   42
5.3  Conditions Precedent to the Obligation of JWS
      and the Parent.........................................   42
     (a) Accuracy of Representations and Warranties..........   42
     (b) Performance of Agreement............................   42
     (c) Certificate.........................................   42
     (d) Shareholder Approval................................   42
     (e) Burdensome Condition................................   42
     (f) No Action Pending...................................   43
     (g) Performance of Nassau Agreement.....................   43

                                     -iii-

                                                               Page
                                                               ----
ARTICLE VI: TERMINATION AND ABANDONMENT......................   43

6.1  General.................................................   43
6.2  Procedure Upon Termination..............................   44
6.3  Survival of Certain Provisions..........................   45


ARTICLE VII: POST-CLOSING COVENANTS AND
     TRANSACTIONS............................................   45

7.1  Access to Books and Records.............................   45
7.2  Dissolution or Merger of JWS............................   46
7.3  Certain Tax Matters.....................................   46
7.4  Deposits................................................   47

ARTICLE VIII: ASSUMPTION OF CERTAIN OBLIGATIONS AND
     LIABILITIES; INDEMNIFICATION............................   47

8.1  Assumption and Indemnification..........................   48
8.2  Procedure...............................................   50
8.3  Payment.................................................   52

ARTICLE IX: MISCELLANEOUS....................................   52

9.1  Certain Definitions.....................................   53
9.2  Fees and Expenses.......................................   53
9.3  Notices.................................................   54
9.4  Severability............................................   56
9.5  Entire Agreement........................................   56
9.6  Binding Effect; Benefit.................................   56
9.7  Assignability...........................................   56
9.8  Amendment and Modification; Waiver......................   56
9.9  Public Announcements....................................   57
9.10 Section Headings........................................   58
9.11 Counterparts............................................   58
9.12 Jurisdiction............................................   58
9.13 GOVERNING LAW...........................................   58

ASSET ACQUISITION AGREEMENT, dated February 9, 1996 (this

WHEREAS, JWS desires to dispose of and the City desires to acquire certain of the assets related to the System, all as more fully set forth herein, on the terms and subject to the conditions set forth herein; and

WHEREAS, as a condition and inducement to its willingness to enter into this Agreement and to consummate the transactions contemplated hereby, the City has required that JWS and the Parent agree to join in certain representations, warranties and indemnities as hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and of the mutual representations, warranties, covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I: ACQUISITION

(a) Cash and cash equivalents (including money on deposit in banks and other institutions) or similar type investments, such as certificates of deposit, Treasury bills and other marketable securities, and commercial paper, stocks, bonds and similar investments received by JWS prior to the Vesting Date (as defined in Section 5.1(c)); and

(b) the assets of JWS listed on Schedule B hereto.

(iii) After receipt of the Statement and the Adjustment Statement, the City will have 14 days to review such statements together with the workpapers used in their preparation. Unless the City delivers written notice to JWS on or prior to the fourteenth day after its receipt of the Statement and the Adjustment Statement, the City will be deemed to have accepted and agreed to the Statement and the Adjustment Statement and such agreement will be final and binding. If the City so notifies JWS of

(iv) If the Adjustment Amount as shown on the Conclusive Adjustment Statement is a negative number, then the Acquisition Price will be reduced by such amount, and the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay (x) to the City from the Escrowed Sum an amount in cash equal to such Adjustment Amount, plus interest accrued thereon in accordance with the Escrow Agreement and (y) to JWS the balance of the Escrowed Sum as determined in accordance with Section 1.3(c)(i), if any, plus accrued interest thereon in accordance with the Escrow Agreement. If the Adjustment Amount is a negative number, the absolute value of which exceeds the amount held by the Escrow Agent, then the entire Escrowed Sum, plus interest accrued thereon in accordance with the Escrow Agreement, shall be delivered to the City and JWS or the Parent will pay to the City the excess amount. If the Adjustment Amount as shown on the Conclusive Adjustment Statement is a positive number, then the Acquisition Price will be increased by such amount, and the City shall pay to JWS an amount in cash equal to such Adjustment Amount, and the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay to JWS the balance of the Escrowed Sum as determined in accordance with Section 1.3(c)(i), if any, plus accrued interest in accordance with the Escrow Agreement. All payments to be made pursuant to this Section 1.3(c) (iv) will be made on the second Business Day following the date on which the parties agree to, or the Neutral Auditor delivers, the Conclusive Statement and the Conclusive Adjustment Statement. Any payment required to be made by JWS or the City (other than payments from the Escrowed Sum) pursuant to this Section 1.3(c) (iv) shall bear interest from the

Closing Date through the date of payment at a rate of 6.0% per annum, and shall be payable by federal funds or wire transfer of immediately available funds to an account or accounts designated by the party entitled to receive such funds prior to the date when such payment is due.

(v) If the PSC shall determine that the customers of JWS located in Queens County have overpaid JWS by reason of the Rate Increase, then the balance of the Escrowed Sum, to the extent available, shall be applied to refund such overpayments, it being understood that funds shall be released from the Escrow Account from time to time in order to permit JWS to make refund payments to customers located in Queens County at such times as are required by order of the PSC. Then, after all amounts determined to be owing by JWS to customers located in Queens County by reason of such PSC order have been paid, the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay to JWS the remaining balance held by the Escrow Agent (plus interest accrued thereon in accordance with the Escrow Agreement). If the amount held by the Escrow Agent is insufficient to pay such amounts, JWS and/or the Parent shall make all additional payments required by the PSC.

the Reduction Statement shall give effect to 50% of the severance payments so avoided. The Preliminary Reduction Statement shall be prepared by Reduction Amount calculated on the Preliminary Reduction Statement.

(iii) After receipt of the Reduction Statement and the Net Reduction Statement, the City will have 14 days to review such statements together with the workpapers used in their preparation. Unless the City delivers written notice to JWS on or prior to the fourteenth day after its receipt of the Reduction Statement and the Net Reduction Statement, the City will be deemed to have accepted and agreed to the Reduction Statement and the Net Reduction Statement and such agreement will be

(iv) If the Net Reduction Amount as shown on the Conclusive Net Reduction Statement is a positive number, then the Acquisition Price will be reduced by such amount, and the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay (x) to the City from the Escrowed Sum an amount in cash equal to such Net Reduction Amount, plus interest accrued thereon in accordance with the Escrow Agreement and (y) to JWS the balance of the Escrowed Sum as determined in accordance with Section 1.3(c)(i), if any, plus accrued interest thereon in accordance with the Escrow Agreement. If the Net Reduction Amount as shown on the Conclusive Net Reduction Statement is a positive number that exceeds the amount held by the Escrow Agent, then the entire Escrowed Sum plus interest accrued thereon in accordance with the Escrow Agreement shall be delivered to the City and JWS or the Parent will pay to the City the excess amount. If the Net Reduction Amount as shown on the Conclusive Net Reduction Statement is a negative number, then the Acquisition Price shall be increased by the absolute value of such amount, and the City shall pay to JWS an amount in cash equal to the absolute value of the Net Reduction Amount as shown on the Conclusive Net Reduction Statement, and the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay to JWS the balance of the Escrowed Sum as determined in accordance with Section 1.3(c)(i), if any, plus accrued interest thereon in accordance with the Escrow Agreement. All payments to be made pursuant to this Section 1.3(d)(iv) will be made on the second Business Day following the date on which the City and JWS agree to, or the Neutral Auditor delivers, the Conclusive Reduction Statement and the Conclusive Net Reduction Statement. Any

payment required to be made by JWS or the City (other than from the Escrowed Sum) pursuant to this Section 1.3(d)(iv) shall bear interest from and including the Closing Date through the date of payment at a rate of 6.0% per annum, and shall be payable by wire transfer of immediately available funds to an account or accounts designated by the party entitled to receive such funds prior to the date when such payment is due.

accordance with generally accepted accounting principles, (h) any guaranty by JWS of any debt, obligation or dividend of any person or entity,
(i) any liability or obligation of the Business to JWS or any of its Affiliates (except obligations of the City under this Agreement), or (j) any obligation of JWS to make refunds to its customers (all of the foregoing being hereinafter referred to as the "Excluded Liabilities").

Without in any way limiting JWS's obligation to seek to obtain all consents and waivers necessary for the acquisition by the City of any Contracts and licenses included in the Acquired Assets, if such consent is not obtained or if such assignment is not permitted irrespective of consent, JWS shall cooperate with the City in any reasonable arrangement designed to provide for the City the benefit under such Contract or license, as the case may be, including enforcement for the benefit of the

City of any or all rights of JWS against any other person arising out of breach or cancellation by such other person and including, if so requested by the City, acting as an agent on behalf of the City, or as the City shall otherwise reasonably require; and any transfer or assignment to the City by JWS of any property or property rights or any Contract or agreement that shall require the consent or approval of any third party, shall be made subject to such consent or approval being obtained.

beyond the Closing Date shall be prorated as of the close of business immediately preceding the Closing Date between JWS and the City. In the event that either party collects or receives any income, revenues or receipts to which the other party is entitled pursuant hereto, it shall hold such amounts in trust for the other and promptly pay such amounts to the other party.

(a) The Acquisition Price, adjusted as provided in Sections 1.3(b),
(c) and (d), with statutory interest thereon at a rate of 6% per annum from the Vesting Date to the Closing Date, less the Escrowed Sum, by federal funds or wire transfer of immediately available funds to an account or accounts of JWS designated by JWS by notice given to the City at least two Business Days prior to the Closing Date, as may be agreed between the parties; and

(b) the executed Escrow Agreement in substantially the form attached hereto as Exhibit B; and

(c) such other instruments or documents, in form and substance reasonably acceptable to JWS, as may be necessary to effect the Closing.

(a) assignments, if any required, in form and substance reasonably acceptable to the City, assigning to the City all Contracts (as defined in
Section 9.1) included in the Acquired Assets; and

(b) such other instruments or documents, including but not limited to proof of payment of applicable New York Real Property Transfer Gains Tax, in form and substance reasonably acceptable to the City, as may be necessary to effect the Closing.

cooperate with each other and execute and deliver, or cause to be executed and delivered, all such instruments, including instruments of assignment, transfer and conveyance and instruments of assumption, and take all such other actions as such party may reasonably be requested to take by the other party or parties hereto, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement.

ARTICLE III: REPRESENTATIONS AND WARRANTIES

full corporate power and authority to own all of its properties and assets and to carry on its business as it is now being conducted.

Agreement and the consummation by JWS and the Parent of the transactions contemplated hereby: (i) will not violate, or result in the violation of, any provision of any law, rule, regulation, order, judgment or decree applicable to JWS or the Parent; (ii) will not require any consent, authorization or approval of, or filing with or notice to, any governmental or regulatory authority under any provision of any law applicable to JWS or the Parent, except for the approval of the PSC, and except for any consent, approval, filing or notice requirements which become applicable solely as a result of the specific regulatory status of the City or which the City is otherwise required to obtain;
(iii) will not violate any provision of the respective certificates of incorporation or by-laws or other organizational documents of JWS or the Parent; and (iv) will not require any consent, approval or notice under, and will not conflict with, or result in the breach or termination of, or constitute a default under, or result in the acceleration of the performance by JWS or the Parent or the creation of any Lien under, any indenture, mortgage, deed of trust, lease, license, franchise, contract, agreement, warrant or other instrument to which JWS or any of its Affiliates or the Parent is a party or by which either of them, or any of their assets, are bound or encumbered, except with respect to clauses (i), (ii) and (iv) above for any consent, authorization, approval, filing or notice that would not, if not given or made, or any violation, conflict, breach, termination, default or acceleration which does not, and is not likely to, either impair the ability of JWS and the Parent to consummate the transactions contemplated hereby or have a Material Adverse Effect.

the System and the Business are being conducted in compliance with all applicable laws, rules and regulations, except where the failure to so comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. JWS has all licenses, permits, certificates and other authorizations and approvals necessary for the operation of the System and conduct of the Business as presently operated and conducted under applicable laws, ordinances and regulations of any governmental authority, other than those the absence of which could not reasonably be expected to have a Material Adverse Effect.

consistent with JWS's past practice of arriving at such allocations for cost of service studies with the New York State Public Service Commission since June, 1986.

agents or, since September 30, 1995, any specific increase in the salary or compensation to any officer, agent or employee whose total salary and compensation after such increase would be at an annual rate in excess of $50,000; (v) any damage, destruction or loss to any asset or property which would have a Material Adverse Effect, whether or not covered by insurance; (vi) establishment of any new Plan or material modification or amendment or provision for material increases in any existing Plans, except pursuant to the Effects Bargaining Agreement, or in accordance with the terms of such Plans in effect prior to the date hereof (which modifications or increases, if any, are disclosed in Schedule 3.1(k)), or written interpretation or announcement by JWS under any Plan which would materially increase the expense of maintaining such Plan over the level of expense thereof for the fiscal year ended December 31, 1994; (vii) any claim, action, suit or proceeding commenced or, to the best knowledge of JWS, threatened against JWS, which, if adversely determined, could reasonably be expected to have a Material Adverse Effect; (viii) any grant by JWS of recognition to any labor organization (other than ongoing effects bargaining with a previously recognized union); and (ix) any occurrence, event or condition (including, without limitation, any strike or labor trouble) which could reasonably be expected to have a Material Adverse Effect. For purposes of this section, "Plan" means any plan, program, policy, fund, arrangement or agreement providing for benefits for employees of JWS including, without limitation, any "employee benefit plan" as that term is defined in Section 3(3) of the Employee Retirement Income Security Act (" ERISA"), all retirement, pension benefit, profit sharing, medical, dental, disability, vacation, hospitalization,

incentive, bonus, executive compensation, deferred compensation and any other similar material fringe or employee benefit plan, fund, program or arrangement, whether or not covered by ERISA, which is maintained by JWS for the benefit of, or relates to, any or all present or former employees or directors of JWS.

carry on its business as it is now being conducted, (ii) to enter into this Agreement and perform its obligations hereunder and (iii) to acquire the Acquired Assets.

reorganization, moratorium or other laws relating to or affecting creditors' rights generally and by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law.

(i) will not violate, or result in the violation of, any provision of any law, rule, regulation, order, judgment or decree applicable to the City; (ii) will not require any consent, authorization or approval of, or filing or notice to, any governmental or regulatory authority under any provision of any law applicable to the City, except for the approval of the New York City Comptroller and possibly the approval of the New York State Department of Environmental Conservation and the New York State Department of Health, and except for any consent, approval, filing or notice requirements which become applicable solely as a result of the specific regulatory status of JWS or which JWS is otherwise required to obtain; and (iii) will not conflict with or violate any provision of the laws of the State of New York or The City of New York;

Counsel. To the best knowledge of said Responsible Officers, no other employees of the City have discovered any such information.

ARTICLE IV: COVENANTS AND TRANSACTIONS PRIOR TO CLOSING

(a) During the period commencing on the date hereof and ending on the Closing Date, JWS shall, upon reasonable request, afford to the City, its counsel, accountants and other authorized representatives reasonable access during normal business hours to JWS employees and to the properties, books and records with respect to the Acquired Assets, in order that the City may have the opportunity to make such reasonable investigations as it shall desire to make of the Acquired Assets. JWS will furnish to the City such additional financial and operating data and

information as the City may from time to time reasonably request with respect to the Acquired Assets

(b) During the period commencing on the date hereof and ending on the Closing Date, the City agrees to continue to observe and be bound by the terms of the June 21, 1995 confidentiality agreement between the parties; provided, however, that the City shall be permitted to disclose information to the public in connection with any public hearing that may be required pursuant to applicable law or regulations.

JWS agrees that, except as permitted, required or specifically contemplated by this Agreement or as otherwise consented to or approved in writing by the City, during the period commencing on the date hereof and ending at the Closing Date:

(a) the System shall be conducted only in the ordinary course consistent with past practice;

(b) JWS will not (i) dispose of or encumber, or agree to dispose of or encumber, any interest in the Acquired Assets other than (A) in the ordinary course of business, consistent with past practice, and (B) pursuant to the after-acquired property clause of an existing indenture or mortgage; (ii) acquire, or agree to acquire, any asset material to the System, taken as a whole, other than in the ordinary course of business, consistent with past practice; (iii) cancel any debts or waive any claims or rights, other than in the ordinary course of business, consistent with past practice; (iv) make any capital expenditure or commitment, other than (A) in the ordinary course of business, consistent with past practice,(B) pursuant to existing commitments or
(C) which is not material to the System, taken as a whole, and, in any event, will not make any capital commitment or expenditure that is, individually, in excess of $100,000, except in the case of an emergency, without the prior written approval of the City, which approval shall not be unreasonably withheld or delayed, or (v) make any commitment or expenditure for office furniture and equipment, LAN and information systems, transportation equipment or tools and work equipment in excess of the amounts set forth in JWS's 1996 Construction Plan, Schedule 4.2(b) attached hereto, without the prior written approval of the City, which approval shall not be unreasonably withheld or delayed;

(c) JWS shall promptly notify the City in writing of, and furnish to City information reasonably requested by it with respect to, the occurrence of any event or the existence of any state of facts that would result in any of JWS's representations and warranties not being true;

(d) JWS shall not alter in any material respect the terms on which services are provided and shall use all reasonable efforts to (i) maintain and preserve the Business,(ii) retain its present employees and agents provided, that JWS may terminate employees and agents in the ordinary course of business, and (iii) preserve and maintain its relationships with customers, suppliers and others until the Closing; provided, however, that JWS may, but shall not be required to, increase compensation, pay special bonuses, or otherwise modify benefits, all as set forth on Schedule 3.1(k);

(e) JWS shall use all reasonable efforts to maintain in full force and effect all existing insurance and renewals thereof, and will give all notices and present all claims under all policies of insurance in a due and timely fashion;

(f) JWS shall maintain its books, accounts and records in the usual, regular and ordinary manner, consistent with past practice, and make no material change in the accounting methods or practices with respect to the Business or the Acquired Assets, unless mandated by law, regulation or the PSC, in which case JWS will provide notice of such change to the City;

(g) JWS shall not alter in any material respect its practices with respect to collection of Accounts Receivable and shall not sell, discount or dispose of Accounts Receivable (except that JWS may take appropriate action to increase its efforts to collect Accounts Receivable);

(h) JWS, prior to undertaking any negotiation or discussion with any labor union as to recognition, labor contracts, or other matters of like import relating to the Business, other than ongoing effects bargaining with representatives of the Union, will first notify the City and furnish to the City such information relating thereto as the City may reasonably request. In no event shall JWS enter into any agreement or understanding that would have a material adverse impact on the Business with any union without the written consent of City;

(i) JWS will not engage in any transaction with any of its Affiliates other than as contemplated by this Agreement or in the ordinary course of business on an arm's-length basis.

(j) JWS agrees that all Queens data processing production functions must continue to be performed by the current information systems. This includes, but is not limited to, all Queens customer service, billing, collections, meter reading and field

work functions. If any Queens production functions are to be transferred to any new system application, including, but not limited to, the MUPS application, they must continue to function properly on the current system.

(k) JWS agrees that the customer billing data, programs and equipment to be transferred under this Agreement for the purpose of operating the billing system shall function adequately and appropriately to serve their intended purposes, consistent with past practice.

(l) JWS shall deliver to the City copies of its severance policy and the Effects Bargaining Agreement as soon as practicable after each document is adopted in final form.

(b) At the Shareholders' Meeting, the Parent, as the sole shareholder of Jamaica Water Securities Corp. ("JW Securities"), shall cause the Common Shares held by JW Securities (which constitute 96.12% of the issued and outstanding Common Shares) to be voted in favor of adoption and authorization of this Agreement and the Asset Acquisition.

to assist the City so that the City can provide continuous, uninterrupted service to its customers subsequent to the Closing Date by:

(a) providing the City's representatives access to JWS's sites, facilities and installations;

(b) providing the City's representatives access to accounting and billing information; and

(c) providing such information, data and technical assistance as is reasonably required by the City's representatives in order to accomplish the technical changes, staff acquisition and training as may be necessary to assure uninterrupted service;

and requests of the PSC as are reasonably necessary to obtain PSC Approval, if any is required.

compensation to be paid. The judgment of the court in accordance with the stipulation in the Condemnation Proceeding shall be final, binding and conclusive with respect to all terms, including the amount of the Acquisition Price, and neither party shall appeal such judgment. The parties hereto shall use their respective best efforts to assure that the Vesting Date shall occur on, or as close as possible to, the Vesting Date as defined in the Nassau Agreement.

of JWS to whom the City will offer employment commencing on the Closing Date. The City shall include on the Employees List the job title and description, salary and benefits offered to each such employee.

ARTICLE V: CONDITIONS PRECEDENT

for the Asset Acquisition shall have been obtained and be in full force and effect, and all required waiting periods shall have expired or been terminated.

          pursuant to General City Law (S) 20(2).

          5.2       Conditions Precedent to Obligation of the City.  The
                    ----------------------------------------------
obligations of the City to consummate the transactions contemplated by this
Agreement are also subject to the satisfaction (or waiver by the City) at or
prior to the Closing of each of the following additional conditions:

outstanding Common Shares entitled to vote at annual or special meetings of shareholders of JWS.

(a) by mutual written consent of the City, JWS, and the Parent; or

if an action shall have been commenced seeking an order, decree or ruling, restraining, enjoining or otherwise prohibiting the transactions contemplated hereby, either the City or JWS, or both, shall have 30 days from the date of filing of such order, decree or ruling or the taking of such action, or the commencement of such action, to have such order, decree or ruling reversed or vacated, or such action dismissed; or

(c) by either the City or JWS and the Parent, upon written notice given to the other party in the event of a breach or default in the performance by such other party of any representation or warranty, or a material breach of a covenant or agreement contained in this Agreement, provided that, in the case of a default in the performance of a covenant or agreement contained in this Agreement, such default has not been or cannot be cured within 30 days after written notice of such breach or default has been given by the terminating party to the breaching party and describing such breach or default in reasonable detail; or

(d) by either the City, the Parent, or JWS, if any court of competent jurisdiction or any governmental or regulatory body with jurisdiction over the subject hereof shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated hereby and such order, decree, ruling or other action shall have become final and nonappealable; or

(e) if, at any time prior to the Vesting Date, any party to the Nassau Agreement terminates the Nassau Agreement in accordance with its terms, provided that upon such termination JWS and the Parent will make all reasonable attempts to secure another buyer ("Other Buyer") for the Nassau portion of JWS's business on terms reasonably comparable to those contained in the Nassau Agreement. In such a case, JWS and the Parent shall proceed with all transactions contemplated hereby contemporaneously with the sale to the Other Buyer.

terminate and the transactions contemplated hereby shall be abandoned without further action by any of the parties hereto. Termination of this Agreement shall not preclude either party from suing the other party for breach of this Agreement; provided, however, that each of the parties hereto agrees that no such lawsuit for breach of this Agreement shall be brought against any officer, director or employee of any of the parties hereto.

ARTICLE VII: POST-CLOSING COVENANTS AND TRANSACTIONS

alter or destroy any such books, records and other data without giving 30 days' prior written notice to JWS and the Parent to permit JWS or the Parent, at its expense, to examine, duplicate, or repossess such records, files, documents and correspondence, or any portion thereof.

(a) After the Closing Date, the City shall provide notice to JWS or the Parent in writing within 30 days after its receipt of any correspondence, notice, or other communication from a taxing authority or any representative thereof of any pending or threatened tax audits, or any pending or threatened judicial or administrative proceeding that involves taxes, for taxable periods for which JWS may have a liability under this Agreement, including tax accounting changes that may create a future liability, and furnish JWS or the Parent with copies of all correspondence received from any taxing authority in connection with any audit or information request with respect to any such taxable period for which JWS or the Parent may be liable to pay any taxes under this Agreement.

(c) JWS shall be entitled to any refunds or credits of taxes attributable to JWS arising in any tax periods prior to the Closing Date. The City shall promptly notify and forward to JWS the amounts of any refunds, credits or benefits due to JWS hereunder within 10 Business Days after receipt thereof.

(d) All transfer, documentary, sales, use, registration and other such taxes (including, but not limited to, all applicable real estate transfer or gains taxes) and fees (including any penalties, interest and addition to such taxes), if any, incurred in connection with the transactions contemplated hereby shall be the obligation of JWS and shall be paid at or prior to the Closing.

ARTICLE VIII: ASSUMPTION OF CERTAIN OBLIGATIONS AND LIABILITIES; INDEMNIFICATION

(i) the operation of the System and use or ownership of the Acquired Assets on or after the Closing Date;

(ii) any Liability arising out of a claim for severance by any Offered Employee with respect to whom an adjustment to the Acquisition Price was made pursuant to Section 1.3(d), to the extent of the amount of said adjustment with respect to said Offered Employee; and

(iii) any misrepresentation, breach or inaccuracy of any representation or warranty or failure to comply with any agreement, condition or covenant on the part of the City under this

(i) the operation of the System and use or ownership of the Acquired Assets prior to the Closing Date;

(ii) any liability of JWS;

sole discretion and shall not thereby waive any right to indemnity therefor pursuant to this Agreement. The indemnifying party shall not, except with the consent of the Indemnified Party, enter into any settlement that does not include as an unconditional term thereof the giving by the Person or Persons asserting such claim to all Indemnified Parties an unconditional release from all liability with respect to such claim or consent to entry of any judgment. Notwithstanding the foregoing, following the Closing, each Indemnified Party will afford to the indemnifying party and its counsel, accountants and other authorized representatives reasonable access during normal business hours to relevant properties, books and records (and permit the indemnifying party and its counsel, accountants and other authorized representatives to make copies of such books and records at their own expense), to the extent that such access may be reasonably required to facilitate the investigation, litigation and final disposition of any claim which may have been or may be made against any Indemnified Party relating to the System, the Acquired Assets or any of the transactions contemplated by this Agreement. The City Indemnified Parties shall hold any such confidential information in confidence on the same terms and subject to the same conditions as set forth in Section 4.1(b) hereof, and the JWS Indemnified Parties shall hold any such confidential information in confidence on the same terms and subject to the same conditions applicable to the City in Section 4.1(b) hereof.

reimbursement. If the Indemnified Party shall be entitled to indemnification under this Article VI and the indemnifying party shall not elect to control any legal proceeding in connection therewith, the indemnifying party shall pay upon request from time to time to the Indemnified Party an amount equal to the Indemnified Party's costs and expenses arising as a result of such proceeding which have not been previously reimbursed.

ARTICLE IX: MISCELLANEOUS

fees and expenses incident to the negotiation, preparation and execution of this Agreement, including attorneys', accounts' and other advisors' fees and the fees and expenses of any broker, finder or agent retained by such party in connection with the transactions contemplated by this Agreement.

(b) The parties respectively represent and warrant to each other that they have not employed or utilized the services of any broker, finder or investment banker in connection with this Agreement or the transactions contemplated by it, other than, in the case of JWS and the Parent, Bear, Stearns & Co. Inc. ("Bear Stearns"), and in the case of the City, PaineWebber Incorporated ("PaineWebber"), Peter Kind, and Andrew Collens. Attached as Schedule 9.2(b) is the acknowledgment of Bear Stearns relating to the City's non-responsibility for any fees of Bear Stearns in connection with this Agreement or the transactions contemplated hereunder, and the acknowledgments of PaineWebber, Peter Kind, and Andrew Collens relating to JWS's and the Parent's non-responsibility for any fees of PaineWebber, Peter Kind, or Andrew Collens in connection with this Agreement or the transactions contemplated hereunder.

(a) if to JWS, to it at:

Jamaica Water Supply Company
410 Lakeville Rd.
Lake Success, NY11042
Attention: Edward J. Haye
Vice President, Corporate Secretary, and
General Counsel

with a copy to:

Simpson Thacher & Bartlett
425 Lexington Avenue, 28th Floor
New York, New York 10017-3909
Attention: Vincent Pagano, Jr., Esq.

(b) if to the Parent or to SellCo, to them at:

EMCOR Group, Inc.
101 Merritt Seven, 7th Floor Norwalk, CT 06851
Attention: Sheldon I. Cammaker Executive Vice President and General Counsel

with a copy to:

Simpson Thacher & Bartlett 425 Lexington Avenue, 28th Floor New York, New York 10017-3909 Attention: Vincent Pagano, Jr., Esq.

(c) if to the City, to it at:

Department of Environmental Protection 59-17 Junction Boulevard Corona, NY 11368
Attention: Steven F. Ostrega, Deputy Commissioner

New York City Municipal Water Finance Authority 75 Park Place, 6th Floor New York, NY 10007
Attention: Mark Page, Executive Director

with a copy to:

New York City Law Department 100 Church Street
New York, NY 10007
Attention: Mary Richman, Assistant Corporation Counsel

or to such other persons or addresses as any party shall specify as to itself by notice in writing to the other parties.

other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

unreasonably withheld or delayed). Where any announcement, communication or circular concerning the transactions referred to in this Agreement is required by law or any regulation or rule it shall be made by the relevant party after consultation, where reasonably practicable, with the other parties and taking into account the reasonable requirements (as to timing, contents and manner of making or dispatch of the announcement, communication or circular) of the other parties.

CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

JAMAICA WATER SUPPLY COMPANY

By:  /s/  Frank T. MacInnis
     ----------------------
     Name: Frank T. MacInnis
     Title: Chairman of the Board

EMCOR GROUP, INC.

By:  /s/ Frank T. MacInnis
     ---------------------
     Name: Frank T. MacInnis
     Title: Chairman of the Board

THE CITY OF NEW YORK

By:  /s/ Peter J. Powers
     -------------------
     Name: Peter J. Powers
     Title: First Deputy Mayor

For purposes of Article VIII:

SELLCO CORPORATION

By:  /s/ Frank T. MacInnis
     ---------------------
     Name: Frank T. MacInnis
     Title: Chairman of the Board

ASSET ACQUISITION AGREEMENT

between

WATER AUTHORITY OF WESTERN NASSAU COUNTY,

JAMAICA WATER SUPPLY COMPANY

and

EMCOR GROUP, INC.

Dated as of February 9, 1996

                                                                                    Page
                                                                                    ----
ARTICLE I:  ACQUISITION......................................................         2

1.1   Acquisition............................................................         2
1.2   Excluded Assets........................................................         3
1.3   Acquisition Price; Lease Repayment Amount; Adjustments.................         3
1.4   Excluded Liabilities...................................................        16
1.5   Assignment of Contracts and Rights.....................................        17
1.6   Apportionment of Expenses..............................................        18

ARTICLE II:  CLOSING.........................................................        19

2.1   The Closing............................................................        19
2.2   Deliveries by the Water Authority......................................        20
2.3   Deliveries by JWS......................................................        21
2.4   Additional Transactions At or Following the Closing....................        21
2.5   Allocation of the Acquisition Price....................................        22

ARTICLE III:  REPRESENTATIONS AND WARRANTIES.................................        22

3.1.  Representations and Warranties of JWS and the Parent...................        22
      (a)  Due Organization..................................................        22
      (b)  Authorization and Validity of Agreement...........................        23
      (c)  No Conflict; Consents.............................................        24
      (d)  Title to Acquired Assets; Liens and Encumbrances..................        25
      (e)  Agreements and Contracts..........................................        26
      (f)  Legal Proceedings.................................................        26
      (g)  Government Licenses, Permits and Related Approvals................        27
      (h)  Conduct of the Nassau System in Compliance with Regulatory
             Requirements   .................................................        27
      (i)  Environmental Matters.............................................        28
      (j)  Financial Statements..............................................        29
      (k)  Absence of Certain Liabilities and Changes........................        29

3.2   Representations and Warranties of the Water Authority..................        31
      (a)  Due Organization and Power of the Water Authority.................        31
      (b)  Authorization and Validity of Agreement...........................        32
      (c)  No Conflict; Consents.............................................        33
      (d)  Disclosure........................................................        34
      (e)  Financing.........................................................        34

3.3   Survival of Representations and Warranties.............................        35
3.4   Schedules..............................................................        35
3.5   No Implied Representation..............................................        35

ARTICLE IV:  COVENANTS AND TRANSACTIONS PRIOR TO
             CLOSING.........................................................        36

4.1   Access to Information Concerning Properties and Records; Confidentiality       36
4.2   Conduct of the Nassau System Prior to the Closing Date.................        37
4.3   Shareholders' Meeting; Approval........................................        39
4.4   Cooperation............................................................        39
4.5   PSC Approval...........................................................        40
4.6   DEC Approval...........................................................        41
4.7   Condemnation Proceeding................................................        41
4.8   Non-Solicitation.......................................................        44
4.9   Business Plan..........................................................        45
4.1   Retained Employees.....................................................        46
4.1   Compliance with WARN...................................................        46
4.1   Bond Issuance..........................................................        46
4.1   JWS Capital Budget.....................................................        47
4.1   Customer Deposits......................................................        47
4.1   Sublease Option........................................................        47
4.1   Further Actions........................................................        48
4.1   City Agreement.........................................................        48

ARTICLE V:  CONDITIONS PRECEDENT.............................................        49

5.1   Conditions Precedent to Obligations of the Parties.....................        49
      (a)  No Injunction.....................................................        49
      (b)  Regulatory Approvals..............................................        49
      (c)  Condemnation Proceeding...........................................        49

5.2   Conditions Precedent to Obligation of the Water Authority..............        50
      (a)  Accuracy of Representations and Warranties........................        50
      (b)  Performance of Agreement..........................................        50
      (c)  Certificate.......................................................        50
      (d)  Bond Authorization and Sale.......................................        50
      (e)  Cooperation Agreement.............................................        51
      (f)  Burdensome Condition..............................................        51
      (g)  No Action Pending.................................................        51

5.3   Conditions Precedent to the Obligation of JWS and the Parent...........        51
      (a)  Accuracy of Representations and Warranties........................        51
      (b)  Performance of Agreement..........................................        51
      (c)  Certificate.......................................................        52
      (d)  Shareholder Approval..............................................        52
      (e)  Burdensome Condition..............................................        52
      (f)  No Action Pending.................................................        52
      (g)  Performance of City Agreement.....................................        52

ARTICLE VI:  TERMINATION AND ABANDONMENT.....................................        52

6.1  General.................................................................        52
6.2  Procedure Upon Termination..............................................        54
6.3  Survival of Certain Provisions..........................................        55

ARTICLE VII:   POST-CLOSING COVENANTS
               AND TRANSACTIONS..............................................        55

7.1  Access to Books and Records.............................................        55
7.2  Collection of Accounts Receivable.......................................        56
7.3  Dissolution or Merger of JWS............................................        59
7.4  Certain Tax Matters.....................................................        59

ARTICLE VIII:  ASSUMPTION OF CERTAIN OBLIGATIONS
               AND LIABILITIES; INDEMNIFICATION..............................        62

8.1  Assumption and Indemnification..........................................        62
8.2  Procedure...............................................................        65
8.3  Payment.................................................................        66

ARTICLE IX:  MISCELLANEOUS...................................................        67

9.1  Certain Definitions.....................................................        67
9.2  Fees and Expenses.......................................................        68
9.3  Notices.................................................................        69
9.4  Severability............................................................        70
9.5  Entire Agreement........................................................        70
9.6  Binding Effect; Benefit.................................................        71
9.7  Assignability...........................................................        71
9.8  Amendment and Modification; Waiver......................................        71
9.9  Public Announcements....................................................        72
9.1  Section Headings........................................................        72
9.1  Counterparts............................................................        72
9.1  Jurisdiction............................................................        73
9.1  GOVERNING LAW...........................................................        73

WHEREAS, JWS desires to dispose of and the Water Authority desires to acquire certain of the assets related to the Nassau System, all as more fully set forth herein, on the terms and subject to the conditions set forth herein; and

WHEREAS, as a condition and inducement to its willingness to enter into this Agreement and to consummate the transactions contemplated hereby, the Water Authority has required that JWS and the Parent agree to join in certain representations, warranties and indemnities as hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and of the mutual representations, warranties, covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

I ACQUISITION

(a) Cash and cash equivalents (including money on deposit in banks and other institutions) or similar type investments, such as certificates of deposit, Treasury bills and other marketable securities, and commercial paper, stocks, bonds and similar investments received by JWS prior to the Closing Date (as defined in Section 5.1(c));

(c) the assets of JWS listed on Schedule B hereto.

(iii) If the Adjustment Amount as shown on the Conclusive Adjustment Statement is a negative number, then the Acquisition Price will be reduced by such amount, and the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay (x) to the Water Authority from the Escrowed Sum an amount in cash equal to such Adjustment Amount, plus interest accrued thereon in accordance with the Escrow Agreement and (y) to JWS the balance of the Escrowed Sum as determined in accordance with Section 1.3(b)(i), if any, plus accrued interest in accordance with the Escrow Agreement. If the Adjustment Amount is a negative number, the absolute value of which exceeds the amount held by the Escrow Agent, then the entire Escrowed Sum, plus interest accrued thereon in accordance with the Escrow Agreement,

shall be delivered to the Water Authority, and JWS or the Parent will pay to the Water Authority the excess amount. If the Adjustment Amount as shown on the Conclusive Adjustment Statement is a positive number, then the Acquisition Price will be increased by such amount, and the Water Authority shall pay to JWS an amount in cash equal to such Adjustment Amount, and the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay to JWS the balance of the Escrowed Sum as determined in accordance with Section 1.3(b)(i), if any, plus accrued interest in accordance with the Escrow Agreement. All payments to be made pursuant to this Section 1.3(b)(iv) will be made on the second Business Day following the date on which the parties agree to, or the Neutral Auditor delivers, the Conclusive Statement and the Conclusive Adjustment Statement. Any payment required to be made by JWS or the Water Authority (other than payments from the Escrowed Sum) pursuant to this Section 1.3(b)(iv) shall bear interest from and including the Closing Date through the date of payment at a rate of 6.0% per annum, and shall be payable by wire transfer of immediately available funds to an account or accounts designated by the party entitled to receive such funds prior to the date when such payment is due.

(v) If the PSC shall determine that the customers of JWS residing in Nassau County have overpaid JWS by reason of the Rate Increase, then the balance of the Escrowed Sum, to the extent available, shall be applied to refund such overpayments, it being understood that funds shall be released

from the Escrow Account from time to time in order to permit JWS to make refund payments to customers located in Nassau County at such times as are required by order of the PSC. Then, after all amounts determined to be owing by JWS to customers of JWS residing in Nassau County by reason of such PSC order have been paid, the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay to JWS the remaining balance held by the Escrow Agent (plus interest accrued thereon in accordance with the Escrow Agreement). If the amount held by the Escrow Agent is insufficient to pay such amounts, JWS and/or the Parent shall make all additional payments required by the PSC.

the relevant books and records to the extent required to prepare the Reduction Statement and the Net Reduction Statement.

(iii) If the Net Reduction Amount as shown on the Conclusive Net Reduction Statement is a positive number, then the Acquisition Price will be reduced by such amount, and the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay (x) to the Water Authority from the Escrowed Sum an amount in cash equal to such Net Reduction Amount, plus interest accrued thereon in accordance with the Escrow Agreement and (y) to JWS the balance of the Escrowed Sum as determined in accordance with Section 1.3(b)(i), if any, plus accrued interest thereon in accordance with the Escrow Agreement. If the Net Reduction Amount as shown on the Conclusive Net Reduction Statement is a

positive number that exceeds the amount held by the Escrow Agent, then the entire Escrowed Sum plus interest accrued thereon in accordance with the Escrow Agreement shall be delivered to the Water Authority, and JWS or the Parent will pay to the Water Authority the excess amount. If the Net Reduction Amount as shown on the Conclusive Net Reduction Statement is a negative number, then the Acquisition Price will be increased by the absolute value of such amount, and the Water Authority shall pay to JWS an amount in cash equal to the absolute value of the Net Reduction Amount as shown on the Conclusive Net Reduction Statement, and the Escrow Agent shall be authorized, pursuant to the Escrow Agreement, to pay to JWS the balance of the Escrowed Sum as determined in accordance with Section 1.3(b)(i), if any, plus accrued interest thereon in accordance with the Escrow Agreement. All payments to be made pursuant to this
Section 1.3(c)(iv) will be made on the second Business Day following the date on which the Water Authority and JWS agree to, or the Neutral Auditor delivers, the Conclusive Reduction Statement and the Conclusive Net Reduction Statement. Any payment required to be made by JWS or the Water Authority (other than from the Escrowed Sum) pursuant to this Section 1.3(c)(iv) shall bear interest from and including the Closing Date through the date of payment at a rate of 6.0% per annum, and shall be payable by wire transfer of immediately available funds to an account or accounts designated by the party entitled to receive such funds prior to the date when such payment is due.

Acquisition Price payable on the Closing Date shall be increased by the Lease Repurchase Amount as shown on the Preliminary Lease Repurchase Statement.

Without in any way limiting JWS's obligation to seek to obtain all consents and waivers necessary for the acquisition by the Water Authority of any Contracts and licenses included in the Acquired Assets, if such consent is not obtained or if such assignment is not permitted irrespective of consent, JWS shall cooperate with the Water Authority in any reasonable

arrangement designed to provide for the Water Authority the benefit under such Contract or license, as the case may be, including enforcement for the benefit of the Water Authority of any or all rights of JWS against any other person arising out of breach or cancellation by such other person and including, if so requested by the Water Authority, acting as an agent on behalf of the Authority, or as the Water Authority shall otherwise reasonably require; and any transfer or assignment to the Water Authority by JWS of any property or property rights or any Contract or agreement that shall require the consent or approval of any third party, shall be made subject to such consent or approval being obtained.

of business on the day immediately preceding the Closing Date shall be the obligation and paid for by JWS and all Operating Expenses attributable to the period from and after the close of business on the day immediately preceding the Closing Date shall be the obligation of and paid for by the Water Authority. Operating Expenses attributable to any period including and extending beyond the Closing Date shall be prorated as of the close of business immediately preceding the Closing Date between JWS and the Water Authority. In the event that either party collects or receives any income, revenues or receipts to which the other party is entitled pursuant hereto, it shall hold such amounts in trust for the other and promptly pay such amounts to the other party.

ARTICLE II

CLOSING

the parties may agree. The actual time and date of the Closing are herein referred to as the "Closing Date." The parties hereto agree to use their best efforts to cause the Closing Date to occur on or as soon as practicable after the Vesting Date consistent with the provisions of this Agreement.

(a) the Acquisition Price, adjusted as provided in Sections 1.3(b) and
(c) and Section 1.3(d), with statutory interest thereon at a rate of 6% per annum from and including the Vesting Date to but not including the Closing Date, less the Escrowed Sum, by wire transfer of immediately available funds to an account or accounts of JWS designated by JWS by notice given to the Water Authority at least two Business Days prior to the Closing Date; and

(b) the executed Escrow Agreement in substantially the form attached hereto as Exhibit C; and

(c) such other instruments or documents, in form and substance reasonably acceptable to JWS, as may be necessary to effect the Closing.

the provisions relating to condemnation in Section 4.7, JWS shall deliver to the Water Authority the following:

(a) assignments, if any required, in form and substance reasonably acceptable to the Water Authority, assigning to the Water Authority all Contracts (as defined in Section 9.1) included in the Acquired Assets; and

(b) such other instruments or documents, including but not limited to proof of payment of applicable New York Real Property Transfer Gains Tax, in form and substance reasonably acceptable to the Water Authority, as may be necessary to effect the Closing.

agreement setting forth the manner in which the Acquisition Price, as adjusted, is allocated among the Acquired Assets, it being expressly understood that this
Section 2.5 shall not create any additional financial obligations on the part of any party hereto. No party hereto shall take any position for federal or state income tax purposes which is inconsistent with such allocation, unless required to do so under applicable law. The parties hereto acknowledge that the Water Authority will not agree to any allocation of the Acquisition Price, as adjusted, which under applicable federal tax laws and regulations, would restrict the average maturity of the tax exempt bonds to be issued by the Water Authority to finance the Asset Acquisition to less than thirty years.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

(a) Due Organization. Each of JWS and the Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the State of New York (in the case of JWS) and Delaware (in the case of the Parent) and each has full corporate power and authority to own

all of its properties and assets and to carry on its business as it is now being conducted.

regardless of whether such enforceability is considered in a proceeding in equity or at law.

(iv) above for any consent, authorization, approval, filing or notice that would not, if not given or made, or any violation, conflict, breach, termination, default or acceleration which does not, and is not likely to, either impair the ability of JWS and the Parent to consummate the transactions contemplated hereby or have a Material Adverse Effect (as defined below).

contemplated by this Agreement. Except as described on Schedule 3.1(f) hereto, there is no action, proceeding or, to the best knowledge of JWS and the Parent, any governmental investigation currently pending against JWS or the Parent which could reasonably be expected to have a Material Adverse Effect. JWS is not in violation of any term of any judgment, decree, injunction or order entered by any court of competent jurisdiction and outstanding against it, which violation would have a Material Adverse Effect.

than those the absence of which could not reasonably be expected to have a Material Adverse Effect.

will be arrived at using a methodology consistent with JWS's past practice of arriving at such allocations for cost of service studies with the PSC since June, 1986.

of employees of JWS, but not including increases granted to individual employees for merit, length of services, change in position or responsibility or other reasons applicable to specific employees and not generally to a class or group) in any rate or rates of salaries or compensation to directors, officers or employees or agents or, since September 30, 1995, any specific increase in the salary or compensation to any officer, agent or employee whose total salary and compensation after such increase would be at an annual rate in excess of $50,000; (v) any damage, destruction or loss to any asset or property which would have a Material Adverse Effect, whether or not covered by insurance; (vi) establishment of any new Plan or material modification or amendment or provision for material increases in any existing Plans, except pursuant to the Effects Bargaining Agreement, or in accordance with the terms of such Plans in effect prior to the date hereof (which modifications or increases, if any, are disclosed in Schedule 3.1(k)), or written interpretation or announcement by JWS under any Plan which would materially increase the expense of maintaining such Plan over the level of expense thereof for the fiscal year ended December 31, 1995; (vii) any claim, action, suit or proceeding commenced or, to the best knowledge of JWS, threatened against JWS, which, if adversely determined, would have a Material Adverse Effect; (viii) any grant by JWS of recognition to any labor organization, other than effects bargaining with representatives of the Union; and (ix) any occurrence, event or condition (including, without

power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereunder, including the acquisition by condemnation, and the maintenance and operation, of all or part of the Nassau System and the Business. The execution, delivery and performance by the Water Authority of this Agreement and the consummation by it of the transactions contemplated hereby have been duly and validly authorized by adoption of a resolution at a public meeting of the Water Authority, and no other action on the part of the Water Authority, other than (i) the authorization and sale of one or more series of bonds in the aggregate amount of not less than the sum of (A) the Acquisition Price plus (B) the Lease Repurchase Amount plus (C) the total costs of the Water Authority incurred in issuing such bonds plus (D) the total estimated expenses of the Water Authority to be incurred in connection with the transactions contemplated by this Agreement plus (E) amounts necessary for reasonable and customary working capital and reserve funds, and (ii) the adoption of a resolution approving the acquisition of the assets by condemnation after public hearing, is necessary to authorize the execution, delivery and performance by the Water Authority of this Agreement and the consummation by it of the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Water Authority and, assuming the due authorization, execution and delivery hereof by JWS and the Parent, is a valid and legally binding obligation of the Water Authority, enforceable against

the Water Authority in accordance with its terms, except to the extent that enforceability may be limited by a bankruptcy filing after the date hereof or by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors' rights generally and by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law.

provision of the Act; and (iv) will not require any consent, approval or notice under, and will not conflict with, or result in the breach or termination of, or constitute a default under, or result in the acceleration of the performance by the Water Authority under, any indenture, mortgage, deed of trust, lease, license, franchise, contract, agreement or other instrument to which the Water Authority is a party or by which it or any of its assets is bound or encumbered.

contain any condition nor are subject to any consent or approval which the Water Authority does not reasonably expect to obtain prior to the Closing Date.

been provided to the Water Authority are not and shall not be deemed to be representations or warranties of JWS or the Parent. The Water Authority acknowledges that there are uncertainties inherent in attempting to make such estimates, projections and other predictions, that the Water Authority is familiar with such uncertainties, that the Water Authority is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections and other predictions so furnished to it, and that the Water Authority shall have no claim against anyone with respect thereto.

ARTICLE IV

COVENANTS AND TRANSACTIONS PRIOR TO CLOSING

(a) the Nassau System shall be conducted only in the ordinary course consistent with past practice;

(b) JWS will not (i) dispose of or encumber, or agree to dispose of or encumber, any interest in the Acquired Assets other than (A) in the ordinary course of business, consistent with past practice and (B) pursuant to after- acquired property clauses of existing indentures or mortgages (which shall be cleared as contemplated by Section 3.1(d); (ii) acquire, or agree to acquire, any asset material to the Nassau System, taken as a whole, other than in the ordinary course of business, consistent with past practice; (iii) cancel any debts or waive any claims or rights, other than in the ordinary course of business, consistent with past practice; (iv) make any capital expenditure or commitment, other than (A) in the ordinary course of business, consistent with past practice, (B) pursuant to existing commitments or (C) which is not material to the Nassau System, taken as a whole, and in any event, without the prior written approval of the Water Authority (which approval will not be unreasonably withheld or delayed), will not make any capital expenditure, except in the case of emergency repairs, that (x) individually is in excess of $100,000, (y) in the aggregate with all other capital expenditures subject to this clause (C) exceeds $400,000 or (z) in the aggregate with all other similar capital expenditures subject to this clause (C) would cause total capital expenditures for categories 391, 392 and 393 on the JWS 1996 Construction Plan by PSC Account to exceed the total provided therefor for Nassau County for 1996; and

(c) JWS shall promptly notify the Water Authority in writing of, and furnish to the Water Authority information reasonably requested by it with respect to, the occurrence of any event or the existence of any state of facts that would result in any of JWS's representations and warranties not being true;

(e) JWS shall use all reasonable effort to maintain in full force and effect all existing insurance and renewals thereof, and will give all notices and present all claims under all policies of insurance in a due and timely fashion;

(f) JWS shall maintain all books, accounts and records in the usual, regular and ordinary manner, consistent with past practice, and make no material change in the accounting methods or practices with respect to the Business or the Acquired Assets, unless mandated by law, regulation or the PSC, in which case JWS will provide notice of such change to the Water Authority;

(g) JWS shall not alter in any material respect its practices with respect to collection of Accounts Receivable and shall not sell, discount or dispose of Accounts Receivable (except that JWS may take appropriate action to increase its efforts to collect Accounts Receivable);

(h) JWS, prior to undertaking any negotiation or discussion with any labor union as to recognition, labor contracts or other matters of like import relating to the Business (other than effects bargaining with representatives of the Union), will first notify the Water Authority and furnish to the Water Authority such information relating thereto as the Water Authority may reasonably request. In no event shall JWS enter into any agreement or understanding with any union that would have a material adverse economic impact on the Business, without the written consent of the Water Authority;

(i) JWS will not engage in any transaction with any of its Affiliates other than as contemplated by this Agreement or in the ordinary course of business on an arm's-length basis;

(j) JWS shall deliver to the Water Authority copies of its severance policy and the Effects Bargaining Agreement as soon as practicable after each document is adopted in final form.

(a) providing the Water Authority and the Water Authority's representatives access to JWS's sites, facilities and installations;

(b) providing the Water Authority and the Water Authority's representatives access to accounting and billing information; and

The provisions of this Section 4.4 shall also extend to the underwriters and their counsel in connection with the financing of the Asset Acquisition.

pursuant to Section 4.7(b), or if filed shall be discontinued, and the following additional deliveries shall be made pursuant to Section 2.3 hereof:

(i) one or more bargain and sale deeds sufficient to convey title to those Acquired Assets consisting of real property, free of all Liens (subject to Permitted Exceptions), in customary form with covenant only against grantor's acts, duly executed and acknowledged by JWS and in proper form for recording;

(ii) one or more bills of sale sufficient to convey title to those Acquired Assets consisting of personal property, with the following warranties:

(A) that JWS is the sole and absolute owner of the property described in said bill of sale and has full right to transfer same;

(B) that JWS is transferring title thereto free and clear of any liens, mortgages, debts or other encumbrances of whatsoever kind or nature;

(C) that there are no judgments existing against JWS in any court, nor are there any replevins, attachments or executions related to the Acquired Assets issued against JWS now in force; and

(D) that JWS has sufficient assets to pay all of its creditors;

(i) an affidavit to the effect that JWS is not a "foreign person," as defined in Section 1445(f)(3) of the Internal Revenue Code;

(ii) information sufficient to permit the Water Authority to complete Internal Revenue Service Form 1099 with respect to the transfer of the Acquired Assets;

(iv) such additional instruments or documents that are customary and necessary to perfect a conveyance of the Acquired Assets, provided, that no such additional instruments or documents shall impose any liability or cost upon JWS or the

Parent that is a material addition to the liabilities and costs imposed on JWS and the Parent herein; and

(v) with respect to all well plant sites listed on Schedule 3.1(g)(i) hereto, JWS shall give and the Water Authority shall accept such title as any title insurance company which is a member of the New York Board of Title Underwriters will be willing to approve and insure in accordance with their standard form of title policy, which title policy may be subject to Permitted Exceptions.

prohibited from hiring any employee of JWS absent any such solicitation by the Water Authority, and that this Section 4.8 shall not apply in the case of a subsequent attempt by the Water Authority to acquire the property of JWS. The Water Authority agrees that any remedy at law for any breach by it of this
Section 4.8 would be inadequate, and JWS would be entitled to injunctive relief in such a case. If it is ever held that the restriction placed on the Water Authority by this Section 4.8 is too onerous, the Water Authority agrees that any court of competent jurisdiction may impose lesser restrictions to the maximum extent permitted by law, and the Water Authority hereby consents and agrees that such scope may be judicially modified accordingly in any proceeding brought to enforce such restriction.

not less than the sum of (a) the Acquisition Price, plus (b) the Lease Repurchase Amount, plus (c) the total costs of the Water Authority incurred in issuing such bonds, plus (d) the total estimated expenses of the Water Authority to be incurred in connection with the transactions contemplated by this Agreement, plus (e) amounts necessary for reasonable and customary working capital and reserve funds.

(a) At the Closing, JWS shall obtain, and deliver to the Water Authority, a release from each of the lessors under the Meter Leases of the Lien with respect thereto.

customer's water service in the full amount of the balance of any such deposit.

or the consummation of the transactions contemplated hereby; and (iv) to furnish to each other such information and assistance as is reasonably requested in connection with the foregoing.

ARTICLE II

CONDITIONS PRECEDENT

.1 Conditions Precedent to Obligations of the Parties Parties;. The respective obligations of the parties hereto are subject to the satisfaction (or waiver by each of JWS and the Parent and the Water Authority) at or prior to the Closing of each of the following conditions:

any court or by any governmental or regulatory body nor any statute, rule, regulation or executive order promulgated or enacted by any governmental authority which restrains, enjoins or otherwise prohibits the transactions contemplated hereby shall be in effect.

and complied in all material respects with all obligations and agreements, and complied in all material respects with all covenants and conditions, contained in this Agreement to be performed or complied with by it prior to or on the Closing Date.

court which, in connection with this Agreement or any of the transactions contemplated hereby, seeks a judgment which if awarded would materially adversely affect the economic or business benefits to the Water Authority of the transactions contemplated by this Agreement.

(d) Shareholder Approval. The Asset Acquisition shall have been approved by the affirmative vote of the holders of the outstanding Common Shares entitled to vote at annual or special meetings of shareholders of JWS.

with the grant of a regulatory approval or permit, imposes any condition or restriction upon the Parent or JWS which would materially adversely affect the economic or business benefits, to the Parent or JWS, of the transactions contemplated by this Agreement or (ii) in connection with the grant of a regulatory approval or permit or otherwise, would be reasonably likely to result in a material adverse effect with respect to JWS.

ARTICLE III

TERMINATION AND ABANDONMENT

(a) by mutual written consent of the Water Authority, JWS and the Parent; or

commencement of such action, to have such order, decree or ruling reversed or vacated, or such action dismissed; or

(c) by either JWS, the Parent or the Water Authority upon written notice given to the other party in the event of a breach or default in the performance by such other party of any representation, warranty, covenant or agreement contained in this Agreement, which breach or default (i) is, either individually or in the aggregate, material in the context of the transactions contemplated hereby, and (ii) has not been, or cannot be, cured, (A) in the case of a representation or warranty contained in this Agreement, within 60 days after written notice of such breach or default has been given by the terminating party to the breaching party and describing such breach or default in reasonable detail, or (B) in the case of a covenant or agreement contained in this Agreement, within 30 days after written notice of such breach or default has been given by the terminating party to the breaching party and describing such breach or default in reasonable detail; or

(d) by either JWS, the Parent or the Water Authority, if any court of competent jurisdiction or any governmental or regulatory body with jurisdiction over the subject hereof shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated hereby and such order, decree, ruling or other action shall have become final and nonappealable; or

(e) by JWS or the Parent, upon the occurrence of any one of the following:

(i) if, on or prior to February 28, 1996, the Water Authority shall not have commenced the Condemnation Proceeding by filing a petition in the Supreme Court of the State of New York, County of Nassau, unless JWS shall have exercised its right pursuant to the last sentence of Section 7.2(b);

(ii) if, on or prior to February 28, 1996, the Water Authority shall not have (a) advertised, or taken other appropriate action, for the submission of bids or proposals by third parties for a contract providing for the operation of the Nassau System, or delivered to JWS a notice indicating that the Water Authority will not utilize a third party for the operation of the Nassau System; (b) furnished to JWS the Bid or Proposal Parameters unless the Water Authority shall have delivered to JWS a notice indicating that the Water Authority will not utilize a third party for the operation of the Nassau System and

(c) furnished to JWS the Business Plan, all in accordance with Section 4.9 hereof;

(iii) if, on or prior to April 30, 1996, the Water Authority shall not have executed a contract with a third party with respect to the operation of the Nassau System or established a final Business Plan for the operation of the Nassau System itself; or

(iv) if, at any time prior to the Vesting Date, any party to the City Agreement terminates the City Agreement in accordance with its terms.

ARTICLE IV

POST-CLOSING COVENANTS AND TRANSACTIONS

(a) The Water Authority shall, on the fifth Business Day of each month up to and including the eleventh month following the month in which the Closing Date occurs, deliver to JWS a sum in cash equal to the sum of the Collected Receivables collected by the Water Authority on or prior to the last calendar day of the immediately preceding month. All cash received by the Water Authority in respect of the Accounts Receivable which has not been remitted to JWS pursuant to this Section 7.2(c) shall be remitted to JWS promptly after its receipt by the Water Authority. Any payment made pursuant to this Section 7.2(c) by the Water Authority to JWS shall be made in United States currency.
(b) The amount of Collected Receivables collected by the Water Authority on or prior to the last calendar day of each month up to and including the tenth month following the month in which the Closing Date occurs shall be certified by the Water Authority to JWS as of the last calendar day of each such month on or prior to the fifth calendar day of the following month. JWS shall have the right to review the basis for each

certification by the Water Authority pursuant to this Section 7.2(c) during the thirty-day period immediately following the receipt of such certificate. If, at the end of such thirty-day period, JWS shall object to any such certification or to the amount of the Collected Receivables reported by the Water Authority under this Section 7.2, stating the basis for such objection, the Water Authority and JWS shall use their best efforts to resolve each such objection. If the parties have not resolved any such objection prior to the sixty-day period immediately following the last payment date provided for in Section 7.2(b), the issue shall be determined by reference to an independent accounting firm of national reputation mutually acceptable to the parties hereto, whose decision (which shall be made within six days) shall be binding upon the parties hereto. If the parties are at any time unable to agree on such accounting firm, then each party will have the right to request the American Arbitration Association to appoint such accounting firm. Each party shall bear one-half the costs of said accountants' fees and disbursements. Any additional amount owing as a result of such accountants' determination shall be paid within five business days after such determination.
(c) For purposes of determining the amount of Collected Receivables for all customers of JWS located in Nassau County, (i) any funds collected from a particular account debtor, or from its successors or assigns, during the period from the Closing Date through the last calendar day of the tenth month

following the month in which the Closing Date occurs shall be applied first to that portion of the outstanding Accounts Receivable of such debtor and shall be deemed collected for the benefit of JWS, until all Accounts Receivable with respect to such account debtor have been collected, and (ii) any other discharge of an Account Receivable of such account debtor by the Water Authority without JWS's consent shall be deemed to be a collection of such Account Receivable in the amount discharged. The Water Authority shall not be obligated to apply any amounts received to any Account Receivable representing amounts owed by a debtor under a deferred payment arrangement with JWS unless and until, and then only to the extent that, at the time of collection from such debtor amounts are due and owing to JWS from such debtor in accordance with the terms of such arrangement. The Water Authority agrees that it shall use all reasonable efforts in accordance with its normal collection procedures (without recourse to commencing or prosecuting any litigation) to collect the full amount of all Accounts Receivable. No credit shall be applied by or on behalf of the Water Authority to any Accounts Receivable due to JWS without the prior written consent of JWS.
(d) For purposes of collecting the portion of Accounts Receivable representing revenues from customers earned by JWS but unbilled due to the Closing Date occurring prior to the end of the billing cycle applicable to such customers, the Water Authority shall, for each such customer, calculate the

amount of Accounts Receivable owed to JWS by multiplying (x) the fraction the numerator of which shall be the number of days accrued in such customer's billing cycle (up to and including the day immediately prior to the Closing Date) and the denominator of which shall be the total number of days in such customer's billing cycle, times (y) the total amount due under such customer's bill at the end of the relevant billing cycle. The Water Authority shall distribute bills to each such customer on behalf of JWS in the ordinary course and shall collect the amounts due on all such bills on behalf of JWS in accordance with the provisions of this Section 7.2.

(a) Notwithstanding the provisions of Section 7.3(a), it is agreed and understood that all obligations of JWS hereunder are, whether or not expressly so stated, joint and several obligations of JWS and the Parent. It is also agreed and understood that JWS and the Parent will make all payments to former customers of JWS that are required pursuant to the PSC Settlement Agreement.

notice to JWS or the Parent in writing within 30 days after its receipt of any correspondence, notice, or other communication from a taxing authority or any representative thereof of any pending or threatened tax audits, or any pending or threatened judicial or administrative proceeding that involves taxes, for taxable periods for which JWS may have a liability under this Agreement, including tax accounting changes that may create a future liability, and furnish JWS or the Parent with copies of all correspondence received from any taxing authority in connection with any audit or information request with respect to any such taxable period for which JWS or the Parent may be liable to pay any taxes under this Agreement.

convenient basis to provide additional information or explanation of any material provided hereunder or to testify at proceedings relating to such Tax Claim. In no event shall the Water Authority settle or otherwise compromise any Tax Claim without JWS's or the Parent's prior written consent.
(b) JWS shall be entitled to any refunds or credits of taxes attributable to JWS arising in any tax periods prior to the Closing Date. The Water Authority shall promptly notify and forward to JWS the amounts of any refunds, credits or benefits due to JWS hereunder, less any reasonable expenses related thereto incurred by the Water Authority, within 10 Business Days after receipt thereof.
(c) All transfer, documentary, sales, use, registration and other such taxes (including, but not limited to, all applicable real estate transfer or gains taxes) and fees (including any penalties, interest and addition to such taxes), if any, incurred in connection with the transactions contemplated hereby shall be the obligation of JWS and shall be paid at or before the Closing.
(d) At or prior to the Closing, JWS shall pay all installments on real property taxes that are due and payable prior to the Closing Date on the real property included in the Acquired Assets. JWS shall not be responsible for the payment of any installments on real property taxes that are due and payable after the Closing Date.

ARTICLE V

ASSUMPTION OF CERTAIN OBLIGATIONS AND LIABILITIES; INDEMNIFICATION

that as a condition precedent to any indemnification pursuant to this clause (iii), the Water Authority shall have received written notice of a claim from the JWS Indemnified Party pursuant to Section 8.2 within the applicable statute of limitations period, or, with respect to Liabilities relating to any misrepresentation, breach or inaccuracy of any representation or warranty, within the period specified in Section 3.3 hereof.
(b) JWS, the Parent and SellCo Corporation, a Delaware corporation

(iv) any Environmental Liabilities relating to the Business or the Acquired Assets, except for those described on Schedules 3.1(i)(1) and (2);

in its sole discretion and shall not thereby waive any right to indemnity therefor pursuant to this Agreement. The indemnifying party shall not, except with the consent of the Indemnified Party, enter into any settlement that does not include as an unconditional term thereof the giving by the Person or Persons asserting such claim to all Indemnified Parties an unconditional release from all liability with respect to such claim or consent to entry of any judgment. Notwithstanding the foregoing, following the Closing, each Indemnified Party will afford to an indemnifying party and its counsel, accountants and other authorized representatives reasonable access during normal business hours to relevant properties, books and records (and permit the indemnifying party and its counsel, accountants and other authorized representatives to make copies of such books and records at their own expense), to the extent that such access may be reasonably required to facilitate the investigation, litigation and final disposition of any claim which may have been or may be made against any Indemnified Party relating to the Nassau System or the Acquired Assets or any of the transactions contemplated by this Agreement. The Water Authority Indemnified Parties shall hold any such confidential information in confidence on the same terms and subject to the same conditions as set forth in Section 4.1(b) hereof, and the JWS Indemnified Parties shall hold any such confidential information in confidence on the same terms and subject to the same conditions applicable to the Water Authority in Section 4.1(b) hereof.

.3 Payment. On each occasion that an Indemnified Party shall be entitled to indemnification or reimbursement under this Article VI, the indemnifying party shall, at each such time, promptly pay the amount of such indemnification or reimbursement. If the Indemnified Party shall be entitled to indemnification under this Article VI and the indemnifying party shall not elect to control any legal proceeding in connection therewith, the indemnifying party shall pay upon request from time to time to the Indemnified Party an amount equal to the Indemnified Party's costs and expenses arising as a result of such proceeding which have not been previously reimbursed.

ARTICLE II

MISCELLANEOUS

hereunder, and the acknowledgement of Merrill Lynch & Co. relating to JWS's and the Parent's non-responsibility for any fees of Merrill Lynch & Co. in connection with this Agreement or the transactions contemplated hereunder.

(a) if to JWS, to it at:

Jamaica Water Supply Company 410 Lakeville Road Lake Success, New York 11042 Attention: Edward J. Haye Vice President, General Counsel and Corporate Secretary

with a copy to:

Simpson Thacher & Bartlett 425 Lexington Avenue, 28th Floor New York, New York 10017-3909 Attention: Vincent Pagano, Jr., Esq.

(a) if to the Parent or to SellCo, to it at:

EMCOR Group, Inc. 101 Merritt Seven, 7th Floor Norwalk, CT 06851 Attention: Sheldon I. Cammaker Executive Vice President and General Counsel

with a copy to:

Simpson Thacher & Bartlett
425 Lexington Avenue, 28th Floor
New York, New York 10017-3909
Attention: Vincent Pagano, Jr., Esq.

(a) if to the Water Authority, to it at:

Water Authority of Western Nassau County 99 Tulip Avenue, Suite 305 Floral Park, New York 11001 Attention: Frank A. Tauches, Jr., Esq.

Chairman

with a copy to:

Dominick M. Minerva, Esq.
107 South Central Avenue
Valley Stream, New York 11580

or to such other persons or addresses as any party shall specify as to itself by notice in writing to the other parties.

this Agreement, including without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representations, warranties, covenants, or agreements contained herein, and in any documents delivered or to be delivered pursuant to this Agreement and in connection with the Closing hereunder. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other or subsequent breach. The parties hereby authorize their respective attorneys to agree in writing to any changes in dates and time periods provided for in this Agreement

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

JAMAICA WATER SUPPLY COMPANY

    /s/ Frank T. MacInnis
By: ____________________________
    Name: Frank T. MacInnis
    Title: President

EMCOR GROUP, INC.

    /s/ Frank T. MacInnis
By: ____________________________
    Name: Frank T. MacInnis
    Title: Chairman of the Board, President
           and Chief Executive Officer.

WATER AUTHORITY OF WESTERN NASSAU COUNTY

    /s/ Frank A. Tauches, Jr.
By: ___________________________
    Name:  Frank A. Tauches, Jr.
    Title: Chairman

APPROVED AS TO FORM FOR AND ON BEHALF OF THE WATER
AUTHORITY OF WESTERN NASSAU COUNTY:

    /s/ Dominick M. Minerva, Esq.
By: _____________________________
    Name: Dominick M. Minerva, Esq.

FOR PURPOSES OF SECTION 8.1 HEREOF:

SELLCO CORPORATION

    /s/ Frank T. MacInnis
By: ______________________________
    Name: Frank T. MacInnis

    Title: President

By: /s/ Frank T. MacInnis
    -----------------------
    Frank T. MacInnis
    Chairman, President and
    Chief Executive Officer

    /s/ Frank T. MacInnis
By: _______________________
Name:  Frank T. MacInnis
Title: Chairman of the Board and President

    /s/ Frank T. MacInnis
By: _______________________
Name:  Frank T. MacInnis
Title: President

    /s/ Robert L. Reynolds
By: _______________________
Name:   Robert L. Reynolds

Title:  Vice President

                                          YEARS ENDED DECEMBER 31,
                                             1995         1994
                                          ----------   ----------
              PRIMARY
- ----------------------------------------

Net (loss) income                         $  (10,853)  $  302,431
                                          ==========   ==========

Weighted average number of common
 shares outstanding                        9,424,201    9,424,083
Add - common equivalent shares
 (determined using the "treasury stock"
 method) representing shares issuable
 upon exercise of stock options              156,217           --
                                          ----------   ----------

Weighted average number of shares used
 in calculation of primary income per
 common share and common equivalent share  9,580,418    9,424,083
                                          ==========   ==========

Primary net (loss) income per common
 share and common equivalent share        $    (1.13)  $    32.09
                                          ==========   ==========

            FULLY DILUTED
- ----------------------------------------

Net (loss) income for primary income
 per common share and comon equivalent
 share                                    $  (10,853)  $  302,431
                                          ==========   ==========

Weighted average number of shares used
 in calculating primary income per
 common share and common equivalent
 share                                     9,580,418    9,424,083

Shares issuable upon exercise of stock
 options included in primary
 calculation above                          (156,217)          --
Shares issuable upon exercise of stock
 options based on year-end market price      182,657           --
                                          ----------   ----------

Weighted average number of shares used
 in calculation of fully diluted (loss)
 income per common share and
 common equivalent share                   9,606,858    9,424,083
                                          ==========   ==========

Fully diluted net (loss) income per
 common share and common equivalent
 share                                    $    (1.13)  $    32.09
                                          ==========   ==========