Members of an employee-owned company.

NEW RESIDENTIAL CONSTRUCTION

While this site is primarily designed for the building trade, homeowners and prospective homeowners can gain some insights into the complex process of building a quality home. Therefore, there are no passwords or access codes required for any part of this section of our Web site.

1. Client Profile - Section 1
2. Products - Section 2
3. Partnering Relationships - Section 3
4. Electronic Capabilities - Section 4
5. Design and Performance Standards - Section 5
6. Design and Implementation Process - Section 6
7. Business Direction - Section 7
8. Environmental Issues - Section 8
9. Points of Difference/Customer Satisfaction - Section 9

Contact Person:
If you are a builder and wish to contact Tempo Mechanical about our construction offering, including quotations, please contact Tom Murrell, Senior Vice President, at (972) 579-2016. He will quickly arrange to have a qualified representative meet with you

CLIENT PROFILE - SECTION #1
Tempo separates residential construction into two related broadly different categories.

Production Home Builders
Remains our largest single business unit still providing the majority of our construction business comprising approximately 1100 homes and 1600 systems in 2009.

Custom/High Performance Home Builders
Increasingly custom homes and specifically high performance (low energy usage) homes, have become a major component of our construction operation. We are able to effectively leverage our buying power with our equipment and materials vendor partners enabling Tempo to provide a truly superior mechanical systems design and installation at a competitive price.

Tempo Mechanical's industry leadership in the areas of technology, engineering and organization provides the flexibility to serve clients that are within the same industry but with vastly different needs.

A typical profile of Tempo client is reflected below:

• Production builders currently building 50 or more homes per year in the DFW area.
• A custom builder building 4 plus homes per year and looking to have your HVAC professionally designed and installed. Specifically, a builder that needs a HVAC contractor that can communicate with their clients in an articulate manner with regards to system efficiency and building science principles.

• Knowledge of mechanical and energy codes assuring the inspection process does not slow down production. Proactive study of code initiatives allowing Tempo to keep builders informed of changes in time to adapt their processes to accommodate them.
• In depth understanding of "above code" building programs such as Green Built Texas, LEED-H and ENERGY STAR. Tempo is able to advise builders of the HVAC requirements and how best to meet these advanced standards.
• Understanding that strategic partnering with vendor/suppliers is the best way to stay competitive in the future.
• Understanding of the value of a formal quality program and is able to measure quality.
• Understanding of the importance of contractor's ability to perform warranty service that exceeds the expectations of their homeowners.
• Accurate, quick and consistent pricing.
• Recognizes the value of construction personnel that arrive on time and finish their work on time.
• Understands the value of consistency of design and installation of systems.
• Wants a true independent, aggressive and innovative "Partner" in the highly competitive Residential New Construction market.
• Desires accurate and timely billing.

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PRODUCTS - SECTION #2
In addition to the basic products required to properly heat and cool a house, Tempo Mechanical Services, Inc. offers a complete array of accessory products for your homeowner's added comfort and efficiency. These products can be purchased at the time of construction and included in the mortgage package, or later through our Service organization.

• All major brands of HVAC (Heating, Ventilating and Air Conditioning) are available to Tempo Mechanical at competitive prices.
• "Environmentally Friendly" RNC products utilizing the EPA certified refrigerant 410A (contains no chlorine that attacks the ozone layer) are now standard in a competitive product line as well as in high performance equipment offerings.
• Zoning systems for an enhanced degree of temperature control in a specific area.
• Enhanced filtration and electronic and media type air cleaners - up to 99% efficient.
• Fresh air devices both with and without air exchange designed to keep your home comfortable
• Ultraviolet anti-fungal, anti-viral air treatment systems
• Steam humidifiers to add moisture to the indoor air
• Promotes easier breathing in dry weather
• Protects furniture and finishes from excessive drying
• Advanced programmable thermostats including "web enabled" and wireless products to provide comfort and energy efficiency by syncing the HVAC system operation with homeowner's daily schedule.
• Extended warranties to provide protection for the equipment and labor cost incurred beyond the one-year requirement.
• Available in both "parts only" or parts and labor agreements
• Energy Saving Agreements (ESAs) that provide for maintenance to keep systems at a maximum performance level and discounts on needed repairs or replacement.

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PARTNERING RELATIONSHIPS - SECTION #3
Tempo Mechanical understands the benefits of and is committed to fulfilling the obligations required of partnering relationships. Since inception, Tempo has demonstrated this commitment with clients, vendor/suppliers and employees.

• Tempo Mechanical's ability to retain clients is related directly to our genuine belief that what helps our clients grow and prosper will eventually benefit Tempo Mechanical.
• Our long-range view of client relationships allows us to make the infrastructure investments required to support such relationships. It is clear to us that our "continuous improvement process" must extend to our clients.

• Relationships with our suppliers have been longstanding. Currently, Tempo uses a limited number of suppliers for both our equipment and materials needs. By keeping the number of suppliers small we feel that we can have both the benefits of competitive bidding to be a Tempo vendor and provide a vendor partner with sufficient long term volume justify the level of service we require at that competitive price.
• We encourage our vendor Partners to be proactive in bringing new and innovative products and techniques to our attention for evaluation.

• We are an Employee Owned (ESOP) Company
• Many of our Partners have over 20 years of service with the company.
• Tempo Mechanical has recruitment and retention plans based on principals of "Servant Leadership".
• Tempo believes our employee Partners should:
• MASTER the job before you
• Be a STUDENT of the position above, and
• Be a TEACHER of the position below
• Our goal for each Partner is a minimum of 40 hours of formal training per year.
• Benefit package which includes:
  • ESOP and 401(k) Participation
  • Education Support
  • Training Benefits
  • Medical, Dental and Vision Care Programs
  • Performance Based Compensation
  • Personal Time Off
  • Uniforms are supplied and laundered
  • Tool purchasing programs
• Full disclosure of company financial performance is conveyed to all Partners on a regular basis Every Partner is reviewed individually on an annual basis.
• Several company-wide social events are scheduled each year.

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ELECTRONIC CAPABILITIES SECTION #4
Tempo Mechanical Services, Inc. is setting the standards of electronic information. It is clear to us that the business of the future will consist of the leaders in technology and we have and will continue to make large investments in this area. Currently we excel in:

• Home Architectural Plans received via e-mail from homebuilders
• ACCA Manual "J" conforming, room-by-room heating and cooling loads on every plan
• AutoCAD HVAC Plans and Engineering
• AutoCAD material take-off generated directly from our drawings
• Integrated job cost and dispatching systems
• Scheduling database and job tracking
• Weekly backlog tracking
• Performance trend lines
• Customer Satisfaction Surveys and tracking
• Electronic Data Interchange with vendors
• Purchase order and invoice reconciliation
• Just in Time Inventory
• Cellular communication with Alpha Numeric Paging
• GPS" Vehicle tracking
• Electronic wireless dispatching

• Quickly produce the documents required to obtain a building permit (ACCA Manuals D, J, S & T)
• Exceptional customer service to the homebuilder and homeowner
• Predictable scheduling
• First class HVAC drawings and installation
• Cost savings generated by inventory efficiencies
• The ability to adjust manpower at peak seasons
• Ease of information transfer to and from customers

• AutoCAD Drawings
• Field generated revisions
• HVAC load calculations
• Accurate material take-offs
• Pricing
• Invoicing
• Scheduling
• Information handling

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DESIGN AND PERFORMANCE STANDARDS SECTION #5
Tempo Mechanical Services utilizes established proven design standards that are endorsed by the Independent Engineering Association, commonly referred to with the acronym ASHRAE or the American Society of Heating, Refrigeration and Air Conditioning Engineers. These standards govern the installation methods; acceptable materials, load calculation methodology and the appropriate testing procedures to make sure these standards are met.

1. Air Diffusion Council - Sets standards for ductwork construction and installation.
2. ACCA (Air Conditioning Contractors Association) - compiles engineering data into design manuals for use in Residential HVAC Construction. (Manuals D, J, S & T)
3. FHA/VA
4. ENERGY STAR, LEED-H, Green Build Texas
5. Various state, federal and local codes (including SB-5) and amendments

Performance Specifications
Tempo Mechanical is fully capable of designing and installing to your specified heating and cooling performance standard. Homeowners' needs and wants with regards to desired room temperature are diverse but can be accommodated if known at the design stage. Tempo can also offer advice with regards to operating costs and efficiencies as these standards fluctuate up or down.

The vast majority of production homes are governed by the standard stated below. In accordance with the Residential Warranty Corporation™ Limited Warranty Program and current NAHB Guidelines, Tempo Mechanical warrants the performance of your HVAC (Heating, Ventilating and Air Conditioning) system to maintain an average room temperature within 4°F of the specified cooling thermostat setting of 78°F and 5° or 6°F of the specified heating standard of 70°F. This temperature difference may be more pronounced in "open" style 2-story houses due to the natural convection (rising) of warm air. The standard procedure for measuring the air temperature is to place the thermometer at the center of the room 5'0" above the floor level. The base heating design temperature criteria is 70° F indoors @ 22° F outdoor air temperature. In the cooling mode the ASHRAE design criteria is 75°F indoors @ 100° F outdoor air temperature. These standards, on which your system is sized, assume all windows are draped and during times of extreme outside air temperatures, those approaching the design conditions, the equipment will run continuously. This is not harmful to your air conditioner.

Basic air balance is the responsibility of the homeowner. If after seasonal balancing, and during the first year of occupancy, your HVAC system fails to meet the above warranted criteria, Tempo Mechanical will balance your airflow to meet these criteria without charge. Seasonal balancing adjustments will need to be made by the homeowner. An example of this would be the kitchen area or laundry room where maximum air flow is required in the cooling season to offset the heat generated by the appliances, and conversely, in the winter heating season the air flow required is minimal for the same reason. Doors must be left open to allow proper airflow. Today's architectural designs that feature open two story ceilings adjacent to stairways often have the same problem due to the natural convection (rising) of the heated air. These air balance modifications should be made seasonally by the homeowner and are accomplished simply by adjusting the damper located behind the register in the affected area.

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DESIGN AND IMPLEMENTATION PROCESS SECTION #6
All house plans are CAD generated regardless of original source.

Take-off
The take-off process is electronic and is initiated by the CAD drawing. Our in-house programming capability has provided an electronic link that enables our financial software to read directly the design drawing and automatically perform the take-off in seconds. All Field Superintendents have the ability to electronically change plans, in effect providing an "as built" drawing for a more accurate take-off as adjusted for actual field conditions. This helps control costs by minimizing wasted materials.

Estimating
The estimating process at Tempo Mechanical is fully automated. This automation avoids extension errors and assures the proper calculation of the actual costs involved in each job. It also allows for quick and accurate modification of pricing for both standard options and homeowner requested changes.

Both detailed and summary reports are available for verification of costs. We currently have an inventory of over 5,000 plans with the accompanying take-off.

• Our AutoCAD Design process generates a Bill of Material for every distinct house plan.
• The builders issue a Purchase Order to confirm addresses and pricing for a house plan.
• Vendor Purchase Orders are generated from the plan Bill of Material.
• Purchase Orders to most vendors are electronically created to insure that the most recent revisions are reflected in the Purchase Order.
• Guaranteed consistency on all similar house plans.

• Contract pricing is confirmed from our customer purchase orders.
• Invoicing is customized to each customer's specific requirements.
• Our construction schedule triggers our invoice system.
• Invoicing will always be consistent and current to help you manage your cash flow.

• Scheduling is monitored and tracked in a database.
• Customers are given a confirmation number for each service order.
• Inventory is on a "just in time" inventory system that is highly automated.
• HVAC rough and trims are scheduled with a four day lead time.
• HVAC start-ups are normally done within 24 hours.
• Red Tags and noncompliance issues are corrected within 24 hours.
• Our Customer Service Group will call you to confirm scheduling of noncompliance issues.
• We monitor the status of all houses on the schedule for projected start dates.
• Field Supervisors track your schedule and provide status feedback.
• Schedules are adjusted to meet your needs on a daily basis.

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BUSINESS DIRECTION SECTION #7
Our roots date back to 1966 when Tempo was formed as a part of the TDIndustries' family. As an employee-owned company we purchased our Business Unit from our parent company in 1998. This strategic move allowed us to form a Service Department to focus on our home installations as life cycle customers.

Tempo Mechanical Services has traditionally been a high volume Residential New Construction HVAC Contractor to the point where 82% of the company revenue was directly attributable to RNC activities. Recognizing the volatility the new construction business in 2006, we began to diversify and make a significant financial and management investments in our commercial construction, repair and replacement services and energy/code certification/testing business units. Through that effort we have reduced our RNC revenue percentage to 44% of total corporate revenue. This flexible capability has allowed us to utilize our workforce more efficiently and to achieve modest, controlled growth in 2007 and 2008.

Growth
We purchased the Business Unit from TDIndustries with 29 Partners. We are now over 100+ Partners strong. Tempo Mechanical's investment in technology and process improvement has us poised for significant growth over the next decade with focus and control toward customer satisfaction. We are always looking for improvement opportunities and control measurements. We are investigating new production methods that we believe will reduce our cycle time on the job and therefore reduce the entire new home construction cycle.

Cost Reduction
Tempo Mechanical has a strong focus on quality and improvement that will reduce our cost. These savings can be passed along to our customers through:

• Ease of information transfer
• Reduced cycle time in construction
• Ongoing innovations and process improvements
• Systematic design and scheduling
• Leveraged purchasing
• National Account Management for qualified builders
• Improved customer satisfaction

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• In 2000 the EPA mandated a phase out of R-22 (Freon™) refrigerant in virtually all air conditioning products. As of January 1, 2010 it is no longer permissible to manufacture air conditioning products that utilize R-22 refrigerant. This phase out is very similar to the one imposed on the auto industry in the late 80s and early 90s. The purpose of the phase out is to protect the earth's ozone layer, which studies have shown can be damaged by the chlorine found in R-22 refrigerant. The depletion of the ozone layer and the resulting increased ultraviolet radiation exposure has been directly linked to increased incidents of several forms of cancer.
• The replacement refrigerant for residential equipment will be R-410A (Puron™, Earthwise™, etc). The advantage of this refrigerant is that the cooling capacities and ability to remove moisture from the air are equal to or greater than the R-22 refrigerant it replaces. This refrigerant will not harm the ozone layer. All Tempo service personnel have been trained and certified to work on R-410A equipment.

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POINTS OF DIFFERENCE/CUSTOMER SATISFACTION / CONTACT SECTION #9
Tempo Mechanical is not organized as typically expected of a large contracting entity. The items listed below show Tempo Mechanical's clear separation from the expected.

Performance-Based Pay
Wherever practical, Tempo Mechanical Service, Inc. Partners are compensated on a performance based system. This allows the individual to achieve exceptional earning based on his or her individual effort. They are not limited by some artificial structure.

Our Installers and Technicians are rewarded for their production and quality.

• This reduces cycle time and punch calls per job
• Increases customer satisfaction
• Increases our overall capacity to perform
• Our Field Supervisors are also rewarded by job performance and customer satisfaction

• Tempo Mechanical has two distinct customer service groups:
  • One to specialize in the builder as the customer
  • One to specialize in the homeowner as the customer
• Both groups support each other for increased customer satisfaction

Training
Training is a year around effort at Tempo Mechanical Services, Inc. We believe that the major factor limiting the growth of the organization is our ability to find trained people to do the available work. Therefore, Tempo Mechanical has accepted the challenge of developing the skilled work force that is required. To this end, all Partners are challenged to complete 40 hours of structured training every year. Tempo also supports other general educational efforts of our Partners such as outside technical training.

We must satisfy our homeowners by:

• Showing up for appointments when scheduled
• Correcting any problems on the first trip
• Offering competitive maintenance and extended warranty programs

Satisfying our builder clients is important as well. Commitment to customer satisfaction requires our Partners to "Walk the Walk". Simple jargon is not enough.

We must satisfy our builder clients by performing to the following standards:

• Show up on time every time
• Complete the job the 1st time and not have to return
• Charge a competitive price

We are well aware that many of our builder clients receive incentives based on their customer satisfaction scores that homeowners provide after closing. We are also aware that our actions as the HVAC Contractor can greatly influence these scores.

Partner Empowerment
Partners of Tempo Mechanical are expected to make as many onsite decisions as possible and are trained to do so. Our Partners are not criticized or chastised for making wrong decisions, but encouraged to learn all facets of their profession so they can make confident, accurate judgments. This benefits our clients by assuring that work is not delayed by indecision on our part.

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